WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009400010001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 33
• Document Creation Date: December 21, 2016
• Document Release Date: June 9, 2008
• Sequence Number: 1
• Publication Date: January 14, 1972
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
14 January 1972
No. 0352/72
Copy N2 46
State Dept. review completed
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CONTENTS
(Information as of 1200 EST, 13 January 1972)
Bangladesh: The Return of Mujib . . . . . . . . . . . . . . . . . . . . . . 3
New offer to Malta . . . . 5
Laos: Long Tieng Totters . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Ghana: The Army Takes Over . . . . . . . . . . . . . . . . . . . . . . . . 2
Indochina . . . . . . . . . . . . . . . . . . . . 7
EUROPE
Yugoslavia: The Pot Bubbles 6
FAR EAST
Political Skirmishing in Italy . . . . . . . . . . . . . . . . . . . . . . . . 15
NATO: Studying Troop Reductions . . . . . . . . . . . . . . . . . . . . . 16
Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
New Trials for EC Farm Policy . . . . . . . . . . . . . . . . . . . . . . . 17
Fedayeen Action, Israeli Reaction . . . . . . . . . . . . . . . . . . . . . 18
Uruguay: The Tupamaros Are Back Again . . . . . . . . . . . . . . . . . . 24
Ecuador . . . . . . . . . . . . . . . . . . . . 24
VENEZUELA AT TIIE CROSSROADS
(Published separately as Special Report No. 0352/72A)
g . 23
Chile A Season for Maneuvers . . . . . . . . . . . .
Stirrin s in Guatemala . . . . . . 22
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LONG TIENG AREA
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Laos: Long Tieng Totters
The government hold on Long Tieng is pre-
carious after several days of sharp fighting. North
Vietnamese attacks have forced the government
to abandon several positions along the defensive
line north of Long Tieng, including positions in
the Tha Tam Bleung and Sam Thong areas.
Long Tieng itself has been subjected to sev-
eral infantry raids and continuing artillery at-
tacks. North Vietnamese troops have overrun
irregular positions on Skyline Ridge overlooking
the complex, but government forces have con-
tained Communist penetrations of Long Tieng
Valley. The North Vietnamese appear capable of
launching even stronger attacks. Despite heavy US
air strikes, elements of seven North Vietnamese
regiments are in the area southwest of the Plaine
des Jarres. There is no evidence yet that these
units are experiencing overriding logistical dif-
ficulties.
The government has about 8,000 irregulars
in the Long Tieng area, mostly in defensive posi-
tions. The morale of many of these units is very
low, and they probably could not take back many
of the lost positions. Vang Pao hopes to retake
positions on Skyline Ridge, but if this fails, the
government forces will probably have to with-
draw from Long Tieng.
In south Laos, an estimated two North Viet-
namese battalions with artillery support forced
irregulars to abandon Ban Gnik, the government's
last position on the Bolovens Plateau. Govern-
ment casualties were extremely heavy in four
days of concerted enemy attacks. The withdrawal
from Ban Gnik leaves only small government
units between Pakse and the Bolovens, and many
will probably pull back in the near future.
Ghana: The Army Takes Over
Army elements in Accra moved early in the
morning of 13 January to depose Prime Minister
Busia, who is currently in London for medical
treatment. Although for a while the situation was
confused, as the day wore on there were increas-
ing indications that the coup would succeed.
First news of the army move came in an
announcement over Ghana radio that power had
been taken by Lt. Col. Acheampong, the com-
mander of one of Ghana's two infantry brigades.
Shortly thereafter, the coup forces were reported
to control the main military camp in Accra, the
airport, and the prime minister's residence. Other
key points in the capital, including Osu Castle,
the government's nerve center remained in the
hands of Busia supporters.
The position of the other brigade was uncer-
tain. In any case it is not in the capital area. As
time passed, however, the coup forces appeared
to be gaining additional military support.
In an attempt to build popular support, the
coup leaders have emphasized popular grievances
growing out of austerity measures imposed by
Busia's economically hard-pressed government.
These included cuts in the pay and perquisites of
army officers, for which Acheampong openly crit-
icized the government. In addition, he has long
been bitter about the promotion ahead of himself
of officers he considers his inferiors and about
other recent personnel changes in the army.
Acheampong attended a training course in the US
in 1968-69 and is regarded as decidedly pro-West-
ern, especially pro-US. There is no connection
between the coup leaders and Ghana's deposed
dictator, Kwame Nkrumah, now in a cancer in-
stitute in Bucharest.
Initial public response in Accra has been
generally favorable. Residents there have long
been antagonistic toward the Busia government,
and their discontent was intensified by the recent
rise in the cost of living that followed the sharp
devaluation of Ghana's currency two weeks
ago.
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VL\)1 . J 1
Bangladesh: The Return of Mujib
Mujibur Rahman returned home on 10 Jan-
uary to a country jubilant over his liberation but
faced with formidable economic, political, and
internal security problems. The 51-year-old
Mujib's swiftness in establishing a parliamentary
form of government, with himself holding the
prime ministership and several other key port-
folios, shows that he fully intends to exercise a
dominant role. His public statements so far have
been relatively free of rancor. He has declared his
gratitude for Indian, Soviet, and Eastern Euro-
pean support, but he has also commended the
UK, France, and "the people of the United
States." While asserting that Bangladesh is no
longer linked in any way to Pakistan, Mujib has
also insisted that he bears no ill will toward the
Pakistani people. He has called for an investiga-
tion of Pakistani atrocities by an international
body.
Mujib has urged his countrymen to adhere to
the law in dealing with persons accused of col-
laboration with Pakistan. The regime has already
arrested several hundred alleged collaborators and
is planning to put them on trial. It may request
that India turn over accused collaborators now in
its custody but it is uncertain whether New Delhi
would comply.
The new country faces many problems, and
the most staggering are in the economic sphere.
Bangladesh has an empty treasury, almost no for-
eign exchange reserves, a massive food deficit, a
shortage of managerial talent, a badly deranged
communications and transportation network, and
a seriously impaired capacity to grow jute and
tea, the main export commodities. The return of
millions of refugees from India, which is already
under way, will place an enormous added strain
on the country's meager resources.
