WEEKLY SUMMARY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 03154565
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 85
• Document Creation Date: October 23, 2023
• Document Release Date: August 28, 2023
• Case Number: F-2022-01252
• Publication Date: October 2, 1970

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DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Stcret_
42
2 October 1970
No. 0390/70
(b)(3)
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The WEEKLY SUMMARY, issued every Friday morning by the
01 lice ol Current Intelligence, reports and analyzes significant
developments of the week through noon on Thursday. It ire-
qu,Jitly includes material coordinated with or prepared by the
(Piice of Economic Research, the Office of Strategic Research,
aryi the Directorate of Science and Technology. Topics requir-
in. more comprehensive treatment and therefore published sep-
as Special Reports are listed in the contents pages.
RNING
Te XIX SUMMARY contains classified information af-
;ling the national security of the United States, within the
weaning of Title 18, sections '793 and 794, of the US Code, as
awentied. Its transmission or revelation of its contents to or re-
pt by an un-authorized person is prohibited by law.
GROUP 1
Excluded ham cortarnotic
downgrading and
declassification
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--SELSREZ__
CONTENTS
(Information as of noon EDT, I October 1970)
Page
FAR EAST
Cambodia: Drive to Kompong Thom Still Stalled 1
Vietnam: More Communist Troops Head South 2
Communist China: Refurbishing the Bureaucracy 4
Thailand: A Period of Transition 5
Japan Turns to the US for Aid on Space Program 5
THE FATE OF CHINA'S YOUTH
(Published separately as Special Report No. 0390/70A)
EUROPE
The Asian Parade to Moscow 6
USSR: Recent Appointments Spell Status Quo 7
Safeguards Problems Beset the IAEA 9
France: Government Labor Policy Succeeds 9
CONSTRAINTS ON THE SOVIET OIL POSITION, 1970-80
(Published separately as Special Report No. 0390/70B)
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MIDDLE EAST - AFRICA
Egypt: Nasir Passes from the Scene
1.1
Jordan: The Crisis Ebbs
12
Chad: Insurgency Respite
14
Congo (Kinshasa): Bad News for Brussels
15
WESTERN HEMISPHERE
Dominican Opposition Crumbles
16
'terrorism on the Upswing in Guatemala
17
Peru: Discontent Growing in the Military
18
Ovando of Bolivia Completes First Year
19
Chile: Allende Sees Clear Road to the Presidency
?.0
Jamaica: La bor Troubles
NOTES: Yugoslavia; Sweden; 1m:el-national Aviation;
Ecuador
Cuba;
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FAR EAST
Cambodia: Drive to Kompong Thom Still Stalled
Late last week government troops inching
their way overland toward Kompong Thom city
finally reoccupied the village of Tang Kouk,
where their advance had been checked by enemy
elements for over two weeks. The Communists
offered little resistance, as the bulk of their forces
in and near the village apparently had withdrawn
earlier to the northeast, possibly to their base in
the nearby Chamcar Andong rubber plantation.
The Cambodian Army column on Route 6
has reached elephantine proportions, now consis-
ting of 20 battalions. The Communists' failure to
make any heavy attacks on this inviting target
perhaps may be partially due to the threat of air
strikes. In any case, the enemy has successfully
ND
Cambodia
Communist-controlled
100
550153 10-70 CIA
7
LAOS
SOUTH
VIETNAM
tied down large numbers of government troops
since 7 September with a minimum of effort and
in doing so has drawn more public attention to
Cambodian military deficiencies.
It remains to be seen how much longer
Phnom Penh will continue this operation, which
is still 35 miles short of its goal. The column's
commander has already told the press that the
push north may be abandoned because Kompong
Thom can now be resupplied by boat. Although
some lead elements from the column did venture
beyond Tang Kouk, most of the government
troops were busy "reorganizing and consolidat-
ing" their positions around the village until a
three-day religious holiday brought all activity to
a full stop. Civic action personnel from Phnom
Penh have also been indoctrinating villagers freed
from enemy control. If the government task force
does resume its advance, it can expect to meet
with more determined Communist resistance.
A third river convoy reached Kompong
Thom during the week, meeting only token en-
emy harassment en route. It delivered another
battalion of fresh troops and a heavy artillery
battery. Communist propagandists near the city
have been telling villagers they will attack it soon,
once they are reinforced and have installed anti-
aircraft defenses.
The Communists continued to carry out
light harassing attacks and ambushes on govern-
ment positions and lines of communication. The
most significant action was directed against two
of the country's most vital roads, Routes 4 and 5.
Traffic on Route 4 has been subjected to
harassment recently
(b)(1)
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On Route 5, which connects Phnom Penh
with rice-rich Battambang Province, one Commu-
nist ambush resulted in the death of the Battam-
bang Province police chief. This incident and
other recent attacks within 20 miles of Battam-
bang city have heightened local apprehensions
over the possibility of Communist attacks even
closer to the city. Battambang reportedly has
assumed the appearance of an armed camp, and
its residents have initiated a number of local de-
fense measures. Regular government forces in the
province are green and poorly armed, and prob-
ably not capable of withstanding the increased
Communist pressure that is likely to come as the
harvest season approaches.
* � �
Vietnam: More Communist Troops Head South
Communists Plan New Action
Communist forces in South Vietnam are
trying to mount relatively small-scale attacks in
widely separated parts of the country. They ap-
parently hope to demonstrate their ability to
strike key targets at a time when they seem to be
faltering in their efforts to shake the confidence
of the government's territorial security forces and
disrupt pacification.
Many signs point to early October as the
period for the next round of attacks, but enemy
timetables often slip, and some units have already
been delayed in their combat preparations. Plan-
ning for attacks is concentrated mainly in the
northern half of South Vietnam, although some
units in the delta provinces could also participate
on a limited basis. The biggest threat is in Quang
Fri and western Thua Thien provinces where sev-
eral North Vietnamese regiments are located near
the South Vietnamese artillery position at fire
support base O'Reilly. Most of the expected ac-
tion in other areas will probably consist of shell-
ings, harassment, and terrorism conducted by
local force and guerrilla units. Since Sihanouk's
ouster in Cambodia last March, the immediate
enemy main force threat to the provinces that
ring Saigon has been all but eliminated and the
enemy's large-unit potential in the delta has been
severely curtailed.
Madame Binh Aims for Doves
Military ambitions aside, the Communists
have undertaken a considerable effort on the po-
litical plane to depict themselves as a force for
peace. This is the main thrust of new evidence as
to how the Communists plan to exploit the Viet
Cong's eight-point proposal. A party directive
drafted in late August and passed on to cadre
earlier this month leaves the clear impression that
Madame Binh's initiative is aimed in part at
energizing peace movements in South Vietnam
and abroad. The Communist "diplomatic offen-
sive," it says, is designed to trigger a rise in
antiwar activities in the United States, but the
directive makes much more of the effort that is to
be directed against the Thieu government. It or-
ders the Communists to win over South Viet-
namese "middle classes, religious groups, intel-
ligentsia and the bourgeoisie" through an appeal
to their peace instincts. By convincing people that
only the ouster of the present Saigon regime and
the withdrawal of US forces stand ir the way of
peace, the directive asserts the Communists will
pave the way for the rise of a "third force" that
will come to terms with them. The directive or-
ders the entire Communist apparatus in Vietnam
to be mobilized in support of this effort.
The extraordinary amount of background
material on the Viet C:ong proposal now being
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passed to Communist troops in the field suggests
other steps will be taken to support this "diplo-
matic offensive." By itself, Madame Binh's initia-
tive seems modest indeed; yet the Communists
are making a real effort to assure their troops that
basic Communist positions are unchanged and are
warning that much fighting, and not peace, lies
ahead.
The directive does seem to contain a hint or
two that the Communists are not locked in to all
the language used by Madame Binh. There is a
suggestion, for example, that the Communist po-
sition on a complete US pullout has some flexi-
bility.
Peace Advocates Return
Communist efforts to stir up peace senti-
ment come at a time when Lower House deputy
Ngo Cong Duc, whose peace plan provoked the
latest furor, has returned from Paris to defend his
views. While in France, Duc elaborated on his plan
calling for the participation in the Paris talks of a
fifth delegation composed of South Vietnamese
doves. His proposals have been denounced by
many moderate and hard-line Vietnamese politi-
cal figures, and large protest demonstrations
against Duc have been staged in several provincial
capitals. Another dovish deputy, Pham The Truc,
who issued controversial antigovernment state-
ments while in Japan last year and who has stayed
out of the country since then, reportedly is also
preparing to come back to Saigon.
The return of these deputies will add to the
unsettled political atmosphere, particularly if
President Thieu pushes hard for the legislature to
take action against them. Thieu called on the
Lower House to move against Truc last year and
he has now charged that Duc's proposal is no
different from the Communist position. A new
government initiative to force action against the
deputies could create considerable executive-legis-
lative friction, as it did in the Tran Ngoc Chau
case last winter. The Lower House is considering a
petition for Duc's expulsion, but it seems doubt-
ful that it will receive the necessary two-thirds
vote unless the government intervenes di-
rectly.
� � �
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Communist China: China: Refurbishing the Bureaucracy
Peking is moving forward in its efforts to
normalize the central government apparatus even
though several controversial policy and staffing
problems probably remain unresolved. Last
month the regime announced its intention to hold
a National People's Congress (NPC), which is ex-
pected to serve as a forum for unveiling the new
mechanism. It is uncertain how many loose ends
the regime will attempt to tie up before con-
vening the long-delayed congress, but the return
to duty of a growing number of senior civilian
bureaucrats and other signs of a reversion to con-
ventional operations suggest that much of the
groundwork for governmental reconstruction has
already been laid.
In most ministries, the principal decision-
making authority still appears to rest with mili-
tary commissions that assumed control early in
the Cultural Revolution. At least one civilian min-
ister has been designated, however, and over the
past few months more than a dozen veteran of-
ficials have been identified as vice ministers or
department heads in both domestic and foreign
affairs areas. Only last week, Peking called at-
tention to the reinstatement of four more vice
ministers who had served in the textile, agri-
cultural machinery, petroleum, and industrial
machinery ministries until their eclipse during the
Cultural Revolution.
The reappearance of such senior bureaucrats
suggests that many day-to-clay operational respon�
-
sibilities are being turned back to civilian experts.
An increase in civilian responsibilities may
also be taking place at the lower echelons; several
recently received letters disclose that a variety of
administrative and professional experts who had
been sent to rural areas for labor reform are now
being recalled to Peking because of "work re-
quirements."
In addition to progress on staffing, there
have been a number of other indications since last
summer that Peking has been giving considerable
attention to the work of the central ministries.
Propaganda has implied that a number of min-
istries have been holding nationwide working con-
ferences and planning sessions. That the Ministry
of Foreign Affairs appears to be functioning ef-
ficiently is evidenced by the increasing activity of
its regional department heads and the continued
posting of ambassadors, including two last week
to East Germany and Somalia.
Peking is continuing its efforts to con-
solidate and streamline much of Hs top-heavy
bureaucracy, and several ministries apparently
have been merged. As a result, the NPC may
reveal a government machinery considerably
pared down from the 40 ministries that existed
before the Cultural Revolution, although the cur-
rent proliferation of vice ministers suggests the
regime may not have succeeded in defying Park-
inson's Law.
� � *
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Thailand: A Period of Transition
After almost seven years of unimaginative
but steady leadership, Prime Minister Thanom is
now clearly on the way out. The maneuvering to
succeed him and reshape the way Thailand is
governed, however, has yet to begin in earnest.
Thanom has become a casualty of his own
style of leadership and of problems at home and
abroad over which he, or any Thai prime minister,
has only limited control. Although Thanom's
self-effacement was ideally suited to the sort of
collective rule by which Thailand has been gov-
erned since Marshal Sarit's death in 1963, there is
a growing feeling that it is not appropriate for the
tough decisions that the country now faces. In its
handling of highly controversial legislation�the
tax bill, the budget, the proposed press act--the
government has been divided and indecisive. Not
only has Thanom been unable to whip his politi-
cal opponents in the parliament into line, but
divisions within the government's own ranks have
grown sharper, more rancorous, and unresponsive
to the prime minister's leadership. In addition,
the public display of differences among top lead-
ers over policy toward Cambodia has not only
hardened existing divisions within the leadership
but has further undermined public confidence in
the government's ability to act forcefully and
decisively on an issue of grave national concern.
Thanom himself has grown increasingly
weary of the political wars engulfing his admin-
istration; he has promised to give up his post as
supreme commander of the Thai armed forces
when he reaches the normal retirement age of 60
in October 1971. This would also appear to be a
logical time for him to retire from the premier-
ship as well, but strong counterforces�the loyalty
of all of the armed forces and police and, most
importantly, the monarchy�could suffice to keep
Thanom in office until the next elections sched-
uled in early 1973 when he has publicly promised
to step down.
