WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009400040001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 29
• Document Creation Date: December 21, 2016
• Document Release Date: March 20, 2008
• Sequence Number: 1
• Publication Date: February 4, 1972
• Content Type: SUMMARY

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DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
State Dept. review completed
4 February 1972
No. 0355/72
COPY NP 4 6
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CONTENTS
Information as of 1200 EST, 3 February 1972)
Indochina: Peace Proposals 1
...And Military Preparations 2
Israelis Agree to Interim Talks . 4
Nationalist China: Continued Economic Growth . 6
Japan-USSR: Atmospheric Improvement . 7
Japan's Textile Industry Does Well . 8
Gold Price Hits All Time High 9
Malta: Agreement in Sight? . 9
Warsaw Pact Summit: Promulgations from Prague 10
West Germany: Economic Improvement Programmed 11
Slow Start for General Preferences 12
Yugoslavia: The Party Muddles Through 12
Bangladesh: Not Completely Secure 13
E t: Sadat to Moscow; Students Calm 15
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Nepal: A New King 16
Sudan: Several Faces of Rebellion 17
Ghana: Uneasy Lie the Heads 18
Allende Broadens His Cabinet 19
Guatemalan War Drums-Just a Lot of Noise 20
Security Forces Hit Brazilian Terrorists 21
Venezuelan Leftists Win Student Vote 22
Controversy and Confusion in Uruguay's Vote Count 23
Mexico: Widespread Arrests 24
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Indochina: Peace Proposals
At a press conference in Hanoi on Wednes-
day, Viet Cong representatives issued an "elabora-
tion" of their seven-point proposal which seem-
ingly changes some elements of the Communist
negotiating position, particularly with resper_t to a
political solution in South Vietnam. For the first
time, the Communists indicate they would discuss
arrangements for a caretaker regime and elections
with members of the "Saigon administration,"
provided President Thieu resigns and many other
sweeping conditions are met. These conditions
include an end to the pacification program and to
US "interference" in South Vietnam, boat the
customary demand for an outright cessation of
US military and economic support for the regime
is not repeated.
7-he Viet Cong proposal does not appear to
alter the previous formulation on a POW ex-
change, which held out the prospect of a phased
release geared to the pace of US troop withdraw-
als. But unlike past proposals with their emphasis
on deadlines, this one leaves it to the US to name
an explicit withdrawal date, which it says will also
be the "terminal date" for the release of all civil-
ian and military personnel now under detention.
There are omissions and ambiguities in the
Viet Cong package which have not cropped up in
recent formulations. The new plan does not re-
peat the standard line that a political solution and
US withdrawal are "closely linked," although it
does specify that agreement on the two issues will
make it "easy" to resolve the other problems in a
settlement. Moreover, the question of a POW re-
lease is discussed only in connection with US
withdrawal and is not explicitly linked, as it has
been in recent Communist pronouncements, to
the provisions for a political solution. The Viet
Cong troposal also omits any reference to a cease-
fire, suggesting that the Communists may hope to
keep this issue dissociated from the points cov-
ered in their new package.
the wake of President Nixon's disclosure of the
secret negotiation., between the US and North
Vietnam. Through gut the week Hanoi has tended
to equivocate, gi~ring no clear sign whether it
intended to reject 'she US package now that it was
being aired in puk~lic. On Monday, Hanoi publi-
cized the nine-poi it plan it had put forward last
June in private talcs with Dr. Kissinger. In doing
so, the North Vietnamese claimed that the US
disclosures had created "obstacles to negotia-
tions," but they also admitted that Hanoi favored
meaningful discussions in any form. At the same
time, despite negative comments by most of the
Hanoi media, and reportedly by Premier Pham
Van Dong as well, North Vietnamese officials in
Paris showed some willingness to probe the US
negotiating initiative from a substantive view-
point, focusing most of their comments on the
provisions for a political solution in South Viet-
nam and for US troop withdrawals, points which
they complained were not explicit enough.
In retrospect, much of this equivocation
may simply have been to mark time while the
Communists prepared to unveil the latest Viet
Cong package. Urdoubtedly the Communists in
the weeks ahead vrill try to use the new formula-
tion to gain propaganda mileage and refurbish the
image of the Viet Cong's Provisional Revolution-
ary Government, whose role was cast in doubt
when Hanoi revea~ed it had been engaged in bi-
lateral discussions with the US and had presented
a peace plan of its own. The Communists may
also believe that by casting Thieu as the primary
obstacle to peace, as they do in the new package,
they can strike a responsive chord among critics
of US policy and .Neaken Vietnamese confidence
in the Saigon adn inistration. At the same time,
Hanoi may regarr the Viet Cong proposal as a
serious negotiating move which could loosen the
logjam on the issue of a political solution as well
as add to the pressure on the US to hasten its
withdrawa Is.
Communist news media have described the
Viet Cong proposal as a rejection of the "agares-
sive and neocolonialist stand" they say President
Nixon demonstrated in last week's statement on
the eight-point peace plan. This is perhaps as clear
an indication as any of Communist attitudes in
Peking has "I~~yally" weighed in to denounce
the President's eight-point plan as an attempt to
impose "truculent and unreasonable" conditions
for a US troop withdrawal while offering
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high-level support for Hanoi's own seven-point
proposal. Chinese commentary, however, has
stressed the importance of troop withdrawal
while downplaying or fuzzing the political aspects
of both the North Vietnamese and US proposals.
The Chinese have also refrained from
characterizing the US proposal as "deceitful," as
the North Vietnamese do. An NCNA account of a
meeting between Vietnamese envoys and Chou
En-lai, for example, noted that Chou had listened
to such a denunciation of the plan by his
interlocutors without explicitly expressing
agreement; Chinese endorsement was limited to
Hanoi's seven-point proposal.
The most obvious divergence in treatment of
the US plan by the two parties was contained in a
Chinese account of a Nhan Dan article on 29
January attacking the US package. The Chinese
version of this article carefully deleted portions of
the Vietnamese comment that claimed there was
nothing new in the US proposal and omitted
Hanoi's characterization of its own seven-point
proposal as one comprising "two basic and closely
related points." This Chinese reluctance to couple
the military and political aspects of a Vietnamese
settlement as tightly as does Hanoi has been evi-
dent at least since Pham Van Dong's visit to
Peking last November.
The Chinese concern in treating last week's
dramatic developments has been to balance their
own interests vis-a-vis both Hanoi and Washing-
ton. Peking is obviously most reluctant to accuse
the President of bargaining in bad faith on the
very eve of his visit to China; at the same time it
is anxious to indicate to Hanoi that it is not
deserting the Vietnamese cause in order to strike
a deal with the United States. Nevertheless, it
seems clear that Peking's own priorities place
American military withdrawal from the Indochina
peninsula well ahead of a political settlement in
Saigon thoroughly acceptable to its North Viet-
namese allies. Indeed, it is possible that the
Chinese hoped that an agreement on withdrawal
could have been reached between Washington and
Hanoi prior to the President's visit, thereby pro-
viding an underpinning for more wide-ranging dis-
cussions on the future of Southeast Asia.
The Chinese, however, are painfully aware-
from experience-that their leverage on Hanoi is
limited, particularly in areas in which the Viet-
namese believe their vital interests are involved.
