WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A005000010001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 38
• Document Creation Date: December 20, 2016
• Document Release Date: April 18, 2006
• Sequence Number: 1
• Publication Date: August 13, 1965
• Content Type: SUMMARY

am
E
74 .
State Dept. review completed
WEEKLY SUMMARY
25X1
CENTRAL INTELLIGENCE
se 2007/03/06 CIA-RDP79-00927A0W00010001-7
13 August 1965
OCI NO. 0302/65
Copy No.
eEruaN to aMr,B a a~cmm~
JU8 IMMEDIATE
1~KJ
Approved For Release 2007/03/06 : CIA-
AGENCY
OFFICE OF CURRENT INTELLIGENCE
SECRET
Q9 t cluded from outomdtic
downgrading and decclasiifitation
 25X1 Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
 Approved For lease 2007195 DP79-00927, 05000010001-7
(Information as of noon EDT, 12 August 1965)
VIETNAM
Military activity has focused on the continuing engage-
ment between increasing numbers of South Vietnamese
troops and Viet Cong units around a government outpost
at Duc Co in Pleiku Province. The South Vietnam po-
litical picture is still clouded with rumors of rivalry
apparently stimulated by suspicions among diverse
Vietnamese political and religious circles, but there
continues to be no firm evidence of an early move against
Premier Ky. Hanoi and the Liberation Front are parroting
propaganda attacks on the US build-up as well as strong
suggestions of the impending entry of foreign volunteers.
The eighth SAM site has been discovered but it was a
mobile installation and eluded air strikes. A Soviet
100-mm.antiaircraft site with eight guns has been spotted
between SAM sites six and seven.
SECRET
Page
ApprovecpighRglease & O%tff*%IWP79-0q%27 5SQ0010001-7
 Approved For lease 2007/03/06 : CIA-RDP79-009205000010001-7
SECRET
NEW INFILTRATION ROUTE TO SOUTH VIETNAM
Aerial photography shows the Communists have nearly
completed a motorable route through southern Laos to
the South Vietnamese border farther south than the
older infiltration routes.
SHADDOCK MISSILE USED IN COASTAL DEFENSE
A recent Soviet film shows that the 300-nautical mile
Shaddock missile system can probably be used in a coast-
al defense role as well as for a tactical ground forces
weapon.
SOVIETS CONTINUE TO IMPROVE DISTANT MILITARY ACTION CAPABILITY 9
The recent use of motorized rifle (infantry) troops in
airborne and amphibious exercises suggests that the
Soviets are attempting to improve the distant action ca-
pability of these nonspecialized forces.
SINGAPORE SECEDES FROM MALAYSIAN FEDERATION
The rupture was apparently forced by Malaysian Prime
Minister Rahman, who feared the political aggressive-
ness of Singapore's Prime Minister Lee. Lee has promised
the continuation of British bases in Singapore, and ap-
parently will follow a friendly but cautious policy to-
ward Indonesia and Communist China.
ECONOMIC IMPLICATIONS OF SINGAPORE'S WITHDRAWAL FROM MALAYSIA 12
Singapore's withdrawal is unlikely to have much imme-
diate economic effect on the remaining Federation states.
Singapore may push for an expansion of trade with Com-
munist China, however, and apparently hopes to rebuild
trade with Indonesia.
THE CHINA ISSUE AGAIN AGITATES JAPANESE POLITICS
13
Ruling-party politicians, desirous of assuming the
popular pose of supporting closer relations with Com-
munist China, are pressing for an easement of credit
restrictions on trade with Peiping.
KASHMIR QUESTION AGAIN IMPERILS INDIA-PAKISTAN PEACE
15
Pakistan's infiltration of more than 1,000 Kashmiri
guerrillas across the cease-fire line in Kashmir last
week has reversed the recent calming trend in Indian-
Pakistani relations.
SE CRE T
Approve A r elease *f -WP79-0W7NR58%0010001-7
 Approved For F1rtease 2007/03/06 : CIA-RDP79-00927A,905000010001-7
SECRET
YEMENI PEACE MOVES CONTINUE
Egypt and Saudi Arabia continue to exchange peace
feelers while Yemeni royalists and anti-Egyptian
republicans work on a possible political solution.
GREEK POLITICAL CRISIS APPROACHING CLIMAX
The King's position has become critical and he is re-
ported considering the early institution of military
rule. Violence may occur if Papandreou and the Com-
munists carry their campaign to the countryside.
KHARTOUM FRUSTRATED BY SOUTHERN SUDANESE REBELS
Khartoum is frustrated by its inability to control
the security situation in southern Sudan and is accusing
foreign "imperialist" powers of assisting the rebels.
The government is said to be considering asking Egypt
for military equipment.
NEW KASAVUBU-TSHOMBE CONFRONTATION LOOMS
Kasavubu and Tshombb are still maneuvering about the
premier's tenure of office and a new clash may come
before the September meeting of Parliament. A siz-
able rebel build-up may be underway near Lake Tangan-
yika.
Europe
FRANCE CONTINUES ITS "QUIET DIPLOMACY" ON VIETNAM
Cultural Affairs Minister Malraux's recent trip to
China was the latest in a series of moves designed
to illustrate France's availability to undertake
"good offices" and its access to interested parties.
There is no evidence of any agreement with Peiping
on specific moves toward negotiations.
SECRET
Approved For Release 2007/03/06 : CIA-RDP79-00927A005000010001-7
Page iii WEEKLY SUMMARY 13 Aug 65
 Approved Foelease 2007/03/06 : CIA-RDP79-00927A~05000010001-7
SECRET
THE GENEVA DISARMAMENT TALKS
Little or no progress has been made in the disarmament
talks during the past three weeks. Neither side has
presented any new proposals or suggested possible com-
promises. The nonaligned urge short term agreements
and discussions on general and complete, rather than
partial, disarmament.
THE POLITICAL SITUATION IN BRITAIN
The Conservative Party's prospects have improved with
the resignation of Douglas Home and the election of
Edward Heath as party leader. Prime Minister Wilson
is having trouble with his own supporters but, with
all his problems, he still has a good chance of avoid-
ing elections until next spring.
Western Hemisphere
PERUVIAN GUERRILLA ACTIVITY INTENSIFIES
Movement of the Revolutionary Left guerrillas and
Indian peasants have ambushed another Civil Guard
detachment and have attacked more haciendas. There
are also signs a new guerrilla front has been opened
in the southern department of Cuzco.
POLITICAL ACTIVITY RENEWED IN GUATEMALA
The prospect of presidential elections in March 1966
and the lifting of the state of siege have revived
political activity. The government has selected an
unpopular candidate.
BRAZILIAN PRE-ELECTION POLITICAL ACTIVITIES
The federal government has been concerned about the
nomination of certain gubernatorial candidates who
are allegedly corrupt or tied to Communism. In some
powerful states, the accomplishments of the administra-
tion and the philosophy of the revolution are key
election issues.
DOMINICAN LEADERS WEIGH OAS COMMITTEE PROPOSAL
Imbert has implied he would sign. Some elements
in the rebel camp favor acceptance with semantic
changes. Others are demanding complete rejection.
Approved For Release 2004/9 EI
,X-RDP79-00927A005000010001-7
Page iv WEEKLY SUMMARY 13 Aug 65
 Approved For lase 2007/03/06 : CIA-RDP79-009275000010001-7
.-
??~ Lao Cai / ,. Nan-fling
100 200
MILES
Chia-lai- ih'
[ A I N A IN
1f f.
