WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A007300020001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 36
• Document Creation Date: December 21, 2016
• Document Release Date: May 30, 2008
• Sequence Number: 1
• Publication Date: August 29, 1969
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
44
29 August 1969
No. 0385/69
State Dept. review completed
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(Information as of noon EDT, 28 August 1969)
VIETNAM
The designation of General Tran Thien Khiem to suc-
ceed Tran Van Huong as prime minister has broken the
six-week impasse in President Thieu's efforts to re-
organize the government, and their similarity of
views will probably facilitate the early selection
of a cabinet. The focus of military action, mean-
while, has shifted for the present to the Que Son
Valley in northern I Corps region, where some 800
Communists and 70 American troops have been killed
since 19 August.
FACTIONALISM CONTINUES TO FRUSTRATE PEKING
Peking's most recent policy pronouncement underscores
its frustration over persistent internal disorder and
opposition to domestic programs, but central author-
ities still appear to be groping for solutions.
LAOTIAN GOVERNMENT FORCES PUT PRESSURE ON ENEMY
The military initiative has passed to the government
side for the moment, as monsoon rains and US air-
strikes inflict a heavy toll on Communist forces.
CAMBODIA MOVES TOWARD ECONOMIC REFORM
The Lon Nol government, eager to exercise the lati-
tude in economic matters that Sihanouk has for the
moment given it, is making an early start to spur
the lagging Cambodian economy.
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Europe
PACE OF GENEVA DISARMAMENT TALKS QUICKENS
The pace of the disarmament talks at Geneva has
quickened recently, highlighted by a new Soviet
draft treaty limiting the use of the seabeds for
military purposes.
CZECHOSLOVAK LEADERSHIP BECOMES INCREASINGLY CONSERVATIVE 11
Party First Secretary Husak's willingness to resort
to orthodox methods to maintain control has won the
favor of Moscow but has made him vulnerable to the
pressure of the conservatives and has limited his
maneuverability within the party.
WESTERN TOURISM TO COMMUNIST EUROPE IS INCREASING
Growing Western tourism in the USSR and Eastern Eu-
rope is becoming an important source of hard cur-
rency. Yugoslavia continues to lead the Communist
world in attracting Western tourists.
DEVALUATION ALTERS SCENE IN EUROPEAN COMMUNITY
The French devaluation has set back the community's
Common Agricultural Policy and has changed the con-
text in which the British membership issue will be
considered.
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POSTDEVALUATION PROGRAM WILL TEST FRENCH GOVERNMENT 15
As the traditional summer lull in French politics
draws to a close, the government is preparing a post-
devaluation program designed to put. France's economic
house in order.
Middle East - Africa
THE WEEK IN PERSPECTIVE
AL-AQSA MOSQUE FIRE INCENSES ARABS
The fire in this highly revered mosque in Jerusalem
on 21 August has generated an emotional reaction
throughout the Arab world, but an Arab foreign min-
isters' meeting in''Cairo deferred taking any decisive
action until later this fall.
GHANA VOTES FOR NEW PARLIAMENT
The elections to be held on 29 August have been pre-
ceded by an orderly campaign, but :Last-minute maneu-
vering by politicians, government officials, and
military officers has heightened political tensions.
INDIA'S INDIRA GANDHI TRIUMPHS AGAIN
The election of V. V. Giri as India's president was
a clear victory for Prime Minister Gandhi in her ef-
fort to gain control of the ruling Congress Party.
EASTERN WING DOMINATESLPAKISTANI POLITICAL SCENE 21
Fthe first
significant stirrings of labor and student unrest
since the declaration of martial law have surfaced.
CONGO (KINSHASA) TIGHTENS' RESTRAINTS ON STUDENTS
President Mobutu is taking elaborate precautions
against a recurrence of the demonstrations that dis-
rupted most higher' educational institutions in the
country last June.
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Western Hemisphere
TENSION CONTINUES ALONG GUYANA'S DISPUTED BORDERS
Negotiations to settle a dispute with Surinam have
yet to produce concrete results, and Guyanese fears
that Venezuela intends to invade have been renewed.
DOMINICAN PRESIDENT ADOPTS TOUGH STAND
President Balaguer's tough public posture and a show
of military force apparently stymied Communist plans
to incite widespread disorders during the nation-
wide transportation strike that began on 27 August.
PERUVIAN GOVERNMENT IMPLEMENTING DEVELOPMENT PLANS
In the past two weeks the military government has
moved to implement the agrarian reform law, has com-
pleted the expropriation of IPC, and has ratified a
trade agreement signed with the Soviet Union earlier
this year.
