WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009400030001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 39
• Document Creation Date: December 21, 2016
• Sequence Number: 1
• Content Type: SUMMARY

Approved For Release 2008/05/16: CIA-RDP79-00927A009400030001-7
'W" Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
28 January 1972
No. 0354/72
State Dept. review completed Copy N2 47
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CONTENTS
(Information as of 1200 EST, 27 January 1972)
India-Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Egypt: Students Demand War Footing . . . . . . . . . . . . . . . . . . . . 3
Troubles for the UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indochina . . . . . . . . . . . . . . . . . . . . . . .
UNC
25X6
East-West Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
European Money Worries . . . . . . . . . . . . . . . . . . . . . . . . . 10
Belgium: Right On . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The Soviet Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Ghana: The Cautious Junta . . . . . . . . . . . . . . . . . . . . . . . . 12
Israel: Terrorism and Reprisal . . . . . . . . . . . . . . . . . . . . . . . 13
Libya: Toil and Trouble . . . . . . . . . . . . . . . . . . . . . . . . . 13
International Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Persian Gulf: Murder in Sharjah . . . . . . . . . . . . . . . . . . . . . . 15
Somalia: Still Unstable . . . . . . . . . . . . . . . . . . . . . . . . . 16
Panama: Opportunity Comes Knocking . . . . . . . . . . . . . . . . . . 17
Uruguay: Dissent in the Tupamaros . . . . . . . . . . . . . . . . . . . . 18
Mexico : Political Crimes . . . . . . . . . . . . . . . . . . . . . . . . . 19
Peru: Caution on Communists . . . . . . . . . . . . . . . . . . . . . . 19
Argentina: Limited Options . . . . . . . . . . . . . . . . . . . . . . . 20
Chile .................................21
CUBA'S CHANGING RELATIONS WITH LATIN AMERICA
(Published separately as Special Report No. 0354/72A)
The Drug Scene . . . . . . . . . . . . . . . . . . . . ? ? ? ? . . . . . 22
UN: Council Goes to Africa . . . . . . . . . . . . . . . . . . . . . . . 23
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India-Pakistan
New Delhi is trying to use the projected
peace negotiations to ensure Pakistani acceptance
of the altered power relationship on the subcon-
tinent. To this end, the Indians reportedly are
insisting that Pakistan agree to certain pre-condi-
tions for the negotiations.
The Indians presumably realize that Pak-
istani President Bhutto cannot formally recognize
Bangladesh as long as Indian troops are "in occu-
pation." But New Delhi insists that Islamabad
acknowledge the reality of Bangladesh before
peace talks can open. Additionally, New Delhi has
made it plain that it will not negotiate the return
of Pakistani prisoners-in theory, jointly held
with Bangladesh-until Bhutto takes steps to treat
with the Bengalis on the issue. The Pakistani
leader, however, has stated repeatedly that he
cannot negotiate with Mujib or other Bengalis as
long as Indian troops remain in "East Pakistan."
More importantly, Indian officials have
stated privately that Bhutto must indicate he is
abandoning "the policy of confrontation" with
New Delhi. Foreign Minister Singh has suggested
that this could include such cuts in Pakistan's
military establishment that the country would no
longer pose a security threat to India. Singh has
also suggested that Pakistan must express a will-
ingness to renounce its claim to Indian-held
Kashmir. Both of these suggestions appear far
beyond anything Bhutto can deliver now. The
Indians profess that they long ago wrote off their
claim to Pakistani-held Kashmir and maintain it
only to "sustain their legal case." They will insist
that a "mutually acceptable" rectification of the
1949 Kashmir cease-fire line be arranged.
New Delhi would give little in return for
these concessions from Islamabad. While India
fully intends to withdraw the bulk of its 45,000
troops from Bangladesh by May or June, tension
apparently is to be maintained in the west. Only
after a comprehensive peace settlement would
New Delhi be willing to withdraw its troops to
the pre-war boundaries-although not necessarily
to pre-war home cantonments far inside the
borders. I n the west, India presently holds about
1,400 square miles of Pakistani territory-includ-
ing a large segment of strategically unimportant
desert-to some 150 square miles of Indian ter-
ritory held by the Pakistanis.
Bhutto s under considerable domestic pres-
sure to secure the return of up to 90,000 Pak-
istani prisoners (70,000 West Pakistani troops--
the rest paramilitary and civilians). Only some
600 Indian scIdiers are held by Islamabad. There
is a growing acceptance in Pakistan of the loss of
Bangladesh, but the Indian pre-conditions such as
recognizing Irdia's claim to Kashmir, or reducing
the military forces to a level most Pakistanis
would regard as an invitation to Indian occupa-
tion, are una _ceptable to Bhutto, the Pakistani
military, and probably most Pakistanis. Should
the Indians press such demands, Bhutto might
find he had enough popular support to refuse
negotiations despite the prisoner of war issue.
Until such problems as the prisoners and the
occupation of Pakistani territory are resolved, a
further outbreak of fighting is possible.
Meanwhi e, the Indians are in no hurry to
get the talks started, apparently in the belief that
delay may soften Islamabad's already weak bar-
gaining positicn and increase the possibilities of
wringing out tae desired concessions. In pursuing
this tactic, the Indians are showing little concern
for the sensitive balance of political forces within
Pakistan. New Delhi maintains that it is adopting
a wait-and-see attitude toward Bhutto, but, if
they insist on such tough demands, the Indians
would make his task more difficult and conceiv-
ably could create conditions under which Bhutto
might well hale to take a stronger anti-Indian
position to avoid a military coup.
BHUTTO'S FIRST MONTH
President 3hutto apparently is trying to sat-
isfy those Pakistanis demanding reforms by mak-
ing dramatic policy announcements while at the
same time hoping to avoid a confrontation with
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conservatives by exercising restraint in imple-
menting these policies.
Bhutto's most publicized economic reforms
have been directed against the few wealthy fami-
lies who own a large part of the country's in-
dustry. Shortly after Bhutto took over, the gov-
ernment arrested three industrialists, seized thirty
firms, and threatened life imprisonment for any-
one who failed to repatriate money held abroad.
This week, in an attempt to gain some coopera-
tion from business and industrial leaders, Bhutto
announced the release of the three prisoners, gave
his assurances that private enterprise is necessary
to build Pakistan, and extended the deadline for
reporting holdings abroad to 15 February.
The President said he would announce a land
reform program that will supposedly affect 80
percent of the people. The government, however,
has not yet revealed what this reform entails, and
it could well be less sweeping than many peasants
expect. Bhutto has made it clear that the program
must be implemented carefully, and the agricul-
ture minister, in talking to reporters, emphasized
plans to seize "ill-gotten" land, i.e., land illegally
taken from the government or retained by land-
owners despite previous land reforms.
I n the two provinces where Bhutto's Pak-
istan People's Party is weak, local politicians have
denounced his effort to meet growing demands
for self-government and are demanding a large
measure of provincial autonomy and the imme-
diate end of martial law. Bhutto announced that
assemblies in all four of Pakistan's provinces
would convene on 23 March and that provincial
ministries will be formed soon afterward, but did
not indicate how much power would be given to
these governments. The President would still rule
the country under martial law, and even when
martial law ends his party would dominate the
national government.
Nw~
President Bhutto
Although the President has so far avoided a
major confrontation with any group, he has
probably satisfied none more than temporarily.
Dissatisfaction-encouraged by the left wing of
his own party-is growing among students and
workers, and may soon force Bhutto to take some
action. So far he has been content simply to
denounce those trying to "mislead" the students
and workers and has not ordered the police to
break up strikes or stop students from seizing
educational institutions.
Bhutto also faces continuing economic prob-
lems. Agricultural prospects are poor because of
drought. Industry must cope not only with strikes
but with the loss of markets in Bangladesh, and
continuing import restraints resulting from bal-
ance-of-payments problems. Moreover, Pakistan
has not repaid its debts to official foreign credi-
tors since last April. Official foreign exchange
data show holdings at $175 million-equivalent to
three months' imports at 1971 levels-down from
a peak of $343 million in early 1970.
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 Egypt: Students Demand War Footing
President Sadat is facing his first serious out-
break of open dissent. For nine days, Egyptian
university students carried out a series of dis-
cussions, sit-ins, and rock-throwing demon-
strations challenging the direction of the Sadat
government. The students criticized the new cab-
inet as insufficiently militant. They demanded
that Sadat put the nation on a war footing and
commit himself to resuming hostilities with Israel.
They called for a clarification of the Soviet role in
Egypt and the nationalization of US interests in
the Middle East.
Although the primary reason for the out-
break of dissent was frustration over the current
stalemate in which Sadat is unable to make either
diplomatic or military progress, other more im-
mediate factors sparked the disorders. Sadat's
speech to the nation on 13 January, in which he
feebly attempted to justify his inaction during the
"year of decision" in 1971, was greeted with
derision by Egyptian students and greatly con-
tributed to their unhappiness. The new "con-
frontation cabinet" likewise failed to meet stu-
dent expectations of a body dedicated to the
military recovery of the Sinai and capable of
bringing it about.
Sadat initially attempted to reason with the
students, but on 24 January he arrested a large
number of the agitators, sparking an intensi-
fication of the protests. Security forces sub-
sequently clashed with rioting students in various
parts of Cairo in attempts to discourage the
spread of derionstrations. Although there was
little evidence of support for the students from
other quarters, many young, educated Egyptians
have been inducted into the armed forces since
the 1967 war and at least some of them doubtless
sympathize with the student grievances.
