THE PRESIDENT'S DAILY BRIEF 13 MAY 1975

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006014796
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: May 13, 1975

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The President's Daily Brief
May 13, 1975
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Exempt from general
declassification schedule of E.O. 11652
exemption category, 5B(1),(2),(3)
declassified onh, on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
May 13, 1975
Table of Contents
Laos: Prime Minister Souvanna continues to urge
his countrymen to remain calm. (Page 1)
Thailand: The Thai National Security Council reached
several key foreign policy decisions at a meet-
ing last Friday. (Page 3)
Iran: We present the precis of a National Intelli-
gence Estimate on Iran. (Page 5)
NATO: The defense ministers of nine European mem-
bers of NATO want to discuss military procure-
ment and standardization of equipment. (Page 9)
Note: Cambodia (Page 10)
At Annex we discuss the emerging foreign policy of
the new Cambodian leadership.
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LAOS
Prime Minister Souvanna yesterday
asked his countrymen in a national radio
address to remain calm despite the changes
over the past week which have given the
communists virtual political and military
control of Laos. He asked for their con-
tinued allegiance to the coalition govern-
ment.
Describing the present situation as "not seri-
ous," Souvanna reassured his audience that the gov-
ernment has not changed its role and policies. He
said the government would continue to apply firmly
the principles of the 1973 Laotian peace accords.
The new acting defense minister, General Kham-
mouane Boupha--technically a "patriotic neutralist"
but in reality a Pathet Lao backer--took a tough
stand during several addresses he made over the
radio network yesterday. Boupha lashed out at the
US and its conservative Laotian "stooges." He
claimed that all of Laos' present difficulties had
been caused by "American imperialists and extreme
right-wingers," who have set out to destroy the 1973
peace accords, the coalition government, and the
Lao economy.
The US charge has registered a strong protest,
as he did after last week's attack on the embassy,
with Pathet Lao Deputy Prime Minister Phoumi Vong-
vichit over Boupha's statements. He told Phoumi
that it was one thing for a newspaper to criticize
Americans, but a very different matter when such
public criticism came from a "responsible" cabinet
minister.
Phoumi played down the incident and promised
to rein in Boupha as well as the Pathet Lao's Min-
ister of Information, Souk Vongsak. Phoumi also
used the occasion to reaffirm the Pathet Lao's de-
termination to maintain the coalition government
and its present policy and to have "good relations"
with all "friendly" countries.
(continued)
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According to a late report, yang Pao submitted
his resignation from the Lao armed forces to Prime
Minister Souvanna this morning. Pathet Lao troops
last week cut his only overland resupply route, ef-
fectively isolating the Meo tribal enclave, and com-
munist forces are reportedly advancing toward Long
Tieng.
Acting Defense Minister Boupha insists that
yang Pao represents a potential threat to the coa-
lition government and that he and Meo tribesmen in
northern Laos must be "destroyed."
Civil unrest, inspired by the Pathet Lao, con-
tinues in Pakse and is threatening to spread to
Savannakhet and other non-communist controlled urban
areas in southern Laos. At last report, several
thousand demonstrators--calling themselves the
"Pakse Liberation Movement"--had blocked all com-
merce into and out of Pakse and had seized a number
of southern rightist provincial governors. In ad-
dition to demanding the ouster of these and other
rightist officials and a resolution of local eco-
nomic problems, the protestors are clamoring for
the "neutralization" of all of south Laos.
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THAILAND
The Thai National Security Council
chaired by Prime Minister Khukrit reached
several key foreign policy decisions at a
meeting last Friday.
stall the Vietnamese communists
on the return of South Vietnamese aircraft.
send Foreign Minister Chatchai to
Peking and to set September as the deadline
for the establishment of diplomatic relations
with China.
by Khukrit to the US.
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arrange for a visit 25X1
not to take any initiatives
at the annual foreign ministers' conference of
the Association of Southeast Asian Nations
(ASEAN).
In the clearest signal to date of Thailand's
intention to maintain good relations with the US,
the Prime Minister would travel
to the US at an unspecified date to confirm to you
Thailand's "close and lasting" friendship and to
seek better US understanding of Thailand's current
difficulties.
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hoped to convince the US of the increased 25X1
importance of its support to Thailand at this time.
The meeting was, in effect, the most compre-
hensive review of foreign policy since Khukrit took
office less than two months ago. It is clear that
Khukrit and other members of the Council have slowed
Foreign Minister Chatchai's attempts to accommodate
Asian communist regimes. Chatchai pressed vigor-
ously for "immediate" recognition of China, but
settled for a date no later than the September ses-
sion of the UN General Assembly meeting in New York.