BOLIVIAN ELECTION CAMPAIGN HEATS UP
General Ovando has charged that an electoral fraud
is being planned for the presidential election next
May.
CUBAN-MEXICAN RELATIONS HIT SNAG
An airline hijacking incident and ensuing reactions
by both sides have clouded the usually cordial atmos-
phere between Cuba and Mexico, but relations probably
will return to normal after a period of coolness.
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President Thieu and his newly designated premier, General Tran Thien
Khiem, are proceeding apace to form a cabinet. Thieu and Khiem agree on
many issues, and their relationship should result in a better coordinated
government than heretofore.
Military action in South Vietnam last week shifted to the northern
provinces. US infantry units ran into stiff resistance in the Que Son Valley.
Communist forces appear to be trying to draw allied units away from
pacification duties along the coast. Elsewhere, the enemy still poses a serious
threat along the Cambodian border northwest of Saigon and in the Mekong
Delta.
In Laos, government forces have begun to put pressure on the Commu-
nists and to regain the initiative, at least temporarily. Because of monsoon
rains and US air strikes the Communists have had to transport supplies on
foot along part of Route 7 in the Plaine des J arres, and are being pressed by
Meo units in the southern part of the Plaine. Government forces are also
moving into enemy territory in southern Laos.
Factionalism and disorder in many provinces continue to plague Com-
munist China's leaders. The latest policy ir..junction takes a tougher line
against disorder, but the party hierarchy still appears unable to decide on a
firm course of actionin many instances.
Devaluation of', Cambodia's currency emphasizes Premier Lon Nol's
eagerness to take advantage of the latitude in economic affairs that Sihanouk
has given the new government. The measure was deemed a necessary first
step toward spurring the country's lagging economy.
South Korean President Pak has overcome the opposition within his
own party to his third-term constitutional amendment, now awaiting passage
in the National Assembly. Even opposition party legislators admit the
amendment will eventually be adopted. Only student demonstrators pose a
threat, and Pak has '', strengthened riot-control forces in anticipation of re-
newed student agitation against the amendment this fall.
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SOUTH VIETNAM
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VIETNAM
Political Developments in
South Vietnam
The designation of General
Tran Thien Khiem to succeed Tran
Van Huong as prime minister broke
the six-week impasse in President
Thieu's efforts to reorganize the
government and may lead to the
early completion of a cabinet.
Thieu had deliberated at length
over what to do about Huong. In
view of the differences between
the two over "politicizing" the
government and of the National
Assembly's criticism of Huong,
the latter's resignation may well
have been the result Thieu was
seeking. Khiem, whom Thieu re-
called from exile in Taipei and
had appointed first as int rior
minister and later as deputy
prime minister, appears to have
been Thieu's personal choice for
the premiership for some time.
Huong's stature and Khiem's mili-
tary background undoubtedly gave
Thieu pause, however.
Thieu and Khiem, who have
been military comrades for more
than 20 years, see eye to eye on
many issues
Their close
relationship s oul result in a
better coordinated government at
the top than has been the case
during the independent-minded
Huong's 15-month tenure.
Although Thieu had anticipated
adverse US and international reac-
Page 3
tion to Khiem's appointment, the
domestic response has been generally
favorable.
His efficiency and good re-
ations with the National Assembly
are cited as his strong points.
Reservations about his appoint-
ment have appeared in some quarters,
however. Several An Quang Buddhist
followers and circles hoping for a
negotiated end to the war see Khiem
as a threat. The Buddhists are
wary of him as possibly tainted by
past membership in former Presi-
dent Diem's Catholic-oriented Can
Lao Party, and by his role in the
1964 coup that ousted Generals
Minh and Don, who are credited with
overthrowing Diem. Propeace ad-
vocates fear that Khiem's appoint-
ment might be an obstacle to prog-
ress in Paris because it could be
taken as a sign that Saigon intends
to try for a military victory rather
than to seek a negotiated settlement.
Military Developments in
South Vietnam
The focus of military action
has shifted, at least for the pres-
ent, from the provinces northwest
of Saigon to the northern I Corps
region.
For the past week, US infan-
try units have run into stiff re-
sistance from the North Vietnamese
2nd Division in the Que Son Valley,
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WEEKLY SUMMARY 29 Aug 69
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which cuts into mountainous ter-
rain southwest of Da Nang. Since
19 August some 800 Communists and
about 70 American troops have been
killed in the area.
According to some reports,
the Communists in the Que Son Val-
ley had been getting ready for an
assault on a government refugee
center. Their dug-in positions
suggest that they were also try-
ing to draw allied units into the
interior, away from pacification
duties in the populous districts
along the coast. In addition, one
of the enemy's basic objectives is
to engage and inflict significant
casualties on US forces.
