WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A008400050001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 31
• Document Creation Date: December 21, 2016
• Sequence Number: 1
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
50
Navy review
24 December 1970
No. 0402/70
completed.
State Dept. review
completed
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(Information as of noon EST 23 December 1970)
Page
Vietnam: A Time for Soul Searching . . . . . . . . . . . . . . . . 1
Laos: The War Slows . . . . . . . . . . . . . . . . . . . . . . 3
Cambodia: Clearing the Roads . . . . . . . . . . . . . . . . . . 4
Okinawa: Riots Inflame Japanese Nationalism . . . . . . . . . . . 5
South Korea: New Team Forming . . . . . . . . . . . . . . . . 5
EUROPE
Gomulka Era Ends in Poland . . . . . . . . . . . . . . . . . . . . 7
Bonn's Economic Ostpolitik Pushes Forward . . . . . . . . . . . 10
EC Impasse on Monetary Union . . . . . . . . . . . . . . . . 12
MIDDLE EAST - AFRICA
Lebanon: Internal Security Organization Reined In . . . . . . . . 13
Jordan: A White Christmas for the Fedayeen? . . . . . . . . . . 14
UNRWA's Position Remains Precarious . . . . . . . . . . . . . 14
Libya: The Politics of Islam . . . . . . . . . . . . . . . . . . 15
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MIDDLE EAST - AFRICA (continued)
Persian Gulf: Simmering Subversion . . . . . . . . . . . . . . 16
Cyprus: Makarios Sees Rightist Opposition Growing . . . . . . . . 18
India: Prospects for Early Elections . . . . . . . . . . . . . . . 18
WESTERN HEMISPHERE
Chile: Copper Nationalization and Agrarian Disturbances . . . . . . 19
Venezuela: Communist Party Splits . . . . . . . . . . . . . . . 22
Honduras: New Political Structure Proposed . . . . . . . . . . . 22
Brazil: Prisoners to Be Exchanged for Diplomat. . . . . . . . . . . 23
Central America: Common Market Confrontation
Likely in January . . . . . . . . . . . . . . . . . . . . . . 24
Soviet Economic Relations With
Western Latin America Improving . . . . . . . . . . . . . . . . 25
NOTES: Philippines-USSR; Communist China - USSR; East Germany -
Berlin: UN; Netherlands: Egypt-USSR; Guinea; Haiti; USSR-Cuba; Peru
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FAR EAST
Vietnam: A Time for Soul Searching
Despite mounting evidence that some of
their leaders are unhappy over the way the war is
going, the Communists apparently intend to pur-
sue the same tactics they have employed for the
past two years, at least through next spring.
F
CO VN issued a directive in mi - cto er
ou ining the tasks for this winter and spring in
South Vietnam: the Communists are to
strengthen the party's political and paramilitary
apparatus, step up guerrilla warfare, and destroy
the allied pacification effort. They are to avoid
costly, large-scale engagements but are to keep up
smaller attacks.
The directive similarly suggests that an all-
out Communist effort in Cambodia is unlikely for
the time being. conquer-
ing Cambodia w u c serve no purpose because the
Cambodian Communists are presently too weak
to administer the country. Nonetheless, the
directive indicates that half the main-force units
in the COSVN area (which includes Cambodia as
well as lower South Vietnam) are to be com-
mitted in Cambodia.
One reason for this conservative approach
seems to be the Communists' belief that their
own key facilities are threatened. COSVN says,
for instance, that the allies will launch an offen-
sive against Communist supply lines in the Laos-
Cambodia-Vietnam triborder area that will be
larger than last spring's move into Cambodia.
is one ot s priority tasks.
breaking up this attack
South Vietnam or Cambodia. Moreover,
An underlying tone of pessimism has long
been evident in Communist documents and to a
lesser extent in propaganda. The COSVN directive
provides further evidence that the Communists
see little chance for a quick victory in either
Page 1
provided an
additional index o the degree to which the war is
weighing on Communist officials in the north.
the editor of the party
is aiso an a ernate member of the
central committee, was unusually gloomy in dis-
cussing the war
F
~He claimed that Viet-
namiza ion was a shrewd adaptation of the Maoist
doctrine of protracted war and was sapping North
Vietnam's energy and morale. He also expostu-
lated on the problems Hanoi faces in opposing US
power-especially moving supplies to the front-
and admitted that the war was not going as well
as the Communists claim publicly. Even allowing
for some editorializing this kind 25X1
of unburdening is
quite rara from a North Vietnamese of such high
standing.
How to Fight the War: One View or Many?
The field commander of Communist forces
in the South-a general officer whose nom de
guerre is Tran Nam Trung-also is not pleased
with the way things are going and has urged a
different approach to the war. In an article broad-
cast by Viet Cong radio and published in the
Hanoi press, he calls for large-unit, quasi-conven-
tional military operations of the kind that Hanoi
pursued in the mid-60s-a theme that has since
been muted as the Communists have adopted
lower profile tactics.
Trung argues that large-unit pressure-par-
ticularly the 1968 Tet offensive-was instru-
mental in starting the US on the path of disen-
gagement, and that similar pressure is needed
again if the Communists are to end the war suc-
cessfully. He seems to say that the time is ripen-
ing to accelerate big-unit warfare while maintain-
ing guerrilla and subversive action, both because
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allied ranks have been thinned by the widened
war and US withdrawals, and because the Com-
munists have gained new allies in Laos and Cam-
bodia. Unlike other recent military commentaries,
Trung's article does not dwell on the need to
preserve and strengthen local assets as the neces-
sary precondition for a gradual return to large-
scale combat. It argues, instead, that increased
military action will improve both the climate for
recruitment and for political and guerrilla activ-
ity.
Trung's article could signal the start of an
intensified Communist drive some time soon in
Cambodia, where most of the large Communist
units are now campaigning. On the other hand,
because the article is cast largely in terms of the
situation in South Vietnam, it may mean that
Hanoi has decided it must make a greater effort
there if the allied position is to be reversed. Be-
fore the Communists could step up the war in the
South, however, they would need several months
to a year to re-establish their supply and base
systems and to move more troops and supplies
down from the North.
Another possibility is that Trung's article
represents the start of a renewed debate over the
best way to carry on the war at its present stage.
Similar disagreements often have been reflected in
the Communist press in the past, notably in the
mid-60s when the issues were how many North
Vietnamese troops should be committed and how
they should be used. If the Trung article does
signal a high-level debate of this kind, it may not
necessarily represent the prevailing view in Hanoi,
and more conservative articles about how the war
should be fought may appear in the press before
long.
Storm Before the Calrnn
Enemy military activity continued to ac-
celerate up to the beginning of the Christmas
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Begins Dec. 24-1900 Dec.24r0500
lads Dec. 25-1900 Dec.2510500
Page 2 WEEKLY SUMMARY
cease-fire period, but the enemy will probably
abide by its self-imposed, three-day cease-fire. Al-
though most Communist actions were small scale,
they included shellings and large-caliber rocket
attacks on Saigon and Da Nang. Ground clashes
also multiplied during the week, but many were
the result of allied field operations in which Com-
munist casualties were high compared with allied
losses.
Terrorism picked up significantly in Saigon,
especially the bombing of allied billets. The. Viet
Cong Liberation Radio broadcast an appeal last
week to "step up combat activities," citing al-
leged US "crimes in the north" and the Qui Nhon
incident. It appears that the Communists might
have advanced the dates for these attacks in an
attempt to compound the unrest caused by stu-
dent arson and other protest activities. The
attacks on US vehicles and personnel by Honda-
mounted gasoline bombers have tapered off,'.how-
ever, following an appeal by Saigon Student
Union chairman Mam to "show goodwill" and a
stern warning by General Minh, the Capital Mili-
tary District commander.
The Communists began their cease-fire
period at noon on 23 December (Washington
time) and the 24-hour allied truce will begin early
on 24 December (Washington time). Following
past practice, the Communists probably will use
the cease-fire to resupply and reposition their
forces within South Vietnam.
