WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A008400030001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 30
• Document Creation Date: December 21, 2016
• Sequence Number: 1
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
11 December 1970
No. 0400/70
State Dept. review completed
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~r.ut;.r,1
(Information as of noon EST, 10 December 1970)
Page
FAR EAST
Laos: Activity on Two Fronts
1
Vietnam: Calm Before the Storm
2
Cambodia: On the Defensive .
3
Senk.aku Islands: Peking Enters its Claim
. 5
EUROPE
USSR: Defense Budget for 1971 Announced .
7
British Economic Position Deteriorates
8
European Concern With Pending US Trade Legislation
9
Portugal: Gaetano Unveils Constitutional Changes . . .
10
Soviet Leaders Look to the Party Congress ,.
11
LJN: General Assembly Seeks Maritime Accords
12
Yugoslavia: Economic Stabilization Program Introduced
13
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Page i WEEKLY SUMMARY 11 Dec 70
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MIDDLE EAST -AFRICA
Jordan: Jarash Clash Tests Cease-fire , . 14
India Attempts to Improve its Air Force 16
Israel -Arab States: }awing Talks 1$
Israel: Labor Party Elections . 19
Pakistan: Elections , . 19
OAU-Guinea: Denunciation of Portuguese Raids , 20
WESTERN HEMISPHERE
Chile: Rivalry Among Allende`s Backers , 21
Cuba: Uncertainty, Austerity Mark Castro Speech 22
Brazil.: Abduction of Swiss Ambassador o 22
Uruguay's Terrorists Persist . 24
25X6
NtJTES:~Frar~ce; International Aviation, Arms Control; UN-Guinea;
Venezue a-Co om is
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Page ii WEEKLY SUMMARY 11 Dec 70
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FAR EAST
Laos: Activity on Two Fronts
Fighting has slowed following the Commu-
nists' attempt last weekend to dislodge the irregu-
lars defending Site 22, the last major government
base on the eastern rim of the Bolovens Plateau.
The eastern Bolovens has grown in importance to
the Communists this year because it commands
the Se Kong River and Route 16; both may
become key logistic routes during this dry season.
The Communists also intend to increase pressure
along the northern edge of the Bolovens. A gov-
ernment sweep operation between Paksong and
Thateng, however, has not made significant con-
tact with Communist forces believed to be in the
area.
In north Laos, the government harassing
operation around the Communist logistic center
~pon a
Plaine des ~-
J~trS~ ..
(-~_,] Communist-controlled territory
~~ Contested territory
? Government-held location
? Communist-held location
LAC?S
,rhai~+g Enemy,
Poks ~rtg attack ~.
`Bolovens siie 2.'.
~~P_latea, Rt r,~
r
__ -,
at Ban Ban, northeast of the Plaine des Jarres,
continu~~s to move along slowly. Elements of
three government irregular battalions headed to-
ward B~~n Ban from the northwest have met little
enemy resistance. The irregular forces moving
from the south have had some casualties, but they
too are making slow progress.
If Souvanna's critics are worried about what
kind of peace the prime minister is prepared to
make, they should be mollified by recent events.
Sensitive to the grumbling on the right, Souvanna
has gone out of his way to talk tough. Communist
envoy 'iouk Vongsak recently complained that
Prime fJlinister Souvanna Phouma has not yet
replied officially to the proposal to halt bombing
in Xieng Khouang and Sam Neua provinces be-
fore, during, and after the proposed talks at
Khang Khay. Souvanna has advised his political
consultative committee that the government
could riot accept the Communist proposal be-
cause ii provides far too much leeway for the
Communists to carry out military operations on
the Plaine, without being hampered by air strikes.
He said the Communists would, therefore, drag
out the talks as long as possible without being
under Amy pressure to make meaningful agree-
ments.
