WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009500070001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 31
• Document Creation Date: December 21, 2016
• Document Release Date: July 7, 2008
• Sequence Number: 1
• Publication Date: May 12, 1972
• Content Type: SUMMARY

Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
NAVY review
completed.
State Dept. review
completed
Secret
12 May 1972
No. 0369/72
Copy N2 51
Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
EEK MM RY, su b
mig by the f urr~ I~
d +T1
2
ali"
# ugh o4
r
CONTENTS (12 May 1972)
1 Reactions
3 Italian Elections: No Solution
7 Indochina
12 China: Industry Moves Ahead
13 Japan-USSR: A Hint of Flexibility
14 Indonesia's Second Chance
15 German Economy Turns the Corner
16 Iceland: The Base Issue
17 International Oil Developments
18 Sadat: A Whirl with the Maghreb
20 The Yemens: More Machinations
21 Lebanon: Few Election Surprises
21 Turkey: Still Uncertain
22 Burundi: All Over, but-
22 Bangladesh: Aid Lags
24 Brazil: Church-State Frictions
25 Uruguay: Bordaberry Under Fire
25 Venezuela: Dictator to Return
26 British Honduras: The Heat's Off
27 Cuba
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
REACTIONS
Hanoi's propagandists have responded to the
US decision to shut off supplies to North Viet-
nam with a flood of outraged rhetoric, but there
are indications that the leadership itself is waiting
for a strong sign of support from its allies. Hanoi's
first official pronouncement on the US decision
devoted almost as much attention to the need for
more international support as to the US action
itself. The government statement, issued on 10
May, included two long passages exhorting "fra-
ternal socialist countries to check in time the
bloody hands of the US aggressors" and express-
ing "confidence" that North Vietnam's allies
would not fail to measure up to their respon-
sibilities.
Earlier North Vietnamese comment on the
President's speech emphasized in predictable
terms Hanoi's own determination to continue the
war whatever the cost. The North Vietnamese
delegation in Paris asserted in a statement on 9
May that the Vietnamese people, "united as a
single person," would continue to pursue their
objectives. The Viet Cong delegation, in a parallel
declaration, claimed that enough supplies are al-
ready stockpiled to keep the offensive going. In
other press play, the Vietnamese Communists
have sought to conjure up images of a US leader-
ship "gone rri,."' and have offered their most
biting personal criticism of President Nixon since
the US-China summit.
North Vietnam's negotiators, meanwhile,
have re-stated their claims of US intransigence in
both the public and the private exchanges. Chief
negotiator Xuan Thuy told a news conference in
Paris on 10 May just before he left for consulta-
tions in Hanoi-that it was Washington, not
Hanoi, that had refused to budge at the latest
round of secret talks. Politburo member Le Duc
Tho, who accompanied Thuy to the airport, as-
serted that Dr. Kissinger had tried to mislead the
public with his statements that the Communists
were insisting on setting up a Communist regime
Page 1
in Saigon. Hanoi Radio argued that the US had in
fact escalated its negotiating position by trying to
cut North Vietnam off from outside support.
On 11 April, Moscow issued a relatively low-
key and temperate statement affirming that the
Soviets have been giving and will continue to give
the Vietnamese people the necessary support. The
statement makes no mention of the forthcoming
Soviet-US summit meeting. It does come down
hard on the US for its alleged violation of interna-
tional law, but is worded in such a way as to
suggest that the USSR-initially at least-will not
attempt to challenge the closure of North Viet-
namese ports. Like previous Soviet statements on
Vietnam, it warns that the US "bears the entire
responsibility for its illegal acts" and that Moscow
"will draw appropriate conclusions." The Soviets
"resolutely insist" that the US cancel "without
delay" its recent actions and return to the Paris
talks. In short, the statement is essentially a hold-
ing operation worded in such a way as to preserve
Moscow's freedom of action.
The Soviets elected to leave twelve dry-cargo
ships and two tankers in North Vietnamese ports.
