WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009000060001-8
• 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
3 September 1971
No. 0386/71
State Dept. review completed
Copy Ng 45
go- aag5~s/i
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LUKE 1
CONTENTS
(Information as of 1200 EDT, 2 September 1971)
International Economic Developments . . . . . . . . . . . . . . . . . . . . 1
Political Repercussions of US Economic Program . . . . . . . . . . . . . . . . 1
Indochina
North Vietnam: Changing Line? . . . . . . . . . . . . . . . . . . . . . 3
South Vietnam: Lower House Elections . . . . . . . . . . . . . . . . . . 3
Cambodia: A Host of Headaches . . . . . . . . . . . . . . . . . . . . . 5
Laos: Little But Talk About Peace . . . . . . . . . . . . . . . . . . . . 5
Early Chinese Grain Crops Disappointing . . . . . . . . . . . . . . . . 8
Communist China: Last Four Provincial Party Committees Formed . . . . . . . 9
The Inter-German Talks: Phase Two of the Berlin Settlement . . . . . . . . . 11
Soviet Leaders Plan Road Tour . . . . . . . . . . . . . . . . . . . . . . 12
Malta-UK: Deadlock Continues . . . . . . . . . . . . . . . . . . . . . . 13
Scant Progress Made at UN Maritime Meeting . . . . . . . . . . . . . . . . 13
Yugoslavia: New Government; Old Economic Problems . . . . . . . . . . . . 14
Jerusalem-Israel: The Remaking of a City . . . . . . . . . . . . . . . . . . 15
Pakistan: Leftists in the Bangla Desh Movement . . . . . . . . . . . . . . . 18
Uganda-Tanzania: Border Clash Brings Relations to New Low . . . . . . . . . 19
Zambia: Tribalism Again Breaks to the Surface . 19
Bolivia: Banzer Settles Ind
Argentina: Politics 23
Uruguay's Quic ening Campaign Unsettles Its Neighbors . . . . . . . . . . . . 25
NOTES: Austria; Nepal; Chad; Peru; Allende's Travels; El Salvador
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International Economic Developments
The Japanese allowed the yen to float when
the exchange market opened on 28 August, and
by 1 September it had appreciated by almost six
percent, relative to the old yen-dollar parity.
Japanese financial authorities then imposed strin-
gent new controls on the foreign exchange opera-
tions of Japanese commercial banks to limit day-
to-day fluctuations in the value of the yen. Tokyo
has made clear that it regards the yen float as a
sufficient quid pro quo for removal of the US
import surcharge and has indicated it will not
establish a new fixed rate until the surcharge is
removed. Tokyo probably intends to float its
currency unti! a multilateral agreement on new
parities is worked out.
Elsewhere, France is maintaining its dual-
rate system, and by midweek the dollar had de-
preciated by 3.8 percent vis-a-vis the free "finan-
cial" franc, which is used for nontrade transac-
tions. The "commercial" franc is the only major
European currency still firmly pegged to the
parity existing before the announcement of the
new US economic policy. The Bank of France,
however, has had to make substantial dollar pur-
chases in the commercial market to maintain this
rate. With the yen floating the French franc is
now most vulnerable to speculative pressures that
in time could undermine the dual-rate system and
force the French to float for all transactions.
London imposed new restrictions on foreign
accounts in the hope of inhibiting an inflow of
speculative funds that would further appreciate
the pound, now at a premium of three percent.
British banks are restricted from paying interest
on additional deposits of nonresidents, and other
financial institutions are prohibited from accept-
ing further nonresident deposits. These moves
were reinforced on 2 September by a cut in the
prime interest rate from six to five percent which
also stimulates the domestic economy.
Large gold sales by speculators drove the
free market price down to $41.10 per ounce in
London by 1 September. This compares with the
closing price of $43.00 on 13 August, the last
trading day before the President's announce-
ments. The sellers apparently are beginning to
accept that there is little likelihood of an early
increase in the official price of gold.
The EC countries have made little progress
toward establishing a common position for the
annual meeting of the International Monetary
Fund at the end of the month in Washington.
Whether France and Germany are more willing to
compromise on their differences may become evi-
dent at the 3 September meeting in Paris of the
deputies of the Group of Ten. French Finance
Minister Giscard d'Estaing, meanwhile, seems to
have indicated that Paris' view of the future inter-
national financial system is steadfast. Interviewed
by Der Spiegel, Giscard supported the establish-
ment of a new international reserve unit. This
stance is consistent with France's traditional op-
position to national currencies bein used as re-
serve currencies.
Political Repercussions of US Economic Program
Reactions to the new US economic program
continue to range from "understanding" for US
motives on the part of some free world countries
to Communist denunciations of the measures as
another manitestation of US "imperialism" and
the "decline of capitalism." Even among close
friends of the US, however, there is some resent-
ment at US attempts to shift adjustment burdens
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to foreigners. Moreover, there is evident unease
over what the sudden, unilateral measures may
portend for US leadership and for the future of
international cooperation. This uncertainty is
compounded by doubts that the US intends soon
to abandon the much-criticized import surcharge
and fears about the permanency of the proposed
limitation of the tax investment credit to pur-
chases of US-made goods.
Although it has been widely acknowledged
that the US actions are by no means unprece-
dented in international economic affairs, the feel-
ing nevertheless persists that a superpower cannot
follow the rule-breaking examples set even by
West Germany or the UK. Reflecting this view,
the Norwegian delegate at last week's GATT
Council session categorized the US among the
"GATT congregation of sinners" as "not guilty of
the biggest sins, but the biggest of sinners."
However "chauvinistic" they may deem the
US program to be, most officials-in both the
developed and lesser developed countries-do
recognize that it may have provided the occasion
for far-reaching reforms of the international
monetary system and the establishment of revised
guidelines for world trading. The problem trou-
bling them, and many private observers as well, is
how to establish a propitious negotiating climate
out of the disarray the moves have engendered. In
their view, the stated US objectives-a substantial
and lasting improvement in the US balance of
payments, an adjustment in the burdens of de-
fense, and an end to unfair trade practices-raise
issues which, to say the least, cannot be resolved
all at once.
In Western Europe, a prime consequence of
the US moves has been to refuel the existing
tensions between France and West Germany over
monetary policies. Paris may eventually have to
relax its rigid position on exchange rate questions,
but for the present at least, it is clearly unwilling
to seem to be "giving in" either to Bonn or to
Washington. This attitude will probably prevent
the early adoption of a Common Market position
that would enable an international sorting-out to
get under way.
On the Alliance front, the US measures have
renewed fears-which coincide with improved
prospects for beginning talks on mutual and
balanced force reductions-of unilateral reduc-
tions in US troop levels. Furthermore, as is ap-
parent in published remarks by German Eco-
nomics Minister Schiller, Bonn considers that the
balance of payments adjustments resulting from
European revaluations lessens the need for im-
proved offset arrangements with the US.
