WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A005800050001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 40
• Document Creation Date: December 20, 2016
• Document Release Date: May 3, 2006
• Sequence Number: 1
• Publication Date: May 26, 1967
• Content Type: SUMMARY

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DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
EO1A LY
JOB
State Dept. review completed
Secret
0
,5 0
26 May 1967
No. 0291/67
?'3 $ '"4"
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(Information as of noon EDT, 25 May 1967)
VIETNAM
Except for a one-day standdown in observance of Bud-
dha's birthday, allied forces last week continued
their major assault against North Vietnamese staging
areas and heavy gun positions in northeastern Quang
Tri Province. In Saigon, signs that Chief of State
Thieu intends to run for the presidency are creating
friction in military circles.
LAOTIAN PREMIER'S POLITICAL MOVES FRUSTRATED
Conflicting regional interests have blocked his ef-
forts to reorganize the cabinet. Communist military
forces are increasingly active in northern Laos.
HONG KONG GOVERNMENT SUPPRESSES COMMUNIST-LED DISORDERS
The strong measures seem to have set back for the
moment the Communist challenge to British authority,
but Peking is maintaining its pressure on the British.
CONTINUED DISORDER IN COMMUNIST CHINA
Peking's accounts of widespread violence involving
pro-Mao forces are probably exaggerated and designed
to discredit local party officials. Their circulation
underscores Peking's difficulties in effecting changes
.in the provinces.
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Europe
MOSCOW NAMES NEW KGB CHIEF
The appointment of party secretary Yuri Andropov as
chairman of the Committee of State Security (KGB)
this week was probably a result of high-level dis-
satisfaction with the performance of that organiza-
tion and of shifting power relationships in the
politburo.
EEC MEMBERS TO MEET AT ROME SUMMIT
Prospects for the first summit meeting of the Six
since 1961, originally promoted to mark a positive
step toward political unity, are clouded by De
Gaulle's opposition to British membership in the
community.
UK RESISTS SPAIN'S PRESSURE ON GIBRALTAR PROBLEM
Madrid has agreed to receive a British negotiating
team to hear British complaints about Spanish a-_r
restrictions which affect air traffic at Gibraltar.
THE NEW YUGOSLAV GOVERNMENT
The sweeping personnel changes made this week in con-
formity with the constitution ensure continuity of
the regime's policies and further enhance the author-
ity of the leaderships in the republics.
SRCRE'l'
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ARAB-ISRAELI CONFRONTATION AT NEW HIGH
Israel and its Arab neighbors are mobilizing. With
Nasir's announcement affecting shipping into the Gulf
of Aqaba, the threat of conflict is greater than at
any time since 1958. An incident in the gulf or along
the Israeli frontiers could quickly lead to escalation
of the war of nerves.
FIRST STEP IN GREECE TOWARD RETURN TO CONSTITUTIONALITY
A committee has been appointed to prepare a new draft
constitution within six months, but the government
probably would not be prepared to submit any revisions
to public referendum until at least early 1968. Mean-
while life in Greece goes on at an apparently normal
pace.
INDIAN PARLIAMENT OPENS DIFFICULT SESSION
The Congress Party government, although marginally
strengthened, faces a continuing onslaught from its
divided opposition in the first full-scale session of
the new Parliament since its election in February.
DEVELOPMENTS IN THE NIGERIAN CRISIS
Gowon's recent attempt to conciliate Ojukwu and the
East seems unlikely to deter the East from further
steps toward seceding from the Nigerian federation.
Western Hemisphere
MEXICAN GOVERNMENT CRACKS DOWN IN SONORA
The governing party is undoubtedly alarmed by the wide
support for the opposition, which is essentially a
protest against the party's system of "imposing" po-
litical candidates.
BRAZILIAN POLICY DIRECTION CAUSES CONCERN
There is growing concern among responsible Brazilian
military and political leaders over President Costa e
Silva's failure to assert firm leadership in either
domestic or foreign matters.
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PERU'S FISCAL CRISIS CAUSING POLITICAL PROBLEMS
Military leaders are greatly concerned over a polit-
ical stalemate between President Belaunde and the
opposition-controlled Congress on the subject of new
taxes to meet an economic and fiscal crisis.
CUBA PLEDGES TO SUPPORT SUBVERSION
Havana last week acknowledged its involvement in the
guerrilla landing in Venezuela on 8 May and defiantly
promised continued support to "all revolutionary move-
ments fighting against imperialism in any part of the
world."
OAS MOVING CAUTIOUSLY ON CUBAN AGGRESSION ISSUE
Some members of the organization of American States
fear that a hastily called consultative meeting of
foreign ministers will result in a sterile condemna-
tion of Cuba which will only underline the impotence
of the OAS in the face of Cuban-supported subversion.
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FAR EAST
Although the confrontation in Hong Kong remains
tense, local Communist leaders appear uncertain as
to their future course in the face of the unyield-
ing British stance. The Hong Kong Government has
banned unauthorized demonstrations and public meet-
ings and has taken other strong measures to suppress
leftist agitation. In Peking the regime is display-
ing strong public support for the Hong Kong leftists
by denouncing alleged British "atrocities," demand-
ing prompt acceptance of its five-point demand of
15 May, and staging new demonstrations outside the
British Embassy. It is still unclear, however, how
far Peking will go in supporting more violent and
risky actions to force British compliance with Chi-
nese demands.
There is no evidence so far that policy in deal-
ing with the Hong Kong crisis has become an issue in
the internal struggle in China. Reports in Chinese
media of widespread violence and disorder underscore
the apparent inability of the Peking leaders to exert
effective authority in some areas. Peking posters
have blamed local military commanders for instigat-
ing clashes with militant Red Guards in at least
five provinces.
The brief truce in Vietnam commemorating Bud-
dha's birth produced no changes in the diplomatic
impasse. Although Hanoi routinely denounced US and
South Vietnamese operations in the southern Demili-
tarized Zone as an "extremely serious step of war
escalation," it avoided any charge that this opera-
tion has destroyed the Geneva agreements as a whole.
There were no indications that Hanoi interpreted
this operation as foreshadowing an invasion of North
Vietnam or that it will result in any significant
changes in Hanoi's war policy.
Pressure on the fragile unity of Saigon's mil-
itary leadership increased with an announcement that
Chief of State Thieu has decided to run for the pres-
idency. The rivalry between Thieu and Premier Ky
apparently encouraged the leading civilian contender,
former premier Tran Van Huong, to decide on an earl
declaration of his candidacy.
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VIETNAM
US Marine and South Vietnam-
ese Army (ARVN) task force ele-
ments are in the final phase of
a major offensive against an esti-
mated 9,000 North Vietnamese regu-
lars in the southern portion of
the Demilitarized Zone (DMZ) and.
adjacent areas of northeastern
Quang Tri Province.
The allied campaign began on
17 May in an effort to relieve
heavy Communist pressure on five
Marine outposts--Con Thien, Cam
Lo, Camp Carroll, Gio Linh, and
Dong Ha--on the periphery of a
strategic 100-square mile area
just south of the buffer zone.
Marines positioned in this area
have suffered heavy casualties
from two months of steady artil-
lery, rocket, and mortar bombard-
ment from emplacements within the
DMZ. There had been recent indi-
cations that elements of at least
three North Vietnamese regiments
had completed battlefield prepara-
tions for a major ground assault
against the Con Thien garrison.