(continued)
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Chatchai has recently spoken out in favor of a
neutral Southeast Asia, a theme that the Malaysians
are likely to push.
At the ASEAN meeting, which opens in Malaysia
today, the other member states--Singapore, Indone-
sia, and the Philippines--are unlikely to go much
beyond their earlier endorsement in principle of
the Malaysian proposal for a Southeast Asian neu-
tral zone. Nor are the foreign ministers likely
to progress very far in their efforts to devise a
common policy to deal with recent communist succes-
ses in Indochina. At Thailand's suggestion, the
five agreed recently on recognition of the new re-
gime in Phnom Penh. Malaysia then went ahead on
its own to recognize the Provisional Revolutionary
Government in Saigon.
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IRAN
Following is the precis of a National
Intelligence Estimate approved by the US
Intelligence Board on May 9, 1975.
We see little prospect during the next few
years for a serious challenge to the Shah's author-
itarian control over Iran's internal affairs and
programs. Nevertheless, the Shah's monopoly of
decision-making and his trend toward greater re-
pression of opposition will incur certain political
costs:
--Growing alienation and dissent, including
terrorism, on occasion with anti-US overtones.
--Limited bureaucratic and governmental ef-
fectiveness in implementing the Shah's ambi-
tious objectives.
--The stifling of political institutions which
could maintain stability after the Shah's de-
mise.
The Shah is unlikely to change his course ma-
terially; hence strains within Iranian society seem
destined to grow as other sectors of life modernize
and the pressure for political participation becomes
more insistent. In the event of the Shah's early
death, competition for power could lead to serious
instability.
In the short run, Iran will be able to obtain
the finances necessary to accomplish the Shah's
dramatic economic development objectives but will
be constrained by:
--An inadequate agricultural base.
--Serious shortages of skilled and semi-skilled
labor.
--Port and transportation bottlenecks.
As a result, we anticipate a slowdown in the
rapid pace of Iran's economic expansion over the
next few years. In the longer run, if oil revenues
(continued)
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do not rise significantly there will be current ac-
count deficits due to increased expenditures in mil-
itary, industrial, and agricultural products. Even
so, Iran will provide opportunities for significant
economic gains for the US in investment and trade.
By the end of this decade, Iran will have ac-
quired a formidable military arsenal capable of
projecting significant ground and air forces into
the Arabian Peninsula and South Asia, and a blue
water navy capable of routine operations in the In-
dian Ocean. Iranian combat effectiveness, however,
will remain limited by lack of training and the
ability to maintain sophisticated equipment.
Foreign support, particularly from American
technicians, will remain essential to Iran's mili-
tary establishment for many years. The Shah is not
likely to seek nuclear weapons in the near future,
but he will probably attempt to acquire the neces-
sary technology.
The Shah is likely to grow increasingly asser-
tive in his foreign policies. He would risk con-
frontation with the Arabs, the West or even the So-
viet union in order to assert Persian primacy in
the Gulf or to maintain what he considers a suffi-
ciently high level of oil revenues.
Although he will remain suspicious of Soviet
intentions and will continue to rely on the US as
the ultimate deterrent to the USSR, the Shah be-
lieves he has taken out insurance in the form of
economic and political ties and that he can deal
effectively with the Soviet Union on his own under
foreseeable circumstances.
Iran will be prepared to deploy forces unilat-
eral in order to forestall a radical upset in the
Gulf. There are also prospects for greater coop-
eration with Saudi Arabia's Prince Fahd and, fol-
lowing Iraq's recent regional overtures, for a re-
duction in Iraqi-Iranian hostility. Iran's rela-
tions with South Asia will remain limited over the
short term; the Shah is likely to limit his finan-
cial backing for Pakstani arms purchases.
In the Middle East, the Shah will probably con-
tinue to expand his relations with Egypt, and it is
becoming less likely that Iran would supply Israel
with oil in the event of resumed hostilities.
(continued)
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US-Iranian relations are likely to become more
difficult in coming years. The Shah is seeking to
remove both the US and Soviet military presence
from the Persian Gulf and the Indian Ocean And to
establish his own regional collective security ar-
rangements in the Gulf; while he will tacitly ap-
prove of US naval operations in these waters as
long as the USSR keeps naval vessels on station
there, we cannot depend on him to provide access
to Iranian facilities to support fleet units, and
he will probably use his influence to end our use
of Bahrain.