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The primary contenders for next year's pres-
idential race in South Vietnam continue to
maneuver for support. President Thieu is pushing
legislation that will restrict the number of candi-
dates and probably give him a better chance of
winning a plurality. The idea of a runoff election
between the top two candidates apparently has
been dropped, which will spare Thieu the pros-
pect of facing various opposition groups united
behind one candidate. In line with Thieu's plan to
marshal the government bureaucracy behind his
campaign, Colonel Be, head of the National Train-
ing Center at Vung Tau, has begun to organize
some of the. thousands of village development
cadre graduated by the center to work in the
provinces for Thieu's re-election.
Thieu's principal challenger, Big Minh, con-
tinues to express confidence about his chances.
Minh believes that he will draw support from
Military Region (MR) 1 and 2, from the southern
Catholics, and from middle- and junior-grade offi-
cers. Several province chiefs in MR 1 and 2 have
indicated that Minh can expect support there, and
his credentials as a southerner should stand him in
good stead in the delta. The support of the An
Quang Buddhists will be crucial to Minh's
chances, but they have withheld any commitment
to his candidacy so far, although they generally
are sympathetic to his views.
Vice President Ky also is preparing to toss
his hat into the presidential ring but has held back
a formal announcement. Ky claims to have re-
ceived pledges of support from some moderate
Buddhists, and from young military officers.
Nevertheless, he has implied that he will run
for vice president, probably with Thieu, if he 25X1
concludes that his presidential chances are
poor.
Laos: The War Slows
The government's month-long operation
against the Communist logistics base at Ban Ban
continues to make slow progress. Since 27 No-
vember, the more than 2,100 irregulars have suc-
ceeded in establishing positions about ten miles
north and from three to six miles south of Ban
Ban and have gained control of the airstrip at San
Tiau. The forces have harassed North Vietnamese
and Pathet Lao units in the area and have am-
bushed trucks on Route 61.
So far, however, they have been unable to
generate sustained drives toward the Ban Ban
valley, through which flows the bulk of supplies
for Communist units in the Plaine des Jarres.
Progress has been slowed by bad weather-
limiting effective air support-and by sporadic
skirmishing with enemy units.
Elsewhere fighting has been confined largely
to probes and harassing actions, although Com-
munist forces around Ban Na in the north and the
Bolovens Plateau in the south continue to plan
attacks aimed at driving government forces from
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Cambodia: Clearing the Roads
Cambodian and South Vietnamese (ARVN)
forces have succeeded in reopening Route 7 be-
tween Skoun and Kompong Cham, but large
numbers of Communist troops still pose a threat
in the area. The three ARVN battalions have now
turned to clearing secondary roads north of
Route 7 and government troops have remained to
protect the roadway. The Communists so far have
avoided any significant contact with the South
Vietnamese units, although they have launched a
number of harassing attacks against government
positions along Route 7. There have been uncon-
firmed reports that large numbers of enemy
troops are located just south of Prey Totung-the
scene of bitter fighting last week--as well as other
reports indicating that enemy troops are moving
westward across the Mekong River southwest of
Kompong Cham city. So far, the battle for con-
trol of Route 7 has resulted in heavy casualties on
both sides, extensive damage to the highway, and
the almost total destruction of Prey Totung.
Page 4
The fighting in the Kompong Cham area
apparently has also cost the government an im-
portant political casualty. National Assembly
president In Tam has resigned as governor of
Kompong Cham Province following meetings with
Prime Minister Lon Nol that preceded the deploy-
ment of ARVN troops west of Kompong ham
city. If Tam's resignation does not take effect
until after the ARVN operation is terminated, he
may either withdraw it or Lon Nol may recon-
sider accepting it.
Why In Tam quit is not clear, although the
circumstances of his resignation suggest that he
may have been unhappy about the government's
inability to do more to assist Kompong Cham.
Politically ambitious, In Tam may see some ad-
vantage in divorcing himself from Lon Nol's mili-
tary policies or at least in staking out a position
independent of Phnom Penh. In any case, his
resignation is the first of a top-rank government
leader and could be a sign that the war pressures
are beginning to cause some cracks in the facade
of unity that has prevailed since Sihanouk's
ouster.
from neighboring Vietnam.
Elsewhere, government forces have made no
progress in dislodging the Communists from the
Pich Nil Pass area or in breaking their hold on
Route 4. Enemy harassing attacks and sapper
raids against government positions and bridges all
along Route 4 have kept the Cambodian Army on
the defensive and occupied with repairing the
damage. That major highway, which connects
Phnom Penh with Cambodia's main seaport, re-
mains closed, and the capital's rapidly falling fuel
stocks have led to an informal rationing of gaso-
line and cooking fuel for civilian use. Efforts to
supply Phnom Penh with petroleum products
from South Vietnam have not yet gotten under
way but, once in operation, as much as three
quarters of the country's needs can be shipped in
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Okinawa: Riots Inflame Japanese Nationalism
Popular reaction in Japan to the recent riot-
ing in Okinawa has been highly emotional and
critical of the US, reflecting the growing Japanese
national feeling and impatience for the end of US
rule in 1972.
The violence against US military personnel
and property, touched off by an automobile ac-
cident in which an Okinawan was injured, sparked
a wave of criticism both in Japan and Okinawa
against the Japanese Government for "permitting
the US administration to disregard basic human
rights" on Okinawa. The Japanese opposition par-
ties are demanding that judicial authority in
Okinawa be transferred to Japan before reversion
takes place in 1972.
Prime Minister Sato immediately appealed
for calm, urging the avoidance of any action that
might interfere with the smooth process of rever-
sion. Foreign Minister Aichi expressed the hope
that the US would reflect on the problems leading
up to this "unleashing of emotions." Privately, he
inquired whether the US might be able to shift at
least some criminal jurisdiction to the Okinawan
authorities prior to reversion.
Okinawan bitterness has been building up in
recent weeks as the result of a number of in-
cidents, including the acquittal of a US service-
man accused of the hit-and-run killing of an
Okinawan woman, and continuing delays in the
removal of chemical weapons from Okinawa. Re-
action to these issues is taking on disturbing racial
overtones, and further incidents involving US
military personnel could well provoke more seri-
ous disturbances.
In this period of transition from US to
Japanese administrative control, the Okinawans
are prey to strong and often conflicting emotions.
Not a few are apprehensive over their economic
future under Japanese rule, expecting to be
treated by Tokyo as poor country cousins. Con-
versely, despite these anxieties and the fact that
the US military presence provides a major source
of local income, many Okinawans are concerned
that the islands are to remain a military strong-
point. They are susceptible to opposition charges
that the US, in connivance with Tokyo, intends
to maintain nuclear and chemical weapons on
Okinawa even after reversion. In this interim pe-
riod, therefore, Japanese leftists may find Oki-
nawa an unusually attractive area in which to
escalate local grievances into larger issues against
the interests of both the Sato government and the
South Korea: New Team Forming
The recent top-level government changes in
Seoul are designed to strengthen President Pak
Chong-hui's hand in the national elections next
year and are not indicative of any major policy
shifts. Incoming Prime Minister Paek Tu-chin is an
experienced political functionary who served the
Rhee regime in a variety of top jobs, including
that of prime minister. Like his predecessor, who
steps down to run for the National Assembly,
Page 5
Paek is a northerner with no political base in the
south and will be completely dependent on Presi-
dent Pak. The other major change is the selection
of one-time chief presidential secretary Yi Hu-rak
to head South Korea's Central Intelligence
Agency, Yi is politically shrewd and close to
President Pak. His appointment is indicative of
the President's heavy dependence on the security
apparatus in the upcoming elections.
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Other shifts are expected. The ministers of
Home Affairs and Transportation have tendered
their resignations in assuming traditional "moral
responsibility" for the loss of some 300 lives
when a ferry boat capsized on 15 December. Pak
has also received the pro-forma resignations of
leaders of his Democratic Republican Party.
Likely changes include the restoration of Pak's
controversial former number-two man, Kim
PHILIPPINES-USSR: The Marcos administration
is giving active consideration to opening diplo-
matic ties with the Soviet Union, but an early
move does not appear to be in the offing. The
Soviets have indicated their readiness for this
step, and influential members of Marcos' admin-
istration are advocating such ties as a means of
encouraging Soviet economic assistance. Although
Chong-pil, to a position of influence in the party.