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FAR EAST
Indochina
North Vietnam: Changing Line'
Two authoritative North Vietnamese articles
have been published recently that are markedly
different in tone from other Hanoi pronounce-
ments of the past several months. They could
mean that the party line on the war is in flux.
Both articles are replete with standard propa-
ganda fare, some of which reflects Hanoi's con-
tinuing concern over its international position in
the wake of the contacts between Washington and
Peking. In their treatment of the war, however,
the two articles omit any reference to the 19th
party central committee plenum, which took
place sometime around the turn of the year and
which called for an increase in the Communist
war effort. Nor does either article tout the battles
in southern Laos and Cambodia last spring as
"strategically significant" Communist victories-a
hitherto standard bit of jargon that implied that
Hanoi viewed those battles as a springboard for
further Communist military gains in the not-too-
distant future.
Moreover, the notion that the Vietnamese
Communists are pointing toward large-scale mili-
tary action in the war-a theme that has pervaded
their propaganda since at least last March-has
been conspicuously weakened in these two arti-
cles. The army magazine even picks up an odd
line that has appeared once or twice in other
recent publications, to the effect that the worst
of the fighting is over. Both articles, in addition,
have long passages of convoluted language empha-
sizing the unvarying "correctness" and "creativ-
ity" of the Vietnamese Communist party line.
The North Vietnamese have in the past reverted
to such topics either when there seemed to be
differences within the leadership to be papered
over or when a policy shift was in preparation..
Hanoi's other, less authoritative media have
continued to replay the themes omitted in the
party and army journals. If the shifts in the theme
begin to appear in the other media, the impres-
sion that a policy change is in the wind will be
strengthened.
The Soviets, meanwhile, have finally set a
tentative date in early October for their long-
planned visit to Hanoi. Both Moscow and Hanoi
doubtless view President Podgorny's forthcoming
trip as a useful counter to the recent Sine-US
rapprochement and will use it to accentuate. the
positive aspects of Soviet - North Vietnamese
relations. Chinese efforts to allay Hanoi's concern
in the wake of Peking's gestures toward the US
have not been overly successful, and Hanoi prob-
ably welcomes the opportunity to remind the
Chinese that it has other great power backers.
Moscow, for its part, is likely to use the occasion
to stress Soviet support for the Vietnamese, in-
cluding a possible commitment for additional,aid.
The Soviets also will try to reassure them that the
USSR, at least, will not sell out North Vietnam's
interests in the South. The fact that this display
of support for Hanoi will be taking place in Pe-
king's backyard will be further cause for satisfac-
tion in Moscow, which has taken a dim view of
Peking's "meddling" in the USSR's East Euro-
pean sphere of influence.
South Vietnam: Lower House Elections
Voters in the Lower House elections op 29
August returned a progovernment majority to the
new 159-member House. Only a minority of the
incumbents won re-election and the political
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affiliation of some of the new deputies is unclear,
consequently the exact line-up will not be certain
until after the House reconvenes in the fall. Pres-
ident Thieu should still be able to muster major-
ity support in the House on most issues, as he has
in the past. The President has privately expressed
satisfaction with the election results, indicating
that he believes about 60 percent of the deputies
will support him. Moreover, the impressive 78.5
percent turnout-substantially higher than for
previous legislative elections-is helping the gov-
ernment rebut opposition charges that Thieu's
election policy has caused widespread voter
apathy in South Vietnam.
With a nucleus of about 25 deputies associ-
ated with the An Quang Buddhists, the opposi-
tion in the Lower House may be somewhat larger
and more cohesive than it has been. As expected,
An Quang candidates were most successful in the
northern provinces, and opposition figures also
did well in Saigon and other urban centers. Never-
theless, some members of the opposition are
charging that they would have done much better
if local officials had not rigged some of the
contests.
Communist guerrilla attacks rose sharply last
weekend, but damage was generally light and the
action, did very little to disrupt the voting. Mili-
tary activity dropped off again during the week.
Although the Communists clearly had not made a
serious effort to interfere with the voting, it is
more difficult to judge how successful Viet Cong
cadre were in their parallel effort to join in and
influence the outcome of the elections. There is
sufficient antigovernment sentiment among non-
Communists in the larger cities and in the north-
ern provinces to account for the sizable opposi-
tion victories in those locations without any help
from the Communists.
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Cambodia: A Host of Headaches
Sirik Matak returned to Phnom Penh this
week and was faced with a number of significant
political problems that have combined to under-
mine governmental unity and stability. One of his
first tasks will be to help the regime skirt a
possible showdown with the National Assembly.
The legislature postponed its interpellation of
Finance Minister Sok Chhong on government eco-
nomic policies until Matak's return. The cabinet
reportedly is ready to stand behind Chhong if he
is forced to resign. If Matak still holds to his view
that a single minister's troubles are not worth the
downfall of the government, however, he may
seek to solve the problem by reshuffling the cabi-
net or by accepting Chhong's resignation-which
has already been submitted. In addition to pos-
sibly delaying the government's submission of its
vitally important economic reform package to the
Assembly, Chhong's resignation would cost the
government the services of one of its few talented
technicians.
It is also likely that Matak will be called on
to make an effort to reduce the bad blood that
now exists between Prime Minister Lon Nol and
Chief of State Cheng Heng. The serious rift be-
tween the two leaders stems in part from Cheng
Heng's continuing conviction that Lon Nol is un-
fit to govern and should step aside. The fact that
a number of other key officials, including First
Deputy Prime Minister In Tam, reportedly also
share this belief can only complicate whatever
steps Matak may take to stop such squabbling
within the leadership. Simultaneously, Matak will
have to pay some attention to his own vulner
political flanks,
There is some evidence that Lon Nol may be
sympathetic to his critics' view of his present
capacity for leadership. The prime minister has
shown signs that he is both physically and emo-
tionally tired from the strains of his office
The problem of Phnom Penh's increasingly
strained relations with Saigon will also demand
Matak's attention. Adverse public reaction to re-
ports of mistreatment of Cambodian civilians by
South Vietnamese Army (ARVN) troops is again
putting pressure on the government to reduce its
military dependency on Saigon's forces. Lon
Nol's recent request for the elimination of a ten-
mile corridor along the border in which AFVN
can operate without high-level coordination With
Phnom Penh should help tone down popular con-
cern, if only temporarily. As long as the present
lull in the fighting continues, however, Cambo-
dian anti-Vietnamese sentiments are likely to be-
come more pronounced.
