WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A006400070001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 35
• Document Creation Date: December 21, 2016
• Document Release Date: October 2, 2008
• Sequence Number: 1
• Publication Date: May 17, 1968
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
DIA review
completed.
Secret
44
UNCODED May 1968
No. 0020/68
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(Information as of noon ED'.[', 16 May 1968)
VIETNAM
In the first week of the Paris talks, Hanoi's rep-
resentatives moved quickly to focus attention on the
question of a cessation of US bombing and all other
acts of war. In the South, the Communists' second
"general offensive" tapered off, but the Viet Cong
attacked several remote allied outposts. South
Vietnam is expected soon to have a new premier--Tran
Van Huong.
DISORDERS NOT ENDED BY CHINA'S NEW PROVINCIAL REGIMES
Clashes between "revolutionary" factions and unruly
demonstrations continue to be widely reported even
in provinces that have already established "revolu-
tionary committees." In general, however, fighting
is heaviest in the six provinces where these new
bodies have not yet been set up.
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COMMUNIST DRIVE IN NORTH LAOS TEMPORARILY STALLED
The enemy is continuing its build-up around Na Khang,
however, and a full-scale assault might yet occur be-
fore the dry season ends in a week or two. In Vien-
tiane, meanwhile, Prime Minister Souvanna apparently
is trying to re-establish his credentials as a neu-
tralist.
Europe
SOVIET UNION THREATENS TO INTERVENE IN CZECHOSLOVAKIA
Moscow placed Czechoslovakia under the threat of mil-
itary intervention last week, evidently fearing that
Dubcek was not going to be able to control liberal
extremists in Prague.
STUDENT-LABOR DEMONSTRATIONS TEST FRENCH GOVERNMENT
The massive disturbances on 13 May have assumed major
political significance, and could lead to a reshuf-
fling of the cabinet in an attempt to placate the
opposition.
FRANCO-SOVIET MILITARY COOPERATION PLODS ALONG
The bilateral military exchanges, now in their third
year, so far are of marginal value to the French
though probably of slightly greater worth to the
Soviets.
Middle East - Africa
PORTUGUESE AFRICA ATTRACTING FOREIGN INVESTORS
Despite the continuing insurgency in Angola and
Mozambique, the mineral resources of these Portuguese
territories are attracting foreign interest and sev-
eral large-scale investments have already been made.
SUDANESE ELECTIONS GUARANTEE RADICAL GOVERNMENT
The elections concluded in Khartoum last week give
leftward-oriented forces an easy majority in the new
Constituent Assembly; moderate leader Sadiq al-Mahdi
garnered fewer than 40 seats in the 218-man assembly.
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17
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WARM WORDS THAW SAUDI-IRANIAN RELATIONS
Conciliatory public statements by King Faysal and
the Shah may end the impasse in Saudi-Iranian rela-
tions, but last-minute problems could block a re-
scheduling of the Shah's visit to Saudi Arabia.
SOUTHERN YEMEN ARMY CONSOLIDATES ITS POSITION
The army is wrapping up the radical fringe of the
ruling National Liberation Front, but has made no
move against the regime itself. Meanwhile, the gov-
ernment has suspended aid talks with the British and
is desperately seeking aid from other sources.
Western Hemisphere
PANAMANIAN GOVERNMENT RIGGING ELECTION RESULTS
The outcome of last Sunday's voting has still not
been announced officially, but both candidates are
claiming victory in the turbulent aftermath of an
election marred by widespread fraud and intimidation.
CONFRONTATION BUILDING IN ARGENTINA
Relations between President Ongania and army com-
mander in chief Alsogaray have deteriorated and an
eventual confrontation between them appears to be
building.
PRESIDENTIAL RACE BROADENS IN ECUADOR
In the campaign leading up to presidential elections
on 2 June, steady gains by center-left candidate
Andres Cordoba have put him into the forefront, along
with demagogic Jose Maria Velasco and conservative
Camilo Ponce.
BERMUDAN ELECTIONS CHALLENGE TRADITIONAL WHITE RULE
Bermuda's general elections on 22 May, the first
since suffrage was extended to all citizens over 21,
offer the Negro majority an opportunity for a greater
voice in the 40-member National Assembly.
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In the opening sessions of the Paris talks, Hanoi's representatives tried
to project an image of confidence and superior bargaining strength. They
avoided delays and wrangling over procedural details in order to focus the
talks promptly on their key demand for a complete and unconditional
cessation of bombing. They also sought to convey a business-like approach
by refraining from ultimatums and deadlines.
Chief negotiator Xuan Thuy, however, concentrated on establishing
the point that the future of the talks hinges on 1JS acceptance of Hanoi's
"primordial and most pressing" demand for a "definitive and uncondi-
tional" cessation of bombing and all other acts of war against North
Vietnam. He denounced the idea of reciprocal restraint in exchange for an
end to the bombing, but did not rule it out categorically.
The Saigon government attempted to counter this thrust and to
influence the US position by renewing its insistence that there should be
no cessation of bombing until North Vietnamese infiltration into the
South ends under effective controls. On the political front, President
Thieu was expected to announce the appointment of Tran Van Huong as
the new prime minister soon. The delay in this cabinet reshuffle was
caused both by the Communist attack on Saigon and by the uneasiness of
Vice President Ky and the senior generals over the prospect of increased
civilian influence at their expense.
The fighting in Saigon proper subsided this week and most Com-
munist forces withdrew. They apparently intend to dig in close to the
city, however, and new assaults may come at an time
Uncertainty over the implications of the Paris talks and the long-term
course of US policy in Asia was reflected in statements by LaotianQ
leaders. Souvanna Phouma apparently is seeking to re-establish
his standing as a neutralist by publicly emphasizing his commitment to the
neutrality of Laos and by refuting charges that lie is inextricably tied to
the US. In a gesture to Hanoi, Souvanna's National Day speech omitted
denunciations of North Vietnamese aggression in Laos which he has
constantly stressed over the ast ear.