Kim's own presidential ambitions almost brought
him into open conflict with the President last
year when Pak pushed through a constitutional
change permitting him to run for a third term in
1971. His restoration to presidential favor will
enable Pak to use Kim's considerable political
talents during the coming elections.F
growing numbers of Filipinos consider the tra-
ditional policy of avoiding Communist states out-
moded, this group-however vocal-represents
only a relatively small proportion of the*
Marcos is likely to move cautiously as he
may feel it necessary first to develop a national
consensus that relations are desirable.
COMMUNIST CHINA - USSR: The Tass an-
nouncement on 19 December of the adjourning
of the annual Sino-Soviet river navigation talks, in
session since July, has left unclear whether any
agreement was reached beyond a decision to re-
convene next year. The talks, which normally
deal with technical matters relating to use of the
Far Eastern border rivers, were reportedly pro-
longed by the interjection of the territorial dis-
pute, particularly the question of ownership of
certain islands. In 1969, when the talks resumed
after a year's hiatus, the sessions lasted only a few
weeks before an agreement was signed. It is possi-
ble that a technical agreement on some naviga-
tional matters had been reached in line with re-
cent mutual efforts to prevent fundamental dif-
ferences from interfering with normal state-to-
state relations, but the border rivers normally
freeze at this time, making any agreement for
1970 academic. Peking and Moscow have failed,
however, to make progress toward resolution of
the more basic issues discussed in the Peking
political talks, which apparently have been in
recess since 5 December when the two top'Soviet
diplomats returned to Moscow.
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Gomulka Era Ends in Poland
EU ROPE
Fourteen years of rule by Communist party
chief Wladyslaw Gomulka ended on 20 December
after a week of bloody rioting and nationwide
worker disaffection. The central committee en-
trusted power to Edward Gierek, the tough and
efficient party administrator of Silesia, Poland's
industrial heartland. The new leader shows signs
of striving for a more responsible, pragmatic style
of government, greater communication between
the rulers and the ruled, and in the short run,
relief of the economic grievances that sparked the
riots.
Order seems to have been restored in all the
riot-torn areas by midweek, although local dis-
putes over immediate economic issues, go-slow
strikes, and popular tension persisted in some
urban areas including Szczecin, where a curfew
was still in effect. The government on 22 Decem-
ber rescinded the harsh emergency decree issued
last week. No Soviet military involvement was
noted at anytime during the disturbances.
The population as a whole seems to have
accepted calmly the party leadership changes and
for the moment appears prepared to give Gierek a
chance to bring about those improvements that
had so long eluded the Gomulka regime. Warsaw
officially announced that Gomulka himself was
gravely ill and would be hospitalized for an ex-
tended period.
In his speech to the nation shortly after the
announcement of the leadership changes, Gierek
was critical of the ill-timed and ill-conceived eco-
nomic steps taken by his predecessor, promised to
remove the badly thought out conceptions in
economic policy, and indicated sympathy with
the people's problems. He announced that the
politburo would soon seek to improve the lot of
those hardest hit by the price rises in fuels and
essential foodstuffs, the immediate cause of the
crisis.
Although Gierek thus promised relief, which
in the short term could include steps backward
from incipient economic reforms, he gave no sign
that the price changes would be rescinded or that
the reforms would be abandoned. In a speech to
the parliament session on 23 December he
promised only that today's prices would be
frozen for two years. For the immediate future,
Gierek's success in maintaining the thrust of the
reforms while remedying their immediate impact
on the working class will determine his ability to
restore order in the country and to stabilize his
hold over :he party leadership.
Gierek made no allusions to outside incite-
ment or other causes for the disturbances, a sign
of realism that could augur well for the future.
Reported Disturbances or Strikes In Poland- 14-19 December
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Instead he promised to consult with the lower
echelons of the party and the "working class"
before taking further steps. His appeal for support
from all strata of the population probably was a
breath of fresh air to most Poles, whose most
frequently articulated grievance was the isolation
of the Gomulka regime's policymaking from
popular desires. Because the party's channels of
communications are either nonexistent or
atrophied at present, however, this promise will
be hard to keep.
Unlike 1956 when a popular upheaval
brought Gomulka to power, the seven days that
have just shaken Poland were neither a result of
hunger nor of Stalinist terror. They were caused
rather by mounting popular resentment over the
inattention given by an inept and autocratic lead-
ership to domestic bread-and-butter issues, in part
because of its preoccupation with foreign policy.
Gierek's first and major tasks will be to change
the regime's modus operandi, to re-establish a
dialogue with the workers, and to seek immediate
economic remedies. To succeed he needs the sup-
port and confidence of both the party apparatus
and the people. In this regard, the regime has
already indicated that it intends to seek an ac-
commodation with Poland's powerful Roman
Catholic Church. For the moment, Gierek's
greatest asset appears to be his realization that
without popular support any new policies he may
introduce will founder.
The new leadership is clearly worker ori-
ented. The shades of opinion represented in the
top bodies seem to constitute a deliberate at-
tempt to achieve a regime of "national unity" and
a "collective leadership."
The new hierarchy is a mixture of age and
youth, but on balance the new team is younger,
better educated, and probably more modern and
realistic in outlook. Thus, the leaders are likely to
work well with Gierek, who, unlike Gomulka, is
traveled, approachable, speaks several Western
languages, and reportedly is at ease in the
presence of Westerners. The "rational izers,"' who
had entered the upper-middle levels of the regime
as the price for Gomulka's continued leadership
following the party crisis of 1968, have now as-
sumed a balancing role on the politburo.
Although Gierek has taken over leadership at
a time when Poland's chronic factional warfare
has all but disappeared, his task is the more dif-
ficult because of the immediate circumstances of
his rise to power. Among the outstanding intra-
party questions is his ability to work with the
newly promoted, hard-line politburo member,
Moczar. During the 1968 struggle Gierek seemed
to sympathize with many of Moczar's nationalist
and quasi-populist views, but he could not as-
sociate himself with Moczar's demagogic
methods. In the end he closed ranksi with
Gomulka to check Moczar's ambitions. Whatever
compromise has now been struck between ' them,
neither is likely to forget the past.
Other problems are represented by such
Gomulka carryovers as trade union boss Loga-
Sowinski, and former premier Cyrankiewicz.
Moving rapidly to bring the government into line
with the new party hierarchy, a special parlia-
mentary session on 23 December appointed hard-
headed economist and former deputy premier
Piotr Jaroszewicz to replace the durable Cyran-
kiewicz, who moved up to the largely ceremonial
post of head of state vacated by retiring Marshal
Marian Spychalski. For the time being many
other ministerial portfolios are likely to remain
unchanged for the sake of continuity; initial
changes are likely to focus on the economic
sector.
Gierek is likely to focus such attention as he
can on consolidation of his credentials in the
Soviet orbit. He has already gone on record to
stress both personal and national loyalty to the
Soviet Union. Both Moscow and the Polish people
understand that Warsaw's relationship with the
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USSR and the bloc has not changed. Moscow's
chief interest in the upheaval has been the restora-
tion of political tranquility. Moscow's low mili-
tary posture presumably reflected its fear of
sparking a violent anti-Soviet reaction from the
nationalistic Poles. In line with this approach,
Moscow has offered strong backing for Gierek.
Within hours of Gierek's appointment, Brezhnev
tWladyslaw Gomulka
Jozef Cyrankiewicz
Edward Gierek
tBoleslaw Jaszczuk
Stefan Jedrychowski
tZenon Kliszko
Stanislaw Kociolek
Wladyslaw Kruczek
Ignacy Loga-Sowinski
(Marian Spychalski
*Piotr Jaroszewicz
Stefan Jedrychowski
^Edward Babiuch
Stanislaw Kociolek
Wladyslaw Kruczek
Ignacy Loga-Sowinski
*Stefan Olszowski
Jozef Tejchma
Van Szydlak
Jozef Cyrankiewicz
Edward Gierek
Mieczyslaw Jagielski
*Piotr Jaroszewicz
*Mieczyslaw Moczar
*Jan Szydlak
^Henryk Jablonski
^Wojciech Jaruzelski
^Jozef Kepa
addressed a warm personal message of congratula-
tions, greeting Gierek as a "sincere friend of the
Soviet Union" and a "convinced Communist and
internationalist."
