WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A006900010001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 35
• Document Creation Date: December 20, 2016
• Document Release Date: February 14, 2006
• Sequence Number: 1
• Publication Date: January 31, 1969
• Content Type: SUMMARY

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secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
State Department review completed Secret
42.
31 January 1969
?fie S 91 a k r N n 3 c c is 9
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(Information as of noon EST, 30 January 1969)
VIETNAM
The Communists are unlikely to introduce any sig-
nificant new initiatives soon at the Paris talks,
apparently waiting for a better reading of the in-
tentions of the new administration. On the military
side of the coin, however, there are many signs that
they are planning new offensive activity in South
Vietnam. The South Vietnamese Government is keeping
a watchful eye on Buddhist demonstrations, and par-
ticularly on Buddhist militants who lately seem to
be parroting the Communist line about having a new
peace cabinet replace the present government.
PHILIPPINE MORATORIUM ON SABAH UNLIKELY TO LAST
Philippine Foreign Secretary Romulo apparently in-
tends to shelve his government's claim to Sabah until
next fall, but the issue is likely to flare up again
earlier.
LEGISLATIVE ELECTIONS MAY EMBARRASS THAI GOVERNMENT
The government party may not win a majority in the
first legislative elections held under the new Thai
constitution.
LEADERSHIP TURNOUT MASKS CONTINUING DISSENSION IN CHINA
All the top Chinese leaders appeared together pub-
licly on 25 January for the first time in three and
a half months at a rally, held in part to dispel
widespread rumors within China about Mao's health
and changes in the leadership.
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CHANGES IN COMMUNES IMPERIL CHINA'S FOOD PRODUCTION
Food production goals in China are being endangered
by innovations in numerous programs that are pro-
foundly affecting peasant income and food distribu-
tion.
Europe
CZECHOSLOVAK LEADERSHIP FACES ADDITIONAL CRISES
The leadership successfully weathered the crisis
caused by the Jan Palach suicide, but the affair
has contributed to the storm brewing in the party
leadership, already split by conservative-liberal
infighting.
MYSTERY STILL SURROUNDS KREMLIN SHOOTING
Since their initial statements, Soviet authorities
have remained silent about last week's attack on the
motorcade carrying Soviet leaders and cosmonauts.
EASTERN EUROPEAN COUNTRIES INCREASE MILITARY BUDGETS
All the East European countries have announced in-
creased military budgets for 1969, but there is no
evidence that this is because of large scale mili-
tary buildups.
HOPES DIM FOR PROGRESS ON A EUROPEAN CAUCUS
An Italian plan to strengthen consultation within
the Western European Union is not expected to pull
much support from other members, nor have they in-
troduced any plan which promises to be more effec-
tive in improving ties between Britain and the con-
tinent.
MADRID ADOPTS STERN MEASURES TO CURB UNREST
The government took a hard line and imposed a state
of emergency throughout Spain last week to deal with
rising student and political unrest. A strict do-
mestic press censorship has been imposed and some
arrests have been made.
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Middle East Africa
THE WEEK IN PERSPECTIVE
INDIAN STATE ELECTIONS TO HAVE NATIONAL IMPACT
Four important northern states will go to the polls
next week in midterm elections crucial both for the
future of the Congress Party and the stability of
Indian political life.
TROOPS PATROL RIOT-TORN PAKISTANI CITIES
Tension remains high throughout Pakistan in the wake
of intensified student-led rioting. Curfews have
been imposed on troubled areas and army troops--called
in to assist civil authorities in four cities--have
restored a tenuous calm in most areas.
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INTERNAL DISORDERS BESET THE ETHIOPIAN GOVERNMENT
The continuing tax revolt in Gojam Province and the
resurgence of rebel activity in Bale and Sidamo
provinces are severely straining Ethiopia's military
and financial resources.
Western Hemisphere
THE WEEK IN PERSPECTIVE 25
PROBLEMS CONTINUE FOR THE BRAZILIAN GOVERNMENT
Problems involving the resignations of high-level
officials, economic development policies, corrup-
tion, and urban terrorism increased for the Costa
e Silva government last week.
PERU TAKES CONTROL OF US OIL COMPANY OPERATIONS
The government says it will complete the expropria-
tion on 4 February if IPC does not pay the $15 mil-
lion it allegedly owes the state.
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The Communists, waiting for a better reading of the intentions of the
new US administration, appear unlikely to introduce any significant initia-
tives soon in the Paris talks. Probably in an effort to encourage some
movement on the allied side, the Communists have kept their public com-
mentary relatively temperate and cautious.
Communist forces throughout South Vietnam continued to press allied
forces with a number of small-scale attacks and numerous incidents of
terrorism. Most enemy main force combat units are avoiding allied sweep
operations and completing preparations for possible offensive activity in
February, perhaps before the Tet holiday in mid-month.
All the top Chinese Communist leaders appeared together in public this
week for the first time in over three months. The turnout probably was
designed to dispel widespread rumors within China about Mao's health and
changes in the leadership, but it sheds no light on the political infighting
believed to be taking place in advance of the ninth party congress.
Philippine Foreign Secretary Romulo apparently intends to shelve his
government"s claim to Sabah until next fall, but it is doubtful that President
Marcos or congressional candidates will forgo exploiting Sabah as a campaign
issue. Romu.lo's effort to keep the dispute quiet may founder if the Malay-
sians decide to exploit the issue for their own purposes.