The Communists' impatience with Souvanna
may stE~m from his failure to come up with a
significant counterproposal, although they are
well aware that he is moving cautiously because
of pressure from the rightists. For example, he
could propose that a bombing halt be imposed in
the nori:h if the Communists refrained from mili-
tary activity and withdrew some of their forces
from advanced positions. The Communists might
not agrE;e, but then the onus would be on them
for the lack of progress toward talks. ~ ~ 25X1
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Vietnam : C,~lrrt f3ejore the StUrrtt
A relative calm prevails in Saigon despite
early maneuvering for next year's presidential
election. A number of problems that plagued the
government in the past have been alleviated, at
least temporarily. Although new student demon-
strations broke out this week and some extremists
are planning further agitation, most student and
veteran groups have remained relatively quiet
since late summer, in part because of disputes
among their leaders.
Probably the most significant favorable
trend has been the improvement in the country's
economy since the reform program was launched
in early October. Although inflationary pressures
have not been overcome, the economy absorbed a
partial devaluation and substantial wage increases
for government workers without the sharp price
increases predicted by some observers. Moreover,
the reforms helped curb speculation, dampen
black market activity, and reduce windfall profits
by importers.
President Thieu has made some headway in
improving relations with other branches of the
gavernmen#. Although Thieu was criticized in Oc-
tober for alleged interference in the organization
of the National Assembly, he has since begun to
discuss pending legislation regularly with govern-
ment supporters in the Assembly. Late last month
the Lower House quietly passed a bill that gen-
erally met the president's budget requests for
next year. This was in sharp contrast to previous
years, when the subject touched off considerable
debate and Thieu was unable to get what he
wanted for a long time.
Despite a Supreme Court decision implying
that the government should release convicted
Lower House Deputy Iran Ngoc Chau, protests
over Chau's continued detention have been
largely confined to outspoken oppositionists, and
many of these have been pro forma. The Court
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itself seems less likely to invalidate executive de-
cisions following the justices' election of a govern-
ment supporter to a one-year term as Chief Jus-
tice last weekend. During the past year under an
independent-minded Chief Justice, the Court has
challenged the executive on several significant
caws; a mare sympathetic attitude would elimi-
nate asource of recurrent. political embarrassment
far Thieu.
This series of favorable developments for the
government could be reversed with little warning.
Extremists are still trying to mobilize groups for
antigovernment agitation. Mareover, the eco-
nomic situation remains fragile and could easily
deteriorate again. Finally, partisan activity will
increase as Saigon politicians begin to line up in
earnest far the election campaign, and opposition
fortes are certain to pose new problems for
Thieu.
As for the Communists, there is growing
evidence that they see the coming election year in
South Vietnam as a time of opportunit )North
Vietnam's Premier Pham Van Dang told
hat even though Com- 25X1
monist military prospects in the South are poor,
he sees political forces at work there that will
work to the Communists' advantage. Dong
claimed that discontent with the South Viet-
namese Government has grown, especially,in ur-
ban centers, and that it will develop into a politi-
cal force of great consequence. He made the un-
precedented statement that this may give the
1971 elections "some significance."
For several months the Communists have
been pushing the idea that new political gppor-
tunities are emerging in the South. Dong drivelled
on it during a major speech in September and
party -eader Le Duan stressed new forims of
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political confrontation in a lengthy address in
February, Communist propaganda in recent
weeks has been playing up both real and fictitious
antigovernment sentiment in the South.
Dong's remarks add to the impression that
Hanoi's tactics over the next year will be shaped
with an eye toward political trends in the South
and suggest that Hanoi intends to inject addi-
tional Communist assets into the political picture
in hopes of nurturing opposition to the govern-
ment.
South Vietnamese forces are having some
success in new military operations against long-
time Communist strongholds, but government
efforts against the enemy's hard core apparatus
are lagging badly in certain key areas. The com-
mander of the northern provinces reportedly is
quite satisfied with the results of recent sweep
operations. Although reports of heavy Commu-
nist losses may be exaggerated, a mass of reliable
evidence indicates these sweeps cut sharply into
the enemy's position and capabilities. Additional
operations of this kind are to continue in the
north and the tactics employed there may be used
elsewhere.
The South Vietnamese commander in the
Mekong Delta also is conducting new operations
taking the fight into long-secure enemy base
areas. Some 7,000 South Vietnamese troops are
currently searching for Communist forces known
to be based in the U Minh Forest. Contacts and
casualtiE~s have been relatively light so far, but
such operations are bound to make life more
difficult for the Communists. Similar South Viet-
namese ground offensives are under way in enemy
redoubts in the Seven Mountains region along the
Cambodian border and a large area in the heart of
the delta. In each case, the South Vietnamese are
setting rap permanent artillery bases on terrain the
Communists have long considered their own.
