WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A007000030001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 37
• Document Creation Date: December 20, 2016
• Document Release Date: June 9, 2006
• Sequence Number: 1
• Publication Date: April 4, 1969
• Content Type: SUMMARY

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`becret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
State Dept. review completed
RETURN TO ARCHIVES t RECHA05 CENTER
iT tPAEHWATELY AREA USE
aoe.l L Cox
Secret
4 1-
4 April 1969
No. 0364/69
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(Information as of noon EST, 3 April 1969)
Far East
THE WEEK IN PERSPECTIVE
VIETNAM
Communist-initiated actions declined in many parts
of South Vietnam to the lowest level. of the current
offensive, although the enemy apparently intends to
prolong the offensive at least through April. Pres-
ident Thieu's offer to talk privately with the Lib-
eration Front was turned aside by the Communists in
Paris and drew a mixed reaction among South Viet-
namese politicians and military men.
THAI INSURGENTS ATTEMPTING TO REVIVE MOVEMENT
Insurgent leaders in northeastern Thailand have made
a major reappraisal of their strategy in an attempt
to regain lost momentum.
SOVIETS MORE ACTIVE IN LAOS
Some of the Soviets' activity appears aimed at dem-
onstrating their willingness to serve as an inter-
mediary between the warring factions, but Moscow
has not wavered in its support for the Pathet Lao
and Hanoi.
LAO GOVERNMENT WIDENS OFFENSIVE IN NORTHEAST 6
Government guerrilla troops, in conjunction with the
current air strikes, have made some early headway in
their offensive in the northeast.
CHINESE PARTY CONGRESS OPENS AMID SIGNS OF BICKERING 8
The long-postponed ninth party congress opened in
Peking on 1 April. Although slated to mark the end
of the Cultural Revolution and the political con-
flict that accompanied it, the congress is more
likely to paper over differences than to resolve
them.
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SINO-SOVIET BORDER REMAINS QUIET FOR SECOND WEEK
The border issue is still getting considerable play
from Moscow, but the Chinese press and radio have
all but dropped it.
Europe
THE WEEK IN PERSPECTIVE
CZECHOSLOVAKS MOVE TO SUPPRESS ANTI-SOVIET DISSIDENCE
Widespread anti-Soviet demonstrations last weekend
seriously complicated relations between Prague and
Moscow and led the Dubcek leadership to impose new
restrictions in an effort to prevent further anti-
Russian outbursts.
PROGRESS SLOW ON SOVIET COMPUTER NETWORK
The USSR continues work on a nationwide computer
network, with much of the system still under devel-
opment.
11
13
14
WEST GERMAN NAVY INCREASING ITS NATO CAPABILITY 16
A naval armament program recently begun by Bonn will
substantially increase West Germany's ability to
carry out its assigned NATO naval mission.
EUROPEAN STATES REACT TO WARSAW PACT SECURITY APPEAL 17
The bland document signed on 17 March by Warsaw Pact
members in Budapest clearly satisfied none of its
signers except Rumania, but it did whet some inter-
est in Western Europe.
WEST GERMANY TO INCREASE TRADE WITH COMMUNIST COUNTRIES 18
Bonn has raised import quotas from Eastern Europe
and the USSR and is seeking to improve its trade
with Communist China.
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Middle East - Africa
PAKISTAN'S YAHYA KHAN CONSOLIDATES POWER
The new military regime is consolidating its posi-
tion through a series of concessions and a willing-
ness to repress any opposition. The populace is
quiescent, and life for the time being appears
normal.
ISRAEL PURSUING TOUGH MILITARY AND DIPLOMATIC LINE
As Four-Power talks on the Middle East open at the
United Nations, Israel seems to be pursuing an un-
relenting hard line militarily toward the fedayeen
and diplomatically regarding a peace settlement.
FEDERAL NIGERIAN FORCES GO ON THE ATTACK
Federal forces have begun new attacks in the civil
war, scoring minor gains. Prime Minister Wilson
apparently reassured federal leaders of the UK's
continued support for Nigeria.
Western Hemisphere
NO EVIDENCE OF IMPROVEMENT IN PERUVIAN SITUATION
President Velasco continues to appear optimistic in
his public statements, but little progress has been
made in discussions aimed at resolving the IPC issue.
VENEZUELA LEGALIZES THE COMMUNIST PARTY
President Caldera is presenting his legalization of
the Venezuelan Communist Party as a logical exten-
sion of steps initiated by his predecessor, but his
decision was probably based on an expectation of
political gains in a number of areas.
OUTLOOK FOR CUBAN FOREIGN TRADE BRIGHTENS
The value of Cuba's foreign trade will increase
appreciably this year, primarily because of ex-
panded trade with the free world.
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UNREST SURFACING IN DOMINICAN REPUBLIC
The relative if uneasy political calm imposed by
the Balaquer administration during the past two and
a half years is showing signs of deterioration. In
recent weeks, a variety of problems have provided
the opposition with handy political cudgels with
which to generate unrest.
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Communist-initiated military activity in South Vietnam dropped this
week to its lowest level in the six weeks since the spring offensive began. The
enemy is apparently regrouping and refitting; captured documents and
prisoners indicate that the Communists plan to prolong their offensive at
least through April, and possibly beyond,
The Communists in Paris have turned aside but have not rejected
outright President Thieu's offer to talk privately with the Liberation Front.
They apparently intend to continue their waiting game until they detect
some sign that the allies are prepared to grant the Front some significant
political status. In Saigon, most public and press reaction to Thieu's offer has
been cautiously favorable. The hawks in the National Assembly have, how-
ever. been highly critical.
The long-postponed ninth congress of the Chinese Communist Party
opened on I April. Although slated to nark the end of the Cultural
Revolution and the political conflict that accompanied it, the congress is
more likely to paper over differences than to resolve them. Details of the
proceedings have not yet been made public.
Government guerrilla troops in northeastern Laos. in conjunction with
current air strikes, have made some early headway in an offensive designed
to forestall what Lao military leaders believe is an imminent Communist
assault on government headquarters in the Plaint des Jarres area. Successful
continuation of the government offensive could do much to repair the
shattered morale of government forces in the area, but it could also trigger a
sharp reaction from the Communists.
Increased attention given to Laos by the Soviet Union in recent weeks
appears aimed at demonstrating Soviet willingness to serve as an inter-
mediary between the warring factions Moscow has not, however, wavered in
its support for the Pathet Lao and Hanoi. The Soviets continue to use their
position as co-chairman of the Geneva Convention on Laos largely to
disseminate Communist propaganda. 25X1'
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VIETNAM
Communist-initiated mili-
tary action in many parts of
South Vietnam declined this week
to the lowest level since the cur-
rent offensive began six weeks
ago.
