WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A006500030001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 34
• Document Creation Date: December 20, 2016
• Document Release Date: June 15, 2006
• Sequence Number: 1
• Publication Date: June 21, 1968
• Content Type: SUMMARY

~P~5
Approved For Release 2007/03/06 : CIA-RDP79-00927A006500030001-9
Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
State Dept. review completed
Secret
44
21 June 1968
No. 0025/68
Approved For Release 2007/03/06 : CIA-RDP79-00927A006500030001-9
 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
 Approved For Release 2007/03/06 :9-00927A006500030001-9
(Information as of noon EDT, 20 June 1968)
VIETNAM
Vice President Ky's power base has eroded as a re-
sult of dismissals, military resignations, and Ky's
own seclusion. This has contributed to an atmos-
phere of growing crisis in Saigon. The Paris talks
remain on dead center, while in South Vietnam there
are indications that the relative lull in hostili-
ties may foreshadow a step-up in the tempo of fight-
ing near Saigon.
Page
1
POLICIES IN COMMUNIST CHINA MARKED BY DIVERGENT TRENDS 5
The Chinese Communists continue their efforts to re-
furbish Peking's image abroad by adopting a more
reasonable public posture toward the outside world,
indicating that foreign policy is at least temporar-
ily insulated from the political struggle and domes-
tic confusion inside China.
MALAYSIA-SINGAPORE DEFENSE GUIDELINES FORMULATED
The five-nation Commonwealth defense conference on
10-11 June in Kuala Lumpur achieved modest success
in formulating guidelines for the joint defense of
Malaysia-Singapore through 1971, but specific mili-
tary commitments after 1971 were studiously avoided.
LAOTIAN POLITICAL ISSUES REVIVE
Long-standing internal problems are beginning to come
to the surface again now that the rainy season has
brought a decline in the fighting.
SECRET
Approved For Rem%@ 2.007/0KfiYA4;WRiM6r0927=OSSfl0QW001-9
 Approved For Release 2007/03/06 : CIA-RDP79-00927A006500030001-9
SECRET
Europe
THE WEEK IN PERSPECTIVE 9
EAST GERMANS USING ACCESS ISSUE TO GAIN RECOGNITION
Two new East German resolutions are broad enough to
be used to choke the flow of traffic to Berlin but,
unlike similar measures in the past, there is no
immediate hint of an impending crisis.
CZECHOSLOVAKIA MOVES AHEAD ON REFORMS
Czechoslovakia this week took some important steps
toward reform despite continuing Soviet pressure
designed to forestall or prevent implementation of
Prague's action program.
FRENCH PARLIAMENTARY ELECTIONS APPROACH
The national legislative elections on 23 and 30 June
may take place in an atmosphere of relative calm:
only a fraction of the original 10 million strikers
remain off the job and the students appear to have
been at least temporarily quelled.
Middle East - Africa
USSR EMPHASIZES TRAINING IN MILITARY AID TO EGYPT
The major emphasis now, a year after the June war
made the need obvious, is on teaching the Egyptians
how to use their Soviet-supplied equipment.
SECRET
ApprovedrFacfeRellase[ Pg / ?DP791009ZApg6500030001-9
 Approved For Release 2007/03/0?Eefi-RIIP79-00927A006500030001-9
ISRAELI POWER STRUGGLE HEATS UP
The unity of the Israeli Labor Party and of the gov-
erning coalition it dominates was strained this week
when Prime Minister Eshkol designated a new deputy
prime minister--a surprise move aimed at blocking
any attempt by Defense Minister Dayan to win control
of the party and the government.
SENEGAL DEALS WITH LABOR DEMANDS
President Senghor has made some progress in coping
with the deep-seated grievances that prompted labor
participation in last month's antigovernment demon-
strations. His neglect of student demands, however,
led to renewed student boycotts and the closing of
all schools last week.
CONGO'S IMPROVED ECONOMY STILL FACES LONG-RANGE PROBLEMS 19
Although the reforms that Kinshasa initiated a year
ago to correct the Congo's distorted financial system
have been fairly successful, the economic outlook is
for stagnation for some time.
MOROCCAN COMMUNISTS SEEK LEGAL STATUS
Although banned since 1959, the Moroccan Communist
Party has been tolerated by the government, and it
recently has begun to operate more openly.
Western Hemisphere
LIBERAL PARTY MAJORITY LIKELY IN CANADIAN VOTING
Prime Minister Trudeau has established a rapport
with his audiences throughout most of the country.
POLITICAL TENSION EASES IN COLOMBIA
President Carlos Lleras Restrepo and maverick sena-
tors of his own party appear to have avoided another
disruptive confrontation over reform legislation by
some quiet political horse-trading.
SECRET
Approved For FCeig set?a07/W?MLYCI~k N-009i~A67MM30001-9
 Approved For Release 2ECRE 6 : CIA-RDP79-00927A006500030001-9
URUGUAY'S CHRONIC ILLS PERSIST
The government has curbed student violence by impos-
ing a limited state of siege, but has been unable to
resolve the underlying problems that precipitated
the recent crisis.
SECRET
Approvgg j~priFy eleaWAR9,VOAkWMAC -RDFY9&02?,4006500030001-9
 Approved For Release 2007/03/g6 P79-00927AO06500030001-9
Events last week disclosed no change in Hanoi's strategy of maintain-
ing an inflexible stance in the Paris talks while pressing its primary
objective of eroding the morale and authority of the Saigon government.
Communist psychological warfare was highlighted by threats to hold the
capital under daily bombardment for 100 days. Defense Minister Giap
publicly characterized the current military situation as "one long battle of
Dien Bien Phu" and Viet Cong propaganda is urging the South Vietnamese
Army as well as police and civil servants to desert their posts "at this
decisive moment."
The pace of Communist military action in the past two weeks
declined to the level that prevailed prior to the offensive in early May.
The Communists, however, continued sporadic shelling of Saigon and
directed heavy fire against Quang Tri city and allied bases along the
Demilitarized Zone. They appear to be preparing for another coordinated
offensive against Saigon to begin soon.
This steady military and psychological pressure is being exerted
against a background of seeming political disarray in Saigon. Vice Presi-
dent Ky, whose position has been eroded by recent replacements and
resignations, was obliged to issue a public denial of coup plotting and
disunity in the leadership. Prime Minister Huong also denied disaffection
in his cabinet but this did not still rumors that he has threatened to resign
unless President Thieu coordinates more closely with him on appointments
such as that of the controversial new mayor of Saigon.
