WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A006200040002-0
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• Document Creation Date: December 19, 2016
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• Content Type: SUMMARY

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DIRECTORATE OF
INTELLIGENCE
Secret
WEEKLY SUMMARY
Secret
52
5 January 1968
No. 0001/68
1CPV C.7
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(Information as of noon EST, 4 January 1968)
Far East
THE WEEK IN PERSPECTIVE
VIETNAM
Communist military forces violated the New Year's
cease-fire with a record number of incidents and two
malor attacks.
F_ _j Hanoi this week strengthened its commit-
ment to talk with the US in exchange for a bombing
cessation.
CAMBODIA SOFTENS STAND ON "HOT PURSUIT"
In the face of mounting indications that allied forces
might soon conduct ground operations into Cambodia,
Sihanouk has made a series of moves designed to take
some of the heat out of the crisis.
JAPANESE-SOVIET ECONOMIC RELATIONS GROWING
Trade between the Soviet Union and Japan reached an
all-time high in 1967, and the two countries are dis-
cussing the further expansion of economic relations.
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Europe
THE WEEK IN PERSPECTIVE
SA-3 AIR DEFENSE EQUIPMENT INTRODUCED INTO EAST GERMANY 11
POLAND'S GOMULKA TACKLES PARTY :CNSTABILITY
Year-end political developments in Poland indicate
that party boss Gomulka is adopting a stern line
against prevailing economic problems, public res-
tiveness, and factional instability in the party.
CZECHOSLOVAK LEADER HINTS AT ATTEMPTS TO MUDDLE THROUGH
President and party boss Novotny appears to be seek-
ing compromises in grappling with his domestic and
party problems.
TOP-LEVEL CEMA MEETINGS NOTE SLOW PROGRESS
Recent Council of Mutual Economic Assistance meet-
ings have stressed the standard theme of expanded
economic cooperation in spite of continuing economic
problems among member states. Multilateral activi-
ties are to be increased, specifically in the estab-
lishment of new industries, production specialization,
and research activities.
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Middle East - Africa
THE WEEK IN PERSPECTIVE 15
NEW TENSIONS ARISE ON CYPRUS
The Turkish Cypriots' creation of an administrative
council to oversee the affairs of their community
has aroused the ire of the Makarios regime.
ALGERIA'S POLITICAL PACE QUICKENS
The Boumediene regime is moving to restructure the
National Liberation Front, to mold the country's
only labor organization into an.arm of the party,
and to tighten the command structure of the armed
forces. The purging of disloyal elements can only
enlarge the hitherto disunited opposition.
PEACE EFFORTS RENEWED IN YEMEN
The tripartite Arab committee on a peace settlement
in Yemen has decided to set up an all-Yemeni com-
mittee to prepare for a conciliation conference as
the royalists apply more military pressure to the
republican regime.
INDIAN GOVERNMENT STRENGTHENED BY RECENT DEVELOPMENTS 19
The Gandhi government has acted with uncharacteristic
decisiveness in recent months, and the result has
been an enhancement of the prime minister's political
stature.
Western Hemisphere
THE WEEK IN PERSPECTIVE 21
FIDEL CASTRO DELIVERS ANNIVERSARY SPEECH
Fidel Castro spent the bulk of his anniversary speech
on 2 January discussing Cuban internal developments,
as is customary on this occasion. With regard to
international problems, he reiterated Cuba's support
of armed revolution and again criticized US "imperial-
ism."
SECRET
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BRAZILIAN LABOR BECOMING RESTIVE
A trade-union campaign against the government's
restrictive wage law offers an easy target for ex-
ploitation by Communists and other far leftists.
PARAGUAY TIGHTENING UP ON DPPCSITION AGAIN
The atmosphere of political liberalization that E!X-
isted during last summer's constitutional convention
in Paraguay appears to be deteriorating somewhat in
the stress of the present presidential election cam-
paign.
LINES FIRMLY DRAWN FOR PANAMA'S ELECTIONS
Opposing forces for Panama's presidential elections
in May have solidified around two leading contenders,
Arnulfo Arias, twice elected and twice ousted from
the presidency, and former finance minister Samudio.
Arias, now by far the stronger contender, is moving
to ensure h:_s victory at the polls.
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FAR EAST
Hanoi has issued a less ambiguous statement
of its position regarding talks following a cessa-
tion of bombing in an effort to stimulate greater
international and domestic pressure for US conces-
sions. Foreign Minister Trinh's statement that
Hanoi "will hold talks" with the US after an un-
conditional halt in bombing and other "acts of war"
against North Vietnam may have been timed to encour-
age efforts to extend the cease-fire during the lu-
nar new year in late January. North Vietnam's terms
for a negotiated settlement remain unchanged. Chi-
nese displeasure over Hanoi's move to appear more
flexible on negotiations was evident in Peking's
silence on Trinh's statement.
Cambodia Chief of State Sihanouk has issued
a flurry of statements designed both to deter ma-
jor allied intrusions into Cambodia in pursuit of
Vietnamese Communist forces and to warn the lat-
ter to limit their presence in Cambodia. He has
sought to gain time and greater maneuverability in
dealing with this dangerous problem by indicating
willingness to receive an American envoy and by
distinguishing between US operations into isolated
areas of Cambodia and intrusions into populated
areas. Hanoi, Peking, and the National Liberation
Front have attempted to exploit international at-
tention to this "sanctuary" issue by promising
support for Cambodia in the event of US "aggres-
sion."