25th vision
Ayy
CAPITAL ~
N
N IN
REGJgN , VINH
h. BINH
NIEN -
, HOA
~
BINHS
DUO
tint-c I
H ~~ ~gn Bayard z%
QUANG
rr ~r.e F nr?vkr.vI-an TRI
Hai-V6-u
~, 2n
vision`
PHUOC
LONG
24th p ial Zone
II CORPS
DARLAC
23r Div' 'o
t2UANG
BINH
iTUY,
DINH
Id Di
The Indochina - South China Area
South Vietnamese military
boundaries
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
III CORPS
Rung Sat Special Zone (VNN)
 Approved For Release 2007/03/06 : CIA-RDP79-00927A 05000010001-7
SE CRE T
The focus of military ac-
tivity in South Vietnam during
the past week has been on the
continuing engagement between
increasing numbers of South Viet-
namese forces and Viet Cong
units at the government outpost
of Due Co in Pleiku Province.
On 3 August, two government air-
borne battalions reinforced the
camp's small garrison, which had
been under enemy pressure since
early June. After unsuccessful
efforts by these forces to lift
the siege, a strong relief
column began moving over Route
19 from Pleiku on 8 August.
Three days later, the column
reached Due Co after a series of
running battles with the Viet
Cong who fired from ambush po-
sitions along the road. In this
fierce action two government
tanks, several trucks, and one
105-mm. howitzer were destroyed.
Casualties in the Due Co fight-
ing for the past week now stand
at 76 killed (2 US) and 233
wounded (2 US) on the government
side, and more than 200 Viet
Cong killed.
The situation at Due Co
is still unresolved, and Viet
Cong capabilities and intentions
are largely unknown. As a con-
tingency measure the US 173rd
Airborne Brigade, consisting of
one artillery and two infantry
battalions, was ordered from its
defensive deployment around Bien
Hoa Air Base near Saigon to a
ready reserve position in Pleiku
town, 35 miles from Due Co. At
last report, elements of the
airborne brigade had moved to-
ward Due Co over Route 19,
reaching a point 12 miles east
of the camp.
Viet Cong activity else-
where has been characterized
by an increased number of at-
tacks on isolated outposts and
district towns throughout South
Vietnam. Areas immediately
west and southwest of Saigon
as well as Chuong Thien Prov-
ince in the delta area were
subjected to particularly heavy
pressure. The most costly at-
tack, however, occurred on 5
August when the Esso oil stor-
age facility near Da Nang was
severely damaged.
Political Situation in
~;outh Vietnam
The two-day meeting of
the ruling military Directory
on 4-5 August, and Premier Ky's
subsequent press conference
dominated last week's politi-
cal scene in Saigon. Contrary
to advance speculation, there
was no indication that the Di-
rectory had expressed dissatis-
faction with Ky's performance.
However, some of the decisions
SE CRE T
Approved For Release 2007/0$/06 : CIA-RDP79-00927A005000010001-7
Page 1 WEEKLY SUMMARY 13 Aug 65
 Approved Fof%lease 2007/03/06: CIA-RDP79-00905000010001-7
SECRET
at the meeting--particularly
those projecting the possible
punishment of once-powerful of-
ficers now "exiled" abroad or
in disfavor at home--did little
to dispel rumors of continuing
political rivalry.
These rumors appear to have
been stimulated by suspicions
among diverse Vietnamese politi-
cal and religious circles that
the return of Ambassador Lodge
presages some new US political
move, and that Premier Ky's mid-
August mission to Taiwan and
Thailand--about which few details
have been provided--was timed so
that he would be absent when
Lodge arrives. Ky's extempo-
raneous remarks, at his press
conference, concerning the proper
limits of friendship with for-
eign countries, further served
to fan such speculation
Hanoi and the Liberation
Front continued their propaganda
attack on the US build-up in
South Vietnam this week and edged
closer to an explicit call for
the.en;try of foreign volunteers
into South Vietnam. Although
the phrasing still stopped. short
of making an actual request, it
conveyed a strong suggestion
that the arrival of North Viet-
namese troops into South Viet-
nam might be imminent.
Responding to the Libera-
tion Front's 3 August call for
regrouped southerners in North
Vietnam to get "ready" to re-
turn southward, Hanoi on 8 Au-
gust claimed "the entire North
Vietnamese people and army" are
prepared to respond. In addi-
tion, the high command of the
North Vietnamese (DRV) Army on
5 August declared itself "ready
to fullfill any task assigned
by the party at any place." Al-
though these statements still
manage to be oblique, they con-
stitute the strongest hint yet
by the DRV military of involve-
ment in South Vietnam.
The Front communique of 3
August also implied a need to
build up Viet Cong forces
through increased recruitment
of local South Vietnamese.
"We are resolved," said the
communique "to arm the entire
people and to rapidly multiply
the fighting forces." This em-
phasis on the need to meet the
new challenge of the US build-
up may indicate a growing aware-
ness on the part of the Viet-
namese Communists that the US
is determined not only to stay
in South Vietnam but to commit
extensive military resources.
It may also be a tacit admis-
sion by,the Vietnamese that
the US;build-up could change
the military balance of power
in South Vietnam.
SE CRE T
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
. Page 2 WEEKLY SUMMARY .13 Aug 65
 79-009275000010001-7
Approved For Fase 2007/03/Q Elkff
Hanoi continued to show
disinterest in peace talks this
week by taking several personal
swipes at both Tito and Shastri
for being spokesmen for US in-
terests.
Peiping has also bitterly
attacked Tito and Shastri as US
"errand boys." The Chinese seem
primarily concerned that Egypt
(UAR) might support new efforts
by the nonaligned states to pro-
mote Vietnam negotiations. The
UAR ambassador in Peiping left
for home suddenly following a
meeting with Chou En-lai on 3
August--only a day after the
Cairo press had played up stories
that Tito and Shastri had asked
Nasir to sound out Peiping and
Hanoi about a Vietnam settlement.
The Chinese and North Ko-
rean Government's statements is-
sued on 7 August are the latest
in a series of formal Communist
reactions to President Johnson's
announcement on new troop commit-
ments to Vietnam but neither con-
tains any basically new elements.
The Peiping pledge to send Chi-
nese to fight "shoulder to
shoulder" with the Vietnamese
people "according to their need"
adds nothing to China's existing
conditional commitment to dis-
patch fighting men when a "call"
comes.
The first official Soviet
reaction to President Johnson's
28 July press conference was a
restrained 6 August TASS state-
ment denouncing the planned US
troop build-up as a futile but
dangerous, decision which tended
to widen the war. The state-
ment warned that US policy makers
shoula not delude themselves
that American "aggression" would
go unpu'=Ashed, but did not go
beyond customary expressions of
Soviet determination to provide
the DRV with "all necessary"
assistance. The TASS statement
--which referred to the damag-
ing effect Soviet assistance
has already had on US forces--
was followed on 8 August by a
Pravda article underscoring Mos-
cow's assumption of the "main
burden of expenditures for or-
ganization of the common defense
of the countries of socialism."
The tenor of these statements
suggests that they were aimed
in part at blunting Peiping's
repeated charges that the So-
viet Union is rendering only
grudging and half-hearted sup-
port to Hanoi.