Despite the heavy action in
the northern part of the country,
enemy main force troops continue
to pose their greatest threat along
the Cambodian border some 60 to 90
miles northwest of Saigon. Four
regular enemy divisions are gen-
erally holding their ground in this
remote border area, and they could
bring heavy pressure to bear against
allied bases and provincial towns
there with little advance warning.
Another area where significant
enemy ground initiatives can be ex-
pected in the near future is the
western part of the heavily popu-
lated Mekong Delta. The Communists
recently committed a purely North
Vietnamese regiment to this area
for the first time in the war. They
began reinforcing the western delta
this spring by shifting another Viet
Cong regiment, composed largely of
North Vietnamese fillers, from the
area north of Saigon to Chau Doc
Province. It appears likely that
these moves are aimed at strength-
ening the enemy's weakened force
structure in the delta; Viet Cong
units throughout this vital region
have been under heavy allied pres-
sure for over a year.
Numerous sources have reported
enemy plans to carry out another
series of widespread shellings and
ground assaults to mark 2 September,
the 24th anniversary of North Viet-
nam's declaration of independence.
If the Communists follow past prac-
tice, the action could come either
a few days before or shortly after
the holiday on 2 September.
FACTIONALISM CONTINUES TO FRUSTRATE PEKING
Peking's most recent policy
pronouncement underscores the
regime's frustration over per-
sistent internal disorder and op-
position to its domestic programs.
An authoritative editorial broad-
cast on 24 August lashed out at
those who distort Mao's policies
and central committee directives.
Although the editorial's strong
language reflects Peking's im-
t'age 4
patience with the lack of re-
sponse to its injunctions, the
central authorities still appear
to be groping for solutions to
the nation's many problems.
The latest editorial--pre-
sumably an outgrowth of high-level
party deliberations--reiterated
denunciations of local anarchy
and demands for organizational
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WEEKLY SUMMARY 29 Aug 69
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discipline, dominant themes in
national progaganda recently. It
decried "erroneous tendencies"
such as factionalism and "indi-
vidualism," which are posing se-
rious obstacles to Peking's drive
to restore political unity and
are contributing to intensified
disorders in a number of locali-
ties. Citing a quotation from
Mao, the editorial warned that
"dictatorship" will be exercised
over "criminal gangs" who disrupt
public order.
The editorial's tough line
reinforces the central committee
directive of 23 July ordering the
army to curb unruly factlonalists
in Shansi Province. The direc-
tive's text--just recently re-
ceived--charged that two factions
in Shansi were refusing to obey
all Peking's orders and were at-
tacking army units, undermining
local governing organs, and even
robbing state banks. All govern-
ment operations in the province
have apparently been paralyzed
for some months.
The extent of provincial
disorder still remains well be-
low that reached during the Cul-
tural Revolution, but pressure
on central authorities to re-
duce the level of instability
appears to be increasing, Armed
conflict and jockeying for power
continue to undercut the effec-
tiveness of many local governing
bodies. Factional rivalries and
lack of discipline seem at least
partially responsible for the
absence of significant progress
in rebuilding the Communist Party
apparatus. Moreover, radiobroad-
casts from several provinces com-
plain that anarchism has hindered
agricultural production and the
fulfillment of state plans.
Despite the regime's growing
concern and its tougher line
against disorder in recent in-
junctions, it still appears un-
able to decide on a firm course
of action in many instances. This
suggests that differing concerns
persist within central leader-
ship councils and that some ele-
ments have been unwilling to sup-
port. a heavy crackdown on pro-
vincial troublemakers. Thus,
the July directive ended by say-
ing that Peking regards both fac-
tions in Shansi as "revolution-
ary"--a formulation likely to
impose restraint on the army's
efforts to curb their activi-
ties. At this stage, it is
still uncertain whether the re-
gime: is ready to give a clearer
mandate to local authorities to
restore law and order. 25X1
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LAOS: Current Situation
95904 $-69 CIA
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LAOTIAN GOVERNMENT FORCES PUT PRESSURE ON ENEMY
The military initiative has
passed to the government side for
the moment, as monsoon rains and
US air strikes inflict a heavy
toll on Communist forces.
In the north, government
forces have had some success in
disrupting Communist supply lines
into the Plaine des Jarres. Gov-
ernment troops, who have begun
patrolling portions of Route 7,
indicate that the road is closed
to enemy truck traffic between
Ban Ban and Nong Pet.
The government ini-
tiative apparently took the Com-
munists by surprise.
Page 7
In a move coordinated with
the. effort to cut Route 7, Meo
leader Vang Pao has launched a
multibattalion operation against
the southern portion of the Plaine
des Jarres. The operation is an
attempt to put the enemy on the
defensive in hopes of discourag-
ing further initiatives west of
the Plaine.