Infighting among political factions also
could eventually present difficulties. Although
Mujib's Awami League swept the elections of
December 1970, several leftist parties played an
active role in the independence struggle and are
now seeking a share in governing the country. The
Awami League has kept these parties out of the
cabinet but, in order to keep their support, the
government has appointed several of their leaders
to a board for a national militia, a potential
source of power..
The Awami League itself encompasses a
broad range of political persuasions. Prior to
Mujib's return, the party's left wing, led by Prime
Minister Tajuddin Ahmad, appeared to be gaining
the upper hand. Mujib's presence will overshadow
the factional wrangling for the time being. More-
over, he is a middle-of-the-roader, and his assump-
tion of the prime ministership in place of Ah-
mad-who remains in the cabinet as finance minis-
ter-means a redaction in influence for the left. If
the government should falter in the face of the
country's problems, however, leftist politicians
both within and outside the Awami League would
probably make 3 renewed bid for an enhanced
role.
Closely related to the government's political
problems is the challenge of public order. The
police force was decimated during the past ten
months and it w 11 take many months to rebuild.
The government probably now controls less than
a third of the estimated 50,000 armed guerrillas
in the country. Many of the others are believed to
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be either bandits or affiliated with left-wing po-
litical groups. Some guerrillas belong to the Mujib
Bahini, an armed student group, which could
make trouble if the government falls short of the
students' idealistic expectations.
The Indian Army, together with some of the
better disciplined guerrilla units, so far has been
able to prevent a serious breakdown in law and
order. New Delhi has proclaimed that it does not
intend to keep its forces in Bangladesh indefin-
itely, and some Indian units have already been
withdrawn. The two governments have stated in a
joint communique that the rest will leave when-
ever Dacca requests their departure. Bangladesh,
nevertheless, is likely to remain heavily dependent
on the Indians for help in maintaining internal
security-and in resurrecting the economy-for a
long time to come.
The problems of the Biharis, one of the main
groups accused of having aided Pakistan, appear
to have eased for the moment. Recent UN and
Red Cross visitors to the three main Bihari en-
claves found that food supplies had begun to
arrive and that the Indian Army was inoculating
people against cholera. Relations between the
Biharis and the Bengalis remain uneasy, however,
and the Biharis are deeply depressed over their
bleak economic prospects and the threat of future
vendettas.
On the diplomatic front, several Eastern Eu-
ropean countries and Mongolia have recognized
Bangladesh, but Moscow so far has delayed, prob-
ably to avoid worsening its relations with Islam-
abad. Indian Prime Minister Gandhi's desire to
prompt socialist countries to recognize the Dacca
regime-together with her unhappiness with the
US position during the Indo-Pakistani war-prob-
ably influenced her decision on 7 January to
upgrade India's representation in North Vietnam
to the ambassadorial level.
Senior UN secretariat officials have estab-
lished basic principles for assistance to Bangla-
desh. Relief will be given without any implication
of diplomatic recognition. Refugee assistance in
India will gradually be phased out in favor of
efforts in Bangladesh. Such operations will at-
tempt to avoid the atmosphere of permanence
that has characterized the UN Relief and Works
Agency program in the Middle East. The early
resumption of UN olitical activit Ilj in this area is
not likely.
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New Offer to Malta
NATO has set the stage for another offer to
Maltese Prime Minister Mintoff, but London may
not be willing to cooperate in this effort to con-
ciliate him. The North Atlantic Council on 12
January decided to tell Mintoff by Saturday that,
if negotiations with the British are resumed and
lead to a satisfactory agreement, NATO would
offer a payment of over $31 million annually.
The US offer to add about $2 million to the
previous NATO package has been matched by like
pledges from Italy and West Germany. It appears
that no further substantial amounts will be added
to the $31-million package. The French still re-
fuse to participate, but Paris may add to the
$18.2 million in bilateral aid available thus far to
Malta. Mintoff has been insisting on $46.8
million.
The North Atlantic Council also agreed to a
UK proposal that renewed negotiations be con-
ditional upon Malta dropping its deadline of 15
January and agreeing not to harass the British
withdrawal. In the event that the UK completes
its withdrawal, t seems unlikely that the British
would return in substantial numbers, if at all.
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vi vl\L' 1
Yugoslavia: The Pot Bubbles
A show trial of Croatian nationalists may be
in the offing. Coincident with the opening of a
major party meeting on 12 January in an atmos-
phere of nationality tensions, eleven officials of
the Croatian cultural society Matica Hrvatska
were arrested. All are accused of having ties with
radical emigres and foreign intelligence services.
They are also charged with working to separate
Croatia from Yugoslavia.
Allegations of foreign intelligence meddling
in Croatia have been bandied about for some
time. Tito himself accused the ousted republic
party leadership of such ties, but this is the first
indication of anyone actually being called to ac-
count. No foreign intelligence service was named,
but a Yugoslav press report of the case, in refer-
ring to an attempt to undermine Yugoslavia's
self-management system, suggests that the charge
is aimed at the Soviets.
The 25th session of the presidium of the
Communist Party met on 12 January, with no
indication as yet as to whether a consensus was
reached on Tito's demands for party reorganiza-
tion. Some of Tito's colleagues feel that only a
party congress has the authority to make the sort
of changes Tito wants; others simply want an
assurance that too much power will not be con-
centrated in the hands of a select few. The pre-
sidium did adopt the standing orders for the sec-
ond party conference to be held on 25-26
January and announced that 357 delegates would
attend.
Serbian party boss Marko Nikezic is in the
forefront of presidium members opposed to re-
organization and reinforced discipline if it means
returning to a highly centralized party. Nikezic
and Serbian secretary Latinka Perovic, along with
others, may be in hot water over this issue. Both
openly defended Croatia's right to put its own
house in order without outside interference at a
time when Tito was saying all Yugoslav parties
should assist "our Croatian comrades." Thus,
they not only differ with Tito, but their views are
not in line with popular feeling in Serbia.
In Belgrade, anti-Croat feeling is on the rise.