Military Situation in the DRV
Another new surface-to-air
missile (SAM) site--the eighth
--was detected about 33 miles
northwest of Hanoi in low-level
photography it
contained s aunc ers with
missiles, a FAN SONG guidance
radar, and eleven associated
vans which were partially camou-
flaged.
On 9 August a strike was
conducted against this site.
Pilots reported that their ord-
nance was delivered on target,
but the missile equipment had
been removed. This was subse-
quently confirmed in photography.
SECRET
Approved Fo ?eaSe 20( O510t :?MAMB1a79-0dk7=5?00010001-7
 Approved Fditelease 2007/03/06 : CIA-RDP79-009278005000010001-7
SECRET
SELECTED COMMUNIST LAND
INF11TRATION ROUTES
Approved For Release 2007/03A6~"A RDP79-00927A005000010001-7
 Approved For Release 2007/031QS:T P79-009275000010001-7
SERE
It is evident that the Communists
are effectively using the mobil-
ity of their SAM equipment to
elude US air strikes.
On 11 August a Navy A4E
was shot down about 52 nautical
miles south-southwest of Hanoi.
Preliminary reports indicate that
the aircraft might have been
hit by a SAM. SAM equipment had
not been previously detected in
this area.
The first confirmed Soviet
100-mm. antiaircraft artillery
weapons were identified in low-
level photography
Subsequently, one o er posse e
100-mm. site was noted. The
confirmed site is located about
a mile south of SAM sites 6 and 7
and has eight guns. It has long
been suspected that the DRV
had a few of these weapons
effective range is estimated to
be 39,000 feet.
25X1
25X1
25X1
US air strikes and armed
reconnaissance missions con-
tinued to strike many of the
same targets which have been
struck previously. Eight US
aircraft were lost during the
past week, bringing the total
downed since last August to
84.
The Communist World
Aerial photography shows
that the Communists
had i is e e greater part
of a motorable route through
southern Laos to the South Viet-
namese border opposite Quang Tin
Province. When completed, the
route will permit truck movement
much farther south than was pos-
sible on the older infiltration
routes.
Earlier evidence had indi-
cated that Route 92 in Laos had
been extended to the Saravane
region. The photography showed
that trails from the Ban Phone
region also had been improved.
Cargo was moved over the re-
maining 30-mile gap by using
pirogues on the Se Kong River.
Construction of a road to close
this gap was interrupted by
the rainy season, but it will
probably be quickly completed
after the advent of the next
dry season, when extensive sup-
ply activities can resume.
SE CRE T
25X1
Approved FoP ease 20 6M :-tWBJ679-0( 927 56?0010001-7
 Approved For R lease 2007/03/06 : CIA-RDP79-00927A005000010001-7
Shaddock missile launcher being Shaddock missile being fired
raised into firing position from cannister
Shaddock missile displayed in Moscow Parade
Type
Length
Diameter
Maximum Range
Warhead Weight
Cruise Altitude
Propulsion
Surface to surface cruise missile
36 feet
2.5 feet
300 nm
approximately 1,500 pounds ( nuclear
1,000-3,000 feet or HE )
Turbo -jet
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
 Approved For W ease 2007/03/06 : CIA-RDP79-0092785000010001-7
SECRET
SHADDOCK MISSILE USED IN COASTAL DEFENSE
A recent Soviet film shows
a Shaddock missile, or a varia-
tion thereof, being used in a
coastal defense role. This film,
released for the 25 July Navy
Day celebration, provides the
first firm evidence that the
300-nautical-mile system can be
used in a coastal defense role as
well as for a tactical ground
forces weapon.
The Shaddock-type vehicle
was shown being positioned and
fired by a navy crew during a
coastal defense exercise. The
firing order was given by a navy
colonel, which suggests that at
least one regiment with four
launchers probably was involved
in the exercise.
The Shaddock was first ob-
served in a 1961 Moscow parade.
The position of the missile in
the line of march of that and
25X1 subsequent parades
25X1
25X1
indicated that it was a
ground forces weapon. Both the
coastal defense and ground forces
versions of the Shaddock probably
are-similar to the SS-N-3 mis-
sile used on submarines and sur-
face ships.
The coastal defense mis-
sile probably would be equipped
with an active radar homer
which would not be used against
ground targets. To be effec-
tive beyond 50 miles, the
coastal defense version of the
Shaddock would also require
some means of forward observa-
tion--such as air or sea recon-
naissance--to detect targets
and report their locations back
to the missile control center.
The long range and mobil-
ity of this system will signif-
icantly improve Soviet capa-
bilities against amphibious
landings. The missile probably
has replaced, or will largely
replace, the 35-mile-range
Kennel missile which has been
deployed around Soviet ports
and naval bases.
L
a 300-mile coastal de-
fense missile would enable the
Soviets to completely control
the inland seas and seaward
25X1
25X1
F822roaches to the USSR.
Approved For Release 20Q7YgrtO# A-RDP79-00927A005000010001-7
Page 7 WEEKLY SUMMARY 13 Aug 65
 OMONAft
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
 Approved Fo ?elease 20076 1& l" -DP79-00927~K005000010001-7
SOVIETS CONTINUE TO IMPROVE DISTANT MILITARY ACTION CAPABILITY
The recent use of motorized
rifle (infantry) troops in air-
borne and amphibious roles sug-
gests that the Soviets are at-
tempting to improve the distant
action capability of these non-
specialized forces.
The unusual landing of mo-
torized rifle troops from large
transport aircraft and the use
of such troops in amphibious
landings were demonstrated in a
recent Soviet exercise. In the
late July issue of Red Star,
photographs of this exercise
show motorized rifle troops with
an armored personnel carrier be-
ing landed from an AN-12 (Cub)
transport, and other motorized
rifle troops riding tanks ashore
from Polnocny-class tank landing
ships. The exercise was prob-
ably held in the vicinity of the
Saaremaa Island in the northern
Baltic, the site of most of the
important combined airborne and
amphibious exercises conducted
inside the USSR in recent years.
Soviet transports have
normally carried only regular
airborne troops in exercises.
The recent airlift of motorized
rifle troops by these aircraft
probably presages the develop-
ment of a more general airlift
Specially trained army
motorized rifle units have been
employed in amphibious exer-
cises in the past. Some of
these units may have been used
to form the as yet small marine
forces, which function as ad-
vance parties and assualt waves.
SECRET
Approved FoP.feaae 20d /b : b~79-009Z7R'65000010001-7
 Approved For Rerease 2007/03/06 : CIA-RDP79-00927A000010001-7
x-~FDAH
PAHANG
NEGRI
SEMBILAN
NON
Djakarta j_
JOHORE
MALAYSIA - INDONESIA - SINGAPORE
MALAYSIA
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
MALACCA' to
 Approved For F` ease 2007/03/ CI~~79-00927 CA65000010001-7
SINGAPORE SECEDES FROM MALAYSIAN FEDERATION
Singapore's secession from
the Malaysian Federation on 9 Au-
gust was the climax of two years
of increasingly bitter differences.
The rupture apparently was forced
by Malaysian Prime Minister Tunku
Abdul Rahman, who has explained
that his only alternatives were to
take repressive action against the
Singapore Government or to sever
all connections.