Peking also has reason to be concerned that too
much pressure on Hanoi would simply push the
Vietnamese into the arms of Moscow. In these
circumstances, the Chinese are likely merely to let
Hanoi know how the situation looks from Peking,
hoping that their allies will then draw their own
conclusion as to the proper course to pursue.
South Vietnamese reaction to the allied
peace plan announced last week has been gen-
erally favorable, although tempered in some cases
by concern that too much has been conceded to
the Communists. Most attention has focused on
President Thieu's offer to resign one month be-
fore anew election to be held with Communist
participation. The great majority of comments on
the prgposals by Saigon politicians and the press
have welcomed them as constructive and as giving
the South Vietnamese Government a propaganda
advantage over the Communists. Even some lead-
ing critics of the government, including repre-
sentatives of the An Quang Buddhists, have indi-
cated general support for the plan. On the other
hand, hard-lining anti-Communist elements are
complaining that the proposals go too far and
offer the enemy too much. Despite the wide-
spread interest in and commentary on the peace
proposals, many South Vietnamese remain cau-
tiously noncommittal while awaiting further de-
velopments.
...And Military Preparations
The Communists' Spring Offensive
With the Tet holiday a little more than a
week away, indications that the Communists are
planning a substantial increase in military action
in South Vietnam continue to mount. It still
appears that the main focus of the action will be
in the central highlands and just south of the
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DMZ. Enemy preparations seem well advanced in
both of the sectors and attacks could get under
way soon. The increase in rocket and mortar
attacks this week in northeastern Quang Tri Prov-
ince may represent the opening phase of larger
scale action soon to follow south of the DMZ.
There is also abundant evidence suggesting
that many of the enemy's local force and guerrilla
units, backed up in some cases by regular combat
forces, are preparing for a fairly widespread round
of attacks throughout the country. The type of
action expected, including shellings and limited
ground assaults against military and some urban
targets, is relatively easy to set off on a loosely
coordinated basis and would be intended to give
the appearance of considerable strength and
ability to maintain the initiative. Many reports
have indicated that attacks will be scheduled
around Tet, the lunar new year holiday that be-
gins on 15 February, and the President's trip to
China later this month.
On the allied side, friendly forces are in a
heightened state of alert in anticipation of the
enemy offensive. Extensive pre-emptive actions
have also been undertaken by allied units, and in
a number of areas during the past week significant
casualties have been inflicted on Communist
units. The aggressive allied stance could well dis-
rupt enemy planning and cause some slippage in
the attack schedule and might blunt some enemy
offensive capabilities.
Waiting at Long Tieng
Ground activity has remained at a fairly low
level in the Long Tieng area as both sides con-
tinue preparations for more fighting. Small unit
clashes and shelling attacks by mortars and recoil-
less rifles occurred daily, but no major positions
changed hands.
The North Vietnamese have used their
130-mm. field guns only sparingly during the past
week. Air strikes are believed to have destroyed
some, but it is not clear how many of the 16 guns
detected moving into north Laos in November
have been put out of action. The reduced use of
the guns could reflect a desire to avoid exposing
them to air strikes, an attempt to conserve am-
munition prior to a major ground assault, or
movement of the guns into positions closer to
Long Tieng for greater effectiveness.
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Seven NVA infantry regiments remain
southwest of the Plaine des Jarres. They ap-
parently are content to probe the government's
defenses while concentrating on developing their
logistical system to support a major ground at-
tack.
Vang Pao is taking advantage of the relative
calm to reorganize his defenses. The eight fresh
irregular battalions that arrived last week have
been deployed to relieve other irregulars whose
fighting effectiveness and morale had substan-
tially declined after weeks of hard fighting.
Israelis Agree to Interim Talks
On 2 February, following a special cabinet
meeting, the Israeli Government announced that
it had decided to participate in the US-proposed
talks in "close proximity" on an interim Suez
Canal agreement. According to the Israeli press,
prior to agreeing to participate in the talks, the
Israelis had been seeking "clarification" from the
US on three issues: the relationship of the deliv-
ery of aircraft to an interim agreement; the US
position on Secretary Rogers' speech to the UN
on 4 October; and the US role as a middleman in
indirect talks between Israel and Egypt.
Mrs. Meir emphasizes Israel's goals.
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munists have the military initiative.
Communist leader Souphanouvong sent a
telegram to Prime Minister Souvanna on 24 Janu-
ary reiterating that the "Laos question" must be
solved by the parties involved on the basis of the
1962 Geneva Accords and in accordance with the
current situation in Laos. The full text of Soupha-
nouvong's message is not yet available, but it is
unlikely that the Communists will have any seri-
ous interest in negotiations until they have as-
sessed the results of their dry-season offensive.
Souvanna has not reacted to the message, but he
usually resists pressure for talks while the Com-
Meanwhile, in what appears to be a con-
scious policy of encouraging Egyptian President
Sadat to seek a political rather than a military
solution, Israeli leaders in recent speeches have
welcomed what they describe as a trend toward
political realism in the Arab countries. Speaking
to the recent congress of the World Zionist Organ-
ization, Deputy Prime Minister Allon described
Sadat's decision not to resort to force as an act of
"a courageous leader concerned with the destiny
of his country and people." At the same congress,
Foreign Minister Eban also picked up the theme
of "Sadat's courage" and said that the trend in
the Arab countries since 1967 has been toward
greater realism and not greater extremism.
ring.
The Egyptian position on participation in
the interim talks, however, is not clear. Sadat has
publicly renounced US mediation efforts, stress-
ing instead the need to rely on UN mediator
Gunnar Jarring as the primary hope for achieving
a settlement of the Middle East impasse. Fol-
lowing the Israeli announcement, an official Cairo
spokesman said any Israeli decision to talk would
have to be relayed to Eavot through Jar-
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Nationalist China: Continued Economic Growth
The booming economy remains a bright spot
amid the political troubles that have recently hit
Taipei. The economy last year grew by 11.4 per-
cent and gross national product (GNP) reached
$6.2 billion. Growth was again paced by exports,
which rose by 33 percent to over $2 billion and
gave the island a trade surplus of more than $190
million. Exports of manufactures such as textiles,
clothing, and electronics-where Nationalist China
ranks second only to Hong Kong in the Far East
among the developing nations-accounted for
most of this gain.
Over the past decade, Taipei has had an
average annual growth of about ten percent, and
per capita GNP has risen to over $400, more than
double the average for less developed countries.
The key to this achievement has been Taipei's
ability to attract large amounts of private foreign
capital into new export industries. Foreign firms
have been attracted by the island's low cost labor,
political stability, and liberal investment laws. In
recent years private capital inflows, mainly from
the US, Japan, and Overseas Chinese, have aver-
aged over $125 million annually. Foreign firms
also have provided the technical know-how,
management techniques, and access to foreign
markets that have been essential to the island's
success.
probably is seen by Taipei as a mixed blessing.
The Nationalists want to avoid becoming over
dependent on Japan economically but fear that
any weakening in economic interest could be a
prelude to Japanese recognition of Peking.
Taipei is attempting to prevent its reduced
political status from threatening continued
growth by moving to secure continued inflows of
foreign capital and access to world markets. As a
first step the government is reducing red tape and
acting more quickly on foreign business propos-
als. Taipei also is drawing up plans fora world-
wide trade offensive that emphasizes increased
sales to Western Europe and to the less developed
world where only limited inroads have yet been
made.
Furthermore, Taipei is not allowing diplo-
matic setbacks to interfere with its foreign trade.
