WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004900110001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 29
• Document Creation Date: December 21, 2016
• Document Release Date: August 28, 2008
• Sequence Number: 1
• Publication Date: July 16, 1965
• Content Type: SUMMARY

Approved For Release 2008/08/28: CIA-RDP79-00927AO04900110001-8
OFFICE OF CURRENT INTELLIGENCE
DIA review completed. State Dept. review completed
CENTRAL INTELLIGENCE. AGENCY
16 July .1965
OCI No. 0298/&5
Copy No.
SUMMARY
SECRET
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 25X1 Approved For Release 2008/08/28: CIA-RDP79-00927AO04900110001-8
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" SECRET
(Information as of noon EDT, 15 July 1965)
VIETNAM
Hanoi has again rebuffed a British effort to discuss
negotiations on the Vietnam war by refusing to allow
MP Harold Davies to see any high-level officials during
his visit last week. The North Vietnamese, meanwhile,
are continuing their efforts to line up bloc support.
Both they and the Chinese have strongly protested recent
US air strikes, and Peiping asserted that US aircraft
overflew Chinese territory during one raid. At Hanoi,
a fifth surface-to-air missile site has been detected
near completion. The Viet Cong summer offensive in
South Vietnam may have entered a temporary lull.
The Communist World
Page
MOSCOW MOVES TO RECONVENE GENEVA DISARMAMENT CONFERENCE 5
Moscow's proposal, coinciding with its announcement of
further defense aid to North Vietnam, represents a deci-
sion to keep open top-level bilateral contacts with the
US at a time when the Vietnam conflict might create a
critical hazard for Soviet-US relations.
STATEMENTS BY SOVIET LEADERSHIP ON DEFENSE NEEDS
Recent high-level Soviet statements are intended to sug-
gest that the international situation has forced the USSR
to maintain its present military spending level or even
to increase it, but there does not appear to be any evi-
dence of an augmented domestic military program, of costly
aid to Hanoi, or of abandonment of economic goals which
compete with military programs for resources.
FLOODS IN EASTERN EUROPE
Recent severe flooding in the Danube River basin has
caused considerable economic losses to Czechoslovakia,
Hungary, and particularly to Yugoslavia.
SECRET
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Cnuimn.1 'WNW
Asia-Africa
SOUTH KOREAN PARLIAMENT FACES CRISIS
As the National Assembly prepares to debate the treaty
normalizing relations with Japan, opposition tactics to
block ratification and the dissension and disorganiza-
tion within the government party might lead to the
eclipse of the legislature as it is now constituted.
MALAYSIAN GOVERNMENT'S TROUBLES WITH SINGAPORE CONTINUE
9
Some Malays are urging extreme measures, including the
arrest of Singapore's Prime Minister Lee Kuan Yew, to
counter his demands for a nationwide noncommunal polit-
ical system that would give the Chinese population a
greater voice and threaten Malay predominance.
LAOTIAN NON-COMMUNISTS JOCKEY FOR POSITION
10
On the eve of National Assembly elections, several key
military leaders outside Vientiane are showing increas-
ing dissatisfaction with the leadership in the capital.
PRO-EGYPTIANS PURGED FROM IRAQI CABINET
10
President Arif has replaced them with relatively obscure
technicians, but his policies toward Egypt are not like-
ly to harden.
ALGERIAN CABINET FORMED BY BOUMEDIENNE
Boumedienne retained the defense portfolio and named
himself premier when unable to persuade any of the "his-
toric chiefs" of the revolutionary period to take the
post. His regime is not likely to overcomequickly the
near paralysis in government inherited from Ben Bella.
TSHOMBE LOSES ROUND IN CONGO POLITICS
By prevailing in his dismissal of Premier Tshomb4's
interior minister, President Kasavubu has demonstrated
his superior legal prerogatives.
SECRET
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`O SECRET
RHODESIA SETS GRADUAL COURSE TO INDEPENDENCE
Both London and Salisbury wish to avoid a confrontation,
but their positions remain far apart.
Europe
NEW FRICTION WITHIN ITALIAN GOVERNMENT COALITION
Corruption charges against a former high official of
the Italian Government have exacerbated differences
between the Christian Democrats and their partners in
the center-left coalition.
GREEK POLITICAL CRISIS AT HIGH PITCH
The controversy between Prime Minister Papandreou and
King Constantine over control of the military has raised
constitutional issues which have rocked Greek politics.
THE COMMON MARKET CRISIS
France's "empty chair" policy continues to block any
significant new community activity. The approaching
vacation season--in which negotiations in any forum
will be difficult to arrange--may only serve to confirm
the stalemate and will allow a further buildup of pres-
sures from economic interest groups for a settlement.
Western Hemisphere
SITUATION IN THE DOMINICAN REPUBLIC
Settlement of the crisis still seems some weeks off.
The Organization of American States has obtained the
reluctant agreement of both rebel and loyalist leaders
to Hector Garcia Godoy as provisional president pending
elections, but each side has stipulated conditions clearly
unacceptable to the other.
SECRET
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NEW
Iftow
SECRET
PERUVIAN INSURGENCY
Despite the reduction of public concern over guerrilla
activities in central Peru since the army took command
of counterinsurgency operations, there are no firm in-
dications that guerrilla strongholds in this area have
disintegrated.
POLITICAL CONTROVERSY IN BRAZIL
Despite the increasing frequency of political challenges
to the prestige and authority of the Castello Branco
administration, the government so far does not appear
to be in jeopardy.