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VIETNAM
C
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VIETNAM
In the first week of the
Paris talks, Hanoi's representa-
tives moved quickly to focus at-
tention on the question of a ces-
sation of US bombing and all other
acts of war. They refrained from
wrangling over procedural matters
and tried to project a reasonable
attitude by avoiding harsh polem-
ical language. Chief negotiator
Thuy's opening statement repeated
Hanoi's long-standing positions,
but put them in less categorical
language than is frequently used
in North Vietnamese propaganda.
Thuy's relatively restrained
tone was not matched by the do-
mestic output of the North Viet-
namese press. The main party
daily on 12 May used Hanoi's
harshest terms to outline the
North Vietnamese position on the
bombing issue. The newspaper
called for a "definitive and un-
conditional" cessation, specifying
that "all other acts of war" in-
cluded not only reconnaissance
flights and leaflet drops, but
also naval gunfire, artillery
firing across the Demilitarized
Zone, and "sabotage activities."
Xuan Thuy's statement on 15
May picked up the same language
to describe Hanoi's demands for
a full cessation of the bombing
and other acts of war. He re-
tained some flexibility on the
issue of military reciprocity,
saying only that the US has "no
right to demand a price" for a
bombing halt. Xuan Thuy stressed
that such a halt is the first re-
quirement "for a peaceful settle-
ment," and he "recalled" that the
initial purpose of the talks is
to reach agreement on this issue.
He did not make an immediate bomb-
ing halt a condition for contin-
uing the talks, however. The
North Vietnamese stance so far
suggests they do not want the
talks to break down over the
bombing issue.
:Hanoi's plans for its new
Communist front group in South
Vietnam--the National Alliance--
are becoming clearer. The Al-
liance apparently is to be in-
troduced into the negotiation's
along with the Liberation Front
when South Vietnamese issues
come up. The Communists may in-
tend for the Alliance to serve
as an umbrella under which various
southern groups and individuals
can be assembled to act as the
"true spokesmen" for the South
Vietnamese people.
The Ground War in the South
The Communist's second "gen-
eral offensive" of 1968, which
was launched on 4-5 May, began
to run out of steam this week.
Allied reaction forces have driven
back attacking enemy forces from
the capital city of Saigon and
in key areas of the northernmost
provinces. Nevertheless, some
enemy main force units have
launched new strikes at several
allied strongpoints while others
are completing preparations for
possible combat.
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In the western highlands
provinces of Kontum, Pleiku, and
Darlac, the long-anticipated
enemy campaign may have begun in
midweek when Communist artillery-
men shelled several provincial
capitals and allied military po-
sitions.
Although most enemy forces
have now withdrawn from Saigon,
the Communists still pose a se-
rious threat and could renew heavy
attacks at any time. Mortar and
rocket harassment of military in-
stallations and airfields inthe
area is expected to continue while
the Communists possibly prepare
for new ground attacks.
There has been increasing
evidence to support earlier specu-
lation that Communist military
forces in South Vietnam are tailor-
ing some of their military actions
to affect the Paris talks. Cap-
tured documents and prisoner In-
terrogations have made increas-
ing reference to attacks that
could strengthen the position
of the Communist representatives
at Paris.
In this sense, the Commu-
nist may well consider the latest
military campaign a success, even
though at considerable cost to
themselves. For example, the.
number of allied soldiers killed
last week--562 Americans and 607
South Vietnamese--was the highest
for any week of the war to date.
Although total over-all allied
casualties were not record set-
ting, this heavy death toll may
be exploited by the Communists,
even though their own losses of
5,552 men killed were the heaviest
suffered in a single week since
their record casualties sustained
during the Tet offensive earlier
this year.
South Vietnam to Have New Premier
After much deliberation,:
President Thieu hopes to announce
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the replacement of Prime Minister
Loc and several cabinet members
by the end of this week. The
delay has been caused in part by
the renewed Viet Cong attacks
on Saigon. A more important rea-
son, however, has been the ap-
parent uneasiness of Vice Presi-
dent Ky and the senior generals
over the possibility of increased
civilian control at their expense.
Tran Van Huong is still slated
to be the new prime minister
barring any last-minute military
opposition. He reportedly would
bring other prominent politicians
into the cabinet.
The Lower House finally
passed a watered-down version of
the general mobilization bill
after several days of debate.
The bill provides for the draft-
ing into the armed forces of
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males in the 18-38 age group and
requires that males 16-17 and
39-50 years of age join the peo-
ple's self-defense force, but
contains no penalties for infrac-
tions. It fails to grant specific
authority to the government to
requisition public and private
property, stipulating that there
is sufficient authority under
existing statutes.
The bill does authorize the
executive to organize and ad-
minister the self-defense force
by decree. The government is
already pushing ahead in this
field. On 11 May, several thou-
sand students, who had been
armed and organized into a "Capi-
tal Protection Division," were
dispatched to man defensive posi-
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DISORDERS NOT ENDED BY CHINA'S NEW PROVINCIAL REGIMES
Sporadic but violent clashes,
often between armed groups, are
still occurring in many areas of
February, instructing military
units on how to correct politi-
cal errors and overcome "fac-
tionalism."
China,
25X1 Minor clashes between "revolu-
tionary" factions and unruly dem-
onstrations continue to be widely
reported even in provinces that
have already established "rev-
olutionary committees." In gen-
eral, however, fighting is
heaviest in the six provinces
where these new bodies have not
yet been set up. Apparently,
top leaders in Peking are having
considerable difficulty reaching
agreement on who is to run these
provinces.
These are all hard-core prob-
lem areas where factions have
been fighting each other, some-
times savagely, throughout the
Cultural Revolution. They also
seem to be run by military men
who may not be entirely trusted
by Peking. Recent speeches by
Peking leaders, as quoted in Red
Guard newspapers, have been
critical of commanders in at
least four of the six provinces.