Rahman and fellow Malays
within the federation had become
apprehensive over the political
aggressiveness of the Singapore
Chinese, who constitute 80 percent
of Singapore's total population
and 42 percent of the former Ma-
laysia's total population. Spec-
ifically, Rahman feared that Sing-
apore's Prime Minister Lee Kuan
Yew would succeed in establishing
his Chinese-dominated People's
Action Party (PAP) in the other
states of the federation and
eventually gain control of the
central government.
Lee apparently intends to
pursue a cautious policy toward
both Indonesia and Communist China.
His,foreign minister has announced
that at present Singapore will not
establish relations with either
country. Lee, however, is under
local pressure to ease restric-
tions on trade with Djakarta, with
which Singapore conducted a flour-
ishing exchange before the crea-
tion of Malaysia. Lee has de-
clared that Singapore would welcome
trade with all countries, includ-
ing Indonesia and Communist China.
He is permitting Peiping's Bank
of China to retain its branch in
Singapore, which the Malaysian
Government had scheduled for clos-
ing this month.
Alluding to Indonesia's ef-
forts of the past two-and-one-
half years to bring about Malay-
sia's breakup, Lee expressed a
wish to be friendly with Indonesia
but said he wanted assurance that
"we won't be invaded or knocked
out by rockets." He emphasized
that any understanding Singapore
might reach with Indonesia could
not be at the expense of Malaysia
or jeopardize the federation's
security. Lee said that any re-
lationship with Indonesia would
have to be based on the latter's
recognition of Singapore as a
sovereign state, not as a "neo-
colonial creation," Indonesia's
accusation against Malaysia.
Indonesian Foreign Minister
Subandrio announced quickly that
Indonesia was prepared to recog-
nize Singapore, but some reserva-
tions appear to be developing. Ac-
cording to the eight-point seces-
sion agreement between Singapore
and Malaysia, British and Malay-
sian troops will continue to use
existing military bases and in-
stallations in Singapore in order
to protect Malaysia and other UK
interests in Southeast Asia. In-
donesian officials apparently are
now set to demand the removal of
the British-Malaysian bases as
the price of Indonesia's recogni-
tion. Singapore is hardly ex-
pected to accede to this condition,
which would weaken the defense
posture of Singapore and Malaysia
and produce a serious rupture with
both Malaysia and Great Britain.
The British have reacted with
surprise and regret to the announce-
ment of Singapore's separation from
Malaysia. They feel that Tunku
SECRET
Approved Fo fba1a. 20 DC : CD 1V79-0M21A@0800010001-7
 Approved For Release 200?,WLkf-RDP79-00927A005000010001-7
deliberately refrained from con-
sulting them to prevent their in-
tervention, and they acknowledge
that the action undermines their
defense of Malaysia. They fear
that Chinese Communist influence
will grow in Singapore, thereby en-
dangering their military facilities
and providing a base for subversion
against Malaysia.
ECONOMIC IMPLICATIONS OF SINGAPORE'S WITHDRAWAL FROM MALAYSIA
Singapore's recent withdrawal
from the Federation of Malaysia is
unlikely to have much immediate
economic effect on the remaining
states of the federation. The mem-
ber states have retained a substan-
tial degree of autonomy within the
federation, and the integration
of economic activities has pro-
ceeded slowly, hindered by politi-
cal and racial friction between
Malay and Singapore. Little ac-
tion has been taken in implement-
ing the planned common market area
and each state is still operating
under its own development plan.
Prime Minister Lee has an-
nounced that. Singapore will trade
with all the nations of the world.
He has also said that the Bank of
China, which was to close before
the end of August on orders from
the federal government, will re-
main open. Freed from conserva-
tive Malaysian influences, Singa-
pore is likely to push for the ex-
pansion of trade with Communist
China and apparently hopes to re-
gain some of its former entrepot
trade with Indonesia.
rubber, either through smuggling or
unscheduled off-loading. Subse-
quently, both Indonesia and Malay-
sia imposed stringent restrictive
measures, and smuggling is now al-
most nonexistent. Shipments
through third countries continue,
but these too have diminished.
Indonesia's small producers
may hope that trade between Singa-
pore and Indonesia can be legalized,
or that Indonesia will now exercise
less care in policing the embargo.
There has been no indication as yet,
however, that Indonesia will be will-
ing to make these concessions.
If a broad economic coopera-
tion agreement can be worked out
between Singapore and Malaysia, the
long-run economic situation may be
more advantageous to both sides than
it was under the federation, which
was hampered by racial and political
rivalries. The maintenance of a com-
mon-market arrangement would tend
to alleviate pressing development
problems. Manufactured products
from Singapore and the agricultural
and manufactured products of Malaya
will find wider markets, thus stim-
ulating industrial and agricultural
expansion. There could also be some
coordination of industrial develop-
ment plans, resulting in a more eco-
nomical allocation of resources.
Sarawak and Sabah, while not making
an immediate contribution to the
growth of the area, provide poten-
tial markets for manufactured goods
from both Singapore and Malaya.
All legal trade between Singa-
pore and Indonesia was halted af-
ter a trade embargo was imposed
in September 1963, although some
smuggling continued. Rubber was
the most important commodity in-
volved, and by August 1964 Singa-
pore had regained about 70 percent
of its former trade in Indonesian
SE CRE T
I
25)1
Approved FoVeWeala.,20MMU& 5 79-0t%2#1AII0?6b0010001-7
 Approved For RMease 2007/03/?SA i&jt ff79-00927AWt000010001-7
114
On the other hand, if Singapore
and Malaysia agree to cooperate on
a basis comparable to that which
prevailed between Singapore and Ma-
laya prior to the federation's forma-
tion, Singapore's development prob-
lems would persist and Malaysia would
also be adversely affected.
Singapore's growing unemploy-
ment has been created largely by the
continuing decline in its entrepot
trade, not only because of Indo-
nesia's confrontation policy, but
THE CHINA ISSUE AGAIN AGITATES
also because most neighboring coun-
tries are attempting to develop di-
rect trading relations. To solve
the unemployment problem, manufac-
turing activity must be expanded.
Without theprospec.t of wider mar-
kets created by a common market,
there would be little incentive for
industrial expansion. Competition
between Singapore and Malaysia
for foreign capital would also
emerge, and development::efforts
would be duplicated in many in-
stances
The possibility of closer rela-
tions with the Chinese Communists is
once more agitating Japanese poli-
tics, with almost all elements of
the ruling Liberal Democratic Party
(LDP) including the prime mipister,
anxious to exploit it.
As a result of Japan's rapid
postwar rise to economic pre-emi-
nence in Asia and to a place among
the top industrial powers of the
world, the Japanese people are de-
manding that their leaders assert
more dynamic leadership and inde-
pendent initiative in world affairs.
Prime Minister Eisaku Sato is well
aware of this trend and anxious
to capitalize upon it. Sato has
buttressed his position by a treaty
settlement with South Korea and by
a $150-million loan to Nationalist
China, and may now feel it is timely
to deal with the Communist China is-
sue.
Sato's predecessor, Ikeda, took
the initiative in providing deferred-
payment credits by the semigovern
mental Export-Import Bank for the
JAPANESE POLITICS
sale of a synthetic textile plant
to Peiping. This provoked threats
of retaliation from Taipei. To
smooth relations with the Chinese
Nationalists, Ikeda, as a temporary
move, decided in early 1964 not to
permit government financing of
credits to Communist, China. Sato
committed himself to this domesti-
cally unpopular policy by inept
handling of the issue early in his
term. He is now being pressured
by intraparty rivals, and he ap-
pears to be seeking means to escape
his commitment.
