THE PRESIDENT'S DAILY BRIEF 24 MARCH 1975

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006014753
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: March 24, 1975

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The President's Daily Brief
March 24, 1975
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Exempt from general
declassification schedule of E.O. 11652
exemption category, 5B( I )A2),(3)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
March 24, 1975
Table of Contents
Arab States - Israe14 The Arabs and Israelis blame
each other for the breakdown of the talks
(Page 1)
South Vietnam: The government's position in the
? northern.provinces is deteriorating. (Page Z)
Thailand-Cambodia: Prime Minister Khukrit Pramot
has decided to permit the continuation of am-
munition flights to Cambodia from Thailand.
(Page 4) .
Cambodia: Airlift operations resumed today. (Page 5)
'Western Europe - Portugal - USSR: West European
? leaders are indreasingly concerned over develop-
ments in Portugal. (Page 6)
Portugal: The new cabinet that is likely to be an-
nounced early this week will almost certainly
be in accord with the radical views of Prime
Minister Goncalves. (Page 7)
International Oil Developments: The economic per-
formance. of the major industrial countries ?
will be the single most critical factor deter-
mining oil demand in non-Communist countries
over the next three years. (Page 9) ?
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ARAB STATES - ISRAEL
Israel and Egypt, as might be ex-
pected, are blaming each other for the
collapse of the latest round of negotia-
tions.
The Israelis, in their statements, tried to
leave open the faint possibility that the US's step-
by-step approach might be revived, but Egyptian
Foreign Minister Fahmi stated flatly that this ap-
proach has come to an end. He said that Cairo now
plans to consult with the Arab states and the Pal-
estine Liberation Organization, and then request a
resumption of the Geneva peace conference.
Fahmi avoided blaming the US for the diplomatic
stalemate, saying that "it is abundantly clear by
now that Dr. Kissinger tried very hard to succeed."
Yesterday he said that US-Egyptian relations will
continue on an amicable course. A commentary in
the semi-official Cairo daily al-Ahram, however,
blamed Washington for not pressuring Israel enough.
Cairo radio announced yesterday that Fahmi
would make an important speech today at the Arab
League foreign ministers' meeting in Cairo. Presi-
dent Sadat is expected to address his nation later
this week; Prime Minister Rabin will make a formal
statement to the Knesset today..
The Israeli cabinet has received widespread
popular support. Spokesmen for liberal and conserv-
ative political parties alike praised its stand as
the only proper response under the circumstances.
Syria has not yet reacted. President Asad re-
portedly met last night with Palestine Liberation
Organization chairman Arafat to discuss the situa-
tion.
A PLO spokesman, obviously elated by the break-
down of the talks, said it should serve to unify
the Arabs and implied that the only answer to the
Israeli stand is force.
(continued)
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The incident between fedayeen and Israeli
forces reportedly occurred when a platoon-size
Israeli force crossed the Lebanese border. The Is-
raelis report five terrorists were killed; fedayeen
forces have been placed on alert in anticipation
of further Israeli attacks. At the time of the
clash, Israeli aircraft were conducting flights
over Lebanon and the Golan Heights. There was
no apparent reaction by Syrian aircraft.
Egyptian military preparations for the past three
months and that they amount to an "early warning"
of possible military action. it is not
clear whether these preparations have been coor-
dinated with diplomatic moves or were undertaken
as a contingency should diplomatic talks fail.
preparations could be strictly
precautionary
Israel began a "limited response" to Egyptian
actions on Friday. These include the mobilization
of some reservists and the increase of troop
strength in the Sinai by about 1,000 men.
Israel had "no offensive intentions,"
would not break the cease-fire, and had no desire
to escalate or dramatize military activity.
there was no evidence of any Syrian
military moves,I
Syria would not stand by if Egypt should initiate
military action. IDamascus might under-
take some limited action, such as an assault on
Mount Hermon or the occupation of the UN buffer zone.