The military-dominated government in Thailand promulgated a new
constitution last summer providing for an elected lower house, the first in
ten years. With just over a week left before the ballotin
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VIETNAM
The Communists are unlikely
to introduce any significant new
initiatives soon at the Paris
talks. They used the first of-
ficial meeting to restate their
well-known demands for a politi-
cal. solution--Hanoi's four points
and the Liberation Front's five
points. These broad generalities
also characterized Communist in-
terviews and press appearances
throughout the week. Hanoi
clearly is waiting for a better
reading of the intentions of the
new US administration before try-
ing any new tactics in Paris.
In a probable effort to en-
courage some movement on the al--
lied side, the Communists kept
their public commentary relatively
temperate and cautious. The
speech of the North Vietnamese
delegate at the opening session
was generally free of bombast;
the propaganda coverage of Presi-
dent Nixon's first week in office
has been unusually mild. In re-
acting to the specific US proposal
on the Demilitarized Zone at the
fi:cst session, the Communists
have been essentially negative,
but at the same time they have
avoided outright rejection. For
their part, the Communists proba-
bly will demand that initial sub-
stantive discussions in Paris
focus on US "aggression" and with-
drawal of US forces. Although
the Communists are not launching
any new initiatives in Paris,
they apparently are preparing
new military ones in South Viet-
nam.
Political Developments in
South Vietnam
The government is keeping
a close eye on radical elements
within the militant Buddhist
ranks. Under the direction of
Thich Thien Minh and prominent
layman Tran Ngoc Lieng, the more
radical militants have been ac-
tively promoting a peace campaign
that includes a strong antigov-
ernment pitch. Although Saigon
does not yet consider them a
serious threat to political sta-
bility, it has placed restrictions
on public gatherings to forestall
Communist attempts to exploit
Buddhist demonstrations.
Some Buddhist radicals have
also joined the Movement to Strug-
gle for Peace, which reportedly
has Communist backing. This
group demands that a peace cabi-?
net replace the present govern-
ment, a line similar to that of
the Communists. The Communists
reportedly plan to use such
Buddhist activists as well as
labor and student dissidents to
promote a special national con-
gress that will demand a change
in the Saigon government.
Prime Minister Huong be-
lieves that the Buddhist mili-
tants are attempting to restore
the organization and influence
which the Buddhists enjoyed in
the 1963-66 period when they
could disrupt national life and
topple governments. Although he
has been a strong advocate of
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civil liberties, Huong has ordered
the national police to take a
new hard line against Communist
sympathizers and neutralists,
including Lieng. The prime min-
ister is aware that the govern-
ment will have to move adroitly
against the militants because
they will be quick to claim gov-
ernment repression--a tactic they
have used successfully in the
past to rally popular support
for their cause.
Military Developments in
South Vietnam
Communist forces through-
out the country continued to
press allied forces this week by
initiating a number of small-
scale ground attacks, scattered
shellings, and numerous incidents
of harassment and terrorism.
The enemy has also recently ex-
panded their drive to neutralize
the progress being made in cer-
tain areas by the government's
"Accelerated Pacification Cam-
paign." Most of the enemy's
main force combat units, however,
are avoiding allied sweep opera-
tions and completing prepara-
tions for possible offensive ac-
tivity in February.
Three attacks by mortar,
bazooka-type rocket, and small
arms fire were made on villages
situated near major urban cen-
ters in the western highlands,
causing relatively high civilian
casualties and damage to houses.
Other Communist military
actions included several hit-and-
run terrorist attacks within Sai-
gon and a bombardment of an al-
lied airfield at Phan Rang, de-
stroying two US aircraft and
damaging 27. South Vietnamese
Rangers reportedly killed more
than 300 Communists in a bat-
talion-sized engagement northwest
of Pleiku city while suffering
only light casualties.
There are continuing indica-
tions that many of the Communist
military forces are completing
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preparations for widespread of-
fensive activity in the period
preceding Tet, which will take
place 17-19 February this year.
Intelligence from numerous
sources points to early February
as the period for renewed hostili-
ties in certain key sections.
According to a prisoner re-
cently captured west of Saigon,
the Communists seem to be still
holding open the option of a main
force thrust on the capital city.
The prisoner claimed that a sub-
ordinate regiment of the Viet Cong
9th Division is planning to move
toward Saigon on 15 February,
probing into key sectors of the
city on subsequent days.
Because of the current lo-
cation and readiness posture of
many of the enemy's forces, large-
scale ground attacks appear pos-
sible only in certain key areas
of South Vietnam. Nevertheless,
a coordinated series of heavy
mortar and rocket attacks against
major allied military installa-
tions or even key urban areas
could come at any time. 25X1
PHILIPPINE MORATORIUM ON SABAH UNLIKELY TO LAST
Philippine Foreign Secretary
Romulo apparently intends to
shelve his government's claim to
Sabah until next fall, but the
issue is likely to flare up again
earlier.
It seems unlikely, however,
that President Marcos and congres-
sional candidates will be willing
to forgo exploiting Sabah as a
campaign issue. Electioneering
will begin in earnest after the
mid-year party conventions, and
both Philippine parties may well
use the Sabah claim, especially
in their effort to win Moslem
votes in the southern Philippines.
Malaysia also faces national
elections, probably in May. Dis-
cussion of the claim, especially
in Sabah itself where anti-Phil-
ippine sentiment runs strong,
could well provoke a Philippine
response.
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LEADERSHIP TURNOUT MASKS CONTINUING DISSENSION IN CHINA
All the top Chinese leaders
appeared together publicly on 25
January for the first time in
three and a half months at a
rally, held in part to dispel
widespread rumors within China
about Mao's health and changes
in the leadership.
