WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009500020001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 21, 2016
• Document Release Date: June 11, 2008
• Sequence Number: 1
• Publication Date: March 31, 1972
• Content Type: SUMMARY

Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7 25X1
Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
31 March 1972
No. 0363/72
State Dept. review completed
Copy
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
The WEEKLY SUMMARY, issued every Friday
morning by the Office of Current Intelligence, reports
and analyzes significant developments of the week
through noon on Thursday. It frequently includes
material coordinated with or prepared by the Office
of Economic Research, the Office of Strategic Re
search, and the Directorate of Science and Technol-
ogy. Topics requiring more comprehensive treatment
and therefore published separately as Special Reports
are listed in the contents pages.
The WEEKLY SUMMARY contains classified infor-
rnation affecting the national security of the United
States, within the meaning of Title 18, sections 793
and 794, of the US Code, as amended. Its transmis-
sion or revelation of its contents to or receipt by an
uiauthorized person is prohibited by law.
CONTENTS (31 March 1972)
MIDDLE EAST
AFRICA
WESTERN
HEMISPHERE
1 El Salvador: Rebels' Fate
2 The European Communities
4 Indochina
8 Korea: Seoul Scores
UK-Malta: An Accord at Last
French Defense Policy
Yugoslavia: Smallpox Adds Woes
Poland: New Faces of 1972
International Oil Developments
Progress on Drug Controls
18 Turkey: New Tremors
19 Cyprus: A Byzantine Minuet
20 Arab Parleys and Peregrinations
22 Cabinet Changes in Damascus
22 Sudan: An Accord in Doubt
23 Uganda-Israel: Fractured Friendship
23 Arms Deliveries to Guinea
24 Chile: The Week That Was
25 Brazil Favors China Trade
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
SECRET
El Salvador: Rebels' Fate
The angry and emotional mood within the
Salvadoran Government following the failure of
the coup attempt last weekend appears to be
changing to Wef calm and reason. President
Sanchez has assu'red`1he US ambassador that there
will be no executions. Even so, the loss of some
150 lives and the extensive property damage pre-
clude lenient treatment of the coup leaders.
About 80 persons are under arrest, and a
number of others, including most of the leaders,
After the Coup
have sought asylum in local embassies or have fled
the country. Colonel Benjamin Mejia, instigator
of the revolt, is believed to have taken refuge in
the Vatican Nunciature, although the nunciature
has denied this.
The question of Mejia's whereabouts has
been overshadowed by a storm of protest over the
treatment accorded defeated presidential candi-
date Napoleon Duarte. Duarte, whose radio
appeal for popular support for the rebellion
SECRET
Page
1 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
enraged Sanchez, was beaten and forcibly re-
moved from a Venezuelan diplomatic residence
by security forces. Appeals by members of the
diplomatic corps and a stiff protest from Vene-
zuela hinting at a possible rupture in relations
apparently obtained his release; members of his
family say he has arrived in Guatemala.
President Sanchez told reporters that the
right of diplomatic asylum would be respected;
presumably, persons already under the protection
of various embassies will be given safe conduct
out of the country. Those under arrest, he said,
will be tried in accordance with the law. As for
the soldiers involved, Sanchez feels they were
merely following orders, some having been told
they were defending the government. The interior
minister added that civilians will be tried in civil
courts because the country is not under a state of
siege.
The revolt, which started during the early
hours of 25 March, had the support of little more
The European Commun.if_i_es-
CAUTION ON BREZHNEV
Soviet Foreign Minister Gromyko has con-
firmed that Brezhnev's overture, to the EC last
week marked a significant shift in Soviet policy
and had been approved by the Politburo. Com-
munity circles have accepted it as a turning point.
They have long held that sooner or later Moscow
would have little choice but to temper its attacks
on the EC and seek some way of dealing with the,
organization.
Now that the Russians seern'to be moving in
this direction, and perhaps toward eventual
recognition of the EC, the reaction is cautious.
Community members are aware that Brezhnev's
remark' were timed to influence the debate in
than the 1st Infantry Brigade and the Artillery
Brigade, both located in the capital city. The
rebels gained an early advantage by capturing
President Sanchez. Duarte was brought into the
act well after the coup was under way, and his
radio appeal apparently did not have the blessing
of his Christian Democratic Party. It also did not
have the desired result, since popular support for
the rebels failed to materialize.
Since his release that afternoon, President
Sanchez, realizing that military support is the
mainstay of any Salvadoran government, has been
busy patching the cracks in this part of the
foundation. Order has been restored, and the cur-
few hours have been reduced each day. The gov-
ernment may now be able to turn its attention to25X1
the legislative program it had begun just before
the revolt and recover some of the popular
support lost during the disputed elections.
West Germany over ratification of the Eastern
treaties and that the Ostpolitik debate in turn will
influence the Soviet position. More substantj K,,
there is concern in some quarters that zinev's
"formula" may imply recognitii+-`"of CEMA as
the sole bargaining agent 'Jarlhe East in future
dealings with the c0:= To pay this price for Soviet
recognition.,,wourd mean acquiescing in increased
Soviet-controls over East European states. As EC
Commissioner Deniau noted in a recent article
forecasting the new Soviet position, it could also
narrow the community's own freedom of action
by preventing direct contact between it and the
individual East European countries.
Despite their bows to regional solidarity,
both sides are reluctant to give up the possibility
SECRET
Page
2 WEEKLY SUMMARY 31 Mar 72
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
of bilateral dealings between members of the two
organizations. Thus,, Brezhnev spoke with deliber-
ate ambiguity of the USSR's relations with the
"participants of the Common Market." In react-
ing publicly to this, French Foreign Minister
Schumann emphasized Moscow's "realism and
concern for maintaining individual relations with
the community states independent of the USSR's
relations with the community as a whole." F
Recent discussions in -NATO about a
European security conference 'show that the
Europeans are well aware that Moscow still hopes
to restrain the development of the EC. It is thus
unlikely that, for the immediate future, the com-
munity will do more than listen attentively for
friendly signals from the East. The real test of
Soviet and Eastern European attitudes will be
their willingness to begin substituting trade ar-
rangements negotiated with the community for
the present network of bilateral agreements.'t,
Under the EC's common commercial policy, no
new bilateral agreements may be negotiated after
next January. The shift in Soviet attitudes never-
theless assures lively debate this spring in prepara-
tion for discussing EC relations with the East at
the EC summit meeting in October.