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4ORT
VIET
Demilitarized Zone
pa Nang
MR 1
?14
THAIL
Qui Nhon
) MR 2
Khan
009.4
Nha Trang
Gulf of
Thailand
MR 4
R3
'Capital Special Zone
South
China
Sva
SOUTH VIETNAM
MILES
557530 3-75
? ?
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FOR THE PRESIDENT ONLY
SOUTH VIETNAM
The South Vietnamese position in
the northern provinces is rapidly de-
teriorating. The defense Zine north
of Hue is crumbZing, and the Communists
have cut Route 1 south of the city; an
assault appears imminent. To the south,
North Vietnamese troops today overran
Tam Ky, the capital of Quang Tin Prov-
ince.
Pressure is building around major cities of
the central coast. Ground attacks and shellings
near Qui Nhon may dictate the movement of South
Vietnamese units from outlying northern districts
in Binh Dinh Province.to strengthen Qui Nhon's
defenses.
The Communists are also pushing out of the
mountains northwest of Nha Trang. A tank-led Com-
munist force is in a good position to outflank a
South Vietnamese airborne brigade and move directly
toward Nha Trang.
Pressure has increased on Tay Ninh. With the
prospect of three Communist divisions converging
on the province, some senior government commanders
are now questioning the wisdom of defending Tay
Ninh.
To the northeast of Saigon, Communist forces
continue to expand their holdings along Route 20
which links Saigon with the southern highlands.
the Joint Gen-
eral Staff was uninformed about President Thieu's
plans to withdraw from the highlands and from north
of Hue. Staff officers privately express lack of
confidence in Thieu, and General Truong, commander
of Military Region 1 and probably the best South
Vietnamese battlefield commander, has criticized
Thieu's decision as "basically wrong."
Some officers are privately speculating that
the best course would be for Thieu to step aside
as a move toward a political solution. Prime Min-
ister Khiem has privately observed, however, that
there is no indication that the North Vietnamese
are willing to compromise or even to consider ne-
gotiating.
As criticism grows against President Thieu,
anti-Americanism threatens to reach serious pro-
portions. Many South Vietnamese, who have long
cooperated with Americans, believe that insuffi-
cient US material support was a key factor in last
week's events.
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FOR THE PRESIDENT ONLY
THAILAND-CAMBODIA
Thai Prime Minister Khukrit Pramot,
contrary to his public stand of two days
ago, has secretly decided to permit the
continuation of ammunition flights to
Cambodia from Thailand. Army commander
Krit Siwara,
confirmed that it is
government policy to continue the flights
but to "confuse" the issue in public
statements.
Khukrit reportedly agreed to let the flights
continue after being told by his advisers that
Phnom Penh would probably fall if the flights were
terminated. Khu-
krit overrode the views of his defense and foreign
ministers, who urged a halt to the flights during
a meeting of the national security council on Fri-
day. The Prime Minister instructed the council
"not to think" about the ammunition shipments and
to avoid any speculation or comment on the subject.
Khukrit's strategy could quickly unravel.
Khukrit's political opponents or Bangkok's free-
wheeling press may well choose to make an issue of
the flights. The ministers of defense and foreign
affairs are both key leaders of the right wing with
political ambitions of their own. They could leak
the council's deliberations to the press in an
effort to dissociate themselves from the decision
and to embarrass Khukrit. The defense minister,
for example, told reporters Saturday that "he will
not allow" the US to continue the airlift. A
broadcast from Hanoi over the weekend has aroused
anxieties by attacking the new government for its
"indecisive" attitude toward the arms shipments.
Should public pressures continue to build and
if Khukrit should perceive it to be in his politi-
cal interest, he is quite capable of reversing him-
self on the ammunition flights.
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Cambodia: Lower Mekong
Oudong
Continued fighting
P re k
Phnou
Tuol Leap.
Government
operation stalled
Positions to bee
0 abandoned
co
PHNOM
PENH
?
Continued fighting
e4.0
15
?
ons abandoned
? Banam
Neak Luong
River
narrows
Takeo
0 Miles 10
557527 3-75
SOUTH VIETNAM
01 in ? ?