In China, continuing tension within the leadership was reflected in
divergent lines in foreign policy and domestic affairs. Peking is making a
deliberate effort to present a more moderate posture toward the outside
world by reviving the pre - Cultural Revolution theme of the "five
principles of peaceful coexistence" as the basis of its foreign policy. This
line contrasts sharply with greater militancy in domestic propaganda aimed
at arousing the "masses" against alleged enemies of the state and restoring
the momentum of the Cultural Revolution.
The five-nation Commonwealth defense conference in Kuala Lumpur
last week scored a modest success in formulating guidelines for joint
defense of Malaysia and Singapore through 1971, but the participants
SECRET
Approved For Relea1
se 20 7/03/06 SGT 679-0227JA 60030001-9
 SECRET
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
KIEN \PHONGN
GIANG
CH UONG
t,INH
LONG
LONG
KHANH
HoA P TUOC
N got.
PH UOC
LONG
VINH `
BINH
BINH
TUY
THUAW-
KH ANH"i
HOA;
SOUTH VIETNAM
100
MILES
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
SECRET
 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
SECRET
VIETNAM
Evidence that Vice Presi-
dent Ky's power base has eroded
as a result of dismissals, mili-
tary resignations, and Ky's own
seclusion multiplied last week
and contributed to an atmosphere
of growing crisis in Saigon. Al-
though some of the resignations
have not yet been acted on, Presi-
dent Thieu may well be tempted to
press his advantage and consoli-
date his hold while Ky's support-
ers remain disinclined to react
forcibly.
Ky, prompted by rumors of
an irreparable breach between
himself and Thieu and of coup
plotting, declared on 17 June
that a coup at this critical junc-
ture would be unacceptable. He
explained in a nationwide tele-
vision address that, although he
was turning over his assignment
as director of the People's Self-
Defense Force to Prime Minister
Huong, he was not abandoning his
constitutional role as vice presi-
dent, and he appealed for unity
behind the government.
Ky's public gesture has ap-
parently done little to ease the
underlying tension between him-
self and Thieu. Ky and his mili-
tary associates probably remain
deeply distrustful of Interior
Minister Khiem's influence
on Thieu and skeptical of the
new Huong cabinet. Huong himself
has had to deny rumors of disaf-
fection within his cabinet, but
he has so far successfully weath-
ered his first challenge by dis-
missing Minister of State Phan
Quang Dan for advocating direct
talks with the National Libera-
tion Front.
Enemy shelling of Saigon,
although diminished in recent
days, has evoked some demands
both for peace and for a step-
up in the government's war ef-
fort. Pressure for a settlement
has come primarily from leftist
students but the moderate Bud-
dhists have begun to talk of a
peace campaign. At the same
time, however, many influential
newspapers and assembly members
are expressing dissatisfaction
with the course of the Paris
talks and with the partial bomb-
ing halt, which leaves Hanoi im-
mune to retaliation.
There has been some criti-
cism of the government's ina-
bility to prevent attacks on Sai-
gon. The continuing enemy pres-
sure and the government's moves
to strengthen its local command,
however, may have contributed to
the relatively swift assembly
passage last week of the general
mobilization bill with all of
the amendments proposed by Thieu
to broaden its application.
SECRET
Paqe 3 WEEKLY SUMMARY 21 Jun 68
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
 Approved For Release 20 EQ3tO6 IA-RDP79-00927AO06500030001-9
The War in the South
Enemy military activity has
declined during the past two weeks
to the pace maintained in April
just prior to the last Communist
offensive. It appears that the
current lull may again foreshadow
a major increase in the tempo of
the fighting, especially in the
Saigon area and in northern I
Corps.
Enemy propaganda during
the past week has been promising
an intensification of armed ac-
tion in the capital--a line the
Communists would probably not take
if they did not intend to follow
through with some spectacular new
moves. According to high-level
prisoners an attack is planned
for later this month using the
North Vietnamese Army (NVA) 7th
Division as a spearhead force.
It is clear from prisoner
statements and captured documents
that the Communists had planned
to mount stronger ground pressure
against Saigon during the past
few weeks, but that allied spoil-
ing operations inflicted heavy
casualties before the enemy could
get into position. The surrender
on 18 June of more than 100 troops
from a Communist unit outside
Saigon points up the enemy's dif-
ficulty in keeping up the pres-
sure.
Several battalion-size for-
mations from Viet Cong units that
normally operate in the upper
delta provinces have been engaged
in the recent Saigon fighting.
The shift of these forces north-
ward is probably responsible to
some extent for the slowdown in
Communist action in the delta.
Significant Communist mili-
tary moves have also taken place
in Quang Tri Province and in the
area of the Demilitarized Zone
(DMZ), apparently as part of
preparations for a general in-
tensification of pressure. Pris-
oner interrogations have now
fairly well confirmed that at
least two regiments of the NVA
308th Division have moved into
the Khe Sanh area.
In addition, there are in-
dications of preparations for
sustained offensive action across
the zone. Recent photography has
revealed new road construction in
the central DMZ area, suggesting
plans to enlarge supply and troop
infiltration terminals. Parallel-
ing this has been the employment
of enemy helicopters in the
area, apparently in a logistic
support role.
Paris Talks
The Paris talks remained
on dead center this week with
Hanoi refusing to discuss any
SECR m *
Approved F lgase 2 WZ1Q 6StOLAA P79-QQ92r7uADQ6500030001-9
 Approved For Release 2007/ %PF-RDP79-00927AO06500030001-9
reciprocity for a bombing halt.
Hanoi Radio emphasized this hard
line by denying Western press
speculation that private deals
on this issue were under considera-
tion.
In the ninth negotiating
session in Paris, the North Viet-
namese deviated little from the
harsh and propagandistic tone
they have taken at previous meet-
ings. Xuan Thuy accused the US
of creating "obstacles" that pre-
vented progress, and claimed
that the US had actually in-
creased the number of air strikes
against the North last month.
He insisted that this pointed
up Washington's "lack of good
faith," and asserted that Hanoi
would not be pressured by calls
for a resumption of the bombing
of the entire North.
North Vietnamese propaganda
on the talks has continued to
treat the fighting as a national
war of independence and to justify
Hanoi's right to support the
South while not acknowledging
any North Vietnamese Army pres-
ence in the South. Part of this
effort was the resurrection of
the Liberation Front's two-year-
old threat to call in foreign
Communist volunteers--a threat
that was originally issued in
1965 and has always been put for-
ward as a conditional right.
The new treatment preserves this
condition and does not maintain
that the call has been either
issued or answered.