All 14 in the political
elite were present, for Peking's
display of unity. The only al-
teration in the top ranks was a
slight further demotion for eco-
nomic: planner Li Fu-chun, who was
criticized in 1968, and subse-
quently was dropped from the in-
ner circle. The turnout thus
sheds no light on the political
infighting believed to be taking
place behind the scenes in ad-
vance of the ninth party congress,.
now expected within the next few
months.
The necessary political
alignments in some provinces are
still not firm. In Sinkiang, for
example, local broadcasts have
for weeks been denouncing a
leader easily identifiable as
Wang En-mao, the former military
and party boss there. Wang none-
theless showed up in Peking among
important regional military lead-
ers. The position of his name,
immediately following a group of
Nanking Military Region officers,
could imply that he has been
transferred.
Peking's latest concern over
the political reliability of mil-
itary commands in the provinces
is reflected in a recent direc-
tive by the central committee's
Military Affairs Commission about
strengthening unity between "army
and government." Because local
government units nearly everywhere
are dominated by military repre-
sentatives, this directive carries
the implication that splits are
developing within the military,
between those who have assumed po-
litical responsibility and those
who lack it.
In Kweichow Province, long a
stronghold of radical military of-
ficers, recent radiobroadcasts
criticized some local military
districts for "mishandling" rela-
tions with the government, and
stated that new military units
have been transferred into the
province. It is not clear whether
they were to reinforce the mili-
tary establishment now running
Kweichow, or to weaken its author-
ity.
Reflections of political
struggle continue to be noted in
some other provinces. Outbreaks
of fighting at Hsuchou, reported
periodically since January 1967,
probably reflect a jurisdictional
conflict between the Nanking and
the neighboring Tsinan military
commands. The Nanking commander,
who also heads the Kiangsu govern-
ment, has civil responsibility for
the province, but regular army units
under the command of the Tsinan
Military Region control the Hsuchou
area. Earlier in the Cultural Rev-
olution the two military commanders
seemed to be politically opposed,
and in June 1968 the Nanking re-
gion commander publicly criticized
the Tsinan Military Region for mis-
handling conditions in Hsuchou.
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CHANGES IN COMMUNES IMPERIL CHINA'S FOOD PRODUCTION
Food production goals in
China are being endangered by in-
novations in numerous programs
that are profoundly affecting
peasant income and food distribu-
tion. This is in contrast to
the practice at the height of the
cultural revolution in 1967-68,
when the government attempted to
insulate agriculture from disrup-
tive activities.
the official press, po-
litical reliability as well as
work performed will govern wage
payments to peasants. Each in-
dividual is to have his class
origin reviewed and will be judged
periodically for his political
behavior by his fellow commune
members. Although private plots
are not to be abolished, they
are nevertheless to be reduced
in size.
These changes will reduce
the income of the more entrepre-
neurial peasants and production
units. Also, the more prosperous
peasants have been further under-
mined by amalgamations of smaller
communal units
This
process tends to merge richer
with poorer localities and thus
to equalize income throughout
the countryside.
While these changes are be-
ing pressed, the government has
also been transferring the urban
population by the tens of mil-
lions into rural areas, appar-
ently with little or no compensa-
tion to the communes for feeding
or housing the newcomers. Large
portions of educational and medi-
cal service systems--formerly
organized and paid for by the
state--also are being made the
sole responsibility of the com-
munes.
The government probably is
experimenting with these programs
in order to restore politics to
prominence in the peasants' con-
sciousness and to reverse the
ideologically abhorrent trend
of recent years--relying on ma-
terial incentives, with accom-
panying growing disparities in
individual peasant incomes. If
fully implemented, these initia-
tives could jeopardize even the
moderate goals for grain output
approved for this year.
It is still uncertain whether
the current experimentation will
result in the adoption of a uni-
form new system for all communes.
Rumors that such a move was sched-
uled on 1 January have proven
false. The government appears
to be especially wary of possible
peasant resistance and its ef-
fects on food production. Peking
thus has stressed the need for
popular acquiescence to each
change, and has agreed to adapt
the pace of change to local con-
ditions.
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Official silence on last week's shooting incident in Moscow has led to a
flood of rumors.
the shooting took place within the Kremlin walls and the target was
the Soviet leaders and not the cosmonauts. Moscow ended speculation on
Kosygin's long absence by announcing that he would shortly return to work
after a battle with a cold and a liver ailment.
The Soviet press continued its cautious treatment of the new US
administration. Pravda noted President Nixon's press conference use of the
"more restrained" term "sufficiency" of military power, and one radio
commentary spoke of a "more realistic" approach to foreign policy.
The threatened student riots in Prague were averted by the firm
government response and the students' own sense of responsibility. After
two weeks with the flu, party leader Dubcek returns to face a variety of
problems, including factionalism in his party leadership and the sharpening
conflict between Czechs and Slovaks.
At this week's session in East Berlin of the Soviet bloc's Council for
Mutual Economic Assistance, national interests prevented the participants
from coming to grips with the major controversial issues on the agenda,
particularly the question of economic integration.
A working group, preparing plans for the international Communist
parties' conference, slated for May, will meet sometime next month in
Budapest. The Rumanians say they will take part.
De Gaulle may use a tour of Britanny this weekend to make soundings
on a possible referendum in March on changes in the Senate and regional
government. Such a referendum, at a time of continuing student and labor
unrest, could be a vital test of the government's popularity.
The three major Italian labor confederations are threatening a one-day
general strike on 5 February unless the government makes basic changes in
its proposed new pension plan. Government leaders are divided in their
attitudes toward labor's demands and are unlikely to satisfy
them.
