CENTRAL INTELLIGENCE BULLETIN - 1961/05/09

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02049783
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 23
• Document Creation Date: August 14, 2020
• Document Release Date: August 27, 2020
• Publication Date: May 9, 1961

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3.3(h)(2)
3.5(c)
9 May 1961
Copy No. C
CENTRAL
INTELLIGENCE
BULLETIN
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9 May 1961
CENTRAL INTELLIGENCE BULLETIN
CONTENTS
1. Laos: (Page t)
2. Angola: South Africa giving Portugal increased
arms aid. (Page ii)
3. Congo: Spaak says Belgian advisers should be re-
moved from Congo. (Page it)
4. USSR: Helicopters conduct night anti-submarine
warfare operation. (Page tit)
5. Iran: New prime minister lifts press control; plans
to punish several officials for corruption. (Page tit)
6. Morocco: I4assan II criticized both by supporters
and by left-wing opposition. (Page itt)
7. Jordan: Adverse domestic reaction to Husayn's en-
gagement. (iv)
8. Great Britain: Two key trade unions express sup-
port for Labor leader Gaitskell's pro-NATO policy.
(Page iv)
9. Venezuela: President Betancourt calls for economic
austerity program. (Page iv)
10. De Gaulle attempts to put Algerian situation in
perspective. (Page v)
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BURMA
Nom Bac
V) Sa\rnNeual
j
LUANG' PRA Arj-z---
1 _t
....
Muong Houn .... AM NEUA
. Luang Prabang'. i 4/..."?
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SAYABOURY .r.t,KHOU N
M B ANG
an Ban ..
7 S
ou Khoun r
Muon Kasv ....) 8c-in ph.k Xieng Khouang
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) Ban Ta Viag
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/ .amone Vang Vreng
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/ ' L Y E N T IA NE 4 Borikhonec
/ Ban to Heup Pak Sane ;
�-.1 Kam Keu
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% Vienna
KHAMMAUANE
Nhommargt
NORTHERN LAOS
GOVERNMENT
Forces in
411 KONG LE - PATHET LAO I Coroct
KONG LE - PATHET LAO AREAS
0 50 ,109
-- TRAIL' "
STATUTE MILES
C) ROUTE NUM
6105o6
Thakhek Mahaxay
van nakhe
Pha Lane
- Tchepone
L1011,9
SAVANN:AKH ET
Alt.VIETNAM
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CENTRAL INTELLIGENCE BULLETIN
9 May 1961
DAILY BRIEF
Laos: No agreement was reached in negotiations held on
8 May in the Nam Lik area. The government delegation of (pied
fered to go to enemy-held Namone village for military, talks jp3
if the other side would come to government territory for po-
litical discussions, but the enemy delegation insisted that the r- a,.s
talks be held at the same place, presumably Namone.Mhoumi j40je"io
now plans to ask the ICC to intercede to make the cease-fire
more effective and to take other steps to circumscribe enemy
freedom of action. He also says he will request the ICC to spon-
sor tripartite political talks in Vientiane between Souvanna,
Souphannouvong, and himself. While the presence of ICC
representatives in both Vientiane and Xieng Khouang should
� help to facilitate a settlement between the two sides, the ICC
is not empowered to play the direct role envisaged by Phoumg
a.Jittle action is reported from the main fronts, although
fighting continues in the area south and east of the Plaine des
Jarres between Meo guerrillas and enemy forces. Scattered
skirmishing is reported elsewhere. The continuing redeploy-
ment to better positions of both government and enemy forces.
howe e increases chances of more serious fighting.
orations were scheduled through 8 May.