The government has tried to answer some of
the students' demands by instituting a series of
austerity measures and by promising to step up
military training for university students. In a sub-
sequent discussion with groups of the nation's
political and trade leaders, Sadat attempted to
give further proof of his commitment to regain
the occupied territory. He reiterated that all ne-
gotiating contacts with the US had been broken
and reaffirmed his belief that the battle is "in-
evitable." He warned, however, that the nation's
students shou.d be the first to "respect the sov-
ereignty of law."
Sadat is apparently determined to force an
end to the student protests and very likely hopes
that the situation will cool during the current
academic vacation. If the protests go on, or if the
protesters begin to receive support from other
segments of the population, it will be difficult for
him to ignore demands for a clearer definition of
his intentions. In that event he could be forced
into taking some dramatic action to ensure his
own political survival.
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low, SJ XJKJ '1'
Troubles for the UK
Some progress was made at the talks in
Rome last week. Prime Minister Mintoff appears
to have accepted, conditionally, the final UK-
NATO offer of $36.4 million annually, plus bilat-
eral aid, but he claimed that he needed cash
immediately to cover an anticipated budget defi-
cit. The allies appear willing to grant Mintoff's
request, at least partially, by offering to make a
large advance payment available soon. A satisfac-
tory settlement in other respects would have to
be reached first, however.
The discussions in Rome also covered the
question of foreign military use of Maltese facili-
ties. A number of points remain to be resolved in
this area, but an Italian official who attended the
talks is of the opinion that a mutually acceptable
compromise can be achieved.
NATO is pressing for the complete denial of
Malta to Communist forces. Mintoff agreed to
exclude military visits by Warsaw Pact countries
and Albania, but he left the way open for non-
operational visits by pact members. Moreover, he
would not rule out visits by the Chinese. Mintoff,
while stressing that nothing should preclude Val-
letta from granting some rights to Libya, indi-
cated that Tripoli would not be allowed to inter-
fere with British activities.
Mintoff proposed that use of the UK's air
and naval facilities be subject to both Maltese and
British approval. Such an arrangement would pro-
tect the British against unilateral Maltese moves,
while at the same time giving Malta a veto over
foreign use of British bases. Mintoff said that at
least Italy and West Germany would be permitted
access.
The British, who are undeniably fed up with
Mintoff, are likely to continue negotiating out of
concern for NATO. They are not likely, however,
to respond to advice from their NATO partners
on the bilateral aspects of a settlement, such as
the level and conditions of local employment. A
British official recently reminded US diplomats
that it is London that must live with a new
agreement and issues that seem unimportant to
some allies are vital to the UK.
RHODESIA: SETTLEMENT PROSPECTS DIM
Although the disturbances that rocked Rho-
desia's urban centers last week have subsided,
signs are growing that African opposition to the
proposed settlement is widespread.
Most urban blacks were expected to oppose
the accord, but early indications suggest that rural
Africans are also coming out solidly against it.
Even some government-appointed chiefs and the
eight Africans who represent the tribal areas in
parliament reportedly have told the Pearce com-
mission that they reject the agreement. Some
African officials of the multi-racial Centre Party
and the country's five influential Catholic bish-
ops, who had earlier expressed approval of the
settlement terms, also came out this week against
the accord.
The commission still has about six weeks of
canvassing, but, unless the present trend is re-
versed soon, which now seems unlikely, Lord
Pearce will have no recourse but to report to
London that the accord is not acceptable to Rho-
desian Africans. In that case, the settlement,
which the British view as a last-ditch effort to
prevent Salisbury from slipping into a complete
South African - type apartheid, is dead. Under
such circumstances, the Heath government, recog-
nizing Britain's inability to influence events, may
very well try to absolve itself of an further
responsibility for Rhodesia.
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Indochina
Evidence of Communist plans for a major
offensive in South Vietnam accumulate, but the
South Vietnamese commanders whose units prob-
ably will bear the brunt of the fighting are sur-
prisingly confident. They feel that their forces
will be able to handle whatever the Communists
are planning for their annual spring campaign,
even though there are numerous indications that
the Communists would like to make this year's
effort the biggest since 1968.
The South Vietnamese in command of Mili-
tary Regions 1 and 2, and of the 1st and 2nd
divisions as well as several province chiefs and
other officials all generally agree that the Com-
munists plan to hit hardest in the central high-
lands, with a secondary effort against the two
northernmost provinces. They anticipate that the
attacks will begin sometime in February and that
some may be timed to coincide with the Tet
holidays. They anticipate further that the Com-
munists will be hampered by supply shortages and
insufficient troop replacements. They also feel
that the apparent lack of extensive battlefield
preparations suggests the Communists could not
wage a sustained or prolonged offensive. Divi-
sional commanders are exuding confidence in
their units, claiming that troop morale is high and
that logistics are adequate. Territorial forces in
the populated areas, they say, are capable of
handling any threat from Communist local forces.
The strong confidence of these officials con-
trasts sharply with the foreboding they have dis-
played in the past when a major enemy offensive
seemed imminent. General Lam in Military
Region 1 probably has more reason to be opti-
mistic than General Dzu, his counterpart in Mili-
tary Region 2, since Lam's regulars are among the
country's best. Dzu may be basing some of his
optimism on assurances from Saigon that reserves
will be sent to the central provinces if needed,
thus offsetting at least in part the poor quality of
some of his forces.
But the Communists Prepare
The North Vietnamese are expanding their
surface-to-air missile capability along the major
north-south road network through southern Laos.
In aerial photography of early January, four pos-
sible SAM positions were noted in the Muong
Nong area. This is the southernmost point at
which SAM launching positions have been de-
tected, although pilots have reported sighting
SAM equipment as far south as the Chavane area
on the 15th. The SAM build-up in the panhandle
suggests that Hanoi will make a much more deter-
mined effort than ever before to protect its
logistics network during the remaining months of
the dry season.
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And logistical activity along the Ho Chi
Minh Trail is steadily increasing. Sensor detec-
tions and aerial observers indicate that the volume
of shipments is growing throughout the Lao pan-
handle and northeastern Cambodia. Some trucks
are moving in daylight-a sure sign of urgency.
Government Positions on Skyline Ridge
The North Vietnamese clearly had the gov-
ernment on the ropes after the irregulars were
routed from the Plaine des Jarres in late Decem-
ber, but so far they have been unable to score a
knock-out at Long Tieng. Taking advantage of the
confusion among retreating irregulars, enemy
units managed to enter the base earlier this
month, while other units captured Skyline Ridge
overlooking the government complex. In an un-
usual display at premature boasting, the Com-
munists claimed publicly that they had captured
the base.
Irregular units rallied and after some hard
fighting were able to drive the raiders from the
base. On 24 January, after bloody fighting, gov-
ernment forces pushed the North Vietnamese
from their last positions on the ridge. The Com-
munists apparently suffered heavily from air
strikes. They seem also to have had difficulty
moving supplies to their troops.
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Both sides are now preparing for another
round of hard fighting. In an effort to ease their
supply problems near Long Tieng, the North Viet-
namese are building a road south from the Plaine
des Jarres. They also are attempting to surround
Long Tieng. Elements of three North Vietnamese
regiments are now south, west, and east of the
base and are probably deploying anti-aircraft
units to combat the government's air support.
The government, aware of what the Com-
munists are up to, is hitting North Vietnamese
troop concentrations and supply routes with air
strikes, and irregular battalions are trying to pre-
vent the North Vietnamese from emplacing AAA
weapons on the hills south of Long Tieng. Over
2,800 fresh irregular troops were airlifted into
Long Tieng this week to strengthen the govern-
ment forces; Vang Pao now has nearly 12,000
irregulars in the Long Tieng area.
While the key battlefront in the north is at
Long Tieng, Communist troops have moved west
of the Plaine to capture Sala Phou Khoun on the
road between Jientiane and the royal capital,
Luang Prabarng. Government spokesmen in
Vientiane clairr that North Vietnamese troops
were responsible for driving the 1,300-man gov-
ernment forces -rom the town. Government com-
manders are now trying to regroup their forces,
and reinforcements are being sent to Muon
Kassy, about 25 miles to the south. to
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East-West Germany
The West and East German negotiators, Bahr
and Kohl, resumed bargaining on 20 and 21 Jan-
uary on a bilateral transport agreement. Kohl led
off, not unexpectedly, by submitting a revised
version of the draft he had proposed last Septem-
ber, which is not to Bonn's liking. Essentially,
each negotiator is probing to see if the talks can
be used to achieve broad but conflicting goals;
Pankow wants to speed its acceptance into the
international community, while Bonn wants to
ease travel to the West for East Germans.
Talks have not been renewed between the
West Berlin Senat and East Germany to refine
details of last month's inner-Berlin agreement.
The Senat informed Pankow on 11 January that
it was ready for expert-level talks on land ex-
changes on West Berlin's perimeter, but Pankow
has not yet replied.
The new East German draft transport agree-
ment contains much technical detail that Bahr
and Kohl had agreed on before deciding in No-
vember to concentrate on the Berlin access ac-
cord. The new draft adds civil aviation and ocean
shipping and has a protocol note calling for Pan-
kow's accession to international transport con-
ventions.