The Serb-in-the-street, faced with uncertainty
about the future and signs of confusion in the
party hierarchy, suddenly has remembered the
fratricide of World War II when thousands of
Serbs died in Croatia. Against this background,
the Belgrade rumor mill has been active, adding to
a mood of general uncertainty in the city. Re-
current, but unfounded, stories include the im-
minent return of Alexander Rankovic, the former
vice president whom Tito purged in mid-1966
following the revelation that Rankovic was work-
ing against Tito in league with a foreign power,
i.e., the Soviets. Stories are rampant in Belgrade
that the police are afraid even to hand out traffic
tickets for fear of offending people in high places
and that firms are unable to pay workers. Serb
chauvinism is evident in the grumbling about the
ineffectiveness of Tito's leadership and in state-
ments that Yugoslavia would be better off under
a Greek-type regime-a reference to the fact that
the Yugoslav military is dominated by Serbs.
Elsewhere, tension between Albanians and
Serbs in the autonomous province of Kosovo are
running high. Both Serb and federal officials are
keeping a close eye on the situation there fol-
lowing reports that large amounts of small arms
are being smuggled into the rovince.
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Indochina
ABOUT ANOTHER GENERAL OFFENSIVE
The Communists are spreading the word
widely, and with unusual openness, that a massive
spring military campaign is being planned in
South Vietnam to affect President Nixon's trip to
Peking. Even members of the North Vietnamese
negotiating delegation in Paris have been putting
out the word. The openness of Communist discus-
sion of their military intentions is puzzling, since
they usually work hard to conceal even the out-
lines of their plans.
In adding its bit, Radio Hanoi has suggested
that a change in military tactics in South Vietnam
may be in the offing. A long series of commen-
taries by an unknown but authoritative author
who uses the pseudonym Chien Thang touches all
the propaganda bases, including the need for
more diplomatic and political activity abroad. He
then gives a big boost to main-force warfare,
noting that this type of combat is the "most
important part of the army's combat strength in a
war," and implying that heavy main-force action
is the key to ultimate victory. By contrast, com-
mentaries since early last summer have given as
much emphasis to guerrilla struggle and political
action inside South Vietnam as to large-unit war-
fare.
Chien Thang's articles, which originally ap-
peared in the North Vietnamese army journal,
may have been mainly designed to rationalize the
current heavy employment of Hanoi's army in
Laos and Cambodia and condition the populace
to increased use of main-force units in the war.
His shift in emphasis, however, could also reflect
some disagreement within the regime on the idea
of committing more resources and manpower to
main-force warfare. Perhaps significantly, it was
published in the wake of a speech by National
Assembly President Truong Chinh that placed far
more emphasis on domestic priorities than has
been characteristic of other recent top-level pro-
nouncements. Differences over the proper pace of
military action have spilled over into North Viet-
namese media in the past, most notably in con-
nection with the offensives of 1968.
How much of the talk about a big offensive
in South Vietnam is rhetoric and how much is
solid intention is still far from clear. Communist
cadre are being told that a "general offensive"
aimed in large part at hitting urban areas is sche-
duled for the next few weeks or months. There is
little evidence as yet of hard planning for an
all-out effort, although a few reports suggest that
detailed orders for major efforts here and there
are being formulated and issued.
Also lackirg so far, except in the border
areas of Military Regions 1 and 2 where a big
spring effort dces seem to be in the works, is
substantial evidence of the resupply and redeploy-
ment activities that have preceded a maximum
Communist military effort in the past. However,
if the Communists are willing to take the casual-
ties, and this would include the decimation of
many of their military units in South Vietnam-
they could put on a spectacular offensive that
would have major psychological effects both in
South Vietnam and abroad.
South Vietnam's armed forces experienced a
number of serious personnel problems last year
despite an over-all improvement in their fighting
performance. P study covering the first eight
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painted a
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Tractors prepare fields for rice seedlings in North Vietnam.
25X1
pessimistic picture of troop replacement and re-
cruiting efforts. The armed forces were only
about 70 percent of authorized strength during
the period. The study does not make a direct
correlation between the increased combat role of
the South Vietnamese Army and the growing
personnel problems, but it is apparent that this is
indeed a big factor. Casualties suffered by govern-
ment forces rose by over 11 percent during the
1971 period, and the monthly desertion rate
increased by ten percent. Desertions have ham-
pered the development of the South Vietnamese
armed forces over the years. A constantly increas-
ing war weariness is taking its toll on both govern-
ment and Communist recruiting efforts.
Although government operations against the
Communists improved over-all both in quantity
and quality, in some respects the army's perform-
ance deteriorated compared with 1970: the num-
ber of weapons lost in combat increased 123
percent while the number of enemy weapons cap-
tured decreased by 22 percent.
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HANOI PUTS ITS BEST FACE FORWARD
Hanoi issued a rosy New Year's pronounce-
ment on the economy that obscures the damage
caused by the record floods last summer. The
glowing account of agricultural successes focused
on the 1971 spring harvest, when there was a
bumper rice crop and a substantial increase of
industrial crops. But the November harvest ac-
counts for two thirds of annual rice production,
and Hanoi was only able to claim that a "major"
part had been saved despite the floods. Analysis
of photography indicates that some 40 percent of
the November rice crop was destroyed by the
floods. As a result, rice production for the year as
a whole probably was down by more than 20
percent. This would make it the smallest yearly
harvest since the Communists came to power in
1954. Livestock losses reportedly ran as high as
20 percent.
The floods had less of an impact on indus-
try, although they probably prevented output
from reaching pre-war levels. Disruption caused
by the floods seems to have curtailed industrial
activity generally for two to four weeks, long
enough to account for a loss of five to ten percent
in output.
The net result of all these difficulties was a
drop in GNP of approximately ten percent under
1970.
WINTER LIGHT IN CAMBODIA
The country enjoyed another quiet week
militarily, with enemy forces confining them-
selves to minor harassing attacks against scattered
government positions. The lull in the fighting
probably stem, from the Communists' need to
rest, refit, and resupply their troops-particularly
those employed along Route 6 and near Phnom
Penh. Some enemy forces are also occupied with
the rice harvest which will soon be completed.
Communist action can be expected to pick
up again soon. During the last dry season, they
fought hard curing November and December,
then laid low for a few months before winding up
the dry season with a series of sharp attacks along
Route 4 and in the Tonle Toch area northeast of
Phnom Penh. This year, they may swing into
heavy action somewhat sooner, particularly if
Hanoi undertakes an Indochina-wide effort.
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Political Skirmishing in Italy
Prime Minister Emilio Colombo's govern-
ment is likely to resign soon. Each of the parties
in the center-left coalition is seeking a greater
voice in government policy. At the same time, the
parties are trying to put together a program that
will carry them over several rather high hurdles in
the coming year.