If Thanom leaves office early, as seems in-
creasingly likely, leadership would almost cer-
tainly pass on to Deputy Prime Minister Praphat,
long the single most powerful figure in the gov-
ernment. With an exaggerated reputation for
venality and conservatism, Praphat's ascension
would be opposed by many elements of Thai
society�including the monarchy and its sup-
porters. His recent announcement that he is
resigning from all commercial positions should
help mollify some but will not win over his major
opponents. These elements would see Praphat's
elevation as signaling a retreat from the goal of a
constitutional government with representative
institutions. There is, however, no evidence that
Praphat himself is maneuvering to hasten
Thanom's exit, but many of his supporters in the
army and in the civilian bureaucracy are eagerly
looking ahead to the day of change. r
� � �
Japan Turns to the US for Aid on Space Program
Japan has recently decided to forgo its "do
it yourself" space booster program in favor of
obtaining the required technology and equipment
from outside sources, primarily the US. This de-
cision probably will be reinforced by failure of an
attempt to orbit Japan's first scientific data col-
lecting satellite on 25 September.
Up to now, Japan's space program has relied
on two boosters of native design, the Lambda and
the Mu, developed by Tokyo University scientists.
The Lambda was used to place Japan's first
satellite�a small one not designed to collect in-
formation�into orbit last February. The Lambda
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program was plagued by separation and ignition
problems, but Tokyo University scientists finally
overcame these problems after four launch at-
tempts had failed.
[he Mu is a larger launch vehicle having four
solid-propellant stages as well as eight strap-on,
solid-propellant boosters. The launch attempt oa
25 September was the first firing of the complete
Mu space launch vehicle and was unsuccessful
because the fourth stage failed to ignite. Tokyo
University scientists probably will try again to
launch the Mu in January,
Meanwhile, Japan's National Space Develop-
ment Agency has been designing larger launch
vehicles as follow-ons to the Mu rocket. This
group had planned to develop two progressively
The Asian Parade to Moscow
larger and more powerful launch vehicles, de-
signated the Q and the N. Under present plans,
however, the Q�an all-Japanese design�will be
limited to testing purposes, and only the N will be
used operationally. Furthermore, to shorten the
development time and increase the payload of the
N booster Japan has decided to forgo its own
development of a new first stage for the N and
will rely instead on the US Thor-Delta rocket for
this purpose. The other two stages will be de-
signed and built in Japan.
As plans now stand, Japan will acquire two
or three Thor-Deltas from the US and hopes to
arrange for licensed production in Japan. There
will be eight launches of the N vehicle beginning
in 1975 to place communications and scientific
satellites into orbit.
4 * � -
ELI ROPE
1--ecent developments in Soviet policy to.
vvard Europe and the Middle East have tended to
take the limelight away from Moscow's relations
with the Asian states on the periphery of China.
That an intensive Soviet courtship of these states
is under way, however, is evident in Soviet trips
abroad and especially in the steady stream of
Asian visitors to Moscow in recent months_
One of the consequences of last year's
clashes on the Sino-Soviet border was the new
impetus given Moscow's drive to win friends and
influence in Asia. Almost immediately after the
incidents, Premier Kosygin visited India, Pakistan,
and Afghanistan; President Podgorny went to
Mongolia and North Korea; and lesser Soviet of-
ficials traveled to Burma, Cambodia, Laos,
(b)(3)
Thailand, Singapore, Malaysia, Indonesia, and
Japan.
The visits seemed motivated primarily by
Moscow's desire to gain acceptance for the Soviet
version of what had happened on the Ussuri
River. The subsequent recall of all the USSR's
ambassadors in Asia for a general policy review,
coupled with Brezhnev's "proposal" for a system
of collective security in Asia, suggested that the
Soviets had embarked upon a new effort to in-
crease their influence.
Brezhnev's proposal, couched in general
terms, evoked a great deal of curiosity and also
much skepticism. No detailed elaboration of the
proposal was ever given and Moscow, after taking
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soundings from Asian leaders, apparently con-
cluded that, for the time being at least, it was
wiser to concentrate on bilateral paths of trade
and diplomacy.
Since last September, when Japanese For-
eign Minister Aichi made his first official visit to
the USSR, there has been a virtual parade of
Asian visitors to the USSR. Aichi was followed by
Prince Sihanouk in March, and in April leading
officials from the Asian Communist countries (Le
Duan from North Vietnam, Tsedenbal from
Mongolia, and Choe Yong Kon from North
Korea) went to Moscow for the Lenin Centenary
celebrations.
They in turn were followed by Pakistani
President Yahya and Australian Deputy Prime
Minister McEwen in June, Malaysian Prime Min-
ister Tunku Abdul Rahman in July, and Indo-
nesian Foreign Minister Malik and Afghan Prime
Minister Etemadi in August. September was the
busiest month of all. Singapore's Prime Minister
Lee Kuan Yew and Indian President Gin i both
made lengthy state visits to the USSR, and
Afghanistan's King and Queen also stopped off
for a two-day "unofficial" visit.
Moscow has clearly derived benefit from
some of these visits; others have not been so
successful. Developments in Cambodia over which
the Soviets had almost no control, for example,
have placed strains on the USSR's relations with
Hanoi that talks in Moscow were not able to
overcome. On the other hand, Indonesian Foreign
Minister Malik's visit resolved the debt-repayment
question that had been clouding Soviet-
Indonesian relations for years. The Soviets rec-
ognize, however, that diplomatic efforts will take
time. Consequently, Moscow is probably not too
discouraged by its lack of progress thus far and
will probably continue to encourage close and
frequent contacts with Asian leaders.
� � �
USSR: Recent Appointments Spell Status Quo
Party boss Brezhnev has been increasingly
active in domestic and foreign policy affairs in
recent months and the extensive publicity ac-
corded him has further underscored his pre-
eminence within the leadership. The pattern of
recent personnel assignments suggests, however,
that he has not measurably increased his author-
ity in this vital political area and that collective
decision-making still prevails.
Appointees to several important regional
party posts have all been relatively obscure local
officials who have made their way up through the
local party organization. None has any visibly
close contacts in the politburo. Although this
pattern in part reflects a conscious party effort to
work out a more orderly "career development"
policy in the wake of Khrushchev's arbitrary ap-
proach, it also reflects the fact that no one mem-
ber of the politburo has gained the upper hand in
cadre matters. Brezhnev has been able gradually
to eliminate followers of his political rival
Shelepin, but he apparently has not exercised
more than a veto in the selection of their replace-
ments.
The recent change in the leadership of the
Leningrad party organization has reflected this
situation. There are a few tentative indications
that the political sympathies of former Leningrad
party boss Tolstikov, who was confirmed as am-
bassador to Peking in mid-September, lie with
Shelepin. In any event, he is clearly no supporter
of Brezhnev, and his exile to Peking is a gain for
the General Secretary. Tolstikov was succeeded in
the key Leningrad post, however, by his long-time
deputy and presumed protege, Grigory Romanov.
The 47-year-old Romanov is little known
outside of Leningrad. He has spent his entire
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career there and has served as second secretary of
the oblast party committee since 1963. Similarly
obscure local officials were selected to head the
party organizations in Chelyabinsk Oblast and
Khabarovsk Kray during the summer. These shifts
were obviously made with an eye to the up-
coming party congress next March, when both
men can expect to be elected to the central com-
mittee. Romanov is already a member. Because o'
the importance of the Leningrad party post, he
should eventually gain a seat on the politburo as a
candidate member. Tolstik.ov was the only head
of the Leningrad organization in recent years who
failed to achieve this rank.
The Leningrad shift was presided over by
party secretary Suslov. His presence underscored
both the importance of the Leningrad post and
his own position in the leadership. It also pro-
vided additional evidence that Brezhnev did not
have a free hand in the selection of the party boss
in this oblast, whose allegiance has historically
been especially important to the head of the
party.
Since Brezhnev became party boss he has
publicly presided over two personnel changes
elsewhere. In both cases his presence was a clear
display of his personal involvement in the matter.
The first and most notable time was at the rein-
statement of his protege Kunayev as Kazakh
party boss immediately after Khrushchev's ouster.
Brezhnev has not publicly demonstrated this
authority in cadre matters for several years, how-
ever, which raises a question as to how firm his
control of the new central committee will
be.
� � *
YUGOSLAVIA: President Tito is wasting no
time in rallying support for his recent proposal of
a collective presidency. The party executive bu-
reau met in unprecedented session on 25 Septem-
ber, together with representatives of the Federal
Assembly, the popular-front organization, trade
unions, and the constituent republics. Edvard
Kardelj, who more and more appears to be Tito's
choice as his successor, gave the main report ap-
proving the concept of a collective presidency,
and necessary constitutional changes were agreed
0 *
SWEDEN: Final returns from the parliamentary
elections on 20 September have reduced the
ruling Social Democratic Party's representation in
the new unicameral Riksdag even further, thus
forcing Prime Minister Olof Palme to rely more
heavily than he had anticl'pated on Communist
support to remain in office. The 350 seats in
parliament are distributed as follows: Social
Democrats 162; Communists 17; Center 71; Lib-
erals 58; and Conservatives 41. When the new
Riksdag convenes next year, the three bourgeois
upon, at least in principle. The full presidium of
the Yugoslav party will meet on 3 October, only a
short time after the completion of President
Nixon's visit, to hear Tito and Kardelj speak on
the subject. Thereafter, lesser party and gov-
ernment bodies on the republic level will be
convened to discuss the topic. The reason for
Tito's haste is not clear. As far as is known, he is
not ill and does not intend to retire soon.I
�
parties together will have one-seat majorities on
all parliamentary committees, giving them the
power of life and death over legislative proposals.
This factor combined with the ideological hetero-
geneity of the Communist delegation�ranging
from pro-Maoist through neo-Stalinist and re-
visionist to New Left�does not promise smooth
sailing for the Palnne government, despite its
ostensible 10-seat majority in combination with
the Communists.
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se
Safeguards Problems Beset the IAEA
The highlight of the annual conference of
the 103 member states of the International
Atomic Energy Agency (IAEA) that ended this
week was the adoption of an Italian proposal to
amend the IAEA statute to expand the Board of
Governors, the agency's executive entity, from 25
to 35 members. Rome and Bonn would receive
permanent seats on the board under terms of the
amendment, which must be ratified by two thirds
of the member states.
The Soviets strongly opposed the Italian ini-
tiative and will probably launch a campaign to
delay ratifications of the amendment until Italy
and West Germany, both members of the Euro-
pean Atomic Energy Community (EURATOM),
have ratified the Nonproliferation Treaty (NPT).
Moscow maintains that states sitting on the board
but not having fully accepted the treaty will seek
to weaken the safeguards agreements that nonnu-
clear-weapon states or regional groupings must
reach with the IAEA. Both Italy and West Ger-
many will delay their NPT ratifications until
EURATOM has worked out a satisfactory agree-
ment with the IAEA, a lengthy process currently
delayed even more by the refusal so far of France
to join its five partners in drafting a negotiating
mandate for EURATOM.
France does not intend to sign the NPT and
wants any IAEA-EURATOM agreement phrased
in such a way as to protect its right as a nuclear
power to refuse international inspection of its
nuclear facilities. Several other states, those in the
near - nuclear-weapon category, also have ex-
pressed concern that a comprehensive IAEA ver-
ification arrangement would have a strong indus-
trial espionage potential harmful to any techno-
logical advances they may make in peaceful ap-
plications of nuclear energy.
The difficulties the IAEA faces in establish-
ing a viable safeguards system were most evident
at the recent meeting of its working group look-
ing into the question of inspections. The US, with
support from the UK and Hungary, argued pri-
marily for minimum restrictions on IAEA rights
of access. Three near-nuclears�West Germany,
Japan, and Sweden�favored inspection only at
certain key points in the utilization of fissionable
material. An accord was not reached
(b)(1)
(b)(3)
Fifty-six nonnuclear-weapon states adhering
to the NPT were to have begun safeguards nego-
tiations with the IAEA by 1 September under
terms of Article 3 of the treaty. Only 16 have
declared their readiness to enter into negotiations,
and the IAEA's continuing inability to set its own
house in order on the desired level of inspections
hardly serves to induce a more forthcoming atti-
tude on the part of the 40 delinquents.
� � �
France: Government Labor Policy Succeeds
Prospects for a peaceful labor scene this fall
have been greatly enhanced by the Pompidou
government's efforts to create a "new society."
Premier Chaban-Delmas, architect of "La Grande
Reforme," has introduced a number of innova-
tions that have satisfied major demands of labor
leaders in the private and public sectors, thus
reducing the possibility of large-scale strikes re-
sulting from social and economic tensions. Impor-
tant negotiations begun this week with the na-
tionalized railway workers will test whether in
fact the unions are content for the present to
-SPeit-EX_
(b)(3)
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bargain around a conference table rather than in
the streets.
Earlier this month, Finance Minister Giscard
D'Estaing completed a series of consultations
with France's five major labor federations on gov-
ernment proposals for tax reform. These talks
constituted one of the more significant reaffirma-
tions of the government's philosophy of consulta-
tion in the field of labor relations. One aim of the
government in promoting consultation is to create
a sense of participation on the part of the unions
in the search for programs and actions commen-
surate with France's resources and progress.I
rthe labor leaders involved, in-
cluding Georges Seguy of the Communist-led
General Confederation of Labor (CGT), have ex-
pressed satisfaction that their meetings with the
Finance Minister have constituted a true dialogue,
with a genuine give-and-take of ideas and argu-
ments on the regime's tax proposals.