Despite the recent pullback
of some main force units, cap-
tured documents, prisoners and
other evidence indicate that the
enemy still hopes to prolong the
current offensive at least through
April, and possibly beyond. Ac-
cordingly, sporadic shellings,
combined with limited ground
probes, may continue over the
near term.
Reaction to Thieu's
"Private-talks" Offer
Although the level of fight-
ing has been reduced in some of
the northern provinces, the large
Communist forces in III Corps as
well as units in the delta re-
main in forward staging areas.
Allied forces, meanwhile,
continue to challenge enemy moves.
During the weekend of 29-30
March a number of clashes oc-
curred in the provinces surround-
ing Saigon, resulting in fairly
heavy Communist losses. Except
for a single abortive rocket at-
tack and scattered incidents of
terrorism, however, Saigon re-
mained free of enemy activity,
as did the other major cities of
the country.
In Paris, the Communists
continued their waiting game this
week by turning aside President
Thieu's offer to talk privately
with the Liberation Front. Al-
though obviously hopeful that
either Washington or Saigon will
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WEEKLY SUMMARY 4 Apr 69
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eventually make a significant
move to get the Paris talks off
dead center, President Thieu's
offer was not what they were look-
ing for. Thieu clearly scored
a public relations success and
his offer may have caught the
Communists off guard. Their
propaganda response, delivered
over Liberation Radio and at the
regular Paris session, was an
awkward attempt to denigrate the
offer without rejecting it.
The Liberation Front will
probably continue to stand off
from any direct talks with Sai-
gon until the Communists see some
sign that the allies are prepared
to grant the Front some signifi-
cant political status. In their
reply to Thieu's offer, the Com-
munists insisted that it was the
substance of the discussions
which was important, not the for-
mat, and ever since the four-way
talks began in January they have
been demanding a broad discussion
of political issues in South
Vietnam. Until they get some
insights into allied demands for
a political settlement they proba-
bly will refuse to tackle either
military problems or to engage
in serious private dialogues.
Most of the South Vietnamese
public and press reaction to
President Thieu's announcement
has been cautiously favorable.
Privately, however, several lead-
ing politicians sympathetic to
the government have expressed
concern that the President was
going too far too fast.
Many politicians accept the
announcement as another demon-
stration of Saigon's serious in-
tentions to work for a peace
settlement. Several left-wing
critics of the government, in-
cluding some militant Buddhists,
have apparently been at least
temporarily disarmed by the Pres-
ident's "forward step."
The Saigon press, following
a government warning against un-
favorable comment, has played up
the positive aspects of the an-
nouncement, although most edi-
torials stop short of endorsing
it. Several papers have, how-
ever, suggested that US pressure
led to Thieu's statement.
Strong negative reaction to
the idea of secret talks has been
registered by the hawks in the
National Assembly. Northern
Catholics and Revolutionary Dai
Viets have attacked the state-
ment as a "shameful defeat,"
charging Foreign Minister Thanh
with making "unilateral con-
cession after concession," and
claiming that the government's
policy at the Paris talks has
"failed completely."
These same critics privately
point out that Thieu made a ser-
ious mistake in agreeing to secret
talks while at a press conference
of foreign newsmen, because it
made it appear that he was re-
sponding to foreign, that is, US,
pressure. The chairman of the
Upper House said that sitting down
with the Front comes close to rec-
ogniz::ng it. Other politicians
fear the statement could lead to
a change in the government's stand-
ard position that only individ-
uals, not the Front itself, may be
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accepted into the political life
of South Vietnam. Even Prime Min-
ister Huong reportedly believes
that the announcement represents
too great a concession to the Com-
munists and that Thieu took the
step under American pressure.
Thieu's proposal carries
far-reaching implications for
the South Vietnamese, and such
initiatives generally lead to
political ferment and maneuver-
ing behind the scenes. Rumors
of unlikely alliances among var-
ious ambitious political leaders
are already beginning, as politi-
cal opportunists look for ways
to exploit any uncertainties
created by the President's an-
nouncement. In addition, some
South Vietnamese division com-
manders believe that the comment
will create morale problems in
the armed forces and will proba-
bly lead to an increase in the
desertion rate, although a new
troop indoctrination program
explaining the issue has been
ordered.
THAI INSURGENTS ATTEMPTING TO REVIVE MOVEMENT
Insurgent leaders in north-
eastern Thailand have made a ma-
jor reappraisal of their strat-
egy in an attempt to regain lost
momentum.
The Communists in the north-
east have long been aware of their
weaknesses. Hampered by-serious
morale and supply problems, and
faced with increasingly effec-
tive government security opera-
tions, they have been on the de-
fensive for nearly two years.
They have taken some remedial
steps to conserve their strength
such as splitting up guerrilla bands
into smaller groups, encouraging'
unreliable insurgents to defect,
and removing ineffective leaders.
25X1
r
The Communists are under no
illusions of being able to re-
gain their previous momentum
soon. Nevertheless, there are
signs, including sporadic insur-
gent incidents in some previously
unaffected areas, and the first
reported distribution of uniforms,
that some of their plans are
being implemented. 25X1
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SOVIETS MORE ACTIVE IN LAOS
The Soviets have been giving
increased attention to Laos in
the past several months. Some
of their activity appears aimed
at demonstrating Soviet willing-
ness to serve as an intermediary
between the warring factions, but
Moscow has not wavered in its
support for the Pathet Lao and
Hanoi.
A commentary in
Izvestia on 22 March called for
flex b lity on both sides.
The Soviets, however, have
made no use of their position as
co-chairman of the Geneva Con-
vention on Laos. They continue
to use that position largely for
the dissemination of Communist
propaganda. They have also given
full support to Communist efforts
to obtain a halt in US bombing
of the "liberated areas." Mos-
cow's strongest effort in this
direction was contained in a
statement by Foreign Minister
Gro:myko on 28 January which laid
all Laotian ills to US interven-
tion and claimed that a cessation
of US activity "would help attain
the speediest political solutions."
Subsequent Soviet commentary has
pursued a similar line.
Moscow's renewed attention
to Laos probably is motivated by
several growing concerns. One
is the danger that the Communists'
current dry season offensive could
provoke a stiff US reaction or that
a sharp deterioration in the Lao-
tian situation could have an ad-
verse effect on the Paris talks.
Moscow doubtless is also concerned
over the significant Chinese pres-
ence in northern Laos which became
public early this year. The So-
viet ambassador's visit to Samneua
doubtless included an effort to
appraise the extent of the Chinese
presence.
In any case, Moscow constantly
exercises great care not to jeop-
ardize its favorable relationship
with Hanoi by getting out of step
over the Laotian question, and
will continue to support North
Vietnam's interests. Deference
to Hanoi, which has a primary
stake in Laos, is doubtless the
principal reason for Moscow's
refusal to act constructively
in its co-chairman role.