Bonn wants to omit from the agreement civil
aviation and ocean shipping. These issues, in
Bonn's view, are too involved and, in the case of
the former, also touch sensitive issues connected
with Berlin air access. Bonn probably will have
difficulty as well with the draft's new citations of
East German sovereignty, unqualified by any ref-
erence to residual Four Power rights in Germany.
For his part, Kohl objected to two key West
German desiderata-that West Berlin be included
under the terms of the agreement and that some
provision be made for improved travel opportuni-
ties for citizens of both countries. Consistent with
Pankow's view that the Federal Republic cannot
act for West Berlin, Kohl expressed East German
intentions of negotiating a parallel transport
agreement with the Senat.
Kohl did hint at a willingness to discuss the
travel issue in exchange for Bonn's support of
East German accession to a number of additional
international conventions and participation in
some international conferences and organizations.
The Brandt government feels it must try for a
breakthrough on travel to counter domestic crit-
icism that Ostpolitik has ignored the human ele-
ment, but it wants to delay East German partici-
pation in world affairs to a later stage.
The next session will be on 2-3 February in
Bonn, but Bahr will not begin hard bargaining
until March. In contrast to his optimistic mood
before the meeting with Kohl, Bahr now doubts
that Pankow really wants to conclude a transport
agreement, at least this spring. Furthermore,
Bonn officials believe that Pankow is not inter-
ested in negotiating a general treaty governing
inter-German relations after the transport treaty
is concluded.
Although Bonn has wavered on the subject,
its current position is that UN membership for
West and East Germany should await the conclu-
sion of a general treaty on relations. This position
would be undermined if Bonn agrees to Pankow's
membership in various international organizations
in order to achieve a transport a reement. 25X1
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HONECKER TIGHTENS RANKS
I n a series of articles and speeches, the East
German leadership has called for ideological dis-
cipline as the nation enters a period of greater
contact with the West.
The core of the argument was contained in
an article by party chief Erich Honecker that
appeared simultaneously in Neues Deutschland
.:ind the international journal, Problems of Peace
and Socialism. Honecker maintained that East
Germany must concentrate on building socialism
and forge even closer ties with the Soviet Union
in the process. The party chief stressed that the
c, ation of a new society was a long and compli-
cated task and that the USSR was the only model
to follow. He thereby put his ideologists on no-
tice that the Ulbrichtian notion that East Ger-
many had reached a stage in its development
where it could serve as a model for the West was
no longer tenable. Furthermore, he warned his
economists to stop relying exclusively on Western
tools for economic analysis and going for easy,
short-term successes. They should instead return
to the principles of Marxist-Leninist political
economy and long-term, balanced planning and
management.
Turning to basic ideological questions, Hon-
ecker expressed his concern that party members
might be seduced by Western social democracy
and called for greater efforts to inculcate the
masses in patriotism for the German Democratic
Republic and loyalty to the USSR. Aware that his
views on the threat from the West might be mis-
interpreted by those within the party who de-
plore the Soviet detente policy, Honecker went
on to condemn deviation from the "common line
of the international Communist movement" as
anti-Soviet Maoism.
Honecker's article was thoroughly coordi-
nated with the Soviets before publication, and as
a result many )f his key points were blunted or
deleted. To repair the rents in his argument, Hon-
ecker took his case directly to the public in an
unyielding speech on 6 January. He warned East
Germans, and implicitly the Soviets, of the dan-
gers of taking j relaxed view of the Brandt gov-
ernment. Honeecker, already uneasy over the
public mood created by improvement in East-
West relations, could only have been shocked to
see the results of a party-sponsored opinion poll
in East Germzny naming Brandt as the most
popular German politician. Stressing the un-
bridgeable ideological, social, and political gap
between the two German states and the unaccept-
ability of Brandt's two states - one nation theory
as the basis for inter-German relations, Honecker
fired a round of abusive salvoes against Bonn's
"unchanging imperialist character." The Soviet
response to l-ionecker's fire-eating speech was
cool. TASS deleted all references to the military
might of the Warsaw Pact and the dominance of
the Socialist system in Europe as well as the
anti-Western v tuperation. What was left was a
mild address in praise of peace and friendship
with the USSR
Shifting tears, the East German leadership
decided to express its uneasiness more subtly,
cloaking it as an attack on Maoism. A Neues
Deutschland editorial castigated the Chinese
"drivel" about the "sellout" of East German sov-
ereignty by the Soviet Union as a result of the
Berlin accords. Once again, TASS deleted the key
points the Pankow regime was attempting to
make about the effects of detente on East Ger-
many, leaving only a generalized attack on the
Chinese heresy
The Honecker regime has attempted by its
attacks on the social democratic and Maoist devia-
tions to keep the party membership in line and, at
the same time, warn Moscow of the potentially
divisive, destabilizing effects of detente. The
treatment of the East German argument in the
Soviet media demonstrates that Pankow's fears
are being given short shrift.
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EUROPEAN MONEY WORRIES
Concern is growing in Europe that the Smithsonian currency realignment is
threatened by US domestic economic policies. Europeans blame the dollar's continuing
international weakness, in large measure, on relatively low US interest rates. This
reduces the incentive of overseas holders of funds to invest them in the US. Moreover,
the proposed large budget deficit raises doubts about the US ability to dampen inflation,
further weakening confidence in the durability of the recent currency realignment.
High-level French officials, such as Pompidou's economic and financial adviser, have
been raising these points, saying that such policies are not in keeping with the under-
standing reached at the Azores meeting between President Nixon and Pompidou.
If the anticipated reflow of dollars to the US fails to develop while the unfavorable
trade balance continues, Europeans believe that the US balance-of-payments will remain
in deficit. This in turn raises the question of how the US would finance this deficit.
Foreign central banks are reluctant to increase their dollar holdings now that the dollar
is no longer convertible. Because it is generally recognized that the US cannot reopen
the gold window, many central bankers feel that some form of limited convertibility, at
least for additional dollar holdings, should be implemented. Alternatively, EC Com-
mission Vice President Barre has suggested that the US seek international credits as the
UK did when the pound was devalued in 1967.
Belgium: Right On
The new cabinet of Prime Minister Eyskens,
sworn in last week, represents a renewal of the
coalition and policies in effect since 1968. The
Socialist - Social Christian government is both
moderate and experienced. Eyskens, in his fifth
term at the helm, will rely on many of his pre-
vious ministers. The important defense and eco-
nomic portfolios, however, have been given to
relative newcomers, two well-known politicians
from Brussels. This is an obvious attempt to re-
coup the government's standing in the capital,
which cast a strong vote against Eyskens' program
of constitutional revision in last November's na-
tional elections.
The government will focus on domestic af-
fairs. It intends to further the regional decen-
tralization of administrative and economic
functions, broaden social benefits, and provide
for greater environmental protection. The lin-
guistic situation should not be a major problem.
The previous coalition completed constitutional
revisions that provide cultural autonomy for the
nation's Dutch- and French-speaking citizens.
Only minor details remain to be worked out, and
there are no other apparent threats to the present
domestic tranquillity.
In foreign affairs, the retention of Pierre
Harmel as foreign minister and the appointment
of a conservative Social Christian to the Defense
Ministry foretell a continuation of past policies.
The new coalition has agreed to support stronger
political ties in the EC and maintain Western
collective security. The coalition program calls for
a reduction of two to three months in the term of
military service. A passage in the program entitled
"from Detente to Entente" looks with favor on
Facilitating preparations for a European
conference and calls for the opening of nego-
tiations on East-West troop reductions. Even
these proposals are generally consistent with
Belgium's past policy of being in the forefront of
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The Soviet Union
The new Soviet five-year plan got off to a
slow start in 1971. Gross national product grew
by only about 3.5 percent. A decline in agricul-
tural output from the record level in 1970 was
largely responsible, but the pace of industrial
growth also sagged, especially in the last six
months of the year. The failure to meet the goals
for labor productivity and for putting new plant
and equipment into use suggests that some of the
key goals of the five-year plan are threatened.
After a bumper year in 1970 because of
unusually good weather, agricultural output last
year declined by about 1.5 percent. Less favor-
able weather conditions last year caused a decline
in the output of all major crops except cotton. As
a result, the Soviets are buying grain and sugar in
non-Communist markets to cover domestic re-
quirements and export commitments. The pro-
duction of livestock products, particularly meat
and eggs, increased again in 1971, but the boost
in livestock numbers was only half the 1970 level.
Agricultural production was disappointing,
but the leadership continued to devote an in-
creasing share of the nation's investment re-
sources to this sector-about 25 percent in 1971.
The more than 21 billion rubles invested in agri-
culture equaled the plan figure and were 10 per-
cent higher than in 1970. Deliveries of agricul-
tural machinery were on schedule, and the supply
1966-69
Actual*
1970
Actual
Plan
. / .ual
1971-75
Plan*'
Gross national product
5
8.5
_,....
5,.
6
Industrial output
7
6.5
5,.
8
Agricultural output
2
13
5
, J 5
3.5
Construction work
6
10.5
6.5
Services
4.5
3.5
..,.:,$,5
4
'4 nnual average
**.4 verage annual growth required to meet 1975 targets.
of mineral fertilizers to the farms climbed by
almost 11 percent. Tractor deliveries were slightly
behind schedule and the supply of trucks fell 15
percent short of the planned target.