25X1
POLICIES IN COMMUNIST CHINA MARKED BY DIVERGENT TRENDS
The Chinese Communists are
continuing their efforts to re-
furbish Peking's image abroad by
adopting a more reasonable public
posture toward the outside world.
This shift in tactics indicates
that foreign policy is at least
temporarily insulated from the
political struggle and domestic
confusion inside China.
Chinese Posture Abroad
Recent propaganda statements,
which probably reflect a basic
policy decision, have begun to
stress moderate lines that have
not been given emphasis since the
Cultural Revolution erupted in
1966. This development has fol-
lowed a number of moves appar-
ently calculated to repair dam-
age done earlier to Chinese for-
eign relations by "Red Guard"
diplomacy.
Foreign Minister Chen Yi
illustrated Peking's new tacti-
cal approach in a speech on 11
June during the visit of the Ne-
palese foreign minister in which
he typified Sino-Nepalese rela-
tions as "an example to friendship
and good neighborliness between
countries with different social
systems." Chen affirmed China's
intentions to "promote the com-
mon cause of the Afro-Asian peo-
ples united against imperialism"
by adhering to the "five princi-
ples of peaceful coexistence."
He emphasized that it was China
SECRET
Approved FW`el25ase 26&'/66~'ffA~-kSP79b9l5LA06&500030001-9
 Approved For Release 2007/03/06 : CIA-RDP79-00927A006500030001-9
SECRET
that "first initiated and carried
out" these principles as the basis
for its foreign relations.
In his remarks, Chen betrayed
increased concern over Moscow's
efforts to isolate China even
more. He charged that "certain
people," a clear reference to
the Russians, are attempting to
create a new anti-Chinese alli-
ance by fabricating evidence of
subversive activities abroad by
Peking.
This new line probably re-
flects adherence to an "instruc-
tion," attributed to Mao Tse-tung
and issued on 29 May, ordering
propaganda media to avoid all
mention of China's influence on
"international revolutionary
movements." In recent weeks, prop-
aganda on Asian "armed struggles"
has been sharply curtailed.
Earlier, the emphasis was on the
importance of relying on the
thought of Mao as the fundamental
guideline for "national libera-
tion."
The Chinese will probably
seek to exploit the state visit
by Tanzanian President Nyerere
this week by highlighting Pe-
king's friendly assistance to the
"Afro-Asian world." In recent
months, a number of visiting Afri-
can dignitaries have been given
an effusive welcome by the Chi-
nese and Peking has been devot-
ing heavy propaganda coverage to
its aid projects in Africa.
Contentious Meetings in Peking
25X1
Chinese leaders
are reported to have held an im-
portant series of meetings during
May. They were supposedly attended
by the few dozen members of
the central committee who have
survived the Cultural Revolution
and by representatives from pro-
vincial Revolutionary Committees
and the large military regions.
The main topic is said to have
been whether to bring the Cul-
tural Revolution to an early end.
The provincial representatives
favored an early termination,
while members of the Cultural
Revolution Group maintained that
the movement should go on at
least another year.
delegates
were unable to reach agreement
on this issue.
25X1
25X1
The increasing militancy of
Peking propaganda since May indi-
cates that the regime is still
dominated by proponents of con-
tinuing "revolution" and purges.
At the same time, the renewal of 25X1
violence in the provinces sug-
gests that the militants are
facing strong opposition.
SECRET
ApprovedpFapi Relese 2Qp 4 06sUpl&WP79-OM2,74iQO% 00030001-9
 Approved For Release 2007/03/C%Eeik ii'P79-00927A006500030001-9
MALAYSIA-SINGAPORE DEFENSE GUIDELINES FORMULATED
The five-nation Commonwealth
defense conference on 10-11 June
in Kuala Lumpur achieved modest
success in formulating guidelines
for the joint defense of Malaysia-
Singapore through 1971. Specific
military commitments after 1971,
however, were studiously avoided.
Britain emphasized its con-
cern for the area by pointing to
its promise to keep about 10,000
military personnel there until
the end of 1971. It will, more-
over, donate its facilities, ex-
cept for such operational equip-
ment as radars and missiles, which
could be purchased. The British
also offered to provide advisory
and training groups after 1971,
and said they would bring in ele-
ments of their own forces for
training in the area after 1971.
The conferees adopted a
British suggestion to hold a ma-
jor five-power military exercise
in the area in 1970, and agreed
in principle to hold additional
exercises after 1971. Such exer-
cises presumably would demonstrate
Britain's capacity to deploy its
mobile forces.
Australia and New Zealand
agreed to keep forces in the area
through 1971; Australia will main-
25X6 tain two jet aircraft squadrons.
For their part, Malaysia and
Singapore affirmed their intention
to cooperate closely in defense
matters. Singapore will build up
a small air force and navy, and
will cooperate with Malaysia in
patrolling coastal waters. Malay-
sia will continue to base its navy
in Singapore.
A major point of contention
at the meetings was the Malaysi-
ans' initial insistence that the
five powers assume joint responsi-
bility for control of all bases
and facilities, a stand they aban-
doned after it was firmly rejected
by Britain. The conferees, how-
ever, did agree to the concept of
joint participation in an inte-
grated air defense system. Malay-
sia hopes Australia will accept
the military command position in
this system.
Specific defense arrangements
are now to be worked out by three
joint groups representing each of
the military services. Another
ministerial-level conference is
scheduled to meet in about a year.
The success of these efforts will
rest largely on the willingness
of the leaders of Malaysia and
Singapore to suppress their mutual
suspicions and antagonisms.
SECRET
Approved For eefease 200 "HE ~'Y G X 9-009 A0 0b830001-9
 Approved For Release 200 p,~Q1 IA-RDP79-00927A006500030001-9
LAOTIAN POLITICAL ISSUES REVIVE
Long-standing internal prob-
lems are beginning to come to the
surface again now that the rainy
season has brought a decline in
the fighting.
The country may be faced
with an unusually high budget in
the coming fiscal year unless
tax receipts from gold transac-
tions, one of Vientiane's primary
sources of revenue, increase sub-
stantially or the government
moves to increase other taxes.
Gold imports have decreased sig-
nificantly because of unsettled
conditions in the world gold mar-
ket.
A large deficit would lead
to inflation and might undermine
US and other foreign support for
the international currency sta-
bilization fund in Laos. Finance
Minister Sisouk na Champassak is
willing to make deep cuts in the
military budget to maintain civil
expenditures, but army leaders
have made it clear that such a
course is unacceptable. Sisouk,
who has been considered at times
as Prime Minister Souvanna's heir
apparent, has talked of quitting
but a recent budgeting plan
worked out with US assistance
should ease the pressure on him.
