WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009400020001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 30
• Document Creation Date: December 21, 2016
• Document Release Date: March 5, 2008
• Sequence Number: 1
• Publication Date: January 21, 1972
• Content Type: SUMMARY

ii / C (
Approved For Release 2008/03/05: CIA-RDP79-00927AO09400020001-8
Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
State Dept. review completed
21 January 1972
No. 0353/72
Copy N2 46
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CONTENTS
(Information as of 1200 EST, 20 January 1972)
What's Next in Indochina? . . . . . . . . . . . . . . . . . . . . . . . . . 2
Gromyko's Coming to Tokyo . . . . . . . . . . . . . . . . . . . . . . . . 4
Malta: The Impasse Appears Broken . . . . . . . . . . . . . . . . . . . . . 5
Chile: A Setback for Allende . . . . . . . . . . . . . . . . . . . . . . . . 6
International Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Communist China: Sowing Pragmatism . . . . . . . . . . . . . . . . . . . . 7
Burma: Rumors of Retirement . . . . . . . . . . . . . . . . . . . . . . . 8
Indonesia: Students Romp . . . . . . . . . . . . . . . . . . . . . . . . . 9
EC: Signing the Accession Treaty . . . . . . . . . . _ _ 15
Yugoslavs Prepare for Party Conference . . . . . . . . . . . . . . . . . . . 10
Soviet Civil Air Sales: A Breakthrough . . . . . . . . . . . . . . . . . . . 11
The Pact Comes to Prague . . . . . . . . . . . . . . . . . . . . . . . . . 12
France: Defense Budget Slights Army . . . . . . . . . . . . . . . . . . . 13
UK Economy Gathers Steam . . . . . . . . . . . . . . . . . . . . . . . 14
Iceland: Treaty Tie-ups . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Drug Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Ghana: The Junta Confronts Reality . . . . . . . . . . . . . . . . . . . . 17
Egypt: The Home Front Must Be Ready . . . . . . . . . . . . . . . . . . 18
Israelis Press the Lebanese . . . . . . . . . . . . . . . . . . . . . . . . . 18
Ethiopia-Sudan: Warmer Relations . . . . . . . . . . . . . . . . . . . . . 19
Malagasy Republic: Only the Beginning . . . . . . . . . . . . . . . . . . . 19
Rhodesia: Opposition to the Settlement . . . . . . . . . . . . . . . . . . 20
Bangladesh Still Seeks Independence . . . . . . . . . . . . . . . . . . . . 21
Venezuela: Renewed Guerrilla Activity . . . . . . . . . . . . . . . . . . . 22
Dominican Republic: Stability Costs . . . . . . . . . . . . . . . . . . . . 23
Bolivian Military Shifts Completed . . . . . . . . . . . . . . . . . . . . . 24
Guatemala Si, Belize No! . . . . . . . . . . . . . . . . . . . . . . . . . 25
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SJ UKr 1' _
What's Next in Indochina?
The North Vietnamese are about two
months into their 1971-72 dry-season campaign.
So far, there have been no major surprises. The
North Vietnamese played out the first phase of
the campaign in Cambodia, where by mid-Decem-
ber they had routed the Cambodian Army along
Route 6, harassed and threatened Phnom Penh,
and managed with a minimum of effort to parry
the hesitant South Vietnamese thrust into the
Chup and Dambe base areas. Although another
round of attacks against Cambodian positions and
lines of communications will almost certainly
take place before the current dry season ends,
nothing big seems to be in the works for at least
the next several weeks.
Hanoi launched its Laotian offensive at the
time that the military situation was quieting
down in Cambodia. In south Laos, Hanoi sent
reinforcements into the Bolovens Plateau area,
erased the government's hard-won rainy season
gains, and quickly regained control of Saravane
and the strategically located plateau. In north
Laos, with more troops and firepower than they
had ever massed before, the Communists pushed
Vang Pao's forces off the Plaine des Jarres and
pressed on toward Long Tieng.
If Long Tieng falls in the near future, the
North Vietnamese might use the remaining three
months of good fighting weather and the large
amounts of military supplies now on the way to
north Laos to push farther westward toward Vang
Pao's fall-back position near Ban Son. They might
also send units into the Muong Cha Valley, where
some 150,000 Moo refugees are encamped.