Communist resistance to the
allied push has varied from
moderate to heavy. As of 25 May,
confirmed enemy losses stood at
641 killed as against allied
casualties of 125 killed (101 US)
and 728 wounded (613 US). In ad.-
dition, allied units had captured
and/or destroyed enemy stockpiles
containing more than 55 tons of
ammunition, explosive, and food-
stuffs.
Elsewhere in Quang Tri Prov-
ince, two battalions of the lst
ARVN Regiment killed more than 150
Communist troops dur__nq a 14-hour
engagement on 20 and 21 May with
an estimated North Vietnamese Army
(NVA) battalion some five miles
east of Quang Tri city. On 21 May
elements of the 325th NVA Divi-
sion launched a heavy mortar at-
tack against the allied Special
Forces camp at Lang Vei near the
Lao border, but failed to breach
the camp's defense perimeter in a
follow-up ground assault.
Heavy Infiltration Continues
There are indications of con-
tinuing North Vietnamese infiltra-
tion into the DMZ - Quang Tri -
Thua Thien areas.
Recently captured documents
indicate that the 9th Regiment/
304th NVA Division entered South
Vietnam via the DMZ on 1 March and
that at least one of its subordi-
nate battalions participated in
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WEEKLY SUMMARY 26 May 67
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Ba Long
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the attack against La Vang, south
of Quang Tri city, on 6 and 7
April. Although the present loca-
tion of the 9th Regiment is un-
known, there is evidence that the
unit may have reinforced the Com-
munists' "Northern Front" military
command which is responsible for
operations in Quang Tri and Thua
Thien provinces.
In addition, there are tenu-
ous indications that elements of
the 330th NVA Division may be de-
ploying to South Vietnam. I
North Vietnamese Military
North Vietnam's limited fighter
aircraft inventory has been seri-
ously reduced during May with the
loss of over 30 aircraft. Twenty-
five have been lost in aerial en-
gagements and another six, and
possibly seven, fighters have been
destroyed on the ground. Hanoi's
operational in-country fighter
strength is now estimated to be
about 45 aircraft.
Despite these significant
losses, Hanoi has a substantial
reserve of jet fighters at China's
Yunnani Airfield with which it can
maintain at least a limited air
defense capability.
Bloc Aid to Hanoi
A high level Hungarian mili-
tary delegation led by the minis-
ter of defense visited Hanoi from
15 to 23 May. The almost exclu-
sively military character of this
delegation strongly suggests that
military aid was discussed. This
is the first such visit by Hun-
garian military personnel since
North Vietnam came under aerial
attack. Most other East European
countries have sent delegations
to North Vietnam in the past two
years, but they have been pri-
marily political in character.
Hungary has no independent
capacity to supply Hanoi with
sophisticated weapons systems
but could provide small arms and
support equipment or some trained
personnel. The background of the
men on the delegation would qual-
ify them to discuss a variety
of military aid specialities,
including conventional artillery
systems.
Politics in South Vietnam
Broad hints from Chief of
State Thieu that he soon plans
to announce his presidential
candidacy in opposition to Premier
Ky are creating some friction in
the military and perhaps encour-
aging civilian candidacies.
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In press interviews and pub-
lic statements last week, General
Thieu broached the possibility of
his candidacy, but stopped short
of committing himself. Foreign
Minister Do and Thieu's press of-
ficer later declared that he had
definitely decided to run. No of-
ficial announcement has yet been
made, however, and it is still pos-
sibile that Thieu will not be a
candidate. By promoting reports
of his candidacy in the meantime,
Thieu is trying to keep his op-
tions open and to prevent the mil-
itary establishment from uniting
behind Ky.
Ky's supporters are showing
concern over the possibility of
Thieu's candidacy.
Civilian candidates may well
feel that the war of nerves be-
tween Thieu and Ky significantly
enhances their own prospects for
an electoral victory. 25X1
for- 25X1
mer premier Tran Van Huong--the
leading civilian contender--now
intends to declare his candidacy.
LAOTIAN PREMIER'S POLITICAL MOVES FRUSTRATED
Laotian Prime Minister Sou-
vanna's success in electing a more
amenable National Assembly early
this year has not yet led to sub-
stantive progress in resolving
long-standing political problems.
The spirit of cooperation
among regional, family, and mili-
tary factions which seemed to be
emerging after the election has
diminished as Souvanna has sought
to implement his oft-stated polit-
ical goals. The reassertion of
factional suspicions and Souvanna's
failure to win backing for a broad-
based "united front" have forced
him to abandon all but the least
controversial governmental changes.
One of the unresolved prob-
lems is the reorganization of the
cabinet. Although there is com-
mon agreement that changes are
needed, Souvanna has found it
difficult to make them without
conflicting with regional inter-
ests. Thus his efforts to replace
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Deputy Prime Minister Leuam
Insisiengmay, an obstreperous
rightist, have foundered on the
refusal of southern leader Bourn
Oum to see his protege demoted.
Souvanna has also attempted
to remove from Vientiane the left-
leaning neutralist, Information
Minister Pheng Phongsavan, long
a target of rightist assembly
deputies, by naming him ambassa-
dor to Moscow. His move was com-
plicated by the cool Soviet re-
sponse to Souvanna's intent to
name the outgoing ambassador,
rightist Khampan Panya, to the
position of foreign minister.
Unable to make these desired
changes, Souvanna will reportedly
content himself with filling cer-
tain minor subcabinet positions
and will retain the foreign min-
ister's portfolio himself.
Other political problems,
such as the designation of a fu-
ture successor to Souvanna, have
been placed in abeyance because
of the regional hostilities which
they generate. Souvanna is sen-
sitive to the fragility of his
present alliance with key mili-
tary commanders. His awareness
of the danger in pressing changes
too vigorously will probably
cause him to pursue a cautious
course in the coming months.
On the military front, the
Communists appear to be making a
renewed effort to counter recent
government initiatives in iso-
lated areas of northern Laos.
In late April and early May,
Communist forces of perhaps two
battalions captured several for-
ward guerrilla positions north-
east of the royal capital of
Luang Prabang (see Indochina map
on page 3).
Farther east near Communist-
held Samneua town, enemy forces
were reported early this month to
be moving toward a progovernment
outpost with access to important
lines of supply from North Viet-
nam. The Communists had been
pushed back earlier in recent
fighting in the area.
Although they are reacting
to the increased aggressiveness
of government forces, the Commu-
nists probably are also trying to
weaken the government's ability
to monitor their movements from
advance outposts, some of which
are behind their lines.
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HONG KONG GOVERNMENT SUPPRESSES COMMUNIST-LED DISORDERS
Strong measures by the Hong
Kong government against Communist-
led agitation has set back for
the moment the Communist challenge
to British authority in the colony.
Peking is maintaining pressure,
however, through diplomatic moves
and harassment of British diplo-
mats.
On 22 May the police used
tear gas and truncheons to dis-
perse mobs in the main shopping
area of Hong Kong island--an
episode which Communist propaganda
exploited to spread charges of
brutality. The government has
since banned all unauthorized
processions and meetings in an
effort to prevent further inci-
dents. Since the disorders began
on 6 May over 600 demonstrators
have been sentenced to jail terms
ranging from three to 18 months.