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CAMBODIA
Rockets struck facilities on the mil-
itary side of Phnom Penh's Pochentong air-
port again yesterday, but airlift opera-
tions resumed today.
Government operations against suspected rocket-
launching sites northwest of the airport remain
stalled. The local commander has diverted some
units back to Tuol Leap, where Communist attacks
have forced his troops to abandon a number of posi-
tions. North of Phnom Penh, units of the Cambodian
army's 7th Division are still under heavy pressure
and are cut off from government lines around Prek
Phnou.
The-sea-saw battle continues on the east bank
of the Mekong River where Communist forces over the
weekend again penetrated an area directly opposite
Phnom Penh's waterfront. Recent intercepted mes-
sages have shown a build-up of insurgent forces
along the Bassac. On the lower Mekong, the govern-
ment enclave at Neak Luong remains the target of
heavy shelling.
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WESTERN EUROPE - PORTUGAL - USSR
West European leaders are increas-
ingly concerned over developments in Por-
tugal. Willy Brandt, leader of the West
German Social Democratic Party, pZans to
discuss the situation with you this week.
NATO chiefs of mission met yesterday in
Brussels, and NATO ambassadors held talks
yesterday in Lisbon and will meet again
after the new Portuguese cabinet is formed.
an emissary of Portuguese Socialist Party.
Brandt to:
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--tell his Soviet contacts that the USSR should
rein in the Portuguese Communists;
--describe the Portuguese situation to US
leaders during Brandt's visit to Washington
and impress upon them that Portuguese Social-
ists count on US assistance; and
--take any action that Brandt believes would
help non-Communist forces in Portugal.
West German Chancellor Schmidt on Friday eve-
ning told the Soviet ambassador to Bonn that any
nation which had influence in Portugal should use
it to prevent chaos in Lisbon. He did not allude
to any connection between events. in Portugal and
detente. The West German government would like the
NATO allies to make similar representations to '
local Soviet ambassadors.
? The West Germans also took the lead in the
NATO chiefs of mission meeting. The West German
representative said his government had asked the
Irish president of the EC to have that body make a
collective representation in Lisbon expressing the
community's concern. Bonn thinks this should be
followed by bilateral approaches by EC and NATO
members. The Portuguese should be told that their
alliance with the West would be adversely affected
by the suppression of pluralistic democracy.
The Italians have already called in the Soviet
ambassador to discuss Portugal. Most of the allies
seem reluctant, however, to follow West Germany's
lead until they hear how the US plans to approach
this problem. The NATO chiefs of mission will meet
again today.
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PORTUGAL
The new cabinet that is likely to
be announced early this week will almost
certainly be in accord with the radical
views of Prime Minister Goncalves. The
Communist-dominated Democratic Movement,
which has the status of a separate party,
is expected to join the three-party
coalition of Socialists, Communists,
and Popular Democrats. It is widely
rumored that each party will be given
equal representation and that each party
leader will be appointed minister with-
out portfolio.
Socialist Party leader Mario Soares reportedly
opposes this scheme. He prefers to remain foreign
minister and is also arguing to keep on the Social-
ist justice minister. Perhaps to bring additional
pressure on the Socialists to agree to his plans,
Goncalves consulted over the weekend with the lead-
ers of two other left-wing parties that are known
to have close associations with the Communists.
Whatever the final makeup of the cabinet, the
real power in Portugal will be exercised by the
newly established revolutionary council, which acts
as the executive body of the Armed Forces Movement.
Four new members of the council, who hold relatively
moderate political views, will not participate fully
as long as they hold their current jobs. One of
these individuals is expected to be Portugal's next
ambassador to the UN, a post that would remove him
from a position of influence.
The revolutionary council has assigned itself
the task of implementing the "necessary structural
reforms" of the economy. This will presumably
enable the council to set aside the moderate, three-
year economic program that was approved with much
difficulty only a few months ago.