According to an April news-
paper, the military in Yunnan
Province is divided, and each
faction has sent representatives
to Peking to confer with top
leaders. They are said to be
studying a directive, issued by
Mao and the central committee in
Delegations from all six
provinces have been in Peking
since at least February, while
top officials try to hammer out
new leadership lists for their
areas. On 13 May, Peking radio
expressed the hope that new com-
mittees would be formed in these
six provinces "as soon as possi-
ble."
Deadlines like these have
seldom been met, however. Last
fall, Mao Tse-tung ordered com-
mittees to be formed in all prov-
inces by the end of the year or
by the Chinese New Year at the
latest, but the job was less than
half completed by the end of Jan-
uary. In late March, a target
date of 1 May was widely pub-
licized but only four of the 11
remaining provinces made that
deadline.
It appears that the exist-
ence of disorders is no obstacle
to the formation of a new "revo-
lutionary committee." Fighting
was very heavy in parts of Liao-
ning Province just before a com- 25X1
mittee was established there on
10 May.
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Provinces without
"revolutionary committees"
U. S. S. R.
MONGOLIA
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Dalron
fOREA,;;~
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PHrIPPIMES
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The chairman of the Liaoning
committee is the controversial
commander of the Shen-yang Mili-
tary Region, Chen Hsi-lien. Chen
has been denounced repeatedly by
militant Red Guard groups, who
have staged many unruly demonstra-
tions against him this year in
Shen-yang. Apparently they have
continued to contest Peking's
decision to confirm their long-
time enemy as chairman of the new
committee. If this is the case,
it would imply that Chen Hsi-lien
has not been empowered to take
firm measures against them.
Last month, Mao Tse-tung's
nephew, Mao Yuan-hsin, who has
been playing an unobtrusive
but apparently important role
in the Cultural Revolution
group, told representatives of
a Red Guard faction from Liao-
ning that they deserved to be
criticized for some of their ad-
tions but he assured them that
the center considered them on
the whole to be a good "revolu-i
tionary" group. Inasmuch as
Mao Yuan-hsin showed up on the
new Liaoning committee--his pub-
lic introduction to Chinese
politics--he presumably will b4
in a position to protect groups
he favors in Shenyang.
As was the case in Shensi
when a committee was formed
there on 1 May, Liaoning has
failed to resume broadcasting
of local news and still replays
only Peking-originated items.
Both provinces have done this
for more than a year, and the
continuation of the practice
means they have been unable to`
broadcast accounts of inaugural
ceremonies. "Local blackouts
of this kind were ordered by
Peking last year wherever fac-
tional conflicts were serious,
but all other provinces resumed
local broadcasting at least sev-
eral days before they acquired:
committees.
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COMMUNIST DRIVE IN NORTH LAOS TEMPORARILY STALLED
The Communists' annual dry-
season offensive is moving into
its last stages but the push
against the important government
guerrilla base at Na Khang appears
to have stalled.
With the support of stepped-
up US air strikes, government
troops have recently reoccupied
a number of outlying defensive
positions lost to the enemy in
early May. Enemy pressure
against the base's defenses has
eased and the Communists have
thus far been unable to bring
the vital airstrip under fire.
The Communist build-up
against Na Khang is continuing,
however. Construction is moving
ahead on a road that will facil-
itate the movement of heavy ar-
tillery and supplies into the im-
mediate area, and there are re-
ports that fresh troops are
being moved in to reinforce the
four Communist battalions already
deployed against the base.
In Vientiane, Prime Minister
Souvanna, apparently in an ef-
fort to re-establish his creden-
tials as a neutralist, has taken
advantage of recent opportunities
to express his continuing com-
mitment to the neutrality of
Laos and to refute charges that
he is inextricably tied to the
US.
Souvanna responded favor-
ably to Yugoslav President
Tito's invitation to attend a:
proposed conference of nonaligned
nations, citing the benefits
to Laos' "international image,"
In addition, he made a small con-
ciliatory gesture toward Hanoi.
His National Day speech on 11,
May was moderate in tone, and,
in sharp contrast to last year,
did not mention North Vietnamese
aggression in Laos.
These steps almost certainly
reflect the uneasiness in Vien-
tiane generated by the talks
in Paris. Souvanna no doubt be-
lieves that his increasingly
close identification with US
policy in Indochina over the
past several years may be cir-
cumscribing his ability to ma"
neuver.
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Moscow increased its pressures on Prague this week, even as some
possibly unexpected side effects of its saber rattling were becoming evi-
dent elsewhere in Eastern Europe.
Rumania and Yugoslavia have drawn together in support of the
Czechoslovaks, evoking memories of the once-influential "Little Entente."
Yugoslav Foreign Minister Nikezic, on his arrival in Prague for a sudden
visit on 13 May, voiced his government's "special interest and sympathies"
for Czechoslovakia.
Rumanian party chief Ceausescu is to visit Tito later this month,
probably to review the situation and to consider how best they might
influence coming events in Eastern Europe. The Rumanians also are
presumably uneasy about the implications for themselves of Moscow's
handling of the Czechoslovak case, and wish to make a special point of
their close relations with Belgrade.
Polish leader Gomulka, visiting Hungary to sign a friendship treaty,
presumably is also holding council on the course of events in Czecho-
slovakia. Hungary has supported the new Prague regime, in sharp contrast
to the bitter attacks by Poland and East Germany.
De Gaulle has indirectly bestowed cautious approval upon Czech
developments with his public declaration in Bucharest that "no European
nation should submit to a shameful effacement of national sovereignty."
He carefully balanced this statement, however, by suggesting that a num-
ber of factors make it: necessary for Eastern European countries to main-
tain special relations with their neighbors, especially Russia.