Th~~ picture is not as rosy in some other
parts of the country. A sharp attack on a district
town along the central coast last week, for
example, again highlighted the continued strength
of the Communists in that densely populated
region. 'The assault caused 70 South Vietnamese
casualties while only a handful of enemy troops
were reKrorted killed. Attacks on this scale are no
longer common in the coastal districts, but the
Communists mount them often enough to remind
the population that they are still dangerous.
Cambodia: On the Defensive
A strong Communist attack on government
forces in southern Kompong Cham apparently has
resulted in the Cambodians' worst setback since
the enemy began to step up military activity in
that province last month. The Communists also
continued to thwart the government's cautious
efforts to reopen sections of three important
highways.
Three Cambodian Army battalions defend-
ing the district headquarters town of Peam
Chikang, some ten miles southwest of Kompong
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Cham, were routed by a heavy enemy assault on 6
December. The fate of the garrison at Peam
Chikang is not known; only a handful of troops
have managed to find their way to friendly lines.
Before losing radio contact., the town's com-
mander claimed that over 100 of his men were
wounded, and a subsequent report indicated that
another 100 troops may have been killed. The
attack probably was led by elements of the Viet
Cong 272nd Regiment that recenfiy moved to the
west bank of the Mekong River.
The defeat at Peam Chkang also served to
dramatize Kompong Cham's growing isolation,
Page 4
which is rapidly lowering the morale of the city"s
jittery residents. Basic foodstuffs are increasingly
scarce and expensive, forcing the government to
airlift supplies to the city.
Elsewhere in the province, enemy harassing
attacks again disrupted government efforts, to re-
open Route Er, southwest of Skoun, and Route 7,
between Prey Totung and Kompong Cham city.
These actions have forced the Cambodians to
divert several battalions from the "Chenla" col-
umn that has been stalled between Skoun and
Tang Kouk for three months. Prime Minister Lon
Nol told a US Embassy officer on 9 December
That he had asked Saigon for troops and heli-
copters to clear the routes to Kompong Chatn.
The Communists have managed to keep this
force on the defensive with about six maid force
battalions subordinate to the NVA 174th and VC
275A Regiments. Although the recent deploy-
ment of the 272nd Regiment improvei;J the
enemy's capability against numerically superior
Cambodian forces, it appears that the Commu-
nists will continue their present economy-of-force
tactics as long as they achieve results against
spin#ed bu# inexperienced Cambodian soldiers.
Such tactics may reflect a decision to mimimize
lasses and #o conserve supplies until later 'in the
dry season when stockpiles may be replenished
from the Laotian infiltration corridor.
Cambodian troops scheduled to try t? clear
enemy forces from the Pich Nil pass overlooking
Route 4 remained pinned down at Sre Khlong by
Communist harassing attacks, while government
(coders in 'Phnom Penh apparently debated what
tactics should be used to clear the strategic high-
way. In the northwest, army units re-entered the
town of Puok unopposed and began an operation
to clear Route 6 east toward Siem .Reap
city.
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Senkaku Islands: Peking Enters its Claim
Peking's clairn last week to the Senkaku Islands
has enlivened the dispute over oil exploration rights
in the East China Sea and will complicate the issue
even further. The controversy heated up in August
1969 soon after the announcement of the discovery
of potential oil deposits, which may be among the
ten largest in the world. Japan and Taiwan both
support rival claims to oil exploration rights in the
area. Taiwan insists that the area is part of the
Chinese continental shelf. Tokyo's case, meanwhile,
is based on its claim that the Senkakus belong to the
Ryukyuan chain which will be reverted to Japan in
1972. In spite of these conflicting claims, Taiwan--
over Japanese objections-granted permission to sev-
eral US oil companies to prospect near the islands.
Late this summer, tensions rose between both sides
as a result of minor incidents involving Chinese
Nationalists in the area. The situation has eased
somewhat since then and the Japanese and Chinese
Nationalists have formed informal committees
aimed at reaching an understanding on the explora-
tion of the oil resources.