In the south, government
forces have pushed into long-held
enemy territory south of Muong
Phalane. Although the enemy has
been slow to react to these re-
cent encroachments, past experi-
ence indicates taht they will
not accept for long the presence
of government troops near the
vital Communist infiltration
corridor.
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WEEKLY SUMMARY 29 Aug 69
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CAMBODIA MOVES TOWARD ECONOMIC REFORM
The Lon Nol government is
off to an early start toward spur-
ring the lagging Cambodian econ-
omy. The alacrity with which the
new leaders devalued Cambodia's
currency is a clear sign of their
eagerness to exercise the lati-
tude in economic matters that Si-
hanouk has for the moment given
them.
Less than a week after tak-
ing over, the government announced
that the riel would be devalued
by some 37 percent. Although in-
fluenced in part by the recent
precedent in France, devaluation
of the riel has long been recog-
nized by Cambodian and foreign
economists as a necessary first
step toward solving the country's
economic problems.
By more accurately reflect-
ing the riel's purchasing power,
devaluation may enable the gov-
ernment to relax some foreign
trade and exchange controls and
may help attract foreign invest-
ment. Diplomatic observers in
Phnom Penh suggest that the gov-
ernment particularly wants to
facilitate eventual increases in
US dollar investments. Devalua-
tion should also help the Cambo-
dian balance of trade by encour-
aging exports through lower costs
to foreign purchasers and by dis-
couraging imports. Improvement
in this area will be slow, how-
ever, because Phnom Penh is al-
ready selling as much of its major
exports--rice, rubber, and corn--
as it can.
Devaluation is just the be-
ginning of the range of economic
reforms necessary to establish
even a modicum of economic growth.
The new government may next try
denationalization of certain
sectors of the economy, but it
may be some time before the ef-
fects of such measures become ap-
parent.
There is little evidence
that the government intends to
initiate any major changes in
Cambodia's foreign policy. This
is one area in which Sihanouk
takes special interest, and his
skill in dealing with Cambodia's
delicate external problems is rec-
ognized by even those domestic
elements who at times have criti-
cized his tactics.
It does seem clear, however,
that Sihanouk wants the Lon Nol
government to continue toward
closer relations with the US.
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The USSR this week again gave China special attention. A Pravda
editorial on 28 August set forth in authoritative language Moscow's view of
the dangers of Peking's "adventuristic course." Accusing Chinese leaders of
whipping up a "military psychosis" among its people, the editorial said that
the Maoists are stockpiling new-presumably nuclear-arms, which would
mean no continent would be unaffected should war break out. Pravda went
on that Chinese encroachments on the border would be "resolutely re-
buffed," but said in conclusion that the USSR has no intention of aggravat-
ing relations.
The Czechoslovak regime turned its attention to ensuring that there
would be no replay of the demonstrations that rocked the country during
the anniversary of last year's invasion. New repressive regulations instituted
by party leader Husak will intimidate would-be dissidents in the future; they
also have made Hu.sak more a captive of the conservative wing of the party.
Moscow gave its stamp of approval to the new measures. Pravda asserted that
the Czechoslovak party was now in complete control of events, and Moscow
awarded Husak the Order of Lenin.
Celebrations inl Bucharest on 23 August, the 25th anniversary of Ro-
mania's "liberation," provided the latest opportunity for Ceausescu to em-
phasize his regime's independent course. The delegations and messages from
the USSR and Bucharest's other Warsaw Pact allies reflected a continuing
correct, but hardly warm, attitude toward Romania's position in the Com-
munist world.
The recent Romanian-Israeli agreement to raise their diplomatic mis-
sions to embassy level has put the Romanians in a difficult position with
some Arab countries. The reaction in Egypt, Syria, Iraq, and the Sudan has
been stronger than Bucharest expected. Nevertheless, Romanian Foreign
Ministry officials gave the impression at week's end that they expect the
Arabs, at least the Egyptians, to cool off soon. A large portion of Cairo's jet
aviation fuel comes from Romania.
With the close of the traditional summer lull in French politics, the
government has prepared a post-devaluation program designed to put
France's economic house in order. The program, which will probably be
announced in phases over the next few weeks, will provide a test of the new
government's leadership ability.
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PACE OF GENEVA DISARMAMENT TALKS QUICKENS
The pace of the talks at Geneva to simplify diverging interpreta-
has quickened recently, highlighted f tions of the many international docu-
by a new Soviet draft treaty limit- ments on the subject. They treat
ing the use of the seabeds for mil- chemical and biological warfare to-
i
tary purposes. Two additional re-
solutions on chemical and biologi-
cal warfare (CBW) have also been
tabled.