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CZECHOSLOVAK LEADERSHIP' FACES ADDITIONAL CRISES
The Czechoslovak leadership
succeeded in maintaining effec-
tive control during the major
crisis created by the suicide of
student-martyr
Jan Palach. Dub-
cek, however, is challenged still
by several other pressing politi-
cal and social problems, any of
which could generate a new crisis.
Tne regime, fearing uncon-
trollable civil disturbances,
took extraordinary security pre-
cautions for the Palach funeral,
which included putting the civil
and security police and the armed
forces on alert. Some popular
leaders appealed to the people
to refrain from demonstrating,
and the students policed them-
selves in order to make the fun-
eral a solemn and dignified af-
fair.
Soviet troops remained in
the background during the crisis
last week, and Soviet press com-
mentary was relatively low-key.
`['here have been other indications
that Moscow would give priority
to private diplomatic channels to
make its wishes known.
The Soviets also charged sep-
arately that foreign newsmen had
i::oo much freedom in Czechoslo-
vakia. Over 20 Western journal-
ists were expelled this week as
a consequence, allegedly for
gathering political and military
information while pretending to
serve other interests.
The Palach affair contributed
to the storm brewing in the party
leadership which has been split
by conservative-liberal infight-
ing. The conservatives, led by
Slovak party chief Gustav Husak,
dominated the 16-17 January party
plenum, and are said to be trying
to form an opposition bloc in the
central committee. A strong, in-
telligent, and dynamic leader,
Husak is said to be seeking a co-
alition of Slovaks, Czech conserv-
atives, and some centrists to chal-
lenge openly the Dubcek leadership
at a central committee showdown in
March. The conservatives appar-
ently see Lubomir Strougal, the
Czech party bureau chief, as the
key to their success. He report-
edly controls enough votes to up-
set the present balance between
the conservative and liberal fac-
tions.
Interwoven into this fac-
tional struggle are undercurrents
of frictions between Czechs and
Slovaks emanating from the newly
introduced federalization plan,
which on 1 January divided the
country into separate Czech and
Slovak republics and gave the
Slovaks near-equality with the
more numerous Czechs. Some Slovak
officials are now pushing for a
completely separate and independent
state--they even contemplate a f or-
ign ministry--and their "national-
istic" ideas have generated a full
scale "war of words" between the
Czech and Slovak presses. Ironi-
cally, the new Federal Assembly
met on 29 January to put the fin-
ishing touches on the last major
steps for implementing the federa-
tive arrangement.
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MYSTERY STILL SURROUNDS KREMLIN SHOOTING
Since their initial state-
ments, Soviet authorities have
remained silent about last week's
attack on the motorcade carrying
Soviet leaders and cosmonauts.
In the absence of any official
word on the identity of the as-
sailant, rumors of Kremlin in-
trigue and a sense of unease are
widespread in Moscow and Soviet
diplomatic communities abroad.
According to one of the more
persistent and credible rumors,
the assailant was in some way
connected with a branch of the
security forces. The incident is
likely to bring demands from some
elements in the leadership for
tighter domestic controls.
The first word of the shoot-
ing on 22 January came from So-
viet officials who told Western
correspondents that an unidenti-
fied gunman had fired a series
of shots at the second car in
the motorcade which was carrying
several veteran cosmonauts. The
chauffeur of the car and a motor-
cycle policeman were wounded.
The first car was an open
one carrying the four honored
cosmonauts. The other cars were
closed. The assailant may have
intended his shots for the Soviet
leaders, as he might reasonably
have expected them to be in the
second car. Brezhnev and Podgorny
were in fact in the third car.
A Foreign Ministry spokesman
confirmed that the incident had
taken place much as reported, only
adding that the apprehended as-
sailant was mentally deranged.
The subsequent terse TASS announce-
ment made no mention of the as-
sailant's mental condition. It
labeled the shooting a "provoca-
tion" and stated that an investi-
gation was under way. A comment
by cosmonaut Leonov, one of the
occupants of the attacked car,
added no significant details.
His statement that the shoot-
ing occurred as his car reached
the Borovitsky gate to the Kremlin
fails to clear up a crucial, much
disputed point--whether the shots
were fired from ouside the gate
where crowds were gathered or
from inside the Kremlin grounds,
where entry would have been
closely screened.
Western cor-
respondents standing outside the
gates were unaware of the shoot-
ing.
The Soviet leaders reacted
to the episode with no visible
signs of alarm, appearing relaxed
and unconcerned at the Kremlin re-
ception immediately after the
shooting. Most of the Moscow-
based members of the politburo
were on hand for the celebration,
except for Premier Kosygin, party
secretary Kirilenko, and Deputy
Premier Mazurov. They all have
been out of sight for several
weeks. A Foreign Ministry spokes-
man on 30 January confirmed that
Kosygin has beenill, suffering
from a liver ailment and a cold,
but said he is expected to return
to duty next week.
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EASTERN EUROPEAN COUNTRIES INCREASE MILITARY BUDGETS
All the Eastern European
countries have announced increased
military budgets for 1969, most
of them for the fourth consecu-
tive year. The increases are gen-?
erally larger than in the past
few years, ranging from a low of
nine percent for East Germany to
more than 20 percent for Rumania
and Hungary, and almost 40 per-
cent for Albania. The military
budgets in all countries account
for an equal or larger percent-
age of their total budgets than
in 1968.
There is no evidence that
the increases in military spend-
ing are because of large-scale
military buildups. It is prob-
able that the Warsaw Pact members
are responding to Soviet pres-
sures to bring their military
capabilities up to desired levels.