The campaign for electing a constituent assem-
bly, scheduled for April 25, continues, but moderate
parties are in disarray. The Social Democratic
(continued)
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Party, the only center-right party left in the
election, has announced it will stay in the campaign
even though intimidation has reached the point that
party leaders no longer sleep at home.
The Portuguese military also seems to be in a
state of disarray since the abortive coup of March
11. that discipline
within the ranks is practically non-existent, partly
because the chain of command has been so disrupted.
A highly placed member of the army staff reports
that there is not a single unit which, if called
upon, can be counted on to respond.
A military spokesman for the government, mean-
while, has stated that the "Portuguese Liberation
Army," a right-wing guerrilla organization based
in Spain, may have been involved in the abortive
coup earlier this month. No direct accusation
against the Spanish government was made and the
government moved to squash rumors that the US had
any connection with this rightist organization. In
Madrid, Foreign Ministry officials reiterated the
Franco government's stated policy of non-interfer-
ence in Portuguese affairs. The leftist press,
nevertheless, is likely to allege CIA involvement.
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INTERNATIONAL OIL DEVELOPMENTS
The economic performance of the ma-
jor industrial countries will be the
single most critical factor determining
oil demand in non-Communist countries
over the next three years. Industrial
production is falling in nearly all
these countries, but recovery gener-
ally is expected to begin by the end
of the year.
Barring petrodollar recycling difficulties,
we expect production in major industrial countries
to rise by about 4 percent next year and 7 percent
in 1977, as the recovery gains momentum. This
growth--combined with continuing importer reaction
to high oil prices and the impact of any policy de-
cisions to suppress oil demand--will determine the
demand for oil from members of the Organization of
Petroleum Exporting Countries.
The pattern of oil import demand this year
will be significantly different from that in years
past. Importers will enter the spring with full
stocks. Import demand will slump sharply during
the second and third quarters--to only about 25
million barrels a day, compared with about 27 mil-
lion barrels a day this past February. It will
then rise sharply to about 29 million barrels a
day during the fourth quarter. Demand for OPEC
oil during 1975 as a whole will be down about 8
percent.
Economic recovery will cause demand for OPEC
oil to increase above the 1975 level. Demand for
OPEC oil should grow by about 2 percent, or by
600,000 barrels,a day in 1976. More rapid economic
growth will cause OPEC sales to increase by a fur-
ther 7 percent, or by 1.8 million barrels a day
in 1977. OPEC's export volume, however, will still
be lower in 1977 than it was in 1973.
Had it not been for the Saudi production cut-
back, the next few months would have been somewhat
difficult for OPEC because of declining importer
demand. The Saudi action has largely eliminated
the threatened surplus. As fall approaches, OPEC's
task will shift from one of informally allocating
production cuts to determining in the same informal
way the members' share of the production increases
that are certain to occur.
(continued)
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We do not see this new issue of determining
the share of increased demand as a problem for the
cartel. We believe that large OPEC producers will
meet less of the new demand from their own produc-
tion and will tacitly allow those countries that
need more revenue to raise oil production.
During 1975-77, OPEC countries collectively
will accumulate surplus funds averaging $60 billion
a year. Only Algeria, Ecuador, Indonesia, Venezuela,
and perhaps Libya will have current account deficits.
Other OPEC members will continue to accumulate large
surpluses. By the end of 1977, OPEC states will
have accumulated a total investable surplus of about
$265 billion. We see no particular stress on the
cartel through 1977, so long as Saudi Arabia con-
tinues generally to support OPEC pricing policy.
Beyond 1977, the situation is much less cer-
tain, but OPEC exports clearly will slump sharply
by 1980--probably to only about 22 to 24 million
barrels a day. At this level, only Saudi Arabia
and Kuwait will have sizable surplus earnings, and
the cartel would be under substantial stress. Pres-
sures will be strong on OPEC countries collectively
to boost the real price of oil substantially and
on some members to try to raise output. The out-
come will be heavily influenced by political de-
velopments both within and outside the cartel.
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