Cambodian Army (FANK) units engaged in
the Chenla Il clearing operation along Route6 in
Kompong Thom Province have continued to
make slow but steady forward progress. After
moving unopposed into the town of Baray,
FANK troops pressed on northward and occupied
Kompong Thmar, at the junction of Routes 6 and
21. Enemy resistance to the operation, which has
advanced some 20 miles since it was launched
from Tang Kouk on 20 August, has consisted
primarily of harassing attacks on its flanks. Carly
in the week, FANK casualties in the drive totaled
43 killed and 274 wounded.
L Laos: Little But Talk About Peace
Prime Minister Souvanna Phouma and Com-
munist leader Souphanouvong have kept up the
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appearance of a dialogue on Lao peace talks, but
have moved no closer to negotiations. On 18
August, Souvanna again called on the Commu-
nists to name their plenipotentiaries, and agree to
discuss a cease-fire and a bombing halt in north-
east Laos as the first order of business.
Just before his departure for a six-week vaca-
tion and visits to Thailand, France, and the US,
Souvanna spelled out some of his thinking in an
interview with the Lao Press Agency. He stated
that if the Communists accepted his proposal to
"neutralize" the Plaine des Jarres, government
attacks in the area "could easily come to an end,"
and for the first time made explicit that all units
of both sides would withdraw, under proper con-
trols. Souvanna also stressed that his absence
should not hinder any progress toward talks, not-
ing that his representative would be able to con-
tact him at all times, and was authorized to begin
contacts at the former neutralist headquarters at
Khanq Khay on the Plaine.
Lao Communist leader Souphanouvong re-
sponded to Souvanna's message by denouncing it
as "unrealistic" and a "crafty maneuver," and
repeated Communist insistence that talks are im-
possible as long as allied bombing of their forces
and the infiltration corridor continues. The
Pathel: Lao representative in Vientiane reportedly
gave similar short shrift to Souvanna's press
interview.
Some Movement on the Military font
The Communists are offering determined
resistance to the government's month-old
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offensive to take Paksong on the Bolovens Pla-
teau. The North Vietnamese have been fighting
from strongly fortified positions west of Paksong
and have also constructed strong fortifications
north of the town. North of the Bolovens govern-
ment forces have moved into Ban Lao Ngam, the
center of an area believed to contain Communist
supply caches. So far this force has encountered
only light resistance.
In north Laos, the Communists again
demonstrated their determination to defend, the
hills north of the Plaine des Jarres against Yang
Pao's irregulars. Three irregular battalions were
forced to withdraw from their positions in the
foothills north of the Plaine following a series of
heavy shellings and ground attacks on 27 and 28
August.
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Early Chinese Grain Crops Disappointing
The early harvests of the year have probably
dampened Peking's optimism over food prospects.
An announcement by the State News Agency
described the early rice crop just harvested as
"good," which in the Chinese lexicon usually
means mediocre. Peking, having benefited from
several successive years of expanding farm output,
apparently was hoping for a larger early harvest
this year as a result of the marked increase in
early-rice acreage in many provinces, but unfavor-
able weather conditions largely nullified the
acreage increase and resulted in a harvest only
slightly, if any, higher than in 1970. The winter
wheat crop, harvested in May-June, was also char-
acterized as "good," presumably contributing to
Peking's disappointments.
Total grain production for this year is not
necessarily compromised. Improved weather con-
ditions, together with better irrigation, mecha-
nization, and availability of chemical fertilizer,
could result in a satisfactory fall harvest, which
accounts for approximately two thirds of the
grain produced each year. China needs four to
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five million tons more grain annually to keep pace
with population growth.
The relatively poor early harvests, however,
could slightly increase Chinese grain import re-
quirements; a Chinese purchasing mission, now in
Canada, may conclude another deal for this year.
So far, China has contracted for 2.7 million tons
of wheat for 1971, all from Canada. Shipments
from Vancouver are being made at an accelerated
rate and the entire amount should be shipped by
early September.
Grain imports are a convenient way of feed-
ing certain northern and eastern cities rather than
representing a vital component of the food
supply. For example, the 4.6 million tons im-
ported in 1970 compares with an estimated
domestic output of 215-220 million tons. Premier
Chou En-lai recently repeated an earlier statement
to Edgar Snow that central grain reserves
amounted to 40 million tons. Although there is
no way to check the accuracy of his claim, there
is little doubt that there is enough grain to tide
over a bad year.
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Corn munist China : Last Four Provincial Party Committees Formed
The final act of a Chinese restoration drama,
begun with the Cultural Revolution, concluded
last week with the formation of the last four of
China's 29 provincial party committees. The
over-all committee leadership is heavily weighted
in favor of moderate elements, although political
compromise between divergent interests is still
the order of the day. Peking's restrained assess-
ment of the new committees, published in the
People's Daily on 27 August, openly admitted
that the "organization as it exists has shortcom-
ings." Among the major problems confronting the
regime are the existence of potentially unwork-
able leadership arrangements and the dominant
role of the military in the party committees, a
source of embarrassment to the regime which has
prided itself in having a party which "commands
the gun."
By early 1967, the old party apparatus had
been jettisoned, and local leadership came to be
COMMUNIST CHINA: The Politics of Provincial Party Building
"Revolutionary" Activists Squeezed Out
1967-68 Revolutionary Committees'
(based on original membership of 222)
1970-71 Party Committees'
(based on original membership of 158)
Military Men March In
First Secretaries ...Milltary occupy 20 out at 29 positions
Second-ranking party Secretaries ...Military occupy 26 out of 29 positions
Remaining Secretaries
and
Deputy Secretaries ...Military occupy 4$ out of 96 positions
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exercised through "revolutionary commit-
tees"-ad hoc administrative units that evolved
during the height of the Cultural Revolution dis-
orders and were often the products of compro-
mise between competing factions. When, in late
1970, the first provincial party committees were
established, it appeared that Peking was willing
simply to endorse leadership alignments already
existing on the revolutionary committees rather
than run the risk of provoking renewed factional
violence. By late spring of this year, however, the
central leadership was obliged to come to grips
with troubled provinces in which leadership ar-
rangements arrived at during the Cultural Revo-
lution had obviously fallen into disarray.
Hard bargaining between conflicting groups
in these provinces resulted in the appointment of
new provincial chiefs for a majority of the prob-
lem committees. In several instances-such as
Inner Mongolia and Shantung-wholesale person-
nel changes were required in order to reduce
personal antagonisms and establish more work-
able leadership arrangements. Although the pro-
vincial heads ousted during this process repre-
sented a wide spectrum of political affiliations,
the majority of those dropped were aligned with
forces associated with the more radical policies of
the Cultural Revolution. The drastic nature of the
leadership changes wrought this year by Peking is
a partial measure of the regime's frustration over
its inability to curb deep-seated divisions respon-
sible for continued instability in the provinces
and for the delays that have slowed the party-
building timetable. The difficulties in ironing out
local disputes have been further complicated by
the oblique maneuvers of rival politburo members
seeking to enhance their bargaining power in Pe-
king by promoting the interests of their followers
in the provinces.