NEW CHALLENGE TO MILITARY REGIME IN ECUADOR
The junta, by military force and the imposition of mar-
tial law in Guayaquil, halted mass demonstrations aimed
at changing its announced program for transition to con-
stitutional rule.
SECRET
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w
SECRET
VIETNAM
Hanoi has again rebuffed
a British effort to discuss ne-
gotiations on the Vietnam war.
The North Vietnamese refused to
allow MP Harold Davies to see
any high-level government offi-
cial during his 8-13 July visit
to Hanoi. The day after he left,
Hanoi radio said he had been re-
ceived only by the Fatherland
Front mass propaganda organiza-
tion for "an exchange of views."
The front, according to the
broadcast, condemned Prime Minis-
ter Wilson's "policy of towing
after" the US on the Vietnam
question.
The North Vietnamese mean-
while continued their efforts
to line up effective Communist
support. Vice Premier Le Thanh
Nghi, leading an economic dele-
gation which has visited virtu-
ally every bloc state during
the past several weeks, signed
agreements with the USSR and
China on 11 and 13 July respec-
tively. No details were given
on the pact with Peiping, but
Moscow announced that it had
agreed to provide additional
aid to develop the DRV's econ-
omy and strengthen its "defense
potential." Nghi,now in Pyong-
yang, has also signed agree-
ments with Poland, East Germany,
Hungary, and Bulgaria.
Another delegation, led by
Vice Premier Hoang Van Hoan, is
on a "friendship" visit to China,
the USSR, Mongolia, and North
Korea. At his first stop in
Peiping, where he arrived on 12
July, Hoan was greeted warmly
by an impressive turn-out by
party and government leaders.
The DRV has also continued
to berate the US for what it
calls the "expansion" of the
"war of destruction." In a 13
July protest to the International
Control Commission and a 14 July
Foreign Ministry statement Hanoi
denounced alleged US air strikes
between 9 and 13 July against
"many populated" areas. The
ministry statement claimed that
on 11 July US aircraft bombed
and strafed Lao Cai, a provin-
cial capital near the China bor-
der and "encroached" into Chi-
nese territory around Hokou.
The statement asserted this was
the first time US aircraft had
attacked "very deep" into DRV
territory and that by this act the
US had taken "a further and ex-
tremely dangerous step" in es-
calating the war.
Chinese Response
China's reaction to the al-
leged overflight of its terri-
tory and the "bombing" of Lao
Cai betrayed heightened concern
that US air strikes near the
frontier might extend across the
border. Its propaganda response
appeared mainly designed to de-
ter an enlargement of the war
by reinforcing earlier warnings
of the dangers of a US attack.
SECRET
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25th
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Rung Sat Special Zone (VNN)
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SECRET
The initial Chinese accusation
on 11 July declared the Chinese
armed forces were ready to fight
"if necessary." A more extensive
commentary in People's Daily on 13
Jury elaborated the earl' -warn-
ing, noting that the Hokou incident
was more serious than the alleged
US overflight of Hainan Island on
9 April because it took place while
US aircraft were "penetrating ever
deeper into the north." The edi-
torial asserted that the "bombing"
of Lao Cai marked a shift in the
main effort of the US air war to
the rail line from Hanoi to the
Chinese border. The specific ref-
erence to the rail line may be in-
tended to underscore Chinese sensi-
tivity to attacks on Sino-Vietnam-
ese transportation lines and to
convey a threat that Peiping might
intervene directly to defend them.
The editorial stressed that China
will not attack unless attacked
first but emphasized that Peiping
is prepared to deliver counterblows
in a full-scale war.
missile defenses are nearing com-
pletion.
work on the fifth site
now in the final stages.
At least three, and possibly four,
sites are complete. Their deploy-
ment pattern ringing Hanoi suggests
that a sixth site will be con-
structed, probably northwest of the
city, but there is yet no evidence
that another site is under construc-
tion.
There is still no firm evi-
dence of any missile equipment or
missiles at any of the sites, nor
pace of the sites' construction--
Page 3
the first was detected in early
April--suggests some foot-dragging
by the Soviets.
While the USSR moves slowly 25X1
ahead in supplying defense material
for the DRV, Soviet and East Euro- 25X1
pean officials
over US policy.
Aside from intermittent private hints
that the DRV's stated four points
are not ironclad preconditions to 25X1
negotiations, Soviet representatives
have been unable to offer any real-
istic proposals for a resolution of
the conflict or to give any believe-
able indication that Hanoi is
SE CRE T
WEEKLY SUMMARY 16 July 65
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SECRET
interested in a negotiated settle-
ment at this time.
Viet Cong Activity
The trend of Communist activ-
ity in South Vietnam this week sug-
gests that the summer offensive of
Viet Cong main force units may
have entered a short rest-and-resup-
ply phase in preparation for large-
scale attacks late in July. Enemy
forces in greater than regimental
strength are deployed possibly for
an assault in the border area of
Quang Ngai and Quang Tin provinces.
Except for two large-scale en-
gagements this week in Binh Duong
Province, Viet Cong activity fol-
lowed the established pattern of
terrorism against the population
and harassment of small forces and
installations. This activity re-
sulted in heavy losses in Popular
Forces units, particularly in the
vicinity of Saigon. In general,
the major enemy effort remained
focused on district towns, and in-
creased pressure developed in II
Corps area and the northern part
of III Corps.