Nonetheless, some labor leaders are still ap-
prehensive and are following a "wait and see'
policy. In an effort to discredit the government's
actions, Seguy has announced that tax reform will
be the theme of mass meetings the CGT will
organize in October at the time the National
Assembly debates the budget.
In the past year, the government has made
several other labor reforms. Blue-collar workers
were transferred from hourly to monthly pay
status and granted fringe benefits formerly en-
joyed only by white-collar workers, and workers
who take vocational training to upgrade their
skills are being given leave with full pay. Although
the CGT has been reluctant, most unions have
responded positively to the introduction of the
"social contract," designed to give labor and man-
agement time to iron out disagreements. In return
for a 90-day pledge not to strike, the unions are
guaranteed wage adjustments linked to move-
ments in the GNP, worker productivity, and the
general performance of the employing company.
Other important reforms include the revision
of the legal minimum wage with annual adjust-
ments, and the share-holding program for Renault
workers, who, on the basis of seniority, are given
rights to dividends and representation on manage-
ment councils.
The successful introduction and implementa-
tion of these reforms and the impressive Gaullist
parliamentary victory in Bordeaux last week indi-
cate that Chaban-Delmas' "new society" is work-
ing.
4 � �
INTERNATIONAL AVIATION: Toward week's
end the US draft resolution on aerial hijacking
had a 50-50 chance of adoption by the Interna-
tional Civil Aviation Organization (ICAO) Coun-
cil. Fourteen of the 27 council members must
vote for adoption, and 10 seemed certain to do
so. France appeared reluctant to oppose the US
draft openly and reportedly was seeking sufficient
abstentions to deny the US a majority of council
ballots. Complicating the prospects for the US
draft were less stringent Canadian and Japanese
alternaticie proposals that may be more palatable
to a number of countries concerned about the
economic effect of an air services boycott.
� � *
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01,
MIDDLE EAST - AFRICA
Egypt: Nasir Passes from the Scene
President Nasir's death following a heart at-
tack on 28 September leaves Egypt and the Arab
world with no single leader of comparable stature.
Nasir's loss will be sorely felt in Egypt,
where there is no obvious permanent successor.
According to constitutional law, Vice President
Anwar Sadat has been appointed interim presi-
dent, and a new president is to be selected within
60 days. Although Sadat may be selected to stay
on as a figurehead chief of state, he is not thought
to carry much weight in Egyptian political circles.
He participated with Nasir in the revolution of
1952
If a figurehead president is chosen for the
short term, the decision-making will probably be
left in the hands of the group of advisers who
constituted Nasir's inner circle. Included in this
group are Minister of State Sami Sharaf, who has
also been chief of presidential intelligence; Min-
ister of National Guidance Muhammad Haykal;
Minister of Interior Sharawi Jumah; and possibly
Amin Huwaydi, who is currently a minister of
state but until recently was chief of general intel-
ligence. There seems to have been some rivalry
among these men and,
although they all ap-
peared to share a com-
mon loyalty to Nasir, it
is not clear whether or
for how long they will
set aside their differ-
ences in order to pre-
serve the political sta-
bility that Egypt has
enjoyed since the early
1950s.
President Nasir
The active military
leadership cannot be
ignored in this period of
transition, however, and whoever eventually
emerges on top will need at least the tacit blessing
of the armed forces. Muhammad Fawzi, the com-
mander in chief of the armed forces and the
minister of war, is not believed to have any par-
ticular political ambitions for himself, but his
influence with the military will be important in
determining whom they support. Other generals
may also hope to play a role in post-Nasir Egypt.
There are also a number of civilians who
either hold positions of some influence now or
have held important posts in the past who could
be involved in the political maneuvering that is
reportedly already taking place. This group in-
cludes such figures as former vice president
Zakariya Muhyeddin; member of the executive
council of Egypt's sole legal political organization
All Sabri; and such former members of Nasir's
"free officer" group as Abd al-Latif Baghdadi.
The final outcome of this period of flux cannot
be predicted, however, and some relatively ob-
scure figure could eventually emerge at the top�
even as Nasir himself did
Israeli Reaction
(b)(1)
(b)(3)
Israeli Arab-watchers expect military leaders
to dominate any Egyptian regime. They believe
that the new rulers will be so preoccupied with
infighting and maintaining power, and so en-
grossed in domestic problems, that they will be
ineffective either diplomatically or militarily.
-SE-eR-E-T
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They see no one of Nasir's stature emerging for
years, and believe that individual Arab states will
act with increasing independence of Cairo. They
thus conclude that Nasir's death has set Arab
nationalism back ten years and has probably
slowed the Arabs' anti-Israeli drive. Israeli of-
ficials are also probably not unhappy that Nasir's
death, combined with the upheavals in Jordan,
has probably set back peace talks for some time.
Other Effects of Nasir's Death
I he Soviets will be gravely worried about
their long-run position in Egypt. They will p ay
their cards in a fashion calculated to protect their
stake, subordinating short-run concerns to their
effort to find and back a new leadership that
promises to be of enduring value to Soviet in-
terests.
Jordan: The Crisis Ebbs
Most Arab leaders are likely to maintain a
respectful silence on the succession question until
the dust has settled, but the centrifugal forces in
the Middle East will be accelerated without
Nasir's stabilizing influence. The other Arab lead-
ers are either too preoccupied with their own
problems, or of too little influence, to be serious
contenders for a leadership role.
Nasir's death seriously complicates Middle
East peace efforts, but its precise effect may not
be clear for some time. At least at the outset, the
new Egyptian leadership will probably be preoc-
cupied with domestic political concerns and will
not be eager�or perhaps able�to explore new
approaches to the Arab-Israeli problem. Even if
they were, they do not command Nasir's author-
ity in Egypt or in the Arab world and would have
trouble making any agreement stic:k
� � �
Thursday morning, army units and truck-
loads of fedayeen began moving out of Amman,
bringing to a close the latest round in the con-
tinuing Bedouin-Palestinian hostilities. Egyptian
President Nasir was the principal architect of the
present settlement, which was agreed to last
weekend in Cairo by King Husayn and Yasir
Arafat, Despite Nasir's sudden death, the frag le
armistice still managed to pass beyond the init'al
stages of implementation under the close super-
vision of military observers from the major Arab
states.
As in past settlements, both sides can claim
victory. The fedayeen were never dislodged from
large sections of Amman and still hold parts of
northern Jordan. The army has had the satisfac-
tion of a showdown with the despised irregulars
and, if its performance in Amman was less than
decisive, it covered itself with glory by repulsing
(b)(3)
the Syrian invasion. Even if the terms of the
settlement are fully carried out, however, further
army-fedayeen clashes seem inevitable. Senior
army leaders are likely to be grudging in their
acceptance, and casual contacts between Bedouin
soldiers and commandos could again erupt into
shooting. Much still depends on the attitude and
leadership of Yasir Arafat, and on the King's
desire and ability to keep the army in check.
The agreement signed in Cairo and endorsed
by Arab chiefs of state on 27 September differed
little from previous government-fedayeen com-
pacts, but it did provide for enforcement by the
other Arab states and this has been the key to its
successful implementation so far. If necessary,
both sides can justify their acceptance despite
previously adamant rejections by terming it an
imposed settlement.
-SreR-E-T-
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The process of cleaning up the capital has
begun, but at least ten days will be required to
restore a modicum of water and power supplies.
Food stocks are beginning to pour in, but the
volume so far is inadequate fully to meet the
need. Earlier casualty estimates have been scaled
down, and it is now believed that the number of
dead in Amman will probably not exceed 1,000.
Emergency hospitals, including two flown in by
the US, are operating around the clock.
Fedayeen units in the north appear to have
spent the early days of the cease-fire con-
solidating and extending their hold on lrbid,
Ramtha, and other cities and towns. As a result of
fighting that continued sporadically as late as 30
September, the army may have succeeded in cut-
ting the road between Ramtha and the Syrian
border. By noon Thursday, however, press
sources indicated that guerrillas and army officers
had signed an agreement to restore peace to the
north and that army tanks had pulled away from
the Ramtha road.
The proximate cause of the latest conflict,
the seizure of foreign hostages by the PFLP, was
finally resolved when the last six airline passen-
gers were released on 29 September. None had
been harmed, and most remarked favorably on
the treatment they had received. The next day,
the seven guerrillas held in Switzerland, West Ger-
many, and the UK were released and flown to
Cairo.
Israel Sees Balm in Gilead
Israeli officials have issued a whole series of
warnings to Jordan and the fedayeen, threatening
a strong Israeli military response if the guerrillas
concentrate in northern Jordan and begin to
harass Israeli settlements in the Beit Shean valley
across the border. The warnings and threats sug-
gest that, given a justifiable opportunity, Israel
may be thinking of moving across the Jordan
River to clean out and perhaps to hold the Gilead
Heights. In this regard, General Bar-Lev, the Is-
raeli chief of staff, warned of military actions
"different in scope and character" than previous
strikes against the fedayeen. Moreover, Deputy
Prime Minister Allon noted that Israel has the
means "to ensure that the Jordan valley and the
Beit Shean settlements will not again be easy
targets for the Jordanian Army and terrorist or-
ganizations." The Israelis have nevertheless scaled
down their build-up opposite north Jordan, al-
though there has been no evidence that the re-
serve units mobilized during the crisis have been
released.
PFLP to go Underground
The PFLP, which was responsible in large
measure for bringing on the recent disorders, has
decided to become an underground terrorist or-
ganization targeted against "reactionary" Arab
states as well as Western interests. The extremist
fedayeen group is convinced that the Palestine
Liberation Organization and certain "reactionary
countries"�Lebanon, Saudi Arabia, Jordan, and
the Persian Gulf states�are "maneuvering"
against it. The PFLP believes that as a result of its
activities over the past three years, the organiza-
tion has established the sort of reputation it needs
to make converts to its cause. Eventually, it hopes
to lead an uprising of the Arab masses, a goal of
its parent organization, the now-defunct Arab Na-
tionalist Movement (ANM). The ANM had
branches throughout the Arab world prior to the
June 1967 war, and the PFLP may be hopin to
reactivate this old apparatus.
� � �
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Chad: Insurgency Respite
President Tombalbaye's government, with
French help, has won a battlefield respite in its
five-year struggle against Muslim insurgents. Con-
comitant administrative measures, however, have
not yielded the improvements and socioeconomic
services necessary to eliminate the underlying
causes of discontent.
The insurgency sterns from the Muslims' his-
toric ethnic conflict with the non-Muslim south-
erners who now rule the country, but it has been
enflamed by poor local administration and unjust
taxation. At the request of the weary Torn-
balbaye regime, France intervened a year and a
half ago on the condition that sweeping reforms
be undertaken.
At the moment, the military situation ap-
pears well in hand. There has been no serious
dissident activity since last April, and the rainy
season now ending has not seen the usual re-
surgence of widespread raids in central-eastern
Chad. Instead, several important insurgent leaders
from the central area have initiated an informal
cease-fire preparatory to engaging in peace talks
early this month. The rebels in this region seem-
ingly are in greater disarray than those in the east
and north, where sporadic incidents are more
common.
Tombalbaye has helped contain the insur-
gency by developing closer ties with his Arab
neighbors. The insurgents have not received aid
from Sudan or Libya, and their self-styled leader
in exile has been barred from both countries.
Also, Khartoum has promised a greater effort to
interdict rebels seeking sanctuary.
French combat troops are being gradually
pulled out, with mid-1971 as the completion
date. An expanded advisory element will remain
for several years to assist in administrative reform
and to complete the retraining of the Chadian
military. Chad's French-led forces, aided by the
permanent French intervention force at Fort
Lamy, supposedly will be ready to assume the
defense burden by next year.
Unless Chad fohows up its military gains
with administrative remedies and a political settle-
ment, however, dissidence will probably continue
Areas of Muslim Dissidence
Northern (Toubou)
Central-Eastern (National Liberation
Front of Chad FROLINA and Chad
iberation Front FL n
S5131 43 10-10 CIA
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and could again reach dangerous proportions,
given the military's uncertain capabilities. More-
over, eastern and northern insurgent leaders are
not party to the scheduled peace talks, which
may yet founder because of government intran-
sigence or prove to be only a rebel delaying tactic
to allow them to regroup. Although Paris sees no
alternative to Tombalbaye, it probably is not pre-
pared to shore him up indefinitely for intangible
results. (b)(3)
� � �
Congo (Kinshasa): Bad News for Brussels
Two years of relatively good relations be-
tween the Congo and Belgium recently came to
an end when Kinshasa announced several eco-
nomic changes that disturbed Brussels, and the
Congolese press assumed an anti-Belgian tone.
Belgian officials have voiced their concern to the
US.
Kinshasa made two announcements affecting
Belgian corporations operating in the Congo in
mid-September. One was a decision to award two
mining concessions in Katanga to an American-led
consortium rather than to a Belgian-led one in-
cluding Union Miniere, the company that oper-
ated the Katanga copper mines until late 1966.