Taipei kept its trade missions open when recogni-
tion was withdrawn by Canada and Italy in 1970,
and trade with both countries continues to in-
crease. I n Canada, where two-way trade more
than doubled last year, Taipei has maintained a
low profile by dealing through aquasi-official
trading company. A similar policy may be used in
trading with other countries not recognizing
Taipei.
Despite the brief lull in investor interest that
followed Taipei's expulsion from the UN in Octo-
ber, government approvals of new investment in
1971 rose 16.5 percent to a record $163 million.
US and European firms, in particular, maintain
their high interest in Taiwan largely because it
continues to offer one of the few opportunities to
compete effectively with Japan. The Japanese, on
the other hand, have been cautious about expand-
ing their substantial involvement on Taiwan. This
Nationalist efforts have been given a boost
by the recent international monetary adjustments
that have improved the island's economic out-
look. By devaluing, Taipei has increased its edge
over Japan and Hong Kong-two of its major
competitors-in world markets, as well as improv-
ing its competitive position in the Japanese do-
mestic market. This should serve as a further
inducement for ex ort-oriented investment
Taiwan.
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Japan-USSR: Atmospheric Improvement
Gromyko's five-day visit to Japan, his first
since 1965, has clearly improved the atmosphere
between Moscow and Tokyo. It provided an occa-
sion for a demonstration of amity and set the
stage for further high-level discussions. With an
eye to Peking and Washington, both sides were at
pains to portray it as a successful first step in the
gradual process of developing closer relations.
There was clearly more form than substance,
however, in Gromyko's discussions with Foreign
Minister Fukuda and other top Japanese officials.
Both sides apparently avoided coming to grips
with the knotty problems dividing the two count
tries, and the wording of the final communique
underscored the fact that no one gave much
ground.
The communique stated that the USSR and
Japan "expect" to exchange visits of heads of
government and "favor" beginning talks regarding
a peace treaty before the end of the year. Japan
has hitherto insisted that such negotiations could
not be held unless the Soviets are willing to dis-
cuss the problem of the Northern Territories-the
small islands north o` Hokkaido occupied by the
USSR at the end of 'JVorld War I I. No mention of
the issue was made in the communique,
At a press conference on his departure
from Tokyo he acknowledged that a solution to
the dispute was "one of the problems" involved
in negotiating a treaty. The Japanese probably
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detect in Gromyko's ambiguous handling of the
issue a sign of new flexibility, however slight.
Moscow probably hopes that its offer of
peace talks will temporarily defuse the territorial
issue, enabling it to push for improved Soviet-
Japanese relations in areas-particularly eco-
nomic-where it senses prospects for agreement
may be better.
Beyond the exploration of a peace treaty
and the possibility of higher level visits, Gro-
myko's sojourn resulted in tl~e establishment of a
two-year program of cultural exchange and a
general agreement to hold annual talks at the
foreign minister level. Japanese participation in
development of Siberia's Tyumen oil field was
discussed, but serious consideration of this enor-
mous project was deferred until the joint eco-
nomic committee meeting that opens in Tokyo
on 23 February.
In recent months the Soviets have mounted
a major propaganda offensive to stimulate Jap-
anese interest in closer economic and political
cooperation and to offset Peking's courting of
Tokyo. An underlying uneasiness about Soviet
intentions persists in Japan, however, and the
Japanese Government will move with extreme
caution as the pace of the dialogue with Moscow
quickens. In addition, Tokyo is actively seeking
an improvement of relations with China and is
unlikely to be deflected from this goal by over-
Japan's Textile Industry Does Well
The government's large and growing allo-
cations to the textile industry have gained the
industry's cooperation with restraints designed to
limit the growth of textile exports to the US.
Some $660 million have been earmarked to help
finance a comprehensive modernization program
under which the government will purchase surplus
textile machinery and provide low-interest loans
to textile firms. Little, if any, money will be used
to shift firms and labor into new industries. Most
funds will be made available to small- and me-
dium-sized firms apparently in an effort to entice
them to stop contesting the legality of the govern-
ment imposed export controls.
Tokyo is probably willing to commit more
funds to achieve this end, but on purely economic
grounds industry will have a hard time arguing for
more financial assistance, especially since 1971
brought record sales. Despite the imposition of
export controls as early as July, the value of
deliveries to the US during the year increased by
about 15 percent to some $600 million; sales to
the US market rose by only about 5.5 percent in
1970. Although much of the increase occurred in
the first half of 1971 when Japanese suppliers
were flooding the US market, sales continued to
rise rapidly even after October when a new and
more restrictive restraint agreement between
Washington and Tokyo was reached in principle.
The continued increase partly reflects higher
dollar prices stemming from the yen appreciation,
although Japanese suppliers also boosted ship-
ments sharply during the last quarter of 1971.
The textile industry by and large should
continue to do well in 1972. Japanese producers
are not likely to reduce textile prices to compen-
sate for the yen revaluation, and Japan is in an
especially good position to sell products at higher
dollar prices without losing much of the US mar-
ket. Its main competitors in the US market-Hong
Kong, Taiwan, and South Korea-are also covered
by export restraints and cannot make full use of
any price advantage they hold over the Japanese
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Gold Price Hits All Time High
The free market price of gold continues to
climb, reaching a record high of $49.25 per ounce
on Wednesday. The volume of sales remains low,
however, and the leading three Swiss commercial
banks which comprise a consortium that pur-
chases most of South Africa's gold are evidently
restricting the supply. Therefore, even if South
Africa is selling its current gold production--as it
did throughout 1971-the Swiss have the abilit to
drive u rites.
Neither supply restrictions nor speculative
demand is responsible for the entire spread be-
tween the current market price and the new pro-
posed floor price of $38 an ounce. For several
years non-speculative demand has probably ex-
ceeded non-Communist gold production, largely
that of South Africa. Through 1970, the gap was
filled by drawing down speculative holdings
created during the monetary crisis of 1967-68.
With that source dissipated, the gap between
supply and demand has been closed by rising
prices. The price needed to close this gap is now
estimated to be about $42 to $44 an ounce, the
range of prices that prevailed last November and
December when speculative demand was negli-
gible.
Some current speculative efforts are driving
the price higher. Speculative demand feeds on the
continued weakness of the dollar in international
monetary markets. Moreover, fears persist that
the US Congress will not raise the official price of
gold to $38 an ounce, or alternatively may raise it
by a much larger amount. Widespread low interest
rates encourage speculation b reducing the cost
of holding gold.
Malta: Agreement in Sight?
There was progress in the most recent round
of talks in Rome on 28-29 January, but a number
of differences-largely financial-have yet to be
decided. Prime Minister Mintoff's continuing ef-
forts to squeeze even more cash from the allies
have resulted in a stalemate over the amount of
annual "rent" to be paid to Valletta. At Rome,
however, the MaltESe leader and the British tenta-
tively agreed to aformula-subsequently endorsed
by most NATO members, but not yet by
Mintoff's cabinet-that would permit the allies to
stand by their "fi+-~al" offer of $36.4 million an-
nually. At the same time, the compromise would
partially satisfy Mintoff's desire for additional
funds over the short run by providing Valletta
with a large advan+.e and by extending the length
of the accord from seven to seven and one half
years. This would reimburse the Maltese for Brit-
ish tenancy during the period of negotiations.