Lines of communication con-
tinued to be cut. Coastal Route
1 was blocked in southern Quang
Ngai, and in Binh Dinh, Phu Yen,
and Binh Tuy provinces. The cen-
tral highlands remained isolated
with principal transport routes im-
passable to civilian and military
traffic. With the exception of
provincial Route 2 in Phuoc Tuy
and provincial Route 1 in Binh
Duong and Phuoc Long provinces,
III Corps roads are considered
open but subject to interdiction
at any time. The coastal railway
is operable only between Hue and
Da Nang in the north, and between
Nha Trang and Phan Rang and along
the spur line inland to Dalat.
On the government side, combat
air operations continued to be the
most potent single factor contribut-
ing to military successes. The mon-
soon rains thus far have proved to
be less of a handicap to close sup-
port and other air activity than
expected. South Vietnamese ground
operations of battalion strength or
larger declined for the second con-
secutive week. An important action
was undertaken by a combined US,
Australian, and South Vietnamese
task force against the Viet Cong War
Zone "D" stronghold north of Saigon.
Strong resistance was encountered in
the four-day probe, and casualties
on both sides were relatively high.
South Vietnamese Politics
The political scene in South
Vietnam continues relatively calm.
The Ky government is proceeding with
various economic measures to impose
greater austerity. Pay increases
and tighter draft enforcement are
in preparation in an effort to aug-
ment military manpower. During the
past week, Defense Minister General
Co was concurrently named chief of
the Joint General Staff, relegating
former chief General "Little" Minh
to probable retirement. Planning
proceeded for greater delegation of
authority to the military corps com-
manders. Open criticism of the new
government, except from the Viet
Cong, is still in abeyance but new
pressures from Catholics as well as
militant Buddhists in Hue may be
in prospect.
SECRET
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SECRET
The Communist World
MOSCOW MOVES TO RECONVENE GENEVA DISARMAMENT CONFERENCE
Moscow's 12 July proposal
to reconvene the Eighteen-Nation
Disarmament Committee (ENDC) in
Geneva later this month repre-
sents a policy decision to keep
open top-level bilateral contacts
with Washington at a time when
the Vietnam conflict is inten-
sifying and poses a critical
threat to Soviet-US relations.
The Soviet proposal coincided
with the public announcement of
further Soviet assistance to
strengthen the "defense poten-
tial" of North Vietnam.
There are indications that
Soviet leaders are concerned
over the Vietnam crisis and the
additional risks inherent in
their increased commitment to
Hanoi. They may believe that,
by agreeing to resume the ENDC
at this time, they will be able
to reduce the chances of a seri-
ous deterioration in US-Soviet
relations during the next sev-
eral months.
Earlier this year, the So-
viets tried to soften the impact
of their change of policy toward
Vietnam. The 31 January announce-
ment of Premier Kosygin's mis-
sion to Hanoi was coupled with
the first authoritative favor-
able commentary on President
Johnson's call, in his State
of the Union message, to extend
US-Soviet contacts. Initial
Soviet comment on the message
had been critical.
The US has for some time
been urging the Soviets to re-
turn to Geneva. Several Soviet
officials, however, observed
that it would be pointless to
discuss disarmament in Geneva
while US bombs were falling on
North Vietnam.
The Soviets, however,
a een careful to avoid any
formal refusal to return to
Geneva.
Soviet leaders may cal-
culate that their new proposal
will appear responsive to Afro-
Asian calls to get the talks
going again. At the recent ses-
sion of the UN Disarmament Com-
mission, the nonaligned resolu-
tion urged prompt reopening of
the ENDC. At that time the
Soviets rebuffed US appeals to
set a date for reconvening the
ENDC by noting that they
had abstained on the resolution
and were therefore not bound
by it. The Soviets probably
do not expect much will be ac-
complished at the next session
of the ENDC. The recent ENDC
meetings indicated that East
and West remain far apart on
basic disarmament issues.
SECRET
16 July 65
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SECRET
Statements by top Soviet
policy makers in the past few
weeks appear aimed at showing
that the USSR, under pressure of
the current international situa-
tion, is forced to maintain mili-
tary allocations at their present
level and may even have to in-
crease them. These statements
are undoubtedly part of the po-
litical offensive in support of
the USSR's commitment to North
Vietnam. However, they probably
should also be read in the con-
text of a continuing discussion
on economic priorities for the
new annual (1966) and long-term
(1966-70) plans. On the other
hand, the possibility that the re-
gime has already reached a deci-
sion increasing defense outlays
cannot be completely excluded.
There does not appear to be any
clear evidence, however, of an
augmented domestic military pro-
gram involving imminent increases
in military outlays above those
planned earlier for 1965. Nor is
there any indication of costly
Soviet support for the Indochi-
nese war, or of abandonment of
current economic goals (e.g. the
program for major increases in
agricultural equipment) that ap-
pear to compete with military pro-
grams for resources.
The most recent statements--
made by party head Brezhnev on 3
and 10 July and by Premier Kosygin
on 11 July--stress the need for
keeping up a high level of de-
fense preparedness, although they
maintain that present efforts are
adequate. The apologetic tone of
Brezhnev's and Kosygin's remarks
echoes the regret expressed by
party secretary Suslov on 2 June
over the material sacrifices im-
posed on the Soviet people by
present defense expenditures.
The tone of defensiveness implicit
in Kosygin's warning of the poten-
tially adverse consequences for
defense should resources be shifted
to other branches suggests that
the regime has been under strong
pressure by advocates of increased
agricultural and consumer-goods
production to cut defense alloca-
tions. Brezhnev and Kosygin take
an equivocal position on the
obviously sensitive issue, how-
ever, both promising an improve-
ment in all sectors of the econ-
omy.