In addition, the local au-
thorities have banned the broad-
cast of inflammatory statements
from loudspeakers and set heavy
penalties for violators. London
has approved actions against the
Peking-controlled Bank of China
which has acted as a command post
for the agitation, and has dis-
patched a helicopter assault ship
carrying British commandos.
Confronted by this firm
stand, the Communists appear un-
certain as to their future course.
Their influence in leftist
unions has been spotty. Sporadic
busmen's strikes have been only
partially effective, and only
half the employees in the gas
company responded to a four-hour
strike call. Although the Commu-
nists appear to be planning future
strikes against the utility com-
panies, the authorities can prob-
ably maintain essential services
with a well-organized emergency
volunteer corps.
In Peking on 22 May the Brit-
ish charge was handed a strong
protest over alleged British
"atrocities" in Hong Kong. The
Chinese also called for a quick
reply to the Foreign Ministry
statement of 15 May which had de-
manded that the British release
arrested demonstrators, punish
those guilty of police brutality,
make an apology, and guarantee
that similar actions will not
occur.
The British have deliberately
avoided acknowledging the Chinese
demands in the hope that Peking
would let the matter slide. Since
many of those arrested have al-
ready been tried, convicted and
sentenced, the British could not
release them without suffering
the same loss of face the Portu-
guese accepted in Macao.
Peking's reiteration of its
demands suggests an intention to
maintain pressure until it gets
some concessions from the Hong
Kong authorities. In other moves,
Peking ordered the closure of
the British representative's of-
fice in Shanghai and on 24 May
renewed demonstrations outside
the British Embassy in Peking.
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JAMMU
AND
KASHMIR
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Area of reported disorder
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CONTINUED DISORDER IN COMMUNIST CHINA
Chinese Communist propaganda
media continue to report wide-
spread violence involving pro-Mao
forces in accounts which are prob-
ably exaggerated and designed to
discredit local officials. Their
circulation underscores Peking's
difficulty in effecting political
changes in the provinces, however,
and implies that leaders in Peking
disagree on who is to be purged.
The latest wall posters
allege that Red Guards have been
massacred by the hundreds in
Heilungkiang and Szechwan recently,
and have been involved in lesser
conflicts in several other prov-
inces. Almost all reports blame
local military commanders for
instigating the conflicts.
In Heilungkiang--long touted
by Peking as a model area--posters
claim that regular army troops,
led by a deputy commander of the
Heilungkiang Military District,
joined with "reactionary" forces
to attack pro-Mao elements on 14
and 19 May. More than a thousand
people, including representatives
of prominent Red Guard organiza-
tions in Peking, were allegedly
killed, wounded, or arrested.
Other posters charge that Wang
En-mao, commander of the Sinkiang
Military Region, ordered the ar-
rest of numerous Red Guards in-
volved in clashes which broke out
in Urumchi on 16 May.
Other posters, and some
provincial broadcasts, indicate
that local military commands are
in open conflict with militant
Red Guards in Szechwan, Honan,
Kansu, and Hupeh provinces. In
only one area has the regime ap-
parently taken forceful measures
to end the fighting. According
to one poster on 18 May, Premier
Chou En-lai ordered troops de-
ployed into a district of Szechwan
where local troops had been fight-
ing Red Guards. Since then, how-
ever, additional bloody fighting
is said to have erupted in other
parts of the province.
Peking's handling of recent
disorders in the provinces has
been equivocal. An editorial in
the People's Daily of 22 May
strongly denounced those who re-
sort to violence, said they had
caused serious production losses,
and implied that Mao Tse-tung
had personally authorized army
units to intervene and stop vio-
lent clashes. There is little
evidence that this order is being
vigorously enforced, however, and
other recent editorials take a
militant line in stressing the
need to sustain the drive against
Mao's enemies, including those
who have "sneaked into the army."
F__ I
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EUROPE
British Foreign Secretary Brown's delayed visit
to Moscow began on 22 May. The Middle East crisis
probably has commanded primary attention in his dis-
cussions.
Both Britain and France are eager to attract
broad international support for any action that might
have to be taken in the crisis. Paris has also ap-
proached the Russians to use their influence construc-
tively but received little satisfaction. The French
are trying to maintain the position that they are the
impartial friend of both the Arab and the Israeli
sides.
The eyes of the Soviets like everyone else's
have been drawn toward the Middle East, and they are
maintaining a bold front on behalf of the Arabs.
Moscow's propaganda on the Middle East has forced
its harangues over Vietnam momentarily into second
place. Condemnation of the US military action in
the Demilitarized Zone and of the bombings in Hanoi
has been sharp but not high pitched. Soviet Ambas-
sador Dobrynin continues his protracted consultations
in Moscow but, according to Foreign Minister Gromyko,
will return to Washington "soon."
In other areas of US-Soviet relations, the USSR's
Supreme Soviet Presidium late last week ratified the
Outer Space Treaty and, although the Russians held
to their tough bargaining position on the Nonprolifer-
ation Treaty, they continued to give signs that they
wanted a treaty signed. The Soviets continue to ob-
ject, however, to the articles on amendments and safe-
guards, and negotiations continue in Geneva toward
some compromise which would permit the draft treaty
to be tabled before the Eighteen Nation Disarmament
Committee.
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MOSCOW NAMES NEW KGB CHIEF
The appointment of party
secretary Yuri Andropov as chair-
man of the Committee of State Se-
curity (KGB) this week was prob-
ably a result of high-level dis-
satisfaction with the performance
of that organization and of shift-
ing power relationships in the
politburo. The manner of the
change suggests that the ousted
chairman, Vladimir Semichastny,
who had headed the KGB since 1961,
is in disfavor. Semichastn 's
future remains uncertain
The public record of the
KGB's errors during the past year
or so alone may have been suffi-
cient to convince the politburo
that changes in its leadership
were necessary. The KGB has no
doubt been criticized for not
preventing the defection of Sta-
lin's daughter and for the intel-
ligence operations recently ex-
posed in Northern and Western
Europe. Other blots on the KGB's
record include its involvement
in the kidnaping of US citizen
Vladimir Kazan and its alleged
role in both the Rankovic affair
in Yugoslavia and attempts to
subvert Rumanian party officials.
The party leadership may also
have been concerned that Semi-
chastny was becoming so entrenched
and influential as to escape the
party's control. His organiza-
tion's missteps could then merely
have hastened the c:iange which
the leadership probably expects
will enable the party to tighten
control over the KGB and ensure
the subordination of its activi-
ties to broaden foreign policy
considerations.
Thus far there are no good
clues as to how Kremlin politics
figure in the change, but Semi-
chastny's removal could be dam-
aging to his long-time political
patron and predecessor as KGB
chief, politburo member Alek-
sander Shelepin. Late last year
there were rumors--which cropped
up again about a month ago--that
Semichastny's removal would be
the next step in the gradual
erosion of Shelepin's position.
During the past month or so, how-
ever, Shelepin has been more ac-
tive in tasks outside his assigned
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responsibility for overseeing the
consumer goods sector of the econ-
omy. Most notable was his attend-
ance with Brezhnev and Andropov
of last: month's meeting of Euro-
pean Communists at Karlovy Vary.