Since late July, Japanese in-
ternational trade officials--in-
cluding the trade minister, Takeo
Miki, a factional rival who hopes
to succeed Sato--have called for
the use of Export-Import Bank
funds to facilitate trade with
Peiping. A trade delegation is
to go to Peiping early in Septem-
ber to negotiate the fourth an-
nual trade agreement for 1966. The
current economic recession makes
Japanese businessmen more eager
than ever to trade with Red China.
SECRET
Approved For release 20 1f 1~6STf'P79 M9~IWO&D00010001-7
 Approved F*elease 2007/03/06 : CIA-RDP79-00927A005000010001-7
JAMMU AND KASHMIR
Boundary shown on Western maps
Motorable road
Track or trail
-- Main points of infiltration
MILES
1
48357 8-65 CIA
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
 Approved Forl lease 2007, 1I6 i 'RDP79-00927 5000010001-7
KASHMIR QUESTION AGAIN IMPERILS INDIA-PAKISTAN PEACE
There is also a more general
interest in keeping the door to
Peiping open, related partly to
the Japanese desire to do some-
thing to help end the war in Viet-
nam. Late this month, nine LDP
leaders will precede the trade mis-
sion for informal discussions with
top Chinese officials on the world
situation and China's plans for
construction. None of these nine
--among whom are several former
ministers, including both an ex-
foreign minister and a former
Pakistan dispatched more than
1,000 Kashmiri infiltrators across
the cease-fire line into Kashmir
this week in an attempt to stimu-
late and simulate an armed upris-
ing, The action has imperiled the
recent calming of Pakistani-Indian
relations and threatens to produce
another dangerous military con-
frontation.
head of Japan's defense agency--
belongs to Sato's faction of the
LDP.
The Pakistani effort is a
symptom of acute frustration. It
seems to be a long-delayed reac-
tion to steps taken by New Delhi
over the last year to wipe out the
last vestiges of Kashmiri "sep-
arateness" within the Indian union.
Inside Kashmir, the infiltra-
tors apparently have not had much
success. Indian security forces,
numbering more than 100,000, ap-
parently have repelled the infil-
trators, while keeping the restive
civil population cowed by their
strength and presence.
operation.
trators and bring.L.ig diplomatic
pressure on Pakistan to halt the
With an aroused Parliament
opening on 16 August, Prime Minis-
ter Shastri will find little sup-
port for a reasoned response to
Pakistan's venture, although ini-
tial indications are that New Delhi
will try to keep its reaction
limited to rounding lip the infil- 25X1
SECRET
Page 15 WEEKLY SUMMARY 13 Aug 65
Approved For Release 2007/03/06 : CIA-RDP79-00927A005000010001-7
 Approved For Release 2007/Q-3~tfAPDP79-00927A005000010001-7
Egypt and Saudi Arabia con-
tinue to exchange peace feelers
over Yemen, while Yemeni royal-
ists and anti-Egyptian republi-
cans work on a possible political
solution.
Egyptian-Saudi peace nego-
tiations on Yemen were recessed
last week as Cairo awaited a re-
ply from King Faysal. Nasir's
envoy had met briefly with Faysal,
and returned to Cairo after a
hopeful but inconclusive exchange
of views.
This week the Saudi Arabian
ambassador relayed Faysal's mes-
sage that he was interested in
meeting with Nasir, but that the
current press of business de-
tained him. He pointed out that
in any event the two leaders
will be meeting on 13 September
at the Arab summit meeting in
Morocco.
Egypt's Field Marshal Amir
recently warned reluctant repub-
lican tribes that their failure
to fight alongside the Egyptian
troops would result in an Egyp-
tian withdrawal from these tribal
areas, leaving the tribes to face
the royalists alone. President
Sallal then embarked upon a re-
cruiting campaign among southern
Yemeni tribes.
Republican tribal leaders,
who have hardened their resist-
ance to Egyptian domination
since the fall of the Numan
government, met in Saudi Arabia
this week with some pro-Numan
republicans and a group of Yemeni
royalists. The meeting appears
to represent a belated recogni-
tion by all anti-Egyptian groups
that they might well find a com-
promise solution to their dif-
ferences and unite against the
foreign intervention of the
Egyptians. Faysal encouraged
the meeting and advised its
participants, probably hoping
they will come up with some
workable ideas to aid the peace
negotiations.
The result of the meeting
has not been announced. Its
proposals may be strong on
organization, but weak in prac-
tical methods of application.
However, the conclave represents
progress in bringing together
tribal leaders who have fought
each other for almost three
years.
SE CRE T
Approved RQj ase 211IMBW6SL1 41P1RRP77g0 A095000010001-7
 Approved For ease 2007/03/06 : CIA-RDP79-00927AQ5000010001-7
SECRET
GREEK POLITICAL CRISIS APPROACHING CLIMAX
The King's position in the
current crisis has become critical.
Unless current efforts to form a
non-Papandreou government, possi-
bly headed by former minister of the
interior Tsirimokos, succeeds or
a rapprochement between the King
and Papandreou is reached, the King
may shortly institute a military
dictatorship with a civilian figure-
head as prime minister. Meanwhile,
the Athanasiadis-Novas government,
which fell in a vote of confidence
on 5 August, is serving in a care-
taker role. Government business is
largely at a standstill.
Former prime minister Papan-
dreou, who was ousted in a quick
maneuver by King Constantine on 15
July, has repeatedly demanded that
he be returned to power or that na-
tional elections be held immediately.
Thus far he has frustrated all at-
tempts by the Palace to form a non-
Papandreou government. Nonetheless,
debates within Papandreou's Center
Union apparently have chipped away
at his parliamentary support. Pa-
pandreou is reported to be under
strong pressure from within the CU
to reach an accommodation with the
Palace.
A weak coalition government
made up of CU defectors, the opposi-
tion National Radical Union (ERE),
and the Progressive Party is now
numerically possible. In a show-
down vote, however, Papandreou might
still be able to block a confidence
motion. Although such a coalition
would consist of diverse elements
and could easily break up, it would
have the advantage of postponing
elections until tempers cool and
personal interests and power strug-
gles possibly weaken Papandreou's
position.
King Constantine, whose family
line is non-Greek, is reported to
have lost much popularity during
the current crisis. In recent days
the monarchy has come under increas-
ing attack. Both Papandreou and
the leftist Lambrakis youth organ-
ization have indicated their inten-
tion to take their struggle to the
countryside. Increasing tension
could result in widespread dis-
orders, especially if Communist ele-
ments abandon their restraint.
Despite the tense atmosphere
in Athens, the police have been
able to keep the situation under
control. Security forces, recently
moved into the Athens area as a
"guarantee against anarchy," should
be able to cope with any situation
that arises. Nonetheless, the re-
pressive measures necessary to
maintain order could seriously
damage the image of the monarchy
and lessen the chance of an early
restoration of order.