Meanwhile, the Paris talks
have generated speculation over
the possible return of the Com-
munists to the government. Prime
Minister Souvanna has indicated
that he will make a fresh effort
to organize a broad-based politi-
cal organization when he returns
in early August from a six-week
vacation in France.
SECRET
ApprovedEgg Release @ Otkuig ,fWP79-00927 00Effi00030001-9
 Approved For Release 2007" .&A-RDP79-00927AO06500030001-9
The East Germans are continuing to probe Western reaction to their
new measures against the transit of West German citizens and freight. The
bulk of traffic to Berlin is proceeding normally, however. Although the
Russians continue to insist that East Germany's moves are justified, they
seem anxious to keep tensions down.
Pravda on 19 June published an authoritative and explicit com-
mentary on recent appeals by President Johnson for better US-Soviet
relations. The article implied that the USSR would respond favorably
when the US showed real interest by acting to end "aggression" in
Vietnam, support for Israeli policies, "ideological subversions" and trade
discrimination against the USSR and its allies, and further "militarization"
of the US and its allies. The Soviets have been at pains to put down any
notion of a warming trend in US-Soviet relations. Anxieties about intellec-
tual dissidence at home and in Eastern Europe account in large measure
for this posture, which is reinforced by Moscow's need to show support
for Hanoi and to parry Peking's propaganda.
In Prague, the Dubcek regime has taken a number of important steps
to implement its action program, including the signing of an agreement to
share power among all political parties. The Soviets will probably object;
last week, Pravda printed an unusually strong personal attack on a liberal
Czechoslovak party leader.
Meetings have resumed in Budapest of the committee preparing for
the forthcoming world Communist conference in Moscow. Rumanian ob-
servers are present, which suggests that nothing controversial is contem-
plated.
A mood of public apathy was apparent in France as the first stage of
the parliamentary elections approached. The voting on 23 and 30 June is
likely to reflect the polarization of political forces between the Gaullists
and the Communists.
The UN Security Council this week passed--with Algeria, Brazil,
France, India, and Pakistan abstaining--the resolution extending to non-
nuclear countries security assurances against nuclear attack. The measure is
intended to encourage t e signing of the nonproliferation treaty, soon to
be opened for signatures.
SECRET
21 Jun 68
Approved F% lease 201 16NAi : l'79-00927AO06500030001-9
 SECRET
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
WEST GERMAN SURFACE ACCESS ROUTES TO BERLIN
Autobahn
Road
+- r- Railroad
Canal
J Schwerin
hence
~SGhwanheide
Cu 7
FEDERAL
Stendal
REPUBLIC
Vorsfelde
i~" ?Oehisfelde
annoyer ~
4#111 Leipzig M
s
not through Gutenfurst . L'
enter West Berlin.
does c
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
SECRET
( DEN.)
POLAND
IN,
 Approved For Release 2007/s //06-~RDP79-00927A006500030001-9
EAST GERMANS USING ACCESS ISSUE TO GAIN RECOGNITION
The Soviet Union has sanc-
tioned East Germany's assertion of
greater authority over traffic on
the autobahns to Berlin, except
for Allied traffic which is still
governed by Four Power agreements.
Unlike earlier pressures on
Berlin, the present situation is
not accompanied by hints of an im-
pending crisis. Although the Rus-
sians continue to insist that the
East German moves are justified,
Moscow seems anxious to dampen any
suggestions of tension.
Two resolutions--on the docu-
mentation for personal travel and
on increased taxes and restrictions
on freight--announced at the East
Germany parliament session on 11
June are broad enough to be used
to choke the flow of traffic to
Berlin. Under the new regulations,
travelers are now required to pur-
chase East German visas and to ex-
change an increased amount of West
Marks for East Marks in order to
enter East Germany. After 15
July, West Germans will have to
have passports. The new freight
taxes go into effect on 1 July.
The East German regime prob-
ably believes that it had to act
now to secure as many attributes
of sovereignty as possible. Ul-
bricht sees Bonn's Ostpolitik
threatening to undercut East Ger-
many's role in Europe and the
stability of his regime endangered
by an ever-lessening cohesion
within the Warsaw Pact. Any set-
tlement coming from the Paris ne-
gotiations on Vietnam also would
tend to hasten European detente
and.Eastern European disunity.
Foreign Minister Brandt on
18 June had a nine-hour talk with
the Soviet ambassador to East Ger-
many, the details of which Brandt
has declined to discuss in public.
The East German broadcasts during
Brandt's visit suggest that they
were not informed in advance by
the Soviets, and the effect may
be to embarrass Pankow in its
attempts to assert its sover-
eignty.
In Bonn, policy making is com-
plicated by divisions that have ap-
peared between the two coalition
partners during the search for ef-
fective countermeasures. Christian
Democratic militants are calling
for "active steps," while the So-
cial Democrats want to avoid jeop-
ardizing the country's detente pol-
icy toward Eastern Europe. Chancel-
lor Kiesinger is seeking to mollify
both groups.
The chances for immediate,
effective countermeasures seem to
have been dealt a setback with
Bonn's decision on 17 June not to
apply interzonal trade sanctions
lest they also affect West Berlin.
Allied officials have stressed
that broadly supported Western
countermeasures, such as restric-
ting East German travel abroad,
are contingent upon Bonn's lead.
Bonn has moved to offset the
impact of the East German decrees.
it will reimburse travelers and
shippers for the new visa fees and
freight charges, and has approved
a program to increase economic aid
to West Berlin. Governing Mayor
Schuetz, while welcoming the pledge
of new aid, has questioned whether
it will be enough to sustain the
city's viability.
SECRET
Approved For lRaIse :1Q07/O MIXRDPW00927Ab0d 'ft&A001-9
 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
SECRET
CZECHOSLOVAKIA i1OVES AHEAD ON REFORMS
Czechoslovakia this week
took some important steps toward
reform despite continuing Soviet
pressure designed to forestall
or prevent implementation of
Prague's action program. Czech-
oslovakia also solidified its
relations with Hungary by renew-
ing a 20-year friendship and
mutual assistance treaty and
again hinted that it is prepared
to improve relations with the
West.
On 15 June, party leader
Dubcek signed an agreement that
will enable the other political
parties within the National Front
to join with the Communists in
formulating and implementing
state policies. Although the
Communist Party will retain its
"leading role," the agreement
"confirms" that power "must not
be a monopoly of any single
party," and provides that each
member of the front will have
the right to develop its own pro-
gram according to its own re-
quirements.