In NATO the British announced their intention to detail a mobile
task force of 20,000 men to the alliance, as well as an amphibious force
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SOVIET UNION THREATENS TO INTERVENE IN CZECHOSLOVAKIA
Moscow placed Czechoslovakia
under the threat of military inter-
vention last week, evidently fear-
ing that Dubcek, who had talked
with the Soviet leaders on 4 and
5 May, was not going to be able
to control liberal extremists in
Prague.
The Soviet pressure began to
build up on 7 May when TASS at-
tacked the Czechoslovak press for
alleging Soviet involvement in
the death of former foreign min-
4-ter Masaryk. The TASS item has
been followed by a series of So-
viet press attacks on Czechoslo-
vak liberals.
The goals and the degree of
Soviet pressure on Prague seem to
be limited, however, and for the
time being suggest that the So-
viets do not intend actually to
intervene in Czechoslovakia. The
troop movements seem instead to
be an exercise in psychological
warfare, and the s
ing continued.
Throughout the period of the
Soviet military moves, there has
been no discernible reaction by
the Czechoslovak armed forces.
The Soviets have so far made
no public attack on any CzechoslQ-
vak leader and they do not seem
to expect or want at this time to
bring about Dubcek's ouster. Their
aim appears to be to persuade him
to rein in the more extreme lib-
erals, whose policies Moscow finds
threatening to the party's control.
Moscow may not be confident
Dubcek can steer a moderate course,
but it would be badly mistaken if
it counted on the conservative
elements to turn back the clock with-
out armed intervention by the USSR,
a step that it is probably hesi-
tant to take.
Although the Dubcek regime
has not bowed to Soviet pressure
tactics, it is now attempting to
mollify the USSR. Reports of a
party conference in Prague on 12-
13 May suggest that Dubcek ap-
parently intends to move against
dogmatic party members and the
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extreme liberals, although he
will still continue the party's
reform program.
On 14 May, Premier Cernik,
in another gesture to Moscow, re-
affirraed that Prague's foreign
policy is based on cooperation
with the USSR and the socialist
countries. Cernik also played
down reports of discord between
Prague and Moscow.
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The Czechoslovak party report-
edly has also asked its journal-
ists--who have been polemicizing
with Soviet, Polish, and East
German news media--to exercise
voluntarily some measure of re-
straint.
Probably in reaction to the
Soviet tactics, National Assembly
chairman Josef Smrkovsky, who ac-
companied Dubcek to Moscow and is
a leading spokesman of the party
liberals, called for an end to
indiscriminate criticism of the
party, declaring that it will
not "permit anyone to imperil
the principles of socialism."
At the central committee
plenum later this month, a date
will be set for the controversial
party congress at which the liberals
had hoped to oust conservatives
and Novotny supporters from the
central committee. Now, however,
the liberals may be somewhat re-
strained by the knowledge that
the USSR will assess their per-
formance critically in order to
judge the future course of de-
velopments in Czechoslovakia.
The current crisis in Czecho-
slovak-Soviet relations seems
to be leading to a further polar-
ization of Communism in Eastern
Europe. A special relationship
may possibly develop between Ru-
mania and Yugoslavia on the one
hand and Czechoslovakia, the
latest backslider, on the other.
Bucharest is reported to have al-
ready criticized Moscow for last
week's "little summit" to which
Czechoslovakia and Rumania were
not invited. Yugoslav Foreign
Minister Nikezic suddenly visited
Prague from 13 to 15 May, pre-
sumably to demonstrate Belgrade's
support and to give advice on how
to deal with Moscow's pressures.
Relations between these
three independently minded coun-
tries and Poland and East Ger-
many are likely to become in-
creasingly strained, particu-
larly if the Prague press con-
tinues to criticize the internal
developments of their northern
neighbors and Pankow persists in
its subversive campaign "to in-
fluence the atmosphere" in Czech-
oslovakia.
Hungary and Bulgaria are not
as free to express their views
on the current conflict. Never-
theless, the Hungarian regime
has been sympathetic to Czech-
oslovakia. The Bulgarian press
has not touched on the current
developments in Czechoslovakia,
which reflects both Sofia's cau-
tion as well as its inability
to fully agree with the Soviet
position.
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STUDENT-LABOR DEMONSTRATIONS TEST FRENCH GOVERNMENT
The massive student and
labor demonstrations on 13 May,
which took place on the tenth
anniversary of General de Gaulle's
return to power, have assumed
major political significance.
Recognition by the government
of the widespread and serious
nature of the present discon-
tent could lead to a reshuffling
of the cabinet in an attempt
to placate the opposition. The
Pompidou cabinet, however, is
not likely to be overthrown.
Although the student dis-
turbances that began two weeks
ago have been led by "neew left"
revolutionaries, the overwhelming
majority of the demonstrators
want. reform of the archaic uni-
versity system. Because of harsh
police tactics, the students
gained widespread public sympathy
and the support of professors
and deans. The government has
now given in to most of the
student's major demands,, includ-
ing amnesty for students con-
victed during last week's riots.
The students and their professors,
therefore, have now taken a ,major
first step toward becoming an
independent factor in French
politics.
The student riots crystallized
urban worker discontent with what
labor leaders label the lack of
"dialogue" between the working
class and the Gaullist government.
In an unprecedented show of unity,
all of France's major labor unions
joined together to proclaim a gen-
eral strike on a clearly po-
litical issue, and marched with
students in a massive "people's
parade" of over 300,000 on 13 May.
The goals of the unions are to
focus attention on their own de-
mands for social reform and to
creme a climate favorable to
the opposition political parties.
Francois Mitterrand's Fed-
eration of the Left and the French
Communist Party are attempting
to use the student crisis to fur-
ther their own ends. Although
the federation and the Communists
made substantial gains in the
parliamentary elections in 1967,
they have not been able to trans-
late their new voting strength
into effective political power
in the National Assembly despite
the Gaullists' lack of a formal
majority. Since March 19.67, the
two parties have presented five
different censure. motions, but
all have failed to gain the 244
votes required. to overturn the
cabinet.'