The Soviet draft represents a
significant move toward an agree-
ment. Moscow has now consented to
limit such a treaty, as the US has
insisted, to weapons of mass de-
struction. Soviet willingness to
limit the treaty to nuclear weap-
ons is conditional on US accept-
ance of a 12-mile maritime zone.
Most delegations in Geneva agree to
a 12-mile zone. Western reactions
to the Soviet initiative have not
yet been formulated with any preci-
sion. Western participants at
Geneva had been hoping for a de-
velopment to break the impasse be-
tween the US and original Soviet
proposals.
The CBW resolutions offered by
Sweden and Canada reflect a desire
gether, in contrast with the Brit-
ish draft convention on biological
warfare presented last month and
slightly revised this week, and in-
clude nonlethal gases in the list of
prohibited agents. The Swedish and
Canadian proposals will obtain wider
support at Geneva, since London has
omitted reference to chemical war-
fare in order to avoid the conten-
tious question of whether the use of
tear gas and other nonlethal sub-
stances is permissible under the
Geneva Protocol of 1925 and interna-
tional custom.
Moscow has already attacked the
British proposal and has taken the
position that the Swedish and Cana-
dian texts unnecessarily restate the
Geneva Protocol. The Soviets con-
tend the protocol is comprehensive
in banning the use of CBW agents and
nonlethal gases. The USSR wants the
Geneva disarmament talks to concen-
trate now on controlling weapons
production.
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CZECHOSLOVAK LEADERSHIP BECOMES INCREASINGLY CONSERVATIVE
Authorities in Prague last
week announced new measures de-
signed to discourage protests of
the kind that marked the anni-
versary of the Soviet invasion.
Party First Secretary Husak's
evident determination to keep
things under control has won
favor in Moscow, but has also
spurred pro-Soviet elements to
greater efforts to run the show
themselves.
The new regulations are in-
tended to intimidate dissidents.
Persons arrested for either po-
tential or real opposition to the
regime face severe punishment and
loss of civil rights. In addi-
tion, the regime has banned most
Western publications and is said
to be planning to restrict travel
abroad.
Moscow has approved, the
Czechoslovak leadership's show
of force in putting down last
week's demonstrations. Pravda
on 25 August asserted for the
first time that the Czechoslovak
party was in complete control of
the situation. As an added mea-
sure, the Soviets awarded Husak
the "order of Lenin" two days
later, the strongest endorsement
they have yet given him.
Husak's willingness to resort
to orthodox methods, however, has
made him increasingly vulnerable
to the pressures of the conserva-
tives and has limited his maneu-
verability within the party. The
conservatives are continuing to
press him to justify the invas-
ion and to "purge" those associ-
ated with last year's liberal re-
form program. Both Rude Pravo,
the principal party daily, and
Pravda, the Slovak party paper
published in Bratislava, appear
to be calling for a witch hunt
tha-c would include former party
chief Dubcek and liberal leader
Josef Smrkovsky.
Husak is unlikely to permit
the mass arrests and the show
trials that the pro-Soviet ele-
ments seem to want. Neverthe-
less, his present responsiveness
to Moscow suggests that it is
only a matter of time before both
Dubc::ek and Smrkovsky are further
demoted. Even Premier Cernik--
who is said to have pledged to
stand or fall with Dubcek and
Smr:{ovsky after the invasion last
August--has turned against them
in an apparent effort to save
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WESTERN TOURISM TO COMMUNIST EUROPE IS INCREASING
Western tourism in the USSR and :to Yugoslavia, has ranked behind sev-
Eastern Europe, although still small feral of the East European countries
in absolute terms, is growing and since 1963.
becoming an important source of hard
currency. Yugoslavia continues to Tourist spending leveled off
lead the Communist world in the re- at an estimated $280 million in
ception of Western tourists. 1967, when about 6.5 million tour-
ists from the West traveled to the
Hard-currency earnings from USSR and Eastern Europe.