AGREEMENT ON AGRICULTURE
Agricultural ministers of the EC countries
last week agreed to substantially higher farm
prices and farm modernization measures. This
shifts the Common Agricultural Policy's produc-
tion goals from gratin to livestock and emphasizes
raising farm income through modernization
instead of through higher prices.
Farm//Product prices were increased by an
average of more than six percent. The prices of
livestock products were raised by an average of
eight percent. Beef prices were raised by only
four percent, however, because the price of meat
could be an important issue in the upcoming
Italian elections. An additional increase in beef
prices probably will be approved later in the year.
Corn and rye prices were boosf6d by five
percent and most other grain priceby four per-
cent. The new prices probably will stimulate EC
grain production modestly, ar}d'the impact on US
grain sales to the EC may- not be great. Rising
production costs will offset at least part of the
price increases. An enhanced demand for live-
stock feed will help-lo sustain US feed grain sales
and should incre$e already large US exports of
soybeans, a feerdgrain substitute.
The c,,ouncil's farm modernization measures,
which establish community guidelines for assist-
ance farm modernization, extension services,
and,,;pensions to induce farmers to retire, will not
significantly increase efficiency or productivity in
the near future. Most member states already have
such programs in effect, and the community will
provide only limited financial support. The
council rejected, for the present, a commission
proposal for a radically new program under which
income deficiency payments would be made to
poor farmers. This measure, which is gaining sup-
port-',,in the community, especially in Germany
and Italy, would break the link between farm
income'And farm prices.
The council decided not to revalue the unit
of account rrl which agricultural prices are stated.
To avoid reductions in farm prices and incomes in
the Benelux countries and Germany as a con-
sequence of their currency revaluations, those
countries will bet, permitted to maintain com-
pensatory border taxes and subsidies. The council
also agreed to exceptional treatment for Italy by
permitting continuation of the import levy re-
duction on corn that encourages Italian livestock
roduction and US corn sales.
SECRET
Page
3 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
SECRET
Indochina
VIETNAM: BATTLES ON TWO FRONTS
During the week, Communist forces kept up
heavy shellings and launched several coordinated
ground attacks near the DMZ; they also put pres-
sure on South Vietnamese forces in central Thua
Thien Province.
Despite this
pressure, the Sout ietnamese are holding their
positions on the mountains southwest of Hue
and, with the help of air and artillery strikes, have
inflicted heavy casualties on the Communists.
In the highlands province of Kontum, as
many as three enemy battalions surrounded a
South Vietnamese battalion north of Ben Het
early in the week. Heavy Communist antiaircraft
fire made reinforcement and resupply difficult
but, after six days of fighting, the Communists
pulled back to avoid further casualties from allied
aircraft and artillery. Losses were high on both
sides; some 340 Communists and 35 South Viet-
namese reportedly were killed.
In the south, the government has ended an-
other stage of its cross-border operation west of
Tay Ninh Province after several weeks during
which large quantities of enemy food and other
supplies were destroyed.
n e ou-tT~i
There are signs of` political activit m
various opponents of Thieu for t rst time
since the presidential election `M -October. The
renewed opposition activity may be an outgrowth
of Thieu's offer last January to resign as parrtof a
PedGeterr~f,atith the Communists. A r ti-
selves largely to talk and do not appear
government activities could be in st if these
groups can find some issue to exp or if further
doubts are raised about Thitenure in office.
Mifi_tantr s~{dnt_ groups hope to f m
new anti-government campaign in the near future.
SECRET
Page 4 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
SECRET
They are demanding the release of student"1ead-
ers, and may try to play on anti-American themes
as they have in the past. The protest strikes and
demonstrations so far have been easily contained
by police. By detaining student leaders, the gov-
ernment has apparently been able to weaken the
protest movement, and the police are confident
that they, can prevent future disturbances from
getting out Qf hand.
A group of An Quang Buddhist, legislators,
meanwhile, has been working for several weeks on
preparations for a projected mass political meet-
ing. They hope it will stimulate development of a
national consensus on the peace issue and some-
how lead to a negotiated peace settlement. The
legislators have sent delegatio:1s to the provinces
in search of support. Not rpuch support has been
forthcoming and the plan Away never get off the
ground. An Quang clerical -leaders have given little
encouragement.
Big Minh also has been holding political dis-
cussions with a wide spectrum of prominent
opposition figures, including An Quang repre-
sentatives who were associated with his abortive
bid for the presidency last year. Despite Minh's
ineffective campaign, many opposition leaders
still see him as the only possible alternative to
President Thieu. The Minh cam is now better
organifed than it was" during the election cam-
paign.
While Hanoi's propagandists continue to
criticize the Chinese for their dealings with the
US, elite party cadres in North Vietnam are being
urged to pay more attention to Hanoi's own
brand of Marxism-Leninism and less to what is
going on in the outside world. A recent issue of a
party journal takes the position that no Com-
munist party has the right to dictate policy to
another. Describing Marxism-Leninism as a gen-
eral set of principles, the article argues that
loyalty to these principles means simply applying
them "creatively" to national conditions.
Instruction such as this is almost certainly
meant to play down the importance for North
Vietnam of China's recent dealings with the US.
Indeed, there is a strong suggestion in the article
that whatever happens in the international sphere,
the North Vietnamese Communists will still be
master in their own house.