This development was probably the catalyst
that brought the Communist Chinese into the fray.
Peking officially entered its claim on 3 December,
when a New China News Agency broadcast contain-
ing most of Peking's standard anti-Japanese propa-
ganda themes was aired. The broadcast was particu-
larly critical of the US and Japanese "collusion" in
attempting to annex Chinese territory for Japan,
and accused the Japanese of having a special need
for strategic materials such as petroleum to help in
their remilitarization.
Peking did not give a precise definition of the
extent of its claim other than strongly objecting to
exploration among the islands and water areas that
belong to China. The grounds for Peking's claim,
however, are presumably the same as Taiwan's, le-
gally, geographically, and historically. The parting of
the ways comes over the question of which govern-
ment-Peking or Taipei-is the legitimate govern-
ment of China.
Tokyo, until now, had been attempting to deal
with Taipei in a very low profile manner, at least in
part to avoid drawing Peking into the dispute. Given
Japan's compelling desire to develop domestic
sources of petroleum, Peking's public statement on
the issue is likely to force Japan to take a more
forceful public stand. Foreign Minister Aichi re-
sponded in Tokyo last week by reaffirming that
sovereignty of the Senkakus-undoubtedly belonged
to Japan and that it is nonnegotiable.
Taipei's delay in reacting to Peking's announce-
ment is almost certainly indicative of its dilemma.
On the one hand, Taiwan probably sees Peking's
statement as strengthening the basic argument of its
own cl~iim. On the other hand, Taiwan is probably
apprehE~nsive that the entry of Peking into the dis-
pute will adversely affect its ability to reach a direct
settlemi:nt with the Japanese.
Peking Claims Senkaku Islands
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Page 5 WEEKLY SUMMAI~Y
Senkaku Islands
Multiple claims complicate
oil exploration rights
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EUROPE
USSR: Defense Budget for 1971 Announced
The Soviet defense budget for 1971 has not
been increased, according to reports presented at
this week's meeting of the Supreme Soviet. The
reports do indicate continued growth in science
expenditures, however, and most of these funds
are used for military-research and development
and for the space program.
Finance Minister Garbuzov stated that the
defense budget for 1971 will be 17.9 billion
rubles, exactly the amount announced for 1970.
This is the first year since 1965 in which the
Soviets have failed to announce an increase in
military appropriations. Evidently Moscow aims
to project an image of moderation in its dealings
with the West, particularly while the Strategic
Arms Limitations Talks are under way. This inter-
pretation of Moscow's intent is strengthened by
Garbuzov's claim that the 1971 budget is one "of
peaceful economic and cultural development."
Th~a published defense budget, however, ex-
cludes rnost spending for military research and
development and for the space program. These
programs are largely financed by the science
budget. Preliminary reports from US Embassy
Moscow indicate that science expenditures will
rise by 8.3 percent to 13 billion rubles. This
would imply a planned increase of one billion
rubles o~rer 1970.
Th~~ leveling off of the published .defense
budget is consistent with intelligence estimates of
the Soviet defense effort. These estimates project
total Soviet defense expenditures in 1971, includ-
ing military R&D and space, at about 23 billion
rubles-or the equivalent of about $68 billion if
measured in US costs-an increase of between one
and two percent over 1970. The esti-mates attrib-
ute mo~;t of the increase to expanded military
research and development.
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British Economic Position Deteriorates
The economic weaknesses inherited by
Prime Minister Heath are increasingly restricting
his policy options.
Particularly unsettling to his government's
efforts to balance international and domestic eco-
nomic requirements were a three-week dock
strike and a protracted tabor wrangle in the auto
industry at midyear. These events, along with
further escalation of wage demands, and record
losses of worktime to strikes have focused the
energies of the new government on wagefprice
restraint as the initial concern of economic strat-
egy, Heath is facing growing inflation, substantial
unemployment, and multiplying threats of strikes
and demonstrations as he seeks to bring some
order to labor relations through new legislation.
The balance of payments will likely show a
smaller surplus this year than last. Even with a
November discovery that monthly exports had
been significantly underrecorded since early this
year, the prospect is not .good that the basic
surplus in 1970 will came up to that of 1969,
when a seven-year string of deficits was broken.