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LAO GOVERNMENT WIDENS OFFENSIVE IN NORTHEAST
Government guerrilla troops,
in conjunction with the current
air strikes, have made some
early headway in their offensive
in the northeast.
The ground portion of the
operation, designed to forestall
a major Communist push south of
the Plaine des Jarres that Lao
military leaders still believe
is imminent, has so far resulted
in the capture of two strategic
positions near Route 4, an im-
portant Communist supply route
east of the Plaine. The posi-
tion at Ban Pha is a government
base that had fallen to the enemy
in February; the other is located
on Phou Khe Mountain, from which
the guerrillas could place artil-
lery fire on Route 4. In addi-
tion, north of the Plaine gov-
ernment forces moved back into
Phu Cum, an important refugee
center. The Communists offered
little resistance to the assaults.
Lao military leaders believe
that recent enemy activity north
of the Plaine des Jarres is a
prelude to an assault against
the neutralist headquarters at
Muong Soui and Meo leader Vang
Pao's headquarters at Sam Thong.
The Communists, in turn, are
aware that the morale of the
government forces is low and
have been attempting to clear
Meo guerrillas from areas they
have long considered "liberated."
The Communists' longer
range objectives are not clear.
Communist forces positioned on
the Plaine have long had the
capability of taking Muong Soui,
which is poorly defended, when-
ever they choose. The Communists
may be preparing for a signifi-
cant push into government-held
areas, but so far their actions
in the northeast have not been
significantly different from
operations in this area over
the past five years.
If the government's offen-
sive continues to go well, it
may do much to repair the shat-
tered morale of the government
forces in the northeast. There
is a possibility, however, that
the Communists may react sharply
to the threat to their rear
areas that the intensive aerial
campaign and ground attacks
near the Plaine have presented.
A sharp rebuff to the government
forces there could lead to an
eventual collapse of the gov-
ernment's presence in Samneua
and Xieng Khouang provinces.
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CHINESE PARTY CONGRESS OPENS AMID SIGNS OF BICKERING
The long-postponed ninth party
congress opened in Peking on 1 April
with much fanfare. The formal agenda
for the meeting includes a discus-
sion of a "political report" deliv-
ered by Mao's heir, Lin Piao, adop-
tion of a new party constitution,
and election of a new party central
committee. Mao himself made what
was described as an "extremely im-
portant speech" at the opening ses-
sion of the congress, but details
have not been made public--a standard
practice in recent years.
The published name list of the
presidium of the Congress--a tem-
porary body of 176 members--indi-
cates little except that all top
leaders were present in their same
order observed since last fall,
and that chairmen of all provincial
committees attended. Chou En-lai
was named secretary general of the
presidium, which underscores his
importance in the central leader-
ship and may strengthen his ability
to influence the proceedings.
According to advance billing,
the congress is slated to mark the
end of the Cultural Revolution and
the political conflict that accom-
panied it. The congress is, how-
ever, more likely to paper over dif-
ferences on a wide range of issues
than to resolve them. Top provin-
cial and central regime leaders have
been meeting in Peking since about
8 March, presumably in an attempt
to reach agreement prior to the con-
gress on a number of divisive ques-
tions involving personnel and policy
matters. Moreover, a muffled debate
on a number of key policy issues has
continued in the press, and fac-
tional fighting in a number of
chronic trouble spots has persisted
in recent weeks. This suggests that
the top regime leaders have not yet
been able to resolve their differ-
ences and raises the possibility;
that debate on a number of issuep
may spill over into the congress it-
self.
Recent editorials in People"s
Daily and Shanghai's Wen Hui Paok
suggest that moderate elements in
Peking have recently been urging
prudence in carrying out Maoist "re-
forms" in agriculture and education.
These are probably typical rather
than exclusive areas of dispute. A
People's Daily editorial on 22 March
called on a peasants to raise
pigs--the chief cash crop in China--
privately as well as on collective
land, adding that "we should be pru-
dent on the new questions concern-
ing policy, especially those related
to ownership." This language is un-
precedented in recent months. Fear
of a widespread reduction in private
plots (on which most pigs are raised)
has caused a good deal of unrest this
winter, and more pragmatic voices in
the leadership have apparently felt
that such fears must be allayed.
Also on 22 March, Wen Hui Pao
noted that recent "revolutionary'
developments in education did not
preclude the fact that the student
should take learning as his main
task." Although clothed in the
usual Maoist rhetoric, the editorial
was clearly defensive in tone, sug-
gesting that radical policies in
this area are being vigorously
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,,... c ALI F?:3NOMOUS REGION
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questioned on the grounds that
they will do more harm than good.
Neither editorial indicates
that present policies are to be
abandoned, but it appears that in
some areas they may be tempered to
meet moderate objections. Perhaps
the greatest significance in these
developments is that relatively
moderate voices have been able to
make themselves heard on the eve
of the congress. The drive to radi-
calize the countryside and the ed-
ucational field took on new life
after last October's central com-
mittee plenum, the last formal meet-
ing of top regime leaders prior to
the congress. It appears that de-
cisions taken at that time are still
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being questioned and both sides are
prepared to press the issue at the
congress.
Persistent factional fighting
in several areas of China further
suggests that some regional and
provincial leaders, who are ex-
pected to be confirmed in office
at the congress, have still not
consolidated their authority. The
situation is particularly severe
in western China, where several
areas continue to be disrupted by
deep splits in the governing mili-
tary establishment and continued
agitation by still active Red Guard
organizations.
In Szechwan Province, the ri-
valry between radical civilians
and conservative military leaders
on the revolutionary committee was
apparently behind an upsurge in
factional fighting there last month.
There were also renewed signs
of violence last month in eastern
Page 10
China. Serious fighting was re-
ported to have broken out in late
February and early March in the
long-troubled Wenchou port area'of
southern Chekiang, and heavy armed
clashes in mid-March on offshore
islands in northeastern Chekiang
resulted in some flights of civl-
ian refugees to the mainland.
Although most regions of eastern
China have appeared for some time
to have been stabilized under mili-
tary governments, it is possible
that in some provinces the military
establishment itself is split, as
it is in many western provinces.
In some areas--Fukien is an exam-
ple--Red Guard organizations are
known to be still active despite
last summer's crackdown. Presuijl-
ably these groups are backed and
protected by important figures at
higher levels, including Peking.it-
self. The continued factional prob-
lems that arise from this situation
are certain to be discussed at the
congress.
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SINO-SOVIET BORDER REMAINS QUIET FOR SECOND WEEK
No new fighting has been re-
ported over the disputed Ussuri
River island on the Sino-Soviet
border for more than two weeks.
A Pravda article on 28 March
charged the Chinese with shell-
ing the island but gave no date.
The article also charged that the
Chinese were building fortifica-
tions on their side of the river;
both sides remain on the alert
for further trouble.