Unless there are unexpected
defections from the ranks of those
who voted with the Gaullists on
past motions, a new motion di-
rected against the government's
handling of the student crisis
will also fail when it comes to
a vcte next week. Even so, the
government may be forced to com-
ply with opposition demands for
a dismissal of the ministers of
interior and education. This
would be counted as a major gain
for the left in its struggle with
Gaullism.
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FRANCO-SOVIET MILITARY COOPERATION PLODS ALONG
Franco-Soviet military ex-
changes, now in their third year,
have so far been of only margi-
nal value to France though per-
haps of slightly greater worth
to the USSR. Most of the coop-
eration continues to be of the
showcase variety, primarily in-
volving exchanges of military
delegations.
The Soviets have pushed for
more extensive contacts but the
French Government has been drag-
ging its heels, claiming it is
studying Soviet requests. Ef-
forts to expand cooperation have
been openly criticized by some
French military officers.
Paris has given little pub-
licity to Franco-Soviet military
visits and exchanges. The Brit-
ish press disclosed, a month
after the fact, that a detachment
of eight Soviet paratroopers un-
derwent training in France in
October 1967. This resulted in
a public furor in France and fur-
ther paratroop exchanges were
canceled. A detachment of French
paratroopers had attended the
Higher Airborne Command School at
Ryazan in the Soviet union earlier
in 1967. The year before, 86 mem-
bers of the French equivalent of
the US National War College toured
the USSR. The Soviets sent a re-
turn delegation of 38 members
from their General Staff Military
Academy in 1967.
Pierre Messmer, French armed
forces minister, visited a naval
academy and air installations in
the USSR this April, and also ob-
served low-level tactical exer-
cises. During his stay, the So-
viets requested an exchange of
military observers at national
maneuvers, but the French are re-
ported to be reluctant to do so.
The French Navy plans to send two
vessels with student officers to
Leningrad this coming July for
a third annual naval exchange
visit.
The contradictions in Franco-
Soviet military cooperation were
evident during the ten-day visit
last October of Marshal Zakharov,
chief of the Soviet General
Staff. He was refused access: to
the air force's underground Wom-
mand post at Taverney because a
NATO exercise under way at the
time was testing French air db-
fenses against a Soviet offen-
sive into West Germany. Zakha,rov
also told his hosts that he re-
garded the new AMX-30 main bat-
tle tank, of which the French,
are so proud, as "too high and
clumsy.11
One of the consequences of
Franco-Soviet military coopera-
tion is the concern of NATO mem-
bers that France may be a secu-
rity risk. In one instance, Ger-
man Defense ministry officials
were disturbed to learn that
France had demonstrated for So-
viet officers two tactical mi--
siles developed jointly by France
and Germany. NATO members also
were concerned because the So-
viet paratroop detachment, which
caused the public furor in France,
trained at the same airborne
training school near Pau where
NATO officers formerly had
trained.
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SECRET
MIDDLE EAST - AFRICA
UN conciliator Jarring has shifted the locus of his talks with the
Arabs and Israelis to New York, where he still faces the problem of
getting agreement on either direct or indirect discussions between the two
sides.
Arab commandos in Lebanon twice shelled Israeli targets during the
week, bringing Lebanon into the terrorist campaign for the first time since
the June war. Lebanese officials, unable either to restrain the increasingly
popular terrorists or to ignore the threat of Israeli retaliation, are openly
nervous.
Elements on both sides of the long-simmering war in Yemen are said
to be interested in putting an end to the conflict, but contentious
tribesmen in both camps seem certain to frustrate any efforts toward
peace.
Softly worded public statements by the Shah of Iran and Saudi King
Faysal have opened the way for a reconciliation between the two mon-
archs. If the Shah reschedules his canceled visit to Saudi Arabia quickly,
public animosity over conflicting Persian Gulf interests could be damped
down.
Peace talks between the Nigerian combatants have been scheduled for
23 May in Kampala, Uganda, but prospects for an early cease-fire or the
settlement of basic differences remain dim. In the only recent important
military action in the civil war, federal troops seized the multimillion-
dollar oil refinery near Port Harcourt, but probably will have difficulty in
taking the city itself.
May
India's Congress Party won a clear majority of 15 over the combined
opposition in the 81-seat Haryana State assembly in the first state-wide 25X1
ollin
i
p
g s
nce the 1967 general elections. The victory should give the
Congress organization a substantial psychological boost as it prepares for
more important elections to be held later in Uttar Pradesh and West
Bengal states.
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In Kenya, President Kenyatta made a brief public appearance on 11
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ANGOLA and MOZAMBIQUE
W_10 CONGO
SOUTH-WEST
AFRICA
4,wwft+*VI* l VISM-~
WALVI{ lAr
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Makin:,
fiFC'R FT
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SECRET
PORTUGUESE AFRICA
ATTRACTING FOREIGN INVESTORS
Extensive mineral resources
have been attracting large-scale
foreign investments into Angola
and Mozambique despite continu-
ing problems with insurgency in
these Portuguese overseas ter-
ritories.
The bulk of foreign activity
is concentrated in Angola, where
several major undertakings have
already been initiated. The
largest investment is being made
by a US oil company, which is ex-
ploiting petroleum deposits off-
shore from Cabinda. Some $125
million will have been spent to
develop these deposits by the
end of this year, when produc-
tion is scheduled to begin.
Crude-oil production is expected
to reach at least 150,000 barrels
per day by 1970.
Nearly $100 million has been
invested by Western sources to
develop iron-ore deposits in
southern Angola, where reserves
total an estimated 120 million
tons of high-grade ore. Exploi-
tation of these deposits has
already begun and production is
expected to reach 5.5 million
tons annually. In addition, a
number of Western firms are in-
terested in other Angolan mineral
deposits, which would require
large investments.