Although exports in late 197!D and early next year
are expected to show solid growth, imports also
will rise, reflecting increased consumption, some
recovery of industrial production, and rising im-
port prices. As 1971 progresses, British produc-
tion costs and export prices will probably rise
FRANCE: For the first time since 1966, two
leading French labor unions have reached an
agreement for joint action in pushing specific
labor demands-higher wages, a shorter work
week, and improved fringe benefits. Although the
two organizations, the Communist-dominated
General Confederation of Labor (CGT) and the
socialist French Confederation of Democratic
Workers (CFDT), represent roughly 65 percent of
Page 13
more rapidly than those of competitors. More-
over, the surplus in invisible transactions will
probably be held down by a decline in overseas
profits and some loss in net earnings from some
services.
The likely decline in the UK's basic external
surplus at a time of slow economic growth seri-
ously complicates its longer run economic, strat-
egies. The probable transitional costs of accession
to the Economic Community loom ever more
burdensome. Ta meet these costs and debt service
obligations Britain may have to incur higher than
acceptable rates of unemployment. The gpvern-
ment`s problems in selling membership to a reluc-
tant British public have also been complica#ed at
the moment by a November 1970 article from the
prestigious National Institute far Economic and
Soria! Research that evinces strong doubts on
whether long-run UK growth and payments. pros-
pects would be any better inside the Common
Market.
A diminished payments surplus and a shaky
domestic economy also will complicate rene otia-
tion next year of the Basle Agreement of 1~6$, a
financial arrangement to support sterling bal-
ances. London must now face its creditor n8tions
with a decidedl disa ointin economic er-
formance. I
organized Gabor, the effectiveness of their cooper-
ation under the new agreement will be limited by
ideological and tactical differences. The agree-
ment has political significance, however, in the
fact that it serves the electoral strategy of the
French Communist Party (PCF), which is pro-
moting the idea of a united opposition of all
parties and organizations of the left for the March
1971 municipal elections.
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INTERNATIONAL AVIATION: A 77-nation dip-
lomatic conference at The Hague is completing
work on a .draft convention to set international
standards to deal with aerial hijacking. The con-
vention is expected to be opened for signature on
16 December, and its entry into force should be
rapidly accomplished. The principal focus of at-
tention at The Hague is the US attempt to
strengthen the extradition and prosecution provi-
sions of the draft. The intent is to increase the
deterrent effect of the convention by foreclosing
the Krossibility that a hijacker claiming political
motivation might escape punishment altogether.
The US proposals have been making some head-
way.
European Concern With Pending US Trade Legislation
Despite strong concern over the pending US
trade legislation the Europeans have adopted a
cautious wait-and-see attitude on the question of
retaliation, reflecting their own uncertainty as to
the probability of enactment.
The European Community's (EC) concern is
both- for the impact on its exports in the short
run and what the proposed legislation may por-
tend in the way of a longer term drying up of
trade expansion opportunities. The Community,
which sells some $6 billion. worth of goods to the
US annually, has shown immediate concern about
possible restrictions on textiles made from
synthetic fibers and on shoes, and the prolifera-
tion of restrictions that could stem from any US
relaxation of the escape clause. Textile fabrics
.primarily made from synthetic fibers make up
about two percent of total Community exports to
the US, while shoes constitute about four percent
of the total. The Italians are particularly sensitive
to restrictions on shoes, which make up abaut 16
percent of Italy's exports to the US.
The Community has officially avoided any
threats of .retaliation, although it has emphasized
it intends to act if Community trade interests are
seriously impaired. A group of experts has been
established to study the anticipated effect of the
pending legislation. The Community could re-
taliate, under General Agreement on Tariffs and
Trade (GATT) procedures, in the absence of ade-
quate US compensation, by raising tariffs on US
Page 9
exports of an equivalent importance to the US. A
provi~~ional list of US exports suitable for Com-
muni~ly retaliation has :been prepared, including
oil sE;ed products, grains, chemicals and office
machines and equipment, but the high value of
US trade that would be affected, about X3.3
billion, suggests that it is preliminary .and subject
to pruning and modification. Should retaliatory
trade restrictions. be imposed by the Community
the rnost likely target is US oil seed product
exports valued at .more- than $500 million in
1969, and accounting for about eight percent of
total exports there. The inclusion of a number of
financial experts in the group suggests, however,
that the Community is also considering nontrade
aspects of its US relations.