Like the two previous KGB
chiefs, Andropov is not a profes-
sional security official. He has
been engaged for ten years in over-
seeing intrabloc party affairs--
since 1.962 as a member of the cen-
tral committee secretariat. Al-
though bloc unity has weakened
during this period, there is no
good indication that his perform-
ance has been considered unsatis-
factory. At any rate, it is
most unlikely that he would be
moved to the top security post
if he were under a cloud.
Not since Beria's ouster in
1953 has the security chief simul-
taneously held a second top po-
litical post, and it is likely
that Andropov will have to give
up his place on the secretariat.
A central committee plenum would
be required to formalize changes
in the secretariat membership.
Party statutes call for a plenum
no later than the end of June,
and it may reassign secretariat
responsibility for intrabloc re-
lations and yield further insight
into the effect of the KGB re-
shuffle on the leadership.
EEC MEMBERS TO MEET AT ROME SUMMIT
The meeting of the Six in
Rome scheduled for 29-30 May will
be their first at the summit level
since 1961. Originally intended
to mark the tenth anniversary of
the Rome treaties establishing
the EEC and EURATOM, the summit
comes at a time when De Gaulle's
strong opposition to Britain's
membership in the community
threatens again to divide France
from the Five and to cloud pros-
pects for political cooperation.
De Gaulle has cast a further
shadow over the meeting by threat-
ening to stay away if EEC Commis-
sion President Hallstein is pres-
ent. The French have long been
hostile to Hallstein as a strong
and effective advocate of Euro-
pean supranationality. De Gaulle's
behavior in this connection has
created considerable resentment
among the Five, but De Gaulle is
probably counting on their re-
pressing it in order to avoid
worsening the atmosphere. Hall-
stein apparently is to play no
official role in the two-day ses-
sion.
He recently withdrew his
candidacy for president of the
new 14-man commission which is
to result from the merger of the
present executives of the EEC,
EURATOM, and the Coal-Steel Com-
munity, and one of the tasks at
Rome will in fact be to select
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Hallstein's replacement. This
may not be easy. The Italians
are expected to press for accept-
ance of one of their candidates.
EEC Vice Presidents Rey of Bel-
gium and Mansholt of the Nether-
lands will also be strong con-
tenders even though the Six have
agreed to give first considera-
tion to an Italian.
On "political unification,"
the summit is expected at most to
make a gesture by agreeing to re-
institute the periodic meetings of
the foreign ministers of the Six
which started after the 1961 sum-
mit but subsequently were aban-
doned. The Five, despite a desire
for some movement toward political
unity, remain suspicious of French
designs to use such sessions under
the guise of political consulta-
tions to take certain matters out
of the hands of the EEC Council.
The Five are also reluctant to
move far in this area without the
British. Belgian Foreign Minister
Harmel in a conversation with Am-
bassador Knight this week noted the
impossibility of serious study of
what the future political organi-
zation of Europe should be "until
the UK is either in or out."
In any 'discussion in Rome of
British entry, De Gaulle is likely
to reiterate the line he took in
his press conference last week that
Britain is economically and politi-
cally unready for full membership.
He will probably assert that ad-
mission of the British would dis-
rupt progress toward integration
and probably destroy the Community.
The French are apparently also
spreading the word--despite its
inconsistency with the latter
argument--that De Gaulle will
demand a complete reorganization
of the Community to take account
of new members. Another line be-
ing heard from the French is that
the commission, whose opinion is
required on entry questions, will
not be in a position to give ad-
vice because of the reorganiza-
tion necessary when the merger
agreement goes through.
None of the Five is eager to
confront the French over British
entry, and an open break on the
question in Rome appears possible
only if De Gaulle should refuse
to consider any negotiations with
the British. The Dutch are plan-
ning to try in Rome to form a
united front of the Five in favor
of entry negotiations,
In the meantime, discussion has be-
gun on whether or not the UK ap-
plication should be placed on the
5-6 June agenda of the EEC Coun-
cil, as favored by the Belgians
and Germans. The discussions in
Rome may center on this point, but
the turn of debate on the British
question remains unpredictable.
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UK RESISTS SPAIN'S PRESSURE ON GIBRALTAR PROBLE
London is refusing to give
in to pressures from Madrid to
relax British control over Gibral-
tar.
The present phase of their
confrontation began in mid-April
when the Spanish announced a new
zone prohibited to all air traf-
fic--a restriction which would
affect operations at the Gibral-
tar airport, especially in bad
weather. The British reacted by
calling off a fifth round of talks
on the Gibraltar problem scheduled
for 18 April. These were to be
held to comply with a UN General
Assembly resolution inviting
both countries to negotiate over
decolonization of Gibraltar. The
British also appealed to the In-
ternational Civil Aviation Organ-
ization (ICAO) to get the Span-
iards to postpone the 15 May ef-
fective date of the prohibited
zone. Evidently influenced by
the Spaniards' argument that the
problem was a political matter
not under its jurisdiction, the
ICAO Council took no action.
When the ban took effect,
the British indicated that their
civil aircraft would try to comply
with the restrictions and in bad
weather would fly to other air-
fields rather than make major in-
fringements of the prohibited
zone. British instructions per-
mit minor infringements when nec-
essary to meet safety require-
ments. Good weather during the
first week of the ban has pro-
vided no occasion to test these
instructions. Spain has made a
show of keeping British aircraft
under surveillance with F-86 jets
and a radar-equipped destroyer.
On 17 May, the British re-
quested direct negotiations with
Spain about the effects of the
prohibited area on use of the
Gibraltar airfield. When the
British ambassador delivered the
note, the Spanish Foreign Minis-
try gave him a Spanish note ask-
ing for prompt resumption of the
postponed general negotiations
on Gibraltar. The British replied
the following day with a strong
note which rejected the Spanish
request for general talks unless
Spain is willing to lift the air
traffic restrictions or at least
discuss this issue.
The Spanish press announced
on 23 May that Spain had replied
with still another note inviting
the British to send a negotiating
delegation to Madrid on 5 June.
The note indicated that although
the air traffic prohibition has
gone into effect and will not be
altered, the Spanish Government
will listen to whatever the UK
desires to say about it. This
move may reduce tension b o
-
ing the way for resumption cpen
t a l k
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THE NEW YUGOSLAV GOVERNMENT
The Yugoslav Government under-
went a sweeping change of leadership
this week to conform with a provi-
sion of the constitution that one
half of all officials be rotated
every four years. The personnel
changes and accompanying organiza-
tional adjustments ensure the con-
tinuation of the regime's economic
reform program, further enhance the
authority of the leaderships in the
republics, and neatly balance power
between the two important rival re-
publics--Serbia and Croatia.
Tito, as expected and as al-
lowed by the constitution, was re-
elected to the presidency for the
fifth straight time. in the Federal
Executive Council (the cabinet),
however, nine of the 17 members are
new and the eight holdovers are
strong backers of the country's eco-
nomic reforms. These include the
dynamic young liberal, Mika Spiljak,
and economic expert Kiro Gligorov,
in the important positions of pre-
mier and deputy premier, respective-
ly. All but one of the top leaders
of the Federal Assembly (parliament)
were rotated.
Tito's long-time friend, Defense
Minister Gosnjak, was rotated out, as
was Assembly President Edvard Kar-
delj, who for many years rivaled the
deposed Aleksandar Rankovic for the
number two spot behind Tito. These
and other former leaders probably
will become policy advisers. The
only important demotion apparently
was that of Veljko Vlahovic, who was
not returned to parliament in any
capacity. There have been rumors
that Vlahovic favors closer rela-
tions with Moscow.