Although the top provincial party leadership
frequently parallels that of the revolutionary
committees, there are significant differences.
Military men continue to hold the top posts of
province head in 20 of the 29 committees and
have expanded their numerical representation in
the ranking positions on the new party com-
mittees to nearly 60 percent. Rehabilitated party
veterans-including several who were bitterly
attacked during the Cultural Revolution-have
likewise increased, and now occupy over 30
percent of the major party posts. A number of
"technocrats" have been recruited from Peking's
central ministries; most of these have been in-
stalled in economically less-developed provinces,
suggesting that the regime has accorded a high
priority to economic development in these areas.
I n the meantime, the representation of "leftist"
activists, often the largest single group on the
original governing bodies, has been reduced to a
single post on most party committees. In those
provinces beset by chronic factional disturbances,
activists have been completely excluded.
Although the party restructuring process is
formally completed, there are still many ques-
tions to be answered. The new party committees
have been declared the leading bodies in the
province, but revolutionary committees still exist
and the actual division of labor between the two
components is by no means clear. Another com-
plicatirg factor is the expanded role of the mil-
itary and the resulting problems of civilian versus
military control of the party structure. Until the
regime begins to address these problems in an
authoritative manner, there will be little chance
for the new party apparatus to regain its pre-1966
image as an infallible and essentially civilian
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The I nter-German Talks: Phase Two of the Berlin Settlement
With the signing of the four-power agree-
ment, the first phase of a Berlin settlement will be
complete and inter-German negotiations can com-
mence in earnest.
Both the East German - West German talks
on personal transit and shipping, and the East
German - West Berlin Senat talks on visits to the
East for West Berliners were suspended during the
final stages of drafting the four-power agreement.
In bilateral meetings since the draft agreement
was announced, however, both sides appeared
eager to proceed.
In the East German - Senat talks, resumed
on 30 August, Pankow's negotiator, Guenter
Kohrt, attempted to expand the discussions to
include traffic between West Berlin and West
Germany, and telecommunications. Senat repre-
sentative Guenter Mueller rejected the proposal
and insisted the talks cover only visits by West
Berliners to East Berlin and the GDR, and the
issue of exchanges of property aimed at resolving
the problem of exclaves-the small parcels of land
belonging to and adjacent to West Berlin but cut
off by intervening stretches of GDR territory.
This agenda question was not resolved, but both
sides agreed to meet again on 6 September.
The East Germans are working very closely
with the Soviets on these negotiations. On 26
August, Foreign Minister Otto Winzer flew to
Moscow to confer with his Soviet counterpart
Andrei Gromyko. When Winzer returned, he was
met by East German negotiators as well as by
Soviet Ambassador Abrasimov.
East Germany's policy of abgrenzung-
separation of the two Germanies-is obviously
thwarted somewhat by a Berlin agreement and a
subsequent relaxation of tensions. Nevertheless,
with Soviet and East European sentiment favoring
detente in Central Europe, it seems unlikely that
Pankow will hamper progress during the second
phase of negotiations.
AUSTRIA: A challenge by the opposition
People's Party (OeVP) to the legality of the na-
tional elections scheduled for 10 October has
added an element of uncertainty to the quiet
campaign. During the past few weeks, People's
Party representatives in the politically conserva-
tive areas of western Austria have filed appeals to
the Constitutional Court for a more favorable
apportionment of parliamentary representation
based upon the currently unofficial 1971 census
figures. The OeVP, desperately searching for
leadership and issues, has much to gain from a
reapportionment or possibly a postponement of
the elections. Socialist Chancellor Kreisky, how-
ever, has dismissed the demands of his opponents
as unjustified and unworkable, and many legal
experts concur in this opinion. The Constitutional
Court, which reconvenes on 4 October, must
make its decision quickly if it is to affect the
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Soviet Leaders Plan Road Tour
The Soviet leadership is planning extensive
diplomatic activity for the remainder of 1971. Al-
though each of the individual trips has its own
rationale and most have been planned for some
time, some common themes emerge. One is an
effort to put some life into Soviet diplomacy in
order to counter China's recent diplomatic gains.
The scheduling of trips to France and Algeria may
be partly in response to reports that Vice Premier
Li Hsien-nien or other high-ranking Chinese of-
ficials plan to visit these countries in the near
future. Brezhnev may also hope that his trip to
Yugoslavia will somehow contribute to blocking
further Chinese penetration of Eastern Europe.
The Soviet leaders will probably also solicit
support for proposals relating to European
security matters. It is noteworthy that, as far as
Canada and France are concerned, the Soviets
have apparently decided to take advantage of
long-standing invitations now that the first-stage
of an agreement on Berlin has been reached. The
Berlin problem until now has been the main
obstacle to forward movement in Soviet policies
toward Western Europe. The unexpectedly favor-
able outcome of the four-power Berlin talks has
left relatively little for the two German states to
discuss, therefore, it is possible that the Soviets
and East Germans will push this phase of the
negotiations to a rapid conclusion. A definitive
proposal on a Conference on European Security
could then be made at the time of Brezhnev's visit
to France, if not before.
SOVIET " LEADERSHIP TRIW;VEL P4 ANS
IAT NAME
8epte ber Foreign Minister (-,,rQmy
22.24` September Brezhnev
*early October Podgorny
14-16 October Podgorny
f 8-:26 October` Kosygin
end of October. Brezhnev & Podgorny
*_offfcialty r'nnonced by MoSCOW
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Malta-UK: Deadlock Continues
Valletta and London continue to haggle over
the terms of a new defense and financial agree-
ment. Prime Minister Mintoff apparently still
hopes to reach an accord with the British that
would obviate the need for Malta to rely entirely
on either Libya or the USSR for economic assist-
ance. Whether the present UK-NATO offer of
financial aid can be raised to a level acceptable to
Mintoff depends on the current maneuvering be-
tween the UK and its NATO partners.
Mintoff recently told British Defense Secre-
tary Lord Carrington that his government needs
$72 million annually to make the economy
viable. He hopes to receive $43.2 million from the
UK and its NATO allies, $16.8 million from
Maltese investors, and $12 million from Libya.
The Maltese leader said that in return for Western
aid the UK could continue to exercise base rights
on the island and that some NATO members
would be permitted to use Maltese facilities, pro-
vided Malta's "friends"-he cited only Libya-also
had access.