Various political and economic considerations
entered into the decision, but, in the final analy-
sis, Mobutu apparently decided that he did not
want Union Miniere to return to the Congo, even
on a small scale.
Secondly, a decision was made to place all
subsidiaries of Cominiere�a large Belgian com-
pany that operates most of the Congo's public
utilities�under the Ministry of National Econ-
omy. Officials in Cominiere are currently engaged
in internal legal wranglings, and the Minister of
National Economy claims the action was taken to
prevent a deterioration of Cominiere's services
while the legal maneuvering is going on.
Although these two decisions were not re-
lated, the Congolese Council of Ministers released
a communiqu6 that linked them. The communi-
que was then reprinted by the local press with
anti-Belgian overtones, a line it probably would
not have taken without direction from or at least
�the tacit approval of the President. Morever,
Mobutu himself added fuel to the fire by making
several anti-Belgian comments in his own
speeches.
Officials in Brussels�already nervous over
Mobutu's recent demotion of National Bank Gov-
ernor Ndele, whom they believed to be the only
Congolese with good financial judgment willing to
speak up to Mobutu�reacted to these develop-
ments with concern. Belgians in the Congo, how-
ever, have remained calm, assuming that this, like
similar incidents, will soon pass.
It is unclear why Mobutu has taken this
tactic when he is so eager to attract foreign invest-
ment into the Congo. Part of it is a lingering
distrust of Union Miniere and Mobutu's personal
ire over the attempts of one Belgian company to
gain control of Cominiere. Of equal importance,
however, may be the national elections to be held
later this month and in November; Mobutu is well
aware that standing up to the Belgians is always
good politics.
� � �
(b)(3)
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WESTERN HEMISPHERE
Dominican Opposition Crumbles
Since his re-election last May, President
Balaguer's political tactics have all but eliminated
any effective opposition, and his opponents now
seem resigned to another four years of his pater-
nalistic rule. The Communist left, which dis-
rupted the election campaign with numerous kill-
ings, is now on the defensive as a result of a
persistent counterterrorism campaign by security
forces_ Former president Juan Bosch's leftist
Dominican Revolutionary Party (PRD), virtually
the only organized, large-scale opposition group,
will probably be the object of increased harass-
ment.
I he only two parties to attract a sizable
share of the vote against Balaguer are in serious
straits. The activities of the Anti- Re-election
Democratic Integration Movement (MIDA) have
practically ground to a halt, and party leaders
retlect the group's despair by focusing not on the
objective of building an effective opposition but
on the hope that Balaguer will step down in 197L.
MIDA, a breakaway faction from the President's
Reformist Party, may find its ranks further
thinned over the next several months as repentant
Reformistas return to the fold. Former general
Wessin's rightist party is faced with even more
serious problems. Military supporters have des-
erted him for a chance to return to the active
duty posts proffered by the administration, and a
significant civilian segment of the party,
has
bolted the organization and accepted government
positions.
I he President has dealt with the left in less
subtle fashion. The security forces' campaign has
been blatant, brutal, and effective. Several rank-
ing figures of the Dominican Popular Movement
(MPD), the most active Communist faction, have
been killed or jailed recently. This week, a party
youth leader was arrested and murdered by
police. The MPD, which was responsible for the
kidnaping of the US air attache in March, may
attempt some spectacular retaliatory act.
Most of its
energies have been spent in a futile battle with
Bosch for leadership of the left. Balaguer's strat-
egy has been to set factions of both the right and
left to warring, and his opponents' naivete has
r:ontributed to the success of his efforts_
Meanwhile, former president Bosch has con-
tinued the surprising, generally moderate policies
he adopted on his return to the country early this
year. Military leaders, who consider Bosch a Com-
munist and the greatest threat to Balaguer's care-
fully nurtured stability, are nonetheless con-
cerned. They fear that he is playing a waiting
game, building a more moderate party image and
hoping to enter the elections in 1974 rather than
abstain as in this year's contest.
Bosch is currently purging radicals from the
party and has outlined plans for rebuilding labor
support and for organizing peasant leagues. New
initiatives in these sensitive areas�the rural
population is the mainstay of Balaguer's electoral
support, and leftist-tending unions have been
tightly controlled�would probably elicit a strong
government response. With other opposition
camps in disarray, the armed forces will probably
turn increasing attention to PRD activities. The
military has already been using a fictitious right-
wing front to harass the party.
� � �
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Terrorism on the Upswing in Guatemala
The almost daily terrorist incidents in
Guatemala over the past two weeks seem designed
to provoke a repressive response from the govern-
ment that in turn might force the more cautious
revolutionary" elements to join a campaign of
armed violence.
The two-month lull in terrorist activity
ended in mid-September with dozens of bomb-
ings, assassinations of police officers and others,
kidnapings, and scattered acts of sabotage. Disap-
pearances of university students have led to pro-
tests and accusations of government repression.
Minister of Government Arenales has claimed
publicly that the terrorism represents a "master
plan" to force the gov nt to "de art from
the margin of the law."
the urban contingent of the e e
Armed Forces (FAR) is planning gradually to
accelerate terrorism to a point where the govern-
ment will react in a heavy-handed manner, thus
alienating the public.
The resumption of terrorism comes in the
wake of a confrontation between FAR com-
mander "Manzana" and dissidents embittered by
inactivity, but it is unclear whether the new
round of violence is the work solely of FAR
splinter groups or whether it is the work of sev-
eral groups.
The Communist Party (PGT), which believes
it has growing assets in the quasi-legal sphere and
therefore opposes the use of armed violence as
the major revolutionary strategy, is seriously dis-
turbed over the recent increase in terrorism and
alleged Cuban influence in the FAR. Because the
PGT is more exposed than the FAR, its members
are more vulnerable to a government crackdown.
PGT leaders reportedly believe that the FAR
wants to provoke the government into retaliating
against the PGT because the party has refused to
cooperate with the terrorists in several recent
operations. More than likely, however, FAR
activists want to prod the PGT into adopting an
active policy of violence.
The Arana government meanwhile is pur-
suing its crash program to upgrade the security
forces, and it plans to activate soon a harder line
against the insurgents. A new emergency law is
now in draft and Congress is being asked to ap-
propriate $500,000 for an anti-insurgency and
pacification program. The mobile military police
reportedly will be replaced by a larger national
guard to police the rural areas, and several of the
now-independent and often rival police forces will
probably be combined. The armed forces have
been redeployed, new paratroop companies have
been added, and the increased army presence in
some rural areas has already slowed banditry and
guerrilla violence.
The lack of visible security success in
Guatemala City, nevertheless, is raising questions
as to why Arana is not implementing his promised
imposition of law and order. The government
evidently remains determined to act against ter-
rorism primarily through legal methods, but
Minister of Government Arenales believes that in
the face of the current security problem, the
government soon must react severely if it is not to
be confronted with the disaffection of right-wing
civilians and some military supporters. The
government is also concerned that the FAR will
attempt a "spectacular" assassination, which
would increa re on the
government.
� � �
(b)(3)
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(b)(3)
(b)(1)
Peru: Discontent Growing in the Military
Military disillusionment with the Velasc:o
government has reached a higher point than at
any time since the overthrow of President
Belaunde two years ago. Opposition to such radi-
cal policies as the industrial reform law is partially
responsible, but perhaps more important is the
growing estrangement of officers who participate
directly in the government from their nonpolitical
colleagues in strictly military positions.
The most recent outward sign of dissatisfac-
tion with the government's policies was the resig-
nation of Labor Minister General Chamot.
Chamot has been instrumental in blocking official
recognition of the Communist labor confedera-
tion despite pressure from some members of the
government. His dismissal and the reorganization
of the Labor Ministry have been among the list of
demands in most Communist-led strikes of recent
months.
It was announced that Chamot resigned for
personal reasons, but a strike of Communist-led
workers that has paralyzed the mining industry
may have increased the pressure on him. The
Communist labor confederation was asked earlier
by the Minister of Interior (who will temporarily
fill the labor post) to play a leading role in the
celebration of the Velasco government's second
anniversary on 3 October. A 15-day suspension of
the miners' strike was announced shortly after
Chamot's resignation, indicating that he was
forced out at this time to avoid any problems for
the government on 3 October. Chamot's perma-
nent replacement will be the present air attache
to Paris, General Pedro Sala Orosco, whose po-
litical attitudes are unknown.
In order to fill some of the strategic posi-
tions expected to open up as a result of the
personnel changes, President Velasco was forced
to resort to issuing a special decree promoting
officers he trusts. General Montagne, the minister
of war who has opposed many of the govern-
ment's radical measures, previously had been suc-
cessful in keeping Velasco's favorites off the pro-
motion list. Most had not met the necessary
requirements, and the President's action in over-
riding the list has angered many top military
officers.
General Jose Benavides, who is highly popu-
lar within the army and is a leading spokesman
for the moderates, retired from active duty when
he was passed over for promotion. Bitter over his
treatment and disillusioned with Velasco's poli-
cies, Benavides could become the rallying point
for other officers hoping to force changes in the
government.
� � 0
(b)(3)
(b)(1)
(b)(1)
(b)(3;
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Ovando of Bolivia Completes First Year
President Ovando celebrated his first an-
niversary in Bolivia's top office on 26 September,
but had to overcome another political crisis in
order to do so. Ovando has had to resort to crafty
maneuvering and compromise to stay in office
this long, and the very eve of his first anniversary
was no exception.
On 25 September there were widespread
rumors that Ovando was either going to resign or
be forced out of office. That something was afoot
was suggested by meetings of top military officers
on 23 September followed by a communique
issued by a group of retired generals on the 24th
cal ling for Ovando's removal and for new
elections.
Apparently, no time frame was set for the
cabinet changes, but removal of the ministers
would represent a further curbing of Ovando's
power by the military. It is possible, however,
that Ovando will continue to procrastinate�as he
has in the past�or balance the removal of the
leftists by dismissing a military minister such as
Interior Minister Ayoroa.
By making these promises, Ovando has
weathered yet another serious political crisis. All
of the participants in the Ovando-military struggle
are still present, however, and there is nothing to
suggest that any basic differences have been re-
solved. Thus, the conflict that has characterized
Ovando's first year is assured for the second.
� � �
CUBA: By avoiding major issues in his speech on
28 September, Fidel Castro did little to dispel the
uncertainty that has characterized his leadership
since the end of the sugar harvest. During his
address marking the tenth anniversary of Cuba's
neighborhood vigilance committees (CDRs),
Castro repeated his theme of 26 July that the
political development of the national youth,
women, farmers, and labor organizations has been
neglected, and promised that these groups would
receive the attention they merited. He assumed
full responsibility for the neglect, and, in an im-
plicit criticism of his own decision to concentrate
on harvesting a record-breaking ten million tons
of sugar in 1970, attributed his error to "a certain
idealism." He again referred to a vague process by
which the people, especially through the mass
organizations, would exert greater control over
production of goods and services, but he again
failed to describe specifically how this control
would be achieved. He made it clear, however,
that repressive measures are being developed for
use against workers guilty of "vagrancy, parasit-
ism, and absenteeism."
� � �
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Ch i le: Allende Sees Clear Road to the Presidency
Marxist Salvador Allende's growing confi-
dence that nothing stands between him and the
presidency was demonstrated clearly this week.
He refused to accept the specific list of
-democratic guarantees" presented him by the
country's largest party, the Christian Democrats
(PDC), saying his long ''democratic vocation" is
proof enough that guarantees are not needed. He
added that the Chilean people are the real guaran-
tee of their democracy, and rejected outright the
PDC request for assurance that as president he
would not interfere with the armed forces. Al-
lende claimed that his respect for their profes-
sional role could not be questioned and that he
would not relinquish even to his own coalit on
the presidential prerogative of designating the
high command of the military.
Allende's adamancy is predicated on his cer-
tainty that a bloc of the PDC represented by 25
legislators will vote for him on 24 October with-
out conditions. This will ensure confirmation of
his slim electoral victory on 4 September. This
bloc is led by defeated presidential candidate
Radorniro Tomic,
Divisions between leftists and moderates have
wracked the PDC for years. One leftist faction
bolted in 1969 and is now part of the Allende
coalition. Tomic's group is sure to bring the mat-
ter to a head at the PDC national congress this
weekend, shattering President Frei's recent efforts
to unify the party.
Ihe formerly close relationship between the
PDC and the Roman Catholic Church in Chile has
weakened considerably. Important elements of
the left wing of the church have come out
strongly for Allende, and on 24 September the
Chilean Episcopate made a formal statement that
in effect counsels "Christian acquiescence" to Al-
lende's plurality in the popular election. Father
Roger Vekemans, a leading international church-
man who has lived in Chile and has played an
active role in social reforms there for some years
sees little hope of stopping Allende short of inter-
vention by the Chilean military, which he con-
siders highly problematical. The prospect of an
Allende government has led Father Vekemans and
his West German backers to transfer his social
development organization (DESAL) to Caracas.