The changes preserve the im-
portant nationality balance among
the major government offices. Al-
though two of the top leaders--Tito
and Spiljak--are Croats, Assembly
President Popovic is a Serb and be-
comes second to Tito in the govern-
ment. The Serbs, who previously
had complained that they were not
receiving a fair share of the key
positions, also were given the de-
fense secretariat and the new secre-
tariat for economy.
Organizational adjustments have
further increased the authority of
Yugoslavia's six constituent repub-
lics. The number of federal secre-
tariats was reduced from 13 to 6,
and newly created federal councils
responsive to the republics were
created to replace the abolished
secretariats.
The election and reorganization
also diffuses power within the gov-
ernment. Tito has not only made it
difficult for any single successor
to dominate the party, but he has
also made accumulation of individual
power difficult in any future gov-
ernment. The post of vice president
has been abolished and the constitu-
tional status of the deputy commander
of the armed forces removed. Tito
apparently intends that power will
devolve to the Federal Assembly, and
not to any individual, following his
death.
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Yugoslav Government Changes
Presldonl
Josip Broz Tito
Vice Presldonl
Koca Papovic
President: Eduard Kardelj
Vice President: Milos Minic
Zvonko Brkic
Strahil Gigov
President: Milos Minic
Council of Nationalities
President; Lupco Arsov
Economic Council
President: Osman Karabegovic
Educational-Cultural Council
President: Djuro Kladarin
Social-Health Council
President: Olga Vrabic
Organizational-Political Council
President: Krsto Popivodo
Federal Executive
Council (FEC)
President: Peter Stambol is (Premier)
Vice President: Jakov Blazevic
Members: Rista Antunovic
Fillip Baikovic
Joze Brilej
Morin Cetinic
Aleksandar Grlickov
Fadil Hodza
Avdo Humo
Radojka Katic
Milutin Maraca
Gaza Tikvicki
Ivan Gosnjak (State Secretary for
National Defense)
Marko Nikezic (State Secretary for
Foreign Affairs)
Risto Dzunov (Secretary for Labor)
Nikola Dzuverovic (Secretary for
Foreign Trade)
Kiro Gligorov (Secretary for Finance)
Joze Ingolic (Secretary for Agriculture
and Forestry)
Dragutin Kosovac (Secretary for Health
and social Policy)
Milan Miskovic (Secretary For
Internal Affairs)
Million Neoricic (Secretary for
Transportation)
Hakija Pozderac (Secretary for
Industry and Trade)
Janet Vipotnik (Secretary for
Education and Culture)
Gustav Vlahov (Secretary for
information)
Mllorad Zoric (Secretary for
Justice)
Milivoj Rukavina (Secretary of the
FEC)
Presidents of the six republic execu-
tive councils were ex officio members
of the FEC.
SECRET
President : Milentije Popovlc
Vice President; Milos Zanko
Marian Brecelj
Dzavld Nimani
Gustav Vlahov
Blazo Djurlcic
Fillip Balkovic
Federal Council
President: Vidoie Smilevski
Council of Nationalities
President: Vldu Tonisic
Economic Council
President: Pelar Zecevic
Educational-Cultural Council
President: Djuro Kladarin
Social-Health Council
Organizational -Political Council
President: Velimir Stojnic
Federal Executive
Council (FEC)
President; Mika Spiljak (Premier)
Vice President: Kiro Gligorov
Rudi Kolak
Members: Marko Bulc
Tome Granfll
Franjo Nadi
Million Neoricic
Hakija Pozderac
Milivoj Rukavina
Janet Stonovnik
Mustafa Sable
Mijusko Sibalic
Velizar Skerovic
All Sukrija
Zivan Vasilijevic
Aleksandar Grl ickov
Morin Cetinic
Federal
Administration
State Secretary for National Defense:
Nikola Ljubicic *
State Secretary for Foreign Affairs:
Marko Nikezic
Secretary for Internal Affairs:
Radovan Stijacic
Secretary for Economy: Borivoie Jelic
Secretary for Finance: Janko Smole
Secretary for Foreign Trade:
Vasil Grivicev
Secretary of the FEC:
Rajko Gagovic
Federal Council for Education
and Culture:
Chairman:'Vukasln Micunovic
Social Policy:
Chairman: NikolaGeorgijevski
Federal Council for Labor:
Chairman: Anton Polainer
Federal Council for Justice:
Chairman: Josuip Brncic
~~ ~ies al FEC~C r lull righrs
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MIDDLE EAST - AFRICA
The Arab-Israeli confrontation overshadowed all
other problems in the Arab world this past week.
Even if the crisis should be contained, the latest
events have raised new political currents. The Arab
peoples are fascinated with the prospects of a war
against Israel. From Jordan, for example, there are
reports of a rise in Nasir's popularity and a drop
in King Husayn's, even within the army, and the King
has felt obliged to make new gestures toward Arab
military unity.
The pace of Egyptian air strikes against royal-
ists and dissident tribes in Yemen may be slowed by
the diversion of Egyptian units to Sinai. For the
time being, this would probably also serve to reduce
Egypt's military threat to Saudi Arabia along the
Yemen border.
In Aden, the two principal nationalist terrorist
groups are submerging their internecine quarrel and
focusing anew on the British and the South Arabian
Federation Government. Although this may not be re-
lated to the Arab-Israeli crisis, Adeni nationalist
leaders have been meeting in Cairo.
How far the Egyptians push their campaign of vil-
ification against the US and the UK, and whether this
will encompass the sabotage against American proper-
ties Cairo is calling for, depends on the evolution
of the crisis. There is some indication that Cairo
is preparing to exploit documents purloined from the
US AID installation in Taiz.
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All
SECRET
ARAB-ISRAELI CONFRONTATION AT NEW HIGH
Nasir's announcement on 22 May
that the Gulf of Aqaba would be
closed to Israeli shipping has
brought the long confrontation be-
tween the Arab world and Israel as
close to flash point as it has been
since 1958.
The Egyptian proscription on
shipping into the gulf, and thus
into Israel's highly strategic port
of Eilat, extends not only to all
Israeli shipping, but to oil cargoes
carried by ships of any nation.
Since the bulk of Israel's oil im-
ports, in addition to its exports
of phosphate now transit the narrow
Strait of Tiran at the entrance to
the gulf, Nasir is threatening what
the Israeli's view as a vital life
line.
The Egyptian announcement came
on the eve of the departure of the
element of the United Nations Emer-
gency Force (UNEF) posted at Sharm
ash-Shaykh southwest of the Strait
of Tiran. Its presence had been
a token of the assurances of safe
passage for Israeli shipping which
Tel Aviv won in 1956-57. Last week,
Nasir first demanded that the UNEF
units withdraw temporarily from
Sinai to the Gaza Strip, and then in-
sisted that the UNEF be pulled out
of Egypt altogether.
Although Nasir may not have ex-
pected the early withdrawal of the
UNEF which followed his request,
the Egyptians moved rapidly to rein-
force and occupy their military po-
sitions in Sinai. Until his threat
to intercept shipping was issued,
the Egyptian deployments were con-
sistent with the assumption of a
defensive posture which would be
touted as indicating his readiness
to attack Israel in the event of an
Israeli strike against Syria. Now,
however, Nasir has put himself in
a position where he must either fol-
low up on his threat or retire be-
hind a smokescreen of allegations
of international pressure.