In a meeting early this week, the North
Atlantic Council failed to come up with addi-
tional contributions to the UK-NATO offer of
$20.4 million annually in cash and aid. Italy and
West Germany have since indicated a willingness
to raise their pledges. Although Bonn is prepared
to match an increased Italian contribution, Rome
believes that the British should bear a larger share
of the burden. An Italian Foreign Ministry official
has implied that a new UK contribution need not
be very large to precipitate an appropriate re-
sponse from Rome.
Mintoff complained recently to the US am-
bassador that the discussions with the British had
been vague and left him uncertain as to what; had
been offered by whom. Progovernment news-
papers have reported that Malta may get a
$36-million settlement-$20.4 million directly
from the UK and the remainder in bilateral aid
from other NATO members-and these figures
have apparently been accepted as an accurate
prediction by the general public. Under such cir-
cumstances, it would be very difficult for Mintoff
to accept an agreement offering much less than
$36 million.
Meanwhile, Mintoff is continuing to keep his
options open on alternative sources of aid. Late
last week a Soviet merchant ship arrived in Val-
letta for repairs in the drydocks and several others
are expected to follow this year. Mintoff told the
US ambassador that he had received a "no string"
proposal from the Soviets, but he did not spell
out what they were offering. He also said thot an
unspecified source had given Malta $3 million in
cash, an apparent reference to the short-term aid
agreement Mintoff signed with Lib a in mid-Au-
gust.
Scant Progress Made at UN Maritime Meeting
US initiatives did not fare well at the re-
cently concluded six-week preparatory meeting
for the 1973 Law of the Sea conference. Develop-
ments at this session-held in Geneva as a meeting
of the UN General Assembly's 86-member sea-
Page 13
beds committee-raise the possibility that the
1973 conference, like its predecessors of 1958
and 1960, may fail to achieve meaningful and
widely accepted agreements.
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During the meeting the US formally
acknowledged its willingness to accept in 1973 a
12-mile territorial waters limit, provided that
rights of free passage through international straits
are guaranteed. The 12-mile limitation received
general support at Geneva, but this backing was
often conditioned on acceptance of a broader
economic zone under coastal state controls. The
US and a number of other countries are presently
unwilling to concede such a zone. Led by 200-
mile claimant Brazil, a few states even persist in
opposing the 12-mile territorial limit and advo-
cate more extensive coastal state controls over
navigation.
A 12-mile limit would effectively close
about 100 straits, many vital to the superpowers'
security interests, unless rights of passage are de-
fined by international agreement. Spain opposes
the free passage proposal and is seeking to confine
entry rights to "innocent" activity, a concept that
would permit coastal state controls over oil tank-
ers and warships, such as British vessels bound for
Gibraltar. Madrid has obtained support from
some Latin American countries by accepting their
call for a 200-mile resource zone. The Spanish
have also recently revived the proposal for demili-
tarization of the Mediterranean. Although the
Spanish lack substantial support, they may hope
to use these moves as bargaining chips in negotiat-
ing with the US over bases and better links with
Western defenses.
No progress was made on fishing issues. Most
of the major powers with distant-water fishing
fleets remain at an impasse with the less devel-
oped countries (LDCs) who are intent on con-
trolling living resources far off their coasts. Simi-
larly, the US proposal for international regula-
tions to govern mineral exploitation of the ocean
floor made little headway. Many LDCs fear that
they could lose a potentially significant amount
of revenue by accepting such arrangements.
Unless some reconciliation of views occurs
soon, positions for the 1973 conference could
become so inflexible as to prevent drafting sub-
stantive agreements there. The one bright spot at
Geneva was the willingness of the Afro-Asians,
who will control a sizable bloc of votes, to rec-
ognize the need for serious bargaining in the inter-
vening period. Some Latin Americans, however,
in an effort to gain concessions, have been en-
gaged in effective delaying tactics that, if pro-
longed, could lead to postponement of the con-
Yugoslavia: New Government; Old Economic Problems
The first order of business and the first criti-
cal challenge for Yugoslavia's revamped govern-
ment will be to implement the stabilization pack-
age enacted last month. The new measures should
provide temporary relief, but without funda-
mental changes in the economy they will have no
lasting impact.
The stabilization program focuses on sub-
stituting the consumption of domestic products
for imports and reducing bank credits to unprofit-
able enterprises. Credits for imported automobiles
have been eliminated, and credit has been tight-
ened for firms producing goods largely with im-
ported materials. In addition, import quotas for
some unspecified goods have been slashed. The
availability of loans for enterprise investments
and of short-term credits for working capital also
have been curtailed.
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The Yugoslavs, while waiting for the
domestic measures to take effect, have obtained
temporary relief in the form of a standby credit
of $120 million from the International Monetary
Fund, and credits and debt relief amounting to
$75 million from Italy and $58.5 million from
the US. French and West German assistance is still
pending. Belgrade for political reasons has so far
rejected attempts by Bonn to tie its aid to a final
settlement of Yugoslavia's World War I I indemnif-
ication claims.
Efforts since last fall to stabilize the econ-
omy have been unsuccessful. Price controls have
been evaded, and inflation has all but wiped out
the anticipated effects of the devaluation of the
dinar last January. For the first seven months of
this year the cost of living rose by 14 percent and
the trade deficit reached $971 million, a
staggering 62 percent above the comparable pe-
riod of 1970.
Like past deflationary campaigns, the new
measures attack the symptoms not the basic
causes of inflation. Even temprorary relief may be
hard to achieve. At this early date the regime
already has run into one snag: credit controls had
to be eased temporarily when illiquid firms were
unable to meet payrolls in early August.
omy again?
Moreover, the new constitutional structure
creates a new uncertainty by giving the republics
an integral role in forming and executing eco-
nomic policy. The next few months will provide
clues to two key questions: will the republics
fully implement the unpopular deflationary meas-
ures and, even if some degree of stability is
achieved, how long will Belgrade be able to resist
the inevitable pressures to overinflate the econ-
MIDDLE EAST-AFRICA
Jerusalem-Israel: The Remaking of a City
The Jerusalem issue is the least negotiable of
all Arab-Israeli territorial questions. Since the war
in 1967, the Israelis have incorporated former
Arab East Jerusalem with former Israeli West
Jerusalem, and have proclaimed the united city as
the capital of Israel. They have also frequently
said that the city would remain under Israeli
sovereignty and would never again be divided.
The only concession the Israelis have ever offered
is that they will permit access to the various
religious sites.
limits. Within this area, they now are well ad-
vanced on housing construction designed to weld
the two former sections into a single city with a
resident Jewish majority. An arc of new buildings,
mostly large apartments, is steadily enclosing the
Old City, making it virtually impossible to again
divide the city along ethnic lines. By April 1972,
the Israelis expect to have built about 7,500 hous-
ing units which would house an estimated 26.000
Jews.