Western tourism in the USSR and
Eastern Europe increased about two Earnings from Western tourism
and one half times over the five- for Communist Europe as a whole
year period 1963-68. Bulgaria, Czech- (stagnated last year following the
oslovakia, and Romania--particularly events surrounding the invasion of
the latter, where the number of free Czechoslovakia. Most of the Com-
world visitors last year was almost imunist countries are actively im-
12 times that of 1963--are working proving tourist facilities and ser-
hard to match the record set by Yu- vices in order to increase their
goslavia in attracting the greatest Ihard-currency earnings. Barring
number of Western visitors. Follow- further disturbances in these coun-
ing Yugoslavia, Czechoslovakia draws tries, they can reasonably expect
the greatest number of Western vaca- I higher levels of Western tourism
Gross Revenue from Weslem Tourism
Million US Donut
150
1963 1966
.. ,.fades Foreign C-rency not Exchan,qed for Diners thro,.yh Yoking, BanA>
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DEVALUATION ALTERS SCENE
The adjustment in the Common
Agricultural Policy (CAP) following
the devaluation of the franc repre-
sented a step backward for the Eu-
ropean community's efforts to inte-
grate the economies of the member
countries. The adjustment changes
somewhat the context in which the
British membership issue will be
considered, but it is too early to
determine how it will affect pros-
pects for British entry.
At a 19-hour meeting on 12 Au-
gust, the Council of Ministers agreed
to exempt France from the uniform
pricing system of the CAP for a pe-
riod of up to two years, rather than
accept the initial French request
for a reduction in the agreed prices
by the amount of the devaluation.
This exemption should enable France
to avoid an inflationary rise in farm
prices that the devaluation would
otherwise have caused. At Dutch in-
sistence, the council also agreed to
review the French exemption before
the end of the year.
The recent exemption only adds
to the CAP's difficulties. The de-
mands for extensive reform in the
CAP--which have been generated by
burgeoning farm surpluses and rapid-
ly rising costs--now seem even more
compelling. In the short run, the
uncertainties resulting from the de-
valuation and the associated agri-
cultural adjustment measures may de-
lay agreement on permanent financing
arrangements for the CAP beyond the
deadline of 31 December 1969.
Discussion of negotiations with
the British on Community membership
IN EUROPEAN COMMUNITY
will be interwoven with the consid-
eration of agricultural questions.
It is probable that Paris will con-
tinue to press for a definite agree-
ment on agricultural financing be-
fore agreeing to the opening of ne-
gotiations with the British, al-
though the French bargaining posi-
tion has been weakened by its recent
exemption from the CAP. Some of
(France's Community partners are
`likely to argue that the French ex-
+emption creates a precedent which
1could be applied in the British
(case. This would probably not be
acceptable to Paris.
Pompidou's thinking on the Com-
munity continues to be a major un-
I known factor. The fact that France
devalued without consulting her Eu-
tropean Community partners caused
some Community officials to question
Pompidou's intentions. Some British
officials apparently believe that
France may welcome the delay in the
opening of negotiations on British
!membership, which the confused ag-
Iricultural situation could cause.
b
I The future of the Common Agri-
cultural Policy itself is impossible
to predict, but the precarious na-
ture of its common pricing system
was revealed by the French devalua-
tion. Several Community observers
have pointed to what they consider
the main lesson of the recent
l events--that a common pricing system
lfor agriculture cannot work well un-
Itil the member states achieve great-
er coordination of their general
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POSTDEVALUATION PROGRAM WILL TEST FRENCH GOVERNMENT
As the traditional summer
lull in French politics draws to
a close, the government is pre-
paring a postdevaluation program
designed to put France's economic
house in order. The program will
probably be announced in three
phases following cabinet meetings
in early September.
Measures to restrict consumer
credit, encourage private savings,
and stimulate the construction
industry are likely to be an-
nounced first. Thereafter, an-
nouncements will be made on gov-
ernment budget cuts and reforms
in the tax structure, mea.s .fires
that the National Assembly will
have to approve. The assembly
will be called into special ses-
sion on 16 September.
Despite a high-powered sales
campaign by high government of-
ficials on television, radio, and
in the press, there is continuing
skepticism about devaluation in
all sectors of society. Critics
contend that unless the govern-
ment's postdevaluation program
is stringently "disinflationary,"
the technical advantages of the
action will be quickly nullified.
At the Finance Ministry nervous
optimism is tempered by the reali-
zation that the success of the
government's attempt to restore
confidence in the franc depends
primarily on labor's response.
Union leaders accelerated
their verbal offensive against
the government this week in an-
ticipation of the labor-manage-
ment talks this fall. Wage ne-
gotiations in the private sector
will probably open in October
after the government has finished
compiling statistics on recent
changes in purchasing power. Union
leaders will argue that price in-
creases are wiping out the bene-
fits gained through strike action
in May-June 1968 and will demand
additional wage increases as a
means of catching up.
Union leaders are taking a
militant stand in an effort to
stay ahead of the rank and file.
They see a recent wildcat strike
at a :Lorraine steel factory--
where about 200 militants closed
a plant of 7,000 for over 25
days-.-as an indication of in-
creasing worker unrest. The
leaders would like to avoid a
wave of crippling strikes, and
are haunted by the events of 1968
when workers proved much more
radical than the union leadership.