On 29 March, Moscow handed
the Chinese Embassy a lengthy
statement on the border issue
recommending a continuation of
the 1964 border talks. The
statement conceded nothing, how-
ever, either on Chinese responsi-
bility for the earlier incidents,
or on Soviet jurisdiction over
the disputed territory. In pub-
licizing the statement and bring-
ing it to the attention of West-
ern governments in what appears
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Page 11 WEEKLY SUMMARY 4 Apr 69
to be another round of diplomatic
demarches, Moscow could scarcely
have expected a positive Chinese
response and, on 30 March, a
Chinese spokesman denounced the
statement as "calumnious and
false." There has been no offi-
cial comment from Peking, but it
will almost certainly be negative.
25X1
article in Pravda on 28 Marc ,
however, called attention again
to the fact that the island will
soon be flooded by the spring
thaw, suggesting that Moscow
does not expect the situation
to worsen. The Chinese press
and radio have all but dropped
the subject.
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The Czechoslovak leadership, as a consequence of widespread and
violent anti-Soviet demonstrations last weekend, finds itself embroiled in its
worst crisis since the invasion last summer. If the leadership bows to intense
Soviet pressure for the immediate imposition of a variety of repressive
measures, a storm of protest, particularly by students and workers, is likely
to arise. The government appears to be temporizing, but there is no certainty
that Moscow is in a mood to accept further Czechoslovak procrastination.
Even as the Soviets moved against the liberal policies and political
figures of Czechoslovakia, however, they were keeping a close eye on their
large neighbor to the East. The Soviet party's theoretical journal published a
strongly worded compendium of China's foreign and domestic sins which
concluded by accusing Peking of opening "a second front" against the
Communist countries. Soviet diplomats, meanwhile, continued to seek out
ways to reinforce Moscow's version of events on the border and to depict the
USSR as a reasonable but resolute defender of its national territory.
Two Warsaw Pact exercises were held this week.
oscow announced
concurrently that exercises involving Bulgarian, Rumanian, and Soviet staff
elements were held in Bulgaria from 25 March to 1 April under the direction
of Marshal Yakubovsky, the pact's commander in chief. The evidence for
this Balkan exercise is scanty, suggesting it was minimal.
Prime Minister Wilson returned from Nigeria insisting that he had not
gone there as a mediator. His main objective may have been to get the
Nigerians to curtail the bombing of Biafra, but in this he was disappointed.
Wilson now believes that the Nigerian problem is in the lap of the Organiza-
tion of African Unity.
The nuclear have-nots at the Geneva Disarmament Conference are
becoming more impatient at the lack of progress. Led by Sweden and
Mexico, they have expressed disappointment that the US and USSR seem
more interested in seabed arms control than in a comprehensive nuclear test
ban or in strategic arms limitation talks.
1
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CZECHOSLOVAKS MOVE TO SUPPRESS ANTI-SOVIET DISSIDENCE
Widespread anti-Soviet dem-
onstrations last weekend seriously
complicated relations between
Prague and Moscow and led the
Dubcek leadership to impose new
restrictions in an effort to pre-
vent further anti-Russian out-
bursts.
On 28 and 29 March, there
were acts of violence against
Soviet installations, equipment,
and personnel in ten cities, and
lesser incidents elsewhere. So-
viet defense minister Grechko and
deputy foreign minister Semenov
arrived in Prague on 31 March
to look into the situation and
to give meaning to Soviet diplo-
matic protests. They reportedly
met with the Czechoslovak party
presidium on 1 April. Moscow is
said to have bluntly warned that
Soviet troops will be prepared
to put down similar disturbances
should they occur in the future.
Under Soviet pressure, the
presidium gave broad authority
to the interior ministry to ar-
rest those who allegedly organ-
ized the anti-Soviet disturb-
ances. This is a concession to
the USSR, which refuses to accept
Prague's view that the demonstra-
tions were spontaneous.
The presidium also stated
that henceforth it will take ac-
tion against any who imperil
Prague's alliance with Moscow.
The statement criticized the anti-
party conduct of certain central
committee members, including pre-
sidium member Josef Smrkovsky, the
only remaining progressive in the
party leadership. This move ap-
pears to be an initial response
to Soviet insistence that the
party, government, and mass media
be purged of antiparty dissidents.
In addition, the presidium
decided to crack down on the mav-
erick press for "arousing...anti-
Soviet hysteria." It suspended
the party central committee weekly
Politika and threatened actions
against other publications that
have been circumventing censor-
ship regulations. On 2 April,
the government press chief an-
nounced the press would be sub-
jected to pre-censorship, but he
did not spell out the details of
this new restriction.
The Dubcek leadership's
new crackdown--its most dramatic
response to civil disturbances
since the invasion--is neverthe-
less a minimal reaction. It will,
however, probably provoke the
trade unionists and students, who
regard Smrkovsky as the symbol
of their hopes. Another crisis
could develop if the police make
wholesale arrests of those who
took part in the demonstrations.
25X1
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WEEKLY SUMMARY 4 Apr 69
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 Approved For R ase 2O 0 3/ CIA-RDP79-00927At 000030001-3
PROGRESS SLOW ON SOVIET COMPUTER NETWORK
The USSR continues work on
a nationwide computer network,
with much of the system still un-
der development. The Soviets
continue to experience serious
difficulties in meeting the key
requirements for the successful
operation of such a network: a
large stock of specially designed
hardware and software and tech-
niques for joining the computers,
skilled technical and service per-
sonnel, an efficient information
collection system and a well-or-
ganized administrative apparatus.
A decree of March 1966 stip-
ulated that a unified network of
computer centers to facilitate
planning would be started during
the current five-year plan pe-
riod (1966-70). When completed,
the network will operate on three
levels: the main computer bank
in Moscow, 50 to 80 regional or
republic centers, and 4,000 in-
stallations at the local level.
The three-tiered network
will necessitate mass production
of specially designed computers
and related hardware. The main
computer center in Moscow has been
completed, but only a small num-
ber of the regional and local in-
stallations have been constructed
and adequately equipped. For ex-
ample, mass production of the
"Ryad" series of computers--the
basic unit of the network--will
not begin before 1970.
The high-speed, high capac-
ity data transmission system nec-
essary to connect the three levels
of the computer network is still
in the research and development
stage. At present, the Soviets
are transmitting digital data by
telegraph and postal facilities,
which are slow and cumbersome for
handling large quantities of in-
formation. Also the failure to
develop good peripheral equipment
such as magnetic discs and tape
units has forced the USSR to im-
port some of this equipment from
the West.
Although the Soviets have
been developing a specific com-
puter language for economic prob-
lems since 1963, much remains to
be done before it can be used ex-
tensively in the network. For
the present the USSR plans to
rely heavily on imported soft-
ware, which will make some devel-
opment expenses in the USSR un-
necessary. Large amounts of time
and money still will be needed to
master and adapt these techniques.