There has been no unusual Soviet military
reaction since the announcement of the blockade.
Three Soviet warships in the South China Sea are
returning from a long cruise in the Indian Ocean
and may remain in the area pending further devel-
opments before proceeding to Vladivostok. At
least one of these ships refueled near the Paracel
Islands on 11 May. A Soviet destroyer near the
Philippines is heading south and will probably go
to the Indian Ocean as the replacement for one of
the returning ships. There is no indication that
additional Soviet warships are headed for the
South China Sea.
From Peking
Peking's first authoritative comment on the
President's speech-which appeared on 11 May in
SECRET
WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
a People's Daily "Commentator" article-con-
tinued China's pattern of reacting with restraint
and moderation to the situation in Vietnam.
While condemning the latest US military measures
as a "dangerous step," the article did not charac-
terize them as a threat, challenge, or provocation
to the Chinese people or government. Moreover,
Peking did not attack President Nixon personally
and limited its rhetoric to replaying familiar
themes of support, including that China is North
Vietnam's "reliable rear area."
Nothing in the statement commits Peking to
a course of action with respect to the port closure
or indicates how it will deal with the five Chinese
merchant vessels that are in Haiphong harbor.
Indeed, in speaking of the time limit prescribed
for foreign vessels in North Vietnamese ports,
Peking limits itself to saying that this action is a
provocation "against the people of Vietnam and
the people of the whole world." There is no
evidence of any unusual Chinese military reac-
tion.
A measure of Peking's over-all restraint to
date was its reaction to US attacks on two Chi-
nese merchant vessels caught in the bombing of
North Vietnamese ports last weekend. Although
the first incident occurred on the morning of 6
May, Peking did not comment until three days
later, and the protest issued by the Foreign Min-
istry at that time was brief and relatively mild.
From Saigon
The South Vietnamese clearly have been
given a shot in the arm by the President's speech.
Prior to the address, setbacks on the battlefield
had led to increasing criticism of the US for
allegedly failing to give South Vietnamese troops
enough support. Some prominent figures even
charged that the US was prepared to make a deal
with the Soviet Union that would sell out Sai-
gon's interests. In a nationwide broadcast follow-
ing the President's speech, President Thieu as-
serted that the mining of North Vietnam's ports
was a "decisive measure" reflecting US determina-
tion to aid South Vietnam. Many pro-government
and opposition political figures have also greeted
the address enthusiastically.
In London, the Heath government, which
described US actions as "inevitable" under the
circumstances, has refused to accept the Labor
Party's challenge to dissociate London from Presi-
dent Nixon's decision. British Foreign Secretary
Douglas-Home has stuck to London's standard
line that the UK's only constructive role in the
conflict is, as co-chairman of the 1954 Geneva
conference, to encourage conciliation. Douglas-
Home met with Soviet Ambassador Smirnovski
on 10 May and for the third time in the last six
weeks urged Moscow to join with London in
calling for a new international conference on
Indochina. The ambassador was non-committal.
An official French statement, released in
Foreign Minister Schumann's name following the
weekly cabinet meeting on 10 May, expressed
France's concern over the "brutal worsening of
the situation in Vietnam." The statement gave
special attention to the risks of a confrontation
between the superpowers. It reaffirmed the
French position that the only solution to the war
is a political one but did not fix any responsibility
for the escalation of military activity in Vietnam.
Paris has not condemned the North Vietnamese
invasion, but the French did criticize the US last
month for breaking off the Paris peace talks.
In Canada, Prime Minister Trudeau told
Parliament that the US action in no way con-
stitutes an "escalation" of the war in the light of
the increased numbers of North Vietnamese
troops in the south. He added that since his
country was on good terms with all three of the
major powers involved, it might agree to assume a
role in a peace settlement. Trudeau said he felt
that the interests of the three powers suggest that
the war should be settled by negotiation rather
than by military means and that the President's
action does not obstruct such a path to
peace.