Over the coming months, there-
fore, the Pompidou government will
be facing crucial tests of its
leadership. The government will
undoubtedly come under fire from
both the left and the right. The
left will reiterate the charge that
Pompidou is a minority president,
elected by less than 50 percent
of the registered electorate, and
the Gaullist right will attack him
for not remaining true to the Gen-
eral's precepts. Pompidou's re-
cent speeches have been dispassion-
ate and almost professorial in
tone, and some observers fear this
drabness will prove a handicap in
dealing with major national prob-
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Israel, in the wake of the emotional Arab outburst over the burning of
the al-Aqsa mosque in Jerusalem, is back at the daily business of defending
the border. Faced with Arab calls for a holy war and increased terrorist
incidents at home and abroad, Israel has struck again to remind the Arabs of
the reality of Israeli' military superiority. Israeli aircraft hit twice at fedayeen
and army bases in Jordan, and on 27 August: carried out another helicopter
commando raid deep into Egypt along the Nile Valley.
In an apparent implementation of Defense Minister Dayan's call for
"establishing facts" in the occupied Arab territories, Israel has also an-
nounced plans for six new settlements, two more each in the Golan Heights,
the Jordan Valley, and northern Sinai.
Afghanistan began electing a new national legislature early this week.
The elections, which will continue until mid-September, probably will not
significantly alter the slow-moving, parochial character of the parliament.
During Kabul's celebration of its Independence Day on 23 August, three
newly acquired Soviet SU-7s were featured.
The Nigerian civil war is still stalemated. The former president of
Nigeria, Nnamdi Azikiwe, an Ibo who has been living in exile in London, has
gone over to the federal side. Azikiwe has no influence with the Biafran
leadership, however, and his action is unlikely to result in large-scale defec-
tions of the Ibos in Biafra.
Zambian President Kaunda assumed direct control over national politics
this week to halt al bitter struggle along tribal and regional lines for the
number-two position in the country. In reorganizing the party and govern-
ment, he extended his personal supervision of key departments and reduced
responsibilities of the two rivals.
Foreign ministers and other representatives of the 41-member Organiza-
tion of African Unity are currently meeting in Addis Ababa to prepare for
the sixth OAU heads of state conference that convenes there next
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AL-AQSA MOSQUE FIRE INCENSES ARABS
The fire in al-Aqsa mosque
stirred Arab emotions as no single
event has since the June 1967 war.
The mosque, an ancient and re-
vered Muslim shrine in the Old City
of Jerusalem, was badly damaged by
fire on the morning of 21 August.
Arab reaction to the fire was swift;
anti-Israeli demonstrations broke
out in Jerusalem, and strikes and
protest marches were held in sev-
eral Arab cities. A chorus of pro-
test from Arab leaders called for
a holy war to liberate Muslim
shrines from Israeli occupation.
Israeli officials were clearly
disturbed by the reaction to the
fire and moved swiftly to undercut
Arab claims of Israeli negligence
or involvement. A special commis-
sion under the chairmanship of a
judge of the Israeli Supreme Court
was established to investigate the
incident, and Israeli political
leaders expressed their regrets to
Muslim leaders in Jerusalem.
AI-Aqsa Afire
Page lb
The arrest of the suspected
arsonist, however, has done little
to dampen Arab emotions. Most Arabs
have ignored or rejected the Israeli
claim that he was responsible. In
any event, the damage to the mosque
will symbolize for the Arabs the
impossibility of accepting Israeli
custody of Muslim holy places.
In reaction to the incident,
Arab foreign ministers convened in
Cairo on 25 and 26 August. Appar-
ently little of substance was de-
cided at the meeting, however. Ac-
cording to the final communique,
a strictly Arab summit was put off
indefinitely, probably because of
opposition from Arab leaders such
as King Faysal of Saudi Arabia.
Faysal advocated convening an Is-
lamic summit to encompass all Mus-
lim countries, however, and the
foreign ministers charged him and
King Hassan of Morocco with the
task of arranging such a meeting.
No mention was made of holding a
"mini" summit of the Arab states
directly confronting Israeli 25X1
The foreign ministers also
called on the Joint Arab Defense
Council to meet the first week of
November. The decision to put off
taking any decisive action at this
time was probably made in the hope
that the coming session of the UN
General Assembly might result in
some progress toward a peaceful so-
lution to the Middle East impasse.
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GHANA VOTES FOR NEW PARLIAMENT
National elections tq be
held on 29 August constitute a
vital step in the military-police
junta's plan to restore demo-
cratic civilian government. The
electoral campaign was orderly,
but last minute maneuver:Lng--
much of it motivated by tribal-
ism--by politicians, government
officials, and military officers
has heightened political tensions.