At the same time, the emphasis on the
"sovereignty" of Hanoi's current policy line may
also be intended as a reminder to cadres of their
own basic responsibilities to hew to that line. The
repeated contention in the article that only the
Vietnamese Communists can know what is right
for the Vietnamese revolution seems a bit prickly,
as if Hanoi were trying to warn cadres that dis-
sidence or disagreement could be read as dis-
loyalty to the regime. There is even a hint that
the leadership already suspects that some cadres
are overly attached to alien doctrine. "Most of
the party's cadres have demonstrated their stead-
fast political standards," the journal says, but
adds, "We are not complacent with the results
achieved." The article goes on to prescribe further
political indoctrination to strengthen party mem-
bers' sense of "independence and sovereignty."
Such language can only suggest to cadres that
someone at the top is not entirely happy with the
way they have responded to the present need for
doctrinal flexibility and an independent national
line.
New oa
Th01-t4d t -7Tn5 se are pu iir1"'m> - Xt system in rt"~~~ TR>Srth
SECRET
Page 5 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
SECRET
ietnam. Photography. sav
al north-south road segments in the early st~ga
A ,construction. They extend over 150,iles,
most in high terrain paralleling tF /Laotian
border,, nd will take several month complete.
;p
There are-.,,long gaps, and the tetra is difficult.,
The North Vietnamese appears-t'o be building the"
road segments. as straight did level as possible.
When finished, the new ,s'y'stem will be less vul-'
nerable to seasonal fEooding. It will also be 1
superior in structure lend alignment to the coastal
roadnet that has been a mainstay of Hanoi's trans-
port system so far.
Photography) alsoshows that a
road through the Demilitarized Zone into South
Vietnam has now been completed as far-youth as
e Sanh. This new road is generally east of the
.00 mountains and will orovide an alternafe-' nuts
when heavy rains, which begin in May, ma
The North Vietnamese renewed their attacks
on Skyline Ridge on 30 March and for the first
time used tanks. Communist troops and tanks
assaulted government strongpoints guarding the
road from Sam Thong, while Communist gunners
directed heavy artillery and mortar fire on posi-
tions at the center of the ridge. Vang Pao's ir-
regulars destroyed two of the three tanks and at
mid-day on 30 March were holding their ground.
The attacks on 30 March came after a week's
stalemate. The Communists held four positions
on the central and western portions of the ridge
but limited their attacks on adjacent irregular
positions to intermittent shellings. The irregulars
tried to retake the lost strongpoints, but their
efforts were hampered by poor weather which
severely limited tactical air support.
SECRET
Page 6 WEEKLY SUMMARY 31 Mar 72
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
SECRET
To the northeast, advance elements of two
government task forces remain within five miles
of Nong Pet and Phong Savan in Communist rear
areas. So far, this operation has failed to divert
enemy forces from the Long Tieng sector.
The political atmosphere in Phnom Penh has
cooled somewhat, and Lon Nol's new government
has begun to get down to business. In an apparent
effort to rally flagging popular support for the
government and to help dampen continuing stu-
dent unrest, the President handpicked a com-
mittee to produce a new draft of a republican
constitution by the first week in April. Lon Nol
simultaneously let it be known that he hopes to
hold an election in government-controlled areas
for a new National Assembly "in three months."
Thus far, moderate student elements appear
to have reacted favorably to such prospects for a
more constitutional form of rule, but some ac-
tivist student leaders have persisted in pushing
unrealistic demands such as recognition of a "stu-
dent assembly" to monitor government actions
until a legislature is in fact elected. To counter
their agitation, the regime has arranged for gov-
ernment-sponsored groups to conduct a series of
demonstrations in Phnom Penh for ''national
solidarity" and against "anarchy."
Communist activity in the Phnom Penh area
was highlighted by several acts of sabotage. Com-
munist sappers caused considerable damage to
one of the capital's two main bridges, temporarily
closing it, and also damaged a fuel barge anchored
in the Mekong near Phnom Penh's docks. The
latter incident was the third of its kind this
month. A sustained campaign against commercial
shipping on the Mekong could have serious con-
Government-held location
0 Communist-held location
sequences, since most of Phnom Penh's supplies
are received via that waterway.
a y Intend to keep up
their harassment of government positions and
installations in and around Phnom -Penh, but
there is no sign they are preparing to carry out
significant or prolonged zrifYitary operations
similar to those they conducted in the capital;
region late last a (rri the contrary, the infantry"
element, ed that campaign are the units that 25X1
ar ving southward away from Phnom Penh
d toward South Vietnam's' Military --Reai.on
SECRET
Page 7 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
Korea: Seoul Scores
South Korean charges of North Korean vio-
lations of the Demilitarized Zone have received
considerable publicity in the past two weeks and
have drawn an unusually sharp riposte from
Pyongyang. These developments suggest that
Seoul has at last hit upon an exploitable issue in
its attempt to discredit North Korea's "peace
offensive."
Pyongyang has for some months been slowly
increasing its military construction activities and
personnel in the northern portion of the DMZ in
violation of the armistice agreement. The most
dramatic aspect of this has been the construction
since last August of some 52 miles of fence within
the western portion of the zone. None of this
activity has any particular military significance.
Nevertheless, the South Koreans drummed up a
propaganda campaign to expose Pyongyang's
activities and to force the North Koreans to abide
by the terms of the armistice. On 10 March,
South Korea informed UN officials about Pyong-
yang's violations and, a few days later, passed the
information along to all foreign military attaches
and the domestic and foreign press corps.
The South Koreans have been successful in
obtaining favorable international publicity for
North Korean construction in DMZ:
fortified position (upper arrow) and fence.
Page 8
these charges and the cooperation of the UN
command in reviving, at this week's Military
Armistice Commission meeting, a proposal for
real demilitarization of the DMZ. Seoul has main-
tained that acceptance of demilitarization under
UN auspices is one of the ways Pyongyang could
prove its peaceful intent and draw a positive
South Korean response to its overtures for a po-
litical dialogue. By zeroing in on this possibility,
South Korea has markedly intensified pressure on
the North to match its words with deeds.
Pyongyang's response has been sharp. In a
series of statements over the past two weeks, it
has shown considerable irritation at the interna-
tional coverage given Seoul's charges and
expressed suspicion that the South Koreans might
be planning to follow up with military action.