Soon after annexing East Jerusalem, the Is-
raelis nearly tripled the size of the municipal
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O.V_UJLCr, JL
ISRAEL-JORDAN
JERUSALEM ADMINISTRATION
BEFORE JUNE 1967 HOSTILITIES
--UN Armistice Line (April 1949)
?.......?? Municipal boundary (1947)
Built-up area
AFTER HOSTILITIES
Israeli-administered municipal area
(26 June 1967)
? Israeli-expropriated land
Church{ the Holy Sepulcher
To Jericho
26 kms.
/ \ (NO MAN'S LAND)
f Ramat
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The Israelis, to build the new housing, have
expropriated some 4,000 acres of land, 3,000 of
which are believed to have been owned by Arabs.
This has created some hardship among the Arabs,
who have generally refused compensation out of
fear that this would acknowledge a lawful Israeli
take-over. Near the sacred Western (Wailing) Wall,
Arabs have been summarily removed, ostensibly
for security reasons, and many of their houses
have been demolished. The Jewish Quarter in the
Old City-from which Jews were expelled in
1948-is now largely Arab, but it is being rebuilt
and most of the Arabs will be replaced by Jews.
Israeli archeological excavations along the
Western Wall near the compound of the Dome of
the Rock and the AI-Aqsa mosques have also
raised highly volatile religious issues. The Arabs
charge that the digging is designed to undermine
these highly revered shrines. The tinder-box qual-
ity of Arab sensitivity regarding these holy places
was demonstrated by the uproar that occurred in
NEPAL: On 29 August, King Mahendra an-
nounced the formation of a new cabinet that
retained K. N. Bista as prime minister. Bista's
reinstatement caught Kathmandu by surprise for
he had resigned only three days earlier following
an unusual royal directive to Parliament criticiz-
ing his government for the arrest of a controver-
sial legislator. Both the King and Bista, however,
appear to have gained from the reshuffle. By
expelling two ministers implicated in corruption,
Mahendra has demonstrated his concern for main-
Page 17
1969 when a fire was set in Al-Aqsa by an Aus-
tralian religious fanatic.
The Israeli press, meanwhile, has launched
an attack on the possibility of a Security Council
debate on Jerusalem. Israeli newspapers have ac-
cused the US of "passivity" in the face of the
Jordanian proposal to bring the issue to the coun-
cil; one New York correspondent quotes Israeli
UN delegate Tekoah as saying Israel will not play
its prearranged part in the "script" prepared by
Jordan and the US for the council meeting. For-
eign Minister Eban is supposed to have said at a
cabinet meeting that if Jordan insists on taking
the question to the UN, it can expect a sharp
Israeli counterattack, including a review of Jor-
danian administration of Jerusalem. Eban. also
hinted that a debate would cloud prospects on
other issues-particularly an interim settlement on
the Suez Canal. The papers add that Israel will
not cooperate with any UN committee that may
be sent to Jerusalem to investigate.
taming the image of honest government. Bista's
personal position in the government has been
strengthened by the King's evident confidence in
his ability and loyalty, and by the added re-
sponsibility of the foreign affairs portfolio in ad-
dition to the three he previously held. Despite
Bista's anti-Indian reputation, Indian diplomats in
Kathmandu consider that he played a positive
role in negotiating the new Indo-Nepalese trade
and transit treaty and that he may help further to
improve bilateral relations.
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SLUKL I
Pakistan: Leftists in the Bangla Desh Movement
Guerrilla activity in East Pakistan is largely
under the control of the moderate Awami League
(AL), but the dozen leftist groups fighting in-
dependently pose a potential threat to AL leader-
ship. Although the role of the leftists now is
small, it has grown steadily since fighting broke
out last March.
The most important of these leftist organiza-
tions is the Communist Party of East Pakistan/
Marxist-Leninist, led by Mohammed Toaha who
now commands a fairly successful guerrilla force
in the southern part of East Bengal. The party
refuses to have anything to do with the AL and
does not appear to have ties with any of the
Indian Communist parties. At least three other
East Bengal groups are aligned with Indian Com-
munists, however, and have expressed an interest
in uniting with the AL. Their proposals so far
have been rejected by the AL leadership.
Nine leftist organizations met last June to
form a united front. Their ultimate objective is to
establish a free Bangla Desh by means of pro-
tracted guerrilla warfare. Hindered by personal
rivalries among their leaders, they are nevertheless
seeking ways to exploit the current instability and
to challenge the moderate insurgent forces.
CHAD: A coup attempt that President Tom-
balbaye claims to have foiled on 27 August ap-
parently was feigned with appropriate theatrics
by the government itself. The purported plot
leader, a Muslim former parliamentary deputy,
was arrested well before the "abortive coup" for
distributing a subversive tract and died under in-
terrogation. The government's exaggerated treat-
ment of the affair seems to have been intended
mainly to justify a subsequent diplomatic break
The AL leaders-predominantly from a
small-town, middle-class background-are poorly
equipped to organize guerrilla warfare. Although
they offer some political leadership, actual fight-
ing is commanded by politically unsophisticated
former members of the army and paramilitary
forces, who may well be susceptible to leftist
propaganda. Moreover, the AL's leaders are al-
most all Muslims, but the refugees-from whom a
guerrilla force could be drawn-may be as much
as 90-percent Hindu. The extremists, on the other
hand, have shown no religious prejudice and
many of their top- and middle-level leaders are
Hindu.
In the meantime, President Yahya has ap-
pointed a Bengali civilian governor in East Paki-
stan to replace Tikka Khan, a West Pakistani
general who has been the focus for charges of
army brutality. The change probably is designed
both to encourage Bengalis to cooperate with the
government and to lessen foreign criticism. There
was some expectation that Yahya would simul-
taneously appoint civilian governors in West Paki-
stan, including two from the west's largest party,
led by former foreign minister Bhutto. The mili-
tary, however, still distrusts leftist Bhutto, and
continues its unsuccessful efforts to unite the
contending factions of the moderate Muslim
League into a progovernment party.
with Libya, which was accused of unspecified
meddling in Chad's internal affairs. There is no
evidence of-and the government did not publicly
charge-Libyan involvement with the former
deputy. What Chad hopes to gain at this time by
needlessly antagonizing Tripoli remains unclear.
Perhaps after four futile months of negotiations
to improve relations, Tombalbaye simply lost
patience with Libya, which has given modest mili-
tary aid to dissident Muslim tribesmen in north-
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Uganda-Tanzania: Border Clash Brings Relations to New Low
The war of words between Kampala and Dar
es Salaam erupted into armed clashes on 24 and
25 August. Official accounts differ; each side ac-
cuses the other of the border violations that
touched off the fracas. The fighting, heavy at
times, apparently lasted for several hours, and
probably involved a few hundred troops from
regular border units. Tanzania has announced the
loss of one soldier and three civilians, while
Uganda maintains that only one of its soldiers was
killed. Both sides apparently have sent additional
troops to the area, and there have been reports of
further skirmishes. In addition, Ugandan Presi-
dent Amin has proclaimed that he has taken
personal command of the army.