Questions about the government's continua-
tion in office and its program naturally arose this
month following the presidential election.
Colombo had proposed a debate when parliament
reopens on 18 January. Now it is likely that he
and his cabinet will resign before the debate can
be held because the small Republican Party has
withdrawn its support and the Social Democrats
refuse to remain without the Republicans. Both
parties would join a new center-left coalition if
their desires are given sufficient weight in a new
program. The larger Socialist Party, on the other
hand, would refuse its support if Republican and
Social Democratic views are too strongly repre-
sented. Since each of the parties finds an echo in
some faction of the Christian Democratic Party,
the making of a new center-left cabinet may take
a long time.
The most immediate problem to be solved
before there is agreement on a new government is
how to deal with the referendum to be held
between 15 April and 15 June on Italy's first
divorce law, passed in late 1970. The major anti-
divorce political party, the Christian Democratic,
agreed to forgo parliamentary opposition to the
law and said it would rely instead on the elector-
ate's decision in a referendum. Thereafter, three
Catholic activist groups presented almost three
times the required 500,000 legal signatures in
their petition for the referendum and raised fears
that the divorce law would be abrogated.
At present, none of the political parties or
leaders, except for the small neo-fascist party,
really likes the idea of the referendum. The cen-
ter-left parties fear it will divide them, and the
Communists have come to believe that a substan-
tial number of their members will support the
referendum in defiance of the party line. Never-
theless, the political leaders have so far been
unable to devise a way of sidetracking the
referendum.
In the pre?aration of a new center-left pro-
gram there will also be considerable debate about
social and econ.)mic reforms and their financing.
The Republicans want to emphasize fiscal re-
sponsibility; thi:2 Socialists stress the priority of
reform.
Over the feast two years, moreover, leaders
of organized labor have successfully put pressure
on the governr-gent to speed up its reform pro-
gram. Economic conditions are such as to incline
political leaders to delay on further legislation,
but they are apprehensive that delay would foster
labor unrest. Certain key three-year labor con-
tracts, signed a4ter turmoil in the "hot autumn"
of 1969, expire this year.
The long-[ ending government decentraliza-
tion, scheduled to take effect on 1 April, may
also provoke controversy. The specified powers to
be transferred f om Rome to the regional capitals
involve public works, welfare, agriculture, and
local police.
Although parliamentary elections are ex-
pected in the spring of 1973, the Republicans and
Social Democrats say they would like early elec-
tions unless the government program meets their
demands. The Socialists are less ready, and the
Christian Demc crats fear elections now would
benefit the neo-ascists.
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NATO: Studying Troop Reductions
The Soviets are still stalling on receiving for-
mer NATO Secretary General Brosio for discus-
sions on the prospects for mutual and balanced
force reductions. Brosio, his patience wearing
thin, would like to have the status of his mission
clarified, although he would not want to let
Moscow off the hook by relinquishing his task
right now.
Moscow's stance is based on its opposition
to bloc-to-bloc talks on force reductions and its
preference for bilateral US-Soviet discussions on
the subject. The Soviets probably calculate that
pursuit of their current objectives in Europe
could only be complicated by receiving Brosio
and involving themselves in the kind of force
reductions dialogue sought by NATO.
In the meantime, the allies are proceeding
with their own examination of approaches to
negotiations that would protect NATO security
and yet lead to fruitful talks. Generally, they
expect that even if the Brosio mission has to be
scrapped, force reduction talks will become more
likely if there is movement toward a conference
on security and cooperation in Europe. They are
also increasingly conscious of the pitfalls involved
and of the need for thorough preparations.
Future NATO studies of force reductions are
likely to concentrate on the phased approach
favored by the West Germans. As Bonn sees it,
East and West first agree on principles to govern
reductions, next work out constraints on Warsaw
Pact and NATO force movements and deploy-
ments, and only then negotiate force reductions.
Bonn prefers this sequence to a "quick fix," i.e.,
immediate troop cuts. West German officials say, 25X1
however, that they would not stand in the way if
the US at some point should opt for the lat-
te r.
BELGIUM: The two-month-old impasse in nego-
tiations for a new government between the Social-
ists and Social Christians is about to be broken.
Gaston Eyskens, Social Christian prime minister
in the last government, is putting together a new
cabinet and is drafting a new program that should
be acceptable to leaders of both parties. He has
been immensely helped by Socialist Party co-
president Edmund Leburton, who succeeded in
overcoming the interparty disagreements on edu-
cational policy -that had undermined Eyskens'
previous efforts. The skilled and popular Eyskens
will probably complete government formation
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New Trials for EC Farm Policy
The common agricultural policy---still the
most integrated of the EC's programs-faces an-
other difficult period. As a result of the agree-
ments reached last month on exchange rates, the
EC must decide whether and how to set a new
value for the "unit of account" in which farm
prices are stated. Decisions on prices for the
1972-73 season are also pending, and debate has
been resumed over implementation of agricultural
reforms agreed to in principle last year. While
farm groups are, as usual, urging substantially
higher prices, the US is pressing for some re-
ductions.
Since the floating of the German and Dutch
currencies in May 1971, free trade in agricultural
products within the EC has been upset by the
compensatory import taxes and export subsidies
introduced to insulate domestic prices from ex-
change-rate movements. These measures are now
applied by all EC countries in trade with each
other and with countries outside the community.
Removal of these measures will probably involve
a revaluation of the unit of account in terms of
gold. This will not be easy to achieve. The com-
munity members will not take this step until the
US formally devalues the dollar.
The unit of account problem, of course,
complicates the always difficult decisions on next
season's support prices. The unit of account must
be fixed before the domestic prices that concern
each member government can be determined. The
commission's latest price proposals, although
above its earlier recommendations, are still below
what EC farm groups have been demanding. They
run counter, however, to US requests for lower
prices, particularly for feed grains, which are an
important US export item. With the commission
believing that farm pressures will increase over the
next two months, an impasse in EC decision-
making could occur if the US has not formally set
the new dollar value of gold by March.