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NORTH
2 VIETNAM
Hued
1\\
SOUTH VIETNAM
100
MILES
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VIETNAM
The allied New Year's cease-
fire was punctuated by a record
170 Communist-initiated incidents
and two large-scale enemy attacks,
resulting in heavy casualties on
both sides. Most losses were
suffered during a major Commu-
nist attack on a US artillery po-
sition in northern Tay Ninh Prov-
ince.
The multibattalion enemy
attack in Tay Ninh was launched
on the night of 1-2 January, well
before the end of either the
Communist or allied cease-fire
periods. Two regiments of the
Viet Cong 9th Division--the 271st
and 272nd--struck a newly con-
structed US artillery position
just eight miles below the Cam-
bodian border with mortar bar-
rages followed by several unsuc-
cessful. attempts to overrun the
site. More than 380 enemy troops
were killed and American losses
totaled 23 killed and 153
wounded.
identified as the 261st and 263rd--
shelled a South Vietnamese base
camp. The intense enemy mortar
and rocket bombardment was fol-
lowed by ground assaults on the
garrison. Before they were
routed, the attackers lost 60
killed, reportedly including a
battalion commander, while
friendly losses in the action came
to 19 killed and 48 wounded.
As in the Christmas cease-
fire period a week earlier, Com-
munist forces in both North and
South Vietnam were observed tak-
ing advantage of the New Year's
stand-down. Heavy truck. traffic
was noted above the Demilitarized
Zone.
Since the end of the holiday
respite and the resumption of ma-
jor allied search-and-destroy op- 25X1
erations in Communist-dominated
territory, contact with the enemy
has been sporadic.
Both Communist units in-
volved had suffered heavy losses
last October, but have been suf-
ficiently reinforced, probably
with North Vietnamese infiltra-
tors, to mount an attack of this
scope. It is possible that the
attack was also designed to di-
vert allied attention from a
current movement of men and sup-
plies along nearby infiltration
routes.
The second major enemy vio-
lation of the cease-fire occurred
in southern Dinh Tuong Province
in the Mekong Delta where elements
of two Viet Cong battalions--
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bombing of North Vietnam, but
shows no sign of modifying its
hard-line terms for a negotiated
settlement.
In a speech at a diplomats'
reception last wee:{, Foreign Min-
ister Nguyen. Duy T.rinh declared
that his government "will" hold
talks with Washington "about
questions concerned" if the US
unconditionally terminates the
bombing and all other "acts of
war" against North Vietnam. Ha-
noi's previous position had been
based on Trinh's statement of
28 January 1967 to the effect
that there "could" be talks if
the US took these actions.
Hanoi on a Cessation
Of Bombing
Hanoi has publicly committed
itself to begin talks with the
US in return for an end to the
This less ambiguous North
Vietnamese position probably is
designed to increase domestic
and international pressure on
the US for a bombing halt and an
extension of the cease-fire dur-
ing lunar new year later this
month. An end to the attacks
has long been a primary objec-
tive of the Hanoi regime, and
the original, offer a year ago
was designed to achieve this
without making any significant
substantive concessions on a
settlement of the war.
The foreign minister avoided
spelling out the timing or con-
tent of any talks, but indicated
that the basis for solving the
Vietnam problem remained Hanoi's
four points and the political
program of the Liberation Front.
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CAMBODIA SOFTENS STAND ON "HOT PURSUIT"
In the face of mounting in-
dications that allied forces might
soon conduct ground operations
against Communist units utilizing
Cambodia for sanctuary, chief of
state Sihanouk has moved to take
some of the heat out of the crisis.
He announced to Western news-
men last week that he would make
a tacit distinction between US
operations conducted in isolated
areas of his country, where there
was little likelihood that Cam-
bodian personnel or property
would be jeopardized, and Ameri-
can probes in populous sectors.
In the former case, his reaction
would be passive and limited
mainly to diplomatic protests
against both the Communists and
the US. He would send forces "im-
mediately," however, to "repel"
American units threatening harm
to Cambodian property or people.
Sihanouk probably believes
his stand will deter any immediate
American action along the heavily
populated southern section of the
Cambodian.-Vietnamese border, where
the most serious consequences for
his regime are likely to ensue if
"hot pursuit" operations are un-
dertaken. Moreover, by making
known his willingness to discuss
Cambodian.-US relations with an
American "envoy," he doubtless
hopes to head off cross-border
operations while such talks are
under way and until their outcome
is clear.
Sihanouk also sought to put
additional pressure on'the Com-
munist side. He blamed Soviet
and Polish intransigence for the
failure of efforts to strengthen
the International Control Com-
mission (ICC) and implied that
their resistance was stimulated
by the Vietnamese Communists.
Sihanouk has long advocated the
strengthening of the ICC both as
a counterweight to the Communist
presence along the border, and as
an example of Cambodia's desire
to remain "neutral."