~rhe Community, hoping to forestall enact-
ment of US trade legislation, has indicated its
willingness to contribute to a negotiated solution
betwE~en Washington and Tokyo on textiles. It has
considered giving conditional assurances that it
will not increase its own textile restrictions if the
US and Japan work out a voluntary agreement.
Nevertheless, the Community, along with other
Western European countries, most notably
Sweden, is .concerned about possible deflection of
Japanese textile exports to Europe in the wake of
a US-.Japanese agreement.
~(-he European Free- Trade Area (EFTA)
countries whose exports to the US total about
$3.6 billion have not indicated what action they
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would take in response to US trade legislation, nine countries is likely to be less than in the case
although the UK, Sweden, and Finland have made of the Community. The industrial federations of
especially strong protests. Because textile fabrics the EFTA countries have, however, joineel with
make up less than two percent of EFTA's total those of the Communit in warnin of the risks
exports to the US and shoes only about one of a trade war.
Pa rt u ga I : Cactaaio Unveils C'onstitutiorral Cltarag~s
The modest constitutional reforms that
Premier Caetano proposed to the Natronal As-
sembly last week show his effort to begin facing
the demands of modern society and remove some
of the more onerous restrictions on political
rights that existed under Salazar.
The most hotly contested item is likely to be
the proposal for greater autonomy for the over-
seas territories. They would become "autono-
mous regions" within the unitary Portuguese
state. The regions would organize their internal
administrations as they wish but the cen#ral gov-
ernment would retain control of foreign affairs
and national defense, would appoint governors,
and would protect civil rights under a policy of
racial nondiscrimination.
The Portuguese leader rejected .any possi-
bility that Lisbon would give up the #erritaries
and stressed the promotion of "spiritual" as-
similation of the natives while the territorial ad-
ministration is adapted to local conditions. Never-
theless, Caetano appears agreeable to having the
territories evolve toward eventual s#atehaod in a
form purposefully left vague, without damaging
immediate Portuguese interests. Also, representa-
tion of the overseas territories in the National
Assembly will be increased somewhat_ Whereas
some critics will maintain that these changes are
only window-dressing, the proposals do open the
possibility for the territories of more freedom
from central control from Lisbon_
The other constitutional proposals are
largely concerned with rights of citizens. They
increase the protection of the individual against
arbitrary action of officials but do not impede the
government's power to act in matters it considers
vital. Thus, the judicial rights of accused persons
wil# be strengthened and preventive imprisonment
will be restricted. On the other hand, the execu-
tive is to be given the power to declare a state of
siege, a right formerly reserved for the National
Assembly.
Caetano presumably believes that he :has a
good chance of getting his proposals accepted
even though they will not satisfy the liberals and
will antagonize some conservatives, on whose sup-
port he still depends. In the case of autonomy for
the overseas terri#ories, national pride in the face
of foreign criticism of Portugal's role in the recent
incursions into the Republic of Guinea may serve
to stiffen domestic opposition to autonomy.
The proposals go far beyond what would
have been possible under Salazar and .show
Caetano as This own man. In fact, in presenting
them to t'he National Assembly, Caetano asserted
that there is a need to keep up with changing
times, that the presence or absence of Salazar had
not influenced policy initiatives, and that he as
prime minister must judge what changes are
necessary.
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~L" l-~.L well as economic goals. Mazurov is the
only other Politburo member who. has done so.
The concept does not appear to jibe with
Kosygin's idea of planning..
In a sense, Suslov appears to be advocating,
if not an alternative to Kosygin's economic
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reform, at least a change in its focus. Suslov appointment with the results of the economic
would stress the incentives of group social bens- reform and the failure of the leadership to came
fits and increased worker ,participation, rather up with a coherent and fresh party program,
than the profit motive and individual material Suslov's ideas may find considerable sup-
incentives. Givers the present widespread dis- port.