The negotiators were close to an agreement
on foreign military use of the island when Mintoff
balked at a portion of the text dealing with the
use of Maltese facilities by US forces. In a move
which is apparentl,r aimed at eliciting a pledge of
US economic assi stance beyond the UK-NATO
package, the Maltese leader asserted that he
would discuss Amirican use of the island directly
with Washington.
British Defense Secretary Lord Carrington
told the US ambassador on 25 January that Lon-
don regards a number of bilateral issues as poten-
tial rupture points if Mintoff fails to yield.
Foremost of these is the level at which the British
will employ Maltese laborers. The UK wants to
reduce its 5,000-n~an local work force by 25-30
percent, but Mintoff-for both political and eco-
nomic reasons-is insisting that any reductions
come by attrition. Carrington pointed out that
widespread unemployment in Britain would make
it difficult, if not impossible, for London to con-
cede.
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The British, who consider that they have not
received thorough support from their NATO part-
ners in dealing with Mintoff, are unlikely to suc-
cumb to allied pressure on any of the bilateral
issues. As Carrington stressed, London already
harbors misgivings about the durability of a settle-
ment with Mintoff and does not want any loose
ends that might later allow him to cause trouble.
The UK forces in Malta, which earlier had
orders to leave intact equipment that could be of
use to NATO, soon may begin dismantling the
major items. The British have pointed out that
once this begins any reversal will be both costly
and difficult. Nevertheless, London believes the
withdrawal process must continue in order
pressure Mintoff to be more forthcoming.~
Warsaw Pact Summit:
Promulgations from Prague
Last week's two-day Warsaw Pact summit
issued several papers, the most noteworthy of
which touched on mutual force reductions in a
way that suggests that Moscow attaches no great
urgency to beginning negotiations. (The last Pact
statement on mutual force reduction was made at
Budapest in June 1970.)
Without proffering any new thoughts on the
forum or other specifics for such discussions, the
Prague document refers only to the desirability of
reaching some agreement on force levels and
armaments in Europe. In a speech last June,
Soviet party chief Brezhnev noted Moscow's read-
iness to discuss both national and foreign force
levels, confirming assurances made earlier by So-
viet diplomats. Thus, last week's assertion that
the projected discussions should include both
types of forces-although a first for the Pact-is
not entirely new.
The Prague announcement also averred that
force reductions should not be detrimental to any
participant. This appears to reflect Soviet suspi-
cions that the Western concept of "balanced"
force reductions is designed to work to Moscow's
disadvantage. The Pact statement also rejects a
bloc-to-bloc approach to force level reductions.
Soviet officials have used this position on oc-
casion to explain Moscow's reluctance to receive
former NATO secretary general Brosio, who was
chosen by NATO last fall to explore Soviet think-
ing.
The summit reiterated as basic principles for
any security conference the inviolability of fron-
tiers, the renunciation of force, peaceful co-
existence, and general and complete disarmament.
This is an expansion of the principles adopted at
the Pact foreign ministers' meeting in Warsaw last
December. The prospective agenda set out in
Prague has been used before and includes the
elimination of artificial barriers, the rational ex-
ploitation of material and energy resources, and
the sharing of culture and technology.
As in their foreign ministers' communique in
December, the Pact members hailed the current
mood of European detente exemplified by
Franco-Soviet cooperation, the West German trea-
ties with the USSR and Poland, and progress
toward a Berlin agreement. In addition, the usual
call for broadened international recognition for
East Germany is coupled with advocacy of im-
mediate UN membership for both German states.
Although military matters received little
public attention, the presence of Pact commander
Yakubovsky in Prague suggests that military
preparedness may have figured in the discussions.
Moreover, a meeting of Pact defense ministers
reportedly is scheduled for Berlin on 10 Feb-
ruary. The Soviets are likely then to attempt to
persuade Romania to upgrade its participation in
Pact training exercises. Yakubovsky may already
have raised this year's training cycle with
Romanian leader Ceausescu just prior to the
opening of the Prague summit. It is doubtful,
however, that Bucharest will make an ma~o25X1
concessions.
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West Germany: Economic Improvement Programmed
West Germany faces another lean year, al-
though business activity can be expected to pick
up in the fall. Real economic growth probably
will be less than the two to three percent pre-
dicted in the government's recently published An-
nual Economic Report. The economic downswing
that began last spring is likely to continue well
into the year, gradually easing the excessive infla-
tionary pressures left over from the 1968-70
boom. Government pump-priming should prepare
the way for the next round of growth, reinforcing
normal seasonal factors, and the restocking of
depleted inventories. If Economics and Finance
Minister Schiller's game plan succeeds, recovery
will be in full swing by the parliamentary election
in 1973, undercutting the opposition on an im-
portant campaign issue.
Proper timing of reflationary measures
clearly is crucial to the Schiller strategy. Thus far,
both the government and the Bundesbank have
maintained a restrictive course, but numerous
factors suggest the need for an early shift to
expansionary measures. The value of new orders
placed with manufacturers, a key indicator of the
economic climate, has remained below sales since
mid-1971, and a steadily increasing number of
firms consider their order backlogs insufficient to
maintain production at current levels. Among
Germany's important growth industries, capital
goods, electronics, and steel have been hit espe-
cially hard by the decline in domestic investment.
Moreover, German industry this year cannot
count on buoyant exports to compensate for lag-
ging sales at home. Although the December mone-
tary settlement improved the competitive posi-
tion of German producers in their principal
European markets, the economic slowdown under
way there precludes the possibility of an early
export boom.
Unemploymer:t in West Germany-although
still low compared with most other industrial
countries-has increased rapidly in recent months..
In December it reached 270,000 (about 1.2 per-
cent of all wage and salary earners), up more than
50 percent from December 1970, and the total
could climb to a seasonal high of perhaps 500,000
during the next few months. Workers placed on
part-time totaled nearly 250,000 in December,
five times as many as the year befare, and their
number is expected to rise significantly during the
next few weeks as 180,000 coal miners face cuts
in their shifts.
The slowdown in business activity has had
the favorable result of easing wage and price pres-
sures. Recent wage settlements in important
branches of industry and in the public sector have
broadly conformed to the government's wage
guidelines. The index of industrial prices has re-
mained steady since mid-1971, and the rate of
increase in consurr~er prices has retreated from its
record high.
To ensure a sapid pick-up of the economy
next fall, the government may soon begin to
implement its reflationary program. Schiller has
called for the release sometime this spring of
approximately $1.3 billion in federal and state
contingency budget and countercyclical reserve
funds (equivalent to about two percent of annual
federal and state expenditures). To permit price
pressures at the retail level to abate further, addi-
tional stimulus ire the form of returning some
$1.8 billion in personal and corporate income tax
payments previously collected as an anti-inflation-
ary surcharge probably will be delayed until sum-
mer. These measures should provide a significant
fillip for investment and consumption expendi-
tures and help reduce unem to ment durin the
second half of 1972.
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Slow Start for General Preferences
The EC has renewed its general trade pref-
erences for the less-developed countries that were
introduced in mid-1971. Response by these coun-
tries apparently has been slow, and the initial
disappointing results may lead to disillusionment
with the concept.