The North Korean defense minister, in his first
major statement in over a year, linked a denuncia-
tion of Seoul with a warning that the North's
army stood ready to retaliate against any South
Korean military adventures.
Pyongyang has also felt compelled to lace
this essentially negative response with something
more positive. Without directly referring to
Seoul's claims, the North Korean party news-
paper, in an editorial broadcast on 25 March,
renewed the North's pitch for talks with the
South. It stressed that problems such as "the
barrier that has existed between the two Koreas"
could be resolved through negotiations. The
editorial indicated that Pyongyang has no inten-
tion of making any concession on the demilitari-
zation issue to achieve a dialogue with the
SECRET
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
Iq
Next 2 Page(s) In Document Denied
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
An agreement was signed in London on 26
March after prolonged and often bitter nego-
tiations. In return for an annual payment of
$36.4 million for seven and a half years, Malta
granted the British continued base rights with
provision for the use of UK installations on the
island by NATO members. Prime Minister Mintoff
has said that at least Italy and West Germany
would be permitted access. Warsaw Pact states
will be denied use of Malta
The withdrawal of British troops and'ma-
terial has ended, and London will restore. mili-
tary contingent to approximately its-former di-
mensions. The UK does intend, however, to re-
duce its Maltese labor force b about 20 ercent,
beginning early next year.
I n Malta, the agreement has been hailed by
all except the most partisan opposition. Mintoff's
success in almost tripling the amount received
under the previous arrangements with the UK will
SECRET
Page 12 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
enhance his stature and may encourage him to
call a snap election in the hope of increasing his
one-seat majority in parliament.
Mintoff's image is likely to be reinforced
further by his trip to Peking scheduled to begin
30 March.
The Chinese
will stage a warm welcome for Mintoff but are
unlikely to give him all he wants.
The extended treaty negotiations have ex-
acerbated the island's economic difficulties. Un-
employment has increased significantly,-,,,' several
manufacturing firms have folded, some retai1 out-
lets have closed, and the flow of tourists has
slowed. Moreover, the evacuation of British de-
pendents last January removed much needed
purchasing power. The agreement is not apt to
alleviate these problems immediately.
Mintoff's preoccupation with foreign afjirs,
combined with his reluctance to delega#e au-
thority, has resulted in little long-term ew'onomic
planning. He now has the opportuni to con-
centrate on his goal of making ,-1Vlalta eco-
nomically self-sustaining.
French Defense Policy
~ y.
In a recent interview, Defense Minister
Michel Debre warned:=of the possible adverse con-
sequences of a Etr=opean defense force. Debre
contended that both the Soviets and the Ameri-
cans would be,6pposed to such a force, which
could cause "r utralist" pressures to grow within
Europe. Alt 'ough not explicitly stated, French
concern oy6r the role Germany would play is a
key reaso for Debre's aversion to a European
defense grouping.
Debre in effect was arguing for the status
quo, both in over-all European and in US-Euro-
pean defense relations. President Pomr1idou him-
self recently said that defense cooperation was
not a current European concern and Earlier called
discussion of possible Franco-British nuclear co-
operation "premature."
For a variety of reasons, Paris may find it
advantageous to follow a' "wait and see" policy
on these questions. France, like the rest of
Europe, is preoccupied with the enlargement of
the European Communities and the impact it will
have on European political and economic devel-
opments. Ther, too, while Paris continues to ex-
press concerti over the possibility of a unilateral
US troop withdrawal from Europe, most French
officials- do not believe such a departure is im-
miner>f Finally, France still has well over a year
before it must decide whether to locate its Pluton
tgwtical nuclear missile system in Germany-which
ould necessitate some cooperative arrangements
France is still wrestling with the problem of
Germany's role in any defense arrangement, par-
ticularly one that would include nuclear weapons.
Bonn's growing economic and political strength
and its increasing willingness to act independently
has not been lost on Paris. The French fear, and
rightly so, that Bonn would not be content to
remain an outsider in any European military ar-
rangements.
France at some point will be forced to come
to grips with these questions, but even then it will
be guided by long-held principles. Chief among
these is insistence that France retain absolute
control over its nuclear forces. Nor will France
allow itself to be reintegrated into NATO's mili-
tary command structure as constituted. Paris may
become somewhat more flexible on questions of
cooperation on conventional armed forces, a shift
suggested by Pompidou's less strident attitude
toward NATO and the US. 25X1
SECRET
Page 13 WEEKLY SUMMARY 31 Mar 72
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
SECRET
Yugoslavia: Smallpox Adds Woes
.Zagreb
HUNGARY
Ties
0 Confirmed cases
Area of restricted travel
1 r 2 deaths retorted
?-1.1 _. a1 j -r I 'A .., _ ROMANIA
Nov Sad
elgrade
BOSNIA AND
HERCEGOV(NA
Split`
Sarajevo C'--2
Tirane
SECRET
Page 14 WEEKLY SUMMARY
5 deaths reported
8 deaths report d
Kosovo _;/ /
OO~.r_i.r
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
SECRET
Despite strenuous efforts to contain it, a
smallpox epidemic is threatening to get out of
control. Belgrade has sought international medical
aid, and it is on the way. Unfortunately, damage
to Yugoslavia's economy will be difficult to
avoid, and the spread of the disease beyond
Yugoslavia itself is already a fact.
Smallpox first appeared in mid-March in
Kosovo to which it had been carried by Moslem
pilgrims returning from Mecca. By 29 March, the
disease had spread throughout the republic of
Serbia and the autonomous province of
Vojvodina. Fifteen people died and nearly 200
were hospitalized. An important factor in the
rapid spread was the small number of people who
had been vaccinated against the disease. Further-
more, an estimated 20-30 percent of the Yugoslav
vaccine proved to be ineffective. At the end of
March, the disease was still localized in the gen-
eral area of Serbia, but Yugoslav experts were
afraid that it would break out with renewed vigor
and spill over into the republics of Croatia,
Slovenia, and Bosnia-Hercegovina.