This is apparently true even in
those countries which prepared
otherwise austere budgets and re-
portedly had hoped to reduce their
military burdens.
Stated military budgets are
believed to indicate the general
trend of defense expenditures in
Eastern Europe. In the past it
had been presumed that military
spending generally was under-
stated somewhat in published bud-
get data because indirect sub-
sidies were paid for some items
purchased by the military and be-
cause certain military outlays
were included elsewhere in the
budget. With the introduction
of economic reform and more real-
istic budget planning, any con-
cealment of military expenses
may be coming to an end.
The Eastern European govern-
ments usually cite increased in-
ternational tensions to justify
their higher military spending.
Other factors also may include
higher real costs, the effects of
inflation, and the budgetary
and price reforms. Included in
the category of increased real
costs are expanded military re-
search and development efforts,
the acquisition of more sophis-
ticated equipment, and the ex-
penses associated with operat-
ing and maintaining more advanced
equipment.
Rumania is probably devot-
ing more resources to its domes-
tic output of small arms as well
as continuing to procure more
sophisticated equipment from the
USSR. Bucharest probably reas-
sessed its military posture after
the Warsaw Pact invasion of Czech-
oslovakia and may have decided
to devote more of its resources
to the defense sector.
Hungary's higher military
spending may in part reflect a
reported expansion of its armed
forces or a higher pay scale.
Another factor may be higher
costs for purchases of more
sophisticated equipment. Both
Hungary and Rumania substantially
stepped up their purchases of
MIG-21 aircraft from the USSR
recently.
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EASTERN EUROPE: BUDGETED MILITARY EXPENDITURES
19
68 Plann
ed 1969 Planned
1969 Percentage
Military Expenditures as
COUNTRY
d
(
(i
n million
s) (in millions)
Change from 1968
Percentage of Total Budget
an
currency)
1968
1969
ALBANIA (Leks)
304
420
+38.2
7.6
9.1
BULGARIA (Leval
264
306
+15.9
6.0
6.0
CZECHOSLOVAKIA (Crowns)
12,900
14,200
+10.1
8.9
9.1
EAST GERMANY (DM)
5,800
6,300
+ 8.6
8.7
9.7
HUNGARY (Forints)
6,400
8,029
+25.5
4.6
5.1
POLAND (Zlotys)
29,096
33,853
+16.3
9.5
9.7
RUMANIA (Lei)
5,200
6,400
+23.1
3.7
4.2
YUGOSLAVIA (New Dinars)
6,030
6,860
+13.8*
56.6
60.4
*In December 1968, Yugoslavia announced a supplementary defense expenditure which brought actual military
spending up to 6,425 million new dinars: The increase of planned defense expenditure in 1969 over actual
expenditures in 1968 is only 6.8 percent. - - -
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HOPES DIM FOR PROGRESS ON A EUROPEAN CAUCUS
The concept of a new politi-
cal-defense entity for Western Eu-
rope is unlikely to make much head-
way at next week's ministerial meet-
ing of the Western European Union
(WEU). The Italians will offer
a plan for strengthening consulta-
tion within WEU, but few other mem-
bers are willing to defend it
against French opposition, and
none has produced a more practi-
cal scheme for improving ties be-
tween Britain and the continent.
The Italians drew up their
proposal last fall after the French
blocked a similar initiative by
Belgian Foreign Minister Harmel.
At that time, the five other WEU
members endorsed its general pro-
visions, including a plea for "man-
datory" political consu':tations on
certain matters of common interest.
The British meanwhile launched a
series of "Euro" dinner meetings
of top officials in hopes of de-
veloping a consensus on this and
other "caucus" initiatives de-
signed to enhance their standing
with the "friendly" European five--
who together with the UK and France
make up WEU.
In trying to cover all bases,
however, the advocates of a "Euro-
pean identity" have actually weak-
ened their cause. Harmel, increas-
ingly skeptical of the 'Italian
plan, has recently confused his
supporters by coming ou,: in favor
of "voluntary" consultation within
WEU on a wide range of issues. The
British, going even beyond this,
have offered to set up a formal cau-
cus outside WEU raising new worries
in Germany over a possible fragmen-?
tation of NATO or duplication of its
activities. Even the Italians have
added to the confusion by insist-
ing that any future "Euro discus-
sions" include such outsiders as
Greece and Turkey.
These conflicting ideas and de-
mands have left the WEU members as
divided as ever. The French have
agreed to discuss the Italian pro-
posal next week, but they continue
to reject the principle of "manda-
tory" political consultation under
any circumstances, contending that
this would infringe on their sov-
ereignty. Unwilling to risk a
showdown with the French, the Ger-
mans, Dutch and Luxembourgers have
backed off from the Italian plan
and now hope for something more
nebulous, such as Harmel's "volun-
tary" consultation.
The WEU foreign ministers will.
probably take the path of least re-
sistance. Even the British are ap-?
parently reconciled to the rejec-
tion of the Italian plan and are look-
ing toward less controversial means
of emphasizing their European as-
pirations. At the very least they
are expected to curry support next
week for further "Euro dinners" at
various diplomatic levels. Next
month, Prime Minister Wilson will
travel to Bonn to encourage closer
direct cooperation between Britain
and West Germany in certain techno-?
logical fields. Beyond this, the
prospects for a formal grouping to
speak for Europe in dealings with
the United States remain quite dim.