Meanwhile, Allende's Popular Unity (UP)
activists are following up their successful efforts
to extend their control over most of the media
and universities by taking quiet but effective con-
trol of union and professional organizations in
virtually every significant enterprise and activity.
They will then be in a position to influence labor
negotiations and to facilitate Allende's reported
plan to halt the exodus of managerial and tech-
nical personnel as soon as he takes office.
With in the UP, the Communist Party
(PCCH) has set up a 50-man commission of spe-
cialists to plan the execution of the coalition's
program according to PCCH priorities. The com-
mission is working on the problem of how to
implement the 40 popular "bread and butter"
measures Allende promised to take as soon as
possible, as well as on how fast and how extensive
the nationalization of Chilean industries should
be. PCCH studies are also being made on attract-
ing foreign investment and on expanding trade
with Communist countries while also maintaining
Western European and US trade options.
!Their optimism that Western European
countries will continue to do business as usual
under an Allende government is well-founded.
French automotive firms have announced that
they will continue with a $2.2-million minority
investment in a new assembly plant in Chile, and
British banking interests are planning to sign a
$10-million long-term loan to finance imports by
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the government development agency. The pro-
Allende media are hailing these developments as
proof that warnings of economic chaos are un-
founded.
Recent terrorist incidents attributed by left-
ists and rightists to each other are adding to the
nervousness among Chileans uncertain as to what
will happen next. The Communist leaders fear
that Allende may be assassinated. They believe
that his death would trigger widespread violence
that would strengthen leftist extremists who con-
sider armed struggle the only road to power and
who reject the Communist thesis that "via pacif-
ica" is effective in Chile. Communist concern is
reflected in press accusations that the US and its
representatives are plotting with Chilean rightists
against Allende.I
� � �
ECUADOR: The makeup of Ecuador's military
hierarchy was radically changed last week when
more than a dozen conservative colonels and the
chief of the armed forces general staff were sum-
marily retired. This move by the ambitious minis-
ter of defense, Jorge Acosta Velasco, who has
recently been acting as though he were in charge
of the entire government, was probably motivated
by his desire to build his support among those
"reform-minded" lieutenant colonels in command
positions. As Acosta and the military continue to
tighten their grip on many facets of internal gov-
Jamaica: Labor Troubles
Prime Minister Shearer's important labor
support has been threatened by a power struggle
between the two major unions. A strike over pay
and worker dismissals that began on 16 August at
the Alcoa plant construction project erupted into
violence on 24 September. The walkout has
grown into a jurisdictional fight between the
country's two major labor unions�the Busta-
mante Industrial Trade Union (BITU), which is
the labor arm of the prime minister's Jamaican
Labor Party (JLP), and the National Workers
Union (NWU), which is controlled by the opposi-
tion People's National Party. For its part, Alcoa
has informed the government that because of
continuing labor disturbances and rising costs it
has been forced into making a "complete reap-
praisal" of its Jamaican activities. This will fur-
ernment operations, opposition elements have
seriously begun to criticize the regime. The mayor
of Guayaquil and the Prefect of Guayas Province,
both of whom are important political leaders,
were removed from office and arrested on 27
September for their criticism of the government.
President Velasco has asked former minister of
government Gab o Martinez Merchan to resolve the
crisis in Guayaquil, an indication that Martinez is
gradually returning to power.
ther complicate the government's chances of find-
ing a solution to the problem.
The government is fighting hard to prevent a
vote to determine which union will represent the
workers. The Alcoa site is in Prime Minister
Shearer's parliamentary constituency, and a de-
feat of the BITU, which seems likely in an honest
vote, would be a heavy blow to the JLP. The
government has marshaled goon squads to intimi-
date workers and has been successful in having
the poll postponed. According to a JLP spokes-
man, the issue could be an important factor in the
general elections, which must be called by early
1972. The two political parties are very evenly
matched nationwide, and both draw their support
primarily from labor.
� � �
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-Secret_
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
The Fate of China's Youth
btfCL
NE' 42
2 October 1970
No. 0390/70A
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SPECIAL REPORTS are supplements to the Current Intelli-
gence Weeklies issued by the Office of Current Intelligence.
The Special Reports are published separately to permit more
comprehensive treatment of a subject. They are prepared by
the Office of Current Intelligence, the Office of Economic Re-
search, the Office of Strategic Research, and the Directorate of
Science and Technology, Special Reports are coordinated as
appropriate among the Directorates of CIA but, except for the
dormal substantive exchange with other agencies at the working
level, have not been coordinated outside CIA unless specifically
iI) dicated,
WARNINC;
"I he SPECIAL REPORT contains ;:lassified information affect-
in the national defense of the United States, within the mean-
tog of litle :8, sections 793 and 794. of the US Code, as
amended. Its transmission or revelation of its contents to or re-
eipt by an unauthorized person is nrohibited by law,
GROUP I
chided t4ant nuannotic
downgrodina and
4ndasafiendon
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THE FATE OF CHINA'S YOUTH
Four years ago the youth of Communist China were caught up in a maelstrom of rebellion aimed
at turning an entrenched governing bureaucracy on its head and remolding the nation's society and
people. Under the banner of the Red Guard movement, youthful activists emerged as the spearhead of
Mao Tse-tung's Great Proletarian Cultural Revolution and made a frontal attack on the educational
system, harried much of the highest leadership, and spread political chaos throughout the land. Their
activities captured the imagination of the Western press and of many "new left" student leaders outside
China, who saw similarities between their movements and that of China's young militants.
The Red Guard movement, however, was only superficially a spontaneous outpouring of youthful
discontent and unrest against the "establishment." In actual fact, the Red Guards were largely pawns in
a great domestic political struggle over
power and policy that was initiated not by
the students but by the regime. The artifi-
cial and carefully structured growth of the
Red Guard movement is no better illus-
trated than in its rather abrupt and conclu-
sive official demise in the summer of 1968.
The end of the usefulness of student acti-
vists as political instruments having been
unmistakably demonstrated to the regime,
it eventually rusticated hundreds of thou-
sands of them for political "re-education"
and reform through labor.
Because of the harsh repression they
have suffered since 1968, China's students
today are probably more cynical, apathetic,
and disheartened than at any time since the
Communists took power in 1949. Even though they did not rebel against the system entirely on their
own initiative, China's students did have outstanding grievances and many of them willingly lent
themselves to the Red Guard movement in the belief that it would rectify such ills as an inadequate
educational system, shortage of job opportunities, and limited career mobility. All of these grievances
are currently being dealt with by the regime but in accordance with the conflicting imperatives of
Maoist ideology and current political realities rather than in response to specific student demands. Thus,
despite the fact that the regime continues to pay lip service to China's youth as Mao Tse-tung's
"revolutionary successors," their influence on policy is nil and their succession is a long way off. In the
meantime, barring another revolution from above, China's youth are likely to continue to express their
discontent and dissatisfaction through the time-honored practice of passive resistance and foot-dragging
rather than through direct assault on the establishment itself.
Special Report
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The Monkey Kings
"Revolutionaries are Monkey Kings, their golden
rods are terrible, their supernatural powers far-
reaching and their magic omnipotent, for they
possess Mao Tse-tung's great invincible thought.
We wield our golden rods, display our superna-
tural powers, and use our magic to turn the old
world upside down, smash it to pieces, pulverize
it, and create chaos�the greater confusion the
better. We are bent on creating a tremendous
proletarian uproar, and hewing out a proletarian
new world!"
Red Guard Poster, 24 June 1966
Many "new left" student leaders in the West
have noted similarities between their "move-
ments" and those of the Red Guards who were
the spearhead of China's Great Proletarian Cul-
tural Revolution in 1966-68. Some parallels
superficially are quite striking. The Red Guards
appeared to be attacking the increasingly irrele-
vant and worn-out remnants of a used-up cultural
tradition. They were fanatic and not open to
appeals for compromise and reasoned adjustment.
Their attack on the self-satisfied Communist
bureaucracy that had grown up since 1949 ap-
peared to reflect a deep-seated hatred of the twin
Special Report
evils of hypocrisy and inertia. Above all, the Red
Guards believed that they were about to inherit
the earth. And initially many militant Red Guard
groups directed their ire specifically at the admin-
istrative apparatus of an educational system that
did not seem capable of preparing them for the
future that propaganda had assured them was to
be theirs.
The Red Guard phenomenon, however, did
not arise out of unfulfilled youthful expectations
but out of internecine quarreling within the hier-
archy. It was brought into existence and pro-
tected by the highest levels of a Chinese regime
that had closed schools in the summer of 1966
precisely so that the students could "make revolu-
tion." The major targets of Red Guard attacks�
entrenched party, government, and academic of-
ficials who were charged with resisting Mao's lead-
ership�were chosen by the regime. The radical
Red Guard leaders were in close communication
with extremist colleagues of Mao in Peking and
took their orders directly from them. In addition,
as the Red Guard movement spread throughout
China it was backed up by an elaborate logistics
network supported by the state. The more im-
portant radical Red Guard groups also communi-
cated with one another and with Peking over the
state-run telegraph net. These activities could not
have occurred without backing from the central
authorities, and in this sense the Red Guard
movement was an artificial�and in many ways
highly structured�movement quite different from
the student protests in the West and in some
other Asian states.
The Revolutionary Tradition
To say that the Red Guard movement was
wholly inspired and manipulated by the regime is
not to deny Mao's genuine concern with culti-
vating "revolutionary successors" or to imply that
political activism is alien to China's youth. In-
deed, the modern Chinese revolution largely
began with the famous student-inspired "May
4th" movement of 1919 that followed the over-
throw of the Manchu dynasty. "May 4th"
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represented the reaction of Chinese youth against
traditional culture and custom that had failed to
adapt China to the modern world as symbolized,
at that time, by the shabby treatment China re-
ceived at the peace conference in Paris. It was no
accident that the most influential journal of that
period was called New Youth or that its editor,
Ch'en Tu-hsiu, was one of the co-founders of the
Chinese Communist Party.
The cultural system that came under attack
in 1919 had always accorded a special place to
the scholar. The imperial mandarinate was an
administrative system peopled by a scholar-elite.
The way to advancement was through study and
examination, and the rewards frequently were
great. Beyond material advantage, the educated
man traditionally was accorded a position of
honor in society. The pace of success, however,
was very slow. Rewards and honor went to the
old and aging while the young remained sub-
ordinate. Scholarship was devoted to quasi-
Confucian ends bearing little relationship to the
needs of the modern world.
The "May 4th" movement turned all this
upside down: the youthful students who were the
spearhead of the movement were exalted over
their hidebound and repressive elders, and tradi-
tional concerns and attitudes were denounced in
favor of the liberating influence of modern tech-
niques and Western intellectual currents. "May
4th" was the fountainhead of both the Commu-
nist movement and the Chinese nationalist move-
ment in its modern form, as well as the source
point for most Chinese intellectual trends of this
century.
The implications of this movement, how-
ever, really were not clear-cut, as they once
seemed. Elderly scholars were denounced and
derided�but by younger scholars. Modern West-
ern intellectual fashions, including Marxism,
flowed into China�but the Maoist version of
Marxism, which in time became the new ortho-
doxy, contained a heavy infusion of notions de-
rived from a romantic view of the traditional,
Special Report
peasant-based uprisings that had punctuated Chi-
nese history. Above all, although Confucianism as
an administrative and philosophic system was dis-
carded, the ethical and cultural assumptions on
which it rested in large degree survived. The spe-
cific gravity of a culture that had remained vir-
tually intact for some three thousand years
proved very high, and the consequences of this
fact still are working themselves out.
One immediate result of the "May 4th"
movement was to fuse the connection between
students and politics. Youthful activists not only
played a major part in mobilizing public opinion
against "imperialism" in the early 1920s but were
also prominent in the growth of the nationalist
movement later in the decade. Student disen-
chantment with Chiang Kai-shek's Kuomintang
was an important factor in the long duel between
the Communists and the Chinese Nationalists.
The idealistic fervor of these children's crusades
continued to be important in the fluid politics of
the 1920s, 30s, and 40s. It was much less so,
however, after the Communist take-over in 1949.
The Legacy of Discontent
In its initial years, the stock of the new
order among most of the politically conscious
young people was extremely high. The achieve-
ments of Mao Tse-tung and his colleagues since
the mid-1930s had indeed been remarkable. They
had gone from one victory to another�they had
unified China, fought the US to a draw in Korea,
halted a runaway inflation, and put China on the
road to economic development and modern iza-
ton. These accomplishments gave the regime a
mantle of invincibility, and young people were
willing to accept its dictates at face value. Their
optimism was also buoyed by the romantic incen-
tive of serving social and political idealism that
promised them participation in political action
aimed at overcoming past weaknesses, such as an
oppressive traditional social order, a fragmented
political system, and an ineffective government.
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701
As the years wore on, Chinese youth were
presented with a series of disillusioning facts and
unpalatable choices, and many lost their revolu-
tionary elan. The students diminished as a politi-
cal force and discovered that the Communists
were as unsatisfactory from an idealistic point of
view as the nationalists had been. By the eve of
the Cultural Revolution, student discontent had
built up to the point where many were eager to
respond to the Maoists' cry that "there can be no
construction without prior destruction."