As the crisis in Southeast
Asia has become more critical,
Moscow has made a strong effort
to forestall US escalation of the
war. As part of this campaign,
Soviet officials have deliberately
emphasized the USSR's military
capability and determination to
defend all "socialist" countries
from "imperialist aggression."
Such public statements are also
designed to counter Chinese
charges that Moscow is operating
in collusion with the US in an
attempt to find "a way out" in
Vietnam through negotiations.
In private conversations
also, Soviet high-level offi-
cers have gone to considerable
lengths to impress US military
representatives with the mili-
tary prowess of the USSR. Dur-
ing the V-E Day anniversary re-
ception in Moscow last May,
Marshal Malinovsky, for exam-
ple, told the US Army attache
that the purpose of display-
ing new missiles in the parade
was to ensure that the US under-
stands Soviet capabilities.
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SECRET
Recent severe flooding in
the Danube River basin has
caused considerable economic
losses to Czechoslovakia, Hun-
gary, and Yugoslavia. Yugo-
slavia apparently has been hard-
est hit by the deluge, which
has been described as even worse
than in the previous record
year of 1954.
Except in Yugoslavia, where
some of the richest wheat and
corn land was damaged, the im-
pact of the flood on 1965 agri-
cultural output is not expected
to be serious, because only a
relatively small proportion of
total agricultural land was af-
fected. In all three countries,
however, the flood caused mil-
lions of dollars in damage to
farm buildings and housing, and
the excessive and prolonged
rains have adversely affected
planted acreage and development
of corn and root crops in most of
the region.
River freight transport has
been interrupted at various
places for the past three months.
In Hungary alone the flood de-
stroyed 25 bridges, blocked
several major highways, and dam-
aged imirortant railroad and com-
munication facilities.
Although damage to indus-
trial facilities was probably
not extensive, the displacement
of workers and the inability of
industry to obtain delivery of
materials are continuing to cause
setbacks in industrial produc-
t
SE CRE T
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W SECRET 'Row
SOUTH KOREAN PARLIAMENT FACES CRISIS
Political passions in South
Korea are mounting rapidly as the
National Assembly this week takes
up the treaty normalizing rela-
tions with Japan. Although even-
tual ratification is almost cer-
tain, obstructive tactics could
postpone indefinitely assembly-
action approving the sending of
a combat division to South Viet-
nam, and might lead to the eclipse
of the legislature as it is now
constituted.
The opposition People's
Party (PP), with the recently
added support from militant
Protestant churchmen, has be-
gun a campaign with several
planned stages against ratifica-
tion of the Japanese-Korean
treaty. In addition to its
speeches opposing it, the PP has
already provoked fist-fights on
the assembly floor, and plans
arson and other violent action
in an effort to obstruct the pro-
ceedings. If the government
still secures ratification, the
PP is threatening to resign en
masse. If the majority Demo-
cratic Republican Party (DRP) re-
fuses to accept the resignations,
as it has the authority to do,
the PP plans to dissolve it-
self in order to vacate its as-
sembly seats in the hope of
forcing a general election. The
recently removed leader of the
PP, Yun Po-sun, probably is en-
couraging such a maneuver in
hopes of using the opportunity
to regain his former power among
opposition forces.
The Pak Chong-hui govern-
ment, at least officially, is
counting on normal assembly
procedure for ratifying the
Korea-Japan agreement and ap-
proving the dispatch of troops
to Vietnam.
Assembly speaker Yi Hyo-
sang has publicly statea tnat
in the event of an opposi-
tion resignation en bloc the
DRP should follow suit. 25X1
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,1 V=r
SECRET
Political strife between
Singapore and Malaysia's central
government in Kuala Lumpur con-
tinues. The predominantly Chi-
nese Peoples Action Party (PAP),
which controls Singapore, re-
mains unwilling to confine it-
self to state-level politics
despite the Malay leadership's
dedication to preserving its
domination of national politics.
Malay extremist elements have
been urging that the PAP threat
be countered by any means neces-
sary, including the arrest of
Singapore's Prime Minister Lee
Kuan Yew.
A meeting between Lee and
Malaysia's Deputy Prime Minister
Razak on,29 June apparently
brought little progress toward
resolving the dispute.
Public altercation between
the state and central govern-
ments has recently increased
after a month of relative quiet.
On 7 July Kuala Lumpur expelled
from Malaysia an alien journal-
ist who was close to Lee. The
journalist had frequently of-
fended central government lead-
ers with his sharp criticisms,
and his expulsion had long been
demanded by Malay extremists.
The following day a high Singa-
pore official charged that the
central government was preparing
to arrest Lee. Razak denied
this, but warned that Lee would
be held responsible if he used
communal issues which threaten
national unity. Lee considers
his arrest a distinct possibility.
Within Singapore, Lee's
position has been strengthened
by a sweeping PAP by-election
victory over the pro-Communist
Barisan Socialist Party in a
BSP stronghold. This indicated
that the PAP's dispute with the
central government and Lee's
persistent championing of Chi-
nese political rights has appar-
ently had wide appeal among
Singapore's predominantly Chi-
nese population. The results
will encourage Lee to continue
his tough line with Kuala
Lumpur.
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Iftw SECRET Nape
Friction within the non-
Communist ranks in Laos is jeop-
ardizing the stability of Pre-
mier Souvanna's coalition govern-
ment. In recent weeks, several
military leaders in key posts
outside of Vientiane have ex-
pressed their opposition to the
present leadership in the capi-
tal, charging widespread corrup-
tion and favoritism.