. These difficulties provide the EC with a con-
venient rationale for not making any far-reaching
concessions to the US in the trade talks that
resume in Brussels on 14 January. It is doubtful
that the EC agricultural ministers will make much
progress on prices at their next scheduled meeting
on 24-25 January. The French, in any case, will
likely try to keep the focus of EC attention on
US demands, which Paris claims constitute an
attack on the common agricultural policy and on
''community solidarity" in general. F 25X1
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The Israeli strikes at fedayeen sanctuaries in
two Lebanese villages just across the border on 11
January followed a month of increased terrorist
operations. The Israelis reported killing an un-
determined number of fedayeen and admitted
losing two soldiers.
Early this week, the commanding officer of
the Israeli Northern Command passed a warning
to the Lebanese through the UN-sponsored Is-
rael-Lebanon Mixed Armistice Commission that
Lebanon's failure to restrain the fedayeen would
result in "corrective action." Several terrorist inci-
dents occurred subsequently. The most serious
and probably the one that sparked the Israeli
retaliation was a Katyusha rocket attack on 9
January on the town of Safad, which is some
seven miles from the border and had been un-
touched by terrorism since 1948. In the attack,
the fedayeen probably erected launchers with
I':atyusha-Launchers Found Near Safad
timing devices inside Israel and then retreated
across the border.
In the past, Israeli retaliations have usually
brought a period of quiet to the border. This
time, however, the fedayeen were back the next
day, firing Katyusha rockets at the Israeli border
village of Kiryat Shimona in northern Galilee. It
was the fourth shelling of the village in a week.
On 13 January, rockets were fired at two other
settlements along the border. If the fedayeen
continue to operate across the Lebanese border,
the Israelis are sure to respond again and probably
in greater force than they did on 11 January.
The Israelis have not yet retaliated against
fedayeen bases in Syria for the murder and de-
capitation of an Israeli civilian engineer in the
Golan Heights on 6 January. Except for this
incident, fedayeen activity along the border with
Syria has been at a relatively low level.
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Stirrings in Guatemala
After 18 months in office, the tone and style
of the Arana administration have generally been
set, and the break-in period is about over. He has
begun to demonstrate greater confidence in his
ability as well as a new ease and even exhilaration
in being the national leader. The law-and-order
President will continue to give attention to the
security situation, but he is broadening his focus.
He is demonstrating interest in social develop-
ment and is beginning to exhibit some pretensions
to an international or at least a regional role.
Arana came into office promising to elim-
inate the terrorism and subversion that in recent
years claimed the lives of two US military offi-
cers, a US and a West German ambassador, and
thousands of Guatemalans. After playing nice guy
for four months, he imposed a state of siege in
November 1970 and sanctioned extra-legal meth-
ods that had a chilling effect on the leftist guer-
rillas. Two months ago, responding to domestic
and international pressures, Arana declared the
pacification program a success, lifted the siege,
and restored full constitutional rights.
held in March. Even now, however, much of the
political maneuvering is actually directed toward
the 1974 presidential election. The somewhat
uneasy coalition between the rightist National
Liberation Movement, headed by Mario Sandoval,
and the makeshift Institutional Democratic Party,
assembled by the military government of the mid-
1960s, will last at least through March and seems
likely to win in a majority of the municipalities.
The major opposition, the Revolutionary
Party, has been having a hard time and has been
leaderless for over a year. Mario Sandoval, who
besides his party post is a leader of the govern-
ment coalition, seems to be trying to engineer the
election as party secretary general of a dissident
Revolutionary Party leader, Carlos Sagastume, in
an apparent attempt to divide the party and pick
up support from Sagastume for a presidential try
in 1974. Other Revolutionary Party leaders plan
to appeal this blatant interference in party affairs
to Arana, who is toying with the idea of extend-
ing his term and may resent Sandoval's machi-
nations.
Since then, guerrilla activity has not in-
creased significantly. Indeed, the locus of activity
has apparently shifted from Guatemala City to
the Peten, a sparsely populated area in the north-
ern part of the country, where this week a five-
man army patrol was ambushed and killed. The
government may soon undertake a major military
effort in this region, which it terms the last ter-
rorist stronghold in the country. Arana will also
devote considerable resources to fighting ordinary
crime, which has reached pandemic proportions
and even more of a political embarrassment than
subversion.
With the lifting of the state of siege, political
activity has resumed. Municipal elections will be
At the same time, Arana is showing more
concern with economic and social development
problems. During visits to the countryside, he has
been shocked by the conditions under which rural
laborers live, and he has begun to increase health,
education, and social services in rural areas. Al-
though the government has begun by pushing the
type of reforms that would make the biggest
splash during the March elections, Arana's rightist
credentials could persuade the landowners and
military to go along with more substantial reform
than they would accept from a centrist regime.
Arana is also beginning to dabble at regional
politics. He is encouraging efforts to revive the
Central American Common Market. On the other
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hand, he has been watching for signs of move-
ment toward independence in British Honduras,
which Guatemala claims, and has engaged in a war
of nerves with Costa Rica. The Guatemalans, con-
cerned about Costa Rica's admission of a Soviet
Embassy, have been harassing Costa Rican trav-
elers and using Costa Rica as a dumping ground
for exiled terrorists and other leftists. Costa Rica
has charged that Guatemala is helping Costa
Rican rightists plan a coup against the Figueres
Chile: A Season for Maneuvers
The flurry of political activity in Chile last
week may have been more sound than substance.
The opposition is being unusually persistent in its
attempts to discomfit the Allende government in
the run-up period before two important legislative
by-elections on 16 January.
When all but five opposition congressmen
voted to impeach Interior Minister Jose Toha on
6 January, President Allende reacted by swearing
him in as minister of defense the next day.
Allende may even hope that his key lieutenant's
experience as interior minister in organizing po-
lice and other internal security forces in support
of the government will be useful in dealing with
the growing evidence of discontent among mili-
tary officers.
Toha switched ministries with Alejandro
Rios, who was named acting minister of interior.
Rios is a 70-year-old Radical Party member and
close friend of Allende. Largely a figurehead at
defense, Rios becomes first in the line of succes-
sion to the presidency. The prospect that with
Rios at the helm, the Interior Ministry will be run
by a capable young Communist, Undersecretary
Vergara, may cause uneasiness in both coalition
and opposition.
Allende intends soon to make other cabinet
changes. The elevation of a Radical to the top
cabinet post could be used to justify reducing the
disproportionate number of ministries headed by
that declining and divided party. Allende could
strengthen the oalition's appearance of plurality,
which he values, by naming more prestigious non-
Marxists to the cabinet.