Industrial production is estimated to have
risen by about 5.5 percent in 1971. Most of the
published production targets were met or sur-
passed, but there were substantial declines in the
output of some processed foods and consumer
durables--notably fish, sugar, television sets, and
washing machines. Moreover, after midyear the
rates of growth of all the major industrial mate-
rials and consumer goods branches slowed ap-
preciably.
Despite the fanfare concerning the place of
the consumer in the 1971-75 plan, per capita
consumption grew at 4 percent last year, com-
pared with about 4.5 percent per year in 1966-70.
The increase in real per capita income was re-
ported as 4.5 percent, the smallest increase re-
corded since Brezhnev and Kosygin came to
power. The average earnings of state employees
increased more than planned, but earnings of col-
lective farmers leveled off after years of steady
growth.
The official statistical report shows that
gains in labor productivity during 1971 in the key
sectors of industry, agriculture, and construction
fell below those achieved in 1970 and were ap-
preciably less than the rates necessary to keep the
economy in line with current five-year plan goals.
Soviet leaders have repeatedly stressed that re-
serves of labor are limited, making the success of
the 1971-75 plan dependent upon a substantial
rise in productivity.
Construction was another soft spot in the
economy. Although targets for the value of in-
vestment allocated were met, the goals for com-
pleting projects were not. Additions to capacity
to produce coal, steel, cement, mineral fertilizers,
and sugar were less than the average yearly
increase in 1966-70. Large gains were scored in
motor vehicles, meat processing, and chemical
fibers.
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Ghana: The Cautious Junta
Two weeks after his take-over, Acheampong
appears to be exercising strong personal control,
but intensification of tribal rivalry has raised new
questions about the army's basic stability. On the
economic front, there has been little forward
movement beyond some symbolic gestures to
Ghana's hard-pressed consumers.
National Redemption Council
The junta has apparently decided on the
make-up of a National Advisory Council, which is
to be the highest level of civilian participation in
policy formation. The council will be headed by
Robert Gardiner, the respected chief of the UN
Economic Commission for Africa, who will take
up his new duties in Accra at the conclusion of
the UN Security Council meeting in Addis Ababa.
The junta is still moving cautiously on eco-
nomic matters while waiting for recom-
mendations from the economic review committee
appointed last week. No options have been com-
pletely foreclosed, and the junta may ultimately
decide to make only minor adjustments in Busia's
austerity measures in the hope of obtaining debt
relief and increased foreign assistance. The only
changes thus far involved the roll-back of prices
on a few key consumer goods and the establish-
ment of state control on the import of others.
Efforts by the junta to gain international
acceptance have been concentrated on neigh-
boring countries. The Foreign Ministry an-
nounced this week, however, that it assumes all
countries represented diplomatically in Accra
have recognized the new government .F-
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Israel: Terrorism and Reprisal
Fedayeen incidents along the Israeli-Syrian
cease-fire line increased after Israeli raids and a
threat to occupy Lebanese territory forced the
fedayeen to stop their operations from Lebanon.
The increased level of terrorism provoked an
Israeli air strike this week against a fedayeen base
just north of Daraa, the first action by Israeli
aircraft inside Syria in some 18 months. Most of
the terrorists had left the area prior to the raid,
and the fedayeen probably suffered few if any
casualties. Even so, the Israelis feel that the raid
served to warn the Syrians that a build-up of
terrorist potential near the border will not be
tolerated. The Israelis claim that the Syrians "su-
pervise" every terrorist act that takes place from
Syrian territory and that the Syrian Army has
provided covering fire for fedayeen units. Fol-
lowing the air strike at the fedayeen base, the
Israelis broadcast a warning to the Syrians that
further fedayeen activity would again draw Israeli
retaliation.
The fedayeen have also been active along the
Jordan River frontier. On 23 January, 12 feda-
yeen, who must have crossed from Jordan, were
detected by the Israelis approximately 13 miles
above Jericho on the West Bank. One of the
terrorists was killed and the rest captured.
Although the Lebanese border has been
quiet following the cessation of terrorist oper-
ations, fedayeen units have begun to move back
into jumping off areas along the border. A re-
newal of terrorist activity there could occur
without warning.
Meanwhile, the fedayeen continue to be
more of a problem for their Arab hosts than for
the Israelis. The US Embassy in Beirut states that
the presence of the fedayeen in the Lebanese
countryside and, increasingly, in larger towns in-
cluding Beirut, constitutes a difficult and growing
internal security problem for the government.
The embassy warns that the Palestinians, frus-
trated in their efforts to hit directly at Israel, may
turn more to terrorism, not only against local
authorities, but also against installations and in-
terests.
In Syria, President Asad faces a similar
dilemma and, with Jordan's unhappy experience
as an example, he has tried to keep the com-
mandos out of all the major cities except Daraa,
the Jordan border town around which most of
the fedayeen units in Syria are believed to be
concentrated. Arab dedication to the cause of
Palestinian irredentism
requires him to provide
them facilities and at least appear to support their
operations. He cannot let them become too bold,
however, for fear of further Israeli reprisals.
Libya: Toil and Trouble
Rumblings are once more being heard in
Libya, as the Qadhafi regime fails to pause long
enough in its pursuit of pan-Arab glory to give
serious attention to the problems of the home
front. The students and the press have been the
most vocal in expressing dissatisfaction with do-
mestic policy. The government reaction has once
again shown up Premier Qadhafi's ineptitude in
handling his own people.
The Libyan students have long sought a stu-
dent union through which they could express
their opinions and demands. After Qadhafi's
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courting of non-Libyan Arab student associations
that met recently in Libya, the students made
another effort and were granted unions. These,
however, were divided between secondary and
university students so as to dilute their strength.
This was not good enough for the students and
they appealed to the Premier, who impulsively
permitted the establishment of a single united
student union.
A few days later, this rapprochement fell
apart when the students failed to turn out in
numbers for a Qadhafi speech scheduled for the
anniversary of a student battle with the former
regime. The students apparently preferred at-
tending a soccer match, and when Qadhafi, en-
raged, caused the match to be canceled, the stu-
dents just drifted home. Later, four students were
arrested in Benghazi for spitting at the motorcade
carrying the Premier and his guest, the Somali
President.
The Libyan press, in its low key way, has
also been at odds with the Qadhafi regime. Most
journalists were retained in their positions after
the revolution, but their work has failed to satisfy
Qadhafi. Upon his emergence from seclusion last
October, the Premier made clear that he expected
the press to do more to make the populace re-
sponsive to the revolution's program. This has not
happened and last week 29 journalists went on
trial for "corruption of public opinion during the
monarchy." The charge fails to make clear why a
number of newsmen approved by the Qadhafi
regime were accused, including the present di-
rector of the state-owned Libyan News Agency.
Most of the major newspapers were shut down
last week, including the government's official
daily paper.
Qadhafi is an emotional man, and he must
be stung by these symptoms of antagonism. The
need for more than lukewarm popular support of
the regime formed a major theme in a speech last
October. The feelings revealed by the students
and the failures of the press are not indicative of
serious dissent in terms of internal security, but
they do point up once again Qadhafi's failure to
generate any sense of movement on domestic
International 'Oil
The Organization of Petroleum Exporting Countries, fresh from winning increased revenues
from the oil companies to compensate for loss of purchasing power resulting from the dollar's
devaluation, forged ahead last week with demands for greater participation. At the initial meetings,
representatives of OPEC sought a minimum 20-percent ownership of facilities within members'
borders. Furthermore, they indicated any agreement would have to specify that the producing
countries' ownership share would rise, at some future time, to 51 percent.
The oil company representives offered no encouragement, but both parties agreed that the
complexity of the issue and varying circumstances within producing countries dictated individual
country negotiations with oil companies operating there, once the oil companies accept the
principle of participation. Talks are expected to be long and drawn out, but mutual dependence-
that of the producing countries on the companies' technical ability, capital resources and control of
the world market, and the oil companies reliance on OPEC for much of their oil-calls for eventual
agreement. It is unlikely that during negotiations OPEC will be so demanding or the companies so
adamant that a disruption in oil production will result. Libya has elected to go it alone and, in
addition to seeking a larger price adjustment to compensate for dollar devaluation, probably will
demand an initial 51-percent share in oil company operations.
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Persian Gulf: Murder in Sharjah
Sheik Khalid ibn Muhammad al-Qasimi, ruler
of Sharjah, was killed in an abortive coup attempt
earlier this week when a small band of rebels led
by a deposed ruler captured his palace and held it
for 15 hours. The palace was seized on the eve of
a major religious holiday that found most security
personnel already on leave. The rebels were be-
sieged and forced to surrender by military forces
of the new United Arab Emirates, of which
Sharjah is a member, and units of several local
security forces. The coup attempt received no
popular support in Sharjah. The ruling family has
named 29-year-old Sheik Sultan ibn Muhammad,
a brother of Khalid, as the new ruler. He is
currently minister of education in the union cab-
inet.
The unsuccessful take-over was led by Sheik
Saqr ibn Sultan, a former ruler of Sharjah and a
cousin of Sheik Khalid. Sheik Saqr was deposed
in 1965 by the ruling Qasimi family of Sharjah/ 25X6
Saqr had a reputationo flirting
wi ra ica Arab regimes and "liberation move-
ments,"
~Sagr spent his e xile 1n
Baghdad and Cairo, and is believed to have been
involved-with Iraq's backing-in an attempt on
Khalid's life in July 1970.