Hanoi's objective would be to smash the Moo's
ability to continue the war and to deny the Lao
Government the bases from which it could launch
a return to the Long Tieng area next summer.
North Vietnamese commanders are sometimes
highly cautious, however, and they might be re-
luctant to push their regiments, which have un-
doubtedly taken heavy losses in the past month,
into the rugged mountains to the west without a
period of time to rest, refit, and improve their
supply lines.
Apart from Long Tieng, there are a number
of other sensitive areas in Laos where Hanoi
could, with little advance warning and at rela-
tively little cost, put heavy pressure on Souvanna
Phouma or create the impression that the military
situation in Laos is highly precarious. In the
north, the Communists could again threaten the
royal capital of Luang Prabang, or they could
move in force westward on Route 7 to cut Route
13 and isolate Luang Prabang from Vientiane. In
the south, they are now in position to harass the
Mekong River town of Pakse, and they could
threaten important government positions along
Route 9.
Although the Laotian campaign is not yet
over, there are strong signs that the Communists
are getting ready to swing into the South Vietnam
phase of their dry-season campaign. It was clear
some weeks ago that the Communists hoped to
follow up their offensives in Cambodia and Laos
with a strong round of operations in the central
highlands and in the western border areas of Mili-
tary Region 1.
The initial targets will be South Vietnamese
Army fire-support bases in the highlands near the
border. If these attacks are successful, they may
be followed by strikes against district towns and
larger military bases. The Communists are also
building a stronger air-defense capability, and per-
haps will also use heavy artillery and armored
vehicles to bolster their effort. Communist radar
and surface-to-air missile sites have been observed
recently farther south in the Lao panhandle than
ever before. They are situated where they can
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J1iUKL1
help protect Communist rear areas during the
offensive.
To meet the challenge, the South Vietnam-
ese are deploying a substantial part of their re-
serve force from the Saigon area to the threatened
sectors. The Communists anticipated this reaction
and evidently hoped that the commitment of
South Vietnamese regulars and reserves would
lessen the pressure on Communist units near the
populated sectors in South Vietnam, permitting
these units to conduct more successful dry-season
operations. President Thieu, fearing just such a
whipsaw effect, is pulling his forces out of Cam-
bodia, both to bolster his defenses in Military
Region 3 and to provide some margin for the
coming tests in the northern part of the country.
The Communists may counter by sending ele-
ments of the 5th, 7tl-, and 9th divisions back to
the Tay Ninh Province - Cambodia border area to
challenge the South Vietnamese after Communist
offensives in the western portions of Military Re-
gions 1 and 2 get under way. There are tenuous
hints of this in current reports of Communist
plans.
SOMETHING BIGGER IN THE WORKS"?
Another factor s the large number of re-
ports claiming that the Communists have ex-
panded their military plans. They are said to be
telling cadre in Soutl Vietnam that a "massive"
military campaign is scheduled for the populated
areas of South Vietnam at about the time Presi-
dent Nixon goes to China. These reports may
merely reflect exhortation to secure a good per-
formance from the t!oops during a routine dry-
season campaign, bui they could also express a
real intention. Certa nly, Hanoi would like to
embarrass the Presid.-ant by a show of military
strength throughout South Vietnam during his
krip to China. A credible report from a captured
officer states that the first phase of the Commu-
nist offensive will be confined largely to the
small-scale harassing :attacks common in the last
18 months. Subsequently, as replacements arrive
for main-force units from the current infiltration
movement, heavy infantry assaults will be
mounted on urban targets.
Evidence of the resupply and redeployment
activities that would need to precede a big cam-
paign aimed partly it the urban areas is still
lacking. Nevertheless, if the Communists are will-
ing to expose many cf their remaining assets and
to take very heavy casualties, they could stage a
short, psychologically impressive flurry of infan-
try-type assaults on key urban concentrations and
installations throughcut South Vietnam. In the
final analysis, Hanois decision on whether to
expend the resources will probably hinge largely
on the political gains the Communists think they
can make in the US and abroad.