In Mozambique, foreign in-
terest in developing the area's
mineral resources has been more
recent. A Japanese firm report-
edly has decided to invest some
$50 million to exploit high-grade
iron-ore deposits in northern
Mozambique, where reserves are
believed to total 360 million
tons. This would be the largest
single foreign private investment
in Mozambique to date. Develop-
ment of other iron-ore deposits
nearby is now under consideration
by a group of British, South
African, and German firms, and
several other companies are
prospecting for additional min-
eral deposits. A number of
foreign companies have become
involved in oil exploration, and in-
vestments by these firms over
the next few years is expected
to exceed $10 million.
The willingness of foreign-
ers to invest heavily in Angola
and Mozambique reflects a belief
that the rebels do not pose a
threat to their investments.
Although the guerrillas are ac-
tive in both territories, the
Portuguese have restricted them
to areas of unknown or doubtful
economic value. Only the oil
project at Cabinda is near in-
surgent activity, and guerrilla
operations there have been very
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SF,CRET
SUDANESE ELECTIONS GUARANTEE RADICAL GOVERNMENT
Moderate political forces
in the Sudan lost heavily in the
general elections concluded last
week.
Former prime minister Sadiq
al-Mahdi's moderate faction of
the Umma Party won fewer than
40 seats in the country's 218-
man Constituent Assembly. The
radical Democratic Unionist Party
(DUP)--a coalition of the urban-
based National Unionist Party and
the basically pro-Egyptian Peo-
ple's Democratic Party--captured
over 100 seats and also holds
the allegiance of another fac-
tion of the Umma led by the imam
of the Ansar sect. The new gov-
ernment has not yet been named,
but will certainly be led by
members of the DUP and the imam's
faction of the Umma, who control
the present cabinet.
Sadiq himself lost his seat
in the assembly, but reportedly
now plans to run in a by-elec-
tion in some safe constituency
that will be vacated by one of
his supporters. Despite pros-
pects of support from splinter
parties and southern assembly
members, however, Sadiq's chances
of influencing the policies of
the new government are minimal.
His refusal last year to cooper-
ate with leaders of the National
Unionist Party seems to have
killed his chances of regaining;
leadership of the country for
the foreseeable future.
Several leaders of the DUP
are now jockeying for the prime
minister's post. The office
will probably go to anti-Western
Muhammad Mahjoub, leader of the
previous government, but the
president of the People's Demo-
cratic Party, Sheikh Ali Abdul
Rahman, has also expressed an
interest in the office. Whoever
leads it, the new government will
certainly follow the policies
initiated by its predecessor of
tightening ties with the USSR and
adhering to a strident Arab na-
tionalist line.
Further confusion was brought
to the Khartoum scene by the
murder last week of William Deng,
a long-time leader of the south-
ern Sudanese. Southerners have
since been demonstrating against
the government, attributing Den's
death to Arab troops in the south,
but the government claims that
he was killed by southern insur-
gents. The southern Sudanese have
been in rebellion against the
Arab north for close to ten years,
and the situation remains one of
the most serious problems the
new government will have to face.
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WARM WORDS THAW SAUDI-IRANIAN RELATIONS
Amicable public statements
by Saudi King Faysal and the Shah
of Iran appear to be clearing the
way for a reconciliation between
the two monarchs.
Saudi-Iranian relations
have been at an impasse since
early February, when disputes
over the status of Bahrain and
of oil reserves in the Persian
Gulf caused the Shah to cancel
his visit to Saudi Arabia. At
issue specifically was a Saudi-
Bahraini communique in which the
Saudis stated their support for
the government of the Iranian-
claimed island. During the three
months since the cancellation of
the Shah's visit, both rulers,
believing themselves to be the
aggrieved party, awaited a con-
ciliatory gesture from the other.
King Faysal appears to have
broken the deadlock in a published
interview with a Kuwaiti journal-
ist, in which he recognized that
Iranians as well as Arabs have
rights and interests in the gulf.
Faysal referred to the "tradi-
tional friendship" between Iran
and Saudi Arabia, and said that
the Shah would be welcome to
visit.
The Shah, meanwhile, had
stated in another published in-
terview that Iran, Saudi Arabia,
and Kuwait should cooperate in
gulf affairs and expressed a de-
sire to visit "the friendly
neighboring country as soon as
possible." Although the Shah's
interview was hedged by refer-
ences to Iranian "rights" in the
gulf, Iranian officials said that
he would have been even more forth-
coming had the tenor of Faysal's
interview been known.
A rescheduling of the Shah's
visit to Saudi Arabia is crucial
to any genuine reconciliation.
Until the two monarchs are able
to deal directly, rather than
through sometimes overzealous
underlings, the issues outstand-
ing between their countries are
not likely to be resolved. The
Shah is reported to be very
pleased by Faysal's remarks, and
the Iranian press has given wide
and highly favorable coverage to
the King's interview.
An apparent Iranian misread-
ing of one Faysal statement may
prove to be a stumbling block,
however. Faysal is quoted as
saying that he has no desire to
"build bridges" in the gulf, a
statement that the Iranian press
has taken to mean abandonment of
the controversial project to
build a causeway between Saudi
Arabia and Bahrain. Saudi of-
ficials state, however, that the
King was only speaking figura-
tively, and that the causeway
is still under consideration.
In addition, the Shah may
await the outcome of Moroccan
mediation attempts and King Fay-
sal's scheduled interview with
an Iranian journalist before mak-
ing a definite decision on a trip
to Saudi Arabia. Any such delays
would provide new opportunities
for semantic and other difficult-
ies to arise.
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SOUTHERN YEMEN ARMY CONSOLIDATES ITS POSITION
The army has made no direct
move against the governing Na-
tional Liberation Front (NLF) re-
gime, but it is taking steps to
suppress the Front's left-wing
paramilitary arm, the "People's
Guard." Meanwhile, aid negotia-
tions with Britain have been
broken off, and the regime is
desperately searching for aid
from other sources.