The EC's general preference system provides
duty-free entry for all categories of semi-manu-
factured and manufactured goods produced in the
less-developed countries, an average tariff prefer-
ence estimated to be roughly nine percent. To
protect EC industry from damage, quotas restrict
duty-free entry to amounts not much above ac-
tual past imports of "sensitive" products, such as
textiles, as well as to relatively larger amounts of
"semi-sensitive" products. Such items, the num-
ber of which has been expanded under the re-
newal, accounted for more than three-fifths of EC
imports of semi-manufactures and manufactures
from these countries in 1968. Concessions to
them for about 150 processed agricultural prod-
ucts are subject to possible escape clause action.
The EC has tightened the regulation that
prevents one country from gaining dispropor-
tionate benefit. It reduced the duty-free imports
from any one country from 50 percent to 30
percent of the quota for some products. Substan-
Yugoslavia: The Party Muddles Through
The party conference's failure to heal or
even face the basic problem of ethnic rivalries
underscores the role of the military as the cement
that binds Yugoslavia together. The twice-post-
poned gathering on 25-27 January failed to over-
come the mistrust-bordering on fear-of fixed
rules and central authority that is rooted in the
immediate post WW-II period. Contrary to the
expectations of Tito, it neither promulgated
guidelines for coping with the issue of national-
ism, nor a plan for complete party reorganization.
The palsied federal party thus continues to grope
for a way to play a unifying role in multinational
Yugoslavia.
tive changes in the system, however, are not ex-
pected until 1974, when the new EC members
align their preference systems with the commu-
nity's.
Preliminary trade data for the first six
months of operation show that many quotas were
not being filled. Only a handful of benefici-
aries-in particular, Hong Kong and Yugoslavia-
appeared to be taking full advantage of the sys-
tem by filling quotas available to them. Some
two thirds of the 91 less-developed countries, plus
the dependent territories of the industrialized na-
tions who are potential beneficiaries, especially
Latin American countries, have failed to comply
with the relatively simple administrative proce-
dures required to benefit under the EC scheme.
For a variety of economic and political reasons,
the EC has not decided whether to offer its gen-
eral preferences to other countries, particularly
Israel, Spain, Greece, Turkey, Malta, Portugal,
Taiwan, and Cuba. A decision on this is expected
by mid-1972.
Since the implementation of the EC system,
several other industrial countries, including Japan
and the UK, have introduced general preferences,
and the President plans to send a US ro I
Con ress later this ear.
The conference did respond to Tito's de-
mand that it strengthen central authority by nam-
ing three Serbs to the party's newly constituted
eight-man executive bureau. (Serbs traditionally
defend the federal party's rights and preroga-
tives.) In addition to Serbia proper, Serbs now
represent Bosnia-Herzegovina and Vojvodina in
the executive bureau--a move which may well
aggravate tensions and revive fears of Serb domi-
nation among some of the other nationalities,
particularly the Croats.
The widely hailed "action program" that
was surfaced at the conference amounted only to
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an intensive review of-but no remedy for--the
party's many problems at hand. It condemned
entrepreneurs who amass wealth from the labor
of others, decried the exodus of workers seeking
employment abroad, and emphasized the plight
of the country's underdeveloped regions. It also
called for greater involvement by the workers in
the decision-making process, and urged tighter
political discipline.
The irresolution of the party will likely lead
the military by default to emerge as the sole
national unifying force. The armed forces have
Bangladesh: Not Completely Secure
Most of the country is quiet, but with rriany
Bengalis still eager for revenge against the coun-
long viewed themsel,ees as the guardian of the one
state concept. Tito's rapport with the military
and his consistent reliance on them for support in
crises, such as the recent move against Croatian
nationalists, have reinforced their voice in the
nation's future. The period during which the
stabilizing force of Tito's personality-he will be
80 in May-can be brought to bear on the internal
scene is at best limited, and the only question is
how big a role the military will choose to play
and when it will start makin its influence felt
directly in policy cir~~les.
try's roughly one million Biharis for their collab-
oration with the West Pakistanis, law and order
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remain tenuous in areas where Biharis are con-
centrated. The first serious disruption since in-
dependence occurred last weekend when Bengalis
and Biharis clashed near Dacca. Some 70 to 100
Bengalis reportedly were injured or killed before
government troops and police managed to restore
order. The Biharis claimed that at least 45 of their
people were killed.
A major factor preventing widespread re-
prisals against the Biharis until now has been the
presence of Indian troops, at least 25,000 of
whom are still in Bangladesh. Occasional clashes
between Indian forces and Bengalis have increased
New Delhi's desire to keep a low profile in Bang-
ladesh and to bring most of its soldiers home
soon. However, the Indians might have to revert
to an active policing role should Dacca's forces
prove unable to prevent serious bloodshed.
The over-all threat may have been eased for
the time being by the generally positive response
to Prime Minister Mujibur Rahman's call for all
guerrillas to turn in their arms. Thousands of
weapons probably remain in Mukti Bahini hands,
however, and the guerrillas-most of whom are
irregulars not wholly under Dacca's control-are
capable of causing considerable trouble if they
become dissatisfied with the government's per-
formance.
As part of the effort to transfer responsi-
bility to the Dacca regime, the Indians apparently
have begun to hand over some of the prisoners
taken during the war to the Bangladesh author-
ities for war crimes trials. Former East Pakistan
Governor Malik and some other Bengali prisoners
reportedly were turned over to Dacca for pros-
ecution on 31 January. The Indians may be
planning to hand over more prisoners, possibly
including some West Pakistani civilians and mil-
itary men accused of war crimes.
If India does turn over these West Pakistanis,
reprisals may be triggered in West Pakistan against
the estimated 400,000 Bengalis who live there.
Prospects for Indo-Pakistani peace talks could
also be damaged, because President Bhutto might
feel compelled to revert to a hard line toward
India. A delay in getting talks started, however,
would be less damaging to India than to Pakistan;
India holds about 90,000 Pakistani prisoners,
compared to only a few hundred Indian soldiers
in Pakistani custody, and the Indians hold a larger
amount of enemy territory in the Indian -West
Pakistani border region. Pressure on the govern-
ment to get the prisoners home is mounting in
West Pakistan.
The repatriation of Bengali refugees, mean-
while, has been proceeding smoothly. Over six
million of the nearly ten million refugees in India
have already returned to Bangladesh, and most of
the others will probably follow soon. Despite the
ravages wrought by the war, most of the refugees
have been able to build rudimentary homes and
settle back into village life. Concern is mounting,
however, over the lack of organized food, medi-
cal, and other assistance programs.
On the diplomatic front, Pakistan moved last
weekend to cut its ties with the Commonwealth
following recognition of Bangladesh by Australia
and New Zealand and in the face of impending
British recognition. Many Western European
countries are also expected to recognize shortly.
Although Bhutto has broken relations with some
Eastern European countries recognizing Bangla-
desh, he did not break with Moscow when it
extended recognition last week. He has also
announced his intention to maintain bilateral ties
with Britain, and his country's need for economic
assistance may deter him from breaking with the
Western European and larger Commonwealth
countries, many of which have furnished
economic aid to Pakistan in the past.
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Egypt: Sadat to Moscow; Students Calm
Student protests have subsided, at least tem-
porarily, and President Sadat is off to Moscow for
another try at gaining more dramatic Soviet sup-
port against Israel and the US.