China's educational facilities, for example,
had expanded greatly since the Communist take-
over in 1949, but they had not kept pace with a
burgeoning population approaching over 800 mil-
lion people�almost half of them under twenty-
one. Competition for places in universities and
colleges was keen, and even those who did man-
age to acquire education frequently found that
they were still stymied. Meaningful jobs commen-
surate with educational level and skills were often
not available, and any openings frequently in-
volved transfer from the comparative comfort of
the great cities of east and central China to re-
mote and backward outposts. Moreover, the lead-
ership that had taken power at the end of the civil
war had not relinquished its stranglehold on mid-
dle and upper echelon jobs. As the queue for
these grew longer, the waiting period grew more
frustrating.
The problem of limited career mobility was
made all the more acute because the regime very
early on had deliberately fostered rising expecta-
tions by painting a glowing picture of a modern
and powerful China to be built by the younger
generation. University students naturally assumed
that they were going to take their places as lead-
ers and builders of the new society. Because the
professional and technical specialists needed for
modernization were in short supply, not all stu-
dents found their hopes dashed. But the absurdi-
ties of Mao's Great Leap Forward in 1958-1959
and the consequent social and economic retrench-
ment in the early 1960s led to a decline in educa-
tional opportunities across the board; as a result,
Special Report
job opportunities were even further curtailed. The
collapse of the leap forward forced the regime to
renege on many of its golden promises and in-
stead, to offer to much of the youth only long
years of dour and unrewarding struggle. For many
urban students, this meant banishment to the
villages to provide mere manual labor in support
of the post-leap efforts to step up agricultural
development. To steel themselves for further sac-
rifices, the youth were told to emulate the very
ordinary achievements of a model army hero, Lei
Feng, who wrote:
"Some people call me an idiot. I want to
do good deeds for the state and people. If
they say I am an idiot, then I am willing
to be one. The revolution needs voluntary
idiots like me."
Meanwhile, for those who remained in
school, tensions also were high. This was partially
a direct result of regime goals that in practice
conflicted rather than complemented an attempt
to modernize the country on the one hand and an
attempt ideologically to remold Chinese society
on the other. Mao had shown an awareness of
these tensions, but his attempts to solve the prob-
lem before the Cultural Revolution exacerbated
rather than relieved the situation.
In China, as elsewhere, education is the key
to advancement�however long deferred. Many of
those who were best qualified intellectually for
higher education were interested merely in mate-
rial rewards and perquisites that a modernizing
society must pay to the relatively small group
that has attained technical proficiency. "Career-
ism," cynical or otherwise, became increasingly
prevalent as the first flush of revolutionary enthu-
siasm wore off. At the same time, however, the
regime was strongly emphasizing that China's
youth would soon inherit both the country and
the Chinese Communist revolutionary tradition.
Mao in particular was concerned lest tradition be
diluted by an indifferent youth bent on pursuit of
their careers. He insisted that peasant and work-
ing-class background be the prime consideration
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in awarding places at institutions of higher learn-
ing.
Red Guard diatribes, even when discounted
for polemical exaggeration, make it clear, how-
ever, that purely academic qualifications con-
tinued to play a part in the selection process after
Mao's abortive attempt to lower educational
standards during the Great Leap period. Stiff en-
trance requirements and difficult exams were re-
instituted, allegedly against Mao's will, in an ef-
fort to raise the caliber of the students who were
to become the technically qualified elite of the
future. Thus, peasant and poor worker youths,
told that they were China's "revolutionary succes-
sors" and uniquely fitted for this role by virtue of
their backgrounds, found that the "class enemy"
still was accorded preferment in the educational
system. The hatred thus engendered boiled over
in the early phases of the Cultural Revolution,
when opposing student Red Guard groups broke
down along class lines�particularly at the more
prestigious universities where bourgeois students
were numerous.
Red Guard Goals
The various frustrations, currents, and coun-
tercurrents faced by the youth before the Cul-
tural Revolution were an explosive mixture, but it
took a deliberate act on the part of the regime to
ignite the fuse. Moreover, the Red Guard move-
ment was never a unitary whole, and as the re-
gime's revolution against itself ebbed and flowed,
various Red Guard groups were employed as op-
posing political instruments both by the Maoists
in Peking and by the civilian and army officials
who were under attack. Insofar as Red groups of
any persuasion could be said to have had a posi-
tive program, it was to acquire power by replacing
disgraced former officials who had come to be
regarded as symbols of the frustrating status quo.
This ambition probably was confined to the lead-
ers of the various Red Guard groups, but at all
levels there was the hope that the log jam block-
ing the way to relatively rapid advancement could
be broken. In retrospect, however, there was
Special Report
never much likelihood that Red Guards would
secure an appreciable number of important posi-
tions.
Implicit in Red Guard attacks on "power
holders" was the larger, less well-defined aim of
purifying the system. Starting from the Maoist
premise of the corrupting influence of "revision-
ism," the Red Guards tended to attribute their
frustrations to the ideological mistakes of the
"power holders." Nevertheless, the evils that they
attacked�bureaucracy, routinization, specializa-
tion, and pragmatic devotion to efficiency at the
expense of ideology�were all inevitable manifes-
tations of the modernization process. The Red
Guards' demand for purity was thus in effect a
call for a primitive, utopian Communism�a call
that echoed Mao Tse-tung's demand for a new
generation of true believers who would dedicate
themselves even more fervently to the Chinese
Communist revolutionary tradition.
Because these romantic and idealistic strands
in the Red Guard program were unrealizable,
cynicism and "careerism," those objects of Red
Guard scorn, tended to grow rather than diminish
among the students. In many instances, the stu-
dents' general hope for advancement degenerated
into a cynical "what's-in-it-for-me" attitude. As
inconclusive battles for power between Red
Guard factions dragged on, more and more indi-
viduals opted out of the struggle entirely and
refused to become committed to any side. Many
became drifters living from hand to mouth, while
others gravitated toward criminal activities.
The Fate of the Red Guards
The success of the Red Guards�and their
mentors in Peking�in destroying the party appa-
ratus during the Cultural Revolution meant that a
power vacuum had to be filled to get the country
running again. By 1968 it was clear that the
vacuum would be filled by the army and that the
fate of the Red Guard movement was sealed. The
Red Guards themselves were incapable of sup-
planting the apparatus they had helped to
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Propagandizing the Ideal
Model for Revolutionary
Young People
Raised on Mao Tse-tung Thought, the twenty-year-old Red Guard Chin Hsun-hua grew to be a firm
proletarian revolutionary.
In 1966, as Chairman Mao lit the flames of the
Great Proletarian Cultural Revolution, Chin Hsun-
hua bravely plunged into the battle to smash the
bourgeois headquarters of the traitor flu Shao-ch'i.
At home, Chin Hs
the frontier region
she was too young,
as a child laborer v
is. You shouldn't
man Mao asks�go,
re-educated by the
ants." Their mother
In 1968, Chairman Mao called on the young people wi
go to the countryside to be re-educated by the poor ax
peasants. As part of a study team, Chin Hsun-hua j
Shanghai to visit Heilungkiang Province on the north(
There he saw vast stretches of land waiting to be op(
became convinced that he should settle down in this box
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an-hua urged his sister to go to
with him. Their mother thought
but he told her, "You worked
then you were younger than she
vony; we're doing what Chair-
mg to the border region to be
poor and lower-middle peas-
agreed.
th education to
id lower-middle
ourneyed from
;astern frontier.
ened up and he
der region.
Chin Hsun-Hua arrived in Heilungkiang in May 1969. He did everything in the
revolutionary spirit of "fearing neither hardship nor death." Building a house, he
got covered with mud from head to foot. Binding wheat, he was soaked with
sweat. When people told him to rest, he answered, "The more I sweat, the less
soft I'll be."
Chin Hsun-hua spread Mao
Tse-tung Thought enthusias-
tically. Whenever a new in-
struction of Chairman Mao
was published, he would cut a
stencil, mimeograph it and
take it around to the peasants.
Once when he arrived at Aunt
Sung's house, the family was
already in bed. But they got
up at once, lit a lamp and sat
down to study it. The poor
and lower-middle peasants'
love for Chairman Mao taught
Chin Hsun-hua a lot.
During a flood on August IS, 1969, several telephone poles on the river bank floated
away. Chin Hsun-hua jumped into the raging waters to save the state's property. He
lost his life in the battle, fulfilling his vow to "fight to the death for Chairman Mao."
"The lowly are most intelligent, while the elite are most ignorant."
Mao Tse-tung
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CONFESSING THE REAL
On 31 March 1970 I arrived
Fuch'eng People's Commune, Y
ch'un, Kwangtung and joined the �
commune members in the fields doing all sorts o farm chores. We w
under great pressure, and the working hours are long. The rice fields �
our production team are enclosed on all sides by water. The place is wet, hum
steamy, hot, and rainy. You scale hills, wade through water, cut fireword, labor in th
open air, and carry loads on a shoulder pole over a long or short distance with sw
Pouring down your back.
ore we came we were told that
tual youth goi to_ the
tile, would issue to eac
bor more than 2
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-CONT115EN-T-4,k1._
destroy, and it seems highly likely that Mao never
intended them to play a major role in adminis-
tering the country. He may well have regretted
having to alienate the Red Guards whom he had
hailed as "revolutionary successors," but once the
regime finally decided that their usefulness as
political instruments was over, it moved swiftly
and cynically to repress them. Without so much
as missing a turn, the enormous propaganda ma-
chinery put the nation on notice in August 1968
that the vanguard of the revolution was no longer
the Red Guards but the more orthodox "worker/
peasant proletariat"
Beginning in the late summer and fall of
1968, most armed Red Guard factions were
broken up and their adherents brutally suppressed
by the army, and the movement itself ceased to
count politically. Although so-called "congresses"
of Red Guards were subsequently established in
major urban centers theoretically to provide
youth a voice in local affairs, such organizations
were controlled and manipulated by the authori-
ties. Moreover, the membership of the congresses
apparently consisted largely of those factionalists
supporting the civil and military leaders who
eventually emerged triumphant in the Cultural
Revolution; for those Red Guards who backed
their opponents a worse fate was in store.
Large numbers of chronic troublemakers and
the rank and file of factions that wound up on
the losing side were shipped off to army-run labor
camps; many of their leaders were tried by drum-
head courts and sentenced to death. Although the
numbers killed were never disclosed, some inkling
of the extent of the executions was revealed in
the summer of 1968 when hundreds of bodies of
militant factionalists from Kwangsi Province were
found floating down the river to Hong Kong,
trussed up like lambs going to slaughter.
Not all former Red Guards suffered so mean
a fate. Some of their representatives have been
introduced into leadership posts in local govern-
ment and party apparatus. Some leaders of the
movement have even been elevated to the party's
Special Report
Central Committee, which was deliberately ex-
panded after the Cultural Revolution to make
room for Mao's "revolutionary successors." It
should be noted, however, that many of these
ex-Red Guards were not students at all but rather
lower echelon "activist" bureaucrats from the
former party and government apparatus. But, de-
spite their rise to higher positions, they are un-
likely ever to be capable of serving as much more
than political tools for more powerful elements in
the establishment.
The initial Draconian measures taken against
the majority of the Red Guards were reinforced
by other programs aimed at curbing disorders and
reducing the opportunities for former factional-
ists to kick up their heels again. The nation's
colleges and universities, which were still oc-
cupied by unemployed students, were taken over
by worker propaganda teams backed by armed
soldiers. This combination moved swiftly to re-
store a semblance of order among a population of
quarrelsome student bodies whose numbers had
not diminished because of the near freeze on
promotions and job assignments from 1966 to
1968.
The most comprehensive measure employed
to solve the problems of restless youth, however,
was forcible emigration to the countryside. By
the fall of 1968, the government had determined
to send 90 percent of the middle school and
university students of the classes of 1966, 1967,
and 1968 (later extended to 1969) to army-run
labor camps, state farms in remote border regions,
rural construction projects, or agricultural com-
munes. This program solved the dilemma in
several ways. It provided order-oriented local of-
ficials with a means for punishing recalcitrant
factionalists and for disposing of the many stu-
dents who had returned to the cities during the
Cultural Revolution. It helped ease pressures on
the limited urban job market by getting rid of a
huge backlog of unemployed students and under-
employed young workers. It also complemented
the regime's renewed efforts to improve rural
development by injecting an educated labor force
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that could help apply modern technology to agri-
cultural production, overcome rural illiteracy,
raise rural health standards, and reduce the dis-
crepancies between the advanced urban centers
and the vast backward peasant communities.
Finally, the program served the long-standing
utopian end of developing Mao's "revolutionary
successors" by teaching them how to work and
identify with the masses they supposedly would
eventually lead. The old promise of revolutionary
succession had a hollow ring, however, because
many of the youthful emigres were told they
would have to spend the rest of their lives in the
countryside. Few youths welcomed the prospect
of once again serving as "volunteer idiots" for a
regime that had used and then discarded them so
hypocritically in the Cultural Revolution.