(Backup, Page 1) (Map)
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Pointe
Noire
Brazzaville
Banana�.�11Z7 Matadi
\Kitona
6111504 2
Luanda
.Gemena
Scattered Force
MOBUTU
LIBERIA
200
TUNISIA
NIGERIA
MOB UTU
Scattered Forces
Leopoldv�
ysville
0
C of the Conao
Bangassou
L'
� Boende
IroT'lga
Bondo
GIZENGA
7,000
MALAYA
470
Francqui KALONJI
1,500
uluabourg �
Bak anga
GHANA
1600
Approximate area nominally contra led by:
Kasavubu-Mobutu
1-1 Clizenga
Kalonji
Tshombe
El United Nations Forces (Service Forces
� Selected road not included)
Selected railroad
Selected airfield
STATUTE MU ..EC
400
LIBERIA
Luputa,_
pmin
ETHIOPIA
an eyville
ETHIOPIA
INDIA
Bukav
Albertville
NIGERIA
900
�Manono
TSHOMBE
7,000
FlisabthvilIe
/
NIGERIA
Usurnbura
IRELAND
650
SWEDEN
650
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Portugal - South Africa: The continuing unrest in Angola 0K
apparently has led South Africa to reconsider its refusal to
provide Portugal with substantial military assistance.
41,
the South Africans have agreed to furnish z,Uuu
twenty-pound bombs and are assisting the Portuguese in ob-
taining 5,000 rifles. As recently as 21 April, the Verwoerd
government declined to provide assistance beyond the 500
bombs already furnished pleading internal security needs.
neintorcement oI rortuguese forces in Angola is continu-
ing. Between 1,200 and 1,500 troops arrived in Luanda by
ship on 2 May; 2,200 additional troops embarked at Lisbon
on 5 May, and are scheduled to arrive in Angola about 13 May.
With these reinforcements, the security forces in the prov-
ince will number about 14,000, of whom approximately 6,000
are white. Contrary to recent Portuguese press reports,
there is no reliable information that the back of the rebellion
has been broken. (Backup, Page 3)
\ Congo:
4
JUN does not plan to use its forces to disarm Katangais armed e
forces. the UN does not 4,
consider tnat its manctate goes oeyona nuerposing its troops
in case of civil war or tribal conflicts, and does not intend to
take the initiative in disarming troops anywhere in the Congo.
Tension continues high in Elisabethville, however, and Katan-
ga's forces reportedly have been alerted to repel any "raid"
by UN force17
aelgian Foreign Minister Spaak told Ambassador Mac-
Arthur on 5 May that Belgium was ready to cooperate with
the UN and that Belgian "political advisers" should be with-
drawn from the Congo as rapidly as possible. He also en-
dorsed a withdrawal of Belgian military personnel, but ob-
served that these should not be withdrawn precipitously 15...s..9
9 May 61
DAILY BRIEF ii
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Iffbeir departure lead to chaos in the Congolese armed forces-7
begrifVfat known night anti-submarine warfare
(ASW) ia-5-ration by Soviet helicopters was conducted in late
April by eleven Hounds (1E-4s) of the Black Sea Air Force.
A submarine and a surface ship participated in the activity.
Helicopters are assigned to Soviet fleets to augment BE-6
seaplanes which have the primary airborne ASW role. Heli-
copters configured for ASW carry depth charges, radar, and
magnetic anomaly devices (MAD) in addition to sonobouys.
Some Soviet destroyers are equipped to carry helicopters, thus
Increasing the seaward range of these aircraft.
The recent activity in the Black Sea is a further reflection
of the continuing Soviet emphasis on incireasince ASW ranahili-
ties.
Iran; Trime Minister Ali Amini believes his main task
in the immediate future is to produce some concrete benefits
for the public to forestall a "red revolution." Meanwhile, he
has lifted press control, and instructed the various security
organizations to limit their activities to their proper spheres
of responsibilities. Amini hopes to prosecute and punish sev-
eral highly placed officials, including military, for corruption,
and the special courts being formed for this purpose will be
established in about two weeks. Radio Moscow has reported
factually on the situation but the Soviet-controlled clandestine
radio National Voice of Iran continues its attacks, insisting
that a change of cabinet is meaningless and that the Shah's re-
gime must be overthrow_9 (Backup,
Page 5)
Morocco: The delegation by King Hassan II of his powers
as president of the council of ministers to the chief of his per-
sonal cabinet, Ahmed Reda Guedira, is another indication that
the King intends to continue his personal and absolute rule for
some time. Both the Istiqlal party, the major political organ-
ization supporting the King, and the left-wing opposition Na-
tional Union of Popular Forces have criticized the King's action.