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Gromyko's Coming to Tokyo
The visit of the Soviet foreign minister to
Japan next week should be the occasion for a
demonstrative show of new Soviet-Japanese
amity, but not much substantive business is likely
to be done.
The visit is a major move in Moscow's effort
to divert the Japanese from improving relations
with China and to weaken Tokyo's ties with the
US. Although Moscow has clearly given higher
priority'to this effort since President Nixon's visit
to China was announced, there has been little sign
that Gromyko will make any dramatic offers to
the Japanese. Nevertheless, both sides hope the
trip, which has been pending for several years,
will improve the atmosphere between Moscow
and Tokyo and lay the groundwork for closer
ties.
Gromyko probably wants to assess Japanese
intentions toward Communist China and may at-
tempt discreetly to discourage Tokyo's overtures
to Peking. He will seek to gauge the Japanese
attitude toward Washington in the wake of the
Nixon-Sato talks. He is also likely to pursue So-
viet efforts to stimulate Japanese interest in closer
economic cooperation, especially in the devel-
opment of Siberian resources. Serious economic
negotiations, however, are likely to await the oft-
postponed fifth meeting of the USSR-Japan eco-
nomic cooperation committee late in February.
There has been no indication that Gromyko
is prepared to budge on the question of the north-
ern territories-the four islands occupied by the
Soviets at the end of World War U. This issue
remains for the Japanese an important obstacle to
better relations. Return of the islands is a long-
term goal on which all segments of Japanese po-
litical opinion are united.
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Recent Soviet comments about the disputed
islands remain negative. Last month, for example,
Troyanovsky told the US ambassador that Mos-
cow's position is unchanged: "The return of the
Kuriles is not a subject for discussion."
It is possible,
owever, a in view o of e impor ance Moscow
now gives to improving ties with Japan and the
depth of Japanese feeling on this issue, Gromyko
may at least drop some hints of flexibility similar
to those made late last summer by other Soviet
officials.
The Japanese welcome Gromyko's visit since
both countries have a close interest in the chang-
ing international situation in the wake of move-
ment in Sino-US relations. An underlying sus-
picion of Soviet motives persists in Tokyo, and
the Japanese will move with extreme caution.
They probably are not optimistic that Gromyko
will bring any concessions on the territorial issue.
While probing the possibilities for an im-
provement in relations with Moscow, the Jap-
anese will be watching for the reaction from
Peking. This consideration does not at this time
appear to be a barrier for better Soviet-Japanese
relations. The Chinese are unlikely to seize upon
increased Japanese-Soviet contacts as a pretext
for creating new difficulties that would disrupt
the current favorable trend toward Peking in
Japan.
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Malta: The Impasse Appears Broken
UK Defense Secretary Carrington and NATO Secretary General Luns Prime Minister Minto
The talks in Rome this week appear to have
broken the negotiating deadlock, though some
differences remain. The North Atlantic Council
agreed on 18 January to an annual payment of
$36.4 million, plus bilateral aid from some NATO
members, as a final offer to Prime Minister
Mintoff for a new Malta-UK defense agreement.
Mintoff, who had indicated that he would con-
sider an offer of $35 million, has not turned
down this proposal.
The talks concentrated on the terms of
employment for British-employed Maltese labor
and the conditions for military use of Malta by
countries other than the UK. Mintoff adopted a
tough stance on the conditions of local employ-
ment. He believes that the present employment
levels should be maintained until the Maltese
Government creates new jobs in other sectors of
the economy. The British are unwilling to give
Valletta carte blanche on this issue, but they are
prepared to maintain a "reasonable" level of
employment.
Mintoff did not abject to NATO's demand
that operational use of Maltese facilities be denied
to Communist fords, but his position on
courtesy visits by Warsaw Pact naval units is un-
clear. The Maltese leader said that a settlement
also must take accou it of Valletta's desire for
close ties with Libya. The allies have no objection
to Malta granting some rights to Libya as long as
they do not run counter to a Malta-UK accord.
In the meantime, London, apparently be-
lieving an agreement is in sight, had moderated its
althougl- the troops who remain on
the island are packing their gear preparatory to
withdrawal, orders have been issued to them not
to dismantle e ui me,1t that could be of future
use to NATO.