By concluding this agreement,
the Czechoslovak party has cast
off the traditional communist
view that the front must act only
as a "transmission belt." The
Soviets, who earlier had objected
to such a conception of the front,
probably regard this agreement
as an unacceptable "revision" of
Marxism, but have yet to comment.
Discussions in the National
Assembly suggest that the Czech-
oslovaks will accept the forma-
tion of even more political par-
ties so long as they operate
within the framework of an en-
larged National Front. The con-
stitutional-legal committee of
the assembly also recommended that
local and national elections be
further postponed until after a
proposed Czech-Slovak federative
arrangement is effected. Elec-
tions probably will take place
sometime in 1969.
The Czechoslovaks earlier
took legislative action, based
on other aspects of the party's
action program, which will not
sit well with Moscow. National
Assembly committees discussed a
bill designed to remove nearly
all travel restrictions and ap-
proved another that provides for
the "rehabilitation" of persons
unjustly imprisoned or killed.
In addition, the government ended
one aspect of its control over
the publishing industry by abol-
ishing the Center for Book Culture
and also granted permission for
the Greek Catholic Church, which
had been "abolished" in 1950, to
resume its activity. Moreover,
the cabinet directed the appropri-
ate ministry to present a new
and presumably more liberal bill
to end press censorship.
On 1-4 June, Moscow made its
first public attack on a high-
ranking Czechoslovak party of-
ficial. A candidate member of
the Soviet central committee,
writing in Pravda, accused
Cestmir Cisar, a Czechoslovak
party secretary, of being a
SECRET
Page 12 WEEKLY SUMMARY
~1
Approved For Release 2007/03/06 : CIA-RP79-00922!$ 068
6500030001-9
 Approved For Release 2007/03/0?Re11 79-00927AO06500030001-9
"revisionist" and "opportunist."
The article, apparently misrep-
resenting a speech Cisar made
on 6 May, suggests that the So-
viets withheld their criticism
until they believed it necessary
to remind Prague of its promises
to preserve the essentials of
Communist control.
In Budapest, both Dubcek
and Premier Cernik were again
equivocal concerning Prague's
intentions toward West Germany,
but both held out the possibility
that diplomatic ties eventually
will be established. Dubcek
urged acceptance of a "realistic
arrangement" between the two
Germanies, but added that it is
in Prague's interest to "normal-
ize" relations with Bonn. He
also said that Prague demands
"nothing else" from Bonn than
that it "break with the heritage
of nationalism" and that it en-
sure that neo-Nazi forces not
gain preponderance.
Cernik had earlier stated
that Czechoslovakia wants to
improve its economic ties with
European Common Market members,
but he stopped short of suggest-
ing that Prague is seeking rela-
tions with the EEC. Prague is
also reported to have taken the
initiative toward making signifi-
cant improvements in its rela-
tions with Austria.
Early in the week, Soviet
Marshal Yakubovsky, the Warsaw
Pact's commander, arrived in
Czechoslovakia to assume control
of the command-staff exercise
now under way. Just before
leaving for Prague, Yakubovsky
said that only communications
troops would be in the exercise
and as of 20 June, no Pact com-
bat troops had been detected mov-
ing into Czechoslovakia. He
also said that the exercise
would take place in Czechoslo-
vakia, Poland, the USSR, and
East Germany, and would involve
units from these four countries
and from Hungary.
This was the first indica-
tion of East German involvement
and contradicted a Czechoslovak
Defense Ministry spokesman's
statement earlier in the month
that East Germany would not
participate in the exercise.
The confusing pronouncements
point up the ad hoc nature of
the exercise, the motive for
which appears more political
than military.
SECRET
25X1
Approved FPoMele a 20 MYS : ?V79-008J27AQ?6W030001-9
 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
SECRET
FRENCH PARLIAMENTARY ELECTIONS APPROACH
The two-stage national legis-
lative elections on 23 and 30
June are expected to take place
in an atmosphere of relative calm.
Only about 200,000 of the original
10 million strikers remain off
the job and these are concentrated
in a few concerns--the metallurgi-
cal, electric, and electronics in-
dustries and the state-controlled
radio and television service. The
students, too, have been quelled,
at least temporarily, since the
police invaded and occupied their
sanctuaries in the Odeon Theater
and the Sorbonne.
Although the election cam-
paign has been marked by scat-
tered incidents of violence un-
usual in France, the political at-
mosphere as a whole has been sub-
dued. The strange mood of public
apathy probably stems from the
belief that the elections will
not solve any of the basic prob-
lems that generated the crisis.
The trend of the elections
has been toward a polarization of
the country's political forces be-
tween the Gaullists and the Com-
munists. The orthodox Gaullists,
running for electoral purposes
under the label of the Union for
the Defense of the Republic (UDR),
have exploited this trend by pre-
senting themselves as the only
viable alternative to a Communist
dictatorship. The UDR will run
candidates in every constituency,
as will the Communist Party. The
Communists welcome the govern-
ment's policy of presenting the
elections as a clear choice between
left and right, and hope to emerge
as the unchallenged leader of the
left, which they claim is insig-
nificant without them.
Public opinion polls on the
first-ballot preferences of the
voters show a small but perceptible
trend toward the Gaullists--both
the UDR and the Gaullist-allied
Independent Republicans--and toward
the small, far-left Unified So-.
cialist Party. Conversely, the
center, the Federation of the Left,
and the Communists all appear to
be losing slightly in comparison
with first-round results in 1967.
In one poll, a large majority of
those preferring either the Gaul-
lists or the Communists indicated
that there was little or no chance
that they would change their mind.
Approximately one fifth of those
queried expressed no preference at
all)
The editor-in-chief of the
influential daily, Le Monde, who
is an authority on tie Communists,
commented that a substantial num-
ber of Communist voters preferred
to keep their political preferences
to themselves, which could account
for the apparent lack of Communist
ro ress in winning public support.
T
SECRET
Approved Fpodrggele se 20QZ/ (f6 5%RPF79-0Q9127, Q6600030001-9
 Approved For Release 2007/033cP-1
gDP79-00927A006500030001-9
MIDDLE EAST - AFRICA
The potential for serious clashes between Arab and Israeli forces has
increased during the week. Egyptian troops are reported to have moved
into a disputed area at the northern end of the Suez Canal, and the
Israelis have threatened retaliation. Israel is also stiffening its attitude
regarding recent incidents along the Jordanian cease-fire line and has
indicated it will employ artillery more freely in future exchanges.