SECRET
Page
2 WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
ITALIAN ELECTIONS: NO SOLUTION
Italy's major parties emerged from the na-
tional elections on 7-8 May with only marginal
shifts in their parliamentary strengths and
without a clear mandate on how to solve the
issues that forced the dissolution of the last
center-left government. The formation of a new
government promises to be a difficult, protracted
affair.
As a group, the four parties of the center-left
coalition that governed Italy for the greater part
of the past decade gained six seats, giving them a
total of 371 in the 630-member Chamber of
Deputies. The parties of the extreme left did not
do at all well. Although the Communist Party
won two additional seats, the Proletarian So-
cialists lost all 23 of their seats, and the militant
Manifesto group failed to win any in its first test
at the ballot box.
The most impressive gains were made on the
far right. The neo-fascists, who for this election
joined forces with the tiny Monarchist Party, won
56 seats, 26 more than the two parties had in the
outgoing Chamber of Deputies. Some of these
gains were drawn from the center-right of the
political spectrum where the Liberal Party lost
ten seats.
The Liberal Party's poor showing reduces
the possiblity of a centrist coalition as a viable
alternative to the deeply divided center-left align-
ment. Italy's largest party, the Christian Dem-
ocrat, had hoped to use the specter of a centrist
coalition as a means of bringing their difficult ally
in the center-left, the Socialist Party, into line.
The election results indicate, however, that the
four parties that would make up a centrist com-
bination now have three fewer seats (331) than
they had in the outgoing Chamber of Deputies.
Although this is enough to constitute a mathe-
matical majority, the margin is thin by Italian
political standards.
The new parliament is expected to convene
on 25 May. At that time, the Andreotti caretaker
government will resign and most likely will be
succeeded by another Christian Democrat mi-
nority government that will rule until a coalition
can be patched together. This may not occur until
after the major parties sort out their problems at
party congresses this summer. An attempt prob-
ably will be made to refurbish the center-left
formula, but, if it is to have a chance to work, the
Socialists will have to retreat from their demands
for closer parliamentary cooperation with the
Page 3
SECRET
WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
SECRET
Adding to the confusion brought about by
growing labor dissatisfaction, Communist Labor
Minister Oyarce resigned on 9 May to return to
purely party duties. Oyarce claims that his deci-
sion was made for "strictly personal reasons," but
it could well be related to his poor performance
in the cabinet. The final blow may have come
when over 8,000 copper miners at the huge
Chuquicamata mine went on a two-day strike to
protest the political manueverings of the Com-
munist general manager, David Silberman.
That strike topped off a month of small
strikes. Newspapermen, water-works employees,
railroad workers, and public health doctors
walked off their jobs, mostly for petty reasons.
Wage demands played a part, but dissatisfaction
with the politically motivated acts of government-
appointed administrators loomed large. The
Chuquicamata strike was especially damaging
even though the settlement terms are unan-
nounced. It cost Chile $1,500,000 in foreign-
exchange earnings and was the first general strike
there since the Chilean Government took over
administration of the property from Anaconda.
Silberman is an abrasive person, and has managed
to alienate the labor unions, which are led by
Popular Socialists and Christian Democrats.
Neither party supports the Allende coalition.
The government's prime problem with labor
is that, despite promises, it is no more able to
meet all of the desires of workers than was its
predecessor. The Chilean worker, including the
white-collar salaried employee, does not under-
stand that his individual aspirations for increased
benefits may result in less for all. The adminis-
trators appointed by the government have not
been able to win the support of the employees
anymore than the previous private owners.
As a result, the condition of unionized labor
continues to be about the same as before, a
Chuquicamata Mine
situation dangerous for Allende since he bases his
support on the working classes. The working class
still supports Allende politically, but does not
hesitate to undercut him through indiscipline and
excessive demands. Oyarce's departure probably
will not result in new initiatives, and the situation
created by frequent disruptions in the economy
will bring political problems for the coalition in
SECRET
Page 5 WEEKLY SUMMARY
12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
SECRET
Page 6 WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
The Communists continue to apply military
pressure on the major battlefronts, with their
main thrust during the week directed against An
Loc. Heavy artillery and infantry assaults have
been launched against the city. The pace of the
enemy advance has slowed in northern South
Vietnam as the Communists complete logistic and
other preparations for a new push. They may
soon increase the pressure against Hue and Kon-
turn to coincide with their renewed attacks
against An Loc. The Communists may hope the
heavy fighting around An Loc will keep the South
Vietnamese from sending reserve forces north.