These discontented officers,
including air force chief Gen-
eral Ma and regional commanders
Vang Pao and Phasouk Somly, have
disclaimed any intent to move
against the capital. Neverthe-
less, there are, indications that
they are prepared to take united
action should the Vientiane
leaders--backed by the potent
Sananikone group--seek to extend
their control over the regional
military. On 12 July General
Ma indicated to a US official
that he had the power to mount
a successful coup should General
Kouprasith--commander of the
Vientiane military establishment
--initiate any action to displace
him.
Tensions within the non-
Communist camp have increased
with the approach of the Nation-
al Assembly elections, slated
for 18 July. Although the Com-
munist Pathet Lao term them "il-
legal" and will not participate,
there has been sharp competition
among the 200-odd candidates for
the 59 seats. Since the results
will not be officially announced
until mid-August, there will be
ample opportunity for behind-
the-scenes factional maneuvering
after the ballots are in.
The military situation re-
mains relatively quiet, with
only limited skirmishes noted.
In the south, government troops
engaged in clearing operations
in the Route 9 area have made
sporadic contact with a sizable
enemy force positioned to the
northeast of Dong Hene and to
the southeast of Pha Lane. North
of the Plaine des Jarres, govern-
ment forces have made limited
advances near Route 6.
PRO-EGYPTIANS PURGED FROM IRAQI CABINET
Iraqi President Arif, end-
ing a two-week cabinet crisis
which he himself largely precip-
itated,, has succeeded in re-
moving from office the most prom-
inent pro-Egyptians in his cabi-
net. In the new cabinet an-
nounced on 11 July the Nasirists
have been replaced by relatively
obscure technicians who are
likely to prove less rambunctious
and more pliable than the pro-
Egyptians. Other prominent Nasir-
ists in the security services
and the army are likely to be
eased out of their positions in
the near future.
The new cabinet appears to
be even weaker than its badly
divided predecessor and may not
long survive. The Nasirists,
who will retain residual strength
in the army even if some leading
pro-Egyptians are retired, may
try for a comeback in a relatively
short time. Arif carried off his
latest moves only by detaching
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SECRET
air force commander Razzaq--pre-
viously a strong Nasirist--from
his pro-Egyptian friends, and
Razzaq's ultimate political at-
titude, as well as his future
within the regime, remains in
doubt.
Since the crisis was pri-
marily a struggle for personal
power, government policies are
unlikely to change appreciably.
Union between Iraq and Egypt was
not in the cards even before the
Nasirists were forced out of of-
fice, but both Nasir and Arif
have been reluctant to put into
motion the machinery for achiev-
ing unity that has been estab-
lished in the past year. Arif's
14 July speech claiming that union
is still an objective of Iraqi
policy is a signal that he is not
anxious for an open break with
Egypt. Nasir, for his part, has
been weakened in the Arab world
by the recent Algerian coup, by
continuing troubles in Yemen, and
by increased hostility to his pol-
icies from the Baathists in Syria
and is unlikely to seek an open
quarrel with Arif at this time.
Colonel Boumedienne has com- negotiator in the current aid
pleted the organization of a talks with France. In the key
cabinet and probably will soon be ministries of foreign affairs
under great pressure to meet pub- and agriculture, however, Ben
geria's stagnant economy. How- has been little indication that
ever, his regime shows little any of the present cabinet knows
promise of being able to make what must be changed to achieve
rapid headway in overcoming the efficiency.
administrative mismanagement that
all but paralyzed the country un-
der Ben Bella. Although Boume-
dienne has no political follow-
ing of his own, the regime may
in time achieve real grass-roots
support because of the large num-
ber of local military leaders
prominent in it.
On 10 July the ruling Na-
tional Council of the Revolution
announced the new 20-man cabinet
--with Boumedienne as premier Rabah Bitat, who maintained his
and defense minister--which will distance from Ben Bella but never
implement the council's policies completely broke with him, is
and run the government. The for- listed as "minister of state."
mer minister of economics and in- The position appears to be honor-
dustry has been replaced by a ific, and his duties, if any, are
probably more competent "tech- unclear.
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SECRET
Congolese President Kasa-
vubu seems to have emerged with
added strength from the latest
round in his struggle with Pre-
mier Tshomb6. The premier backed
away from provoking a major
crisis when he decided not to
challenge Kasavubu's dismissal
of interior minister Munongo,
Tishomb6's controversial close
adviser.
By dismissing Munongo,
Kasavubu demonstrated the vastly
greater legal prerogatives of
the President over those of the
premier--the issue which is the
heart of the feud. The choice
of Munongo's replacement--on
whom premier and President must
agree--should indicate whether
the political tide continues to
move in Kasavubu's direction.
The President's supporters are
actively lobbying to get control
of this key ministry.
The two antagonists are also
fencing over putting into force
provisions of the 1964 constitu-
tion regarding the cabinet, includ-
ing one barring ministers from
simultaneously sitting in parlia-
ment. Tshomb6 is resisting pres-
sure from Kasavubu to form a new
government to fulfill this and
other constitutional requirements,
mainly because he fears that if
he gave up his parliamentary
seat he would be defenseless
against arrest and trial if sub-
sequently fired from the premier-
ship. He now claims to have
found legal justification for
suspending the ban on dual posi-
tions.