In Aden, the army and the
public security forces have been
quietly but systematically dis-
arming the People's Guard and
apprehending its leaders. House-
to-house searches have been made
in some districts and many weapons
have been confiscated. In addi-
tion, there have been fragmentary
reports of fighting in upcoun-
try areas.
the army first undertook a
campaign among the tribesmen to
expose the People's Guard as a
group of atheists bent on destroy-
ing religion and on taking away
tribal lands. The tribes then
cooperated with the army in dis-
arming the People's Guard in
most of the Western Protectorate.
A left-wing leader detained
in Aden after one of the army's
initial roundups escaped last
week to the rebellion-prone east-
ern region of the country. His
presence probably inspired the
abortive uprising that subse-
quently occurred in the area and
the renewed blasts of leftist
propaganda emanating from Jukalla,
the eastern capital. This re-
mote area will probably prove to
be the last stronghold of left-
wing resistance.
Eastern defiance of Aden's
authority is forcing the NLF
leadership to choose between
loyalty to former comrades and
adherence to the general senti-
ment in the country. President
al-Shabi's speeches indicate that
Aden has chosen the second course
and will use the army, formerly
considered its chief opposition,
against the left wingers.
Meanwhile, aid talks with
the British were broken off on
10 May when the regime became
convinced that the British were
not going to increase their of-
fer of about $6 million for a
ten-month period. No dramatic
action against the British is
likely, however, because some
$12 million of the current
agreement remains unpaid and
the regime hopes to obtain this
money as soon as possible. A
Southern Yemeni delegation is
apparently slated to go to Mos-
cow shortly to talk about aid.
So far, however, the Soviets
have offered only military equip-
ment, and not the cash that the
regime needs to stave off eco-
nomic chaos.
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Domestic politics constituted the major news from Latin American
countries this week.
Most of the attention was focused on last Sunday's elections in
Panama, which were characterized by even more fraud and intimidation
than is usual. Both of the presidential contenders, David Samudio and
Arnulfo Arias, are claiming victory. The government appears to be delay-
ing release of the final results, which are being juggled to favor Samudio,
for fear of touching off further violence.
Bermuda is in its final week of campaigning before National As-
sembly elections on 22 May. For the first time in history, traditional
white rule over the island is being challenged by the Negro majority. In
the Dominican Republic, municipal elections were being held on 16 May,
with the main opposition party urging abstention as a protest against the
Balaguer government.
It appears that British Honduras will ask London to set up a con-
ference that would eventually lead to the colony's independence. The
proposed treaty that would have settled the long-standing dispute between
Guatemala and Great Britain over British Honduras has already been
rejected by the colony.
In Chile, the Communists are moving ahead in their plans to form a
broad leftist front for the congressional elections next year and the
presidential election in 1970. Early this week the Communist Party and
the leftist-controlled Radical Party issued a joint declaration calling for
unity of all "progressive forces" to defend democracy. The statement also
attacked the Frei government and challenged his party's "inefficient and
undefined" policies.
The Brazilian Government is still holding the Soviet space event
support ship Kegostrov, and will not release it until the Soviets apologize
in writing for their "involuntary violation" of Brazilian waters. Brazil has
been increasingly touchy about the operation of Soviet ships, articular)
fishing trawlers in its territorial water
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SECRET
PANAMANIAN GOVERNMENT RIGGING ELECTION RESULTS
The outcome of last Sunday's
voting has still not been an-
nounced officially, but both
candidates are claiming victory
in the turbulent aftermath of
an election marred by widespread
fraud and intimidation. The
National Guard and progovernment
goon squads played a prominent
role in attempting to ensure the
election of official candidate
David Samudio.
An outburst of violence be-
tween the opposing political fac-
tions on Monday evening resulted
in the death of two opposition
members and caused the progov-
ernment, three-member electoral
tribunal to delay release of un-
official tallies. Most sources,
however, indicate that the tri-
bunal is stalling for time in
order to manipulate the final
vote in Samudio's favor. The
National Board of Election Re-
turns, composed of members of
all political parties and sub-
sidiary to the tribunal, is
scheduled to begin the official
count on 18 May, but it is still
uncertain when an announcement
of the winners will be made.
the tribunal will be unable to
certify the final results before
June or July, but that when it
does "Samudio will win by about
6,000 votes." In addition, the
government is preparing to "se-
lect" the winners of seats in
the 42-member unicameral assembly
to guarantee Samudio a safe ma-
jority in that body.
According to prearranged
plans, the Robles government
apparently intends gradually
to increase the margin for Sa-
mudio on the basis of late re-
turns from the interior. The
election was unusually disorgan-
ized, and delays at the local
vote-counting centers have slowed
the forwarding of polling records
to Panama City. It is possible
that vote-juggling at these levels
is partially responsible for
the procrastination.
National Union leader Ar-
nulfo Arias may be unwilling to
stand by passively while the gov-
ernment seeks to cover up its
fraud. He is claiming to have
won the election by a majority
of over 45,000 votes. If the
tribunal does not declare his
victory, Arias has threatened to
turn his followers lose "to act',
as they see best." Under these
circumstances, a new round of
disorders could occur.
any serious breakdown
in public order would prompt the
guard to take over the government.
After Monday's rioting, Vallarino
issued a communique stating that
the guard would recognize the
citizen who has been elected con-
stitutional president through the
popular will. Although this some-
what ambiguous statement suggested
that Vallarino might not accept=
the "citizen" blessed by the
electoral authorities, any in-
dependent judgment on his part`
would encounter vigorous opposi-
tion from some of his senior guard
commanders.
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CONFRONTATION BUILDING IN ARGENTINA
President Ongania and Gen-
eral Julio Alsogaray appear to
be building up to an eventual
confrontation.