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MADRID ADOPTS STERN MEASURES TO CURB UNREST
Government officials believe
that a state of emergency imposed
throughout Spain last week to deal
with rising student and political
unrest will be proof of their
willingness to use extreme meas-
ures and will be sufficient warn-
ing to control the situation with-
out resort to mass arrest.
Franco reportedly made the
decision himself to crack down,
under urging from military lead-
ers. The action taken on 24 Jan-
uary suspends for three months
five articles of the Spanish bill
of rights in order to give the
security forces broad powers of
search and seizure and to impose
censorship. The decree is un-
precedented in scope, although
authorities applied a more lim-
ited decree several times in the
last few years, most recently in
the Basque area to curb a local
terrorist organization. Under
the present decree, some sus-
pected agitators have been ar-
rested, but the most noticeable
impact on the ordinary citizen
is the imposition of a strict
domestic press censorship. News-
papers have reported the decree,
but there have been none of the
usual political commentaries.
ment and police. The universi-
ties of Madrid and Barcelona were
both closed indefinitely on 24 Jan-
uary. This week the minister of
information said the universities
would reopen in a few days, but he
warned against any new efforts to
sow disorder and revolution. He
promised a government white paper
on university reform next week.
Madrid officials claim that
the government acted primarily to
avoid a crisis such as occurred
last May in France. In addition
to student unrest, the government
has other reasons for showing that
it is in complete control. Sev-
eral bar associations have dared
recently to criticize it for try-
ing political cases before special
courts. In mid-January 1,300 in-
tellectuals and other prominent
persons sent a petition to the
minister of interior protesting
police brutality. In churches in
several cities, wives and mothers
of political prisoners held a
sit-in aimed at improving treat-
ment of workers and students
jailed for political activities.
Some parish priests and other
church representatives have also
criticized police tactics.
In Madrid, students had been
demonstrating against the alleged
suicide of a fellow student
charged with subversive activity,
and university authorities feared
that serious violence might re-
sult. In earlier demonstrations,
the students had expressed gen-
eral discontent with the govern-
The decree has given rise to
various rumors, and the minister
of interior took pains to deny
publicly that the move was a mil-
itary coup or that General Franco
would step down to make way for 25X1
Prince Juan Carlos. There are no
current indications that these
rumors are true.
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The Iraqi trials of "Israeli spies" and the hanging of 14 Iraqis, nine of
whom were Jews, raised the temperature again in the Middle East. Israeli
leaders reacted vehemently to the Iraqi actions, but were hard put to find a
way to retaliate without endangering the remaining Jewish community there
or those in other Arab states.
The tensions brought new calls for a Middle East settlement from De
Gaulle and from UN Secretary General Thant. Ambassador Jarring has
returned to New York to try again to get the disputants together-this time
perhaps with increased backing from the four big powers.
Lebanese Prime Minister Karami has formed a cabinet whose member-
ship is drawn almost exclusively from Karami's own Shihabist parliamentary
bloc. The opposition Chamounist bloc, eschewing street demonstrations, has
decided to confine its activities to parliament.
The campaign for the mid-term elections in four important states in
northern India is winding up. The results of next week's elections will be
crucial for the future of the Congress Party and the stability of Indian
political life.
In Pakistan, the army has restored a tenuous calm to four riot-torn
cities after a week of student-led rioting. A dialogue between the opposition
and the government now appears likely. The government press said that
President Ayub will soon invite all prominent opposition leaders to meet
with him.
In the Nigerian civil war, the military stalemate remains essentially
unchanged. Most Nigerian newspapers have condemned US support of Bia-
fran relief as aid to the secessionists. Anti-US sentiment over the relief issue
remains strong.
After almost two months of verbal sparring, Central African Republic
(CAR) announced on 24 January the suspension of diplomatic relations with
Congo (Kinshasa). CAR's relations with neighboring Kinshasa and Chad had
deteriorated primarily because of CAR's withdrawal in December from a
short-lived economic union of the three states. Mediation efforts this week
by two of the chiefs of state attending a Kinshasa summit meeting of the
Afro-Malagasy Common Organization-to which all of the feudin central
African states belong-apparently have eased tensions somewhat
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INDIAN STATE ELECTIONS TO HAVE NATIONAL IMPACT
Four important north Indian
states--West Bengal, Uttar Pra-
desh, Bihar, and the Punjab, com-
prising one third of the nation's
total electorate--will begin
electing new state assemblies
next week. The outcome is crucial
to the future of the Congress
Party, which is battling for a
comeback in the political heart-
land of the country, and will go
far in determining the future
stability of Indian political life.
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The ebb of Congress Party
power in the general election
of 1967 left the northern tier
of states in political shambles,
and the situation rapidly dete-
riorated to the point where
parliamentary government became
virtually impossible. Party
discipline broke down, ad hoc
and shifting political units
emerged, and defections sapped
the strength of the non-Congress
coalitions that tried to govern.
Three of the four states going to
the polls next week--Bihar, Uttar
Pradesh, and the Punjab--have
been under direct rule from New
Delhi for several months and
representative government has
been suspended in West Bengal
for about a year.
The Congress Party, which
still rules in New Delhi, has
conducted an all-out campaign.
Prime Minister Indira Gandhi has
maintained a frenetic pace, stump-
ing through all four states, and
virtually all Congress Party lumi-
naries are wrapped up in the cam-
paign. They have played heavily
on the theme that a vote for Con-
gress is a vote for stability,
trying to reinforce memories of
the political chaos that ensued
in the wake of the 1967 election.
The other parties, in turn, have
pointed to the unimpressive record
of almost two decades of prior
Congress governments.