A Polish diplomat in Moscow has indicated
that Gierek and the Soviet leaders may meet
soon. The Pole added that Moscow was gratified
Changes in Polish Party Leadership
tWladysls.w Gomulka
tBoleslaw Jaszczuk
tZenon Kliszko
Mieczyslaw Moczar
Stefan Clszowski
Artur Starewicz
tRyszard Strzelecki
Jan Szydlak
Jozef Tejchma
Edward Gierek
Edward Babiuch
^Kazimierz Barcikowski
Mieczyslaw Moczar
Stefan Olszowski
Artur Starewicz
Stanislaw Kociolek
Jan Szydlak
Jozef Tejchma
Why did it come to this disaster? How and why have such
sharp socia; conflicts arisen?...It is the duty of the party and
government leadership to give the party and the nation a full
answer to these questions. It will be a difficult and self-critical
answer, but it will be clear and true.... The iron rule of our
economic policy and our policy in general must always be to
count with reality, to consult broadly with the working class
and intelligentsia, to respect the principle of collective decision
making and democracy in the life of the party.... We appeal to
workers, to the intelligentsia, to men of science, to all milieus,
for co-participation in the solution of these problems. We shall
create political and organizational conditions for such coopera-
tion, observing the norms of socialist democracy in all fields of
life.
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that the demonstrations in Poland generally did
not have an anti-Soviet cast, and that Soviet lead-
ers had in fact reacted with "wise and friendly
concern."
Relations with the West, especially with
West Germany, probably will be held in abeyance
but not ignored. Too much was achieved by
Gomulka to be reversed or kept in limbo for long.
EAST GERMANY - BERLIN: The East Germans
ended 72 hours of harassment of highway traffic
between West Berlin and West Germany the
morning after the meeting of West German Social
Democratic leaders in the former capital on 21
December. The threat of further disruptions
exists, however, between now and next March,
when the West Berlin elections are scheduled.
There will be great pressure on Federal Republic
politicians to visit the city prior to the elections.
Gierek's first statement on this subject was brief
and cautious, but he made it clear that the road
toward "normalization" of relations with Bonn
would not be abandoned. Gierek never mentioned
the United States in his speech, and his policies
toward it are unlikely to change in the immediate
future, if only because any decisions in this area
will have to yield priority to more pressing do-
mestic problems.
Chancellor Brandt is scheduled to arrive there on
23 December, and President Heinemann is plan-
ning a visit in late January. The Soviets and East
Germans allowed the visits made by these two
officials earlier this month to pass with nothing
more than token press criticism. Other, more
demonstrative displays of West German political
activity in West Berlin, however, can be expected
to evoke a strong, Soviet-backed reaction from
Pankow.
Bonn's Economic Qstpolitik Pushes Forward
Signature on 17 December of the West Ger-
man - Czechoslovak long-term trade and eco-
nomic cooperation agreement completes Bonn's
program of reaching or renewing such pacts with
all countries of Eastern Europe except Albania.
This sets the stage for negotiating a new agree-
ment with the USSR to replace the one that
expired in 1963. Although trade between Bonn
and Moscow has continued to grow in the absence
of a formal agreement, a new pact could foster
even further increases in trade.
Bonn's leading role in East-West trade re-
flects aggressive German sales techniques, the
Communist demand for West German goods, and
the appeal of certain items such as spe?ialized
steels. West Germany accounts for roughly 25
percent of Eastern Europe's and about and eighth
of the USSR's trade with the developed West. The
Soviets have not noticeably favored Bonn in buy-
ing goods embodying advanced technology, how-
ever, despite German statements that Moscow
avidly wants such German products.
During the first half of this year West Ger-
man exports to Communist countries, excluding
Yugoslavia, rose to $1,072 million, an increase of
28 percent. Imports rose 24 percent to $770
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million. Bonn's burgeoning export surplus with
the Communist world grew by almost 40 percent
over the first six months of last year. The share of
the Communist countries in Bonn's over-all trade,
however, remained at a stable five-to-six percent.
Bonn's trade with Hungary and Poland in-
creased most dramatically, growing by more than
half and over one third, respectively; turnover
with Romania and Czechoslovakia rose by only
slightly lesser rates. East Germany continues to be
Bonn's major Communist trading partner, how-
ever, enjoying a special status whereby exchanges
between the two are not considered international
trade. This trade is therefore duty free and
exempt from the Common Market restrictions
that govern the dealings of Bonn, as well as those
of its chief competitors, with other nonmember
countries.
Bonn's various economic relations with the
USSR are currently highlighted by Moscow's
courting of West German truck manufacturers to
participate in building the Kama River truck
plant. This project, which the Ford Motor Com-
pany backed off from, is so extensive that the
Soviets hope to put together a consortium of
West European companies in which the West Ger-
mans would play a major role. German manu-
facturers, however, have been reluctant to be-
come overcommitted, probably with Fiat's trying
experience in building the Togliatti automobile
plant in mind.
West Germany is working with the Soviets to
establish joint air service and to implement the
exchange of scientists agreed to last September.
There is also some indication that Moscow may
open a bank in West Germany to facilitate the
growing economic ties between the two countries.
The largest single Soviet - West German contract,
signed last February, involves the shipment of
large-diameter pipe and equipment to the USSR
with repayment to be made largely from the
earnings of the sale of natural gas in West Ger-
many.
Bonn is well ahead of its West European
competitors in its economic negotiations with
Yugoslavia. Belgrade has finally agreed to let a
West German firm transfer profits into foreign
exchange and to recover its entire investment in a
proposed joint venture with a Yugoslav enter-
prise. In return, Bonn will extend its regular
investment guarantee to the German firm, which
further enhances the likelihood of a successful
deal.
If e:Ktended broadly across the spectrum of
present and prospective West German - Yugoslav
economic: relations, these developments should
further strengthen Bonn's already strong com-
mercial position in Yugoslavia. Furthermore, as
West German - Yugoslav economic ties have
tended to presage Bonn's economic policies
toward the rest of Eastern Europe in the past,
these developments suggest even closer economic
ties with the area in the future 25X1
UN: The annual change in the composition of
the Security Council on 1 January should pro-
duce a Council somewhat more favorable to West-
ern interests. NATO allies Italy and Belgium
replace Spain and neutralist Finland. Spain has
tended to be sympathetic to Arab representations
to the Council. In addition to changes mentioned
above, Argentina takes over from Colombia,
Japan from Nepal, and Somalia from Zambia.
There is a chance that Taiwan's credentials will be
challenged at the first meeting of the new Coun-
cil, something that has not occurred since 1968.
The US mission at the UN hopes to garner enough
votes to block formal consideration of that mat-
ter.
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NETHERLANDS: Prime Minister De Jong's
four-party coalition last week avoided a govern-
ment crisis by agreeing to another compromise in
its anti-inflation program. Opposition by the
labor federations and the labor wings of the coali-
tion parties forced the government to abandon
plans for a six-month wage freeze and to accept
instead limited pay hikes. Although union leaders
EC Impasse On Monetary Union
In failing to agree last week on a plan for
implementing economic and monetary union, the
European Community (EC) demonstrated its dif-
ficulty in compromising on political and institu-
tional issues fundamental to its future develop-
ment. The monetary union, which the Six are
agreed should be established in stages over the
next ten years, would require member states to
relinquish to the Community much of their
authority over economic policies. The first
stage-including a narrowing of exchange-rate
margins among currencies of the Six and greater
cooperation on budgetary policies-is in itself
largely noncontroversial. The lengthy Council
debate last week found the French unable to
agree with the EC Commission and the other
member states on what kind of institutions
should govern the ultimate phases of monetary
union and how much power these institutions
should have.
Some quarters in Brussels feel that the plan
under consideration tried to settle too much too
quickly. Specifically, they believe it was a mistake
to take advantage of Paris' hope for monetary
union to press for an early French commitment
to a supranational organization. The Five, how-
ever, have made it clear that they require such a
commitment now. West Germany has been par-
ticularly insistent on institutional arrangements
support the compromise, rank-and-file members
could still precipitate the government's collapse
this winter if they repeat last August's wildcat
strikes. The De Jong coalition's term expires next
spring in any event, and the issue of inflation,
certain to dominate the electoral campaign, will
be the number-one problem of the next Qovern-
that would provide a safeguard against excessively
inflationary policies, the major costs of which
Bonn would most likely have to bear. Moireover,
Brandt's government is eager to demonstrate that
its Ostpolitik has not engendered any diminution
of its support for an institutionally strong Com-
munity.