Egyptian forces have deployed
to Sharm ash-Shaykh, which controls
the narrow Strait of Tiran and the
ship passage hugging the Sinai coast.
Additional naval units have been sent
south to the Gulf of Suez and the
northern Red Sea. These forces would
be employed in a ship interception
operation.
Egyptian public statements
about mining the entrance to the
Gulf of Aqaba, however, may be ex-
aggerations. Whether or not Egyp-
tian units will interfere with ship-
ping given military escort also is
not clear. Nasir, however, has
threatened this, and if he felt
hard pressed he migh': shoot regard-
less.
The first test of the blockade
is expected sometime in the next few
days, when two tankers of Liberian
registry, but possibly Israeli owned,
are due at Eilat with cargoes of
Iranian crude oil.
All the Arab states in the area
have undertaken some kind of military
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SECRET
mobilization or emergency de-
ployment.
Statements from Damascus mean-
while, give no indication that Syria
intends to exercise any restraint
over terrorist forays into Israel
by the Palestinian groups it sup-
ports. The Israelis report finding
more explosives on 25 May. There
are indications, however, that Egyp-
tian authorities in the Gaza Strip
have acted to ensure against forays
into Israel from Gaza. Increased
patrolling on both sides of the Is-
raeli border in the Gaza sector has
led to several incidents, but so
far these have not been permitted
to get out of hand.
King Husayn of Jordan has been
put in a most difficult position by
the onset of the crisis. On the one
hand, his government is making every
effort to ensure against the mount-
ing of terrorist operations via
Jordan. On the other, as a good
Arab he has felt obliged to make
gestures toward joining in with
Egyptian and Syrian military plan-
ning. This has been rebuffed, but
if an Arab-Israeli clash erupted he
would probably feel similarly obliged
to put Jordanian forces into action
as well. According to reports from
Jordan, there is an upsurge of popu-
lar support for Nasir, particularly
among Palestinian Jordanians, over
his measures toward confronting
Israel, and a parallel decline in
popular support for the King, even
within the army which has so long
been the mainstay of his regime.
Amman has withdrawn its repre-
sentatives from Damascus in retalia-
tion for the explosion on 21 May of
a bomb carried over the border into
Jordan in a Syrian automobile. This
killed 16 people near the border
checkpoint.
The Israelis are standing on
Prime Minister Eshkol's statement
of 23 May that Egyptian interference
with shipping would be considered
an act of aggression. The most re-
cent Israeli statements, in contrast
to those of the Arabs, have been
relatively restrained, but, at the
same time, the Israelis are taking
care not to tip their hand. They
evidently regard the Egyptian de-
ployments as a more serious threat
than they had previously considered
them.
The USSR, whose attitude may
determine whether or not the Syrians
and in particular the Egyptians push
events toward a conflict, is main-
taining a bold front on behalf of
the Arabs. In public statements and
in talks with Western representatives
the Soviets have backed the Arabs
and condemned Israel and her "im-
perialist supporters," and in the
UN the Soviet response to sugges-
tions for multilateral consultations
has been negative.
There have been hints, however,
that in private the Soviets may be
counseling both Cairo and Damascus
to exercise more restraint in their
actions than in their propaganda.
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Initial Western efforts in the
UN Security Council to find some
formula for defusing the crisis were
stalled when they met opposition
from the Afro-Asians and the Commu-
nist nations. Further action along
these lines presumably depends on
Secretary General U Thant's report
on his meetings in Cairo with the
Egyptian :Leaders. Some UN members
are trying to find a way to re-
establish a UN presence to fill the
void left by the abrupt departure
of the UNEF from Sinai. The UN
might, for example, try to work
through the defunct Egyptian-Is-
raeli Mixed Armistice Commission on
the UAR side of the border and on
the Israeli side through the UN
Truce Supervision Organization,
which is still active along the
Israeli borders with Jordan, Syria,
and Lebanon. There have been some
signs from Cairo and Tel Aviv that
both are rethinking their attitudes
toward such bodies, but their first
reactions were generally negative.
As the crisis has developed,
Arab propaganda from Cairo and
Damascus has become increasingly
vituperative in its allegations
that "the colonialists" and the US
have plotted with the Israelis to
flout Arab interests and take over
the Middle East. In Arab propaganda,
the situation is portrayed more and
more as a confrontation with the US,
and calls are being issued for at-
tacks and sabotage against American
installations and properties
throughout the Arab world. If the
crisis is defused, in the UN or
through US or other Western pres-
sures, Cairo--even though it may
welcome it in private--can be
counted on to portray this as a
blatant exercise of imperialism and
to step up its campaign of agitation
against the US throughout the Mid-
dle East.
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FIRST STEP IN GREECE TOWARD RETURN TO CONSTITUTIONALITY
King Constantine's 21 May
announcement of the formation of
a committee to revise the consti-
tution within six months marks
the first move by the new Athens
government toward returning to a
parliamentary system. Previously,
the members of the junta had re-
fused to be pinned down to a
schedule.
The task of rewriting the
constitution will doubtless oc-
cupy the committee for the full
six months. Even after this,
moreover, it will probably be
several more months before the
government would be ready to pre-
sent it to the public in a na-
tional referendum.
As the new government enters
its second month in office its
hold on the country remains un-
challenged by any overt domestic
resistance. So far economic ac-
tivity has been normal. Life in
general appears on the surface to
be going on as usual, with the
public neither conspicuously en-
dorsing nor rejecting the group
in power. The new government in
fact has been able to allow a
gradual easing of its original
restrictions on the population
without triggering any acts of
opposition.
The coup leaders have re-
mained out of public view for
the last few days, apparently hard
at work on two matters of great
importance to them---the removal
of bureaucratic "deadwood" from
government offices and the prepa-
ration of cases against the political
prisoners who are later to be
brought to trial.
he retirement
of a number of high-ranking offi-
cers and the reshuffling of the
Orthodox Church hierarchy evoked
little public response.
Relations with. the King ap-
pear workable, although not cor-
dial. Constantine's efforts to
keep himself in the public eye
and to avoid being upstaged by
the junta members were aided by
the timely arrival of an heir ap-
parent on the King's nameday,
21 May. The King plans to make a
royal tour of military installa-
tions "down to company level" dur-
ing the next week or so, and will
undoubtedly do his best to increase
the personal allegiance he com-
mands within the army.
There is no real evidence of
a split between the new regime's
two strong men, Papadopoulos and
Pattakos. There have been occa-
sional rumors that one is develop-
ing, but these may be based on
wishful thinking. A recurrent
theme is that Pattakos, a native
of Crete, has shown favoritism
to his fellow islanders and that
this is resented by Pa ado oulos.
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INDIAN PARLIAMENT OPENS DIFFICULT SESSION
The current session of
India's; Parliament (22 May - 11
August) promises to test the
cohesiveness and effectiveness of
the ruling Congress Party and of
Prime Minister Gandhi's new cab-
inet.