9 May 61
DAILY BRIEF iii
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The press is speculating that a cabinet reshuffle may be im-
minent. A new flare-up of violence involving the left-wing
Moroccan Labor Union and its Istiqlal-created rival, the Gen-
eral Union of Moroccan Workers, has also contributed to the
growing instability in Morocco. (Backup,
Page 6)
Jordan: (eaction in Jordan to King Husayn's announcement
on 1 May of his engagement to a British girl has ranged from
dismay to anger, with a number of Jordanians predicting that
this "ill-advised" step will lead to the King's "finish." Husayn's
authority is such that he probably can proceed with his marriage 6 k.
plans in the face of a sullen but not openly rebellious people.
The American ambassador nevertheless believes the danger to
the King's position is real and that as the depth of adverse feel-
ings become more annarent to hi7 he may possibly consider
abdicatioig (Backup, Page 7)
Britain: he American Embassy in London sees in two
separate trade union votes last week a strong trend of support
for Labor party leader Hugh Gaitskell's pro-NATO policy, and
against the position of last year's Labor party conference call-
ing for British unilateral nuclear disarmament. The votes of
these two unions should be more than enough to bring the an-
nual party conference this fall back into line with the party's
leadership on defense issues and should help repair the party's
popular standing. Some trade union elements who support
Gaitskell's pro-NATO policy, however, continue to oppose US
air and naval nuclear bases in Brits...J.237
(Backup, Page 9)
/<
� Venezuela: The economic austerity program presented to 0 k
Congress on 5 May is a comprehensive effort by President
Betancourt to restore business confidence and halt the deterio-zt-J-tit)
ration in Venezuela's financial situation. The government, cite�i.
which has been under strong pressure from both rightist an
Communist-leftist elements, had thus far generally resorted
to financial expedients instead of politically unpopular remedial
measures. The new program calls for a 10-percent reduction
9 May 61
DAILY BRIEF iv
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in salaries of public employees, increased taxes which do not
affect the key foreign-owned oil industry, and a reduction in
expenditures of the government-owned economic enterprises
now operating at a substantial loss. (Back-
up, Page 10)
*France-Algeria: De Gaulle's 8 May speech, which was
partly an effort to set the April military insurrection in per-
spective and turn French public attention to the possibilities
of future progress, contained a hint of French official appre-
hension over tension among the European settlers in Algeria.
He appealed to the settlers to "renounce absurd and agitated
dreams." To reinforce De Gaulle's appeal, units of the French
Mediterranean fleet appeared off Algiers, and the Algiers po-
lice repeatedly broadcast warnings that settlers should not
play the game of the extremists on both sides." asench of-
icials close to De Gaulle have expressed consider-
ble anxiety over the possibility of more trouble with the
settlers and the army
De Gaulle's renewed offer to negotiate the future of Algeria
with "Algerian elements, primarily those fighting us," was
made against a background of frequent reports that the rebel
government in Tunis is ready to begin whenever the French
set a date. Presumably for tactical reasons, he coupled this
with the usual reminder that France would build a "new Algeria
without the rebels if no agreemcnt can be negotiated.