The school holiday has relieved one im-
mediate source of pressure on Sadat, but the
regime is concerned about a possible resurgence
of student unrest when classes resume at mid-
month. Members of Egypt's only legal political
organization, the Arab Socialist Union, have met
with delegates from several student unions in at-
tempts to discuss the tatter's grievances. The first
secretary of the Arab Socialist Union has prom-
ised to convene a general conference of student
unions this month and hinted that the students
may be allowed to issue a special newspaper that
could express their views more fully. The govern-
ment, meanwhile, has been attempting to put the
blame for the demonstrations on "other ele-
ments" and "deviated groups."
Sadat's visit to Moscow this week seems to
have been partly inspired by the quest for some
means to undercut his critics at home. Although
no agenda for the talks was revealed, the Cairo
press described the projected discussions as both
politically-and militarily important.
Speaking at a political rally on 25 January,
Sadat hinted that he would soon ask Moscow for
an enhanced miitary capability to counter the
delivery of more Phantom aircraft to Israel and to
enable him to retaliate in kind for any Israeli
deep-penetration raids. Sadat may hope that a
promise of new Soviet arms will underscore his
own commitment to prepare the nation for the
fight to regain the occupied rritorv ~ -
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Nepal: A New King
Crown Prince Birendra's accession to the
throne on 31 January, following King Mahendra's
sudden death from a heart attack, gives promise
of some liberalization in Nepalese politics. The
26-year-old Birendra had gradually assumed more
responsibility following his father's previous heart
attack in 1968, but Mahendra's almost autocratic
control gave his eldest son little opportunity to
demonstrate leadership capability.
King Birendra
Birendra is reserved and intelligent, appar-
ently seriously interested in improving the over-all
social and economic conditions in his underde-
veloped Himalayan kingdom. He has been ex-
posed to the West, having been a student in the
UK and briefly at Harvard.
Birendra's political views rarely have been
publicly expressed, but it is expected he will be
more responsive to demands For political reform
than his father. The throne is still the linchpin of
Nepal's political system and enjoys broad public
support, but there is an undercurrent of discon-
tent among the intelligentsia, who want a more
democratic government.
Under Mahendra, there was a semblance of
democracy because of universal suffrage and a
multi-tiered system of elected councils (pancha-
yats), but important decisions were made by the
King. Political parties have been banned since
1961 after Mahendra dismissed Nepal's only
elected parliamentary government. Mahendra's
frequent cabinet shuffles and the imprisonment
of vocal opposition figtares prevented the forma-
tion of a consolidated challenge to his supremacy.
Birendra probably would prefer to bring
about change slowly and gradually. His pace may
be hastened, however, by the challenge of a small
group of exiled Nepali Congress Party politicians
who operate from India-with New Delhi's taci25X1
approval-under the leadership of former prime
minister Koirala. Koirala advocates political re-
form via revolution
Koirala's ability to set off acountry-wide
reva is still highly questionable, but he probably
could elicit some support from discontented
elements in the Kathmandu Valley and among the
inhabitants of the Terai area of southern Nepal
where allegiance to the monarchy is weakest.
India will most likely encourage Birendra to fore-
stall such developments by granting the long-
awaited political reforms.
In foreign affairs, Birendra will find it dif-
ficult to improve on his father's adroit handling
of Nepal's relations with its two giant neighbors,
Chi
'
na and India. Nepal
s heavy dependence on
Indian trade and aid, however, has resulted in
Nepalese resentment over its dependency and
occasionally has soured relations. At present,
relations with both India and China are good, and
Nepal was one of the first countries to reco nize
its newest neighbor, Bangladesh.
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Sudan: Several Faces of Rebellion
The second postponement of talks between
government emissaries and representatives of the
Anya-Nya rebels within the past two weeks un-
derscores the deep suspicions and wide gap be-
tween the two sides. The talks had been sched-
uled to open in Addis Ababa on 3 February_
elite, some of wr:om served in the Khartoum
government in the 50s, would no doubt take their
place in southern ruling circles. For the moment,
they have been eclipsed by the Anya-Nya field
commanders.
The ostensible reason for putting oif the
meeting until 15 February was Khartoum's un-
happiness with the lack of assurances that the
senior rebel military leaders would attend. Lower
echelon Anya-Nya had attended previous meet-
ings, the last of which was held in Ethiopia in
mid-November, and the Sudanese government had
hoped for more authoritative rebel representation
this time. Nonetheless rebel leaders are apparently
still unwilling to make an appearance. The Anya-
Nya seem inclined to proceed deliberately and
may indeed be encountering difficulties agreeing
on a common negotiating strategy. There are a
number of contentious points to be hammered
out at these talks: a cease-fire, the subsequent
political relations between north and south, and
the disposition of rebel arms. Settlement seems
remote.
One obstacle is the amorphous nature of the
dissident movement. The rebel leadership r_onsists
of two distinct groups: the guerrilla commanders
operating in the three southern provinces of
Sudan, and the exiled civilian politicians Viving in
neighboring African countries. Only the Anya-
Nya commanders-some of whom have lived in
the bush since the beginning of the insurrection in
1955-have any influence on the course of the
revolution. If and when the government and the
rebels get down to serious bargaining, these com-
manders will play a predominant role in setting
terms for acease-fire as well as shaping the po-
litical status of the south. In the event of a
settlement, the southern politicians and educated
'The insurrectionary movement of the Anya-
Nya-taken from a local word meaning "poi-
sonous insect"-is made up of independent bands
and has little formal structure. The guerrilla bands
vary in strength from 50 to several hundred, but
Rebels and Flag
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all are lightly armed and operate in restricted
geographical areas. A typical unit is made up of
members of one of the Negroid tribes. Most of
the tribes participate in the fighting, but there is
little evidence of coordination among them.
The principal political personalities in exile,
most of whom were educated by Christian,mis-
sionaries, fled the Sudan between 1960 and 1965.
Although the exiles claim to have ties with the
Anya-Nya, they probably have little influence
Ghana: Uneasy Lie the Heads
After three full weeks in power, the junta is
still preoccupied with its own problems. Junta
leader Acheampong and his fellow officers seem
increasingly unsure of themselves and have re-
acted to rumors of countercoup activity by tight-
ening military control of the country.
Jockeying for position within the leadership
apparently still centers largely around tribal fac-
tors, particularly over the attempts of Ewe
tribesmen to gain greater influence. This in-
fighting has seriously hampered the junta's ability
to make decisions. Unable to agree on a slate of
civilian department heads as it had promised, the
junta retreated by appointing 14 officers and only
one civilian. Moreover, unable to deal with crit-
icism of one of these appointments, the junta
named the appointee's chief critic to be his as-
sistant.
While denouncing the former regime's
alleged violations of civil liberties and its forays
against critical journalists, the junta has itself pro-
duced an atmosphere of growing repression that
with the guerrilla leaders. The exiles live mainly in
Uganda, Ethiopia, and Zaire, where they have
tribal contacts, sometimes in high places. The
governments of these countries generally tolerate
but do not encourage their activities. Over the
years, the exiles have tried from time to time to
represent themselves as officials of shadow gov-
ernments, none of which has been of any con-
sequence. Their dissident activity is largely
confined to propaganda.
extends to the press. Shortly after the coup three
prominent editors were dismissed and one foreign
journalist was detained and threatened with dire
consequences if his story reached the outside
world. Further evidence of the junta's basic feel-
ings of insecurity includes astep-up in the num-
ber of arrests of suspected "security risks" and
the imposition of exit permits on all Ghanaian
travelers.