In Athens, Premier Papadopoulos carried out an extensive cabinet
reshuffle. Key ministries are unaffected, however, as most appointments
involved second-echelon ministries. The most significant feature of the
shift is that no junta members are among the new appointees, reflecting
Papadopoulos' confidence in his own position.
In Africa, the new government in Sierra Leone may severely limit the
activities of the Peace Corps or even ask it to leave the country. The
cabinet is debating the future of the corps and is focusing particular
criticism on the rural development work of the volunteers. Freetown's
press has tried to link the activities of the Peace Corps with US intel-
ligence.
Peking has been going all out to make Tanzania's President Nyerere
feel welcome during his four-day visit. Nyerere's high-level delegation
includes his three ministers of state, the inspector-general of police, and
the armed forces commander. Talks on additional Chinese aid are likely to
cover diesel locomotives for the Tan-Zam railroad, jet fighters for Tan-
zania's fledgling air force, and Chinese personnel for the Tanzanian civil
service in anticipation of a withdrawal of British administrators.
London is continuing its efforts to get peace talks started again to
end the Nigerian civil war. Lord Shepherd, minister of state for Common-
wealth affairs, who has been talking to the Biafrans in London, arrived in
Lagos on 20 June to present his proposals to the federal government.
Neither protagonist seems likely to react positively, however, and pros-
pects for any sort of talks still appear dim. Meanwhile, the USSR is
reported to be willing to step up its arms shipments to Lagos if the British
halt such supplies to continuing domestic pressure. 25X1
SECRET
Page Approved For Release 2007/v1/09U DP7410( 7A(M WEEK
 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
SECRET
USSR EMPHASIZES TRAINING IN MILITARY AID TO EGYPT
The major emphasis now in
Moscow's military aid to Egypt,
a year after the June war made
the need obvious, is on teaching
the Egyptians how to use their
Soviet-supplied equipment.
The USSR has doubled the
number of its military advisers
and technicians in Egypt to an
estimated 1,500, most of whom ap-
pear to be engaged in training.
Soviet instructors are said
to be with line units of the army
down to brigade level and to be
teaching at basic training schools
as well. Soviet advisers also
are attached to signal, mainte-
nance, reconnaissance, and trans-
port units.
The Soviets' goal appears to
be to teach the Egyptians the ef-
fective use of equipment and per-
sonnel. The quantity of equipment
provided apparently will be gov-
erned by this consideration. When
President Nasir goes to Moscow
next month, military aid will prob-
ably be a major topic of discussion.
The Soviet assessment of the ef-
fectiveness of its training pro-
gram in Egypt during the past year
is likely to be an important de-
terminant of future military as-
sistance.
Soviet military aid deliveries
to Egypt over the past three months
have dropped from six to about two
shiploads per month. About 75 per-
cent of the estimated $300 million
worth of military equipment lost by
the Egyptians now has been replaced,
including most of the aircraft an
at least half of the tanks.
SECRET
cr-e Approved For- elease 2~ 7 06~U ~~P79-vv9 i 0668500030001-9
 Approved For Release 2007/0 8Cj-'fDP79-00927AO06500030001-9
ISRAELI P0tIER STRUGGLE HEATS UP
The unity of the Israel Labor
Party and of the governing coali-
tion it dominates was strained
this week by a political maneuver
of Prime Minister Eshkol. Eshkol
designated a new deputy prime min-
ister in a surprise move aimed at
blocking any attempt by Defense
Minister Moshe Dayan to win con-
trol of the party and the govern-
ment. The prime minister also
announced that Minister of Labor
Yigal Allon would be head of a
new ministry for immigrant absorp-
tion as well as deputy prime min-
ister.
Allon, a hero of the 1948-
49 War of Independence, is the
leader of one of the three par-
ties that merged in January 1968
to create the Israel Labor Party.
Eshkol heads the largest constitu-
ent group, the former MAPAI party,
and Dayan is the leader of the
third.
The maneuver has aligned
Eshkol's "old guard" MAPAI lead-
ership with Allon's faction, and
the two probably can command a
majority within the new Israel
Labor Party. The step may mean
that Allon is Eshkol's preferred
successor to party and government
leadership, although the 73-year-
old prime minister shows no sign
of planning to step down prior
to the parliamentary election in
1969.
Dayan's followers were caught
flat-footed by the move and are
crying foul, claiming they were
not consulted. They boycotted
the special meeting of the party
leadership bureau on 14 June at
which Eshkol's proposal was ap-
proved. The larger secretariat,
in which Dayan's faction has
greater strength, was scheduled to
meet on 20 June. It was not clear
beforehand whether Dayan's faction
would acquiesce grudgingly and
bide its time or would attempt
to force an immediate showdown
with Eshkol.
Dayan himself has shown no
sign of wishing to take up the
gauntlet now. He may make some
gesture of protest, but previously
he has shown every indication of
appreciating that his ambition to
lead the country probably can be
achieved only through securing
control of the Israel Labor Party,
the locus of political power.
At least four of the five
other parties in the governing co-
alition have also criticized Esh-
kol's failure to consult them be-
fore making his move. Formed as
a "national unity government" on
the eve of the 1967 war, the co-
alition has since become a shaky
alliance that is virtually certain
to break up prior to the election
in 1969. Eshkol's present maneu-
ver could provide the occasion
for one or more of the parties to
withdraw. The cabinet is sched-
uled to have a full discussion
of the proposal within a week or
so.
SECRET
Approved Forl eleUe AM% PW 79-00 7A10n6?hO30001-9
 Approved For Release 2007/?Wek RDP79-00927AO06500030001-9
SENEGAL DEALS WITH LABOR DEMANDS
President Senghor has con-
centrated on handling the deep-
seated grievances of the labor
movement in the aftermath of last
month's student and labor strikes.
His neglect of student demands
prompted a three-day student boy-
cott of Dakar lycees last week
which led to the closing of all
Senegalese schools until October.
The boycott probably was also in-
fluenced by renewed student bel-
ligerency in France.
After several preparatory
meetings, representatives of gov-
ernment, labor, and employers met
on 12 June to consider the com-
prehensive list of labor demands
submitted to Senghor shortly be-
fore the May crisis. In a speech
to the nation the next day, Seng-
hor announced agreement on an im-
mediate 15-percent increase in
the basic minimum wage scale and
promised various other improve-
ments.
He emphasized that increased
production and stronger austerity
measures would be required to
finance the programs without a
tax increase, and announced a sym-
bolic cutback in the generous and
much-criticized salaries and
benefits of deputies. Although
many of the labor demands remain
to be negotiated, the increased
minimum wage as well as the full
participation of militant leftist
labor leaders in the negotiations
should temporarily forestall
further labor agitation.