9 May 61
DAILY BRIEF
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Situation in Laos
aouvanna Phouma, who claims he will not attend the Geneva
Conference, has returned to Xieng Khouang from Phnom Penh,
possibly to assume a more direct role in negotiations with the
Boun Oum government. He recently told Ambassador Trimble
in Phnom Penh that he would have to contend with a well-organ-
ized and highly trained leadership core of "perhaps 200" Com-
munists in the Pathet Lao, but expressed confidence that he
could impose his will. He insisted he could keep major cabinet
portfolios�such as defense, interior, and foreign affairs�out
of Communist hands by holding these positions himself if nec-
essary. He felt that new general elections could not be held
for seven or eight months at the earlie!9
Outlining his program in some detail to Ambassador
Triin le, Souvanna said his government would maintain close
contact with the people and strive to meet their needs while
setting an example of sacrifice and hard work. He held that
the abandonment by present Laotian leaders of the country's
traditional socialism, based on simple small holdings, was
the root of much of Laos' difficulties. Souvanna felt that for-
eign economic aid, to be accepted unconditionally from both
East and West, should be on a bilateral basis but that there
would be no need for military aid, since the army would be
reduced to two battalions. In addition to a police force, he
envisaged a universal military training program in which all
young men would receive ten months' instruction in military
matters, manual trades, and good c1tizensh27
/he Boun Oum government, meanwhile, plans to submit
its recommendations to King Savang today on the composition
of the government delegation to Geneva. Phoumi still holds
the view, apparently shared by the King, that initially at least
the delegation's role should be purely consultative. He feels
there can be no serious negotiations with the other side until
an international framework is established and foreign influence
excluded from Laos
The Communists, foreseeing protracted negotiations over
formation of a new Laotian government, are publicizing the
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possibility that the three forces in Laos will have to be indi-
vidually represented at the Geneva Conference. On 8 May,
Moscow rebroadcast a statement by IChamsouk Keola, the
"acting premier" of Souvanna Phouma's Xieng Ithouang "gov-
ernment,*1 which insisted that Vientiane, the Pathet Lao, and
the "lawful government" in Xieng Khouang each would have to
send a delegation to Geneva if a coalition was not formed by
the opening of the conference.
a new training
school for instruction in "new weapons and heavy weapons"
will open in the Plaine des Jarres area on 8 May.
troops are
to be sent to Hanoi for communications training. There have
been previous references to such training being conducted at
Hanoi.
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Portugal Obtains Military Assistance in South Africa
The Union of South Africa has been attempting to expand
its armaments industry and has expressed an interest in sup-
plying the Federation of ..hodesia and Nyasaland as well as
Portugal with munitions.
the Union will begin producing �the Belgian FN rifle in August
and will be manufacturing its own bombs next year. In the
meantime, however, South African officials told the Portu-
guese that they plan to purchase 40, 000 rifles in Belgium.
They indicated a willingness to supply Portugal with 5,000
rifles out of their present stock, provided the Belgian factory
could replace them within a short time.
The efforts of the Portuguese to bolster their military
forces and materiel in Angola were reflected in a speech by
the new overseas minister, to the Angolan legislative council
on 2 May. He indicated that Lisbon was determined at all
costs to crush the rebellion in the province and maintain its
sovereignty in Portuguese Africa, He also implied that what
was good for Portugal in the past would be good for it in the
future. Political and socio-economic reforms in the overseas
provinces were, he said, of secondary importance for the
moment.
The American Embassy in Lisbon feels that the speech
failed to consider the question of Portugal's ability to carry
out such a policy. It cites the opinion of responsible officials
that within a year or year and a half the nation's resources
would be exhausted. The embassy feels that at that point a
political evolution or revolution of some kind would be in-
evitable.
A prolongation of Portugal's military effort in Angola
might have repercussions on its ties with Western defense.
Lisbon would temporarily sus-
pend its NATO commitments in order to have all its troops
available for Africa.
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The Situation in the Congo
The UN is moving to apprehend white mercenaries in the
Katanga armed forces. According to press reports, seven
South Africans have been taken into custody by UN forces in
northern Katanga, while another group of South Africans has
surrendered to the UN in Elisabethville. These developments,
together with the continued silence of UN officials with regard
to Tshombe's arrest, have probably heightened concern re-
garding a possible UN move to disarm all Katangan forces.
The UN attitude toward an effort to bring Tshombe to
trial remains unclear. During the period when Tshombe was
under detention at Coquilhatville, UN officials indicated that
they had no plans to intervene on his behalf. However, the
widespread criticism that would be stimulated by a new po-
litical execution in the Congo might lead Bornboko to dismiss
charges against Tshombe in return for his concession of Leo-
poldville's sovereignty over Katanga. Reports from Coquilhat-
ville indicate that Bomboko--who has dominated the political
conference there and who appears to have instigated Tshombd's
arrest--is closely supported by Congo Army chief Joseph
Mobutu.
the financial situation in Orientale Province "grows
daily more and more alarming,"
"all the parties of the nationalist bloc
are going to unite soon and fuse into one... party which will be
called... the Lumumba African National Party." Such a move
might be designed to mobilize leftist deputies with a view to-
ward an reconvening of the Congo parliament.
lir
�cil9P�SEGRE-T
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Plans of New Iranian Prime Minister
Amini hopes that the "drastic and spectacular" gestures
which he is planning will impress the public sufficiently to con-
vince them that he is "different" from the other prime ministers.