Specific problem areas include:
--The Shah's efforts to maximize oil prices
and the buying power of oil.
--Arms procurement and the pressures that the
Shah may levy to ensure his perceived military
and security requirements are met.
--The growing number of Americans in Iran,
expected to reach about 50,000 by 1978.
--Arab-Iranian rivalries forcing the US to
choose sides.
--The question of safeguards for nuclear equip-
ment and fuels.
The Shah's strategy in dealing with the US is
likely to continue to be based on efforts to expand
economic ties with the US to offset strains devel-
oping from his growing political independence. He
provides important intelligence facilities for use
against the USSR and would probably cooperate in
facilitating US political initiatives in Middle
Eastern diplomacy.
While over the short term, US and Iranian in-
terests are likely to be largely compatible, we can
no longer rely on the Shah to accommodate US inter-
ests in the increasing number of areas where his
interests diverge from ours.
(continued)
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While US-Iranian relations would come into
question if the Shah should leave the scene, much
of the relationship has become institutionalized
to the point where it transcends the Shah.
Power would rest at least initially on a mili-
tary-bureaucratic coalition, but they would come
under increasing pressure and we cannot now foresee
the nature of the regime which will ultimately suc-
ceed the Shah. But even a more extreme regime prob-
ably would not immediately seek to restructure the
present relationship in drastic ways given the
Iranians' view of their interests and the impor-
tance of the US connection.
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NATO
The defense ministers of nine Euro-
pean members of NATO agreed last week to
seek talks with the US to get a better
balance in the programs for military pro-
curement and standardization of equipment.
UK Defense Minister Mason suggested that the
Eurogroup might propose that the West Europeans pur-
chase $5 billion of US equipment in return for an
agreement by the US to purchase $2.5 billion of ma-
teriel produced in Europe.
The target figures will not be mentioned in the
letter Mason intends to write to Secretary Schle-
singer to signal the European initiative. The Euro-
peans hope to discuss their offer when NATO's defense
ministers meet later this month.
The Europeans believe that they must sell equip-
ment to the US in order to maintain a stable and
technologically advanced European arms industry.
They also believe that NATO's efforts to standardize
equipment will be greatly aided if the US buys Euro-
pean.
The defense ministers also agreed that the
Eurogroup--an informal group of European members of
NATO, excepting France--should invite France to par-
ticipate in the procurement and standardization
projects being carried out under the group's aus-
pices.
French cooperation will be sought by promis-
ing that the Eurogroup will buy French military
equipment if France joins one of the Eurogroup's
affiliated organizations.
Previous Eurogroup efforts to obtain France's
cooperation have failed. It would be a major policy
change for President Giscard to alter France's at-
titude. At a minimum, Paris would be likely to
require the Eurogroup states to make firm large-
scale commitments to buy French military equipment.
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NOTE
The US ship Mayaguez, seized by Cambodian com-
munist forces yesterday in the Gulf of Thailand,
is maintaining an almost stationary position some
30 miles west of the Cambodian port of Kompong Som.
Phnom Penh has made no mention of the ship
seizure. Thai Prime Minister Khukrit Pramot report-
edly said today that his government would bar the
US from using bases in Thailand to recover the ship.
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CAMBODIA'S FOREIGN POLICY
The new authorities in Cambodia are
clearly preoccupied with consolidating
their control domestically, and it is
doubtful whether any comprehensive for-
eign policy has been formulated. Author-
itative statements have referred in a
general way to a "neutral and nonaligned"
foreign policy. The massive changes in
Cambodian society undertaken by the new
leadership and the equally massive prob-
lems that may ensue will probably cause
considerable time to pass before the
country emerges from its shell. Some
overall trends are, nevertheless, dis-
cernible. The most important of these
relate to the current state of play be-
tween Phnom Penh and its wartime allies
in Hanoi and Peking and provide important
clues to Cambodia's future alignment.
In the three weeks since the Khmer communist
takeover, Peking has moved rapidly to involve it-
self in Cambodia. Chinese representatives had ar-
rived in Phnom Penh by late April
The scope of Chinese assistance will probably
be substantial. Propaganda statements from Phnom
Penh have stressed the need for economic self-suf-
ficiency and have particularly emphasized agricul-
tural development, but the new regime will need
substantial assistance--250,000 tons of rice alone
between now and August--to overcome immediate sup-
ply shortages. The new leadership will also be
solely dependent on outside technical assistance in
its efforts to get the country's small industrial
sector operating again. China is likely to play an
important role in both these areas.