The major parties contesting
in heavily populated Uttar Pradesh
and Bihar are the Congress, the
Hindu nationalist Jan Sangh, the
increasingly militant Samyukta
Socialists, and new parties formed
by ex-Congress members. In West
Bengal, the battle lines are drawn
between the Congress and a loosely
knit united front of leftist par-
ties that managed to form a gov-
ernment in the state after the
1967 elections. In the Punjab,
the Sikh communal Akali Dal has
joined forces with the Jan Sangh
in an effort to prevent the Con-
gress from regaining power in
this rich agricultural area.
Tensions are running high
as the elections approach. Nearly
7,000 candidates of virtually
every political hue are vying for
some 1,100 state assembly seats.
The level of politically inspired
violence, largely the handiwork
of Left Communist extremists,
has risen substantially in vola-
tile West Bengal and incidents
have been reported in the other
three states. The central govern-
ment is taking special precautions
to prevent intimidation of voters
and is deploying Central Reserve
Police to possible trouble areas
such as Calcutta.
The Political Situation in India
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[:_1 Congress Party government
J Direct rule from New Delhi
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TROOPS PATROL RIOT-TORN PAKISTANI CITIES
Pakistan remains tense in
the wake of student-led rioting.
This week the government: was
forced to impose curfews and sum-
mon troops into troubled areas.
As the army maintains a tenuous
calm in four major cities, specu-
lation is increasing that a gov-
ernment-opposition compromise may
be in tae wind.
The current disorders began
in volatile East Pakistan where
Dacca students' week-long pro-
tests against police repression
culminated in a paralyzing general
strike on 24 January. The govern-
ment imposed a curfew and later
called out the army when police
arid paramilitary forces were un-
able to control the violence. Al-
though order was restored, it
seems unlikely that it can be
maintained without continued mil-
itary control. Students are vow-
ing to defy the curfew and to
pressure the regime until demands
are granted. Harsh measures by
provincial authorities have made
a subsequent flexible response im-
possible and the best the govern-
ment can hope for is a return to
the status quo ante--a solution
clearly unacceptable to the dis-
sidents.
Riots broke out in West Pak-
istan late on 24 January as stu-
dents demonstrated in sympathy
with their Dacca colleagues and
in response to calls by the oppo-
sition to protest. The situation
deteriorated in the following days
and troops were called into La-
hore, Karachi, and Peshawar to
restore order and enforce curfews.
Use of the army indicated not only
the severity of the situation but
also the government's increasing
impatience with student violence
and its intention to use force, if
necessary.
A dialogue between the oppo-
sition and government now seems
likely. It may be the best way
out for the regime which has dis-
covered that repressive measures
intensify resistance while con-
cessions are taken as an admis-
sion. of bankrupt policy. Expec-
tation has been heightened by a
government press story on Wednes-
day which states that President
Ayub will soon invite all promi-
nent, opposition leaders to meet
him and thrash out "the whole con-
stitutional issue." This announce-
ment. may be made in Ayub's regular
first-of-the-month broadcast this
weekend. Important administrative
and ministerial changes are also
rumored.
Even if the government were
able to reach some agreement with
opposition moderates, students and
other youthful elements, who have
recently seized the antigovernment
initiative, would probably refuse
to accept a compromise. An agree-
ment would necessarily fall far
short of opposition demands which
include a parliamentary system,
direct elections and restoration
of civil liberties. The fragile
opposition coalition could be split
wide open, with Ayub benefiting
by the disarray among his adver-
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Lake Rudolf
Massaua`l
Asmara'
T E G R E
1 diat+
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.Diredawa ?H T$et
Harar
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INTERNAL DISORDERS BESET THE ETHIOPIAN GOVERNMENT
The continuing tax revolt
in Gojam Province and a resur-
gence of rebel activity in Bale
and Sidamo provinces are severely
straining Ethiopia's financial
and military resources.
Violence has resumed and ap-
parently intensified in Gojam
Province where a peasant anti-
tax revolt first produced civil
disturbances in mid-1968. The
Gojamis have been protesting a
tax on agricultural income lev-
ied throughout the country, pri-
marily because they fear it is
a play to overturn their tradi-
tional land ownership. The vio-
lence last year was only tempo-
rarily halted by the removal of
several inept provincial offi-
cials in August. Other attempts
at peaceful settlement were also
unsuccessful. Although it is
part of the Amhara heartland of
Ethiopia, Gojam has a long his-
tory of rebelliousness against
domination from Addis Ababa.
The government maintains a
strict news blackout, consequently
a clear picture of developments
in Gojam is difficult to obtain.
No end to the disturbances ap-
pears to be in sight. Moreover,
what is essentially a local chal-
lenge to government authority
has the potential of becoming a
regional insurgency.
After a period of relative
quiet, the insurgency that has
been smoldering in Bale and part
of Sidamo provinces has intensi-
fied since 1965 when the restive
Galla inhabitants revolted over
grievances against the central
government. The leader of the
insurgents, Waqo Guto, returned
in December from Somalia
He as
resumed his familiar pattern of
ambushes and raids, used success-
fully when he first took to the
field. As in the past, the army
has been incapable of coming to
grips with the rebel bands, de-
spite a sizable increase in the
number of military units com-
mitted to the area.
The military operations in
Gojam and against Waqo Guto are
placing a growing strain on Ethio-
pia's financial and military re-
sources at a time when_ the gov-
ernment is urgently trying to
cope with significant financial
difficulties. Moreover, Ethio-
pian patience with Somali involve-
ment with Guto is wearing thin,
although Haile Selassie and other
high officials are well aware that
Somali Prime Minister Egal must
deal carefully with his army.