The Communists do not appear to be concen-
trating large numbers of their troops in forward
positions where they would be exposed to air and
ground attacks.
In the central highlands this week, the Com-
munists captured Polei Kleng-the last major base
west of Kontum City-and were exerting heavy
pressure on isolated government forces at Ben
Het. In the northern coastal area, elements from
the North Vietnamese 711th Division are increas-
ing their activity in southern Quang Nam Province
and have moved closer to Da Nang and the pro-
vincial capital of Hoi An. Farther south, Com-
munist forces reportedly are preparing to attack
Qui Nhon, the capital of Binh Dinh Province.
the current flow of materiel into all regions of
South Vietnam is very heavy. The Communists
are pushing some shipments through in daylight,
not just in Laos where the diversion of allied air
assets to the battlefields has given them greater
freedom of movement, but also in such high-risk
areas as the approaches to Hue.
Page 7
Refugees fleeing from Communist-occupied
districts in northern Binh Dinh Province report-
edly are bringing out stories of enemy efforts to
consolidate political control there. The Commu-
nists are said to be setting up "liberation govern-
ments" and executing some government officials.
Journalists who have interviewed the refugees re-
port that the North Vietnamese units that led the
attacks in Binh Dinh turned over civil authority
to local Viet Cong officials, some of whom were
South Vietnamese government cadre recruited
earlier.
The new governments are said to be trying
criminals, arbitrating land disputes, supervising
repair of war damages, and screening all indi-
viduals who were connected in any way with the
government. Some of these officials are being
given the opportunity to cooperate with the Viet
Cong, but others, particularly policemen, report-
edly are being shot.
The refugees' accounts are generally in ac-
cord with earlier reports of how the Communists
have proceeded after occupying other areas in
South Vietnam, such as Loc Ninh in northern
Binh Long Province. They evidently have well-
developed procedures for capitalizing on their
military operations, and these occupation meas-
ures are being carried out with a mixture of
benevolence and terror. It is clear that they are
intended for the long term, and that it is the
Communist plan to stay in the areas they have
seized.
Refugee Problems
Da Nang is trying to cope with some
400,000 refugees who in recent weeks have
SECRET
WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
streamed into the city from Quang Tri, Hue, and
outlying regions. Government authorities are hav-
ing difficulty providing water-let alone food,
medical care, and sanitary facilities. There is a
growing fear that the city will be attacked and, if
it is, the resulting confusion could greatly compli-
cate efforts to defend it. The situation will be
eased somewhat if a plan to ship as many as
100,000 refugees to a new refugee center in Mil-
itary Region 3 is successfully carried out.
Thieu Seeks Emergency Powers
confidence in their military prospects in the
south. An important North Vietnamese military
commentator published a progress report on 4
May. He claimed that the Communists now had
sufficient "latent strength" in South Vietnam to
fight "protractedly and on a large scale" and that
the current offensive was only part of a prolonged
effort. Last weekend, other Communist press
commentary compared the current action to the
Vietminh victory at Dien Bien Phu-the anniver-
sary of which was celebrated on 7 May-and the
Communists' southern military command urged
Communist forces in the South to encourage a
President Thieu hopes to secure National
Assembly passage next week of a measure grant-
ing him emergency decree powers for a six-month
period. Thieu already has wide authority to act in
times of emergency, but he apparently hopes that
assembly approval of the measure will help to
demonstrate national unity and boost South Viet-
namese morale. The President should have little
trouble obtaining the support he needs in the
Lower House, but his prospects are uncertain in
the Senate, where independent and opposition
elements are in the majority. Thieu has met per-
sonally with Senate Chairman Huyen, the leading
independent, and presidential aides are attempt-
ing to line up sufficient votes in the upper house.