Despite ,ome success in sponsoring social
and economic development in his relatively im-
poverished sheikdom, Khalid was not particularly
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popular in Sharjah. Tracts demanding his abdi-
cation surfaced in mid-1971, and his standing
further declined later in the year when he agreed
to permit Iran to garrison part of the Sharjah-
claimed island of Abu Musa in return for a sub-
sidy from Tehran. Khalid was the target of sharp
criticism from the governments of Iraq, Yemen
(Aden), and Libya for accepting the deal, which
had been negotiated by the British before their
withdrawal from the Persian Gulf.
It is not clear if other Arab states were
implicated in Sagr's unsuccessful uprising, al-
though his background suggests that more was
involved than traditional family rivalry.
The United Arab Emirates withstood its first
test by speedily putting down Sheik Saqr's coup
attempt, but the ease with which he entered
Sharjah and seized the palace points up the fra-
gility of the sheikdoms and their vulnerability to
dissident groups
I
Somalia: Still Unstable
After more than two years in power, General
Siad's military regime continues to face plots and
public dissatisfaction with its policies. Never-
theless, Siad has managed to hang on as president
of the ruling Supreme Revolutionary Council, and
the powerful security apparatus has kept po-
tential opposition elements in check.
Maneuvering within the council, where he
has rivals, presents the major danger to Siad. The
council's 21 army and police officers represent a
precarious balance of contending personal, tribal,
and ideological interests. Siad has thus far main-
tained the balance by manipulation and accom-
modation. He has faced at least two alleged coup
plots, but he has managed to neutralize several
potential opponents. The President's authority is
limited, and he must be regarded as still vul-
nerable to moves by other high-level members of
the regime.
The government is troubled by tribal
enmity. As a result of the military coup, tradi-
tionally dominant tribal groups have largely been
supplanted in the government by previously un-
important tribes, producing considerable re-
sentment. Tribal opposition has also been gen-
erated by the government's failure to accom-
modate tribal interests. The regime views the
tribal system as divisive, and campaigns to erad-
icate it have brought on protests, demonstrations,
and at least one attempt on Siad's life.
or the most part, however, the
military seems to be satisfied with its expanded
political role. Other segments of the population-
Muslim leaders, businessmen, and civil servants-
are also disenchanted with government policies.
These groups are unorganized, however, and pose
little threat.
Although the problems besetting the Siad
government limit its long-range prospects, the
general has proven to be a resourceful and durable
leader. A former army commander, Siad retains
strong ties within the military. He also has im-
portant tribal and family links with the council
and with the powerful and effective National Se-
curity Service. In fact, Siad, who rarely leaves
Somalia, recently has felt confident enough to
visit the Soviet Union and several African and
Arab countries.
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Panama: Opportunity Comes Knocking
Since mid-1970, the small pro-Moscow Com-
munist Party-the Panamanian People's Party-has
been accepted as a political ally by the Torrijos
government. As a result, the party has gained in
prestige and respectability if not in actual power.
It does not, of course, have the capability to
confront the government directly on policy is-
sues. It is attempting instead to push Torrijos ever
further to the left and to reinforce his ingrained
prejudice against the oligarchy and the US. There
is no doubt that Torrijos calls the shots, but given
his narrow base of support, his reliance on the
Communists is likely to grow and the party's
influence may increase substantially.
The party, illegal since 1953, found itself in
a bad way when the present junta seized power in
October 1968. In order to gain acceptance and
quick US support, the junta had proclaimed itself
anti-Communist. For emphasis, it exiled party
leaders and jailed sympathizers. Nevertheless,
faced with an unpleasant choice between futile
opposition and frustrating inactivity, the party
decided to gamble on Torrijos when the govern-
ment began to adopt a nationalist, populist, and
"revolutionary" image.
The effort to work out an arrangement with
the government took until the summer of 1970,
when Torrijos decided that he needed assistance
in developing a mass base. Torrijos agreed to end
harassment of the party, to allow some propa-
ganda activity, and to permit international con-
tacts. He promised that Communists would be
hired by the government and that the party
would be free to build up its front groups. In
return, the party would actively support govern-
ment policies and programs.
The party has made good use of this oppor-
tunity to rebuild its infrastructure and place its
members and sympathizers throughout the
bureaucracy at a time when all other political
parties are forbidden to operate. It has focused on
students, workers, and peasants-the very groups
that Torrijos believes will form a natural con-
stituency for his government-and these efforts
have already paid off. The Communists have
gained a following among the peasants unrivaled
by any other political group. The party works
closely with the government in its agrarian reform
program and now is apparently able to manipu-
late the leadership of the Confederation of
Campesino Settlements-the main vehicle through
which the government is attempting to organize
rural support. In the labor field, the party re-
cently won official government approval for the
Communist-dcminated labor confederation that
represents one fourth of organized labor. Com-
munist influence among students has made the
party particularly useful to the government. In
December, when Torrijos apparently decided to
put pressure )n the US in connection with the
canal negotia-ions and to demonstrate in the
process that he had significant student support,
he called upon the Communists to sponsor "anti-
imperialism week." In early January, when the
government decided to commemorate the 1964
anti-US riots, it again relied heavily on Com-
munist participation.
The Communists have been encouraged by
periodic confirmation of their "special re-
lationship" with the government. They were able
this month, for example, to ignore a one-year ban
on union ele--tions, and they have been given
membership cn the revolutionary councils which
have been set up in two provinces and may be
established in others. The councils are designed to
create popular support for the government and
may be used -.:o mobilize voters in elections. The
Communists have also been encouraged by
Torrijos' foreign policy: his more friendly
attitude toward Cuba, his permission for opening
of Soviet and Cuban news agency offices in
Panama, and his hard line on canal negotiations.
Even so, they are still wary of Torrijos and realize
that they are still only a tool for him. Never-
theless, the Communists hope to parlay their
present role into something far more substantial
and, by being "dependable," to ensure that in a
crisis Torrijos would have no choice but to turn
to them for assistance.
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Uruguay: Dissent in the Tupamaros
Latin America's most famous terrorist
group, the Tupamaros, is showing signs of internal
dissent, but none of the factions appears able to
challenge the leaders.
One of the more prominent leaders of the
dissident faction is the well-known female ter-
rorist Maria Topolansky. The faction appears to
be relatively small, but is capable of independent
action. On 22 December, it marked its inde-
pendent existence by firebombing and destroying
the prestigious Punta Carreta Golf Clubhouse,
dubbing itself the 22 December movement. It
distributed tracts criticizing Tupamaro tactics.
Possibly of greater significance is the re-
ported emergence of a faction headed by
Eleuterio Fernandez, one of the original members
of the National Liberation Movement. A close
friend of Tupamaro chieftain Raul Sendic and a
key leader in his own right, he could command a
sizable following. The Fernandez faction, while in
agreement with many aspects of Tupamaro
policy, sees no advantage in continued political
support for the Frente Amplio since it attracted
only 18 percent of the vote in the last election.
Fernandez apparently puts greater emphasis than
Sendic on the need for a return to terrorist
attacks.
Tupamaro unity had been little short of re-
markable to this point. The organization had
swallowed up the personnel, if not the name-
plates, of several organizations on the Uruguayan
left and had grown from a few dozen persons in
the early 1950s to a force of between 500 and
1,000 militants with thousands of supporters.
Throughout its history, it maintained its cohesion
and central direction to an extent unparalleled in
radical left circles in Latin America.
It was almost inevitable that some factional
strife would eventually result from personality
clashes or policy disputes. The twists and turns of
Tupamaro policy prior to the elections last year,
moving from cautious acceptance of the Frente's
existence to outright support of its platform,
raised a host of tactical questions. As the organi-
zation attempts to adjust its strategy to the new
administration that takes office in March and to
determine the utility of the political arm it has
established in the Frente, more strains may ap-
pear.
The disputes at present show no signs of
significantly affecting the organization's over-all
capabilities or of posing any immediate challenge
to the leadership. The terrorist hierarchy is likely
to go to considerable lengths to preserve its
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Mexico: Political Crimes
Politically motivated kidnapings and robber-
ies have been increasing in the last few months
and the prognosis is for more of the same. The
government, which has viewed the emergence of a
guerrilla-terrorist problem over the past year as
not much more than a security nuisance, is show-
ing more concern and has ordered security agen-
cies to adopt more aggressive tactics.
Last September, a high official in the coun-
try's civil air section was the victim of the first
political kidnaping in recent Mexican history.
Since then, the number of confirmed kidnapings
has risen to eight, five of them committed by
revolutionary groups or at least by persons with
political motivation. Six of the victims have been
wealthy businessmen; the other two have been
daughters of such persons.
Initially, the government met the kidnapers'
demands for ransom and-in one case-the release
of political prisoners. Security agencies generally
delayed any active search until the victim had
been released. In recent cases, however, author-
ities have caught the persons responsible while the
victims were still being held. Even so, the over-all
record of the security agencies is not impressive.
They have solved three cases but have yet to
catch anyone directly responsible for the three
biggest and most professional kidnapings-the
civil air official, a university rector, and a million-
aire businessman whose kidnapers reportedly got
the largest ransom ever paid in Mexico.