While Senghor ignored the
students to deal with labor prob-
lems, rumors began to circulate
that the University of Dakar,
where the May demonstrations
began, would remain closed next
year. When lycees opened on
12 June for the first time since
May, Dakar students, apparently
led by final-year students who
saw no point in taking exams if
there were to be no university
to attend next year, launched a
half-hearted strike. Although
Senghor avoided using force to
disperse the students, one non-
student demonstrator reportedly
was killed by a policeman on
14 June. Probably fearing that
the incident would again cause
labor leaders to rally to the
student cause, Senghor promptly
closed all schools, earning angry
criticism from parents.
Late on 13 June, Senghor
made his first meaningful gesture
to the students. In response to
their basic dissatisfaction with
the French-structured education
system, he announced that the
University of Dakar, which is
administered and heavily funded
by France, would be reformed
to meet African requirements.
He did not announce when the
university would be reopened.
If the proposed reforms are
undertaken, it seems unlikely that
France would continue to under-
write the university. Senegal's
already strained budget will be
heavily taxed by the concessions
to labor and by the cost of re-
pairing damages incurred during
the May demonstrations, and would
probably not stretch to cover
the loss of the large French sub-
sidy to the university.
SECRET
Approved FOOReleige 20'0-77UO6 SUNUEP79-00927hA406600030001-9
 Approved For Release 2007/OR(1if)rRDP79-00927A006500030001-9
CONGO'S IMPROVED ECONOMY STILL FACES LONG-RANGE PROBLEMS
The reforms that Kinshasa
initiated last June to correct
the Congo's distorted financial
system have been fairly success-
ful, but falling copper prices
and years of economic deteriora-
tion will cause stagnation for
some time.
Wage and price increases have
been held within the reform guide-
lines suggested by the Interna-
tional Monetary Fund, foreign ex-
change holdings have risen sub-
stantially, and the free-market
value of the Congolese currency
has stabilized after many years
of decline. Although improvements
in the government budget situa-
tion did not match expectations
and a deficit continued during
the reform's first year, it was
not in itself large enough to af-
fect adversely the other finan-
cial gains. Agricultural and
mineral output, however, has not
yet increased much.
Congolese authorities recently
announced a second phase of the
reform program designed to stimu-
late economic growth. Kinshasa
recognizes that private capital
will play an important role in
achieving this goal and has moved
to improve the investment climate
for foreign businessmen, especially
Belgians. The governor of the
Congo National Bank stated that,
beginning in 1969, profits earned
in the Congo can be repatriated.
For his part, President Mo-
butu has resolved many long-stand-
ing disputes that his government
has had with Brussels. For ex-
ample, the differences between
the state-owned airlines, Air
Congo and Sabena, which for many
years have hampered the opera-
tions of Air Congo, were settled
in early June. In addition, Mo-
butu has named expatriates to re-
place some of the inept Congolese
officials who had been running
government-owned public services.
Despite rejuvenation efforts,
however, the Congo's economy is
still subject to long-range prob-
lems. Even with the additional
expatriates, there will be a
paucity of skills for many years.
The transport system has so de-
teriorated after years of neglect
that even if agricultural and
mineral production could be in-
creased, only a small portion
could be carried to ocean ports.
Moreover, the financial gains
of last year are likely to dis-
sipate. Much of the recent suc-
cess is attributable to the high
copper prices that resulted from
the prolonged US copper strike.
Now that copper prices have fallen,
Kinshasa will be faced with grow-
ing budget deficits and a worsen-
ing balance-of-payments situation.
Lack of economic improvement
will not necessarily cause se-
rious political problems. A
few prestigious development proj-
ects may be enough for Mobutu
or any successor as long as he
has a modicum of control over the
entire country. The populace will
probably, as in the past, absorb
large doses of economic punish-
ment without significant politi-
cal reaction. Violence and a
new round of chaos is always pos-
sible, however. A new uprising,
another period of xenophobia, or
the passing of Mobutu could lead
to further disruptions in eco-
SECRET
Approved FFk el"%e 206b4J :r--&"b 579-00 7A9O6 030001-9
 Approved For Release 2007/Q p RDP79-00927AO06500030001-9
MOROCCAN COMMUNISTS SEEK LEGAL STATUS
The banned but tolerated
Moroccan Communist Party, which
has expanded its activities in
recent years and continues to
enjoy contacts in ruling circles,
is now making a bid for legality.
On 5 June the Communists sub-
mitted to the government the
statutes of a new party--the
"Party of Liberation and Social-
ism"--for recognition as a legal
political entity. They allegedly
had decided on this move last
fall, but considered then that
the time was not propitious.
Under Moroccan law, the organiza-
tion automatically would achieve
legality unless the government
disapproves the petition within
90 days.
The move follows on the heels
of a significant Communist victory
in student polls. Early last
month the Communists won 48 of
the 60 seats on the council
of the major, left-wing student
union at the University of Rabat.
Non-Communist forces rallied and
stopped further Communist inroads
in student elections elsewhere,
but the party may be girding for
a major contest when the student
congress meets this summer.
Although the Moroccan Com-
munist Party acted circumspectly
after being banned in 1959, it has
been operating openly for some
months now. Early this year it
installed an $80,000 printing
press acquired from East Germany
complete with several technicians
to supervise its installation and
operation. Its newspaper, an
Arabic-language weekly published
as the private organ of its secre-
tary general, has appeared more
regularly. In April it played
host to a delegation of the French
Communist Party which openly met
with prominent non-Communist
Moroccans such as former premier
Abdallah Ibrahim, as well as
labor leaders and intellectuals.
Many Moroccan Communists also
appeared at the reception on
15 May celebrating the opening
of the Soviet Consulate General
in Casablanca.
The Moroccan Communists'
principal assets are their ready
access to the King and the high
positions several of them hold
within the government.
SECRET
Approved?P6&Re4ase M.VMM93Q RDP79-AQ92MAAD0500030001-9
 Approved For Release 2007/QMRDP79-00927A006500030001-9
25X1'
Postelectoral shenanigans and student disorders dominated the news
from Latin America last week.
Although the elections in Panama were held more than five weeks
ago, the make-up of the 42-man National Assembly has still not been
determined. The vote-counting in the important provinces of Panama and
Colon has been delayed by President-elect Arias,
In Mexico, the government party continues to deny a small opposi-
tion party its victory in the local elections in Baja California on 2 June.
The mayoralty races in Tijuana and Mexicali, which apparently were won
by the opposition, have been nullified, and the opposition has been
"awarded" only one seat in the state legislature.