Meanwhile, the developing
crisis has prompted Sihanouk to
make changes in his government.
He called for the resignation of
the Son Sann "interim" cabinet,
and asked Sirik Matak, who sub-
sequently turned him down, to
form a new government. Matak,
the Cambodian ambassador to Japan,
is considered pro-Western and
conservative, and Sihanouk's in-
terest in him may be one more in-
dication that he is seeking to
project a slightly more pro-West-
ern stance.
It is likely, nonetheless,
that Sihanouk's softened position
on the border issue during the
past week mainly reflects his cur-
rent appraisal of the power re-
alities in the area and is not
indicative of any genuine willing-
ness to reach a real acc mmd on
with the US. F_ i
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WEEKLY SUMMARY 5 Jan 68
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JAPANESE-SOVIET ECONOMIC RELATIONS GROWING
Trade between the Soviet
Union and Japan reached an all--
time: high in 1967, and the two
countries are discussing the fur-
ther expansion of economic rela-
tion.s.
Assisted by the rapid growth
in Soviet exports, total Soviet-
Japanese trade in 1967 probably
will reach some $600 million.
This will surpass Japan's trade
with Communist China, which was
Tokyo's major Communist trading
partner in 1966. Soviet exports
of raw materials such as timber
and metallic ores increased in
1967, although crude oil shipments
dropped off because of the closure
of the Suez Canal. The Soviets
also increased purchases of ma-
chinery, equipment,and consumer
goods.
New developments in trans-
portation will also facilitate So-
viet-Japanese economic relations.
'Pest shipments via the Trans-Siber-
ian railroad are in progress for
Japanese goods destined for Western
Europe and the Middle East. Earlier
this year, the two countries began
direct flights between Moscow and
Tokyo using Soviet aircraft. The
Japanese hope eventually to gain
onward rights to Western Europe
using their own aircraft.
Soviet-Japanese economic com-
missions are studying several joint
ventures for development of Siberia
and natural gas fields in northern
Sakhalin. The Soviets have shown
some interest, for example, in Jap-
anese assistance in exploiting un-
derdeveloped copper and oil re-
sources. Moreover, the Soviets
have permitted some Japanese tech-
In addition to these transac-
tions arranged by the governments,
private barter trade agreements
also expanded. A potential $167-
million deal is presently under
negotiation involving the exchange
of Soviet timber for Japanese plant
and equipment to develop forestry
resources along the Amur River over
a five-year period beginning in
1969.
Japan already has the largest
business representation in Moscow
of any non-Communist country, and
the Soviets recently permitted a
Japanese trading corporation to set
up the first permanent non-Commu-
nist trade office in Moscow. This
privilege was also extended to
other Japanese firms.
nicians to tour western Siberia,
but they are still reluctant to
permit more than short visits.,
Problems persist, however, con-
cerning credit terms and the kinds
of goods to be exchanged.
Moreover
political problems related to a
peace treaty and the return of the
Kurile Islands are also likely to
slow the development of joint So-
viet-Japanese industrial ventures.
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EUROPE
Factional discord, dissidence among intel-
lectuals, economic problems, and alienation of
youth are taxing both the Polish and Czechoslovak
regimes. In Warsaw, the Gomulka administration
seems to be preparing to reinstall rigorous con-
trols in an effort to head off a crisis of confi-
dence such as is now shaking Czechoslovakia. In
Prague, party chief Novotny is still in charge,
but his grip seems weaker, and a leadership shake-
up could occur at a party central committee meet-
ing reportedly scheduled to begin during the week
of 2 January.
Preparations continue for the Communist con-
sultative conference in Budapest sch duled for
February. high-ranking
Italian, French, and Yugoslav party officials have
consulted with their Hungarian counterpart in Buda-
pest concerning the meeting.
In Yugoslavia on 3 January, Rumania's Ceau-
sescu and Yugoslavia's Tito also got together to
discuss the meeting, which both oppose. They
strongly believe that such Soviet-sponsored af-
fairs tend to restrict their independence and erode
Communist unity. These two held similar consulta-
tions before individually declining to attend the
April 1967 meeting of European Communist parties
in Czechoslovakia.
Brezhnev's on-again, off-again trip to Cairo,
which seemed to have been set for next week, has
once more been postponed. There is no ready ex-
planation for this most recent postponement, but
the press of domestic business may have been
important factor.
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SA-3 AIR DEFENSE EQUIPMENT INTRODUCED INTO EAST GERMANY
The Soviets are installing
equipment in SA-3 Goa surface-to-
air missile (SAM) sites in East
Germany, marking the first de-
ployment of this air defense mis-
sile system outside the USSR.
bomber threat from Western Europe. 25x1
fective against aircraft at alti-
tudes possibly as low as 500 feet.
The poor performance of the
SA-2 SAM against aircraft maneu-
vering at low altitudes in Vietnam
and the Middle East may also have
influenced Moscow's decision to
deploy the SA-3 in Eastern Europe.
The Soviets probably decided
to introduce the SA-3 into East
Germany in an effort to counter
more effectively the fighter-
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In addition to contributing
to the over-all defense of East
Germany, the SA-3 sites are po-
sitioned to provide point defense
for Soviet tactical aircraft
bases.