The new regime's problems are compounded
by its view of its mission. Unlike Ghana's first
military junta, which saw itself essentially as a
caretaker government and made few promises, the
current regime has made much of its intention to
solve Ghana's crushing economic problems in a
brusque military manner. In the meantime, the
country's basic economic difficulties have wors-
ened, and the new military rulers seem much less
capable of dealing with them or even of settling
on the kind of civilian ex ertise it so des erately
needs. 25X1
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Allende Broadens His Cabinet
Chilean President Allende broadened the
base of his cabinet on 28 January, but his political
difficulties are essentially unchanged. The incor-
poration of the middle-class moderate Leftist
Radical Party is the main new element. Six port-
folios changed hands but only three new faces
were added to the list.
The long delay in naming the new cabinet
suggests that considerable haggling took place
inside the governing Popular Unity coalition and
that Allende was unable to make the extensive
changes he wanted.
The few changes t at occurre
co no signs scantly alter the political balance of
the cabinet, however. The Communists continue
in their same three ministries and the Socialists
retain four, The entry of the Leftist Radicals, the
principal objective, was accomplished at the ex-
pense of the Radicals. The entry of the Leftist
Radicals broadens the government's base at a time
when the coalition has suffered a series of psy-
chological reverses.
Allende's unhappiness with his new cabinet
is apparent. In remarks following the swearing-in
ceremonies he anticipated an extensive reorgan-
ization of the sub-ministerial posts-where the
majority of his strength is concentrated-and
vowed that he would not be bound by the old
party quota system. He also said that he would
reallocate five cabinet posts before next March,
suggesting that this cabinet is an interim one.
Hernan del Canto, who assumed the key
Interior Ministry, is the best known of the three
new ministers. He has held the number two post
in the Single Center of Chilean Workers-the
major labor confederation-and is a member of
the Socialist Party central committee. Last April
he represented his party at the Soviet 24th Party
Congress in Moscow. The new minister lacks
former minister Toha's tact, intelligence and
experience; he was not Allende's first choice for
the job. The new mines minister, Mauricio Yunge,
from the Leftist Radicals, has been characterized
as an excellent technician who is non-political.
The third new c~~binet officer, Manuel Sanhueza,
has taken over as justice minister. A lawyer, he
has been the dean of the University of Con-
cepcion Law School. Jose Toha, the recently
impeached interior minister, was given the de-
fense portfolio. His appointment was facilitated
by an announcement that a civil court judge had
cleared him of criminal
h im each=Went.
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Guatemalan War Drums-Just a Lot of Noise
Concern in Central America about a
Guatemalan attack on British Honduras peaked
last Friday when the Arana government placed its
armed forces on alert. The situation has since
quieted down, but the colony's hopes for inde-
pendence in the near future have been dealt a
serious blow. Arana, encouraged by the success of
his saber rattling, is not likely to modify his
demands that after independence the economy,
foreign policy, and defense of British Honduras
must be linked to Guatemala.
Some of the rumors of a Guatemalan attack
that surfaced aver the past couple of months were
apparently started by the Guatemalan Govern-
ment itself. President Arana, concerned that Brit-
i sh Honduras' independence was imminent,
attempted to forestall such a move by signaling
his intention to invade if the colony's political
status were changed before settlement of
Guatemala's territorial claim.
eslgnTed more to deter an attack than to relieve
the underlying Guatemalan concern. Inflated
press stories about British troop and naval move-
ments in the area, which the British hoped would
prevent any Guatemalan adventure, merely raised
the level of tension.
Despite reassurance by Britain of its commit-
ment to a negotiated settlement, Arana remained
suspicious that London might present Guatemala
with a fait accompli, and he feared that British
troop arrivals in the area for maneuvers were
actually designed to support an independence
move. Aware that the British had sufficient
strength to repel an attack, Arana nevertheless
requested Washington to inform London that
Guatemala would not allow British Honduras to
become independent without Guatemala's con-
sent. For emphasis he alerted his military.
At that point the British repeated to
Guatemala their commitment that independence
would not be granted until there had been some
Territorial Claims Againsf
British Honduras
Area claimed by Mexico (in abeyance
unless Guatemala gains territory)
Area claimed by Guatemala
25 50
STFyT l1TE MILES
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British response to the rumors was
25X1
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agreement between Guatemala, Britain, and Brit-
ish Honduras on relationships in the Caribbean
following independence. That, plus the absence of
any further provocative military moves by Brit-
ain, eased the developing crisis. The rnood in
Guatemala shifted from one of anger and appre-
hension to one of triumph. The Guatemalan Gov-
ernment announced the withdrawal of British
naval units from the colony, described their pres-
ence as an attempt at gunboat diplomacy, and
proclaimed that Guatemala had just wore a great
diplomatic victory.
The entire episode, of course, was a mis-
understanding. Its true significance lies in the
future. The Arana government, having staked out
a tough nationalistic position on British
Honduras, could find a retreat from that position
politically embarrassing. Arana was probably im-
pressed by the hawkish sentiment in the press and
in the Guatemalan Congress-which came close to
declaring war on Britain. As Arana moves further
into his term, he may find a number of occasions
when it will be useful to dust off this issue in
order to distract public attention from domestic
problems. He may have little incentive, therefore,
to achieve a compromise settlement. Indeed, if
the government learned anything from recent de-
velopments, it may have been that a policy of
bluster and bluff can keep independence for Brit-
ish Honduras on ice for years.
Security Forces Hit Brazilian Terrorists
The recent wave of arrests and kiilings of
suspected terrorists has apparently frustrated sev-
eral planned kidnapings and other operations. The
latest phase of the campaign to stamp out ter-
rorism was aimed at extremists in three major
cities: Rio de Janeiro, Sao Paulo, and Recife.
Many of those killed or arrested were mem-
bers of the National Liberating Action, which has
been one of the most active groups since the
current urban terrorism started in 1967. During
the past year, the organization has suffered from
dissension between members who have remained
in Brazil and others who have gone to Cuba for
guerrilla training. The latter group includes several
activists who returned to Brazil after being ex-
changed for kid,~aped diplomats.
Police claimed the Cuban-trained militants
of the National Liberating Action who were ap-
prehended in Recife had planned to carry out
guerrilla opera*ions, including the capture of
some towns in the northeast, as well as the
abduction of foreign diplomats and the assassi-
nation of the local army commander.
The roundup in Rio de Janeiro netted ap-
proximately 40 members of the National Liberating
Action and two other terrorist groups. The
majority of the prisoners are under 20 years old
and are from middle or upper class families,
matching the profile of the "typical" Brazilian
The police actions provide new evidence of
the government's determination to use all
methods necessary to eliminate terrorism. The
security forces have gained experience from over
three years of fighting the extremists, and
extracting information from prisoners about
future operations before the terrorists can pull
them off. The authorities also show no sign of
easing up on the treatment,of suspects caught in
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Venezuelan Leftists Win Student Vote
The Caldera government has suffered an-
other setback in its effort to end leftist domina-
tion at Central University. Student elections held
last week, while marking another step in imple-
menting the university reform law, gave a sur-
prising victory to the Movement to Socialism.
This Marxist group split from the Moscow-
oriented Communist Party over a year ago, and its
nationalist stance won it a considerable following
in a surprisingly short time.
With nearly 60 percent of the students
voting, the coalition directed by the Movement
won a majority. The orthodox Communists gar-
nered only 4 percent-a dramatic loss of strength.