However, he needs the Shah's cooperation and feels he must work
carefully to prevent the return of the Shah's old suspicions of
prime ministers who try to goverV
(Amini claims he won the Shah's permission to exercise com-
plete freedom in choosing his cabinet and in dissolving the Majlis
whenever he considers it desirable. The Shah insisted on re-
taining control of the army, however, and on retention of Gen-
eral Amir-Azizi as minister of the interior. Amini conceded
these points but insisted in turn that he must have a greater voice
In determining the effectiveness of military spending. Amini be-
lieves he has persuaded the Shah that all cabinet ministers will
report to the Shah only through the prime minister. The minis-
ters of war and interior and the chief of the national police were
specifically singled out by Amini in this regarli)
CAJnini has described the government institutions as "so
packed with incompetents and so ineffective" that major reor-
ganization is required practically everywhere. His problem is
to assemble a capable group to put the ministries on a proper
working basis without losing the Shah's confidenc.7.
g_mini's assessment of his country's situation and require-
ments is similar to that of most preceding prime ministers .
All have been undercut, however, by the intrigues of the Shah,
who attempts to keep any official from becoming too powerful
by constantly playing one against the other. Aminits success
will depend on his ability to isolate the Shah from such private
contacts and, perhaps more importantly, eliminate the cour-
tiers around the Shah who use their relationship with the court
for their own private advantai9
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Moroccan King Delegates Certain Powers
..ven prior to the publication on 4 May of the decree dele-
gating certain of the King's powers, Guedira was reported to
be the most powerful man in Morocco after King Hassan IL
Guedira was said in effect to be running the Moroccan Govern-
ment as a result of Ha,ssan's ineffectiveness in performing his
official duties and to be the only person from whom ministers
could obtain decisions. He is believed to have antagonized the
ministers of foreign affairs and interior by making ambassa-
dorial and internal appointments without consulting them. He
is also widely believed to have "sold out" to the French and to
have extensive financial holdings outside Morocco]
The Istiqlal daily newspaper Al Alam characterized the
delegation of powers as incompatible With the popular will,
which wanted a government organized on sounder foundations.
At Tahrir, published by the left-wing National Union of Popular
Forces (UNFP), called for a government based on popular will
and stated that Morocco lives "a year after the great experiment
began, in constitutional anarchy under the dictatorship of an ir-
responsible and corrupt administration which is submitted to
neither ministerial nor governmental control."
The Istiqlal-sponsored General Union of Moroccan Workers
(UGTM) has the avowed purpose of liquidating the left-wing
Moroccan Labor Union (UMT), which is aligned with and forms
the base of the UNFP. The far superior strength of the UMT,
however, was evident during the separate parades staged by the
two groups in Casablanca and Rabat on May Day. Just prior to
May Day the Rabat regional chief of the UMT informed an em-
bassy official that his organization was "ready for a test of
strength." The King, while apparently unwilling either to en-
dorse the,UGTM or challenge the strength of the UMT, publicly
deplored the division in the ranks of labor and expressed a hope
that next year would see a "rediscovery of unity and harmony."
�SEeRE-T
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JordanicL11 euuuiis LV zung IlUbctyll Engagement
n g Husayn is not yet aware of the depth of adverse
feeling among the Jordanian people about his betrothal to
Antoinette Gardiner, the daughter of a British military ad-
viser in Jordan. American Embassy personnel have hardly
been able to locate a single Jordanian who approves or is
even neutral regarding the King's decision. Even the simu-
lated public display of well-wishing has fallen short of the
minimum that might be expected as rudimentary courtesy to
the Monarch. Instead, the ambassador reports "there has
been a relative and pointed silence in the land.