It is unclear why the opposition Christian
Democrats abardoned backstage bargaining aimed
at accommodation with Allende and pushed
ahead with the move to oust Toha. Several party
leaders had commented that Toha is the most
reasonable person to deal with in the Allende
government. On 11 January, the Christian Dem-
ocrats joined tine National Party in announcing
that charges of incompetence in his new post as
defense minister will be brought against Toha.
The charges wil be laid before a five-man tribunal
created last year to judge the constitutionality of
legislation and other matters. Allende appointed
three of the tribunal members but probably can-
not be absolutely sure of the vote of one of these.
For his part, Allende has taken to the same
tribunal his case that the congress exceeded its
powers by the earlier motion to impeach Toha
and the changes it made in his 1972 budget. The
budget hassle has been replete with acrimony on
all sides. It involves among other items the con-
trol of important television channels and the fight
for control of the University of Chile, where a
showdown has been postponed until April.
The by-elections to fill a senate and a house
seat formerly held by oppositionists are seen as a
national political test. Actually, local personalities
and issues may be as important in determining the
outcome as the heavy infusions of campaign as-
sistance from Santiago. There have been several
incidents of violence, and there may be more. The
extremist Movement of the Revolutionary Left is
particularly act ve in the provinces where the
elections are being held.
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Uruguay: The Tupamaros Are Back Again
After a standdown of several months, the
Tupamaros seem ready to resume major activity.
The terrorist raid on a border town on 30 Decem-
ber also suggests a shift in tactics to give greater
emphasis to diversionary raids outside the capital.
For three months, the Tupamaros had ob-
served a self-imposed standdown, thinking to
boost the electoral prospects of the leftist Frente
Amplio. The Frente still attracted only about 18
percent of the vote in the presidential election on
28 November.
using the standard Tupamaro ruse of military
disguises. They took over a police substation, a
quarry, and the local airport. They carried off
weapons, explosives, and radio transmitters. News
of the raid was suppressed until 6 January, when
the terrorists seized a capital radio station and
broadcast a recorded proclamation taking credit
for the Paysandu operation and declaring an end
to their unilateral truce.
Several top Tupamaro leaders, including
Raul Sendic, were tentatively identified as having
taken part in the Paysandu assault. It is doubtful,
however, that the security conscious Tupamaros
would have committed so many top leaders to a
single operation. Possibly the most significant as-
pect of the raid was its location, some 225 miles
from Montevideo on the Argentine border. Since
last February, the police have been aware of ten-
tative Tupamaro plans to expand operations to
outlying towns and districts, using Montevideo
activities as a model. It will take more actions
outside the capital before we can be sure that
Tupamaro strategy is branching out into the
countryside. With the 106 members freed in a
spectacular jail break last September added to
several hundred other militants, the Tupamaros
have enough manpower to operate outside the
capital. The September escapees may indeed have
overburdened the support mechanism in Monte-
video.
Moreover, police through mid-December had
recaptured several of the escapees in outlying
areas, and police raids in the interior have turned
up Tupamaro support operations there. If the
Tupamaros do embark on a more wide-ranging
course of action, it will furnish a real test for the
armed forces, which were given over-all respon-
sibilit for counter-insur enc late last year.
Populist Politician Assad Bucaram re-
turned from exile on 8 January and was met
by a crowd of some 30,000 supporters. There
was no violence, although several bombs were
exploded in Guayaquil on the night of 5 Janu-
ary and the situation in the city had been
tense. Bucaram is a candidate for the presi-
dential election in June. If he is not exiled
again, he will be a strong contender.
Meanwhile, the government has seized
two US tuna boats operating inside the
claimed 200-mile territorial limit without
Ecuadorean licenses. A number of boats have
bought such licenses, so there may be less
strain in relations between Ecuador and the
US. Negotiations are under way to reach an
accommodation pending the Law of the Sea
conference to be held next year.
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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Venezuela at the Crossroads
Secret
N2 46
14 January 1972
No. 0352/72A
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The Venezuelans have arrived at a crossroads
in their national life. Christian Democratic Presi-
dent Caldera has set the country on a course that
could produce progress in some fields but could
just as easily jeopardize Venezuela's continued
development and stability. Among his notable
successes in foreign policy, he has deflated border
problems with neighboring countries and has
marked out a leadership role for Venezuela in
Caribbean affairs. On the other hand, his govern-
ment has produced a succession of highly nation-
alistic laws and regulations that are certain to
provoke contention with the international oil
companies on which the economy largely de-
pends.
In his last days, Bolivar characterized his countrymen
as being among the most "turbulent and seditious"
on the continent and correctly predicted that they
would fall victim to "an unbridled crowd of petty
tyrants. "
Special Report
SECRET
While exhibiting great self-assurance as a
major oil producer and as a strategic Latin Amer-
ican country, Venezuela is showing insecurity
about its own institutions at home. The most
remarkable aspect of a loss of confidence in its
hard-won democratic system is the new popular-
ity of former dictator Marcos Perez Jimenez.
As a latecomer to the latest leftist-nationalist
current in Latin American nations, Venezuela has
the advantage of others' experience from which
to draw. It is in a position to achieve the special
place it seeks without creating the international
antagonisms that characterized the actions of
some of the others. President Caldera intends this
and has shown some skill at channeling national
ambitions into constructive routes. Even if he
succeeds in this, there is a question as to whether
he can avoid the biggest pitfall ahead: electoral
politics as the 1973 campaign approaches.
A Little History
Venezuela's long history of dictatorship and
its tedious succession of strong men was a source
of little pride to Venezuelans, who in those days
had cause to feel inferior to other South Amer-
ican states. The Spanish colonists were disap-
pointed in their search for gold and a great indige-
nous civilization such as those that they had
found flourishing in Peru and Mexico. After a
long and bloody war of independence from Spain,
the Venezuelans fought among themselves and
with their compatriots in the federation of Gran
Colombia. In the process, they maligned and as-
sassinated many of their founding fathers and
drove the great liberator Simon Bolivar, himself a
Venezuelan, to an early grave. Bolivar's Gran Co-
lombia broke into independent states and Vene-
zuela was too weak to prevent the eventual loss of
territory to both the east and west.