More than 100 SA-3 sites
have been identified in the So-
viet Union since deployment be-
gan in 1961. The system probably
will go to Soviet forces in Poland
and Hungary, and eventually might
also be exported to the armed
forces of Eastern Europe and
other nations relying on Soviet
militar aid.
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POLAND'S GOMULKA TACKLES PARTY INSTABILITY
Year-end political develop-
ments in Poland indicate that
party boss Gomulka is adopting
a stern line against prevailinci
economic problems, public res-
tiveness, and factional insta-
bility in the party. At the
moment, elements favoring greater
rigor appear to be in the as-
cendancy, and there may be fur-
ther personnel and organizational
shifts in coming months more sig-
nificant than the relatively low-
level changes in recent weeks.
Gomulka evidently has been
working to reassert :ais control
over the party since last summer,
but postponed the first round of
his personnel shifts until after
the 50th anniversary of the Rus-
sian revolution. His current
moves, however, may have been
spurred by the impact of wide-
spread restiveness, which sur-
faced after a meat price rise
in late November. There are
signs that the party leadership
is becoming deeply concerned by
the state of Poland's economy
and its prospects. Economic
problems thus may become the
catalyst for expected future
policy and personnel changes.
The imposition in Warsaw on
23 December of the first death
sentence in an espionage case
since 1956 is the most telling
recent indication that hard
liners--who control the security
apparatus--may be achieving their
long-sought goal of a general.
tightening of domestic policies.
These nationalistic and anti-
Semitic elements have been seek-
ing to influence Gomulka, and
since last June, have sought to
exploit factional instability
arising from the impact of the
Middle East crisis in, Poland. Un-
til now, their efforts had not re-
sulted in any clearly demonstrable
gains.
The personnel shifts have
involved the appointment of Jan
Ptasinski, tough-minded former
party boss of Gdansk Province, as
ambassador to Moscow, and his re-
placement by Stanislaw Kociolek,
formerly party chief in Warsaw and
long considered Gomulka's mouth-
piece there. Other changes in-
clude the political demise of
Leon Kasman, veteran chief editor
of the main party daily, and the
ousters of the mayor of Warsaw and
the local government chief in Lodz.
These shifts-.-especially of Kasman,
who is Jewish--have also renewed
fears among the party's moderate
Jewish segment that they will be
targets of a gradual, future purge.
Gomulka's recent moves, how-
ever, probably are only the initial
stages of a gradual process de-
signed to construct a new factional
balance in the party.
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CZECHOSLOVAK LEADER HINTS AT ATTEMPTS TO MUDDLE THROUGH
Czech President and party
boss Novotny appears to be seek-
ing compromises in grappling with
his domestic and party problems.
In a New Year's day speech,
he endorsed reinvigoration of
the economic reform program, a
stand that may help to blunt the
thrusts of his liberal chal-
lengers. Perhaps with these
people in mind, Novotny once
again gave his blessing to mak-
ing use of "everything progres-
sive.-including things-in the
capitalist countries." The Czech-
oslovak party leader, however,
also threw a small bone to re-
gime conservatives by aligning
the future of the reform program
with Prague's economic ties with
the Soviet Union and the East
European countries.
Novotny attempted to allay
popular fears of reform by play-
ing down a series of price in-
creases slated for the coming
year, and indicated that in-
creased wages would offset the
over-all rise of retail prices.
Novotny also suggested he
has been able to smooth over his
differences with Slovak leaders,
at least temporarily. Novotny
apparently believes he has bought
them off with a resolution passed
by the central committee in De-
cember, which called for acceler-
ation in the growth of the Slovak
economy. Novotny's future rela-
tions with the Slovaks will de-
pend in part on how well he will
be able to deliver on this prom-
ise, but it is difficult to see
how he could be paying more than
lip service to Slovak desires
for "equality."
In sum, Novotny's speech
seems to point to a continuing
attempt on the leadership's
part to muddle through its major
problems, including the crisis
of confidence within the party
leadership. This, incidentally,
is not yet over: a party plenum
is reportedly scheduled to con-
vene this month to discuss
remedies for the critical Politi-
cal situation.
TOP-LEVEL CEMA MEETINGS NOTE SLOW PROGRESS
Communiques issued by recent
Council of Mutual Economic As-
sistance (CEMA) meetings have
stressed the standard theme of
expanded cooperation in spite of
continuing economic problems
among member states. Multi-
lateral activities are to be in-
creased, specifically in the es-
tablishment of new industries,
production specialization, and
research activities.
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The Council--the organiza-
tion's policy-making organ--met
from 12 to 14 December in Buda-
pest, but presented no surprises.
Agreements reportedly were
adopted on mid-range economic
planning, on further development
of industrial specialization,
and on financing scientific/tech.-
nical research. The Executive
Committee--which supervises ac-
tivities of the organization--
met from 15 to 19 December to
discuss coordination of two- and
three-year plans.
CEMA's most successful multi-
lateral efforts to date have
been of a technical nature. The
Joint Freight Car Pool, estab-
lished in 1964, has permitted
more efficient use of freight
cars. The Friendship Oil Pipe-
line brings more than 80 percent
of the total Soviet crude oil de-
liveries to Poland, East Germany,)
Czechoslovakia, and Hungary. The
Integrated Electric Power Sys-
tem permits its members to cover
peak power demands more ade-
quately.