A serious shortage of skilled
programmers and service person-
nel also hinders efforts to ex-
pand the Soviet computer network.
In addition, domestic computer
manufacturers are just beginning
to accept responsibility for in-
stalling and servicing their
equipment.
The several methods of re-
porting and collating statistics
now in practice must be standard-
ized for computer use. Although
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work on a commodity classifier,
which categorizes about 16 mil-
lion products, is almost complete,
other classifiers remain to be
developed, such as ones for eco-
nomic sectors, occupations, or-
ganizations, enterprises, and
geographical regions.
The most serious administra-
tive problem in the formation of
the computer network is the cur-
rent fight between Gosplan and
the Central Statistical Adminis-
tration for ultimate control of
the network. At a lower level,
the failure of conservative eccdn-
omists and factory managers to
cooperate fully in the use of com-
puters in enterprise reporting
and administration has slowed
work in certain critical areas.
WEST GERMAN NAVY INCREASING ITS NATO CAPABILITY
Bonn is making tangible
progress toward increasing its
NATO capabilities. The West Ger-
mans have recently begun a naval
armament program for which $450
million has already been author-
ized. By the mid-1970s, this
program will substantially im-
prove their capabilities to ful-
fill the assigned NATO mission of
assisting in the control of the
western Baltic Sea, supporting
the left flank of NATO forces in
Central Europe, and keeping open
the sea lines of communication
across the North Sea.
In January, the Bundestag
Budget Committee approved the
funding of four guided missile
frigates and 12 improved coastal
submarines. The frigates areo
join the fleet in 1974 as replace-
ments for the obsolescent US
Fletcher-class destroyers. Each
frigate will cost between $45 and
$50 million. Armament will con-
sist of one Tartar missile launcher
with 40 missiles, four 76-mm. can-
nons, and four torpedo tubes for
antisubmarine warfare and surface
targets.
The Lutjens, West Germany's
first guided missile destroyer,
entered operational service last
month. Two other destroyers are
being fitted out in the US and
will be commissioned in the near
future. The destroyers, which
cost more than $50 million each,
are equipped with a development
of the US Tartar missile system
for both surface-to-surface and
surface-to-air roles.
The 12 new submarines will
be upgraded versions of the 350-
ton coastal subs recently completed
for the German Navy. Each will
cost about $7.5 million and deliv-
ery to the fleet should begin
sometime in 1971. In addition,
the navy has requested four guided
missile corvettes and ten guided
missile fast patrol boats.
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EUROPEAN STATES REACT TO WARSAW PACT SECURITY APPEAL
The bland document signed
on 17 March by Warsaw Pact mem-
bers in Budapest clearly satis-
fied none of its signers except
Rumania, but it did whet some
interest in Western Europe.
Since the meeting the War-
saw Pact powers have reinter-
preted the document, in terms
of long-held national positions
which had been submerged enough
to permit drafting of a consensus
text. The Soviets even published
their own altered version of the
appeal.
The implied conditions for
a European security conference
were vague, but would lead to a
formal acceptance of the status
quo in East Germany and West Ber-
lin. This was the minimum East
Germany could accept. Its press
did not support the appeal until
the end of March. By then, Pan-
kow had refocused on old demands:
diplomatic recognition, and the
need to thwart Bonn's allegedly
aggressive intentions. During
the pause in propaganda private
East German feelers were put out
to the West Germans for minis-
terial talks on bilateral issues.
The Poles interpreted the
appeal as a signal to resume
political discussions with West
Germany. In addition, they are
refurbishing earlier proposals
to get discussions started among
a few European states as well as
more grandiose regional schemes.
Hungary has had the task of
formally presenting the European
security conference proposal to
Page 17
Western governments and in the
United Nations, and is typically
sticking to the text. The Czech-
oslovaks have had little time to
become involved, but party leader
Dubcek endorsed the appeal, noting
that there was much to gain for
the West Germans if they improved
their relations with Eastern Eu-
rope.
The Bulgarians have offered
blanket support, dusted off their
old Balkan zone-of-peace plan,
but have not stopped their in-
terference in Yugoslav Macedonia.
The Rumanians have taken the pro-
posal a step beyond the text, en-
dorsing detente, but not on a basis
which would perpetuate Eastern and
Western European blocs. Of all
the Eastern Europeans, only the
Rumanians seem to recognize a
role for the US in Europe. The
Yugoslavs are skeptical that any-
thing will come of the appeal, and
the Albanians see it as a Soviet-
American plot against the Chinese.
Western European response to
the Budapest declaration is coming
into focus in NATO, as the Alliance
prepares for its 20th anniversary
ministerial meeting. The country
representatives at NATO headquar-
ters have drafted language with
alternative formulations for the
ministers, leaving to them the de-
cision on whether to view the Buda-
pest declaration as primarily a
tactical device or as something
worthy of serious exploration.
Most of the Alliance foreign min-
isters, and especially Nenni of
Italy, Harmel of Belgium, and Luns
of the Netherlands, appear anxious
for an exchange of views.
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WEST GERMANY TO INCREASE TRADE WITH COMMUNIST COUNTRIES
West Germany is moving rapidly
to implement its recent decision to
raise quotas on imports from East-
ern Europe and the USSR. Bonn also
is seeking to improve its position
as one of Communist China's major
trading partners in the free world.
Minister of Economics Schiller
has characterized the decision to
increase import quotas as part of a
diversified program to counteract
inflationary pressures and reduce
the still excessive foreign trade
surplus. Bonn's action permits a
one-third increase in the import
quotas for Soviet and East European
industrial products, with the ex-
ception of certain items such as
iron, steel, coal, cotton and heavy
heating oil. Increased quotas for
certain petroleum products have al-
ready been assigned to Poland, Ru-
mania, Czechoslovakia and the USSR.
Bonn estimates that its deci-
sion will permit the East European
states to increase their exports to
Germany by $132 million from last
year's level of $670 million. The
new figure includes $47 million in
expanded quota ceilings already
granted during negotiations over
trade this year with Rumania, Po-
land, Hungary, Czechoslovakia and
Bulgaria. These quota increases
are equal to 20 percent of West
Germany's imports from these five
countries last year.
Despite Bonn's action, the in-
creased West German quotas may not
result in a substantial rise in im-
ports because many East European
products cannot compete effectively
in Western markets. The federal
cabinet has not yet decided if sim-
ilar quota increases will be granted
to East Germany.
Bonn also is seeking to irpprove
its relatively large trade with Com-
munist China. Last year, West Ger-
many ranked third among Peking's
trading partners in the free world--
after Japan and Hong Kong--with
total trade of $260 million. Ger-
man exports to China, however, de-
clined by some $30 million in )968,
reflecting a drop in exports of iron
and steel products as well as the
completion of deliveries of maghin-
ery and equipment for whole plclnts
that had been ordered several years
ago.