The President plans to take some actions on
his own and already has proclaimed martial law
throughout the country. He will implement a
series of economic measures to raise revenues to
meet current heavy expenditures. Included are a
special war bond issue and new tax surcharges on
business establishments and consumer commodi-
ties. The government will await authority from
the assembly before implementing income and
property tax legislation.
Communist Confidence Over the Offensive
On the eve of the US initiative against North
Vietnam, the Communists were showing increased
Page 9
popular "insurrection against the Saigon r 11
he
Viet Cong command had given the initial phase of
the offensive high marks and had concluded that
local forces now had an opportunity to re-estab-
lish power in the liberated areas.
To be sure, Communist commentary has not
been all in this vein. The Viet Cong command's
assessment, for instance, contained sober warn-
ings about Communist shortcomings, particularly
in the delta. The overt pronouncements made
much of the need for further guerrilla and polit-
ical action, and for the consolidation of areas now
under Communist control. Some of Hanoi's op-
timistic line may simply have been intended to
brace Communist fighters for further struggle.
Nevertheless, it is doubtful Hanoi would have
struck such an authoritative tone in its commen-
tary if it were not convinced that the optimism
was basically warranted. The Communists evi-
dently have decided, after a month of action, that
the returns justified the offensive and that there is
a good chance they can change the course of the
war decisively through continued military action.
Hanoi's increasing confidence in its military
prospects almost certainly helps to account for
the recent hardening in its public line on nego-
tiations. Premier Pham Van Dong, for instance,
left the strong impression with a French
SECRET
WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
bhuxh,1'
newspaperman on 3 May that North Vietnam
would continue the war even if the bombing
stopped and President Thieu resigned. He also
characterized the Viet Cong's seven-point pro-
posal and the elaboration of last February as
"indivisible in their parts and timing," clearly
indicating that Hanoi would not be willing to
negotiate any part of the package separately.
The Viet Cong's press chief in Paris, who has
been one of the most vociferous spokesman for
Hanoi's hard negotiating line in recent weeks, has
told a group of Vietnamese residents that the
Communists would be willing to consider a cease-
fire only if Thieu's resignation was accompanied
by sweeping administrative changes in Saigon. He
also asserted that the Viet Cong are now seeking a
"political and military victory" encompassing
both the removal of Thieu and the defeat of
Vietnamization; these, he said, "are now insep-
arable."
Most Communist spokesmen have avoided
linking progress in negotiations so explicitly to a
complete administrative overhaul in Saigon, but
Hanoi's leaders may well have decided that, in
view of the initial progress of Communist forces
on the battlefield, they have no need to soft-pedal
their maximum demands.
Page 10
SECRET
Vang Pao, at left, at Long Tieng
WEEKLY SUMMARY 12 May 72
In Laos, Vang Pao is moving quickly to take
advantage of the withdrawal of many Communist
units from the area southwest of the Plaine des
Jarres. Irregulars moving north from Skyline
Ridge have reoccupied Sam Thong, the former
refugee center six miles from Long Tieng that has
been in Communist hands since mid-March.
Enemy units apparently abandoned defensive po-
sitions around Sam Thong, and the irregulars had
little difficulty in occupying the town. A smaller
irregular force skirted Sam Thong earlier in the
week, briefly occupied Ban Na and found that
Tha Tam Bleung, on the new Communist road to
the Plaine, was unoccupied. Another of Vang
Pao's units is along a ridge leading toward Phou
Pha Sai, a strategic high point overlooking the
southern Plaine.
Some North Vietnamese units remain near
Skyline Ridge to screen the general withdrawal,
and some enemy artillery pieces remain within
range of Long Tieng. These enemy forces will
probably continue to repulse any irregular effort
to cut the route back to the Plaine before the
Communist withdrawal is complete.