U ('~! : Ge~lcral AsserribPv Socks Marititrtc Accords
The current session of the General Assembly
is making a major effort to set in motion machin-
ery which, by leading to a new Law of the Sea
conference severs! years hence, could break the
long stalemate on a variety of maritime issues.
Most countries recognize that technological de-
velopments and unilateral assertions of conflicting
claims have made new international regulations in
this area an urgent matter. Nevertheless, there are
sharp differences of opinion on how these new
regulations should be negotiated and what they
should provide; it remains unclear how these dif-
ferences will be reconciled.
The US, hoping to satisfy these diverse con-
cerns with a broad agenda approach, has proposed
that a Law of the Sea conference be convened in
1973 to consider territorial waters claims, interna-
tional machinery to regulate the peaceful ex-
ploitation of the ocean floor, and pollution prob-
lems. Preparation far such a conference would
begin next year in several committees and con-
tinue in a preparatory meeting in 1972. The
USSR has recently decided to go along with this
approach because it shares with the US an interest
in combating the recent wave of expansive ter-
ritorial waters claims.
Objections, however, are coming from the
less developed states, which have been vigorously
asserting their jurisdictional rights over adjacent
waters and their special claims as poor countries
to seabed resources, and from a US ally, Notway,
that is a leading maritime power. Several Latin
American sta#es consider the US proposal a threat
to their bargaining leverage with the superpowers
on a broad range of issues. Oslo is promoiEing a
resolution that would heave next year's Assembly
fix the date for a Law of the Sea conference. It
would also entrust preparatory work to a tingle
committee, which would be hard to hold down to
a manageable size.
Despite these different views, there appears
to be a growing disposition to tackle the maritime
issues, and much ofi the impetus has come from
the more forthcoming position of the super-
powers during the past year on measures regu-
lating the utilization of the seabeds. The US
proposal that national jurisdiction stop at a water
depth of 200 meters and that the ocean floor
beyond be considered the "common heritage of
mankind" -has been widely acclaimed. In an Effort
to achieve agreements on other maritime subjects
more vital to its interests, Moscow has also
dropped its opposition to the heritage concept,
even though it remains chary of creating new
international machinery to implement it. Pros-
pects are favorable that the present Assembly
session will be able to adapt at least a set of
principles on seabeds exploitation.
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VL V1t.L 1
Yugoslavia: Economic Stabilization Program Introduced
After a heated and extended debate, the
regime has endorsed an economic stabilization
program that includes new steps to further decen-
tralize the economic system.
Yugoslavia is in its third inflationary crisis
since 1960. Prices have been rising continuously
since the last half of 1969 and the trade deficit
has increased sharply during the past year. Much
of the blame is being put on increased federal
spending and on the government's policy of fuel-
ing excessive increases in investment, welfare
spending, and imports by allowing an immoderate
growth in the money supply. Token steps taken
last summer to slow down spending and imports
had little effect. As a result, emergency controls
on imports, prices, and consumer credit were im-
posed in October.
Premier Ribicic has just outlined a new
three-stage program to deal with the crisis. The
first phase, now being introduced, consists of
temporary measures to slow down spending.
These include reduced government expenditures,
a cutback in consumer and investment credit, and
continued control of prices and imports.
Reforms in the present economic system are
proposed for the second stage, to be completed
by February 1971. The direct economic role of
the federal government is to be reduced in favor
of producers, communes, and republics through
changes in the tax and foreign trade systems.
Central authorities will retain those functions
neces~~ary to regulate the market and to channel
funds to underdeveloped areas. During this stage
the temporary restrictive measures adopted earlier
are to be abolished.
-f he third stage will introduce the long-de-
layed medium-term economic plan for 1971-75.
The Flan is expected to be submitted to the
Federal Assembly for approval by the end of
April 1971. President Tito stated that devaluation
of thE~ dinar will be necessary, but not until stabi-
lization measures have been implemented.
~~Ithough Yugoslavia has accepted a slower
growth rate for the coming years, the government
still runs the risk that efforts to stifle inflation
will lead to a recession. The rate of industrial
growth already had slowed down considerably-
well :before any stabilization measures were in-
troduced.