Amin has asserted that Chinese Communists
are involved with the Tanzanians. At a press con-
ference, he dramatically exhibited the body of a
"Communist Chinese" military officer who he
claimed had been assisting the Tanzanian troops.
According to the Tanzanians, the body is that of
a senior Tanzanian police commissioner who was
of African and European parentage. Although
Chinese instructors are known to be advising
Tanzanian troops in the western part of the
country, there is no evidence to support Amin's
charge that they are assisting troops in the border
area. The Chinese, for their part, have labeled
Amin's charge "an out-and-out lie."
Relations between Uganda and Tanzania
have been deteriorating since General Amin! over-
threw the Obote government last January.
Tanzanian President Nyerere, a close supporter of
Obote, has refused to recognize the Amin regime
and has provided refuge for Obote and some of
his close followers. Amin, meanwhile, has: con-
tinually accused Nyerere of harboring and train-
ing pro-Obote guerrillas who, according to Amin,
have entered Uganda on several occasions.
Although last week's clash appears to have
been an isolated encounter, it brings relations
between Uganda and Tanzania to a new low and
virtually eliminates any possibility that the rift
will soon be healed despite mediation efforts
initiated by the Commonwealth. In addition, the
clash has focused the attention of both countries
on the border and increases the chance for imore
serious confrontations in the future.
. . .
Zambia: Tribalism Again Breaks to the Surface
President Kaunda faces a resurgence of tribal
politicking, but the recent formation of a new
tribally based political party is unlikely to cause
him unmanageable problems.
Former vice president and Bemba tribal
leader Simon Kapwepwe-once second only to
Kaunda in political power-resigned from the
cabinet and the ruling UNIP Party on 21 August.
In announcing the formation of his own United
Progressive Party (UPP), Kapwepwe attacked cor-
ruption, economic mismanagement, and the loss
of democracy in Zambia. Despite his emphasis on
national issues, Kapwepwe was acting primarily to
bolster the sagging fortunes of his Bemba follow-
ing. His previous heavy-handed promotion of
Bemba interests gradually alienated most
Zambian political factions, causing Pre$ident
Kaunda to demote him and his tribal associates in
the government and party hierarchy.
Kapwepwe has run into serious problems in
trying to get the UPP under way, however. Un-
able to persuade any important politicians to de-
fect from UNIP with him, he has put together an
uninspiring party executive of political
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lightweights. Most Bemba politicians still in the
UNIP-including the most important tribal leader
left in the cabinet-have publicly declared their
loyalty to Kaunda's party.
Kapwepwe's basic dilemma is how to
broaden his appeal beyond his tribal base, a politi-
cal necessity if he is to mount a credible challenge
to the popular President. His personal philosophy,
as well as the views of the few non-Bembas cur-
rently attracted to him, place him to the left in
Zambia's political spectrum. He has already an-
nounced that the UPP will be guided by socialist
and anticolonialist principles. At the same time,
however, Kapwepwe is trying to form an alliance
of convenience with Zambia's other opposition
party, the conservative ANC, a party that dis-
trusts government regulation of economic and
social activities and espouses dialogue and trade
with white southern Africa. Ironically,
Kapwepwnre's resultant failure thus far to stake out
any clear positions on political issues-under-
scored recently in an unimpressive television per-
formance-serves only to reinforce his image asa
Bemba tribalist.
The most serious problem that Kapwepwe's
defection could create for Kaunda is that it might
result in a permanent disaffection of the Bemba
rank and life. Such a situation involving this im-
portant tribe would set back Kaunda's efforts to
build national unity. Nevertheless, if the President
retains most of the important Bembas in the
government and UNIP, as seems likely, he should
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PERU: President Velasco is showing increasing
concern about the obstacles confronting his gov-
ernment's social and economic reform program.
Last week the government denounced "anti-
revolutionary agitators" on the extreme left and
the extreme right. Then on 27 August Velasco
himself appeared to blame the government's prob-
lems primarily on the "right." At the same time,
however, he criticized the Communists and other
leftists as tools of the right that are being used to
stymie reform. The President probably was,react-
ing to Communist-led labor agitation that has
caused a number of costly strikes at government-
owned installations as well as private enterprises.
There is evidence that some workers are dissatis-
fied with the government's promises of eventual
participation in ownership and management; they
are more interested in the size of their next pa -
_heck.
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Bolivia: Banzer Settles In
President Banzer has completed the cabinet
of his National Popular Front government and
promised that its "nationalist and revolutionary"
program will soon be made public. The President
has professed a desire to deal with Bolivia's basic
problems, but he could soon find himself pre-
occupied with keeping his regime intact.
The alliance of the military, the Nationalist
Revolutionary Movement (MNR), and the Bo-
livian Socialist Falange (FSB) was forged out of
unity of purpose in the face of a common enemy.
Nevertheless, the stresses of coalition rule and
infighting within and among the governing groups
over conflicting partisan interests will provide the
potential for its disruption.
Banzer has moved to consolidate his position
by reorganizing the armed forces' command
structure. Further personnel changes are likely to
come during the traditional year-end rotation of
military assignments.
The MNR has rebuffed demands from its
own e t wing that it leave the coalition in protest
over alleged military abuses committed against
students. Left-wing leader Hernan Siles remains in
exile, and some party militants are said to be
considering taking action to prevent his return.
Bar--zer will also have to deal with the rem-
nants of the defeated "popular forces," but harsh
repressive measures could serve to unify the pre-
viously fragmented extreme left. A self-pro-
claimed Revolutionary Resistance Front, claiming
to represent the country's major extreme leftist
groups, has called for an armed struggle. The
resistance front has also denounced deposed Presi-
dent Torres for betraying the people and sending
them to a useless slaughter. Torres, in exile in
Peru, has attempted to justify his conduct during
the rebellion that overthrew him and has declared
that "the revolution" will eventually crush its
enemies. The Banzer government reportedly has
begun to prepare itself to counter an urban ter-
rorist campaign.
ALLENDE'S TRAVELS: Chilean President Sal-
vador Allende's ten-day, good-will trip to Ecua-
dor, Colombia, and Peru served to demonstrate
that he is accepted as a member in good standing
of the Latin American family. It has also provided
him a wider forum for attacks on US public and
private economic policies and caused some inter-
nal political problems for his hosts. In some cases
important citizens of varying political viewpoints
showed disapproval of the visit, and crowds of
enthusiastic greeters used the occasion to demon-
strate opposition to their own governments.