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
PHNOM*
PENH
CAMBODIA NeakLuong Communist
Phnom Penh's vulnerability to hit-and-run
Communist raids was demonstrated anew on 6
May when a number of government installations
were shelled or attacked by small sapper teams.
The Communists did relatively little damage to
their principal targets, the Monivong bridge and
the Ministry of Defense building, but civilian cas-
ualties were higher than in previous attacks on the
city. It is likely that the attackers were mainly
Vietnamese Communists from the 44th Sapper
and 96th Artillery regiments, aided by some local
Khmer Communist troops.
The scope of the raids and their proximity
to the heart of the city were cause for fresh
concern in Phnom Penh, and additional steps have
been taken to reorganize the capital's defenses.
The attacks may have been designed to erode
public confidence in the Lon Nol government and
to keep large numbers of government troops tied
down in the capital region. If so, the Communists
have achieved some success, because the govern-
ment subsequently recalled several battalions
from areas west of the city and a brigade that had
been assigned to the operation to reopen Route 1
from Neak Luong eastward to Svay Rieng town.
That operation was stalled in its opening phase by
the Communists, and the Cambodians reportedly
have no plans to resume it. For the time being,
they apparently are content to carry out limited
SECRET
clearing operations near Neak Luong and to cling
to Svay Rieng, their only remaining outpost on
the highway.
With little prospect of regaining control of
the principal land route to South Vietnam, the
Cambodians are now also losing ground farther
south in Kampot Province. The Communists there
followed up their recent capture of Kompong
Trach by taking a 35-mile stretch of Route 16,
and by 9 May had driven the Cambodians out of
the small towns of Tuk Meas, Tram Sasar, and
Tani. These actions were probably undertaken in
order to facilitate the movement of supplies
southward to the South Vietnam border.
As is the case on Route 1, the government to
date has shown no disposition to try to regain the
initiative in Kampot. Indeed, since the Chenla II
operation on Route 6 was smashed by the Com-
munists late last year, the Cambodian Army
leadership seems to have adopted an increasingly
defensive strategy. This timidity can clearly be
seen in the Cambodians' failure to take advantage
of the movement of a number of Vietnamese
Communist main force units into South Vietnam
by launching operations into contested areas of
the countryside.
Page 11 WEEKLY SUMMARY
12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
China in 1972 seems headed for a third
consecutive year of rapid growth of industrial
production, featured by large increases in arma-
ments and other heavy industrial output. The rate
of over-all advance will be slower than in 1970
and 1971, because the slack in many industries
created by the Cultural Revolution has by now
been taken up and the demand for raw materials
cannot be easily satisfied. Peking's claims of vig-
orous industrial gains in the first quarter of 1972
seem generally credible; these gains indicate that
Chinese economic growth has not been signifi-
Percentage
Increase
Jan-Mar 72
Jan-May 71
over
over
Jan-Mar 71
Jan-May 70
Heilungkiang
6.1
n.r.
Kirin
13.5
15.7
Liaoning
11.1
15.4
Hopeh
10.5
n.r.
Hunan
8
14
Shansi
13
15.7*
Shantung
15+
n.r.
Chekiang
12.6
15.6
Kiangsi
16+
n. r.
Kwangsi
18.42
20.8
Szechwan
20
30+
Yunnan
22.9
n.r.
Shensi
26.1
18
Kansu
14.9
n.r.
City
Shanghai
6
18.7
Peking
9.7
25
Tientsin
14.4
11.4
n.r. - not reported
*Jan-Jun 71 over Jan-Jun 70
cantly impeded by the continuing political
struggle within the top leadership.
In the last two weeks, Peking has announced
percentage increases in the gross value of indus-
trial production for the first three months of
1972 compared with the same period in 1971 for
17 of China's 29 provincial-level administrative
units-comprising most of the major industrial
areas. In most cases, the increases claimed for the
first five months of 1971 are much greater than
the claims for early 1972.