The elections will fill 140
seats in the parliament estab-
lished by the new constitution,
which was promulgated on 22 Au-
gust by the constituent assembly.
The projected new regime, sched-
uled to come into effect by the
end of next month, will be bound
by elaborate checks and balances
designed to prevent another dicta-
torship such as Nkrumah's Va-
rious restraints have been placed
on the prime ministership and
some power has been vested in
the presidency.
In a last minute move that
aroused considerable bitterness,
the junta pushed through the as-
sembly a provision delegating the
president's functions for a three-
year period to a commission com-
posed of the three top junta mem-
bers--Chairman Afrifa, Vice Chair-
man Harlley, and armed forces
chief Ocran. The assembly re-
fused, however, to modify the
controversial article that ap-
pears to bar from office Komla
Gbedemah, Nkrumah's finance min-
ister and leader of one of the
two major parties contesting the
elections. The anti-Gbedemah ma-
jority in the assembly, spear-
headed by adherents of Kofi Busia's
riva Progress Party, were well
aware that key junta members
shared their desire to block
Gbedemah from power.
On the eve of the voting,
which pits two political moder-
ates who are generally pro-West-
ern in outlook, the outcome ap-
pears to be a tossup. Some ob-
servers give the Progress Party
a slight edge on the basis of its
leader's popularity with tradi-
tionalist elements and the cloud
over Gbedemah. It is possible
that neither major party will
win a majority, and that the bal-
ance of power will be held by
one or more of the several minor
parties participating.
However the voting goes, the
losers are not likely to take de-
feat gracefully, and violence
could ensue. Gbedemah is cer-
tain to be involved immediately
in legal challenges. A victory
for his party might lead him to
attempt to abandon the consti-
tution--a move that might prompt
the junta to nullify the elec-
tions. In any event, the elec-
tions will be followed by a pe-
riod of intense political ma-
neuvering during which the junta's
key members will la the deci-
sive role.
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INDIA'S INDIRA
GANDHI TRIUMPHS AGAIN
The election of V. V. Giri
as India's president was a clear
victory for Prime Minister Gandhi
in her effort to gain control of
the ruling Congress Party from
the old guard in the party hier-
archy. Open intraparty con-
flict has now subsiaed temporar-
ily, but the divisions between
Mrs. Gandhi and her opponents
are deep. Another struggle,
again endangering one-party rule
will remain a possibility as
Mrs. Gandhi tries to consolidate
her gains in the government and
in the party.
The old guard's hold on the
party organization was-seriously
undermined by the presidential
election. About half the Con-
gress P-arty members of parlia-
ment and state legislative as-
semblies appear to have voted
for Giri despite a strong demand
by the party bosses for disci-
pline behind the official Con-
gress candidate, Sanjiva Reddy.
Mrs. Gandhi's open advocacy of
a "free vote" a few days before
the election was the key to Giri's
close victory.
Intransigent party bosses
tried after the election to have
Mrs. Gandhi censured by the Con-
gress Central Working Committee
for supporting Giri, but the at-
tempt failed. Home Minister
Chavan played the leading role
in forcing party bosses to accept
a compromise resolution that
avoided assigning responsibility
for tension in the presidential
election and focused on the need
to re-establish party unity.
Mrs. Gandhi has capitalized
on low morale in the party, which
has accrued from its poor showings
in the general election of 1967
and the mid-term state assembly
elections last February. Dis-
contented party factions in
several states, many of which
voted for Giri, have welcomed
her firm lead against their en-
trenched state party bosses.
Many Congress Party members of
parliament hailed her decisiveness
in achieving nationalization of
the 14 major banks after a long
record of general government
vacillation.
Since the election, Mrs.
Gandhi has reaffirmed her inten-
tion to push forward with pro-
gressive policies. Speculation
centers on land reform legisla-
tion, state control of industrial
raw material imports, and ceilings
on incomes and holdings of urban
property. A cabinet shuffle is
also a possibility.
She may go slowly, however,
while the bureaucracy copes with
the implementation of bank nation-
alization. Communists and other
leftists, who have hailed Giri's
election, will press for immediate
action on new radical reforms, but
Mrs. Gandhi is likely to try to
maintain unity in Congress parlia-
mentary ranks as long as possible.
Another precipitate act on her
part could again provoke the Con-
gress right wing and might leave
the government dependent on non-
Congress leftist support.
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EASTERN WING DOMINATES PAKISTANI POLITICAL SCENE
East Pakistan, where the gov-
ernment's most difficult problems
lie, has figured prominently in
political developments in Paki-
stan during the past few weeks.
Meanwhile, as the govern-
ment