Elusayn's supporters within the government, including
Cabinet ministers, are making no particular effort to hide
their feelings that the King has betrayed them and violated
his trust as ruler of the country. Foreign Minister Musa
Nasir has indicated incomprehension that Husayn could have
made such an unwise and "dangerous" decision--an act, he
said, of a "spoiled child." These supporters feel that if the
King were not going to marry an Arab or Moslem, at least
he should marry someone whose station in life is comparable
to his own; and the fact that 1Vliss Gardiner is a British com-
moner is viewed as almost the ultimate of insults. Among
typical comments heard is one that is heavy with sarcasm:
"Now they (the British) are all our relative..0
nongovernment circles there is strong criticism of the
government for not having prevented the engagement or re-
signed when the announcement was made. In addition, there
is a general feeling that the King's efforts toward a rapproche-
ment with the UAR were patently deceitful�an attempt to win
favor with the people before announcing his controversial wed-
ding planjg
be US ambassador believes that as the present state of
shock passes, opposition to Husayn's decision may take more
concrete and collective form. A member of the Baath par!V
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'Naafi
Ex Jordan has said that he knows of no present Baath plans
to exploit the situation, but that "of course" the party eventu-
ally will, and the first occasion might be at the time of the
wedding itself. On 8 May it was announced officially that the
wedding probably will be on or about 25 May, Jordan's Inde-
pendence Dazj
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British Labor Party's Defense Policy
kwo of Britain's largest trade unions, the 890,000-member
Amalgamated Engineering Union (AEU) and the 354,000-member
Union of Shop, Distributive, and Allied Workers (USDAW) voted
last week� to support Gaitskell's policy of continued loyalty to
NATO with the US supplying the nuclear deterrent. Both of these
were among the four major trade unions which voted in favor of
unilateral British nuclear disarmament at the party conference
last October where the Gaitskell policy was defeated by 297,000
in a total vote of 6,381,09D
rahe American Embassy in London considers it unlikely that
these reversals will affect the unilateral stand of the Transport
and General Workers Union (TGWU)--Britain's largest--but be-
lieves it could influence the votes of the railwaymen whose "uni-
lateralist" stand last year passed by an extremely narrow. mar-
gin. Last week the union's executive voted to support the Gait-
skell policy. Both the TGWU and the railwaymen will vote on
the issue in July7
Even if all other unions, Labor party constituencies, and
the allied Cooperative party reaffirm last year's stands, how-
ever, the AEU and USDAW switch, involving more than a mil-
lion votes, would be more than enough to reverse the votes to
be taken by the Trades Union Congress and Labor party confer-
ences this fall. This should greatly ease Gaitskell's problems
of keeping the Labor party members in Parliament pledged to
collective security, undercutting the dissident campaign against
him as party leader, and presenting the party as a cohesive
organizatioD
l_lother resolution approved by the USDAW may presage
new trouble for Gaitskell, however, and will furnish more am-
munition to the neutralists. This calls for "an end to the need"
for American nuclear bases in Europe and Britain and opposes
the basing of Polaris missiles in British waters. The official
position of the party leadership states that for the present
British soil must be available for US and NATO bases, with-
out mentioning whether nuclear weapons should be allowed on
them7
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Nue vorre
Venezuela's Economic Problems
Venezuela has suffered four consecutive years of unbal-
anced budgets totaling about $1 billion. The deficit for the
fiscal year ending 30 June may amount to $300,000,000, or
only about $20,000,000 less than the preceding year. The
government has been largely ineffective in its efforts to halt
the decline of foreign exchange reserves which began in early
1958, and there has been a considerable flight of capital from
Venezuela. Reserves have fallenfrom $1.38 billion at the end
of 1957 to about $600,000,000 at present, and the latter figure
does not account for about $330,000,000 of medium- and short-
term loans for which foreign exchange must eventually be pro-
� vided.