Relatively moderate increases were claimed
for established industrial areas-Heilungkiang,
Kirin, and Liaoning provinces in the northeast
and the three special municipalities of Peking,
Tientsin, and Shanghai. In contrast, high growth
rates were claimed for Szechwan, Yunnan, and
Shensi provinces-inland areas that are receiving
large allocations of capital investment for indus-
trial and armaments production.
In addition to these provincial claims, Peking
has released percentages for nationwide output in
one key branch of industry-steel. Output of iron
ore was said to be up 13.5 percent in the first
quarter; pig iron, 18.5 percent; crude steel, 15.6
percent; and rolled steel, 19 percent. Here again,
the rate of advance, while substantial, is generally
lower than suggested by last year's claims for
steel. The generally smaller gains in 1972 may
reflect a slowdown in local iron and steel plant
programs and possibly production difficulties at
the Wu-han and Pao-t'ou iron and steel plants-
the only large plants not singled out for fulfilling
output plans. The relatively large increase in
rolled steel output narrows the gap between the
output of crude steel and more finished prod-
SECRET
Page 12 WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
SECRET
JAPAN-USSR: SIGNS OF FLEXIBILITY
The Soviets have begun suggesting to the
Japanese that Moscow is prepared to make con-
cessions on the "Northern Territories," the
islands seized by the USSR at the end of World
War 11. The Japanese want them back as a condi-
tion for signing a peace treaty. The Kremlin now
appears to be seriously considering settlement of
the dispute, although a final decision has not been
reached.
In Tokyo last January, Foreign Minister
Gromyko avoided serious discussion of the terri-
torial issue. He merely acknowledged that it was
"one of the problems" involved in negotiating a
peace treaty. Subsequently, Soviet officials have
gone further, saying that the subject is under
discussion in Moscow or that a compromise is
possible. Although the Soviet media have been
silent on the issue, lecturers have been telling the
Soviet public that the issue will be discussed in
peace treaty talks.
Some Russians have hinted that Moscow
might renew an old offer to return the two minor
islands, Habomai and Shikotan. Other Russians
have talked of returning all four.
SECRET
Page 13 WEEKLY SUMMARY
12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
SECRET
Soviet signs of flexibility on this key issue
are in part designed to create a positive atmos-
phere for peace treaty talks, which are likely to
begin later in the year. Moscow may also want to
encourage Japan to think of reciprocal conces-
sions. Foreign Minister Fukuda has already sug-
gested that Japan would consider demilitarization
of the islands. In settling the dispute, Moscow will
doubtless try to drive a hard bargain; it would
probably like an agreement to include a demili-
tarization provision as well as additional Japanese
concessions such as a firm financial commitment
to Siberian development.
Meanwhile, Moscow's hesitant flirtation with
Japan has been proceeding in other areas. A Jap-
anese technical team is now in the USSR to
examine the feasibility of a billion-dollar invest-
ment in the Tyumen oil pipeline across Siberia.
Although this is the first time Moscow has per-
mitted the Japanese access to the Tyumen oil
field, the ever-suspicious Soviets have talked of
confining the "inspection" to a helicopter over-
flight. Moscow and Tokyo last month completed
their annual discussions on fishery problems. The
USSR took a tough stand, and the contentious
question of Japanese fishing rights in Soviet
waters was not resolved. Such dealings indicate
that Moscow's drive for better relations with
Tokyo has yet to be translated into significant
economic concessions.
INDONESIA'S SECOND CHANCE
Western aid donors, impressed by Indo-
nesia's continued economic progress, have
pledged a record amount of aid this year. About
$725 million in loans and grants, $97 million
more than last year and $55 million more than
Djakarta had originally requested, has been com-
mitted for the fiscal year that began on 1 April.
The US will remain the major donor, prom-
ising $203 million, followed by Japan with $185
million, and the World Bank group with about
$145 million. These three together account for
almost three fourths of the total aid committed.