The continuing crisis is
also being exploited to damage
Greek-American relations. Un-
identified elements, believed to
be Communist, have distributed
two fabricated documents implicat-
ing the US in an incident which
resulted in 13 deaths and 51
injured last November, and in al-
leged plans of the monarchy to
overthrow Cypriot President
Makarios. The Greek Government
has officially labeled the
documents forgeries. No ad-
verse popular reaction has thus
far been reported, but the
Communists will exploit the
alleged documents in every way
possible. F_ I
Approved For Release 21 O/ZS3%66 :CIA-RDP79-00927A005000010001-7
Page 17 WEEKLY SUMMARY 13 Aug 65
 Aft- A"I~
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
SUDflfl
LUM
Al Fashir
Predominantly Arab Ad Damn
wad
ladani
RTW
I redom ii . Negroid
Ap - - 01-7
 Approved For R!K'ease 2007/03/06 : CIA-RDP79-00927A 5000010001-7
SECRET
KHARTOUM FRUSTRATED BY SOUTHERN SUDANESE REBELS
The government of the Sudan
is increasingly frustrated over
its inability to control the se-
curity situation in the southern
Negroid provinces. Various gov-
ernment officials are now accus-
ing foreign "imperialist" powers
of actively assisting the south-
ern rebels, and anti-Western
sentiment is growing in Khartoum.
Press reports that American
and Cuban-exile mercenaries have
been seen along the Congo-Sudan
border are apparently widely be-
lieved in Khartoum. The US is
sharing the blame as a supporter
of Tshombd, and Israel has also
been accused of playing an active
role in assisting the rebels.
Communists and radical Af-
ricans are capitalizing on the
growing anti-Western trend.
Moscow has pledged support for
the government's hard-line south-
ern policies, and Cairo last
week publicly offered the Sudan
"all the help needed." Khartoum
is said to be considering asking
the Egyptians to provice some
military equipment. Prime Min-
ister Mahjub plans to travel to
other Arab capitals to enlist
additional support.
A well-organized rebel
offensive is unlikely, however.
Some groups are in contact
with southern political leaders
in Kampala, but many seem to
operate without political di-
rection. Nevertheless, the
rebels have acquired a wide
variety of modern weapons,
many of them from the Congolese
rebels, and have established a
training center and base camp
just over the border inside
the Congo.
A political settlement
seems impossible for the mo-
ment, and the military situa-
tion is a near stalemate. The
army can probably hold on to
major garrison towns, but the
current rainy season would
make any large-scale govern-
ment offensive into the rebel-
controlled areas extremely
difficult. The government,
however, is reportedly deter-
mined to plunge ahead "like a
blind buffalo" in search of a
military solution,
SECRET
Approved ftrgLReiVse 20 , 6 S kA31P79-Q(9:AJ0W00010001-7
 Approved Fortelease 2007/03/06 : CIA-RDP79-009271005000010001-7
SECRET
NEW KASAVUBU-TSHOMBE CONFRONTATION LOOMS
25X1
25X1
The Congo is presently in
a restless interlude, awaiting
the completion of rerun elections
in three provinces and the early
convocation of Parliament.
A new confrontation between
President Kasavubu and Premier
Tshombd may occur before the con-
vening of Parliament
s om has con-
sistently maintained that his
present government must remain in
office until presidential elec-
tions, now set for six months af-
ter parliament meets. A tussle
over the composition of the new
government may also follow, as
Kasavubu appears determined to
insert some of his key support-
ers into any new cabinet.
Meanwhile, Tshombd has de-
parted for a short visit to Eu-
rope, where he will probably
seek financial and political sup-
port in his struggle with Kasa-
vubu.
On the military scene,
most of the Congo remains quiet,
but the rebels may have started
a substantial build-up in the
Fizi area.
FRANCE CONTINUES ITS "QUIET DIPLOMACY" ON VIETNAM
The visit to China by French
Minister of Cultural Affairs
Andre Malraux was probably part
of Paris' campaign of "quiet di-
plomacy" on the Vietnamese ques-
tion. The visit, which ended on
5 August, is in keeping with
Paris' interest in highlighting
French potential for getting
negotiations started at some
future date, while playing down
the prospects for an early
Geneva-type conference, which
De Gaulle feels is premature
at present. There is no evi-
dence that Malraux's broad
SECRET
Approved Fcfjoee 20p LA6 SQ{ P79-052$$00?00010001-7
 Approved For R lease 2007/03 19YP79-00927 5000010001-7
exchange of views with Chinese
leaders produced any agreement
on specific moves toward negotia-
tions.
The Malraux trip was the
latest in a series of moves de-
signed to illustrate Fra.nce's
availability to undertake "good
offices" and its access to all
interested parties. De Gaulle
discussed the Vietnam problem
in June and July with Indonesian
President Sukarno, Laotian Pre-
mier Souvanna Phouma, Soviet Am-
bassador to Paris Zorin, Japa-
nese Foreign Minister Shiina., and
with Vice President Humphrey.
According to Shiina, De Gaulle
believes that negotiations are
not feasible now but that the
time might be "ripe" in another
year or so. At that point, he
might take a new initiative.
Earlier this year Paris
had made a concerted effort for
an international conference on
Vietnam. Once the US began to
bomb North Vietnam on a regular
basis, however, the French ap-
parently decided that prospects
for bringing the combatants to
the conference table had faded.
France doubtless hopes that
such exchanges as De Gaulle's
talks with foreign leaders, and
the Malraux trip will lead to
a, general recognition that Paris
is the logical channel through
which all concerned can even-
tually reach the conference
table. In line with this,
French officials have disparaged
the efforts of all other possi-
ble intermediaries. The em-
phasis is likely to remain on
low-key diplomatic efforts
coupled with discreet hints that
Paris is still very much in
the picture. France will be
especially anxious, however, to
avoid the embarrassment of be-
ing rebuffed on any formal of-
fer of itself as a mediator.
SECRET
Approved 4Ze ase 2368t MRNMP79IO09 7g4CO000010001-7
 Aft~
Approved For Release eqfff P79-00927A005000010001-7
The Eighteen-Nation Disarma-
ment Committee (ENDC) has made
little or no progress in its
talks in Geneva, now in their
third week. The Soviet and East
European delegations have con-
tinued to attack US policies in
Vietnam and neither Moscow nor
the West has presented any new
proposals or indicated possible
areas of compromise. The pro-
longed haggling among the West-
ern allies over the terms of a
nonproliferation treaty has con-
tributed to the prevailing pes-
simism.
The present negotiations
will probably be recessed early
in September so the committee
may report to the General As-
sembly. The eight nonaligned
members of the ENDC are there-
fore increasingly impatient to
discuss some of the issues in-
herited from the UN disarmament
talks in New York earlier this
year..
The Indian delegate, who
usually acts as the spokesman
for the nonaligned group, has
indicated that nonproliferation
is of less interest to India than
to the Atlantic community and to
the USSR. He claims that the
best hope.for agreement in the
ENDC is a comprehensive test ban
treaty to cover underground test-
ing. He has accordingly urged
the US to consider accepting a
short-term agreement with no on-
site inspections except by invi-
tation.
The eight would also like to
discuss a freeze on nuclear de-
livery weapons as proposed by the
US in the disarmament talks in
New York. They have been reluc-
tant to speak out in the meeting
so far, but they want the ENDC to
discuss general and complete dis-
armament rather than concentrat-
ing on partial measures.
The difficulties among the
Western powers over the nonprolif-
eration draft have continued to
come primarily from the UK's in-
sistence that the nuclear members
of any Allied nuclear force retain
absolute control of that force.