Bonn believes that existing Community
machinery will not suffice to administer the full
monetary union. The French, on the other hand,
maintain that it is too early to knovy what
changes, if any, will be needed. Behind this dis-
pute lies the question whether majority 4oting-
whose present disuse in the Council Parisi would
presumably like to maintain-should =govern
economic policy decisions. Also at issue between
France and the Five are how independent and
centralized a Community central banking system
should be and how much power the European
Parliament should have in relation to the pro-
posed economic and monetary union.
Sources in Brussels believe that as much as
six months may be needed to prepare a com-
promise acceptable to France and the Five,. In the
meantime, the Dutch are apparently promoting
talk of a package deal involving monetar' union
and UK accession. Such linkage, seems
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improbable, however, since it could seriously slow them to outside issues. A package deal might also
the enlargement negotiations. Despite tough serve to escalate the present controversy, which is
French bargaining in the negotiations with being played down by all parties despite the clear
Britain, Paris presumably does not want to be setback presented by the failure to agree on
charged with delaying those negotiations by tying monetar union.
MIDDLE EAST - AFRICA
Lebanon: Internal Security Organization Reined In
The new administration of President Fran- sure that they would not attempt to reinstate
jiyah and Prime Minister Salam is working on its themselves through a coup.
promise to get the army out of politics. If it
succeeds, a major force in Lebanese political life
will have been eliminated.
After General Shihab-the hero of the civil
war in 1958 and the commander of the armed
forces-was elected president in 1958, he reor-
ganized the security forces and gave the main
responsibility for intelligence to the army's G-2,
which he staffed with officers loyal to him. Since
then, it has constantly meddled in domestic poli-
tics, especially at election time, by bribing and
threatening candidates and voters. Even after the
election of President Hilu in 1964, the army con-
tinued to be omnipresent in politics, despite
Hilu's half-hearted attempt to curb its power.
Criticism of army interference in politics
grew steadily and was probably a principal reason
for the election of Franjiyah in 1970. Franjiyah
won by one vote in the presidential election in
the Chamber of Deputies with the support of
those-on both the right and the left-who were,
most vehemently opposed to Shihab and the
army. In his first policy statement, Prime Minister
Salam emphasized the need to get the army out
of politics and to improve its capabilities to de-
fend the country's borders. Thus, effective 15
December, 18 G-2 officers were transferred, some
of them to embassies abroad-presumably to en-
the Chamber passed a bill
canceling all military jurisdiction over press cen-
sorship cases and guaranteeing the right of a de-
fendant in a military investigation to have his
attorrey present.
These measures, when combined with the
licensing of previously outlawed political parties
by leftist Interior Minister Jumblatt in the last
days of the Hilu administration, could result in
increased dissident activity against the govern-
ment
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Jordan: A White Christmas for the Fedayeen?
The first snow of winter fell on the hills of
northern Jordan last week, leaving the fedayeen
commandos who had been expelled from Jarash
out in the cold.
By the terms of the Cairo and Amman agree-
ments that brought an end to the September
fighting, the fedayeen were to have moved their
military units out of the towns and into the hills
and valleys facing their putative enemy, the Is-
raelis. If the logic of this move was unarguable,
the realities were something less than palatable;
most of the fedayeen in Jordan have grown ac-
customed to urban quarters and suburban camps.
It is questionable whether the Jarash-based
fedayeen have actually used the 15-day respite
granted them by the Arab truce commission and
the army to build hillside shelters. This should
have been done long since, but few if any of the
commandos appear to have taken seriously the
idea that they should henceforth live the life of
the military camp. The Jordan Army was to have
spent the time since September refurbishing some
of its own camps in the Jordan valley for feda-
UNRWA's Position Remains Precarious
The chronic financial problems of the UN
Relief and Works Agency (UNRWA), which pro-
vides welfare services to the Palestinian refugees
of the Middle East, have not been alleviated by
recent developments. In fact, it now appears that
UNRWA may not be able to survive the coming
year without a substantial alteration of its func-
tions in the refugee camps.
As a partial result of continuing allegations
of fedayeen utilization of the camps, the annual
UNRWA pledging conference at the General As-
sembly earlier this month produced only a luke-
warm response-about $6 million less than the
agency's budgetary projections for 1971. The sub-
yeen habitation, but the only fedayeen known to
be enjoying army hospitality are those captured
in September and carried off to desert prisons-
Faced with army pressure against their tradi-
tional strongholds in Amman and the northern
cities, with an increasingly hostile attitude among
Bedouin and perhaps even Palestinian villagers,
and with the harsh realities of winter in the open,
many of the commandos appear to have gone
north for the winter, despite the unsettled politi-
cal climate in Syria. In October, there was a
general exodus of guerrilla fighters from Jordan as
those summoned from Lebanon, Syria, and else-
where for the September confrontation straggled
homeward. Since then, buses and trucks bearing
Arabs in camouflage fatigues have been observed
passing through Ramtha toward Dera at least sev-
eral days a week. What happens to these paramili-
tary refugees on the Syrian side of the border, is a
matter for conjecture, but the prospects are ap-
parently more pleasing than those from the
Gilead hills, from where-on a very clear day-you
can see as far as Armageddon.
sequent report of the nine-nation working group
created to study the situation gives little hope for
a quick resolution of the fiscal crisis. Some ob-
servers believe that contributions from other.UN
agencies could fund UNRWA functions, but these
agencies face strains on their own budgets. Arab
UN delegates have stressed the "devastating reper-
cussions" specifically associated with any curtail-
ment of UNRWA's education program, which
could drive up to 50,000 Palestinian teenagers
into an even more active role in the fedayeen
movement.
Representatives of UNRWA generally have
not accepted US suggestions that they relinquish
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some of their duties to the host governments in
order to lower both costs and the agency's liabil-
ity for fedayeen actions. The specific hope that
Jordan would seek to take over some of
UNRWA's functions may also be dimming. A
Jordanian official has told the US that the present
stability in his country is too fragile to permit any
new moves putting additional strains on Jordan's
finances.
Meanwhile, Israel has not yet decided
whether to take over certain UNRWA operations
in the territories it occupied in the 1967 war.
Israeli public opinion favors an end to UNRWA's
presence, but the government appears inclined to
move more slowly, noting that a rapid take-over
would surely evoke an Arab outcry.F 25X1
EGYPT-USSR: Discussions in Moscow between
Soviet leaders and the Egyptian delegation led by
Vice President Ali Sabri are expected to con-
centrate on political contingency plans for the
immediate future. UN special representative
Jarring is scheduled to submit his report on the
status of his mission to the Security Council be-
fore 5 January, and the cease-fire extension ex-
pires on 5 February. Both of these dates will
require Cairo to make some tough decisions,
which it will want to discuss with its Moscow
mentors. Early press coverage of the visit, which
is to last until sometime after Christmas, has
contained only the usual pledges of friendship
while emphasizing the necessity of solving the
Middle East impasse by implementation of the
UN Security Council resolution of 1967.
Military and economic matters are also being
discussed by other members of the Egyptian dele-
gation. According to the semiofficial Egyptian
newspaper al-Ahram, Minister of Industry Sidqi
was to review Egypt's economic development
plans with his Soviet counterpart, while Minister 25X1
of War Fawzi was to meet Defense Minister
Grechko for a discussion of the general military
Libya: The Politics of Islam
Revolutionary Command Council Chairman
Qadhafi may move to form a "progressive" Is-
lamic bloc in an attempt to undermine the posi-
tion of the conservative Arab regimes.
The Libyan press gave extensive coverage to
the first "conference for the propagation of Is-
lam," held in Tripoli from 12 to 16 December
and attended by Muslim scholars from a wide
variety of nations. The "unofficial" conference
issued a final communique calling for the forma-
tion of a permanent Islamic organization to be
Page 15
based in Libya, and for the establishment of a
fund for the propagation of the faith, to be fi-
nanced by contributions from member govern-
ments and "Islamic peoples."