Increased pressure, especially
from the Ethiopian Army for a
return to a hard-line policy
against Somalia, is clearly
possible. Such a move would
have serious implications for
the already fragile Ethiopian-
Somali detente and future re-
lations between the two coun-
tries.
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Early this week the Peruvian Government took over "temporary"
administration of the International Petroleum Company, but the replace-
ment of US employees with Peruvians indicates it may become permanent.
The company says the action means that it is now effectively out of the
petroleum business in Peru, although it still retains ownership of the proper-
ties, at least for now. Meanwhile, the government is expected momentarily
to establish diplomatic relations with the Soviet Union, and has removed
restrictions on Peruvians traveling to Communist countries, presumably
including Cuba and North Vietnam.
Two military men have emerged as the leading presidential candidates
in Guatemala's national elections scheduled for March, 1970. Defense Min-
ister General Rolando Chinchilla apparently will head the ruling Revolu-
tionary Party ticket. President Mendez Montenegro, who is constitutionally
barred from running for a second term, reportedly insisted on Chinchilla
during a recent party caucus. The selection of Chinchilla presumably is
designed to protect the centrist Mendez government from a pre-emptive
military coup and to offset the attractiveness to conservative forces of exiled
Colonel Carlos Arana. Arana's popularity among the military and right-wing
forces increased following his aggressive actions against Communist in-
surgents in Zacapa Department early last year. Arana has indicated that he
will return from his post as ambassador to Nicaragua soon to start campaign-
ing for the presidency.
Premier Price of British Honduras has asked London to postpone the
constitutional conference scheduled for March. The move delays the time-
table for independence and allows further time for negotiations between
Britain and Guatemala on Guatemala's claim to British Honduras. Guatemala
is strongly opposed to any movement toward independence for the colony
before the resolution of the territorial dispute.
Uruguay and Argentina are squabbling again over their boundary prob-
lem. At issue this time is disputed Timoteo Dominguez Island in the River
Plate. Uruguayan President Pacheco recently discontinued boundary negoti-
ations in retaliation for Argentina's occupation of the island. Argentina
mainly wants to protect its navigation rights in the river channel leading to
Buenos Aires; Uruguay wants to exploit potential off-shore oil de-
posits.
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PROBLEMS CONTINUE FOR BRAZILIAN GOVERNMENT
Problems involving resig-
nations of high-level officials,
economic development policies,
corruption, and urban terrorism
increased for the Costa e Silva
government last week.
On Monday, General Albuquer-
que Lima resigned as minister of
interior, the first cabinet res-
ignation in two years. Although
his decision may have been forced
on him by a regulation requir-
ing him to leave the ministry by
15 March or lose his active mili-
tary status, he took the occa-
sion to protest government de-
crees reducing the funds avail-
able for the development of
Brazil's impoverished northeast.
Five key subcabinet officials in
federal agencies concerned with
this problem then left because
they, too, claimed the decrees
were damaging to their agencies.
Their departure further reduces
the effectiveness of government
programs to improve conditions
in this area.
President Costa e Silva im-
mediately replaced Albuquerque
Lima with another hard liner,
General Costa Cavalcanti. The
new minister has a local reputa-
tion as a self-serving politi-
cian and one of his first acts
in office was to appoint his
cousin to head one of the major
agencies in his ministry. No
replacements for the other vacan-
cies have yet been announced.
On the political front,
President Costa e Silva report-
edly signed a decree on govern-
ment corruption that provides
for confiscation of illicitly
acquired properties. At the
same time, the Ministry of Fi-
nance, in investigating income
tax evasion, has obtained a con-
fession from Geraldo Correira,
president of the Minas Gerais
stock exchange and one of the
richest men in Brazil. Action
against Correira has caused some
uneasiness in financial and po-
litical circles. The new decree
and related investigations gave
the government carte blanche in
deciding which present and former
officials to prosecute.
In the face of continuing
urban terrorism, police this
week arrested four men impli-
cated in the numerous bombings
in Brazil's cities since last
March.
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PERU TAKES CONTROL OF US OIL COMPANY OPERATIONS
Peru's military government
took over the administration of
the International Petroleum Com-
pany's (IPC) remaining operations
in the country on 28 January. The
company's president said that
this action means that IPC is ef-
fectively out of the petroleum
business in Peru, although it
still retains ownership of the
properties, at least temporarily.
The government has stated
that control can be turned back
to the IPC if by 4 February the
company has made full payment of
the $15 million bill submitted
by the state for products drawn
from the Talara refinery since
this :Facility was expropriated
last October. The state oil com-
pany has declared that if the
IPC fails to make full payment by
the deadline its remaining as-
sets will be auctioned off to
cover the payment.
The US firm has, so far, re-
fused to pay what it terms an in-
flated bill and reportedly is
giving some thought to submitting
SECRET
a bill of its own for the oil
products the government confis-
cated when it expropriated the
Talara refinery, products for
which IPC claims it is now being
charged. The government is prob-
ably expecting some such move,
and its notification that all
US employees of IPC are being
replaced with Peruvians indicates
that it is preparing for complete
expropriation of the assets on
4 or 5 February, if not before.
President Velasco, who has
led the fight against IPC, has
been reconfirmed in office and
can now continue his campaign
to eliminate the company from
Peru. The "Revolutionary Junta"--
composed of the commanders of
the three services--announced
on 25 January that Velasco would
be retained in office. This an-
nouncement quelled rumors that
General Montagne, the prime min-
ister and minister of war, would 25X1
take over the presidency when
President Velasco retired from
the army on 31 January.
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