The British now appear willing to
concur, however, in the tabling of
the US draft which would freeze
the number of nuclear powers and
other organizations having inde-
pendent control of nuclear weap-
ons. This formulation would be
compatible with the desire of
several NATO members to keep open
the possibility of majority con-
trol in any multilateral nuclear
force. Nevertheless, London still
feels obliged to make fully known
its opposition to majority con-
trol--however much this may ex-
acerbate frictions within the Al-
liance.
There is little chance that
the USSR will agree to the West-
ern draft, and thus discussion will
then turn to other issues.
One proposal that may come
up is Italian Foreign Minister
Fanfani's suggestion for a "nu-
clear moratorium." This proposal
calls for nonnuclear states to
renounce unilateral acquisition
of nuclear weapons for a definite
period after which freedom of
action would be regained should
a nonproliferation treaty not be
accented in the interim. 25X1
SECRET
Approved FDa&l a 2001 W: 1 79-0Q227AAt )5690010001-7
 Approved For R l ase 2007/03/06 : CIA-RDP79-00927A1000010001-7
SECRET
THE POLITICAL SITUATION
The Conservative Party's
prospects have improved with
the resignation of Douglas Home
as leader. The party confounded
its critics by efficiently and
democratically choosing Edward
Heath as party leader. He prob-
ably is the best man in the party
to dispel the "landed gentry"
image which has damaged the
Tories in the eyes of middle-
class voters, and to lead a
really aggressive attack against
the government.
Heath's shadow cabinet is
somewhat more conservative than
might have been expected from a
"modernizing" leader, and im-
portant foreign affairs posts
have gone to men who probably
are more interested in Brit-
ain's ties with Europe than with
its overseas role. Enoch Powell,
shadow minister for defense, has
been an outspoken critic of Brit-
ain's attempts to maintain world-
wide commitments on diminished
resources. Christopher Soames,
who fills the foreign affairs
job, has been suspected of want-
ing Britain to apply for Common
Market membership on De Gaulle's
terms.
Heath's purpose in retaining
all the old familiar faces may be
to enhance party unity and to al-
lay fears of the old guard Tories
about Heath's progressive tenden-
cies.
Prime Minister Wilson fin-
ished the parliamentary session
in mounting difficulty with his
own supporters. His support of
US action in Vietnam, and the es-
sentially conservative measures
he has taken to deal with Brit-
~ ain's financial difficulties,
have cost him Labor Party sup-
port. He has not been able to
deliver union cooperation on
his wage stability program or
to show any other dramatic
progress on curing Britain's
basic economic ills. Many La-
bor supporters probably agree
with the Tory criticism that
his is a government "by gimmick,"
rather than the reforming, in-
novating, peacemaking government
they thought they were electing
last October. This disenchant-
ment is reflected in the latest
Gallup poll, which gives the
Conservatives a seven-and-a-
half_percent lead over Labor.
For all his problems,
Wilson still has a good chance
of avoiding an election, if
he chooses, until next spring.
He is relieved of the daily
danger of surprise defeat by
the Tories, or of open rebel-
lion in his own party while
Parliament is in recess. The
encouraging July export figures
also give him breathing space
in his defense of sterling.
Parliament will not get back
down to business until November,
and Britons traditionally
avoid winter elections. Never-
theless, Wilson will have to
justify himself to his party
conference--in which left-wing
union leaders have a dominant
role--in late September. Heath
no doubt will use the interval
before Parliament reconvenes
to finish his review of Con-
servative policies and prepare
battle.
SECRET
Approved For Release 2007/03/06 : CIA-RDP79-00927A005000010001-7
Page 23 WEEKLY SUMMARY ' 13 Aug 65
 Approved FRelease 2007/03/06 : CIA-RDP79-00005000010001-7
SECRET
Western Hemisphere
PERUVIAN GUERRILLA ACTIVITY INTENSIFIES
After a period of relative
inactivity during late July,
the Movement of the Revolution-
ary Left (MIR) has stepped up
its guerrilla offensive in
east-central Junin and Huan-
cavelica departments, and may
have opened a new front in the
southern department of Cuzco.
Guerrillas, aided by scores
of Indian peasants, ambushed
a Civil Guard detachment some
25 miles east of Satipo in Junin
Department on 9 August. At
least three policemen were
killed. The detachment had been
sent to investigate the killing
of four persons by MIR-led
Indians the previous day at the
village of Kuba.ntia.
Thirty additional civil
guardsmen and 270 army rangers
have been sent to Satipo to re-
inforce units already there.
Terrified hacienda owners in the
area reportedly are planning to
abandon their homes and move to
town for protection.
Some 50 MIR-led Indian
peasants also attacked a ha-
cienda in nearby Huancavelica
Department early this week,
stealing cattle and wounding
the owners. There are also
unconfirmed press reports that
a police post has been attacked
by "extremists" in the Santa
Ana, district of Cuzco Depart-
ment, and that on 31 July a
bridge was destroyed in the
same area, presumably by MIR
guerrillas. If these reports
are correct, it would suggest
that the MIR has launched its
long-anticipated offensive in
the south.
The participation of nu-
merous Indians in the recent
raids and ambushes suggests
that the MIR has greater abil-
ity to incite Indian discontent
than was heretofore believed,
and to utilize the peasants for
subversion. A large-scale
Indian rebellion in the sierra
would be extremely difficult,
if not impossible, to control.
The recent outbreak of
insurgency gives further evi-
dence of the security forces'
inability to contain or isolate
guerrilla activity. Moreover,
the opening of a new front in
the south will compound their
difficulties and severely tax
the government's limited
counterinsurgency capability.
SECRET
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
Page 24 WEEKLY SUMMARY 13 Aug 65
 25X1 Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
 4
Approved For Release 2007/03/06 : CIA-RDP79-00927A005000010001-7
SECRET
Guatemalan politics entered
a new phase after two and a half
years of relative quiet because
of the recent lifting of the
state of siege and the prospect
of presidential elections in
March 1966. The first days of
the campaign suggest that chaos
remains a hallmark of Guatemalan
politicking. Political infight-
ing on the eve of the last
presidential campaign resulted
in the military coup of March
1963.
Guatemalans last voted for
a president in the two incon-
clusive elections in October
1957 and January 1958. President
Ydigoras was finally selected
by congress in February 1958.
Early political moves indi-
cate trouble for the government's
nominee. The official Democratic
Institutional Party (PID) announced
as its candidate Juan de Dios
Aguilar de Leon, an inactive army
colonel who currently heads the
National Electrification Institute.
Aguilar is an unpopular choice,
and his nomination is character-
istic of the regime's political
ineptness. Chief of Government
Peralta's insistence on the
Aguilar candidacy cost the
regime its last chance to spon-
sor a candidate jointly with
other parties, and reports
indicate that the PID may split
over the choice of Aguilar.
The ex-chief of staff of the
armed forces, Col. Ponciano, is
the candidate of the rightist
National Liberation Movement
(MLN), which refused to join
the PID in sponsoring Aguilar.
Peralta is highly displeased
with Ponciano's bid for the
presidency. The moderate left-
ist Revolutionary Party (PR)
is expected to nominate its
director, Mario Mendez Monte-
negro.. So far, no other party
has the legal status to par-
ticipate in the campaign.
Peralta's chronic distrust
of an unfettered normal political
process is likely to grow with
pre-election maneuvering.