The possibility of a radical Islamic organiza-
tion based in Libya threatens Saudi King Faysal's
long-standing campaign to establish an Islamic
secretariat under conservative auspices. It may
also be an attempt by Qadhafi to assume Nasir's
influence among the black Islamic peoples of
northern and western Africa. Libya has the re-
sources to fund such an Islamic organization and
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Qadhafi may well contemplate some connection
between the new organization in Tripoli and the
proposed "progressive" quadripartite alliance of
Egypt, Sudan, Syria, and Libya.
Persian Gulf: Simmering Subversion
With the stabilizing influence of the British
presence on the wane over the past year, the
Persian Gulf sheikhdoms have experienced an in-
crease in subversive groups and a step-up in radi-
cal ideological agitation. This trend represents the
chief threat to the stability and independence of
these states, which are still unable to arrive at any
formula for federation. The subversive groups
themselves, however, face major difficulties, pri-
marily a need to attract outside support and
somehow to meld native nationalism with foreign
ideologies.
For generations, crude nationalistic groups
have sought some form of autonomy, if not inde-
pendence, from the traditional autocratic control
of the various rulers. They have been assisted-or
exploited-haphazardly at various times by Egypt
and Iraq, as well as by neighboring Saudi Arabia
and more recently by Southern Yemen. Until
lately these efforts had done little more than
Page 16
Qadhafi's dabbling in progressive Islamic
politics coincides with a strident Libyan eamp4ign
against Jordan's King Husayn, launched on 9 'De-
cember, suggesting that a political as well as a
religious drive to isolate the conservative Arab
regimes may be in progress. The visit of Algerian
Prime Minister Boumediene to Libya in late be-
cember could give such an anticonservative cam-
paign more momentum. There have been rumors
that Algeria will endorse the quadripartite alliance
in principle, and Libya's moves to enhance, its
Islamic image may be designed to impress the
ascetic Algerian leader.
The Tripoli conference also provided
Qadhafi with some domestic advantage, by piclur-
irg the current regime as devoutly Muslim in
contrast with the morally corrupt government of
former King Idris.
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irritate the traditional regimes, which were buffered
by security organizations officered and equipped by
the British.
Recently, however, the discovery of oil and the
success of the Palestinian resistance movement have
given impetus to the formation of nationalist organ-
izations. The proximity of the radical regime in
Aden has facilitated contacts with foreign support-
ers, and other radical states in the Arab world are
once again aking note of the Persian Gulf.
Domestic and foreign agitators alike have re-
sponded by promoting a bewildering array of organ-
izations that sometimes overlap and often duplicate
each other. Some of these are almost literally paper
organizations, but two are relatively important:
PFLOAG (Popular Front for the Liberation of
Oman and the Arabian Gulf) and FLEAP (Front for
the Liberation of the Eastern Arabian Peninsula).
The first is an umbrella organization that has
tried to shelter an assortment of smaller groups,
many sponsored by Iraqi or Syrian Baathists. Its
chief area of operations has been in Oman and the
Trucial States, where it has carried on sporadic sabo-
tage and guerrilla attacks against oil and military
installations. A split may now be developing, how-
ever, between the ideologically oriented leaders and
the hard-core native nationalists, which could negate
the effects of foreign money and arms.
The other group, FLEAP, has a known mem-
bership of over 200 in Bahrain, where the group was
just recently uncovered. Although FLEAP has taken
Syrian money, it does not appear to have close ties
with Damascus. Primarily a group of frustrated local
Baathis, it had been fairly successful until recently
in building a secure cell system under the noses of
the police, and its discovery came as a rude shock to
security officials.
The strong individualism that separates the re-
gimes in this area is also reflected in the subversive
organizations, and has inhibited cooperation among
the many disparate groups. So far, foreign attempts
to unite them by furnishing arms and expertise have25X1
failed, largely because the attendant effort to inject
a foreign ideology into local causes has added yet
another issue for argument.
GUINEA: President Toure's fears of further Portu-
guese attacks continue unabated, although there is
no independent evidence to substantiate them.
Guinean security forces remain on alert, ex-
-servicemen have been recalled to duty, and local
party authorities have been directed to rally popular
support and to prepare lists of "suspect foreign and
local elements." A German national, whom the
Guineans allege is the local chief of West German
intelligence; has been arrested and charged with
complicity in the recent attacks, and Conakry has
asked for the recall of the West German ambassador.
Toure has again appealed to the United Nations,
charging that troops are massing in Portuguese
Guinea and in Senegal to attack a number of widely
separated Guinean towns. The President also has
almost certainly talked over his fears with friendly
African and Communist countries.
Toure's agitation could be inspired by exag-
gerated and imaginative confessions extracted from
prisoners captured in the recent attacks or from
suspects subsequently rounded up inside Guinea. If
that is, the case, additional arrests and interrogations
will probably produce further reports of impending
invasion and lead to continuing tension in Con-
akry.
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Cyprus: Makarios Sees Rightist Opposition Growing
President Makarios is again voicing suspicion
that his rightist political enemies in the Greek
Cypriot community have begun a campaign to
discredit and weaken him. He sees this as part of a
larger plot, supported by "hard-liners" in the
Greek Government, to force him eventually to
agree to "an imposed solution" to the Cyprus
problem, presumably to be worked out between
Greece and Turkey.
Despite their statements to the contrary,
Nicosia and Athens have never returned to the
cordial relations of the period before the crisis of
late 1967. Relations have grown cooler still since
last March, when several Greek officers stationed
on Cyprus were widely believed to be key figures
in an attempted assassination of Makarios.
Rightist Greek-Cypriot opposition to
Makarios centers around the conviction that he
has reneged on his promise to promote the cause
of union with Greece (enosis). This has led,
within the past year, to both open and clandes-
tine antiregime acts by strong supporters of
enosis. A secret, ultraconservative group known as
the National Front was accused of much of this,
and Makarios has tried in various ways to neu-
tralize the group in recent months.
Makarios now claims to see a threat from
within the island's largest political party, the
moderately conservative Unity Party (UP). which
holds the largest bloc of seats (15) in the 35-
member House of Representatives. A large faction
of the UP is made up of followers of the late
pro-enosis fighter Polycarpos Georkatzis, for
India: Prospects for Earl v Elections
In recent weeks, speculation has been in-
creasing in Indian political and press circles that
Prime Minister Gandhi may dissolve the lower
house of Parliament and schedule elections for
early 1971, although the current five-year term
does not expire until February 1972.
whose murder last March they hold Makarios at
least partly responsible.
This group, if it makes common cause with
the National Front and other anti-Makarios ele-
ments, could constitute a larger domestic political
threat to Makarios than he has yet faced. Backing
from Athens would make the anti-Makarios move-
ment still more formidable.
In the past, when threatened by dissidence
within his own community, Makarios has usually
raised the specter of Turkish irredentism. This
tactic invariably leads to renewed tension be-
tween the two communities and has several times
evoked strong reactions from Turkey, but it has
also succeeded in reuniting all the Greek Cypriot
factions behind Makarios.
Given the present strain in his relations with
Athens, Makarios may hesitate to gamble on its
support again in any renewal of a confrontation
with Turkey. He may thus seek to neutralize 'his
right-of-center opposition by drawing closer, or
seeming to, to the Communist Party of Cyprus
(ADEK) and to the party of his leftist personal
physician, Dr. Lyssarides. ADEK scored a sur-
prising success in last July's parliamentary
election, seating all of its nine candidates and
ensuring the election of Lyssarides and one of his
followers by throwing support to them. Were
Makarios to shift to the left, however, it might
provoke rather than intimidate his rightist op-
ponents-and perhaps Athens-into more decisive
moves against him.
From Mrs. Gandhi's standpoint, there are
strong arguments both for and against early elec-
tions. She currently is highly popular because of
her public image as a strong-willed progressive, a
reputation fostered by recent popular measures
such as her nationalization of a number of private
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banks and her effort to terminate the payments
and privileges granted to former rulers of princely
states. Other considerations favoring early elec-
tions include the possibility that the present
string of four consecutive good annual harvests
could be broken in the fall of 1971; the danger of
worsening inflation and unemployment during
the coming year; the belief of some observers that
an absolute majority for Mrs. Gandhi's Ruling
Congress Party-it now holds 225 out of 522
lower house seats-may be within reach; and the
fragmentation and unattractive public image from
which much of her opposition is presently suf-
fering. Moreover, holding elections at a time other
than during the February 1972 state legislative
elections would focus attention on the national
issues on which Mrs. Gandhi's popularity is based
rather than on local issues and personalities.