Relations between the Presi-
dent and his army commander in
chief have deteriorated since
Alsogaray's appointment in late
1966. Alsogaray is a leader of
the moderate or so-called "lib-
eral" faction in the government
that favors strict compliance
with the "Statutes of the Revo-
lution," the outline of economic,
political, and social reforms
promulgated by the military when
it took power in June 1966. His
brother Alvaro, who is Argentina's
ambassador to the US, is another
influential leader of the moder-
ates and has been helping put
pressure on Ongania.
The moderates are strongly
opposed by the conservative, na-
tionalistic faction that has
talked about establishing a corp-
orate state, similar in some re-
spects to that of Franco's Spain.
They envisage the development of
councils at the municipal, pro-
vincial, and national level made
up of delegates from labor, busi-
ness, civic, social and other
organizations. The councils
would pass on legislation gener-
ated by the executive.
President Ongania, a retired
general, is reported to be very
sympathetic to his conservative
advisers, but he has shrewdly
maintained a position aloof from
both sides. Ongania is aware of
General Alsogaray's maneuvering
to gain support in the military
and among civilian politicians,
and he also knows that Alsogaray
is an ambitious but not very popu-
lar officer. The President has
let it be known that he will deal
firrtly with any attempt by Also-
garay to dominate or remove him.
General Alsogaray faces pos-
sib'e retirement in December 1968
after he completes the standard
two--year assignment as army com-
mander. Some of Alsogaray's ma-
neuvering may be a sincere effort
to prevent the conservatives from
gaining sway over the President,
but a good deal of it seems to
be an attempt to avoid giving up
the influential and prestigious
army post. .
It seems probable that Presi-
dent: Ongania will try to under-
minE! Alsogaray's position in
the army, making it easier for
him to be replaced. Alsogaray's
attempts to counter this effort
will. create further frictions,
but neither the President nor
the general is ready for an open
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SEC RI;.'I'
PRESIDENTIAL RACE BROADENS IN ECUADOR
The presidential campaign in
Ecuador is no longer a two-man
race. Steady gains by center-
left candidate Andres Cordoba
may give him second place on
2 June, although either demagogic
Jose Maria Velasco or conserva-
tive Camilo Ponce is still likely
to win. Even if Velasco loses,
his help will almost certainly
secure a potentially influential
senate post for extremist Carlos
Julio Arosemena, ousted from the
presidency in 1963.
The erosion of Velasco's
initial lead in the campaign for
the first national elections
under Ecuador's new constitution
is a result of several -factors.
Although he is still vigorous at
75, the four-time President seems
to have lost some of his zest
for campaigning. Moreover, a
confusing registration program
has disenfranchised many eligible
voters, particularly in the lower
classes most responsive to Velas-
co's charismatic appeal in past
elections. In addition, his re-
fusal to disavow Carlos Julio
Arosemena's support has estranged
some of his more moderate support-
ers and has probably reduced the
flow of badly needed campaign
funds.
In this situation, Arosemena's
campaign contributions, some of
obscure origin, have improved
his own bargaining position with
Velasco. Most importantly, he
achieved his aim of having his
name placed at the top of the
velasquista congressional slate
in Guayas Province. Given
Ecuador's proportional voting
system and Velasco's strength in
that coastal province, this top
listing is tantamount to election.
Arosemena hopes to use his proven
political skill to become pres.-
dent of the senate, a position;
following the vice presidency in
presidential succession.
Arosemena's penchant for ex-
tremist associations and activi-
ties, not to mention alcohol,
makes him anathema to Ecuado-
rean military leaders. They axe
already concerned over recent ex-
tremist-led student outbreaks
which have closed schools and
forced the education minister'::s
resignation. Arosemena's pos-
sible re-emergence in a position
of political power might overcome
the aversion to political action
they have displayed since the
military junta was ousted in 1:966.
Meanwhile, ex-president
Ponce's coalition has been weak-
ened by internal differences in
the Conservative Party. The
Psychedelic Cybernetic candidate,
representing the "brown-skinned
masses," failed to gain enough
signatures to be able to regidter
for the election. Interim Presi-
dent Otto Arosemena's request
that the Organization of Ameri-
can States (OAS) send observers
to the elections has caused some
adverse comment in Ecuador anc
could embarrass former Ecuado-
rean president and incoming OAS
Secretary General Galo Plaza
Lasso.
SECRET.
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SECRET
BERMUDAN ELECTIONS CHALLENGE TRADITIONAL WHITE RULE
Bermuda's general elections
on 22 May will bring the first
real challenge to traditional
white rule in the island's his-
tory. The elections, the first
since suffrage was extended to
all citizens over 21, offer the
two-thirds Negro majority an op-
portunity for a greater voice in
the 40-member National Assembly.
The predominantly white
United Bermuda Party (UBP) is
being challenged by the over-
whelmingly Negro Progressive
Labor Party (PLP), which is
stressing "black power" in its
appeal to the 55 percent of the
registered voters who are Negro.
The PLP's radical image, however,
may cause some Negro voters to
throw their support to the small
and more moderate biracial Ber-
muda Democratic Party.
The expansion of the vot4ng
rolls, together with recent r*-
districting and the impact of the
race issue, make the election'
outcome uncertain, but the UBP
appears to have a slight edge'be-
cause the electoral boundarie$
are in its favor. Recognizin
its need to attract Negro vot s,
the UBP has adopted a position
supporting racial integration',and
is running 13 Negro candidate*.
British officials believ4
that a UBP victory could provoke
outbursts of violence similar to
the racial disturbances last
month. The British troops air-
lifted from London to help con-
trol these disturbances will re-
SECRET
25X1
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 Approved For Release 2008/10/02 : CIA-RDP79-00927AO06400070001-6
Secret
Secret
Approved For Release 2008/10/02 : CIA-RDP79-00927AO06400070001-6