A Phnom Penh radio broadcast on May 10 gives
a good insight into current Cambodian priorities in
international relations. The broadcast praises
China for "sincere support and mutual respect,"
noting that Cambodian solidarity with China is
"strong, developing, and flourishing." In contrast,
(continued)
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the Vietnamese are lumped together with the Laotians
and North Koreans as "other" close comrades in arms
in a comparatively brief passage. The Soviet Union
is not mentioned at all.
For the near term, Peking may well have close
to a monopoly as a source of foreign assistance to
Cambodia. The image the new authorities have ac-
quired, through foreign publicity about executions
and through the recent explusion of foreigners from
the country, will probably give pause to governments
which might otherwise have been as eager to extend aid
as they were to extend recognition. In this regard,
the humiliating deportation last week of seven So-
viet nationals--Moscow's entire representation in
Phnom Penh--may lead Moscow to reconsider the fea-
sibility of the offer of reconstruction aid it made
to Prince Sihanouk in March.
Even if the Soviets and others choose to over-
look the callous and ruthless front the Cambodians
have turned to the world, there is some doubt
whether any of their aid offers would be immediately
accepted. The Khmer communists' failure to respond
to many unilateral declarations of recognition has
made it clear that they are not ready to make it
easy for any government that waited until the elev-
enth hour to withdraw recognition from the former
regime.
The Khmer communists probably do not plan to
exclude Moscow permanently from the country, but
they are unlikely to open the door to Moscow any
time soon--almost certainly not before they are
more certain how their relations with Hanoi are
likely to shape up.
If the Chinese are in good position to capital-
ize on the current situation in Cambodia and to in-
crease their stock and influence with the new lead-
ership there, the Vietnamese communists are not.
Indeed, Hanoi is probably deeply disturbed by the
initial "foreign policy" statements from Phnom Penh.
Khmer communist prohibitions against foreign mili-
tary bases in Cambodia and the emphasis on the coun-
try's "territorial integrity" serve notice that the
Vietnamese communists' freedom of movement in east-
ern Cambodia is a thing of the past. Although
Hanoi's tactical need for the bases in any event
ended with the fall of Saigon, several recent inter-
cepted messages from local Cambodian commanders
along the eastern border reveal an aggressive atti-
tude toward the Vietnamese; one official has even
(continued)
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been ordered to tell "the Viet Cong to leave imme-
diately." Hanoi seems to have gotten the message:
an intercepted North Vietnamese army message of May
7 indicated that the Vietnamese are shutting down
their logistics operations in northeastern Cambodia,
stating that this was "an urgent matter."
The decision to dismantle the logistics facil-
ities was an easy one for Hanoi to make on purely
military grounds, but it does remove a potential
source of leverage for the North Vietnamese, and
they may have initially been reluctant to move so
quickly on the matter.
Given the fractious nature of its Cambodian
connection for the past several years, Hanoi prob-
ably foresaw problems with an increasingly national-
istic and independent Khmer communist leadership
once the fighting and the insurgents' dependence on
Vietnamese arms deliveries ended. It must be taken
aback, however, by the suddenness with which the
new regime is asserting itself. Hanoi probably rec-
ognizes that, at least for the moment, it is in a
poor position to compete for influence in Cambodia.
An early test for Vietnamese policy toward Cam-
bodia maybe in the offing: a recent intercepted
message disclosed that Khmer communist forces have
been ordered to seize at least two offshore islands
long claimed by both the Vietnamese and Cambodians.
The seizure of a US merchant ship in this area yes-
terday suggests that the occupation may already have
taken place. The former governments in Phnom Penh
and Saigon clashed over oil exploration rights in
this same area last fall. The intercepted message
disclosed that the new authorities in Cambodia know
of the oil potential in the area and that Cambodian
troops are under orders to "be prepared to fight
diligently."
Even at this early stage, this must be gratify-
ing to Peking, which has displayed concern over the
possibility of dominant Vietnamese influence in Cam-
bodia and that Moscow might obtain a role there.
Peking's wartime policy was to hedge its bets by
both continuing its support for Prince Sihanouk and
strengthening its ties with the leadership within
Cambodia. With the new leaders in Phnom Penh appar-
ently receptive to Chinese initiatives even before
Sihanouk's return, this approach thus far seems to
be paying off handsomely.
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