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SECRET I-Owl
Chile: A Setback for Allende
The defeat of government candidates in two
legislative by-elections on 16 January was a harsh
setback for President Allende. His political op-
ponents are encouraged by their recent successful
cooperation in the elections and in congress. They
will now try harder to overcome past differences
in order to orchestrate the rising opposition to
the Allende government.
The election to the Senate of a vigorous and
articulate Christian Democratic agrarian leader,
Rafael ivioreno, was a particular triumph. His six-
percent edge over the long-time president of the
powerful copper workers' union reversed the
slight majority the governing coalition won in
municipal elections nine months ago. In the other
by-election, for a deputy's seat, respected Na-
tional Party candidate Sergio Diez won in a walk-
away from a novice government candidate.
Coalition lead-
ers chose their candidates carefully and waged
hard campaigns with heavy government financing.
Major problems arose for the government can-
didates because of the aggressive role played by
INTERNATIONAL MONEY
The expected repatriation of speculative dollars from abroad has not materialized, and the
dollar continues weak in international currency markets. This reflects largely European fears that
the US Congress may not pass legislation to raise the price of gold, especially if US-EC trade
negotiations fail. Some Europeans even feel that the agreed dollar devaluation may prove too small.
Another factor is the low interest rates in the US relative to those prevailing in foreign markets; this
provides corporate fund holders with little incentive to convert their foreign currency balances into
dollars. In addition, technical factors, such as foreign currency holdings tied up in three-month
deposits which have not yet matured, have contributed to the present situation.
The stronger currencies such as the Japanese yen, the West German mark, the Dutch guilder,
and the Belgian franc have risen above their new central rates (temporary parities) in the past week.
Others, including the British pound, Italian lira, and Swiss franc have moved well up from the lower
limits ^of their new 4.5-percent band of permitted fluctuations. Since the first of the year, none of
the central banks has intervened in the markets except the Bank of Japan, which did so in early
January to ease removal of the harsh exchange controls imposed in August, 1971. The price of gold
has risen to record levels, exceedin $46 er ounce on 17 January.
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the radical Movement of the Revolutionary Left
and because the agrarian platform was so extreme
that Communist and Radical leaders in the coali-
tion disavowed it. These issues served to frighten
voters and to point up the discrepancies that exist
within the government forces.
Christian Democratic leaders were impressed
by National Party campaigners who worked ef-
fectively to overcome coolness among their voters
toward Moreno. The Christian Democrats believe
that the election has strengthened their party and
made its leaders less susceptible to Allende's
blandishments. The Christian Democrats plan to
maintain a vigorous opposition role through the
April 1973 congressional elections.
In order to regain the political momentum
that characterized his first year in office, Allende
will have to take some decisive action. The dis-
may and disarray in his Popular Unity coalition
resulting from the election results will give him an
opportunity to reassert his leadership, change
tactics, and appoint new key officials. His thorn-
iest problems are economic, however, and the
government's ability to overcome them soon is
limited despite its broad powers.
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5hl_:KE I
Communist China: Sowing Pragmatism
Peking's recent pronouncements in several
key areas of national policy suggest that ultraleft-
ist tendencies in the leadership are continuing to
lose ground. Over the past several months, there
has been a relaxation of ideological pressure in
the cultural sphere and a return to more practical
guidelines for education-areas where ultraleftist
influence was dominant during the Cultural
Revolution.
Most recently, pragmatic themes for agricul-
ture have been forcefully stated in Red Flag, the
party theoretical journal, and in numerous provin-
cial radiobroadcasts. "Leftist deviations" in rural
economic policy were scored, and it was argued
that progress toward the ideal state of Com-
munism should be slowed at this stage. The arti-
cles also warned against disregarding objective
economic conditions and confusing "different
stages of development." The emphasis probably
reflects Peking's concern that many local cadres
are still seized with the "leap forward" approach
to rural development that often resulted in the
uneconomic use of mass labor, grossly inflated
production statistics, and the denigration of
material incentives.
At the same tim a number of moderate
economic practices h