Rhodesian Prime Minister
Smith's restrained reaction to
events at the Commonwealth con-
ference last month indicates that
he plans to continue his policy
of gradually working toward in-
dependence through negotiation
and constitutional revisions, and
to avoid a unilateral declara-
tion of independence (UDI) ex-
cept as a last resort.
In late June, he wrote Prime
Minister Wilson that any move on
Britain's part to submit to Com-
monwealth African demands for a
constitutional conference would
be considered interference in
Rhodesian affairs, and might pro-
voke a UDI. The over-all theme
of the letter, however, was that
he was always willing to con-
sider the British prime minister's
views, and hoped that negotiations
on Rhodesia's future would proceed
smoothly.
Prior to the Commonwealth
meeting, Smith had agreed to a
set of principles--including un-
impeded progress toward majority
rule--as the framework for negotia-
tions. He warned, however, that
his interpretation of these prin-
ciples might differ from that of
the UK.
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According to a British of- and bolts" of the Rhodesian prob-
ficial in London, the UK feels lem. Smith, on the other hand,
compelled to produce results be- has lofty contempt for the opin-
cause of increased pressure from ions of most African governments, 25X1
African Commonwealth members, and is unlikely to make conces-
and must get down to the "nuts sions simply to ease London's
dilemma.
NEW FRICTION WITHIN ITALIAN GOVERNMENT COALITION
Friction between Italy's
Christian Democrats (CD) and
their coalition partners is
likely to be aggravated by the
parliamentary debate, beginning
16 July, on corruption charges
against CD Senator Guiseppe Tra-
bucchi. A precarious political
situation will exist during the
week or more of debate, although
the consensus of coalition lead-
ers is that the case will not
deteriorate into a government
crisis.
In part, the PSI's resolu-
tion on the Trabucchi case can
be explained by the party's feel-
ing--as it begins to prepare for
its October congress--that it
must not allow its association
with the Christian Democrats to
obscure its own political identity.
The Trabucchi scandal reinforces
the PSI's insistence on the need
for decisive action on the gov-
ernment's social reform program,
including effective measures of
bureaucratic reform.
Last week the Socialists
(PSI)--supported by Social Demo-
cratic, Republican, and nongov-
ernment party votes--won approval
over CD opposition for their res-
olution to debate the impeach-
ment of Trabucchi, a former fi-
nance minister accused of "abuse
of power" for his role in the
import of Mexican tobacco. The
Trabucchi affair is one of a
number of charges of high-level
corruption in office that have
plagued the Moro government this
year. Its implications may be
serious because the direct CD-
PSI confrontation reflects and
intensifies--as did last month's
film law dispute--suspicion and
mistrust between the two major
parties in the governing center-
left coalition.
CD-PSI differences could
be exacerbated by the increasing
strains within the Socialist
Party. Those PSI elements who
favor withdrawal from the coali-
tion can be expected to intensify
their attacks on the government,
capitalizing on dissatisfaction
within the PSI over the gradual
erosion of electoral support for
the party in recent elections.
The sensitive issue of Socialist
- Social Democratic unification
is also likely to complicate
PSI leader Nenni's task of hold-
ing together his progovernment
majority during the precongress
campaigning in coming weeks.
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The controversy between Prime
Minister Papandreou and King
Constantine over control of
Greece's military leadership
has aroused the country about
the constitutional issue of the
Crown's prerogatives.
Early in the week the King
reportedly had agreed to accept
the removal of Defense Minister
Garoufalias, who had been voted
out of the ruling Center Union
(EK) party, in effect, for re-
fusing Papandreou's request
that he resign from the cabinet.
Garoufalias had incurred Papan-
dreou's wrath by opposing some
of his policies and as a center
of palace influence. The prime
minister appeared anxious to
control the military in order
to protect the reputation of
his son Andreas, who has been
under attack for connections
with a group of left-of-center
officers. Papandreou was pre-
pared to allow another of his
targets, army chief of staff
Gennimatas, to keep his post,
at least temporarily. In ad-
dition, according to the com-
promise arrangements, Papan-
dreou was to assume the title
of minister of defense, but to
appoint an alternate minister
acceptable to the King to ac-
tually run the ministry. Pa-
pandreou's support from his
cabinet, however, which early
in'the week was unanimous, has
shown signs of weakening, and
the King's stand has stiffened.
Constantine has balked at ac-
cepting Papandreou's assumption
of the defense portfolio, and
has still not signed the decree
necessary to remove Garoufalias,
whom he has considered a bulwark
against left-wing influences in
the armed forces. In the search
for agreement on some other
figure for the Defense Ministry,
evidences of a salit in the EK
have appeared.
Leaders of the Communist-
front United Democratic Left
are exploiting the crisis. They
have called upon the members to
unite in a popular front with
the Papandreou government in
the battle with the Crown to
preserve "democratic processes"
and restrict the palace to its
constitutional limits.
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The basic political issues cussions among the six gov-
which have emerged from the cur- Iernments are the only way to find
rent crisis over the EEC fi- ;a solution to the financing prob-
nancial regulations are unlikely
to be resolved in the foreseeable
future. Most observers now be-
lieve that the EEC Commission's
attempt, in connection with those
regulations, to push De Gaulle
further toward supranational
development of the community
has been effectively stymied by
the French President's counter-
threat to destroy the existing
Common Market institutions.
The Commission and its sup-
porters have always been willing
--if faced with intractable op-
position--to postpone confronta-
tion on these questions to a
later date, and they are more of
a mind to do so now. If De
Gaulle is willing to accept a
truce, he can very likely get
most of what he wants by way of
interim financing arrangements.