Bonn clearly wants to maintain
its strong position in the Chin~{a
market despite the occasional dif-
ficulties created by Peking, such
as the harassment and imprisonment
of several German technicians., The
Chinese reportedly made discreet in-
quiries for additional free world
plants at the Canton Trade Fair, last
fall. Bonn probably hopes that ne-
gotiations broken off in 1966 for
a large steel mill complex valued
at from $125 million to $175 million
may be resumed eventually.
Last year, Bonn's trade with
all Communist nations reached a
record high of $3.2 billion or seven
percent of total West German trade.
Despite a sizable increase in iJn-
ports from the Communist countries,
Bonn nevertheless registered a sur-
plus of $470 million in its trade
with these countries. As a number
of East European countries are now
heavily indebted to West Germany,
growth of this trade will depend 25X1
on Bonn's further willingness to
increase its imports or to grant
substantial new credits.
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Four-Power talks aimed at a Middle East settlement have begun in New
York. There are wide differences between the participants on several key
points, and Israel has publicly announced that it will not accept any
recommendations which endanger its vital inte:rests. The talks follow on the
heels of a Security Council condemnation of Israel for an air attack near
As-Salt, Jordan on 26 March. The four powers split on the vote, with the
Soviet Union and France voting for condemnation, and the United States
and Britain abstaining.
Israel, meanwhile, indicated it would continue its policy of "active
defense"-hitting the fedayeen before being hit-and warned of a possible
strike against Iraqi forces in Jordan. In Syria, the perennial infighting
between competing factions in the Baath party was temporarily papered over
by giving each about an equal share in the party leadership.
Iran is deploying forces along its Shatt al-Arab River border with Iraq,
apparently in response to Iraq's attempts to enforce its rights in the waters
that separate the two countries. Iraq is reportedly reinforcing in the area, but
major hostilities are not expected. Iran, meanwhile, broke relations with
Lebanon over the latter's refusal to extradite the former chief of Iran's
intelligence service.
The forced resignation on 2 April of General Joseph Ankrah as head of
Ghana's ruling National Liberation Council will undermine public confidence
in the military regime. Ankrah was caught extorting money for political
purposes. His successor, the young and mercurial Brigadier Akwasi Afrifa,
could disturb council unity without which an orderly transfer to a civilian
government is unlikely.
The visit of Soviet President Podgorny to Algeria from 26 March to I
April made the anticipated splash, but the Moroccan Government has played
Podgorny's trip to Morocco-1 to 6 April-in very low key. In Senegal, a
strike by lycee students lost momentum as holiday recess approached. Labor
leaders, acting as mediators, have been unable to negotiate a settlement of
student grievances, and further agitation could occur when classes resume on
14 April.
A cabinet shuffle in Nepal resulted in the resignation of Prime Minister
S. B. Thapa, who had been made the scapegoat for government failings. He
has been replaced by former Deputy Prime Minister K. N. Bista.
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SECRET`
PAKISTAN'S YAHYA KHAN CONSOLIDATES POWER
The new military regime con-
tinues to consolidate its posi-
tion through a series of conces-
sions and a willingness to re-
press any opposition.
General Yahya Khan, the
Chief Martial Law Administrator,
assumed the presidency on 31
March, ostensibly to permit him
to perform certain necessary
functions under Pakistani and
international law. Although
the move may be a sincere effort
to facilitate the carrying out
of his duties, many will regard
it as confirmation of Yahya's
personal ambitions. Yahya has
formed a military council--his
three deputy administrators--to
help run the country. on the in-
ternational front, he has assured
all nations that he intends no
change in Pakistan's foreign pol-
icy.
The conciliatory gestures
being made by the ten-day-old
regime are probably intended
to convince the people that the
administration will be fair as
well as firm. A new series of
regulations has kicked off a
promised campaign against bureau-
cratic corruption--a major cause
of resentment under Ayub Khan.
Schools in both wings of the
country have been reopened for
the first time in months. Food
shipments have been rushed to
East Pakistan where distribution
in rural areas appears to be re-
turning to normal. The private
sector has been directed to
honor all pay increases forced
by labor in recent months, re-
gardless of the methods used to
extract them. On 30 March, re-
strictions were temporarily re-
laxed throughout the nation to
permit public observance of a
traditional Muslim day of mourn-
ing.
Although the regime is avoid-
ing the excessive show of power
which characterized Ayub's iron-
fisted take-over in 1958, martial
law regulations are being strictly
enforced. Yahya has apparently,
told his officers that violations
will not be tolerated and that
violators are to be shot on the
spot if they ignore a warning.
official figures list six per-
sons killed and more than 80 ar-
rested since martial law was im-
posed last week.
There is no indication that
major political figures--who re-
main invisible and inaudible--are
among those detained. Since pun-
ishments can be extremely severe,
most people are assiduously avoid-
ing provocation. The drab fare
in newspapers across the country
indicates that censorship--al-
though not officially ordered--
is once again in effect.
Pakistanis--East and West--
are quiescent, and life for the
time being appears normal. Never-
theless, most East Pakistanis
are convinced that the military
took over in order to keep West
Pakistan dominant and East Pak-
istan in line by force. Martial
law is a severe setback to their
drive for regional autonomy,
and its imposition has almost
certainly strengthened the hand
of extremists who in time may
succeed in stirring up active
resistance to the government.
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 Approved For Rase 2OSEIA-RDP79-OO927A(lOOOO3OOO1-3
ISRAELPURSUING TOUGH MILITARY AND DIPLOMATIC LINE
As Four-Power talks on the
Middle East open at the United
Nations, Israel seems to be pur-
suing an unrelenting hard line
militarily vis-a-vis the fedayeen
and diplomatically regarding a
peace settlement. Tel Aviv has
initiated what it calls a mili-
tary policy of "active defense"--
to hit before being hit--and has
issued another denunciation of
the Four-Power talks.
The pattern of Israeli air
attacks on fedayeen bases in Jor-
dan over the past two weeks in-
dicates that they are pursuing
this policy of "active defense."
Minister of Defense Dayan said
Israel would hit the guerrillas
with land and air attacks "before
they cross the border and before
they reach the supermarket." The
objective is apparently to keep
the Arab guerrillas on the move,
to interfere with training, to
break morale, and to discourage
terrorist activity generally.
Jordan went to the UN Security
Council last week to ask for
condemnation of an Israeli air
strike near As-Salt in which
they claimed 18 civilians were
killed and 25 wounded. The Is-
raelis insisted it was a fedayeen
meeting place and that as many as
15 terrorists were among the in-
jured. Israeli leaders also
hinted that they intended to fol-
low this active policy even if it
did disturb some members of the
Security Council.