On 18 June in Ecuador, the electoral tribunal suspended the official
counting of presidential votes when it discovered many irregularities in
returns from Guayas Province. Followers of Jose Maria Velasco, whose
unofficial victory depended heavily on majorities in Guayas, have begun
protest demonstrations
Student groups and labor unions in Uruguay, united in protest against
the imposition of a state of siege by President Pacheco's beleaguered
government, embarked on a series of demonstrations and a 24-hour general
strike. Fear of serious bloodshed induced both demonstrators and police
to soft-pedal provocations and resulting suppressions, however, and the
confrontation is still a standoff.
In Brazil on 18 June, student. demonstrators again tangled with Rio
de Janeiro police. The students showed considerably better organization
than in earlier clashes. Irate police officials have declared that no further
disorders will be tolerated, but the students seem determined to continue
their protest and may provoke even more serious incidents.
SECRET
25X1
25X1
Approved FPOr`Release 20HRi M 8 79-0dcJ2fi 6%B0030001-9
 Approved For Release 2007/ Tkc ,RDP79-00927A006500030001-9
LIBERAL PARTY MAJORITY LIKELY IN CANADIAN VOTING
Prime Minister Trudeau's
Liberal Party appears likely to
win a small parliamentary major-
ity in the election on 25 June.
The prime minister has established
a :rapport with his audiences
throughout most of the country.
He has kept the campaign focused
on issues of his choosing--for-
eign policy questions and the
issue of national unity.
In contrast, the campaign
of Progressive Conservative
leader Robert Stanfield has been
poorly organized. The Conserva-
tives have not succeeded in mak-
ing economic problems, on which
the Liberals are most vulnerable,
the dominant theme in the cam-
paign. The Conservatives have
been hurt, too, by a revamping
of the electoral districts, which
eliminated seats in their rural
strongholds.
The leftist New Democratic
Party appears likely at least to
hold its present representation--
22 of the 264 seats--although its
popular vote may fall below the
1965 peak. The strong showing
that party leader Tommy Douglas
made in a two-hour television
debate with Trudeau and Stanfield
has helped head off serious in-
roads into the party's strength.
The New Democrats have made
criticism of US investment in
Canada the central theme of their
vote-getting effort. Both Trudeau
and Stanfield have almost ignored
the issue, however, and it has
not figured as prominently in
this campaign as in some previous
ones.
Trudeau's strong profeder-
alist stand, combined with Stan-
field's equivocal position on the
granting of greater autonomy to
Quebec, will probably gain the
Liberals some seats in English
Canada although it may cost them
ground in Quebec. In the more
rural areas of the province, Tru-
deau's reputation as a social re-
former also hurts the party. It
now appears, however, that only
an unexpectedly heavy turnout
against the Liberals in rural
Quebec can deny Trudeau a parlia-
mentary majority.
The three party leaders
have supported a comprehensive
review of Canada's foreign and
military commitments, and have
favored recognition of Communist
China. The Vietnam issue has
not played a significant part
in the campaign. Several weeks
ago at a press conference, Tru-
deau said that the US should
stop all bombing of North Viet-
nam. He appeared a bit taken
back by widespread international
reporting of his remarks and
has not pursued the subject.
SECRET
125X1
ApprovediFa -dRel se 2Qf 6,51 P79-f 92y7 W00030001-9
 25X1 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
 Approved For Release 2007/OI fZI DP79-00927AO06500030001-9
POLITICAL TENSION EASES IN COLOMBIA
President Carlos Lleras Res-
trepo and maverick senators of
his own party appear to have
avoided another disruptive con-
frontation over reform legisla-
tion by some quiet political
horse trading. Resentment over
Lleras' highhanded pressure and
certain details of dismantling
the governing coalition still re-
main unresolved, however. In
addition, changes in both the
cabinet and the directorate of
the Liberal Party may result
from Lleras' threatened resigna-
tion.
litical bargaining would be more
productive.
Early on 19 June the congress
approved a bill providing for the
gradual dismantling of the Lib-
eral-Conservative coalition and
for wider political representa-
tion in the cabinet. Apparently,
President Lleras had agreed to cer-
tain amendments that made the pack-
age more palatable than it had
been in its original form. The
reforms still face further legis-
lative action after the new con-
gress convenes on 20 July.
The Colombian Senate, which
rejected President Lleras' res-
ignation by a 74 to 31 vote on
12 June, reconvened on 18 June
to reconsider the reform bills,
the defeat of which had precipi-
tated Lleras' threat to resign
and the resulting political ten-
sions. Both sides appear to have
decided that the public airing of
their differences had not helped
either, and that some quiet po-
In the aftermath of these
events, rumored cabinet changes
seem likely to occur soon. Be-
cause much of the acrimonious de-
bate was between factions of the
Liberal Party, the national di-
rectorate of Lleras' party may
also be changed to include some
of the dissidents whose resent-
ment of his pressure tactics has
SECRET
Approved Po Release 20 3/H63CLA P79-0092ZA{}06000030001-9
 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
 Approved For Release 2007/ ~ RDP79-00927AO06500030001-9
URUGUAY'S CHRONIC ILLS PERSIST
Student violence has sub-
sided, at least temporarily, but
President Pacheco has been unable
to resolve the underlying prob-
lems that precipitated the re-
cent crisis.
The government has been
floundering since late April
when cabinet resignations and an
unpopular devaluation triggered
a renewal of political faction-
alism within the governing Colo-
rado Party. A subsequent spate
of strikes added to growing po-
litical and economic instability,
but violence did not become a
major factor until this month.
demonstrations and riots in which
students were joined by Communist
trade union elements. These
events, coupled with a crippling
strike in the government banking
system, probably were the deter-
mining factors in the govern-
ment's decision to impose a lim-
ited state of siege.
In spite of the government's
action, Uruguayan labor leaders
succeeded in instigating a strike
on 18 June in which thousands of
workers participated. The govern-
ment has responded with restraint
and apparently has not decided
what, if any, sanctions are to
be applied against the strikers.
On 6 June, Montevideo police
wounded four students and ar-
rested several others who were
demonstrating for effective gov-
ernment measures to deal with the
deteriorating economy. This po-
lice action provoked a wave of
Unless the President can
pull his government together and
end divisive factionalism, the
situation will grow more chaotic.
25X1
SECRET
Approved Reld,*se 20M63/06,9 P79-0022-bW6M0030001-9
 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
Next 1 Page(s) In Document Exempt
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9
Secret
Secret
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06500030001-9