If, however, he is determined to
have a clear-cut decision at this
time in his favor, no interim
compromise seems possible, and
the present crisis will likely
drag on to a denouement, prob-
ably early next year.
France's "empty chair" pol-
icy is effectively preventing
the community from undertaking
any significant new activity al-
though most routine matters are
proceeding--sometimes with French
participation. Paris continues
to maintain that bilateral dis-
lem... Although there had been
hints from the French that they
might attend the 26-27 July Coun-
cil meeting if their demands
were met, a government statement
following a 13 July cabinet meet-
ing asserted there was no change
in France's boycott policy.
The exploratory talks in
Paris this week between the French
foreign minister and his Dutch,
Belgian, and Italian counterparts
were apparently inconclusive.
Foreign Minister Luns at the
Netherlands and Spaak of Belgium
have indicated a conciliatory
attitude toward the French posi-
tion,. but have reaffirmed that
any new financing proposals must
come from the Commission, as the
treaty provides. Luns has said
that a French attempt to destroy
the EEC institutions, including
the position of the Commission,
would provoke an "extremely seri-
ous confrontation." The Italians,
who will be in the chair, appar-
ently intend to convene the July
Council session as scheduled,
although they do not expect much
to be accomplished in the absence
of the French.
With the sacrosanct vacation
season coming on, serious nego-
tiation in any forum between
July and the end of September will
be difficult to arrange. This
,delay may only serve to confirm
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SECRET v
the stalemate, but it will also
allow a further build-up of
economic pressures for some
kind of a settlement. The con-
cerns of interest groups with
important economic stakes in
the Common Market have thus
far not been strongly vocalized,
but it seems certain that farm-
ers worried about future mar-
kets, businessmen uncertain of
how to invest, and unions anx-
ious about the future level
of economic activity will be-
come more articulate in coming
weeks. Again, however, a set-
tlement even in the fall would
depend on the willingness to set
aside the political issues which
have been brought to the fore-
front in the past two weeks.
In the meantime, there may
be increased awareness of the
legal and practical difficulties
in the way of any attempt by
De Gaulle to "assassinate" the
community's institutions. The
first opportunity to eliminate
certain members of the EEC,
European Coal-Steel Community,
and EURATOM executives would
arise following ratification by
the six national parliaments of
the recently concluded treaty
to merge the three executives.
At the moment, however, it is
still uncertain when this will
be accomplished, and it is
possible that some parliaments
might refuse to ratify the
treaty if they believe such
action would open the possibil-
ity for a French attack on
community institutions.
Once the treaty has been
ratified, unanimous agreement
of the governments is necessary
to designate members of the new
executive. Lacking such agree-
ment, the present members would
continue in office without any
impairment of their powers. In
that event another chance for
designating new members will
occur when the present incum-
bents' terms begin to expire in
September 1965. Again, however,
they will continue in office un-
less their successors are chosen
unanimously.
It is in the period fol-
lowing an executive merger,
therefore, that many observers
perceive the most dangerous
French threat, since the merger
would inaugurate discussions as
to how the three communities
themselves--EEC, ECSC, and
EURATOM--are to be combined
under a single treaty. It is
widely supposed that France may
attempt at that time to gain
agreement for striking out the
majority voting provision and
other supranational features of
the existing treaties.
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Western Hemisphere
SITUATION IN THE DOMINICAN
A political settlement of
the 12-week-old Dominican crisis
still seems some weeks off. The
committee of the Organization of
American States which has been
on the scene since early June
trying to promote a political ac-
cord managed last week to se-
cure the rebel camp's reluctant
acceptance of Hector Garcia Godoy
as president of a proposed pro-
visional government. However,
the acceptance was conditioned
by rebel demands that are clearly
unacceptable to the Imbert gov-
ernment.
The military leaders loyal
to the government have similarly
accepted Garcia Godoy, but the
government's counterdemands are
certain to be opposed by the
Caamano regime. Ambassador
Bunker, the US member of the OAS
committee, has recommended post-
ponement of the Inter-American
Conference scheduled to open on
4 August because of the disrup-
tion that a still-unsettled
Dominican situation would be
sure to cause at the conference.
Garcia Godoy, a respected
former diplomat who served briefly
as foreign minister when Juan
Bosch was president, is having
difficulty finding capable Domin-
icans to serve with him in a pro-
visional government. Several of
the men he has approached are re-
luctant to serve because the re-
gime will be performing a very
difficult transitional role that
will have to include repressive
measures against extremist ele-
ments.
Meanwhile, the leaders of
Bosch's Dominican Revolutionary
Party appear to be laying the
groundwork for participation in
the elections which the OAS en-
visages for some time next year.
Anxious for an early political
settlement, they have accompanied
their acceptance of Garcia Godoy's
candidacy with charges that this
decision was imposed on them by
US military force and that they
had no alternative.
Joaquin Balaguer seems to
be emerging as stronger than any
contender the Bosch forces are
likely to put up in the expected
election next year. Some idea of
his expected tactics emerged last
week in an interview he granted
to the extremist-controlled rebel
newspaper Patria. The former
president made clear that he in-
tends to appeal to leftist and
nationalistic sentiment. He ex-
pressed himself in favor of the
participation of extremist par-
ties in the election, claiming
that this would give the people
"a clear choice." He declared
that the OAS intervention was
"a shameful act, but an unavoid-
able reality" and said the coun-
try should seek economic independ-
ence.. A person close to Balaguer
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1%000116 UlKI! .I' N.rf
has warned US officials that his
campaign statements can be ex-
pected to be very nationalistic
but should not be interpreted as
indicative of any weakening in
Balaguer's friendship for the
United States.