During its long history, the
organization has made some progress
toward coordination of economic
plans and conclusion of agreements
on industrial specialization. An
accommodation evidently was made
during 1967 between Rumania and
other members that should make it
easier to establish multilateral
CEMA projects in which all members
do not wish to participate. More-
over, in the past year progress
has been made in expanding direct
contacts among the producing,
purchasing, and foreign trade
agencies of various CEMA members.
Despite these modest suc-
cesses in multilateral coopera-
tion, however, _Ln recent years bi-
lateral Soviet ?- East European re-
lations have been of greater im-
portance within CEMA. This is in
part the natural consequence of
the overwhelming disparity in
size and resources between the
USSR and the smaller countries,
which renders Moscow far more im-
portant to them than they are to
each other.
Statements regarding the re-
cent meetings reflect continuing
differences of opinion on some
economic issues. Disagreements
over prices in Soviet - East Eu-
ropean trade persist. Moreover,
Soviet demands for East European
credits for Soviet exploitation
of raw materials have been re-
ceived unenthusiastically by other
members. Finally, Poland appar-
ently has gained little support
for its long-standing proposal for
settling mutual accounts at least
partly in gold or convertible cur-
rency rather than by shipments of
goods.
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MIDDLE EAST - AFRICA
New strains have developed in several of the
area's trouble spots, while in others there has been
some forward movement.
Greek Cypriot officials have reacted with predict-
able rancor to the Turkish community's formal estab-
lishment of an administrative council to oversee Turk-
ish Cypriot affairs. The Makarios regime claims the
move is illegal and has cautioned foreign ambassadors
against contacts with the Turkish Cypriot leadership.
Meanwhile, a hitch may be developing in the im-
plementation of the Greek-Turkish troop withdrawal
agreement. No Greek troops have left Cyprus since
20 December, and the Turks are concerned that Athens
will not make good on its pledge to withdraw all
forces by 18 January.
Egypt is reportedly preparing to carry out the
clearing operations needed to allow the release of
the 15 merchant vessels trapped in the Suez Canal
since the June war. Cairo is probably responding to
the numerous appeals for the release of the trapped
ships in the hope of capitalizing on the favorable
publicity that will likely attend such a move.
The tripartite Arab committee seeking peace in
Yemen has called for the formation of an all-Yemeni
committee to prepare for a conciliation conference.
Much could happen to thwart the proposal, however, be-
tween now and the first meeting of the proposed com-
mittee, scheduled for 12 January.
In the Nigerian civil war, Federal military
progress continues to be slow, with heavy losses suf-
fered on both sides. Biafran resolve does not seem
to have weakened. Biafran-hired French mercenaries
are beginning to play an active role in ground op-
erations against federal forces.
Dahomey's shaky new military regime is in im-
mediate trouble as a result of a French decision to
continue to withhold essential subsidies. Paris seems
determined to force a further change in the composi-
tion of the government even at the risk of a Possible
breakdown of rd in the country.
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NEW TENSIONS ARISE ON CYPRUS
The Turkish Cypriots' an-
nouncement on 29 December of the
creation of a provisional admin-
istrative council to manage the
affairs of the community has
created new strains on the island.
The Turkish Cypriot community,
which has been isolated in sepa-
rate enclaves since. the fighting
of December 1963, has handled its
own affairs since that time, but
until now has not formalized the
existence of such a governing
body. The Turkish Government
aided in the formation of the
counc:Ll and has approved of its
implementation.
The Greek Cypriots reacted
predictably. President. Makarios
called the action "devoid of any
legality," and other Greek Cypri-
ots regard it as the first step
toward the establishment of an
independent Turkish Cypriot state.
The Makarios government has banned
foreign ambassadors from having
any contact with Turkish Cypriot.
Vice President Kucuk and the
threat exists that any ambassador
visiting Kucuk may be declared
persona non grata. This has al-
ready been done in the case of the
'Turkish foreign minister, who
visited the island just before
the Turkish Cypriot announcement.
It also seems likely that Makarios
will not now carry out his planned
"normalization" measures to remove
some of the restrictions on the
Turkish Cypriot community.
Although Ankara gives full
support to the Turkish Cypriot
action, it has attempted to em-
phasize the temporary nature of
the council, insisting that the
existence of such a body is
clearly within the limits of the
1960 constitution, which guaran-
teed rights to the Turkish Cypriot
minority. A Turkish official
has admitted that Ankara failed
to anticipate the seriousness
of the Greek Cypriot reaction,
but insists that foreign observ-
ance of Makarios' ban would be
considered an "unfriendly act"
toward Ankara as well as the
Turkish Cypriots.
The Greek Government has de-
clared that the move appears to
violate the recent Greek-Turkish
agreement and is likewise con-
trary to UN Secretary General
Thant's appeal for restraint by
both parties.
Ankara is concerned that
Athens will use this :Latest inci-
dent as a basis for delaying the
removal of its "illegal" forces
from the island. A Turkish offi-
cial says that the lack of any
withdrawals since 20 December
could mean that, the Greeks will
not have their troops out by the
agreed deadline of 18 January.