The party's position in this
first full-scale session of the
new Parliament since its election
in February appears on the surface
to be marginally strengthened
over that in the initial short
inaugural session (18 March - 18
April). During that session the
opposition parties--despite their
substantial ideological differ-
ences--were able to demonstrate
increasing solidarity under the
unifying influence of a common
desire to discredit the already
humbled. Congress Party.
Now, however, the defections
from the opposition front which
contributed to its loss of the
recent presidential contest to
the Congress candidate have led
to bickering which has damaged
the image of cohesiveness which
the opposition parties had managed
to project at the national level.
Nevertheless, they will undoubt-
edly continue to seek every op-
portunity to embarrass and dis-
tract the government.
At. the same time, the Con-
gress Party's unity and confidence,
althouc[h probably restored some-
what by its impressive victory in
the presidential contest, is still
in question. Potentially trouble-
some cleavages within its hier-
archy and incipient unrest among
a few Congress members of Parlia-
ment were only superficially
papered over in a recent lengthy
meeting of the party high com-
mand. The opposition parties,
however, offer little attraction
to potential Congress defectors
at the national level.
The major piece of legisla-
tion to be considered at this
session of Parliament is the an-
nual general budget. No matter
what its character and content,
this will be subject to contro-
versy. Deputy Prime Minister and
Finance Minister Morarji Desai
is expected to submit a stand-
still budget directed mainly at
controlling excessive deficit
financing and halting India's
spiraling inflation.
Present economic stagnation
is expected to continue at least
until crops are harvested next
autumn. This is bound to heat up
the political atmosphere this
summer and provide ample oppor-
tunity for opposition grandstand-
ing. Center-state problems as
well as possible crises in some
of the state governments not con-
trolled by the Congress Party may
provide further distractions.
This may especially be the case
in West Bengal, governed by a
coalition in which the Communists
are the largest element. Here,
the uncertain internal security
situation is a source of great
concern to New Delhi. 25X1
SECRET
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WEEKLY SUMMARY 26 May 67
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 Approved or Release 2007/03/06 : CIA-RDP79-009
2714005800050001-5
SECRET
DEVELOPMENTS IN THE NIGERIAN CRISIS
Lt. Col. Gowon, head of
Nigeria's federal government, has
made a new attempt to conciliate
Eastern Governor Ojukwu, but the
odds continue to favor eventual
secession of the Eastern Region.
and some form of federal military
counteraction.
Last week, Gowon ordered the
lifting of economic sanctions
against the East and asked Ojukwu
to demonstrate good faith by
revoking his recent antifederal
edicts, as well as by releasing
railroad cars being held in the
East and returning hijacked
aircraft. In thus accepting the
recommendations of the unofficial
civilian National Conciliation
Committee, Gowon is trying to
show that he is doing all he can
to prevent the breakup of the
federation.
Gowon has indicated
hat with this initiative
he is also laying the groundwork
for stronger action against Ojukwu
at a later date should this be
decided on. Operational military
planning by federal staff offi-
cers is clearly continuing, and
probably includes military action
aimed at least at supporting
guerrilla activity among Eastern
minority tribes. Such action
might well go hand in hand with
a federal decree creating addi-
tional states separating the
majority Ibos in the East from
the minority tribes.
Although the East has not
yet formally responded to Gowon's
initiative, it is unlikely at
this time to take any signifi-
cant step backward -from its course
toward secession. Indeed, the
Eastern Region's Consultative
Assembly, scheduled to meet on
26 May, reportedly will give
Ojukwu a mandate to declare the
East independent, as the "Repub-
lic of Biafra," whenever he de-
cides the time is ripe.
SECRET
26 May 67
 Approved For Rase 2007/0S/.IATRDP79-00927Ai800050001-5
WESTERN HEMISPHERE
Turbulence continued to dominate the domestic
scene in a number of Latin American countries last
week while diplomatic activity in the area was gen-
erally low-key and inconclusive.
Little forward movement has been made recently
by either Venezuela or the Organization of American
States in deciding just how to handle the latest ex-
ample of Cuban subversion in Venezuela. The main
Venezuelan labor confederation has reinstituted a
boycott of shipping from countries trading with Cuba,
but government officials in Caracas and elsewhere in
Latin America are increasingly pessimistic about
chances of getting multilateral agreement on any
more meaningful anti-Castro measures than those
limited ones now in effect.
Students and their violence-oriented activities
are continuing to plague authorities in several coun-
tries. In Panama, Communist-controlled students try-
ing to re-enact the anti-US student riots of May 1958
were at least temporarily squelched by local security
forces. The Mexican state of Sonora, where martial
law has been imposed in the wake of prolonged student
rioting against the government, is calm but tense as
arrests continue. Brazilian students apparently are
becoming more rambunctious as a result of the rela-
tive permissiveness of the Costa e Silva administra-
tion and were able to stage new demonstrations in
Rio de Janeiro on 24 May.
There was little change in the insurgency situ-
ations in Bolivia and Guatemala during the week al-
though the number of terrorist incidents in the lat-
ter country increased despite heavy pressure from
army and police forces. The number of terrorist
incidents in the Dominican Republic dropped, how-
ever, and political tensions there subsided a bit
as a result. Meanwhile, on the other end of the
island, Haitian dictator Duvalier continued what ap-
pears to be a general housecleaning of possible
troublemakers from his security forces and govern-
ment entourage, making the first cabinet changes
SECRET
Page 27 WEEKLY SUMMARY
26 May 67
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 Approved For Release 2007/ @Rc W=RDP79-00927A005800050001-5
MEXICAN GOVERNMENT CRACKS DOWN IN SONORA
25X1
A wave of arrests continues
in Mexico's northwestern border
state of Sonora, where the tense
calm of martial law has replaced
antigovernment rioting.
Student leaders of the three-
month-old movement opposing the
nomination of Faustino Felix Serna
for governor are seeking refuge
in the United States. Mounting
popular indignation following the
arrest of prominent citizens in
many parts of the state has led
to a steady build-up of federal
troops to supplement the 1,200
soldiers already stationed in
Sonora a week ago.
The governing Institutional
Revolutionary Party (PRI) is un-
doubtedly alarmed by the wide
support for the Sonora opposition,
which is essentially a protest
against Mexico's system of polit-
ical dictation or "imposition" of
candidates. Indicative of a ris-
ing demand throughout Mexico for
more honest and democratic repre-
sentation in the power structure
are the many ovations accorded
ousted PRI president Carlos
Madrazo by student and labor au-
diences. Madrazo, a champion of
democratization, is in extreme
disfavor with the party hierarchy.
Government maneuvering behind
the scenes is implicit in the ab-
sence of reaction outside the
state to the army occupation of
the University of Sonora. Mexican
students, sensitive to government
violation of university autonomy,
normally respond vehemently to
such action.
A new dimension has been
added to the political situation
with the entrance of a Party of
National Action (PAN) candidate
into the race for covernor of
Sonora. The PAN, identified with
the right in Mexico, has provided
the ruling PRI with its most
energetic competition. PRI has
not lost an important election
for a generation, though, and
even a good showing by a defeated
opposition, should a large-scale
defection by PRI dissidents occur
in the 2 July elections, would
be a significant political event
in Mexico.
SECRET
dd'Sab'M-
 Approved For Rase 2007103f ' i gDP79-00927A 800050001-5
BRAZILIAN POLICY DIRECTION CAUSES CONCERN
There is growing concern
among responsible Brazilian mili-
tary and political leaders over
President Costa e Silva's failure
to assert firm leadership in
either domestic or foreign mat-
ters.