Life on the Fann
The rustication of China's students was only
one aspect of an over-all program that since
August 1968 has probably sent upwards of 20
million city residents to the countryside. Never-
theless, the impact of the back-to-the-country
movement has been greatest on middle school,
college, and university students, who constitute
perhaps over one half of all those transferred.
From the fragmentary evidence available, the pro-
gram appears to have had a devastatingly negative
impact on the morale of the youths; the process
of adjustment to their new fate is likely to cause
painful headaches for China's overburdened local
administrators for some time to come.
That the youth of China are shocked and
dismayed at the cruel turn of events in the wake
of the Cultural Revolution is not surprising. In
1966 they were told that they could expect to
inherit the earth. In 1970 they find themselves
tilling it instead. Most find the transition difficult
and degrading. Although some students are for-
tunate enough to land back in their home villages,
most are deposited purposely in unfamiliar and
frequently hostile surroundings.
Special Report
The anger and frustration of the youths is
more than matched by that of their involuntary
hosts. To the peasants, the "assignees" are an
unwanted burden, more mouths to feed. The
peasants often reserve the hardest tasks for their
state-appointed guests. Some undoubtedly derive
a special sense of power and satisfaction in being
able to pile the workload on the crass students
who arrive on the farms exuding an air of superi-
ority. Official editorial comment on the problem
shows that peasants frequently rationalize their
attitude on the ground that "in farming work,
intellectual youths have many impractical ideas,
and it is difficult enough just to teach them how
to carry or lift loads on their shoulders or with
their hands."
Over the past year, the regime has been
pushing local officials to make better use of the
students' education and aptitudes, and there
clearly has been progress in this direction. Some
students have assumed iower level leadership posi-
tions, and efforts have been made in a few areas
to groom more leaders by admitting youths into
nascent Young Communist League branches. Still
other youths are supposed to open primary
schools and conduct part-time study sessions for
adults or for students who cannot be spared from
labor during the day. In addition, many of the
students sent to the countryside are being trained
as "barefoot doctors." Finally, some students
who originally came from rural areas have been
used to open agricultural research stations.
The vast majority of youths, however, prob-
ably are still serving as ordinary field laborers
who, at best, are merely accepting their fate with
sullen resignation. Indeed, there is ample testi-
mony to this in the number of complaints in
regime propaganda about the students apathetic
attitude toward accepting re-education from the
peasants and their preoccupation with "becoming
officials." In recent months, Peking has fre-
quently admonished rural authorities to pay more
attention to organizing the production activities
of their youthful charges and to be more active in
helping them solve their problems. As a result of
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such
-
such pressures from above, commune authorities
reportedly are assigning special personnel to han-
dle youth work, and top officials from urban
areas are being sent to check on how their young
emigres are faring in the villages.
Despite intensified efforts by the regime to
rationalize the youth resettlement program, prob-
lems are not confined merely to the rural areas
and continue to mount. Although the bulk of the
college classes of 1966 through 1968 have been
resettled and universities are beginning to reopen,
Peking apparently plans to continue assigning a
majority of urban middle-school graduates to
rural labor for periods of two to three years or
longer. Some of these graduates reportedly are
resisting emigration actively and, as a result,urban
authorities have been forced to employ increas-
ingly harsh measures, such as arresting the youths'
parents, to meet rural assignment quotas.
Meanwhile, the substantial number of dis-
satisfied youths who continue to return illegally
from the countryside is causing increasing con-
cern to security officials in many cities. Because
these returnees no longer have urban residency
permits, ration cards, or access to legitimate em-
ployment, they are forced to turn to criminal
activities to eke out a living. The extent of this
problem is difficult to determine, but some idea is
provided by the numerous mass trials held
throughout China since last January. These dealt
with a wide range of social, economic, and politi-
cal offenses in a further effort to restore the civil
discipline and control so badly undermined by
the Cultural Revolution. The large number of
common criminals placed on trial and the high
incidence of crimes cited such as robbery, pick-
pocketing, forgery, and prostitution are unusual
in China, suggesting that many of the offenders
are illegal returnees from the countryside who
have unexpectedly turned from "revolutionary
successors" into juvenile delinquents.
Crisis of Authority
The difficulties that local authorities have
been having with youths in both town and
Special Report
countryside point up an interesting paradox; de-
spite the severe repression of former Red Guards
and even though the majority of young people
probably accept their post - Cultural Revolution
fate with sullen resignation, there is an unusually
high incidence of youthful indiscipline in China
today. This is reflected not only in reports of
criminal acts but also in editorial comment on
quarreling between rural assignees and their peas-
ant mentors, "anarchism" among young factory
workers, and even indiscipline in the ranks of the
army. Pre-teen and teen-age youths have been
reported staging street rallies, arguing in public
with policemen, and haranguing adult passers-by.
Such behavior was unknown before the Cultural
Revolution and although it is not allowed to get
out of hand today, young people apparently now
feel more license to engage in give and take with
the authorities.
Part of the reason for this unusual phenome-
non lies in an inherent contradiction in the re-
gime's approach to young people. While on the
one hand it has authorized cruelly suppressive
measures to restore social discipline, on the other
it instructs officials to recognize that the disil-
lusionment of today's youth is a severe and trying
hurdle that should primarily be overcome through
political re-education and persuasion. There is
therefore a gray area in which local authorities
must move cautiously, allowing greater latitude
for open, although nonviolent, expression of
some concerns and grievances.
Another explanation for the marked changes
in the attitude of youth toward authority lies in
what transpired during the Cultural Revolution
itself. By using young activists as the spearhead of
their attack on their party and government op-
ponents, the Maoists brought into existence mass
organizations whose sole purpose was opposition
to recognized authority. Once having been al-
lowed to challenge the legitimacy of the establish-
ment, it is not easy for former Red Guards to
accept the dictates of the power holders who have
emerged from the Cultural Revolution. This prob-
lem is made all the more acute because many
veteran civil and military officials have been
2 October 1970
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returned to power who were the targets of Red
Guard attacks, and the former young activists
apparently feel they have been victimized by a
cruel hypocrisy.
Finally, the Cultural Revolution introduced
into the fabric of national life many sharply
etched antagonisms and divisions that have dra-
matically affected the actions and outlook of the
politically conscious young. The quarrels over
power and policy between competing Red Guards
and between them and their bureaucratic op-
ponents, as well as divisions over the future direc-
tion of China's revolution, have had an enormous
carry-over effect and are present at every level
where youth confronts authority. This phenome-
non is likely to make it increasingly difficult for
the regime to reconcile its authoritarian tenden-
cies in running the state and in modernizing the
country on the one hand and its desire�in part
ideological, in part politically practical�to main-
tain revolutionary momentum and to convince
the younger generation that its interests are still
identical with those of the regime on the other.
Bleak Present, Uncertain Future
The traumatic impact of the Cultural Revo-
lution on China's youth and the variety of repres-
sive actions taken by the regime afterward might
easily have been anticipated. Their fair hopes
blasted, students and other young people on the
whole are now probably the most alienated,
apathetic, and unhappy segment of the Chinese
populace. Within the past year the regime has
taken some action on problems that concerned
the students before the Cultural Revolution, but
the "solutions" have the old familiar ring. For
example, efforts have been made to assign jobs to
some former university students who have es-
caped rural resettlement; these, however, often are
still not always commensurate with the skill levels
of the employees. Efforts are apparently being
made in some cities to give middle-school gradu-
ates of 1969 the opportunity to choose urban
factory assignments over rural resettlement; still it
appears that the choice is given only to a fortu-
Special Report
nate few while the majority are expected to
"volunteer" for labor in the countryside. Finally,
universities have begun to reopen this fall after a
four-year hiatus, but admission criteria have a
heavy political bias. The criteria do contain a
number of loopholes that could allow students
who have been rusticated since 1968 an oppor-
tunity to renew their education, but the returns
are not yet in on how many this would involve or
the quality of the academic training they will
receive. In any case, Peking's most recent com-
mentary on enrollment policy suggests that a
large percentage of the students in the college
classes of 1967, 1968, and 1969, who have al-
ready been labeled "graduates" by the regime,
will have "to find outlets for their talents in the
countryside" rather than in the universities.
As to the future prospects of this year's
middle-school graduates, some localities appar-
ently have held examinations to determine the
best academically qualified for university admis-
sion. The regime, however, maintains that most of
those who will matriculate in the future must
have performed several years of manual labor and
have the proper worker-peasant - class back-
ground. Such criteria may be eventually modified
if it appears that they are preventing the matricu-
lation of a student body capable of undertaking
scientific research and other professional training
in addition to the heavier doses of political and
vocational courses that Mao has ordered the uni-
versities to offer. Nevertheless, future college stu-
dents are likely to be more mature than in the
past and fewer in number, inasmuch as the pres-
ent rustication program seems designed to ex-
clude a sizable percentage of those who graduated
from middle schools during the Cultural Revolu-
tion.
Ultimately, the disillusionment of Chinese
students with the outcome of the Cultural Revo-
lution could redound to the advantage of a more
moderate and pragmatic leadership in the post-
Mao era. There is no sign, however, that the
general malaise of China's youth will translate
itself into any serious obstacle to the continued
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stability of the regime or even a significant turn-
ing away from Communism's idealized political
and social goals. There is no organized student
opposition in China today, and all indications are
that in the future "student power" will again be
carefully channeled into party-directed activities.
To help ensure this, the former Young Commu-
nist League is apparently being reconstituted
along much the same lines as before to prevent
youthful elements from striking out on a path
independent of the party.
In all likelihood, China's youth will continue
to remain rather docile and malleable, at least by
Western standards. As an interest group their
Special Report
needs and demands will probably continue to be
formulated and articulated from above rather
than below. As individuals they will attempt to
alleviate some of the harshness and severity of
their existence without risking much direct con-
flict with the system. They are, after all, products
of a society that has long been skilled in the
tactics of "seeming to comply, while secretly dis-
obeying." In any case, their fate lies not in their
hands but in those of the military and party
figures who eventually seized the levers of power
in the Cultural Revolution. Any changes in the
immediate future in Communist China will be
wrought by these men and not by today's "revo-
lutionary successors."
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DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Constraints on the Soviet Oil Position 1970-80
N9 42
2 October 1970
No. 0390/70B
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SPECIAL REPORTS are supplements to the Current Intelli-
ce eeklies issued by the Office of Current Intelligence.
ftc Special Re lorts arc published separately to permit more
,;oinpreilensive treatment of a surnect. They are prepared by
the Office of Current Intelligence, the Office of Economic Re-
search. the Office of Strategic Research, and the Directorate of
Science and Technology. Special Reports are coordinated as
appropriate among the Directorates of CIA but, except for the
normal substantive exchange with other agencies at the working
.ievel, have not been coordinated outside CIA unless specifically
icatc 0.
RN1NG
Ihe SP VIAL REPORT contains classified information affect-
ing the national delense of the United States, within the mean-
ine. of fitic 18, sections 793 and 794, of the US Code, as
amended. Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
CROUP 1
xcluded from automatic
downgrading and
rinclaisificafion
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CONSTRAINTS ON THE SOVIET OIL POSITION, 1970-80
Since the mid-1950s the USSR has been a substantial net exporter of
oil. In recent years, oil sales have been the country's largest single source of
hard currency. In 1969, however, the Minister of the Petroleum Extraction
Industry, V.D. Shashin, declared that total Soviet exports of oil will not
increase significantly in the future because domestic demand will rise faster
than production. He also said that the USSR will maintain a high level of
exports to Eastern Europe but expressed doubt that exports to the West will
show much further increase. Shashin's predictions may well err on the side
of optimism. Analysis confirms the suggestion that during the 1970s Soviet
consumption of oil is likely to increase faster than production. By 1980
there still will be an excess of production over domestic consumption, but
the excess will be less than the import requirements of Eastern Europe. The
USSR already has begun procuring small quantities of Middle Eastern and
North African oil under barter agreements for re-export to other Communist
countries. Encouraged by the Soviets, the East European states also have
been bartering directly for Middle Eastern oil. The Soviets probably hope
that oil obtained in this manner will permit them to maintain oil sales in
hard currency markets at current levels.
Production
The USSR has emerged as a major oil pro-
ducing nation only in the last two decades. Soviet
crude oil production, which rose from 37.9 mil-
lion metric tons in 1950 to 147.9 million in 1960,
should reach 350 million this year. Thanks to this
upsurge, the Soviet Union now is second only to
the United States in crude oil output. The rate of
increase has declined, however, from almost 16
percent per year during 1956-60 to a less spec-
tacular but still rapid rate of nearly eight percent
annually.
Special Report
During the post-1950 expansion of oil pro-
duction, Azerbaydzhan�where fields had been
producing since tsarist times�was eclipsed as the
principal Soviet source of oil by the prolific
Urals-Volga region. Although production in the
North Caucasus, West Siberia, and Central Asia
subsequently increased considerably, the Urals-
Volga region still accounted for some 60 percent
of national output as recently as last year.