Approximately 3,200 troops re-
portedly have departed so far.
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ALGERIA'S POLITICAL PACE QUICKENS
The Boumediene regime appar-
ently continues to move from
a position of strength to revamp
the national institutions but, de-
spite massive security measures,
has not yet apprehended the ring-
leaders of the mid-December mili-
tary revolt.
Ahmed Kaid, the ruthless,
energetic, and anti-Communist chief
of the country's only party, the
National Liberation Front (FLN),
has moved swiftly to begin the re-
structuring of the party. For the
present, Kaid will retain the ad-
visers of Cherif Belkacem, who was
the principal member of the party's
five-man ruling committee that Kaid
supplanted early last month.
Belkacem, himself, although long
close to Boumediene, seems to have
dropped out of sight. He was
known, however, to have been criti-
cal of the moribund FLN and to have
urged its restructuring. Kaid's
authority is supported not only
by Colonel Boumediene, who has
made clear that the party is to
play a dominant role in the new
Algeria, but also by three strong
men who have emerged from the
shadows in the aftermath of the
Z'Biri revolt--presidency advis-
ers Abdelkader Chabou and Sliman
Hoffman, and gendarmerie chief
Ahmed ben Cherif.
Kaid has also seized control
over the country's only labor or-
ganization, the General Union of
Algerian Workers (UGTA), and will
attempt to mold it into an arm of
the FLN. Although the party has
always sought to control labor,
some factions within the UGTA
wanted it to develop into an inde-
pendent organization. Many labor
leaders have become increasingly
critical of the regime, particu-
larly those who prefer worker man-
agement rather than state control
over production. Some leaders en-
couraged former chief of staff
Colonel Tahar Z'Biri to launch his
abortive revolt. Kaid has already
decided that the recently post-
poned congress of the UGTA will be
held early this year.
Meanwhile, the military cadres
summoned to Algiers by Boume-
diene last week have pledged their
loyalty, denounced the mutinous
movement, and declared themselves
anxious to perserve the "holy
unity" of the army. With this
overt support, Boumediene can be
expected to engage in a massive
purge of the disgruntled former
guerrillas, to tighten the command
structure, and thus to enhance the
efficiency of his military forces.
Weeding out the disloyal from
military or party, however, can
only enlarge and perhaps strengthen
the thus far weak and disunited
hard-core opposition. Even though
he continues to move rapidly, Bou-
mediene also can expect to encoun-
ter great difficulty in selling his
program to the rural Algerians who
to ed who want lobs.
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PEACE EFFORTS, RENEWED IN YEMEN
The tripartite Arab commit-- I The republicans, however,
tee on a peace settlement in Yemen emphasized the two conditions that
has decided to set up an all-Yem- I have formed the basis of their
eni committee to prepare for a
conciliation conference, as the
royalists apply more military
pressure to the republican re-
gime.
The committee, composed of
Morocco, Iraq, and Sudan, has
once more taken steps to end the
Yemen conflict following a repub-
lican announcement of their in-
tention to cooperate. After
meeting in Cairo, the committee
announced on 31 December that it
had decided to form a preparatory
committee that would include an
equal number of representatives
of the royalists, the official
republicans, and the republicans
not in the present government.
policy: the republican form of
government must. be maintained,
and the family of the royalist
imam must not be permitted to
take part in future Yemeni gov-
ernments. If either the official
republicans or the royalists come
to believe that the third party
in the preparatory committee--the
"republicans not in the govern-
ment"--will be able to turn the
committee against them, the idea
will probably collapse and the
first meeting---scheduled for
12 January in Beirut--will not take
place.
Meanwhile,, the royalists have
been rebuilding their military
pressure. Sana and Taiz are un-
der harassing fire, and the roads
to the capital remain, cut.
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INDIAN GOVERNMENT STRENGTHENED BY RECENT DEVELOPMENTS
Prime Minister Indira Gan-
dhi's government seems to be re-
covering from the paralysis that
overtook it after the scare of
last February's general election.
The decline in influence of
inflexible outgoing Congress Party
president Kamaraj, Mrs. Gandhi's
gradual consolidation of her own
position, and the increasingly
evident disarray of the opposi-
tion parties have contributed to
the government's new willingness
to act on politically hazardous
issues.
The change was first trans-
lated into action late last year
when the green light finally was
given to Congress state units to
undermine several failing non-
Congress coalitions. Within a
short time, West Bengal and the
Punjab both had new Congress-
backed regimes, although as yet
the party has declined to enter
their cabinets. In addition,
the politically stymied govern-
ment of Haryana was replaced with
direct rule from New Delhi, and
the ensuing parliamentary storm
in New Delhi was met with determi-
nation and skill. Only in cha-
otic West Bengal did the Congress
move provoke violence, and even
there the challenge by the ousted
coalition members proved less
effective than most observers had
expected.
A more determined legislative
program also emerged during the
recently ended session of the
national Parliament. The govern-
ment's strong parliamentary per-
formance reflected a growing
sense of self-confidence.