On the other hand, Uttar Pradesh, India's
most populous state, is presently controlled by an
opposition coalition that could utilize state
machinery in an election campaign. Mrs. Gandhi
may wish to defer elections in the hope that this
situation can first be reversed. She may also hope
that during 1971 she can strengthen her party's
uncertain position in the populous northern states
of West Bengal and Bihar. Furthermore, Mrs.
Gandhi's party at present is organizationally weak
in most of the country at the state and especially
at the local level. A final factor weighing against
early elections would be the desire of many party
members to postpone the personal expense and
uncertainty of electioneering as long as possible.
Influential senior advisers to the prime
minister are ranged on both sides of the election
question, and it is very possible that she has not
yet made up her mind. If she does decide in favor
of interim elections, she will want to preserve the
advantage of surprise until the last moment. The
prospects for early elections will decrease some-
what: if an announcement has not been made by
mid-January-after that, it would be difficult to
elect a Parliament in time to promulgate a new
national budget by 31 March, when the present
WESTERN HEMISPHERE
Chile: Copper Nationalization and Agrarian Disturbances
With the fanfare of a mass rally on 21 De-
cember, President Allende signed and sent to Con-
gress the constitutional amendment to permit the
nationalization of all mining properties. All con-
tracts, under which the companies have already
turned over portions up to 51 percent of owner-
ship to the Chilean Government, are nullified.
Chile reserves the right to revise the agreements
made with third-party creditors, such as the
Export-Import Bank, and future payments to
them will be deducted from the companies'
compensation. All US mining enterprises are af-
fected except possibly one small mine not yet in
production.
Allende's proposal calls for compensation in
cash over 30 years at three-percent interest, unless
the companies accept another form of payment.
Because it calls for payment based on book value
after deductions for "excessive profits," mine
depletion, and other penalties, it is doubtful
much compensation will be offered.
Pending gov-
ernment take-over the companies must continue
their operations and expansion projects. They
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also must maintain spare parts and supplies under
penalty of the suspension of compensation.
The Chilean Copper Corporation has sent a
representative to Europe to confer with the Inter-
national Council of Copper Exporting Countries
in hopes of working out a plan to stabilize copper
prices. The effort is not likely to succeed. Mean-
while, Kennecott's El Teniente Mine is suffering
from a cash squeeze that may make it impossible
to meet the next payroll. Of the 400 top tech-
nicians and managers at Teniente, 90 have re-
signed.
The major opposition, the National and
Christian Democratic parties, favors the national-
ization, and the bill will pass soon despite the fact
that neither of the parties considers a constitu-
tional amendment necessary. Allende has threat-
ened to send the proposal to the people in a
plebiscite if Congress fails to act promptly. There
may be some opposition to provisions that make
the amendment applicable to any enterprise that
the government deems "of pre-eminent impor-
tance to the economy of Chile."
At the rally Monday evening, Allende also
set up a national peasants' council to assist the
government in implementing more agrarian re-
form. He paid tribute to young people setting off
for a summer of volunteer work helping and train-
ing the poor in rural areas, a practice that has
HAITI: Recent rumors of President Duvalier's
incapacitating illness were exaggerated, judging
from his activities on 19 December. In the morn-
ing, accompanied by his son Jean Claude and a
large group of military officers and civilian offi-
cials, Duvalier met two of his daughters at the
airport. In the afternoon, again accompanied by
his son, Duvalier addressed naval officers and men
at Bizoton naval base where the three Coast
become a focus -of attention in recent weeks.
Seizures of agricultural lands by peasants have
stepped up sharply, and the government and its
supporters have mounted a strong campaign
charging that landowners are importing wealJons
and conspiring to overthrow Allende.
Government and opposition political forces
accuse each other-probably with justification:-of
fomenting the increasing difficulties in the coun-
tryside. In addition, the confrontations diiiide
groups supporting the government. There are
many Radical Party members among the land-
owners who find their lands invaded, sometimes
by groups led by Socialists and members of: the
Movement of the Revolutionary Left (MI R).
Landowners have protested against the break-
down of the rule of law, but their protests-and a
direct appeal to Allende-have been met only by
assurances of more rapid legal agrarian reform and
by a flurry of farm expropriations.
Most of the Chilean press continues to be a
major element in support of the Allende govern-
ment, both directly and indirectly. MIR leaders
use the leftist tabloid Clain to spread specific
conspiracy charges
Guard cutters that took part in the coup attempt
of 24-25 April had arrived earlier in the day. The
ships were earlier welcomed by large crowds and
"tens of thousands" of militiamen, according to
the press.
Public appearances by Duvalier are rare.
Those of 19 December would seem calculated to
show that his control is as firm as ever.
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F-class diesel submarine
Submarine tender
flea cue tug
Alligator-class landing ship
Sura-class heavy salvage ship
Two oilers
`--- Kanln-class guided missile destroyer 19-24 Rovemhd
Kashin-class guided missile frigate Submarine under
#He
Rashin-class guided missile frigate
F-class diesel submarine
Submarine tender
Naval piler.,
Visitpince 9 September: Casilda
USSR-Cuba: Soviet naval units continue their
round of naval visits to Cuban ports. A guided-mis-
sile frigate, a submarine tender, an F-class diesel
submarine, and a naval oiler arrived in Cienfuegos
last Monday. These units have also visited Antilla
and Havana in the past two weeks. A Soviet rescue
tug and two nuclear submarine support barges are
also in Cienfuegos. A second F-class submarine be-
lievec to be in the area has not been sighted re-
cently. During the past four months, nine Soviet
naval units and one merchant tanker have partici-
pated in visits to five Cuban ports.
Recent Cuban Port Visits by Soviet Naval Units
15-31 October
Submarine tender
Rescue tug
Martel..
PERU: The increasing militancy of the Communist-
controlled General Confederation of Peruvian Work-
ers (CGTP) may cause new labor problems. During
the past year, the government has given in to Com-
munist labor demands as part of its policy of weak-
ening the rival Confederation of Peruvian Workers
(CTP).
~In
a communique of 13 December the CGTP expressed
concern over its failure to receive legal recognition
and attacked the CTP's claim that it is the exclusive
representative of the workers. The CGTP said it
"fully supports" the actions of unions that are try-
ing to force government recognition. In a related
move, members of the CGTP-affiliated miners' and
metallurgical workers' union threatened to strike,
partially for the purpose of demanding immediate
legal recognition of the CGTP. The government re-
fused to accept notice of the strike, however, but
granted some of the miners' other demands. The
government's unwillingness to force a direct con-
frontation with labor is likely to encourage the
Communist-led unions to continue to press the
administration for legal recognition of the CGTP
and for the satisfaction of other specific labor de-
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Venezuela: Communist Partin Splits
The Communist Party of Venezuela (PCV)
has suffered the most serious split in its history.
The break occurred, after many months of squab-
bling, on the issue of the degree to which the
party was to submit to Soviet authority. The
dissident group, or left wing, maintains that the
PCV is unduly subservient to Moscow and that
Venezuelan Communists must adopt a more na-
tionalistic posture.
If our generation of Venezuelan Communists
wants to be something more than just a group
of propagandists and harbingers of socialism,
rather than the builders of a new society. they
have to face-and win - the challenge of break-
ing the Stalinist mold.
Teodoro Petkoff, dissident leader
Moreover, the dissidents have charged that the
party suffers an ideological softness that permits
it to coexist with the Venezuelan national system
rather than confronting it to prepare for the revo-
lution.
On 14 December five of the 15 members of
the political bureau, 20 of the-5l members of the
central committee, the entire central committee
of the Communist Youth, and several regional
leaders quit the party.
The dissidents have sufficiently strong lead-
ership and a large enough base to form a viable
party, their announced intention. The orthodox,
or right wing, of the PCV will keep the six party
members who are in the Venezuelan legislature,
the financial and moral backing of the Soviet
Union, and the name and legal position of the
party. Pravda on 17 December reported the split
as though the dissidents had been expelled by the
right wing and inflated the number of central
committee members who remained loyal to tie
Moscow line. Pravda further commented that t he
PCV is confident it can overcome the present
crisis.