Between 1835 and 1935, the country suf-
fered a succession of regional rebellions, military
coups, and brutal dictatorships. Finally in 1958,
the last of the dictators, Marcos Perez Jimenez,
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was ousted and the struggle to implant a working
democratic system began. The two Democratic
Action governments under Romulo Betancourt
(1959-64) and Raul Leoni (1964-69) survived
many military second thoughts about civilian rule
as well as a Cuban-supported insurgency.
The accession to the presidency of Rafael
Caldera in March 1969 marked Venezuela's first
peaceful transfer of power from one party to
another. The transfer seemed to certify political
maturity and to ensure the success story would
continue. The guerrillas were defeated, democ-
racy worked, and the nation was rich. Vene-
zuelans were ready to shed their sense of inferi-
ority and to test a new feeling of national iden-
tity. This new pride took many forms, from a
"rediscovery" of vague indigenous values in
music, art, and architecture to a major effort to
diminish the country's dependence on outsiders.
Although still considerably weaker than in other
Latin countries, the new nationalism had its
xenophobic side.
Some of this xenophobia had its roots in the
"Colombian problem." In addition to the peren-
nial boundary dispute, the presence of
400,000-500,000 "undocumented" Colombians
living and working in Venezuela contributes to
the anti-foreign feeling. The middle and lower
classes particularly resent the Colombians' compe-
tition for scarce jobs and their acceptance of
much lower wages. Another source of resentment
was the wave of immigrants who came to Vene-
zuela in the 1940s and 1950s, mostly industrious
Italians, Portuguese, and Spaniards, who have on
the whole done very well financially. As for anti-
US feelings, the overwhelming US presence-
companies, style of dress, movies, and music-
makes such antipathy all but inevitable. President
Caldera, who came to office with under 30 per-
cent of the popular vote, has increased his politi-
cal strength by playing on nationalistic themes.
His economic programs have had less suc-
cess. The discrepancies between Venezuela's fabu-
Special Report
lously rich and miserably poor have become more
and more visible as a result of high birth rates
among the poor, rapid urbanization, and the con-
tinued concentration of wealth. Despite impres-
sive welfare programs, the government has been
unable to keep pace with mounting social prob-
lems. Extremists have made effective use of the
argument that nearly three terms of democratic
government have failed to satisfy the needs of the
increasing numbers of poor for housing, educa-
tion, jobs, health care, and a better share of the
country's wealth. In addition, disorders caused by
criminals, delinquents, and others have created a
yen for the good old days, i.e., the more disci-
plined era of Perez Jimenez. Indeed, perez-
jimenismo has emerged as a potential major chal-
lenge to the stability of the past 12 years.
-3- 14 January 1972
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San? `
4ernando
r~~la Asurti~on
GRFNATAP
(U. K.)
TRINIDAD AND TOBAGO
OF-SPAIN
ATLANTIC
Venezuela F:(
U}`)NA
COLOMBIA
President Caldera and his Christian Demo-
crats, having been put in office with the slimmest
of pluralities, needed an alliance to govern. After
a year of frustration with a congress still domi-
nated by the Democratic Action, Caldera came to
an agreement with its leaders whereby they have
supported legislation and programs recognized by
both parties to be fruitful. Caldera's prestige has
been boosted by the legislation directed against
foreign petroleum companies; by his successful
shakeup of the armed forces, especially the
Special Report
removal of :he controversial General Garcia
Villasmil from the Defense Ministry; and by his
management of his party's national convention
which, despite internal divisions, elected his can-
didate for secretary general last August.
His paci`ication policy has worked well.
After nearly decade of virtual civil war that
found successive governments locked in a military
and political struggle with Cuban-supported insur-
gents, the country was ready for a new political
consensus. The extreme left, defeated and di-
vided, was ready to deal with anyone other than
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its mortal enemy, the Democratic Action. Caldera
legalized the Communist Party, offered amnesties
to guerrillas and terrorists who would agree to
return to legal political life, established a pacifi-
cation commission under the Roman Catholic
cardinal to negotiate with guerrilla units, ordered
restraint in military countermeasures, and reined
in the security police. The government quietly
urged exile on guerrillas whose crimes were be-
yond presidential amnesty.
In a further gesture of good will, he set out
to establish diplomatic relations with the Com-
munist states of East Europe. Caldera, in effect,
gave the far left a chance to restore its image and
take up the nationalist banner. Further splits
among the Marxists and the reduction of guerrilla
action to a nuisance level have emphasized the
success of Caldera's nationalist tack.
Caldera has also accelerated the trend to-
ward loosening Venezuelan ties with the US and
the expansion of ties with others. He identifies
Venezuela's interests with those of the Third
World, and has begun opening embassies in Africa
and the Middle East.
Caldera's most dramatic exercise of what he
calls a policy of democratic nationalism has been
directed against the big oil companies. One of the
more basic and sweeping pieces of legislation, the
"reversion" law passed last July, increases govern-
ment involvement in the companies' operations,
gives the state all the installations and equipment
when the companies' concessions expire (most do
in 1983), and compels the companies to deposit
up to 10 percent of the amount they depreciate
annually under present tax laws in a fund at the
Venezuelan Central Bank.
Other sweeping controls have followed and
more seem likely. The most recent, which com-
bines a sharp rise in the price of crude oil along
with an unprecedented quota system, could lead
to a showdown. The largest company, Creole
Special Report
(Standard Oil of New Jersey), has indicated a
readiness to risk its entire position in Venezuela
rather than accept the quota controls. Creole con-
siders the price rise unrealistic, but sees greater
danger in the establishment of mandatory export
levels that, the company feels, undermine the
entire basis on which private international oil
companies operate.
(Other companies, though,
seem more willing to seek a pragmatic solution to
the problem. In the past, they have managed to
pass tax increases on to the consumer and con-
tinue to make enough profit so that pulling out of
Venezuela has never before been under serious
consideration.
Should the companies actually find the new
controls so unreasonable that they would risk
their assets in a showdown, the consequences
would be considerable. If the oil companies shut
down, the resulting unemployment and economic
disorientation would create a serious crisis. Even
though the Venezuelans would be unable techni-
cally or managerially to operate the businesses
effectively for the foreseeable future, the public
and military would surely support nationali-
zation.