Tel Aviv also continued to
follow a tough line toward the
upcoming Four-Power talks. In
a communique issued following a
cabinet meeting on 30 March,
Israel announced that it "entirely
opposes" the convening of the
talks. The main Israeli theme
is that powers outside the region
cannot decide the fate of the
Middle East states, and that
Israel and the Arab states should
be permitted to work out their
own settlement through direct
negotiations. Israel, moreover,
cannot accept any Four-Power
recommendations which are not
agreed on by the parties concerned.
The central problem for
Israel in the convening of the
Four-Power talks is that it
believes the cards are "stacked"
against it, that the Soviet Union
and France are clearly pro-Arab,
and that Israel's one Big Power
friend--the United States--will
in the process of the talks agree
to concessions detrimental to
Israel.
Meanwhile, there were some
signs of possible internal polit-
ical trouble in Israel itself.
The ever-unpredictable Dayan was
expressing doubt whether he would
remain in or break with the rul-
ing Labor Party. It is not clear
whether popular Dayan has really
made up his mind to leave or not,
or whether he was issuing a warn-
ing. If he does leave, Israel
faces some domestic political
turmoil amidst its increasing
troubles abroad.
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FEDERAL NIGERIAN FORCES GO ON THE ATTACK
Federal units have launched
attacks in several areas of the
civil war, scoring some minor
inroads into secessionist-held
territory. British Prime Minis-
ter Wilson's visit of 27-31 March
to Nigeria seems to have strength-
ened federal leaders' confidence
in the UK's continued support for
their side. Despite an attempt
by Wilson to meet with Biafran
leader Ojukwu, the visit led to
no peace initiatives.
The long-stationary federal
1st Division, in a move probably
timed to coincide with Wilson's
visit and presumably as part of
the long-heralded federal "final
offensive," has attacked south
from Okigwi and southwest from
Afikpo. It seems unlikely, how-
ever, that the attacks will lead
to any major gains in the near
future.
On the southern front, the
3rd Division, which had been los-
ing ground to the Biafrans stead-
ily since early February, has
launched strong counterattacks,
but the Biafrans have apparently
contained these attacks. The
3rd's main objective is prob-
ably to relieve the federal
brigade which has been under
siege in Owerri for several weeks.
The federal 2nd Division early
last week attempted to move south-
east from Onitsha, but met stiff
Biafran resistance and has ap-
parently postponed further of-
fensive activity for the time
being.
The Biafrans' ability to
hold off sustained federal at-
tacks will depend mainly on the
supply of arms to the secession-
ists.
Prime Minister Wilson ap-
parently reassured federal lead-
ers that he intends no change
in the British policy of supply-
ing arms to Nigeria, which has
of late come under increasing
domestic criticism in the UK.
Lagos, for its part, apparently
did no more than reiterate its
willingness to negotiate a set-
tlement of the war within the con-
text of one Nigeria and renew its
guarantee that the Ibos will not
be treated as second-class citi-
zens in a future Nigeria.
Wilson tried to arrange a
meeting with Ojukwu. Wilson and
Ojukwu were unable to agree on a
meeting place, however, and al-
though both leaders appeared to
see the propaganda value in of-
fering to meet, neither seemed
really anxious for a meeting to
take place.
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Attacking Nigerian Forces Score Minor Gains
Benin City
Enugu
1st Federal'
Division(
Division Okig
~ l'~,t'
Afikpo
O
vim
,Owerr~ '" ,,Umuahia ! L5
3rd FFderal~:!~) Aba
Di vilion
y(~
Part Harcayrt-;
\k (
pkQt Ek
EQUATORIAL GUINEA
FERNANDO POD
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CAMEROON
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 0% 00%
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f RDP79-00927AO07000030001-3
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Peruvian President Velasco continues in his public speeches to appear
optimistic that his government will be able to negotiate a settlement of the
International Petroleum Company issue before the 9 April deadline. There is
no evidence, however, that a breakthrough is near, and some real progress
must be made soon if suspension of Peru's aid and sugar quota is to be
avoided. Velasco still boasts that the US will not invoke the Hickenlooper
sanctions.
Britain and Anguilla have signed a truce that apparently ends the
immediate crisis in the tiny occupied island, but other Caribbean leaders will
probably continue to try to influence future events. Last week, for example,
Prime Minister Shearer of Jamaica made an unsuccessful attempt to persuade
Prime Minister Burnham of Guyana that "independent Commonwealth
countries" should help find a solution to Anguilla's problems.
Prime Minister Shearer, meanwhile, continues to have his troubles at
home trying to keep the crime rate under control. Several foreign embassies
have instituted special security measures to protect their personnel, and the
US Embassy reports that the general atmosphere in the Kingston area ranges
from jitters to fear at all socioeconomic levels.
The Special Committee for Latin American Economic Coordination
(CECLA) began its "expert-level" meeting in Santiago, Chile on 31 March.
CECLA is an exclusively Latin American organization which in essence is a
caucus for coordinating Latin America's economic, commercial, and mone-
tary positions for international conferences, particularly those at which the
industrialized nations are in attendance. The present meeting developed from
the desire of the Organization of American States to formulate a common
position on trade and development. Originally, a ministerial-level meeting
was scheduled for March, but that meeting has been postponed until the
outcome of the Peru - US negotiations over the International Petroleum
Company is known. This preliminary meeting will last until 8 April and will
prepare an agenda for the higher level meeting which will robabl take
place in mid-May.
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No EVIDENCE OF IMPROVEMENT IN PERUVIAN SITUATION
President Velasco continues I nials. The one clear common
to appear optimistic in his pub- denominator among these men is
lic statements on the prospects their strong nationalist posture
of a settlement of the Inter- I on the IPC issue. Several of
national Petroleum Company (IPC)
issue, but there is no evidence
that a breakthrough is near in
the talks with special US emis-
sary Irwin.
In a press conference on
31 March, Velasco said that "the
conversations with Mr. Irwin are
favorable... developing peace-
fully in a climate of harmony"
and that he believes the Hicken-
looper Amendment will not be
applied. Peruvian Government
officials, however, show no sign
of backing down from their hard
line on IPC and some real prog-
ress must be made if the sus-
pension of Peru's aid and sugar
quota on 9 April is to be avoided.
them have been closely linked
with leftist extremist groups
in the past. Velasco apparently
relies on these men as competent
legal experts and has brought
some of them into his talks with
the US emissary.
The President also said that
the government reorganization,
which created four new minis-
tries and abolished two others
effective 1 April, did not sig-
nal discord in the armed forces,
He said that General Montagne
would continue to serve as both
prime minister and minister of
war, thus squelching the wide-
spread rumors that Montagne, who
was suspected of plotting Velas-
co's overthrow, would be forced
to give up one of his posts or
perhaps would be transferred
abroad.