In the absence of clearly
defined administration policies,
politically ambitious cabinet
ministers are maneuvering for
position. This is leading to
some instability in the cabinet
and to the development of cen-
trifugal forces within the gov-
ernment? to the detriment of cen-
tralized planning and authority.
Particularly criticized has
been the "independent" foreign
policy vigorously espoused by
Foreign Minister Jose Magalhaes
Pinto.
For example, the Foreign
Ministry has backed away from
Castello Branco's strong support
of the US position in Vietnam.
In an appearance before Congress,
Magalhaes Pinto became the first
Page 29
authoritative Brazilian spokesman
in several years to fail to indi-
cate solidarity with the US, say-
ing instead that Brazil will re-
main "distant" from that conflict.
Also, despite repeated pri-
vate reassurances to US officials,
the government has done virtually
nothing to halt recent anti-US
incidents. Security officials
reportedly have expressed alarm
over government indifference
toward large anti-US student dem-
onstrations. Top military leaders
fear that unless the government
reacts more firmly to extremist-
inspired student agitation than
it has in recent weeks, increas-
ingly provocative demonstrations
may cause it eventually to react
with undue force.
Many Brazilians are becoming
concerned over Costa e Silva's
preoccupation with seeking popu-
larity at the expense of clearly
defined policies and effective
leadership. He has shown a de-
finite reluctance to intervene in
issues where his action might
erode his public support. Costa
e Silva retains strong support
from the bulk of the military.
The military, however, could prob-
ably be an effective brake only
on policies that might threaten
its own vital interests. 25X1
SECRET
WEEKLY SUMMARY 26 May 67
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 Approved FFelease 2007 RDP79-00 2 AO05800050001-5
PERU'S FISCAL CRISIS CAUSING POLITICAL PROBLEMS
A worsening economic and
fiscal crisis in Peru has forced
a major confrontation between
President Belaunde and the oppo-
sition-controlled Congress which
could lead to military interven-
tion.
At issue is the administra-
tion's request for general au-
thority to levy new taxes to meet
the crisis. Specifically, Peru
is facing increasing inflationary
pressures and a deteriorating
balance of payments. The budget
deficit is approaching $200 mil-
lion compared with last year's
deficit of $66 million. Foreign
reserves dropped from $140 million
at the end of March to only $105
million on 22 May.
As a partial remedy the
government has frozen the salaries
of all government employees and
has proposed sharp cuts in non--
military expenditures. On 8 May,
Finance Minister Mariategui ap-
peared before Congress with the
government's plan. He warned that
currency devaluation could result
unless new taxes were authorized.
The President's opponents in
Congress, however, claim the pro-
posed measures fall primarily on
the working classes--a major
bastion of political strength for
the largest opposition party,
APRA. APRA leaders have proposed
instead even greater budgetary
austerity, which would affect
many of the President's pet
projects.
In the face of this polit-
ical stalemate, rumors have begun
to circulate that military leaders
are restless and that the Presi-
dent may be planning some extra-
legal moves. US Embassy officials
have received reliable information
that Belaunde told leaders of his
own party on 18 May that he plans
to dissolve Congress--presumably
when it reconvenes next week--at
least long enough to implement
tax measures by decree, although
the constitution has no provisions
for such an action.
Some reports reaching the
embassy indicate that the military
will support the President by
serving notice on the Congress
that it must comply with the execu-
tive's request for new tax author-
ity or face dissolution. Still
other rumors have it that the
cabinet is about to be reconsti-
tuted to include military officers
or that a new all-military cabinet
is to be appointed.
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CUBA PLEDGES TO SUPPORT SUBVERSION
Cuba's admission of complic-
ity in the landing of a guerrilla
team on the coast of Venezuela on
8 May is a measure of the Castro
regime's commitment to violent
revolution. In openly admitting
involvement in the incident, Cuba
effectively laid to rest any
suspicion that the affair was
staged by Venezuelan officials
to provide "proof" of Cuban in-
tervention.
A communique made public in
Havana on 18 May acknowledged
that three infiltrators captured
by Venezuelan forces after the
landing were Cuban nationals, and
defiantly announced that "we in-
deed are giving help, and shall
continue to give help as many
times as we may be asked to do so,
to all the revolutionary movements
fighting against imperialism in
any part. of the world." Although
the communique was issued in the
name of the central committee of
the Cuban Communist Party, it
bears all the marks of Fidel
Castro's flamboyant and aggres-
sive style.
The communique, perhaps a
tactical blunder, may have been
precipitated by frustration over
several reverses the Cubans have
recently experienced in attempting
to export revolution. On 8 May,
President Balaguer of the Domin-
ican Republic announced that an
agent of Cuban intelligence, with
a clandestine radio and espionage
paraphernalia, had been seized
in Santo Domingo. On 3 May, the
Colombian Government announced
the capture of a courier involved
in smuggling counterfeit passports
to Havana.
The Bolivian Army, recovering
from a clash with Cuban-supported
guerrillas, on 20 April captured
Jules Regis Debray, a noted French
intellectual and highly touted
exponent of Castro's revolutionary
philosophy who recently spent a
year in Cuba. In Guatemala, Luis
Turcios Lima, leader of a Cuban-
supported guerrilla group called
the Rebel Armed Forces, was killed
in an automobile accident last
October. In Mexico, a Cuban dip-
lomat had to be recalled last
September when he was caught in
the roundup of a clandestine ring
supplying arms to Guatemalan
guerrillas.
The incident in Venezuela,
therefore, is merely the latest
in a long string of Cuban setbacks
in the field of subversion. The
communique makes it clear, how-
ever, that the Castro regime will
not slacken its efforts to provide
material support for pro-Cuban
insurgents where chances for their
success are judged to be high.
SECRET
Page 31 WEEKLY SUMMARY
26 May 1.967
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OAS MOVING CAUTIOUSLY ON CUBAN AGGRESSION ISSUE
Members of the Organization
of American States are reacting
with considerable caution to
Venezuela's call for early action
against Cuban subversion. All
Latin American countries approve
calling a consultative meeting of
foreign ministers of the OAS,
but many of them feel that a con-
sensus should first be reached
on exactly what the meeting is
to accomplish. They fear that a
hastily called meeting without a
definite objective will only un-
derline the impotence of the OAS
in the face of Cuban support for
Latin American revolutionaries.
Some governments, such as
the Frei government in Chile,
although willing to support a
consultative meeting of foreign
ministers, have suggested that
the OAS has already exhausted
its legal possibilities of action
against Castro and would prefer
that the present case be taken
instead to the UN.
Venezuela recognizes that
a mere condemnation by the OAS
without specific sanctions will
have little effect on Cuban sub-
version. It also recognizes that
application of the few measures
still possible under the OAS
charter, such as a blacklist of
firms trading with Cuba, will not
curb Castro. After Havana's
statement on 18 May admitting its
interference in Venezuelan af-
fairs, however, President Leoni
said that Castro's regime must be
punished "at all costs" and that
if the OAS does not take action,
"Venezuela will have to do it on
SECRET
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 md For elease 2007/03/06 : CIA-RDP79-009205800050001-5
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Approved For Release 2007/03/06: CIA-RDP79-00927A Mlffff M-