Although President Caldera has given assur-
ances that the petroleum legislation, no matter
how it reads, will not be enforced in such a way
as to put unreasonable demands on the com-
panies, the government has already proved vulner-
able to prodding by less responsible political ele-
ments. The latest price hike, for example, was
apparently a result of the opposition's strident
insistence that the administration's first proposals
were a "sellout." The leftist opposition, a coali-
tion called "New Force," having had this success
in pushing for more extreme nationalist legisla-
tion, will obviously intensify its effort as it looks
ahead to the elections in 1973. Taking heart from
the Allende victory and Peruvian developments,
the New Force has issued a program for
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Special Report
government that predictably includes a call for
the nationalization of all basic industry. Its radi-
cal program has great appeal, which is likely to
broaden as the establishment parties try to ride
the same wave of nationalism.
The oil companies have so often cried wolf
in the past that many in Venezuela tend to dis-
miss the current groans of anguish. This time,
even domestic entrepreneurs are scared by the
strength of the radical tide. Top Venezuelan in-
dustrialists and wealthy families are banding to-
gether in a secret organization that seeks to deal
with the growing attacks on private enterprise
from the extreme left. The organization is pre-
pared to give clandestine support to candidates
and political parties opposed to radical change.
The group, Progress in Liberty Association, now
surfaces only as the sponsor of seemingly public
interest messages: "The liberty of initiative is the
guarantee of all liberties," and "The liberty of
initiative assures trade union liberty."F-
Evidently, all the leading families and indus-
trial groups are involved in this organization ex-
cept for the more leftist-oriented members of
"Pro-Venezuela," the nationalist organization of
industrialists. This active involvement of the rich
families in politics is new. Until the late 1960s,
the wealthy had few party affiliations and little
political influence. When they contributed to
parties, candidates, or newspapers, it was more in
the nature of covering bets. Not that this isolation
was by choice or out of apathy. With the radical
change in the political structure after Perez
Jimenez' ouster, power fell to the leading populist
parties, especially Democratic Action, which drew
its support from rural masses and labor. Many
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14 January 1972
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political leaders had became hostile toward the
economic elite, when many wealthy families grew
even richer by cooperating with or tolerating the
regime. Mutual distrust between the parties and
the private business sector played a large part in
the recession of 1959-61 when several hundred
million dollars were withdrawn from the country
and investment practically ceased. Confidence
and prosperity were restored after the Betancourt
government adopted conservative fiscal policies
and appointed representatives of private eco-
nomic groups to high office. Many of the eco-
nomic policies pursued by the socially conscious,
reform-minded governments since 1958 have in
fact resulted in a further concentration of wealth
and economic power. The elite is a vulnerable
target in a country dedicated to a fairer distribu-
tion of income.
The Progress in Liberty Association appears
still to be developing a strategy. With its enor-
mous financial resources, it hopes to have sub-
stantial influence in the next elections.
negotiations would begin soon
with key leaders of the major parties to see which
would get association support even though that
support would have to remain behind the scenes.
It would be the kiss of death to any party's
efforts to gain a wide constituency. The private
sector's new direct interest in politics reflects the
increasing concern over the bitter condemnation
of the protected wealthy families in the leftist
publications. Besides fear for their personal secu-
rity, the businessmen see what is going on else-
where in the hemisphere and realize that actions
against foreign private interests will eventually
lead to action against domestic private interests.
So far, their reading of the trends does not
seem to be leading them to a generally more
enlightened approach. For the most part, they
continue to resist a greater tax burden and a less
protected market, steps that would force im-
provements in efficiency and spread the wealth.
Special Report
The economic elite has not yet been among
those beating a path to Perez Jimenez' door in
Madrid. Nevertheless, as the elite sees the moder-
ate parties more and more in competition with
the left for the nationalist banner, the former
tyrant might begin to look more and more attrac-
tive. He is not yet out of his 50s, and his appeal,
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14 January 1972
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as measured in polls, is great enough to have
attracted representatives of many groups to look
into the possibilities for a deal. Although the rich
tend to believe that the next time around Perez
Jimenez would emulate the Peruvian military,
Perez himself is spreading the word that Peru is
not his dish.
Perez Jimenez supporters are already diverse,
and his forces won 400,000 votes (11 percent) in
the 1968 elections. Recent polls indicate that, if
he runs in 1973 or even gives support to a sur-
rogate, he will command from 10 to 20 percent
of the vote. Although he almost surely could not
win the presidency, his political role clearly will
be important. Perezjimenismo may well be a
major force in the next congress and possibly in
the next cabinet.
Large numbers of unorganized poor would
vote for him as a protest. A number of his former
ministers and officials will work for his and their
return to power. And many of the wealthy fami-
lies, retired military officers, and conservatives
who did well under his dictatorship would like a
return to the law and order of the 1950s. These,
along with openly declared perezjimenista politi-
cal groups, represent a force to be reckoned with.
Venezuela is heading into a stormy period.
The twin dangers of rising nationalism and the
growing power of perezjimenismo are a very
heady combination for the democratic parties to
Special Report
handle. Venezuela's commitment to the system it
has developed since the Perez Jimenez tyranny
ended has so far been strong enough to get the
country through rocky times. At this point, how-
ever, political and social malaise has sunk to a
point of serious national weakness. A Venezuelan
observation, "We fell out of the trees straight into
our Cadillacs," points up the nation's rush into
modernism and its ability to buy sophistication
and the trappings of high development. But the
glitter in Caracas is only a thin overlay to a host
of inequalities and social deficiencies that are not
being tolerated happily by the have-nots. And
Venezuela's experience out from under a dictato-
rial yoke may be too brief to stand against the
new rush for quick solutions. Bleeding the last
drop out of foreigners is easy, while getting it out
of the local entrepreneurs is a risk. Unless the
Caldera government shows more restraint in im-
plementing "democratic nationalism" than it has
in drafting the policy, its actions will lead to an
international crisis highly damaging to US-
Venezuelan relations as well as to Venezuela's
economic and political future.
Equally disturbing is the willingness of most
political groups to deal with Perez Jimenez,
whose brutality and corruption can hardly have
been forgotten. Even Caldera and his party are
not above keeping the door open to Perez. The
passions that would be aroused by his return
would be highly unsettling. Venezuela's military,
which has been tolerant of the politicians' foibles
but which was running things only a little more
than a dozen years ago, can be expected to keep a
close eye on developments.
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