The margin of victory astonished the Movement
and represented a significant blow to the ruling
Christian Democrats, who virtually controlled the
voting process but won little more than a quarter
of the total vote.
The constant turmoil at the university is a
growing embarrassment to the government. Al-
though the citizens of Caracas are fed up with the
endless rounds of riots and vandalism, neither
public pressure nor police effort has had any real
effect. Central University still trades on having
stood as the bastion of freedom during the
periods of dictatorship through the 1930s and
1950s. When democratic government triumphed
in 1958, "autonomy" was bestowed gratefully on
the institution, and by the mid-1960s Commu-
nists had turned the school essentially into a state
within a state. The military occupation in 1966
revealed stores of guerrilla arms, and the uni-
versity hospital was found to be treating wounded
insurgents. The military intrusion proved no
solution, and the politiical malaise, if anything,
has worsened, with strikes, walkouts, and demon-
strations the way of life. The Communist hold on
the university bureaucracy served to channel gov-
ernment funds into Communist coffers and into
anti-administration propaganda.
In the first months of the incumbent govern-
ment, the university situation was so anarchic
that President Caldera, a former professor, felt
compelled to order a military occupation in Octo-
ber 1969. It was this crisis that united the two
major democratic parties in drafting the reform
law, which still remains far from operative. The
university has been opened only for brief periods
over the past two years, and authorities were
unable, until last week, to hold student elections
because of disruptions and intimidations by
anarchists, Trotskyists, and other extremists. The
large turnout when the vote was finally held may
be a good sign. Although the outcome is not a
healthy development for the government, at least
the student body has demonstrated that it is
weary of the continual interruptions in the edu-
cational process.
The Movement to Socialism's electoral coup
boosts its chances on the national political scene
as well. The party plans to field a candidate in the
1973 elections, and it will probably be able to
woo the support of other anti-establishment
groups. Particularly, the Movement may lure the
restive groups comprising the "New Force," an
uncomfortable coalition of the two leading
democratic leftist opposition parties and the
Communist Party. The general expectation is that
the coalition will split over the issue of who will
be its standard-bearer in 1973, and the more
dynamic, young elements in the New Force have
already been pushing the line that the Movement
to Socialism candidate should be supported and
the leftist vote should not be divided. The two
democratic parties in the coalition have am-
biva lent feelings about associating with the
Moscow-line Communists. The Communist Par-
ty's poor showing at the university has also
helped to discredit it, despite the attraction of the25X1
financial assistance it presumably will receive
from abroad for the national election cam-
paign.
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Controversy and Confusion in Uruguay's Vote Count
Charges of chicanery and irregularities in
Uruguayan elections have contributed to the
slowness of the tally in the closest presidential
election ever. Official results may be delayed until
the 15 February deadline.
The Blancos, who have repeatedly criticized
the announcement of "preliminary results" by
the Interior Ministry, are now openly charging
fraud against Montevideo electoral officers, the
majority of whom are Colorados. The major com-
plaint is that there have been more ballots than
voters in a number of instances and that Blanco
appeals have been consistently ignored by the
electoral court. Although the party leaders are
not known to have presented evidence to sub-
stantiate their charges, they are preparing a sum-
mary appeal of alleged irregularities for the elec-
toral court. Most of the heat in this issue has been
generated by the supporters of Wilson Ferreira,
who charge that he and the Blanco party are
being "robbed" of victory. Ferreira himself has
shown restraint in his public statements, but he is
said to be furious.
Despite all the controvzrsy, Colorado leaders
seem confident that President Pacheco's hand-
picked candidate, :Juan Maria Bordaberry, will be
the next president. They have dismissed Blanco
charges as insignificant. Meanwhile, a series of
meetings between Pacheco, Bordaberry, and vari-
ous Colorado chiefs has sparked rumors about
the composition c,f a potential Bordaberry cabi-
net. There is no information to substantiate spec-
ulation that Jorge Batlle, leader of the powerful
Colorado List 15 group will accept a post, or to
justify a belief in improved cooperation between
party factions in the future. Bordaberry himself
has given no indication of his cabinet preferences.
Absentee and challenged ballots are still
uncounted, but in past elections these votes have
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not significantly altered the percentages in the
preliminary count. Most observers apparently feel
that Bordaberry, who has officially resigned as
minister of agriculture in anticipation of victory,
will be the next president. The intensification of
animosity between the major parties, however,
Mexico: Widespread Arrests
The greater aggressiveness adopted recently
by security agencies seems to be paying off. Au-
thorities have recently announced the arrests of
scores of "guerrillas" implicated in kidnapings,
bank robberies, and subversive plots that have
been plaguing security officials in recent months.
The arrests brought out one surprising fact: two
of the country's more active guerrilla groups
cover a far wider territory than had been previ-
ously thought.
One of the biggest kidnaping cases was ap-
parently cracked by Mexico City police on 29
January when they arrested seven persons report-
edly responsible for the abduction of airports
director Julio Hirschfeld last September. This was
the first political kidnaping in the country's re-
cent history. Police also say they are holding 30
to 40 others allegedly implicated in the kidnaping
of Guerrero University rector Jaime Castrejon
whose freedom last November was obtained only
by releasing political prisoners-a move no doubt
later regretted by the government as it set off the
wave of further kidnapings and abduction at-
tempts. In addition to these arrests, police
throughout the country have been arresting nu-
merous persons accused of robbing banks and
plotting kidnapings and jail breaks to free im-
prisoned associates. Several members of various
subversive movements that advocate armed strug-
gle against the government have also been picked
up and jailed. Many of them have ties with two of
Mexico's more notable guerrilla groups-those led
by Genaro Vazquez Rojas and Lucio Cabanas
Barrientos. Vazquez' career as a guerrilla was
ended suddenly on 2 February when he was killed
in an auto accident in the western part of the
country. His death will be a blow to the country's
leftists, who will now probably look to Cabanas
suggests that the lack of cooperation between
executive and legislative branches which char25X1
acterized the Pacheco administration will con-
t i n u e if Bordaberry becomes president and
Ferreira dominates the legislature.~~
to fill the void. Cabanas has a good deal of con-
trol over several guerrilla bands throughout
Mexico.
Authorities have taken pains to publicize
their successes in rounding up so many criminals
and have claimed that they have "broken the
back" of the guerrilla apparatus. The revelation
that the links among guerrilla groups in different
parts of the country are more extensive than first
thought is apparently being given little publicity,
however. The government is seeking to pin the
robberies and kidnapings to common criminality.
Interior Secretary Moya said on 19 January that
such acts cannot be considered political, that they
are isolated instances, and that they do not en-
danger the country. He said that Mexico has too
many serious economic and social problems to
allow itself to be distracted by such incidents.
The secretary of defense, General Cuenca Diaz,
weighed in on 26 January with another of his
now-standard denials that guerrillas even exist in
Mexico. He said the arm is not huntin uerrillas
in the countryside press ac-25X1
counts show otherwise , an a isavowed reports25X1
that the army had had any encounters recently 25X1
with Guatemalan guerrillas who had crossed the
border and skirmished with local Mexicans.
Despite the successes of the security agencies
and the efforts of the government to diminish the
significance of the guerrilla activities, the public 25X1
will probably be more surprised by the prolifera-
tion of the guerrilla groups than im ressed b the
in~rPacr .li ffl iencv.
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