Belgrade is taking steps to control further
contagion. Most central government meetings-
including an unprecedented joint meeting of the
state presidency and party presidium-have been
indefinitely postponed to avoid exposing high
federation officials to infection. Sports events and
public gatherings in the affected areas have been
canceled as has the military callup in Kosovo.
The Yugoslavs are seeking 20 million doses
of vaccine from the World Health Organization,
the US, the USSR, the UK, France, and West
Germany. The US has sent three million doses,
modern innoculation equipment, and six spe-
cialists to assist in their use. If the other medical
aid also arrives in timely fashion, the Yugoslavs
will have a better chance of reducing the pro-
jected re-infection to manageable limits.
The epidemic has begun to spread abroad. A
Yugoslav worker from Kosovo has been hospi-
talized in Hanover, West Germany. Austria and
Bulgaria have sealed their borders with Yugoslavia
and Bulgaria has warned that Albania is infected.
The other countries bordering on Yugoslavia-
especially Romania and Hungary, where health
facilities are poor-may also be considering clos-
ing their borders.
As for the Yugoslav economy, it is just be-
ginning to rebound from a serious trade imbal-
ance and inflation. A widespread epidemic could
hit it hard. If, for example, the infestation lingers
beyond six weeks or if it receives alarmist press
coverage in Western Europe, the tourist industry
will be seriously injured and the 1972 balance of
payments will be undermined. If more neighbor-
ing countries close their borders, export earnings
will begin to suffer. Furthermore, shortages may
result from disruption of imports as well as dislo-
cations in production and internal trade. Eco-
nomic damage can be limited, however, if the
disease is controlled in Vojvodina-a major agri-
cultural supply area-and kept out of the highly
industrialized Slovene and Croat re-
publics.
SECRET
Page 15 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
Poland: New Faces of 1972
The personnel shifts effected at the first
session of the new Seim (parliament) this week
cap party leader Edward Gierek's campaign to
remold the Polish power structure. To sup-
plement the party leadership that he chose at last
fall's party congress, Gierek now has a govern-
ment team free of politically embarrassing hold-
overs from the Gomulka era.
The Seim elected 62-year-old Henryk
Jablonski, who had been education minister, to
the ceremonial post of chief of state. Jablonski
replaces Jozef Cyrankiewicz, a political anachro-
nism who had been stripped of all political power.
He was not even elected as a deputy to the Seim.
in all, 11 new members were named to the 17-
member presidential council, indicating that it
will remain representative of diverse domestic
views.
The cabinet changes announced by Premier
.}aroszewicz, who was re-elected, affect economic
and social portfolios. They include the appoint-
ment of two new deputy premiers and six min-
isters, and the creation of three new ministries.
The two new deputy premiers, Olszewski and
Tejchma, are expected to be responsible for trade
and for economic reforms, respectively. Virtually
all of the new appointees appear to be competent
professionals who will focus on areas of high
priority for the Gierek regime.
A meeting of the party central committee
prior to the Seim session relieved the youthful,
liberal Tejchma from the party secretariat, al-
though retaining him as full member of the
policy-making politburo. On the secretariat,
Tejchma had long been in charge of youth affairs
and, under Gierek's leadership, had responsibility
for cultural policy and, at least in part, for rela-
tions with foreign parties. His new post as deputy
premier, an appointment heralded by a virtually
unprecedented announcement by the central
committee, indicates that Tejchma has not been
demoted. Had Gierek been dissatisfied with
Tejchma's performance, he would certainly have
replaced him at the party congress last December.
Parliamentary elections on 19 March pro-
vided a prelude to this week's government shifts.
Over 97 percent of the electorate voted, and a
sizable number exercised their option of crossing
out the names of candidates they did not like
from the party-approved single slate. While Gierek
received 99.8 percent of the vote in his district,
some full members of
the politburo stood as
low as 96 percent.
Nevertheless, the result
represented an en-
dorsement of Gierek's
regime, an outcome he
sought and expected.
The fact that two
thirds of the 460 par-
liamentary seats were
filled by persons who
were not in the last
Seim reflects the suc-
cess of Gierek's effort
to put his own stamp
on the legislature. Among the tasks that Gierek 25X1
has already indicated he will present to parlia-
ment are the drawing up of a new constitution
and local government reform./
International Oil eve opmen s
Persian Gulf members of the Organization of
Petroleum Exporting Countries will begin bargain-
ing sessions next month on participation in oil
company operations within their borders. Saudi
Petroleum Minister Yamani will represent the
other gulf states in the talks. The negotiations will
be contentious, but a compromise settlement is
likely before the end of the year. The main stick-
ing points will be compensation for the com-
panies' assets, the price of oil to be marketed by
the companies for the governments, and a sched-
ule for moving toward the long-term goal of
51-percent participation, i.e., a controlling inter-
est in company operations in a country.
SECRET
Page 16 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
The Shah of Iran is not interested in OPEC's
method of achieving participation and is dis-
cussing his separate package of demands with
representatives of the consortium this week.
Libya, which also intends to hold bilateral talks
on participation, is still embroiled in negotiations
on com ensation for the devaluation of the dol
lar.
An agreement is unlikely until
Libyan oil policy-maker Deputy Premier Jallud
becomes involved, which could be soon now.
Kuwait has joined Libya in restricting its oil
production. In an apparent move to forestall
debate on oil conservation measures proposed by
opposition members in the assembly, the gov-
ernment has instructed the Kuwait Oil Company
to hold oil production this year at or below the
level of 1971. Increased production from other
sources such as Saudi Arabia, Iran, and Nigeria
will satisfy expected growth in oil demand, but
these actions demonstrate the continuing ability
of the oil-producing countries to exert control
over their oil resources even without par-
ticipation.