President Velasco used the
same press conference to deny
rumors that the government is
about to arrest and exile lead-
ers of the APRA party. He also
rejected charges that Communists
had infiltrated the military gov-
ernment. He said that the sto-
ries linking his personal advisers
to various extremist or commu-
nist organizations were simply
part of a propaganda campaign
against the government by IPC
and APRA.
The evidence, though still
sketchy, does tend to justify
concern about the role of some
of the President's civilian ad-
visers--despite Velasco's de-
The President's announce-
ment that no action was being
taken against APRA leaders and
that Montagne would remain in
his job may represent a minor
victory for moderate forces in
the government.
rest
dent Velasco, however, remains in
a very strong position, and some
restrictive action against APRA
nay be taken in the near future,
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VENEZUELA LEGALIZES THE COMMUNIST PARTY
President Caldera is pre-
senting his legalization of the
Venezuelan Communist Party as a
logical extension of steps ini-
tiated by his predecessor, but
his decision was probably based
on an expectation of political
gains in a number of areas.
He may, for example, believe
that at least some aspects of his
minority government's program
will now have support from left-
wing groups represented in Con-
gress. He may expect that the
party's promise of an end to guer-
rilla activities in return for
restoration of the constitutional
guarantees withdrawn in 1962 will
have a divisive effect on other
extremist opposition groups.
There are also reports that Cal-
dera views the reduction of the
guerrilla problem as an indirect
means of lessening the military's
role and its ability to influence
government actions.
Military reaction so far
has been that legalization will
have little effect on Communist
activities. The party's guer-
rilla efforts have been minimal,
and it has been operating freely
through its political front, the
Union for Advancement, for more
than a year. In any case, the
end of guerrilla problems is not
yet in sight. The decree does
not affect the outlawed Movement
of the Revolutionary Left (MIR)
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or the Communist dissident Armed
Forces of National Liberation
(FALN), both of which have active
guerrilla bands. Although both
groups may be splintered between
proponents of continued armed
struggle and those who would ac-
cept a conditional amnesty,
neither seems likely to accept
the terms the government would
demand.
The MIR has already issued
a list of conditions that must
be met before it will even agree
to talk with the government.
For example, it wants elimination
of the Armed Forces Intelligence
Service, all counterinsurgency
ranger battalions, theaters of
operations, and the Joint Opera-
tions Center set up to coordinate
counterinsurgency activities.
The FALN is expected to reject
outright any government plans
that would require it to disband
its cuerrilla force.
The major criticism of Cal-
dera's action has come from con-
servatives in the business com-
munity and in the opposition Demo-
cratic Action party, who claim
that he is moving too fast and
does not realize the basic dif-
ference between allowing rehabili-
tated Communist leaders to func-
tion through a political front
and pardoning the whole movement
through legalization of the party-
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OUTLOOK FOR CUBAN FOREIGN TRADE BRIGHTENS
The value of Cuba's foreign
trade will increase appreciably
this year, primarily because of
expanded trade with the free
world. Most of the expected in-
crease will reflect higher earn-
ings from sugar exports. Trade
with Communist countries, which
accounts for nearly 80 percent
of Cuba's total trade, is likely
to rise only slightly.
The world market price for
sugar has nearly doubled since
the re-establishment of export
controls under the International
Sugar Agreement late last year.
In addition, the volume of Cuba's
sugar exports to the West prob-
ably will increase this year.
Although the 1969 harvest appar-
ently will not be much larger
than last year's, the anticipated
early start on the 1970 harvest
should provide additional sugar
for export in the final months
of 1969.
The prospect of continued
strength in the world sugar mar-
ket also will tend to improve
Cuba's credit position in the
West. The probability of in-
creased Cuban sugar production
after 1969 and the recent easing
of the strain in Havana's rela-
tions with Moscow should further
help Cuba's credit standing.
Even with its improved credit
position, however, Cuba may wish
to slow the rate of new debt ac-
cumulation.
Cuba's debt to free world
creditors currently is fairly
large and the cost of carrying
it is rising. At the end of 1968
Cuba probably owed free world
banks and suppliers more than
$200 million compared with total
exports to the free world in that
year of about $130 million.
Increased exports and pos-
sibly additional credits in turn
will enable Cuba to increase its
imports from the free world dur-
ing 1969. In the past, Cuba has
shown a preference for Western
goods and has tended to increase
its purchases from free world
countries when its hard currency
income would allow such a move.'
Free world goods are frequently
better suited to Cuba's require-
ments than those obtainable from
the Communist countries, and in
the case of machinery and equip-
ment, are often lower in price.
Havana probably believes that
it can count on continued Soviet
credits because of the USSR's po-
litical commitment to Cuba. There
is little chance that Cuba will
ever have to repay these credits.
Havana, however, is concerned
about protecting its credit reps
utation in the West. This good
standing depends on Cuba's hold-
ing its indebtedness in a reason-
able relation to export earnings
and in meeting its repayment ob-
ligations. For the most part
western aid consists of commer-
cial credits, largely from the
UK, France and Spain.
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UNREST SURFACING IN DOMINICAN REPUBLIC
The relative if uneasy po-
litical calm imposed by the Bala-
guer administration during the
past two and a half years is show-
ing signs of deterioration. In
recent weeks, a variety of prob-
lems have provided the opposi-
tion with handy political cudgels
with which to generate unrest.
Student agitation in support
of demands for an increase in the
government-controlled budget of
the Autonomous University of
Santo Domingo has continued since
the opening of the school year
on 20 January. The disturbances
have resulted in one student
death. Although the police have
kept the nearly daily university
demonstrations from spilling over
into the downtown area and have
generally minimized violence,
Balaguer has reportedly stated
that he is ready to close the
university if further provoca-
tions occur.
On the political front, the
President's announcement on 27
February that he might run again
in 1970 has prompted widespread
criticism and talk of a coordi-
nated anti - re-election campaign.
Re-election is a divisive issue
even in Balaguer's own Reformist
Party, where supporters of Vice
President Lora have begun a draft
movement. While the Constitution
does not prohibit a second term,
the specter of "continuismo"--
extended one-man rule reminiscent
of the deposed tyrant Trujillo--
Page 2 9
is already a hotly debated sub-
ject.
A rise in what appears to be
a series of politically motivated
killings by the extreme left and
by the police has added to the
uneasiness. The opposition has
capitalized on the unexplained
murders to publicize charges of
the government's Trujillo-type
rule.
Balaguer's often summary
treatment of his opponents and
the issues they raise--typified
by the closing of the major op-
position party's radio program
on :L3 March--adds a further
strain. The administration, for
instance, has largely brushed
aside clerical charges of its
inattention to campesino prob-
lems, although one of the coun-
try's six bishops and a large
number of priests have publicly
attacked the lack of progress.
The Communists, especially
the Dominican Popular Movement
(MPD), are attempting to exploit
the unrest.
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