Unofficial returns from the 1
August single-slate by-elections,
held to fill vacancies in the
Constituent Assembly, indicate
that about 50 percent of the
ballots were voided as protest
votes--a development which has
greatly buoyed all opposition
elements. The country's worsen-
ing balance-of-.payments situa-
tion may require the Peralta
government to impose controls
which are likely to alienate
business groups who, along
with the military, are the sole
remaining supporters of the
regime.
Elements within the military
are concerned over their identi-
fication with a regime whose
popularity is steadily waning.
Peralta's failure to rectify
some of his political errors
will endanger the unity of the
armed forces on which the regime'
viability depends,
SE CRE T
Approved figkeejtase ,( g4/OfDP79tg0%7gAO0000010001-7
 Approved For 'lease 2007/03/06 : CIA-RDP79-009275000010001-7
SE CRE T
BRAZILIAN PRE-ELECTION
The Brazilian political
scene is becoming increasingly
heated as a result of intensi-
fied maneuvering for the guber-
natorial elections scheduled for
3 October in half of the nation's
22 states. The electoral activ-
ities in several important states
--and the federal government's
reactions to them--are expected
to produce prolonged and exten-
sive repercussions. The elec-
tions will probably be most im-
portant in helping to shape the
outlines of the Castello Branco
government's political strategy
to ensure that a prorevolution-
ary regime is elected in 1966.
In most of the states, lo-
cal rather than national issues
are predominant. In a few po-
litically or economically power-
ful states, however, the accom-
plishments of the Castello Branco
administration--and indeed the
very philosophy of the revolu-
tion it leads--have come to be
key election issues. Federal
authorities have been especially
concerned by the nomination of
certain candidates who, because
of their reputed corruption or ties
with Communism, are unacceptable
to revolutionary leaders. Admin-
istration leaders have strongly
implied that the revolution will
be preserved even at the expense
of normal democratic practice.
The government clearly would
prefer, however, to rely on
strictly legal methods to nul-
lify these candidacies.
The attention of the revo-
lutionary authorities is per-
POLITICAL ACTIVITIES
haps riveted most closely on
the candidacy of retired Mar-
shal Henrique Teixera Lott
for the governorship of Guana-
bara--the state comprising the
former federal district of Rio
de Janeiro.
The 70-year-old Lott is
an avowed leftist and former
minister of war who unsuccess-
fully sought the presidency
in 1960. He won a surprise
victory on 3 August in a close
contest for the nomination of
the Brazilian Labor Party for-
merly headed by ex-President
Joao Goulart. Lott can be ex-
pected to wage an active cam-
paign on openly antirevolu-
tionary themes and probably
would receive the support of a
wide range of opposition ele-
ments.
Government efforts to bar
his candidacy on the legal
technicality that he cannot
demonstrate compliance with a
newly promulgated residence
requirement are now under con-
sideration. If this does not
work ,, other measures--perhaps
even the suspension of the
election in Guanabara--are
likely to be used. Similarly,
gubernatorial candidates in
the states of Minas Gerais and
Goias will probably be chal-
lenged in the courts on the
basis that their candidacies
were prohibited under the terms
of the recently passed "law of
ineligibilities."
Such infringements of lo-
cal politics by federal
SE CRE T
Approved For lea 0 / 6 : CIA-RDP -00927A005000010001-7
Yage MARY Aug 65
 Approved For Reuse 2007/03/06 : CIA-RDP79-00927AOG5+?00010001-7
SECRET
officials are bound to increase
criticism of the Castello Branco
government. Overriding this,
however, is the fact that they
will strengthen the support of
the government, by its main power
base--the Brazilian armed forces.
On the other hand it remains
to be seen whether these tac-
tics will prevent the triumph
of candidates who vehemently
oppose the aims of the revo-
lution in either the 1965 or
1966 elections.
DOMINICAN LEADERS WEIGH OAS COMMITTEE PROPOSAL
The OAS Committee on 9 Au-
gust submitted its proposal to
end the three-and-a-half-month-
old Dominican civil war to both
contending factions and the gen-
eral public.
The proposed settlement re-
tains the principal element of
the committee's June proposals,
the installation of a provisional
government followed by elections
in about nine months. The new
proposal, termed the Act of Rec-
onciliation,; provides for the
rebels'to disband their defenses
and empowers the provisional
government to police the former
rebel zone, utilizing the Inter-
American Peace Force if neces-
sary. It also calls for the
rebels to voluntarily turn over
their arms to the interim re-
gime, with the proviso that the
provisional government can take
necessary steps to recover with-
held weapons. The proposal
permits the reintegration into
the armed forces of rebels who
were on active military duty
when the revolt broke out; and
states that the new regime,
headed by Hector Garcia Godoy,
will initiate negotiations
with the OAS regarding the
IAPF's withdrawal.
Initial reactions from
leaders of both the Government
of National Reconstruction
(GNR) and the "Constitutional"
Government were unfavorable.
GNR leader Antonio Imbert,
however, under increasing
pressure from his military
chiefs, business and civic
leaders, and the diplomatic
community, has implied that
he would sign the act, pro-
vided he could be assured of
minimum rebel influence in the
military.
SECRET
Approved oj-eR 19 I ase QEQ LY/g&. Cl DP71R029ug 655000010001-7
 Approved For'}k4ease 2007gpq:EaaVDP79-00927Vb5000010001-7
Top military officers in-
dicated their approval of the
proposals despite grumbling
from some subordinates. Armed
Forces chief Rivera indicated
that he would step down 30 days
after the installation of a pro-
visional government. The reb-
els,, however, are demanding
that all top officers be re-
moved.
Diverse elements in the
rebel camp are apparently di-
vided over whether to accept
the act with some semantic
changes or totally reject it.
More moderate rebel elements,
such as members of the Domini-
can Revolutionary Party (PRD),
favor acceptance after a few
face-saving modifications.
The Communists, elements of
the rebel military, and oppor-
tunists such as Hector Aristy
have been openly critical of
the proposal and are trying to
rally rebel opposition to it.
Rebel leader Francisco Caamano
is probably under considerable
pressure from these obstruc-
tionist elements to take a hard
line in negotiations.
The Dominican Communist
Party (PCD), formerly the Do-
minican Popular Socialist Party
(PSPD), announced it was op-
posing the new OAS proposal
SE CRE T
and was demanding that Caamano
seek several significant changes.
The PCD is probably trying to
gain support from the two other
extremist parties which have
opposed earlier OAS proposals.
The PCD has suggested a unified
extreme leftist party utilizing
the title "Communist" but it
received an initial negative
reaction from the two other
groups. Joaquin Balaguer, head
of the Reformist Party (PR),
last week released a manifesto
urging public support of the
OAS formula. The specific mis-
sion of the proposed provisional
government, in his view, is to
lead the country to honest and
early elections, elections which
PR officials are confident Bala-
guer would win.
Although Balaguer is one
of the country's most popular
political figures, he has bit-
ter enemies who hate and fear
him because of his close col-
laboration with the former dic-
tator Trujillo.
Approved F8P IONse 2 W6 6S K UP79 -X9 068000010001-7
 Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
Approved For Release 2007/03/06 : CIA-RDP79-00927AO05000010001-7
 Approved For Re ease 2007/0SE(ZR '79-00927A0 00010001-7
Approved For Release 200EMDP79-00927A005000010001-7