In Venezuela, Creole and Gulf, two of the
three largest producers, have attempted to create
an impression of a gradually improving situation
by announcing an increase in production; even so,
Venezuelan exports this year still will be below
the "quotas" imposed on all companies. As a
result, the two companies face fines for not meet-
ing export quotas, but they are trying to get a
waiver based on adverse market conditions. 25X1
Progress on "Dh6gTControls
\ Amendments to strengthen the 1961 Single
Connntion on Narcotic Drugs were adopted by a
large to at a UN-sponsored confer ce in
Geneva 6t week. Key provisions giv5,ie Inter-
to extradite drug tAfickers who
flee across natial boundaries. T e USSR and its
allies cast nine of, the 12 abs ntions, but the
chief Soviet delega has Zae the US privately
that Moscow may sign ;thndment protocol.
It will enter into force } fied by 40 o f the
adherents to the 1961 con n.
against the drug pro
Drug Abuse Co
Sweden agreed
illicit drug
ticipants fr
regional mem
Pakistan.
vention
stances
the 19
ment
stat
SECRET
em in other ways. About $3
edged to the UN Fund for
rol, most of it by the US.
his week to serve as the non-
r of a special UN committee on
siness in the Middle East.' Par-
the area are Iran, Turkey, and
atification of the 1971 draft con-
psychotropic (mind-bending) sub-
ch as LSD-which are not covered by
convention or the proposed amend-
under consideration in more than ,20'
Page 17 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
SECRET
Turkey: New Tremors
There are signs of new uneasiness in top
government circles, and the authorities, contrary
to earlier indications, extended martial law on 25
March for two more months. The next day five
heavily armed terrorists kidnaped three radar
technicians-two British and one Canadian-from
a small town on the Black Sea coast. The tech-
nicians were to have been used as hostages in an
attempt to gain the release of three terrorist
leaders who have been sentenced to death. The
scheme failed, however, when the kijnapers were
found on 30 March following a majotf manhunt.
Ten terrorists-including the kidnaper's-and the
three kidnap victims were killed when\ammuni-
tion exploded in the mountain village house
where they were surrounded by Turkish roops.
Following an emergency session pro ted
by the kidnapings, the military-dominatedla -
tional Security Council issued a statement that
highlighted the continuing difficulties of the gov-
ernment, charged that certain leading politicians
were guilty of irresponsibility, and urged parlia-
ment to get on with the task of enacting reform
legislation. The council implied it may take the
place of the cabinet as the prime expediter of
legislation if the government and parliament do
not act soon.
In a related move, Prime Minister Erim has
publicized a letter to the top political leaders in
which he also admonished parliament to get on
with the task of passing reform legislation.
Among the measures Erim wants are special se-
curity courts to handle cases involving alleged
SECRET
Page 18 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
SECRET
terror ts, a streamlining ofjparliamentary proce-
dures, ar'x an increase in th government's control
over civil sexyants and the p blic media.
a ion a6d reiterated that
inte atioryl conspiracy.
Cypriots. His major interest, as always, is te-.en-
sure tie continuation of his power and the status
quo o*\Cyprus.
akaribs appears to have thwarted the
Cyprilbt bishops' call for his resignation as Presi-
dent.I When the,,' three bishops repeated their de-
man last week, they failed to set a time limit and 25X1
did of renew thei"r,threat to strip Makarios of his
ecclesiastical duties if he refused tci step down.
Ther bishops also gave Makarios a new opening in
their latest statement by giving histfailure to move
Cyprus toward union with Greece-enosis-as one
important reason why he shouldVresign.
I Makarios can turn this jainst the Greeks by
President Makarios' long-distanc debate
with the Greeks goes on. Athens is s9. ling down
to a protracted war of political,* maneuvering
hoping to wear down the Archbiiop. Makarios-
looking for immediate gains-haYrallied the Greek
Cypriots to his side, but, senive as to the limits
to which he can go, he',h Kavoided arousing his
followers to the point .. inviting Greek inter-
vention. The Turkish ,Gypriints are alarmed over
the possibility of a violent out iurst on the island.
The Archbishop has successful y parried all
of the Greek-demands so far. He maymake a few
concessiont eventually, if he can dos without
limiting his own strength. Makarios c Id, for
example, agree to tighter UN controls o er the
Czechoslov w-ms~-aiid`-partially reshu e his
ca'BTPTI`f?; actions which might go part way in
placating the Greeks, the Turks and the Turkish
trding on the widely held assumption that
Athens is behind the bj hops, portraying the
bb ishops' support of enosias being Athens' goal as
ell. If the Archbishop succeeds, it will no doubt
116m Greece's good rg(ations with Turkey, where
sispicion over Athens' ultimate goal in Cyprus is
never far below the surface. Makarios could even
attempt to fan these suspicions by 'seeking a
rapprochement with retired Greek General Grivas,
an enosis zealot.
The Turks have stood apart from the dispute
so far, except to insist on the safety of the
Turkish Cypriots. If the enosis issue raises its head
once again, Ankara will have to take a more active
role. Athens, above all, does not want to risk
another confrontation with Turkey and, to avoid
it, would move to end the dispute with Makarios.
Meanwhile, Makarios' skill at political maneuver-
ing will keep Athens busy.
SECRET
Page 19 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
Arab Parleys and Peregrinations
The Arabs have been traveling and talking
more than usual these past few weeks, discussing
the Arab-Israeli confrontation in the light of such
matters as Husayn's Palestinian plan and the Presi-
dent's trip to Moscow in May.
Egypt seems to be taking the lead. On 8
March, President Sadat began a three-day visit to
Saudi Arabia and Kuwait. He was shortly fol-
lowed to the same countries by Egyptian War
King Faysal with Sadat
Minister Sadiq. They were probably seeking, in
view of the two countries' role as sources of
financial support, further backing for Egypt's ef-
forts to prepare itself for the confrontation with
Israel.
The presidential council of the Confed-
eration of Arab Republics met in Cairo in mid-
March, but accomplished little. The sessions ap-
pear to have been marked once again by dif-
ferences between the three heads of state. Con-
sultations continued even after the official
sessions ended. A subsequent visit to Libya by
Sadat was followed by Qadhafi's arrival in Egypt
for further talks with the Egyptian President.
They may have been considering further the con-
federal reaction to King Husayn's plan for a new
Palestinian-Jordanian state. An effort may be
made to convene an Arab summit to provide a
coordinated response to King Husayn's proposal.