Compounding the kidnaping problem is the
rash of robberies in recent weeks pulled off by
student dissidents. The political overtones are evi-
dent. Two North Korean - trained insurgents, who
had put their urban guerrilla knowledge to use by
robbing banks and stores, were arrested recently.
Three former members of the Mexican Commu-
nist Party youth group, who confessed to a num-
ber of robberies in Guadalajara, have also been
seized. All those arrested attributed their activity
to political causes. They said they turned to vio-
lence in 1968 after many of their associates were
killed in Mexico City while demonstrating.
Government Secretary Moya and defense
chief Cuenca Diaz have been playing down the
seriousness of the security situation, but the
greater aggressiveness by security agencies and the
army's recent intensification of its anti-guerrilla
campaign in all parts of the country, particularly
in the violence-plagued state of Guerrero, point
up growing concern with the proliferation of
crimes committed by "revolutionaries." Several
of the guerrilla groups that have sprung up in the
last year, as well as common criminals wanting to
get in on the act, have the capability to stage such
crimes. Many have been encouraged by the gov-
ernment's acquiescence to demands in the past.
Political kidnapings and robberies will probably
continue, and the pressure on the government to
come up with a solution will increase with each
Peru: Caution on Communists
The Velasco government is continuing its
policy of improving relations with Communist
countries, but concern over Chile and the disrup-
tive activities of local Communists is increasing.
In addition, some Peruvian officials have ex-
pressed concern over Soviet conduct in their
country and have indicated that they do not want
Peru to become heavily dependent on the Com-
munist world.
In a conversation with the US ambassador
on 17 January, President Velasco gave no sign he
would modify his policy of rapprochement with
the Castro regime. Cuba, he said, "is too far away
and too insignificant to pose any threat to Peru."
In contrast, Velasco expressed anxiety over what
he termed "Communist Chile" and showed some
annoyance with Argentine President Lanusse's
friendly attitude toward President Allende. Par-
alleling the Brazilian attitude, Velasco alleged that
Lanusse had "made his peace with Allende and
now sat with arms crossed," leaving others to
fend for themselves. A preoccupation with danger
from the south has colored Peruvian thinking
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since a Chilean military victory over Peru in the
19th century.
relations
with the Soviet Union and other Communist
countries are valued as an expression of independ-
ence from the US and as a source of potential
economic benefits. At this point, Peru is unlikely
to jeopardize its relations with the Communist
world, but new initiatives may be restrained.
Although concern about Communist influ-
ence in the labor field is rising, the military gov-
ernment persists in viewing the labor-based
American Popular Revolutionary Alliance as its
number one enemy. The Peruvian leaders are
determined to destroy the party, and they feel
that they can use the Communists to do this.
These leaders feel that they can deal with the
Communists later.
Argentina: Limited Options
President Lanusse's political and economic
options are being severely limited by growing
military and labor pressures.
The immediate focus of opposition is his
program to slow inflation, spur the economy,
reverse the rapid loss of foreign reserves, and thus
meet requirements for obtaining substantial inter-
national loans. This month, Lanusse suspended
collective bargaining and allowed only moderate
wage increases. He moved to stimulate cattle mar-
keting through tax incentives while holding down
the price of beef. An economic team led by
central bank president Brignone, who helped de-
sign these economic reforms, is coming to Wash-
ington to try to borrow approximately $1 billion
from the IMF, the US Government, and private
banks.
Already, Lanusse is coming under pressure
from Peronist labor to modify his wage policy
and reinstitute collective bargaining procedures,
which have been postponed until 1973. US Em-
bassy officials have expressed the fear that emer-
gency efforts to freeze beef prices will not be
immediately effective and that increases in the
cost of living during the early months of 1972
will produce a labor confrontation that could
wreck current policies. The government's failure
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'r . Ic. C1 ~'Y
to control beef prices in February 1970 was an
important cause of the inflation that has plagued
Argentina ever since.
Lanusse's determination to pursue strong
economic measures appears less than absolute. He
probably realizes that only a gradual version of
the technocrats' stabilization program has a
chance to work in the present political atmos-
phere. Military and labor reactions, and the ques-
tion of what is politically desirable or possible,
are likely to be the overriding considerations.
Apparently, Lanusse's hope is that success in
his quest for international financing will quiet his
critics in military and financial circles, thus pro-
viding him with maneuvering room in his negotia-
tions with labor. Failure to obtain foreign loans
would significantly weaken his position and, per-
haps, make elections impossible. On the other
hand, success in obtaining the loans would not
assure political success and the next few months
of political dealings will be important for La-
Chile
Allende's repeated delays in naming a new
cabinet reflect backbiting within his coalition and
his determination to run his own show. Each
government party continues to blame the others
for defeats in the by-elections on 16 January;
several put responsibility on the Movement of the
Revolutionary Left, while factions in the peren-
nially divided Socialist Party are castigating each
other and even the President. Some, including the
labor leader defeated in the Senate race, complain
that the hard-line leadership under Carlos
Altamirano must be replaced before it drags the
party to disaster.
Hand-wringing and recrimination in adver-
sity is the norm in Chilean politics. Like the loss
of women's and peasants' votes in the by-
elections, it points up Allende's inability to
revolutionize the country by use of existing
ground rules. Nevertheless, he continues to adapt
his actions to this end. For example, he recently
switched from attacks on "remnants of bourgeois
legality" to incignant charges that the opposition
is violating Ch,, le's constitution and cherished in-
stitutions in efforts to weaken his government. In
the same vein are his offers of official posts to
military officers, breakaway moderate Radicals,
and leftist Christian Democrats led by Radomiro
Tomic. Allende's plan to organize a single coali-
tion party to `ake advantage of Chile's peculiar
electoral laws and his comment that 1973 con-
gressional elections will suffice as the plebiscite
the Socialists seek should be seen in the context
of his reliance on maneuver as the weapon most
useful to his personal power.
Comments by Communist Party leaders
imply that they too favor his search for accom-
modation with the opposition. The Altamirano
Socialists, however, appear more convinced than
ever that Allende's course is too slow and is giving
the opposition a chance to recapture the initi-
ative. With other extremists, these Socialists want
to force Allende into a harder line.
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The Drug Scene
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Poland is beginning to face up to its drug
abuse problem. Until recently, Polish press cover-
age of drug addiction concentrated, with a certain
malicious pleasure, on the magnitude of the prob-
lem in the West while alleging that the conditions
for this social malaise did not exist in a socialist
system. The press has now adopted a more real-
istic position that reflects the gradual recognition
that Polish youth is not immune.
One Polish daily said recently that the alarm-
ing number of drug addiction cases in both large
cities and small towns is cause for anxiety. Polish
society, it said, is on the brink of a drug epidemic.
Another article reports that "classic" narcotics
already have replaced glue sniffing and declares
that it is time "we became fully aware of the
gravity of the situation rather than sticking our
heads in the sand and pretending the problem
does not exist." Educators are urged not to hush
up drug cases to protect the reputation of their
schools.
Poland does not yet have a major drug prob-
lem even though the authorities obviously are
concerned that the trend is in that direction. Hard
drugs are still difficult to get, but Polish adoles-
cents have had considerable success acquiring
several psychotropic substitutes. Stealing prescrip-
tion forms and falsifying prescriptions in state
drug stores is the most common method of ob-
taining these substances-particularly morphine
and trichloroethylene. Drug store burglaries also
have increased. The major source of Poland's
narcotics is therefore drugs manufactured by the
state, although the press occasionally points to
the foreign origin of some drugs. Two foreign
nationals, for example, were arrested in Poznan
recently with 30 kilograms of hashish.
A special committee has been formed to
modernize the law on drug offenders. The current
law, passed in 1951, is not only imprecise but
does not take account of a number of new drugs.
One passage, for example, provides that "any
person who without a doctor's prescription uses a
stupefacient in the company of another person is
subject to a year's imprisonment." There is con-
siderable confusion over what constitutes
"company." Polish doctors also complain that the
law does not provide for compulsory treatment of
addicts who have not broken the law, although
they admit there are not enough specialists or
institutions to care for such people.
The purpose of all this journalistic attention
is to end what the media calls an "embarrassed
silence" on the subject of drug addiction. By
informing the populace about the problem, the
government hopes to win approval for strong
measures to correct drug abuse.
Other Eastern European countries rarely re-
veal the dimensions of their drug problem, al-
though Yugoslavia admits having some 40,000
addicts. If drugs were available, they probably
would be widely used by Eastern Europe's youth,
who are generally cynical about their grey exist-
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UN: Council Goes to Africa
A special week-long Security Council
meeting on African issues opens in Addis Ababa
on 28 January. The session is likely to cause
many problems for the Western powers.
The debate will focus on the four usual
African issues-Rhodesia, South-West Africa, the
Portuguese territories, and apartheid. The black
Africans may offer a number of contentious texts
on these topics that can be defeated only by the
veto of a permanent member or by the abstention
of at least seven of the 15 council members. To
obtain the latter-and more palatable-result, the
US, the UK, and France will need support from
the other Western-oriented council members:
Italy, Belgium, Japan, Argentina, and Panama.
The USSR and Communist China were
strongly in favor of the council meeting in Africa,
although they would have preferred either
Conakry or Lusaka as the site. The Soviets hope
for a re-affirmation of council resolutions per-
taining to Africa, accompanied by a listing of
unimplemented provisions and the states allegedly
responsible. The French delegate has denounced
the Soviet approach as inquisitorial, but black
Africans probably favor the proposal as a means
of applying more pressure on the Western powers.