The previous minister of finance resigned in March after
only four months in office, largely because he had failed to
obtain cooperation from the rest of the cabinet in his economic
program. he present minister, Andres Otero, who apparent-
ly also has orthodox economic views, advised Ambassador
Sparks last month that he was "alarmed" by the financial con-
/ditions he discovered on taking office]
Strong political considerations are the primary factor in
the Betancourt regime's reluctance to apply austerity measures,
lEuch as dismissing about 20,000 government employees whom
the finance minister regards as exces_si The level of unem-
ployment is dangerously high in Caracas--focal point of po-
litical violence since the overthrow of the Perez Jimenez dic-
tatorship in January 1958, Moreover, Betancourt's Democrat-
ic Action party has a socialist program which makes political-
ly inadvisable the application of purely economic remedial meas-
ures in a number of public economic enterprises, including the
petrochemical and steel institutes, the air, rail, shipping, and
telephone lines, the hotel chain, and credit organizations. Most
of these run large deficits, possibly exceeding a total of $100, -
000,000 annually. According to the American Em-
bassy in Caracas, the government's agrarian credit bank alone
lost $90,000,000 during the past two years. Nationalist feelings
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NOS9
about these corporations were indicated by the strong and ex-
tended opposition to the Betancourt-supported contract with a
private foreign firm which assists in management of the gov-
ernment steel institute.
According to the American Embassy in Caracas, the gov-
ernment's restrictive policies toward the foreign-owned oil
industry, which contributes the bulk of government revenues,
have been partly responsible for the sharp decline in reinvest-
ment in the industry each year since 1958 and have probably
frightened away potential investors in other fields. Betancourt
and his minister of mines and hydrocarbons have frequently
said that no further private development of Venezuelan mineral
and petroleum resources will be permitted. They have also in-
dicated that the government's objective is to extend control over
oil industry operations, including pricing and price discounts
on crude oil sales, and to reach international governmental
agreements on sharing markets and controlling prices with
other major oil exporting countries.
Betancourt's timing of the austerity program is probably
attributable in part to a belief that his regime is in a stronger
political position than previously after suppressing frequent
leftist violence and rightist plotting during the past eight months.
The program is also designed to obtain favorable consideration
of a Venezuelan request for extensive US aid, which is under
negotiation. Moreover, Betancourt may have almost exhausted
the financial expedients which have been available to him, and
further recourse to such action would probably have undercut
his moderate and conservative political support, reduced his
ability to apply corrective measures subsequently, and worsened
adverse economic conditions.
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',WI V 1.L11:41Y 171 lune
THE PRESIDENT
The Vice President
Executive Offices of the White House
Special Counsel to the President
The Special Assistant for National Security Affairs
The Scientific Adviser to the President
The Director of the Budget
The Director, Office of Civil and Defense Mobilization
The Director, National Aeronautics and Space Administration
Chairman, Board of Consultants on Foreign Intelligence Activities
The Department of State
The Secretary of State
The Under Secretary of State
The Director, International Cooperation Administration
The Deputy Under Secretary of State for Political Affairs
The Deputy Under Secretary of State for Administration
The Counselor and Chairman of the Policy Planning Council
The Director of Intelligence and Research
The Treasury Department
The Secretary of the Treasury
The Department of Defense
The Secretary of Defense
The Deputy Secretary of Defense
The Secretary of the Army
The Secretary of the Navy
The Secretary of the Air Force
The Assistant Secretary of Defense (International Security Affairs)
The Assistant to Secretary of Defense (Special Operations)
The Chairman, The Joint Chiefs of Staff
Chief of Naval Operations, United States Navy
Chief of Staff, United States Air Force
Chief of Staff, United States Army
Commandant, United States Marine Corps
U.S. Rep., Military Committee and Standing Group, NATO
Supreme Allied Commander, Europe
Commander in Chief, Pacific
The Director, The Joint Staff
The Director for Intelligence, The Joint Staff
The Assistant Chief of Staff for Intelligence, Department of Army
The Director of Naval Intelligence, Department of Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
The Department of Justice
The Attorney General
The Federal Bureau of Investigation
The Director
The Atomic Energy Commission
The Chairman
The National Security Agency
The Director
The United States Information Agency
The Director
The National Indications Center
The Director
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