I n the next year or two, the more pervasive
political and economic decentralization now in
the works may outrun the government's ability to
deal evith economic instability. The added power
given to enterprises, and their workers' councils,
may create the need for wage guidelines and a
more effective tax policy once price and import
controls are relaxed. Moreover, the growing
power of republics, with their varying and often
competing economic interests, may make it
harder for the federal government to impose
harsh, unpopular controls when needed to com-
ARMS CONTROL: The UN General Assembly
this week passed Several disarmament resolutions,
highlighted by the 104-2 endorsement given the
US-USSR draft treaty limiting military utilization
of the seabeds. EI Salvador and Peru opposed,
maintaining that the treaty impinges on their
claim to 200-mile territorial waters. The treaty is
Page 13
expected to be opened for signature next month,
and should enter into force soon afterward. The
only likely holdouts are France, Communist
Chinni, and a few Latin American states. With the
seabeds treaty out of the way, the Geneva disarm-
ament conferees will focus on chemical and bio-
logic~il warfare in 1971.
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Jtil.,'~L" 1
M1~C~LE EAST -AFRICA
Jordan : Jarash Flash Tests Cease-fire
A series of minor clashes in northern Jordan
escalated to swell-planned army attack on feda-
yeen positions at Jarash Monday that was carried
out with few casualties. Truce committee efforts
supported by Arab leaders within and without
Jordan have apparently brought a restoration of
the cease-fire. The tensions aroused by the fight-
ing, however, and the army's tough line increase
the danger of further serious outbreaks.
It is not clear how the train of events Leading
to the capture of Jarash evolved. The fedayeen
apparently got wind of an array plan to attack
Jarash on 6 December. This prompted them on 5
December to surround the Jarash police station
from which they were removed by Arab observer
teams overseeing the cease-fire. The following
day, however, commandos attacked the police
station, killing five and capturing 40 policemen.
Numerous earlier skirmishes with the army in the
area around Jarash may have incited the fedayeen
to make a pre-emptive attack in order to with-
stand the expected army assault.
On 7 December the army attacked and re-
captured the police station before taking the
town itself. Fighting was short-lived; damage to
property was light, but fedayeen casualties were
heavy. They reportedly lost 23 killed, 1,1$
wounded, and 320 missing and captured-zmong
wham were some 30 Iraqis dressed as fedayeen
and manning crew-served weapons.
The cease-fire remains precarious, however,.
as the army appears to have developed a de#ailed
plan for slowly rolling up the fedayeen groups in
Jordan to the point where they wilt no longer be
a security threat. The assault on Jarash was the
first major application of this policy, and the
army will probably move next on Ajlun, about
ten miles to the northwes#, where many of the
estimated 2,000 fedayeen fled after the fall of
Jarash. Fedayeen clandestine radiobroadcasts
have already warned that the army has planned to
strike Irbid as well. 1-lawever, the Jordanians re-
portedly believe that such an attack at this tune
might provoke Syrian intervention and therefpre
they probably will not attempt to clear Irbid until
the last stages of a gradual and deliberate cam-
ps ign.
The seizure of Jarash has put the army
astride a main communications intersection, c?n-
trolling traffic moving between Amman and the
Jarash-Irbid-Mafraq triangle in which most of the
fedayeen are now located. The army also claims
to have seeped off the Syrian border with mines
and patrols in order to guard against heavy reswp-
ply from the north, A US Embassy officer driving
to Amman from Syria noted Jordanian armoFed
vehicles dug in on the hills commanding the bor-
der town of Ramtha.
The Higher Arab Military Committee and
the observer teams appear to have played an
important role in damping down the fighting.
In the face of this pressure the
fedayeen eve become more conciliatory; iri a
meeting with Jordanian authorities on 8
December fedayeen leaders agreed to accept
conditions for an implementation of the cease-fire
agreements.
As the Jordanian Army slowly moves to gain
control of the countryside, the fedayeen dilemma
will become serious. [f they do evacuate the
towns, they will be exposed to control by the
army; if they do not, the army intends to char
the towns by force, one at a time. Consequently
the commandos may continue armed resistance,
hoping outside pressures will brin a halt to the.
arm 's clean-up campaign.
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~~ GOLAN HEIGh'TS
Tiberias"t' 3 /
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Jahin ?'
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