No new around is likely to be broken in the
discussions on the Portuguese territories and on
apartheid in South Africa. The recent strike of
the Ovambos in South-West Africa may prompt
new complaints about this old grievance, but the
African goal of UN sanctions against Pretoria re-
mains a non-starter in view of the likely veto by
at least one of the Western powers. Rhodesia thus
may become the central issue, with the Africans
and the Communists seeking to exploit the pre-
sent unrest over the settlement proposals worked
out with the UK.
Whether jther such meetings will be con-
vened elsewhere will depend in part on cost
factors; no less than 120 secretariat staffers had
to be transported to Addis Ababa. Nevertheless, a
new precedent may be set. The Panamanian
delegate has said his government could host a
council meeting next year, hinting that the canal
would be a possible topic.
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Secret
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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Cuba's Changing Relations With Latin America
Secret
N2 45
28 January 1972
No. 0354/72A
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Name S%Mof
Cuba's Changing Relations
with Latin America
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For nearly a decade, Cuba's policy toward Latin America was based almost entirely on
an unequivocal support of armed revolutionary violence. TI-e consistent failures of this
approach, combined with economic difficulties and Soviet pr'ssure, apparently convinced
Castro of the necessity for a more rational approach. Since 1968, Cuba has reduced its
support to insurgent groups and has been cautiously trying to r !sume friendly contacts with
selected Latin American nations. As a result of these policies, as well as the changing
political climate in Latin America, Havana has regained resp actability with a number of
Latin American nations and has succeeded in undermining the efficacy of the economic and
political sanctions imposed by the Organization of American States. Castro has often stated
that Cuba is interested in establishing full relations with on y those nations that follow
policies "independent of US imperialism," but this has not kept him from developing
contacts with countries that fail to meet this criterion. As long is Fidel is convinced that the
present political trend in Latin America is in his favor, he will be less likely to risk an all-out
return to violent subversive operations, Nevertheless, Castro's new policy does not mean
that he has relinquished his belief in the validity of armed struggle, and it does not represent
an abandonment of other forms of subversion, including propaganda support, limited
insurgent training, and funding, which Castro still views as usefL I political tools.
Background
"We promise to continue making Cuba the
example that can convert the cordillera of the
Andes into the Sierra Maestra of the Ameri-
can continent."
Castro, 26 July 1960
Special Report -2
Virtually from the beginning of the Castro
regime, Cuba's foreign policy toward Latin
America has been principally guided by a simple
and radical objective: duplication of the Cuban
revolution throughout the hemisphere. The tac-
tics used by Castro in his efforts to achieve this
goal were developed from his own experiences as
well as the influence of Che Guevara. Political
power, he argued, could be achieved only through
armed struggle. During 1959, unsuccessful armed
expeditions from Cuba were launched against
Panama, the Dominican Republic, Haiti, and
Nicaragua.
After the dismal failures of the expeditions
in 1959, the Cuban subversive effort was not
stopped but became more carefully organized and
wider in scope. The General Directorate of Intelli-
gence was established in 1961 under Soviet guid-
ance and given the principal responsibility for
directing the effort in Latin America. Support
28 January 1972
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from Cuba, although sometimes on a small scale,
was made available to rebel groups in Venezuela,
Brazil, Paraguay, Argentina, Colombia, Peru, Cen-
tral America, and the Caribbean. This support-
arms, equipment, money, training, propaganda,
and in some cases Cuban personnel-ran Cuba
afoul of the Organization of American States,
which voted in 1964 to impose diplomatic and
economic sanctions against Havana.
Cuba's unilateral actions also brought Castro
into conflict with several local Communist
parties, which strongly complained to Moscow
about Cuban interference in the revolutionary
affairs of their countries. Under pressure from
Moscow, Castro agreed in late 1964 to limit his
support to insurgent groups in a few selected
countries and to respect the desires of the local
pro-Soviet Communist parties. Castro honored
this commitment for approximately one year.
The Tricontinental Conference, held in
Havana in January 1966, marked the resumption
of heavy Cuban involvement in armed revolu-
tionary movements. At this conference, Castro
issued an explicit call for violent revolution in the
hemisphere, a call he has repeated on numerous
occasions. Following the conference, Havana an-
nounced the formation of the Latin American
Solidarity Organization as a hemispheric revolu-
tionary front. This period marked the peak of
Cuba's efforts to export revolution. While the
solidarity organization was holding its first con-
ference in Havana during the summer of 1967,
Che Guevara and 16 other Cubans were estab-
lishing a guerrilla movement in Bolivia. Cuban
advisers were also operating with insurgent groups
in Guatemala and Venezuela.
In May 1967, the Cuban effort received a
sharp setback when four Cubans were captured
on the Venezuelan coast trying to smuggle arms
into the country. A far more damaging blow
occurred the following October when Guevara's
band of guerrillas was rolled up by the Bolivian
armed forces. Guevara's death made it appear that
the Cuban experience was in essence unique and
could not be duplicated in other countries.
Special Report
The death of Guevara forced Castro to
reassess his policy. His dedication to subversion
had not only been costly in terms of men and
money, it had also given his opponents justifi-
cation for further isolating Cuba, and he had no
great success to point to. He also faced mounting
domestic problems growing largely out of his mis-
management of the economy. Castro therefore
chose to drop his aggressive tactics. In 1968, he
began to re-establish his ties with the Latin
American Communist parties and project a more
responsible image in the hemisphere.
Prior to this shift, he had carefully main-
tained relations with Mexico, the only member of
the OAS that refused to implement political and
economic sanctions. The relationship was never
especially warm or cordial, but both governments
felt that it was in their interests to keep these ties.
The advantages for Cuba were obvious: the air
connection with Mexico was Havana's sole
window on Latin America, and the Cuban Em-
bassy in Mexico City assumed great importance as
a forward staging base for the transmission of
funds, movement of personnel to and from Cuba,
and dissemination of instructions and propa-
ganda. As for the Mexicans, the maintenance of
ties served to underline Mexico's "Estrada Doc-
trine," which calls for the maintenance of diplo-
matic relations with a friendly country regardless
of the origin or nature of its government. In
addition, pressure from Mexican leftist groups
was reduced.
Events elsewhere in Latin America helped
make Cuba's shift to a more pragmatic policy
something of a success. October 1968 saw the
accession to power of a highly nationalistic gov-
ernment in Peru. This was followed by a leftward
drift (until August 1971) in Bolivia and the elec-
tion of Salvador Allende in Chile. In addition,
other Latin American leaders have come to favor
some form of renewed contacts with Cuba. These
leaders share an intense desire to demonstrate
independence from the US, a decreased concern
with the threat of Cuban subversion and a fear of
being last to jump on the bandwagon.
- 3 - 28 January 1972
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N kP
A` ~~
Cuban C
t
t
~
on
ac
s With
%P C, Latin America Since 1968
6 O7f, 'O _ N 47 . a r
N d~
~ 7 n
~A ~ '' i s o? m~ a
Gd ~? d~-mod A ~
N 7 ~' O t5f fl
N drr `, N y 0.., lot, O- om.-..
O d+ dO
7
N G` A7 G G G G d, O
0 1P CIO dol N d eco
Argentina
Bahamas
Bolivia
Brazil
British Honduras ?
British West Indies ?
? ? ? ? ? ? Castro visit; Air agreement;
Chile ? ?
Diplomatic relations
Colombia ? ? ? Cuban-:olombian Friendship Institute
Costa Rica
Dominican Republic
?
Ecuador ? Castro visit
El Salvador
French West Indies ? ?
French Guiana ?
Guatemala
Guyana ?
Haiti
Honduras Consular relations;
Jamaica ? ? ? ? ? Frequent Cubana charter flights
Mexico ? ? ? ? ? ? Diplomrtic relations; Air agreement;
Netherlands Antilles ? Fishing agreement
Nicaragua ?
Panama ? ? ? ?
Paraguay
Peru ? ? ? ? Castro ,isit
Surinam
Trinidad & Tobago ? ?
Uruguay
Venezuela ? ? Cuban-lenezuelan Friendship Institute
Special Report
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Breaking Out of Isolation
Castro launched his efforts to reduce Cuba's
isolation in the Caribbean. His initial successes
were in the French territories of Martinique,
Guadeloupe, and French Guiana. In mid-1968,
the Cubans negotiated an agreement permitting
their fishing boats to use service facilities in the
port of Cayenne in French Guiana. At about the
same time, Cuba arranged for the sale of cement
to Martinique and Guadeloupe and agreed to pur-
chase pineapple seedlings from Martinique. Al-
though these ventures had little importance for
the Cuban economy, they were a foot in the
door. By 1969, several Cuban delegations had
visited Martinique, Guadeloupe, and French
Guiana; Cuban merchant ships were calling regu-
larly at Martinique and Guadeloupe; Cuban
fishing boats were being serviced in Cayenne; and
cargo flights from Cuba were landing frequently
in Martinique. Cuban contacts with the three
French departments continue. The level of trade
has not been significantly expanded, but visits by
technical and trade delegations occur with fair
regularity. The Cuban fishing fleet has been
granted certain port privileges in French Guiana
that enable the boats to remain on station off the
northeast coast of South America for extended
periods of time.