Meanwhile, Iraqi representatives have toured
various Arab capitals attempting to sell a larger
scheme for Arab unity, ostensibly as a counter to
Husayn. Aside from the predictable general ex-
pressions of support, little has resulted from
Baghdad's efforts, although the Iraqi delegation
received considerable high-level attention in
Cairo. Qadhafi is said to have registered his op-
position to the Iraqi plan because it did not
include Libya and posed a potential threat to the
Arab Confederation. Syria did little more than
agree to submit the idea to the Confederation's
council.
Intra-Arab bonds are brittle at best, and this
latest effort of the Iraqis to emerge from their
diplomatic cocoon will fall far short of achieving
real unity. In fact, Baghdad probably has few
SECRET
Page 20 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
THE LAST DAYS HAVE WITNESSED AN UNPRECEDENTED MOVEMENT OF DELEGATIONS BETWEEN ARAB CAPITALS.
illusions that it could bring about such a union,
but it would like to see some improvement in its
bilateral relations with Syria and Egypt. This
would be an accomplishment of note for Iraqi
leader Tikriti. If any improvements do evolve, it
should be pleasing to Moscow, which has been
working hard to improve its own relations with
the Arabs and has been urging closer Syrian-Iraqi
cooperation on projects of mutual interest such as
the development of the Euphrates River basin.
Fatah chieftain Yasir Arafat also has been on
the road, visiting virtually all of the states of the
Middle East and North Africa at least once, but
concentrating on Cairo. Arafat has been attempt-
ing to provide guidance for an Arab response to
Husayn's plan, but he may also have been dis-
cussing how to increase the effectiveness and par-
ticipation of the fedayeen in the confrontation
with Israel.
AND HOW 00 THEY SAY
THAT ISRAEL HAS AIR
SUPREMACY!!
Preparations for further consultations and
initiatives are under way. Cairo is planning a new
political move that is to include "total Arab
mobilization on the various fronts" and may
involve new initiatives toward West European
countries. The details of this plan are to be made
public before May, according to Cairo press re-
ports. Egyptian Foreign Minister Ghalib is plan-
ning a tour of North African states and will visit
the Soviet Union at the end of April. Some of the
Egyptian moves are inspired by the continuing
need to project a sense of activity on the Arab-
Israeli front, but they also are being undertaken
with an eye to President Nixon's trip to Moscow
in May. Egyptian leaders are probably hoping that
a demonstration of urgency will somehow have a
favorable effect on Arab interests at the Moscow
SECRET
Page 21 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
~ihUJKET
CABINET CHANGES IN DAMASCUS
President Asad has included more non-Baathists in his
new cabinet. Their appointments followed the recent for-
mation of the "National Front," a paper organization of
the ruling Baath party and Syria's other "progressive" po-
litical groups.
The changes demonstrate Asad's flexible style of
governing, although they will not change the realities of
Syrian political life. Baathists now occupy fewer positions,
but they still hold all the key civilian positions as well as
those within the military, the real base of Syrian political
power. Asad's decision to give other groups ostensible par-
ticipation in the government is in sharp contrast to the tight
grip exercised by earlier Baathist
i
reg
mes. While he will
make no converts among doctrinaire party members at home, moves such as this do find favor
with other Arab states Ion at odds with the ruthless Baathist rule in Damascus
S .. ccorc I n moubt
A number of stumbling blocks stand in the
way of full implementation of the peace agree-
ment ratified this week by the government and
the southern rebels. There was bitter quarreling
among the Anya-Nya rebels regarding the terms
of the settlement prior to the ratification cere-
mony in Addis Ababa on 27 March, and there are,
as a result, serious questions about the south-
erners' ability to unite inJionoring the truce.
When government delegates became aware of
the rebel bickering, they moved to convince Lagu
of President Numayri's sincerity and commitment
to meet the needs of the black southern prov-
inces. They may have enlisted the support of
Ethiopian and Ugandan officials who implicitly
threatened the Anya-Nya with denial of their
countries' sanctuary if they did not sign. Lagu,
subjected to these pressures and apparently con-
vinced that he could not gain further concessions,
cut off the debate an ratified the agreement.
The enorefus task now facing Lagu is to sell
the settlemenfmJ to the Anya-Nya commanders in
the field,.A number of southern "lieutenant colo-
nels"..have threatened to break with Lagu if he
failed to get the government's acceptance of
flanges in post armistice security rrangements.
Unless Lagu
was able to satisfy their demands, obstreperous
Anya-Nya chieftains are perfectly capable of
breaching the truce in an attempt to overturn the
settlement.
Even if the two sides are able to overcome
their ingrained mutual distrust, they still face
staggering problems. An estimated half million
refugees who fled the fighting over the years must
be resettled, and the economy of the backward
southern provinces must be built up. The govern-
ment, with limited financial resources and admin-
istrative talent, is ill-prepared for this effort and is
soliciting the aid of international charitable a"rgari-
izations.
SECRET
Page 22 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
Uganda-Israel: Fractured Friendship
President Amin closed the Israeli Embassy countries, notably Libya. Premier Qadhafi may
on 30 March nd"gave its staff ten days to leave have given Amin financial encouragement to
the country. A in's action followed quickly after- break with Israel.
his expulsion o all Israeli civilians and the ap-
proximately 50 m Israeli military advisory con-
tingent in Uganda, in also had stopped Israeli
sponsored constructio projects and canceled
arms pur`hases from lsr I.
Arlin's moves were triggered by lsr'd li press
allegatins that he had postponed a trip to afro
becauset of unrest at home. Relations betw
n
~
Kampal and Tel Aviv have been declining sinc
early th s year when Amin, a Muslim who never-
theless has long had close ties to the Israelis,
began tc strengthen relations with several Arab
Amin's rift with Israel may
unsettling effect on the army,
principal source of strength. T,
training program has been
popular with the armed fo
ited capabilities. Mor
in the army comes
aware of Tel A
been unhap
ell have an
e President's
Israeli military
oth effective and
es. The withdrawal of
minish the army's lim-
ver, Amin's main support
om soldiers who have tribal
rn Sudanese; these soldiers are
s aid to the Anya-Nya and have
with Amin's recent pro-Muslim
stance. Th 'reaction of these troops could add to
`ti?Amin's roubles with an
my.