Most noteworthy was a bill
enacting the assurances of prime
ministers Nehru and Shastri that
English will be used--along with
Hindi--as the central government's
official language as long as any
non - Hindi-speaking state so de-
sires. Mrs. Gandhi and Home Min-
ister Y. B. Chavan skillfully
steered the bill on its difficult
passage through the Congress
Party's legislative ranks and in
Parliament. Although the com-
promise legislation inflamed pop-
ular emotions, it may serve in
the longer run to take some of
the poison out of the long-fester-
ing language issue.
Legislation was also passed
that paves the way for the pro-
jected lifting of the highly
controversial state of emergency
on 10 January. The new unlawful
activities act empowers the gov-
ernment to apply selectively some
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of the more important "emergency"
powers; it heretofore exercised
under the unpopular Defense of
India Rules, promulgated after the
Chinese Communist attacks of 1962.
The legislation also gave
the government the leeway to free
the long-detained K:ashmiri na-
tionalist leader Sheik Abdullah
on 2 January. If he behaves, the
relatively moderate Abdullah's
presence in Kashmir could actually
help New Delhi by drawing support
away from more extremist elements.
If, on the other hand, he presses
too hard for Kashmir autonomy,
there is adequate provision in
the unlawful activities legisla-
tion to arrest him once again.
Her recent political suc-
cesses have improved Mrs. Gandhi's
image, although much of her gov-
ernment's belated forward move-
ment can be attributed. to the
parliamentary skill of Home Min-
ister Chavan and the continuing
support she gets from her arch-
rival, Deputy Prime Minister
Morarji Desai. Both men harbor
strong ambitions for the prime
ministership, but tend to balance
each other off and seem content
for now to continue their coop-
eration. As long as they continue
to pull together and the opposi-
tion remains in disarray, the
Gandhi government should be able
to improve on its ast: unins irin
performance.
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WESTERN HEMISPHERE
Economic problems and prospects figured promi-
nently in end-of-year statements by many Latin Ameri-
can government leaders,
In Brazil, where the government devalued the
cruzeiro by 19 percent on 29 December, President
Costa e Silva stressed the curtailing of inflationary
pressures during 1967, and for the future reaffirmed
his intention to promote the fullest use of nuclear
energy in his country. Argentina's President Ongania
similarly hailed the progress toward stemming the
tide of inflation and called for national unity in
following this course, while reiterating that the
country is not yet ready to return to constitutional
rule.
Chile's President Frei, in his year-end assess-
ment, seemed to disregard the politically difficult
situation he faces. He pointed to strikes and work
stoppages as the greatest obstacle to his country's
development, but avoided criticizing the Communists
and socialists who are responsible for many of them.
Frei also glossed over his deep differences with the
leadership of his Christian Democratic Party.
Venezuelan President Leoni, along with his claims
of economic progress, hit hard at continued Castroite
subversion, and promised a continued battle against
"antidemocratic sectors." Although Colombia's Lleras
made no reference to subversion in his economic-ori-
ented message, the arrest of two Colombian guerrillas
as they returned from training in Cuba gave fresh evi-
dence that Castro has not been discouraged by his re-
cent setback in Bolivia.
Castro himself, in his traditional speech on
2 January, reaffirmed in fairly routine terms his in-
tention to support the world-wide revolutionary move-
ment to the limit of Cuba's capabilities. While in-
sisting that Cuba would continue to follow its "own
path" and to maintain its own ideology--an implicit
dig at Moscow--he went out of his way to pay tribute
to the Soviet Union's efforts to keep up petroleum
shipments. Castro addressed most of his comments
to measures to deal with the petroleum shortage.
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FIDEL CASTRO DELIVERS ANNIVERSARY SPEECH
Fidel Castro spent the bulk
of his anniversary :speech on 2
January discussing Cuban internal
developments, as is customary on
this occasion. With regard to
international problems, he reit-
erated Cuba's support of armed
revolution and again criticized
US "imperialism."
Relations with the USSR came
into the speech somewhat indi-
rectly. In discussing Cuba's
acute fuel shortage, Castro said
it was caused by rapidly increas-
ingly domestic consumption, pri-
marily in the fast-growing agri-
cultural and industrial sectors.
He went out of his way to say
that the Soviet Union is doing
all it can to supply Cuban needs.
In fact, Soviet petroleum de-
liveries last year were about
the same as in 1966?--about five
million tons. Although deliver-
ies fell off somewhat in late
summer after the Middle East
crisis, they returned to normal
again in the last quarter.
Castro made it clear that
he intends to continue his rev-
olutionary efforts despite the
fact that this issue has strained
relations between Havana and Mos-
cow and is a divisive factor
in most Latin American Communist
parties. He said that Cuba will
continue "without hesitation
of any sort" to support the
world-wide revolutionary move-
ment "as far as it is capable."
He also said that Cuba will main-
tain its own ideology, "its most
absolute independence and its
very own path determined by its
own people." Castro designated
1968 as the "year of the heroic
guerrilla" as a tribute to
Ernesto "Che" Guevara and the
"other Cubans (who) died fight-
ing" with Guevara--his first ad-
mission that Cubans had ac-
companied Guevara to Bolivia.