Soviet authorities originally predicted that
the Urals-Volga fields alone would be yielding
350 million tons of oil a year by 1980, but they
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SEttit-L4-4--
Production of Crude Oil in the USSR
400
300
200
100
(million metric tons)
1958 59 60 61 62 63 64 65 66
99985 9-70 CIA
USSR: Major Oil Producing Regions
Azerbaydzhan
ptral
Special Report
67 68 69 70 Plan
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now indicate indicate that annual production there will be
at its peak this year at about 207 million tons.
The amount of oil that ultimately can be re-
covered from this region has been reduced by
extraction at excessive rates and by faulty use of
water injection to maintain reservoir pressure. In-
jected water has encroached on producing oil
zones and has isolated sizable pockets of oil,
rendering them unrecoverable.
Costly blunders have not been confined to
the Urals-Volga region, but have occurred in prac-
tically all oil producing areas. In addition to ex-
cessively rapid extraction and faulty water injec-
tion, a common mistake has been. large-scale burn-
ing off of the natural gas found in association
with oil. The gas should be recycled into the
deposits to maintain pressure and utilized after
the extraction of oil has been completed. In the
important fields of western Kazakhstan, asso-
ciated gas was burned off instead of being re-
cycled. Then cold sea water was injected in an
attempt to restore pressure, and much of the oil,
which is high in paraffin content, solidified. As a
result, production targets have had to be cut
drastically.
Obstacles
Under constant urging to maximize short-
run achievements, Soviet oil technicians have
worked feverishly with poor equipment and ob-
solete technology. The geophysical instruments
they use to map geological structures are gen-
erally outdated. In seismograph technology,
which is used in the exploration of deep, complex
geological formations, the USSR is seven to ten
years behind the US. The Soviets continue to rely
on turbodrills for as much as 80 percent of all
operations, both for shallow and deep drilling.
The transition to greater reliance on rotary drill-
ing, best suited for deeper drilling, is impeded by
a shortage of high-quality drill pipe. Soviet deep-
drilling capability also is limited by a shortage of
high-powered mud pumps and high quality drill
bits. Burdened with their many handicaps, Soviet
Special Report - 3 -
drillers require eight to ten months to drill wells
that American crews could sink in a single month.
Transportation of oil continues to encounter
serious problems. Prior to 1965, most oil was
shipped by rail, although this mode of transport
was nearly three times as expensive as movement
by pipeline. Since 1965, however, pipelines have
carried the greatest tonnage. At least 80 percent
of the oil-pipeline network carries crude oil, and
the remainder oil products. The oil fields of
Azerbaydzhan and the Urals-Volga region, on
which the Soviets have depended so heavily, are
sufficiently distant from major centers of popu-
lation and oil consumption to pose significant
transport problems. The newly important oil
fields of Central Asia and West Siberia are even
less accessible.
Oil refining, like oil extraction, is techno-
logically backward in the Soviet Union and lags
far behind the American industry in the quality
of individual products, in product mix, in the
depth of refining, and in the sophistication of
refining processes. This backwardness has resulted
chiefly from failure to allocate sufficient invest-
ment to refining during a period of rapid growth
and transition to lower quality crude oils. In part,
however, the lag in product mix is attributable to
the pattern of demand, which is influenced by the
small number of automobiles in the Soviet Union.
The demand for high-octane gasoline now has
begun to rise, but facilities for producing it are
not keeping pace. Expansion of existing refineries
and construction of new ones consistently have
fallen short of plans. Nevertheless, primary refin-
ing capacity has increased at an average rate of
about eight percent a year since 1958 and now is
second only to that of the US. It is sufficient to
meet the needs of domestic consumers and to
provide over 25 million tons of products for ex-
port.
Consumption
Soviet oil consumption has increased greatly
since 1950, but only recently has it approached
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(million metric tons)
200
150
100
50
0
1958 59 60 61 62 63
99986 9-70 CIA
the growth rate achieved by production. During
the decade from 1958-68, consumption of oil
products rose at an average annual rate of about
8.4 percent. Despite the existence of an over-all
surplus of oil, sporadic local shortages of certain
oil products nevertheless have occurred because
of failure to turn out the needed range and qual-
ity of products and because of inadequacies in the
transportation and distribution systems.
With production outstripping domestic con-
sumption in past years, an increasing portion of
Soviet oil production was exported. Exports of
oil and oil products increased about 17 percent
per year over the decade from 1958 through
1968. Since 1966, however, the growth of ex-
ports has slowed appreciably, and exports to free
world countries have leveled off. Even so, exports
of oil and oil products remain the USSR's biggest
single earner of hard currency. Last year such
exports brought in some $340 million. Moreover,
the Soviet Union serves as the principal suppJer
of oil to Eastern Europe.
Special Report
64 65 66 67 68
Domestic Prospects Through 1980s
The USSR has abundant potential resources
of petroleum, both on and offshore, that could
enable it to become the world's leading producer
of petroleum by the end of this century. It is
estimated that, as of 1 January 1969, the Soviets
had proved reserves of crude oil of 3.0 to 3.4
billion tons, or about 10 to 11 times the amount
produced annually. This situation Is analogous to
that of the United States, where proved reserves
were estimated at 4.2 billion tons in 1969, giving
a ratio of reserves to production of about 10:1.
To tap their reserves successfully, the Soviets
must overcome difficult obstacles, of which one
of the most serious is permafrost. Some 30 to 40
percent of Soviet reserves lie under permafrost,
and Soviet technicians have yet to prove that they
can operate successfully in such conditions.
Plans call for crude production to rise from
350 million tons in 1970 to 450 million in 1975,
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a goal that implies an average annual growth rate
of 5.2 percent. This rate, which is well below the
7.6-percent rate posted during the five year pe-
riod now ending, seems attainable.
Achievement of the 1980 plan target for
crude output of 550-600 million tons now seems
unlikely. An anticipated decline in production in
some of the older regions, more difficult climatic
and geological conditions in new producing areas,
rising exploration and development costs, and a
shortage of equipment embodying modern tech-
nology�especially for drilling�suggest that pro-
duction in 1980 probably will be in the vicinity
of 500 million metric tons. This estimate implies
that production will increase by only 2.1 percent
per year during the last five years of the decade.
Because future production depends in part
upon current drilling rates, it is significant that
total drilling for exploration and development of
petroleum resources declined after 1967. Given
both the Soviets' inexperience with the sophisti-
cated techniques that are becoming more neces-
sary and the more difficult drilling conditions
anticipated in the 1970s, it is doubtful that aver-
age annual drilling rates will increase very much.
Shashin has indicated that production goals must
be achieved by technical progress and without
any such steep rise in capital investment for drill-
ing as has occurred in recent years. Some im-
provement, however, is possible. The priority as-
signed to the petroleum industry as a leading
earner of foreign exchange makes it likely that
Soviet planners will make an effort to provide the
resources required to solve problems that already
have been recognized by Soviet technicians.
Prospects for the three regions that will be
the USSR's principal sources of oil in the present
decade are mixed at best. In the Urals-Volga re-
gion, blunders have cut prospects for 1980 pro-
duction by some two thirds. It now seems that
production in this region will decline from 207
million metric tons this year to about 180 million
in 1975 and 100 million in 1980. Production
from Central Asia is expected to rise more slowly
Special Report
- 5 -
than planned but to reach 60 million tons in 1975
and 65 million in 1980. West Siberia presents the
greatest potential but poses the most difficult
problems. Production in this area may increase
from 30 million metric tons this year to 100-120
million in 1975 and 150-200 million in 1980.
Demand for petroleum products in the So-
viet Union can be projected by its relationship to
anticipated industrial growth. Using this method
and taking into account the expected growth of
the motor vehicle park, it is estimated that the
USSR will consume approximately 350 million
tons of oil in 1975 and 450 million tons in 1980.
Projections of both production and con-
sumption are, of course, subject to error, and
projections ten years into the future are particu-
larly risky. Western estimates indicate that the
Soviet excess of production over domestic con-
sumption will rise from 90 million metric tons
this year to about 100 million in 1975 and then
decline to about 50 million in 1980. Meanwhile
East European demand for foreign oil is expected
to outstrip Soviet supply capability. If the Soviet
Union is to maintain exports of oil to hard cur-
rency markets in this decade, the USSR and East-
ern Europe will have to obtain oil from non-Com-
munist producers. It seems likely that in 1975 the
Soviets will be obtaining about 10 million metric
tons of Middle Eastern and North African oil for
shipment to other countries on Soviet account.
Moscow probably hopes to pay for some of this
oil by bartering technical assistance and equip-
ment for producing oil. By 1980, however, the
USSR may have to obtain as much as 80 million
metric tons a year from non-Communist countries
in order to maintain its deliveries to foreign
clients. At today's prices this quantity of oil
would be valued at more than $750 million. In
addition, the Eastern European countries prob-
ably will need to import some 15 million metric
tons directly from the Middle East and North
Africa in 1975 and perhaps 30 million in 1980.
Even if the Communist countries' imports reach
the indicated levels, however, the Middle East and
2 October 1970
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Estimated Soviet Production, Demand, and Exports of Oil
Million Metric Tons of
Crude Oil Equivalents
600
500
400
300
EXPORTS
200
100
Imports from the Free World
Necessary to Maintain the
Projected Level of Exports
DOMESTIC DEMAND
PRODUCTION
0
1965 1970 1975 1980
Special Report - 6 -
2 October 1970
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North Africa will remain dependent on free world
markets for the disposal of more than 90 percent
of their oil.
Soviet Interest in Middle Eastern and North African Oils
The USSR's involvement with Middle East-
ern and North African oil, already in evidence for
a decade, is expected to increase further in the
1970s. In the last year or two Soviet interest in
such oil has increased perceptibly, and the USSR
now has oil pacts with most of the major oil
producing countries of the Middle East and North
Africa.
The first agreement with Iraq was concluded
in the early 1960s, essentially for political pur-
poses and for its impact on Western oil interests.
In 1967, however, after Baghdad had reclaimed
some of its concession areas, the USSR and Iraq
signed a memorandum under which the Soviets
would provide technical assistance and equipment
for exploration and for the extraction, transporta-
tion, and marketing of oil in exchange for crude.
An agreement signed with Baghdad in June
1969 and valued at $72 million is repayable in
hard currency. Another pact, valued at $67 mil-
lion, provides for Soviet assistance in exploiting
Oilfield
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Special Report
-7-

2 October 1970
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the big North Rumaila field�where drilling began
in September�and for the surveying of new areas,
with payment to be made in crude. The Soviets
also are to lay an 80-mile pipeline to the port of
Fao, where they will build storage facilities. If
findings in other fields in southern Iraq justify
development, the Soviets "will examine the pos-
sibility of providing technical assistance in imple-
menting" development programs there. In carry-
ing out these agreements, the USSR has sent
numerous experts to Iraq.
The USSR has been exploring for oil in
Egypt and may drill as many as 40 exploratory
wells in the Western Desert, where operations
began in March. The Soviets are to provide ten
seismic crews to bolster prospecting operations
and will deliver six drilling rigs. Furthermore, if
oil is found, the Soviets will provide credits for
the development of the field, which will be repaid
in oil.
The USSR also is expected to receive two
million tons of Egyptian crude from the El Mor-
gan field in 1970 in exchange for Soviet oil de-
livered to northern Egypt. As in the past, the
Egyptian oil probably will be shipped to other
countries on Soviet account, a practice likely to
be followed as long as the Suez Canal remains
closed and the Suez-Mediterranean pipeline re-
mains to be built.
Soviet involvement in Algerian petroleum at-
fairs began in 1964 with the establishment oi the
African Petroleum and Textile Institute, where an
estimated 300 Soviets are on the teaching staff.
About 200 Soviet oil technicians have been work-
ing in Algeria since 1967. In 1969, the USSR
Special Report
contracted to receive 500,000 tons of Algerian oil
annually through 1975 as part of a barter deal.
Recently the Soviets and Algerians signed
several contracts, two of which covered explora-
tion and drilling. At present six drilling rigs are
operational and the USSR is to provide 15 more.
I-he USSR will probably not receive many kudos,
however; most observers describe the Soviet
equipment as antiquated, perhaps as much as 20
years behind Western equipment. The rigs are
usable only for shallow drilling and would be
unsuitable for exploitation of major Algerian
fields.
Soviet exploration in Syria, which has been
going on for more than ten years, helped Damas-
cus to begin commercial production early in
1968. The Soviets also provided technical aid for
construction of a 400-mile pipeline linking the
fields in northeastern Syria with the Mediter-
ranean port of Tartus. In late 1969 Soviet special-
ists prepared a comprehensive plan for oil produc-
tion, and agreed to aid in the establishment of a
research laboratory for Syria's proposed oil insti-
tute.
Six months after seizing power in 1969, the
new Libyan government took several steps, in-
cluding negotiation for Soviet participation in
Libyan oil affairs, to reduce its dependence upon
Western companies. The Soviets have proposed a
joint exploration venture with the newly or-
ganized Libyan National Oil Company and last
May sent a delegation of petroleum experts to
Libya to conduct a one-month study. At that
time they also agreed to supply three Soviet tech-
nicians to the Libyan Ministry of Petroleum to
perform a long-term survey of oil reserves I
--8-
2 October 1970
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rNad
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Pane i WEEK! V cl IMMARV 2 nct 70
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