ARMSDELIVERIES TO GUINEA
Mp scow is responding to President Tdure's request for deliveries of military hardware, and
China rhay be planning to expand its smal military aid program in Guinea.
S'ce the Portuguese amphibiou attack on Conakry in November 1970, Moscow has delivered
sizablelamounts of equipment. Rec t shi ments have included artillery, small arms, ammunition,
~-A J 1?"+ 1 1
di
s
me
um tank
hese deliveries probably were made under the terms of an estimated $5 million S
i
t
ov
e
-
Guirdean arms agreement, igned early last year. The agreement also provides for three patrol craft
and additional MIG-17s. Since 1960 Moscow has provided Conakry with at least $15 million in
military equipment.
Although china has been supplying small quantities of military equipment-vehicles, small
arm, and arnfnunition-Conakry remains dependent on the USSR for most of its arms. Total
Chin se de,, veries have been less than $2 million. Peking,, however, may be preparing to send more
materiels-Under a July 1971 arms accord, patrol boats and ground forces equipment, will be shipped
to G*ea. The Chinese also are helping Guinea construct a small-arms factor outside Cona-
kry.
SECRET
Page 23 WEEKLY SUMMARY 31 Mar 72
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
Chile: The Week That Was
The exposure of an inept coup plan last
week gave the hard-pressed Allende government a
boost. Officials appear convinced that evidence
against the accused far-rightist civilians and re-
tired military plotters is good. The incident has
enhanced the ITT story, which has been treated
with restraint by the Chilean Government thus
far, although not by its controlled media. Allende
will probably combine the charges in a rally called
for 14 April to publicize alleged threats to oust and
murder him. Active duty officers critical of the
government will probably be reluctant to risk
even` the appearance of discontent, particularly
after the official announcement that the govern-
ment has a list of officers allegedly approached by
the plotters.
Christian Democratic leaders seem to have
decided that an outspoken but independent op-
position stand is the best strategy. They are no
longer coordinating moves with the National
Party but are on the one hand launching effective
selected attacks on the government while on the
other carrying on a dialogue with Allende and the
more moderate of the Radicals in the administra-
tion. ;Although the Christian Democrats did not
sponsor anti-Allende marches set for 24 and 28
March, they are protesting the government's ban
on there and reportedly plan to stage a massive
demon?tration in defense of constitutional rights
on 6 April with other democratic parties.
The conservative National Party is annoyed
at the Christian Democrats' aloofness but is going
ahead with its awn plans to step u pressure on
Allende. The Nationals are erned over the
recklessness of far right ext isfis and are de-
veloping legalistic argumen to use irr-.organizing
against property seizures nd violations of public
order and personal libe'fty. The party will focus
its efforts in the rural areas where unrest is rising.
It plans to coordinate the efforts of landowners,
peasants, and other organized groups. The Na-
tionals also hope to expand contacts with the
armed forces and to run Colonel Albert Labbe,
recently retired for his open criticism of the gov-
ernment, for senator.
The government plan to run a well-known
"political independent," Felipe Herrera, for
rector of the University of Chile in the election in
April has hit a snag. Criticizing Herrera as a com-
promiser and "pseudo-Socialist imperialist," left-
ist extremists will run their own candidate,
Andres Pascal Allende. Pascal is a top leader of
the Movement of the Revolutionary Left and a
nephew of the President.
Chilean officials left for the meeting in Paris
of their Western creditors this week determined
to force action and, if they can, to divide the US
from the rest of the group. They were well aware
of the fears of some creditors that a prolonged
renegotiation could cause Chile to default on its
large debts and might strengthen extremist po-
litical influence on Allende. T e inclusion of
hard-line Socialist in the
delegation gives grounds for apprehension. F 25X1
SECRET
Page 24 WEEKLY SUMMARY 31 Mar 72
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
SECRET
Brazil Favors China Trade
The Medici administration recently has been
devoting attention to Brazil's relationship to
Communist China. The government does not have
diplomatic relations with Peking in mind now,
but has begun trade negotiations as part of a
world-wide export pro gtion program.
The door was opened to expan"tied. trade
when a businessman with close ties to the a1mixz;
istration visited Peking and Canton last October
and November. He sold $1 million worth of in-
stant coffee in what was described as the first
direct deal with the Chinese rather than through
intermediaries.
Althou o great hopes
for the early development a large volume of
trade were raised during. t'fie talks, the Brazilian
press reported during"/larch that an agreement
had been signed,,, f$r the sale of 100,000 tons of
sugar. Other..?'press reports say that another
100,000 tons of sugar and. an undetermined
amount of cotton may soon be sold`=1f'raddition,
a spokesman for the Brazilian Exporters Associa-
tion has said that his organization will send four
representatives to the Canton trade fait in Octo-
An administration o4ial has said that he
cannot comment on 11ether the government is
studying the po ility of establishing formal
trode relatior+iith Peking. The administration's
failure t ue any statement on the topic prob-
ably At*u'1't!5 -Toth from Medici's usual tight hold
QW-policy discussions and from the lack of con-
sensus thus far on the proper course. The finance
minister and other economic officials seem to be
pushing for a rapid expansion of trade, while the
Foreign Ministry and the military-dominated Na-
tional Security Council and National Intelligence
Service appear to be advising great c9~ution be-
cause of the political implieatfcing would
like to arrange an exchange of permanent trade
missions as a first step toward diplomatic rela-
SECRET
Page 25 WEEKLY SUMMARY
Approved For Release 2008/06/11: CIA-RDP79-00927A009500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
Next 1 Page(s) In Document Denied
Iq
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
 Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7
Secret
Secret
Approved For Release 2008/06/11: CIA-RDP79-00927AO09500020001-7