Castro's jabs at the US
were fairly routine. He spoke
out against US efforts to "sabo-
tage Cuban trade deals with
non-Communist, countries, but
avoided any repetition of his
denunciation last summer of
Moscow's trade and aid activi-
ties with "oligarchic" govern-
ments in Latin America.
Castro promised that educa-
tion through the pre-university
level will be made mandatory
some day soon. He also plans to
incorporate compulsory military
training for both men and women
into the re ular school curricu-
lum.
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BRAZILIAN LABOR BECOMING RESTIVE
Brazil's long-silent labor
movement has begun a united cam-
paign against the government's
restrictive wage law and the con-
tinuing inflation. Six of the
country's seven labor confedera-
tions have agreed to a plan call-
ing for joint union meetings and
the formation of committees to
coordinate grievances with the
aim of petitioning Congress to re-
peal the law. The other confed-
eration--the largest--has drawn
up a memorandum appealing directly
to President Costa e Silva.
The workers so far have not
benefited from the 1964 revolu-
tion that ousted leftist presi-
dent Goulart and, in fact, have
actually lost ground. The cost
of living has continued to rise,
although the rate of increase for
the first 11 months of 1967 was
only 24 percent, compared with
41 percent for all of 1966. Real
wages have continued a decline
that began in 1961, and for many
industrial workers it is estimated
that real wages may have dropped
ten percent since 1964.
As a result, workers believe
that they are being made to bear
the brunt of the government's
stabilization program. This be-
lief has made it easier for Com-
munists and extreme leftists to
regain the influence they had had
in key labor unions under Goulart.
Further, the workers' ali-
enation has been exploited by op-
portunistic politicians, such as
fiery conservative leader Carlos
Lacerda. He has already attacked
the government in general terms
and is now zeroing in on the wage
policy.
The concerted campaign of-
fers an easy target for exploita-
tion by Communists and other
leftists. They have already in-
stigated a congressional hearing
to be held this month on charges
of "foreign intervention" in
Brazilian unions. The Interna-
tional Federation of Petroleum
Workers has been a particular
target of such allegations and
hints of US complicity have been
given headline treatment.
It is not clear what the ad-
ministration's response to a
newly vocal labor movement will
be. The government is very sen-
sitive to instances of possible
subversion. On the other hand,
the legitimacy of many of the
workers' grievances and the Pres-
ident's oft-stated desire to
"humanize" the Brazilian revolu-
tion as it evolved under his
predecessor may lead the govern-
ment to seek some compromise.
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PARAGUAY TIGHTENING UP ON OPPOSITION AGAIN
The atmosphere of political by Stroessner himself, his
liberalization that existed dur- Colorado Party newspaper re-
ing last summer's constitutional minded voters of past conspira-
convention in Paraguay appears torial activities of the PLR and
to be deteriorating somewhat in expressed the hope that returning
the stress of the present presi- exiles would not constitute a new
dential election campaign. threat.
This change in atmosphere may
Last year, President Stroes- be having its effect on opposition
sner allowed the Radical Liberal I leaders. PLR officials recently
Party (PLR) to become the major claimed complete ignorance of a
opposition party, after being party-sponsored radiobroadcast
outlawed for 25 years, and per- that reportedly referred to Presi--
mitte_d several of its exiled mem- dent Stroessner as a "police chief"
bers to return to Paraguay. Now, I and attacked US assistance to Par--
even though Stroessner is soon aguay as one of the main props of
to be re-elected, his government the regime. A top party official
may be having second thoughts further stated that the program
about permitting the opposition was not under the direct control
to campaign freely for the Febru- cf the party.
ary election.
Despite the apparent re-
In late September, Carlos straints on opposition activity,
Pastore, former president of the ! however, next month's elections
Liberal Party in exile, was will probably be the most demo-
picked up for questioning by the cratic in Paraguayan history, as
police shortly after returning ? three opposition parties are be-
to Paraguay. Last week, follow- ing allowed to participate openly
ing a hard-line campaign speech I in the campaign.
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LINES FIRMLY DRAWN FOR PANAMA'S ELECTIONS
After weeks of uncertainty
and shifting, the opposing
forces for Panama's presidential
elections in May appear to have
solidified around two of the
leading contenders, Arnulfo
Arias, twice elected and twice
ousted from the presidency, and
former finance minister David
Samudio. With official regis-
tration closing on 13 January,
no other nominations are ex-
pected.
that formerly belonged to the
government coalition.
President Robles' attempts
to assemble a stronger govern-
ment coalition to oppose Arias
fell through last week when he
failed to persuade Samudio--
his earlier choice for the nom-
ination--to step down in favor
of National Guard commandant
General Vallarino.
Two government parties have
already picked Samudio as their
candidate, and two others are
scheduled to do so on 5 January.
Arias was nominated last month
by the National Union (NU), made
up of his own mass-based Pana-
menista Party and four parties
Robles hoped that Valla-
rino's candidacy might win back
some of the former government
parties now aligned with Arias.
Neither Vallarino nor Samudio
was enthusiastic about the Pres-
ident's plan, however, and Sa-
mudio announced on 27 December
David Samudio Avila
Arnulfo Arias Madrid
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that he would continue the race
"regardless of the obstacles."
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