Allende's own remarks, interspersed with exposi-
tions of his socialist programs and calls for Latin
American economic independence, generally
stressed such points as mutual interest in the
Andean Pact and the desirability of "ideological
pluralism," which he says his government exem-
plifies. The Chilean president's private meetings
with leftist students in Ecuador and opposition
leader Rojas in Colombia, his insistence on in-
formal dress, and the zeal of his own sizable
security guard were minor irritants, but no dis-
agreements surfaced publicly. On the contrary,
Allende used logical excuses of indisposition to
alter his schedule when he considered it politi-
cally feasible, entertained local interviewers with
his quick wit, and charmed those who accepted
his official hospitality with excellent Chilean
wines.
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lJL S.JS i.I 1
Argentina: Politics
President Lanusse is making progress in his
effort to restore representative government to Ar-
gentina, and an official election date may be set
within the next few weeks. Any optimism on this
account, however, is clouded by the sagging na-
tional ec nom
The president met last week with representa-
tives of the Hora del Pueblo, a loose political
grouping of leaders of the Peronists and Radicals
and other smaller parties, which many observers
believe may eventually serve as the basis for an
electoral coalition. Following the meeting, a gov-
ernment communique announced that an "elec-
toral calendar" would be made public before 15
October.
Lanusse is also making headway in his effort
to neutralize the troublemaking potential of the
predominantly Peronist organized labor move-
ment. He is even being mentioned by some labor
leaders as a potential presidential candidate on a
Peron ist-progressive-military coalition ticket. De-
spite Lanusse's growing popularity with union
leaders, however, only Peron himself-from exile
in Madrid-can deliver the support of the masses
for Lanusse's political plan.
Representatives of the General Confedera-
tion of Labor (CGT) are currently negotiating
with the government for another round of wage
increases and a freeze on prices. If they receive a
substantial portion of what they want, Lanusse
will have gone a long way toward solidifying his
labor support. CGT leaders are beginning to talk
of strikes, primarily to emphasize their wage and
price demands, but also in the hope of strength-
ening Lanusse's position with the military. They
believe that Lanusse is willing to go along with
the price freeze and wage increases and probably
even Peron's bargaining points, but that this ac-
commodation with Peronism will bring him under
considerable pressure from the military. It is
hoped that the disruption and potential for vio-
lence that the threat of renewed labor agitation
and strikes implies will prevent military dissatis-
faction with Lanusse's policies from becoming
hard opposition.
Lanusse thus ap-
pears to awe time to c na inue working toward
his "Grand National Accord," but each step he
takes closer to the Peronists will give new strength
to his opponents in the military.
Page 23
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SLUK.C. I
EL SALVADOR: With their support waning in
the face of a firm government commitment to law
and order, the striking teachers have accepted a
settlement that differs little from the one rejected
two weeks ago. After the government dispersed
the 27 August demonstration with tear gas, the
teachers, seeking some face-saving means of end-
ing the two-month-old walkout, requested the
archbishop's assistance in resolving their differ-
ences with the government. The government,
equally anxious to settle matters before the elec-
tion campaign gets into high gear, added to its
previous offer a promise of no reprisals against
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Uruguay's Quickening Campaign Unsettles its Neighbors
As the pace of campaigning for the general
elections in November quickens in Uruguay,
neighboring Argentina and Brazil are becoming
increasingly uneasy over the prospects of a
Chilean type of election victory by the leftist
Frente Amplio (Broad Front).
Last week President Pacheco publicly an-
nounced he would seek re-election via a constitu-
tional amendment that would permit a second
term. Although Uruguay's fragmented politics
make approval of the amendment by a majority
of the voters only an outside possibility, the Presi-
dent's declaration does signal the beginning of a
major campaign effort by the incumbent Colo-
rados. Similarly, the front-running candidate of
the Blancos, the other major party, also recently
began to challenge what has been the Frente's
one-man show. In previous months early cam-
paigning by the Frente (a coalition principally
composed of Communists, Christian Democrats,
and major party dissidents) easily dominated po-
litical news.
The Frente bandwagon now is running into
official government countermeasures as well. The
minister of interior has forbidden the powerful
major labor federation-controlled by the Com-
munists-to call further strikes; the federation had
been using its labor muscle to support Frente
objectives. The coalition's rally and canvass for
support on 25 August were also hampered by the
government's public warning that arrests would
follow any complaints resulting from planned
house to house visits, which subsequently were
canceled.
Nonetheless, the Frente's early and well-fi-
nanced start, combined with the latent dissatisfac-
tion of most Uruguayans with the performance of
the "establishment" parties, has kept the Frente
atop public opinion polls thus far. The polls,
however, have generally been limited to the capi-
tal, where the Frente is strongest and where many
voters are still undecided.
The Broad Front's initial showing has, how-
ever, been sufficient to galvanize Brazilian, and
Argentine fears that Uruguay would succumb to a
leftist take-over. Both countries have extended
sizable amounts of aid to Uruguay's floundering
economy.
Both neighbors appear willing
to support extralegal action by Pacheco to retain
power if his ticket falls short at the polls, al-
though such an effort is unlikely.
The Brazilians are the most unsettled by
Uruguay's internal turbulence
Relations between
Brazil and Uruguay, built upon a tradition of
suspicion, cooled markedly last year after the
Pacheco administration refused to negotiate for
the release of the Brazilian consul kidnaped by
...and we will defend
our Uruguay from the
"subversion"
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SECKE1'
the Tupamaros. Although the extension of eco-
nomic aid has contributed to an official thaw, Uru-
guayans maintain a traditional distrust of their giant
neighbor. A leftist Montevideo weekly recently
headlined details of a purported Brazilian plan called
"Operation 30 Hours" which called for the military
occupation of Uruguay. Some of the extremists in
the military in both Argentina and Brazil would
prefer to intervene militarily in Uruguay if the situa-
tion deteriorates sufficiently.
At present the Argentine and especially the
Brazilian concern, although sometimes based on
half-truth and faulty analysis, is real and acute. The
Page 26
Lanusse government in Buenos Aires, however, is
more responsive to public opinion than the earlier
Ongania government which reportedly made the
agreement with Brazil. Argentina, already making
some tentative moves toward coexistence with the
Marxist government in Chile, thus seems unlikely to
embark upon a precipitous course in Uruguay.
Brazil, despite its greater concern, also seems likely
to be restrained from a unilateral intervention be-
cause o- the possible reaction from rival Argentina
and the negative effect it would have on its cam-
paign to achieve international influence. Barring
direct intervention, however, the Brazilians espe-
cially are likely to increase efforts to exert influence
via government to government relations and unoffi-
cially through public saber rattling
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WEEKLY SUMMARY 3 Sep 71
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Secret
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