In November 1969, Prime Minister Williams
of Trinidad-Tobago called for greater trade coop-
eration between Cuba and other Caribbean na-
tions. Cuba responded the following month by
sending an agricultural delegation, and Trinidad
reciprocated in February 1970 by sending a simi-
lar delegation to Cuba. Contacts with Jamaica
have also increased. Jamaica, not a member of the
OAS when the sanctions were imposed, now
maintains consular relations with Cuba. Cubana
Airlines uses Kingston as a transfer point for
charter flights transporting passengers between
Cuba and Latin America, but no meaningful trade
has developed.
A change of government in Peru provided
Cuba with its first opportunity to cultivate a
Special Report
major nation in South America. Following the
assumption of power by a nationalist military
regime in Peru in October 1968, Castro altered his
definition of "revolutionary" to include govern-
ments that follow policies independent of "US
imperialism" and implement basic reforms. In a
public speech in July 1969, Castro expressed his
approval of the Peruvian Government. In early
1970, Cuba succeeded in establishing a Prensa
Latina office in Lima in return for an implicit
promise not to publish items embarrassing to the
Peruvian Government. A generous response to the
mammoth May 1970 earthquake significantly im-
proved Cuba's image in Peru and made propa-
ganda points elsewhere in Latin America as a
display of the responsible and humanitarian side
of Cuba's new foreign policy. The Cuban assist-
ance, arranged through the Prensa Latina office,
consisted of medical supplies, medical teams,
mobile kitchens, and clothing. I n October,
Havana announced that it would build six hospi-
tals in the areas devastated by the earthquake.
The inauguration of President Salvador Al-
lende in November 1970 provided Castro with
perhaps his greatest opening to date to break
Cuba out of its hemisphere isolation. Although
some trade between Cuba and Chile had devel-
oped during the Frei administration (1964-70),
ties were quickly expanded under Allende. On 12
November 1970, Chile and Cuba re-established
diplomatic relations. In February 1971, they
signed a two-year commercial agreement and a
bilateral civil air agreement. There were cultural
and technical exchanges, and Fidel Castro was
invited to visit.
During 1969, Ecuadorean officials, including
President Jose Velasco I barra, began to make
public statements critical of the hemispheric
policy of isolating Cuba. In September, Ecuador
very nearly shipped 10,000 tons of surplus rice to
Cuba. The deal fell through when Havana refused
to return the persons responsible for the murder
of a pilot during the hijacking of two Ecuadorean
Air Force planes. The climate later improved,
however, and in June 1970 Cuba was permitted
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? in Chile with Allende
? in Peru with Velasco Alvarado
? in Ecuador with Velasco Ibarra
to station a Prensa Latina correspondent in Quito.
Cuba has also been gradually developing ties
with Panama since General Omar Torrijos seized
power in October 1968. By 1969, athletic teams
were exchanging visits.
Following the Cuban
seizure of two Panamanian-flag merchant vessels
in December 1971, Castro went out of his way to
assure the Torrijos government that Cuba had no
hostile intentions toward Panama. He welcomed a
Panamanian delegation to Cuba to negotiate the
release of the captured crewmen. Cuban spokes-
men in recent months have been giving heavy
propaganda support to the Panamanian position
in the canal talks. Castro's interest in Panama is
somewhat unusual since the Torrijos administra-
tion does not come close to meeting Castro's
definition of a "revolutionary" government. The
critical factor in this case revolves around Tor-
rijos' attitude toward the US.
The past year was marked by further gains
for Castro and his policy. In June, Peru agreed to
sell Cuba 105,000 tons of fishmeal in contraven-
tion of the 1964 OAS economic sanctions. Cuba
Special Report -6-
6 -
gained substantial hemispheric attention from the
gained
achievements of its athletes during the VI Pan
American games in Cali, Colombia. Sponsored by
Peru, Cuba became a member of the UN organiza-
tion of underdeveloped nations, the Group of 77.
Probably the most satisfying event for Castro
personally, however, was his trip to Chile, and its
brief post-script stops in Peru and Ecuador. The
trip, which lasted from 10 November to 5 Decem-
ber, enhanced his image as a Latin American
leader. In December, Peru undertook an initiative
within the OAS to permit member states who so
desire to re-establish relations with the Cuban
Government. The initiative was postponed but
will probably be brought up again by the
Peruvians. Even if it is defeated, Peru will proba-
bly re-establish diplomatic relations with Cuba.
Cuba also experienced some disappoint-
ments during 1971, notably the overthrow of the
Torres regime in Bolivia and the electoral defeat
of the leftist front in Uruguay. Although Castro
reacted to both events by stating that armed
struggle was the only road to power in those
nations, thus far there has been no conclusive
evidence that Castro is departing in a significant
way from the more moderate course he has set
for Latin America as a whole.
Castro has long viewed himself as a modern-
day Bolivar, destined to lead Latin America in its
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"second war of independence." And by this he
means independence of the US. In his eyes, the
US is responsible for all of Cuba's economic dif-
ficulties and has replaced Spain as the colonial
power in the hemisphere. Castro's policy of ag-
gressive support for insurgency movements was
designed to reduce if not eliminate US influence
in the hemisphere. Having discovered that these
tactics were not yielding results, Castro modified
his approach. But he has not discontinued com-
pletely his support of violent revolution. Rather,
he will probably continue to give limited support
to viable guerrilla groups in certain countries.
Castro's long-range design apparently envi-
sions political and economic unification of Latin
American countries. The Cuban leader has fre-
quently stated that such unification is necessary
to give Latin America the strength to "confront"
the US. Typical of this belief are his repeated
calls-echoed by Cuban representatives at regional
conferences-for a "union of Latin American na-
tions" that would replace the OAS and would
exclude the US.
He has also set at least three shorter range
and perhaps more attainable goals: 1) reduce US
influence in Latin America; 2) discredit the OAS;
and, 3) create a leadership role for Cuba in
Special Report
hemispheric affairs. Castro will probably attempt
to achieve these goals by continuing Cuba's ex-
pansion of its Latin relations on a selective,
bilateral basis. This does not mean that Cuba is
interested in developing ties with every nation in
the hemisphere. As Castro stated during his visit
to Chile, Cuba is "not desperate to normalize
relations with other Latin American countries."
He does take the position that there is no reason
for diplomatic recognition of countries "that
obey orders from the United States." Castro
probably also realizes that there still are Latin
American nations that are adamantly opposed to
the re-establishment of any sort of relations.
Castro's moderate. stance is likely to con-
tinue for the foreseeable future. Neither eco-
nomic realities nor Soviet pressures are likely to
change over the next several years. In addition,
Castro can see that an all-out promotion of vio-
lent revolution throughout the hemisphere would
succeed only in returning Cuba to its former
isolation. Only if Castro thought that Havana's
new policy were leading to a string of sharp
reversals would he be tempted to abandon his
moderate approach.
Cuba will continue to strengthen its ties with
Chile although the relationship will not be with-
out problems. By coming to power through legiti-
mate electoral means, the Allende government has
28 January 1972
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demonstrated the unsoundness of Castro's theory
that armed struggle is the only path to power for
a true "revolutionary" government. Although Al-
lende is a close personal friend of Castro, he
represents a legitimate challenge to Castro's posi-
tion as the leading spokesman for Marxist ideol-
ogy in Latin America. At present, however, there
is no evidence to indicate this will seriously im-
pair their relationship.
Castro will probably continue strengthening
ties with Peru. Regardless of the outcome of
Lima's initiative in the OAS, Peru will in all
likelihood establish diplomatic relations with
Cuba. In the meantime, routine exchanges can
easily be conducted through the Prensa Latina
office in Lima or the liaison staff of the Cuban
hospital-construction team.
Cuba's future relationship with Ecuador is
less clear. Castro has been impressed with Ecua-
dor's strong defense of its 200-mile territorial
waters claim and has frequently voiced his sup-
port of that claim. His brief stopover in
Guayaquil was strongly criticized by opponents
of the Velasco regime, however. As a result, Quito
may be more inclined to follow quietly in the
footsteps of Peru on the Cuba issue. For its part,
Havana will probably attempt to expand its con-
tacts with the Ecuadorean Government and
gently encourage Ecuador to follow the Peruvian
example, nationalize foreign businesses, and im-
plement agrarian reform.
Special Report
Castro will probably continue his increased
public support for the Panamanian position in the
canal talks. He is extremely interested in the
outcome because a settlement favorable to
Panama will have a strong impact on US influence
in that area. Such an agreement could, for exam-
ple, provide a tool in pressuring the US to get out
of Guantanamo. Every indication is, however,
that the Cuban leader will exercise caution about
doing anything more than pay lip service to
Panama's canal aspirations.
The new moderation in Cuba's foreign
policy does not extend to the OAS, for which
Fidel still reserves his most vituperative language.
In the unlikely event that the sanctions are lifted,
there is little chance that Cuba would consider
rejoining what Castro has often called "that in-
decent garbage heap called the OAS."
As for other Latin American countries, Cuba
will probably continue its efforts to develop
closer ties with those nations it deems "ac-
ceptable," a term that has already proved flexi-
ble. These efforts will probably take the form of
exchanges of athletic teams, cultural groups, and
scientific and technical delegations. These
contacts will probably be followed by attractive
Cuban trade otfers, which can be expanded until
only formal diplomatic relations are lackin
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