Meanwhile, there are new
signs of bitterness between ri-
val factions in the rebel camp.
Extremists, presumably members
of both the pro-Peiping and the
pro-Castro Communist factions,
went out of their way to em-
barrass Caamano during a 12 July
rebel rally. In an obvious at-
tempt to sabotage Caamano's ef-
fort to appear conciliatory,
these extremists burned a US flag
and engaged in other inflammatory
acts.
The two hard-line Communist
groups, the Dominican Popular
Movement and the 14th of June
Group, are both strongly opposed
to a negotiated settlement of
the crisis.
Public concern over guer-
rilla activities in central
Peru has abated somewhat since
the armed forces took command of
counterinsurgency operations
last week. The public seems to
feel that the guerrillas now
will be at least contained if
not eliminated.
No serious clashes between
government forces and guerrillas
of the Movement of the Revolu-
tionary Left (MIR) are known to
have taken place since the dis-
astrous ambush of a police patrol
on 27 June. Army rangers have
moved into the central zone area
of operations, ready to go into
action if needed. More than 400
civil guard police troops are
controlling travel in the area,
and investigative police con-
tinue to arrest and interrogate
persons suspected of aiding the
MIR.
There are no firm indications
that the central zone guerrilla
stronghold in Junin Department has
di sintegrated
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More political fireworks
can be expected in Brazil dur-
ing the months ahead as the
Castello Branco administration
comes to grips with a number of
challenges to its prestige and
authority. Most of them will be
related,; either directly or
indirectly, to the gubernatorial
elections scheduled in half of
Brazil's 22 states this October,
or to the presidential election
now slated for late 1966.
Of most immediate concern
to the administration is its ef-
fort to bar the candidacy in the
election of certain persons it
deems unacceptable--a few cab-
inet ministers and other public
officials of the Goulart era.
While Congress may make a few
modifications in the govern-
ment's draft "law of ineligibil-
ities," a hard-fought but deci-
sive government victory appears
imminent. Loud grumbling from
both those who oppose the strin-
gency of the measure and those
who believe that additional can-
didacies should be proscribed
doubtless will continue for a
long time, however.
Two powerful state gover-
nors have been making headlines
recently with the vehemence
of their attacks on certain of
President Castello Branco's
policies. Governor Jose de
Magalhaes Pinto of Minas Gerais
has taken particular exception
to the government's decision
to go ahead with the October
elections--in which he is in-
eligible to succeed himself.
He fears that, once he leaves
gubernatorial office, his chances
of a presidential nomination will
be greatly diminished.
Potentially more serious
to the government in the long
run are the histrionic tactics
being used by Governor Carlos
Lacerda of Guanabara in his pres-
idential campaign. Lacerda has
become increasingly vitriolic in
his criticism of the administra-
tion's policies, but a formal
break with the President appears
unlikely so long as the governor
feels he still has a chance of
running in the 1966 presidential
race with the endorsement of
Castello. Branco or his allies in
the revolution. In the mean-
time, Lacerda's efforts to win
support among opposition groups
are bound to produce new prob-
lems for the government as well
as for Lacerda's own party, which
generally has provided the bulk
of the regime's political support.
The most pressing problem
for the government as far as the
presidential election is concerned
is whether Castello Branco
himself will run for a fullfour-
year term. Although Castello
Branco continues to disclaim any
further presidential ambitions,
many militant revolutionaries be-
lieve that his re-election is
absolutely essential if the fruits
of the revolution are to be pre-
served or extended.
Political maneuvering on
these and similar issues will
occupy more and more of the gov-
ernment's time and energies in
the months ahead. However, none
of these activities now appears
likely to shake the government
from its present policies or force
radical revisions of its programs.
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NEW CHALLENGE TO MILITARY REGIME IN ECUADOR
Ecuador's military junta
has tenuously survived another
crisis, this time a concerted
effort by a coalition of polit-
ical forces with mob support
to force an alteration in the
regime's announced program for
transition to constitutional
rule.
The antigovernment National
Patriotic Junta attracted most
political parties and movements
to a plan for staging nation-
wide mass demonstrations begin-
ning 9 July on the anniversary
week end of the military coup
that brought the present govern-
ment to power. As mob violence
mounted--especially in Guaya-
quil--the government restored
public order by wholesale ar-
rests of political, student, and
dissident leaders, and by the
imposition of martial law in
Guayaquil on 13 July.
In a communique issued late
on 14 July, the government con-
ceded its willingness to revise
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Page 21 WEEKLY SUMMARY
the transition plan in consulta-
tion with political leaders.
If it does not carry through
with major concessions now, its
resort to dictatorial measures
will probably provoke continu-
ing demands that it step down in
favor of an interim civilian
president who would preside over
elections. Former president Galo
Plaza has been prominently men-
tioned for this role, and has
offered his services to the gov-
ernment as mediator.
Some politicians, recogniz-
ing that present plans to reform
the constitution by decree will
destroy their chances, are also
determined to agitate for a tra-
ditional constituent assembly in
which all would have the oppor-
tunityto debate constitutional
reform--probably ad infinitum.
Regardless of the immediate
course of events, the junta
faces increasing difficulty in
maintaining national stability.
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''f SECRET `go
SECRET
Approved For Release 2008/08/28: CIA-RDP79-00927AO04900110001-8