The dissidents, as a nationalistic, Marxist
group, will face stiff competition on the Vene-
zuelan political scene, for example, from the
Democratic Action Party and the People's Elec-
toral Movement. Given, however, the organiza-
tional and forensic ability of the group's leaders,
they may be able to pump new life into Vene-
zuela's moribund revolutionary movement.
Honduras: New Political Structure Proposed
President Lopez' call on 8 December for a
unity candidate to represent the country's two
major parties in the March general elections has
added a new and unexpected dimension to the
growing electoral drama. This astute political
move has greatly increased the President's room
for maneuver and has raised serious dilemmas for
the opposition.
Under the plan, which has labor and business
support, the ruling Nationalist Party and the op-
position Liberal Party would share executive and
judicial posts and split the congressional seats.
The joint presidential candidate, as yet unnamed,
would be selected from the ranks of those who
are not legally ineligible to run and who have not
been active in politics. The candidate would also
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have to be acceptable to the army, the labor
movement, private business, and the two parties.
The Liberals, who seem confident that they
would win the presidency if the government did
not resort to fraud, reportedly prefer to go ahead
with normal elections. They reject, moreover, the
idea of a nonpolitical unity candidate. Neverthe-
less, they have agreed to carry on a dialogue with
President Lopez and appear ready to accept an
arrangement that would set up a Colombia-style
system under which first the Liberals and then
the Nationalists would hold the presidency. The
Liberals want their presidential standard-bearer,
Jorge Bueso Arias, to become the unity candi-
date.
Lopez may believe that he possesses both
the proverbial carrot and the stick and be unwill-
ing therefore to accede to the full array of Liberal
demands. He is likely to play upon the Liberals'
fears that if they do not accept his proposal he
will either stage a coup or rig elections against
them. On the other hand, he probably expects
that after seven lean years the relatively generous
political bounty he is of-
fering them will be too
tempting to turn down.
Both Lopez and the
Liberals are currently
testing the political
winds, If the Liberals
can mobilize sufficient
popular support, Lopez
may be relatively accom-
modating in the choice
of a unity candidate and
content himself with
"retiring" to the mili-
tary. More likely, how-
ever, he will stress the
President Lopez
need for a nonpolitical candidate and hope
thereby to set the stage for the nomination of one
of his cronies so that he could retain control from
behind the scenes. The possibility cannot be ruled
out, however, that if an impasse results, Lopez
might plead the lack of a suitable candidate and
arrogate the position to himself. ~
Brazil: Prisoners to be Exchanged for Diplomat
The government apparently is now prepared
to release prisoners in order to secure the safe
return of the Swiss ambassador. This decision was
reached after the abductors dropped their other
demands.
On Monday, the presidential press office re-
leased to newspapers a note acknowledging
receipt of a list of 70 prisoners whose release was
demanded by the kidnapers. The authorities,
recognizing the note as authentic because it was
signed by Ambassador Bucher, are prepared to
send abroad all individuals on the list except for
19 who were either involved in murder or kid-
naping, sentenced to long prison terms, could not
be identified, did not wish to leave Brazil, or are
not presently in custody. The most prominent
figure on the list is Jean-Marc van der Weid,
president of the clandestine National Students
Union,. Jean-Marc, who claims joint Brazilian-
Swiss citizenship, has been held in an isolated
naval prison, and his followers assert he has been
brutally tortured. Also included is a girl who
claims Brazilian and US citizenship, who was
charged with being implicated in a plot to kidnap
the US consul general in Recife. Chile, Mexico,
and Algeria have agreed to accept prisoners.
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Central America: Co,nrnon Market Confrontation Likely in January
Year-long efforts to repair the damage to the
Central American Common Market that resulted
from the war between El Salvador and Honduras
in July 1969 came unglued this month when El
Salvador refused to sign a proposed modus
operandi.
The modus operandi was designed to meet
Honduran complaints that it was not benefiting
enough from Market membership. It provided for
a coordinated agricultural policy to encourage
national product specialization and to stabilize
agricultural prices. It also called for negotiation of
new protocols on the establishment of regional
industries, and it authorized the creation of a
$120-million development fund. Although all five
member states had already agreed in principle to
the modus operandi, at the last minute El Sal-
vador reversed direction and blocked the accord.
El Salvador objected primarily to a common
industrial policy provision and to the creation of
a development fund that appeared to favor
Honduras. Although a number of political and
economic arguments were marshaled to justify
the sudden change of heart, the most plausible
explanation is the unwillingness of the gov-
ernment to make economic concessions to
Honduras without gaining anything in return. El
Salvador has benefited very substantially from the
Market as presently structured and, unlike Nica-
ragua and Honduras, has little incentive to change
the status quo. On the other hand, El Salvador
wants Honduras to end its closure of the Ran
American highway and to release blocked Sal-
vadoran accounts.
Nicaraguan President Somoza is pushing for
a special mid-January meeting of the five Central
American foreign ministers in an effort to rescue
the modus operandi. Attempting to put pressure
on the Salvadorans, Nicaragua, Costa Rica, and
Honduras have threatened to leave the Market
and resort to bilateral trade agreements. Such
tactics, however, may not be enough to break the
impasse. It will probably require significant
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concessions to gain Salvadoran cooperation, and
this could necessitate extensive horse trading
among the five member states. Instead of a subtle
reshaping of the modus operandi, a completely
revised agreement may be necessary. This would
be beyond the capability of a single meeting at
the foreign minister level, and it could require
months of additional negotiations that would
compound the already mounting frustrations of
Soviet Economic Relations with Western Latin America Improving
Moscow's low-profile policy toward Latin
America (excluding Cuba) may be achieving some
modest economic gains, particularly along the
western coast in Bolivia, Chile, and Peru. During
the past six months the USSR has enjoyed slowly
growing economic ties with these countries.
Furthermore, as the relative stagnation in Mos-
cow's economic relations with the rest of the
continent testifies, this improvement is largely the
result of Latin initiatives, to which the Soviets
have responded.
I n Peru, the Soviets have recovered some of
their standing that had suffered during their ill-
starred relief effort following the earthquake last
May. A $30-million credit for agricultural ma-
chinery and other heavy equipment was extended
in August on the typically favorable terms-
repayment over ten years, partially in local prod-
ucts, at low interest rates-granted Latin America
by Moscow. A comparable credit has also been
discussed to help develop Lima's fishing industry,
but interest in an extensive irrigation project,
which the Soviets studied earlier, may have
lapsed.
Moscow apparently is content to pursue a
low-key policy toward the Allende government in
Chile, probably realizing that this is the least
costly as well as the most effective way to de-
velop better relations in the long run. Thus far
only dormant Soviet trade credits totaling $55
million extended in 1967 has been reactivated.
The Soviets extended a $27.5-million credit
to Bolivia in August to cover the purchase of
mining and metallurgical machinery, and a few
Soviet technicians probably will soon be involved
in the study and development of the country's tin
industry. This credit, together with the one to
Peru, is the first economic aid extended by the
USSR to Latin America in almost two years. Most
Soviet aid allocated to the continent in the
1960s--largely to Argentina, Brazil, Uruguay, and
Chile-remains unused.
In addition, cutting across the three Latin
American countries of current Soviet interest are
the encouraging prospects for sales of Soviet civil
aircraft and the possibility of extending south-
ward Moscow's current air service to Havana. Peru
is negotiating a $45-million package deal in-
cluding IL-62 jet aircraft, spare parts, technicians,
and instructors. The Soviets also are trying to
work out arrangements to fly from Havana to
Santiago via Lima. Colombia has already granted
overflight rights to the USSR, and a civil air
agreement several deals can be successfully con-
cluded, Moscow may feel justified in establishing
an aircraft maintenance center on the continent
to forestall the poor servicing reputation the
Soviets have in other underdeveloped countries.
Soviet - Latin American trade relations con-
tinue to be unimportant in economic terms for
both the USSR and the countries concerned. The
Latin Americans exchange basically agricultural
products for Soviet machinery, equipment, and
vehicles. A factor tending to limit expansion of
this trade is the customary trade imbalance,
which the USSR has to settle in hard currency
that it would prefer to spend elsewhere.
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