In contrast to previous years, the major part of
the assistance-about $400 million-is for project
aid, with the remainder slated for food, commodi-
ties, and other non-project items.
Djakarta's success in stabilizing the economy
is largely the result of foreign aid and the policies
pursued by the government. Inflation is now
under control: prices rose by less than three per-
cent during 1971 compared with about 650 per-
cent in 1966, when inflation was at its worst.
Aid commitments of more than $2.5 billion
since 1966 (excluding the recent pledges), declin-
ing trade deficits, and the rescheduling of foreign
debts have brought about significant improve-
ment in the balance of payments. New foreign
investment totals more than $1.5 billion since
1967, and all indications point to a continued
favorable investment climate. The rapid develop-
ment of the country's petroleum resources has
been a particularly bright spot. Oil now accounts
for more than 60 percent of Indonesia's export
earnings, and this portion is expected to increase.
Problems remain, particularly in agriculture,
which still is the most important segment of the
economy. Agricultural production has stagnated
during the past decade, and, as a result, the
country's per capita gross national product re-
mains one of the world's lowest. The exceedingly
high population density of Java, the largest island,
has continued to cause social and economic prob-
SECRET
Page 14 WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
GERMAN ECONOMY TURNS THE CORNER
Business and banking circles in West
Germany are persuaded that the economic down-
swing has bottomed out and that an earlier-than-
anticipated revival is under way. The leading eco-
nomic research institutes now project a 2.5 per-
cent rise this year in real gross national product,
compared with their forecast last fall of no more
than one percent. The revised estimate is roughly
in line with the official government estimate.
The upward revision reflects positive signs in
a number of key activities. Industrial production
and construction were stronger than expected
during the first quarter of 1972. Their relatively
good showing is attributable in part to the un-
usually mild winter and to the resumption of
production in the important metal-working indus-
tries following highly disruptive strikes last
November and December. A renewed rise in the
index of new orders booked by industry suggests,
however, that the improvement is more basic.
Especially encouraging to German businessmen is
the growth in export orders, which provides some
reassurance that the competitive strength of Ger-
man goods has not seriously deteriorated in the
wake of last year's revaluation of the mark.
With business activity during the first
quarter of 1972 holding up better than expected,
umemployment has remained far below the level
reached during the 1966-67 recession. The num-
ber of jobless declined from a high of 375,000 in
January to 231,000 in April, or less than one
percent of the labor force. During the same
period, the number of foreign workers increased
by about 100,000 to a near record of more than
2.2 million.
Despite some recent easing, inflationary
pressures remain strong. A continued rise in the
cost of services has partly offset a substantial
deceleration in the price rise of industrial goods.
As a result, the cost-of-living index last month
was still up 5.1 percent from April 1971. This
compares with the 5.8 percent increase for the
year between December 1970 and 1971.
Ironically, the improved business outlook is
likely to aggravate, rather than ease Bonn's
domestic political problems. Economics and
Finance Minister Schiller had counted on con-
tinued slack in private demand to reduce in-
flationary pressures further and, equally im-
portant, to justify implementation of his con-
tingency budget. But the contingency budget,
which would have permitted realization of at least
some of the government's long-promised social
and economic reforms, already has fallen victim
to rising private demand. Moreover, Schiller's
regular budget proposals for 1972 have been at-
tacked as fueling inflationary fires. In fact, it was
a vote on the budget that brought Brandt his first
parliamentary defeat as chancellor. Once the
treaty issue is resolved satisfactorily, inflation and
the government's alleged mismanagement of the
economy are certain to become the principal
issues in the next parliamentary election cam-
paign.
SECRET
Page 15 WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
SECRET
After less than a year in office, Icelandic
leaders appear to have retreated from their pre-
election advocacy of complete withdrawal of all
US forces from the Keflavik NATO base. The
present, more moderate attitude is due largely to
US efforts to acquaint them with the important
role the base plays in Western defense strategy.
During Secretary Rogers' visit to Reykjavik
last week, Foreign Minister Agustsson implied
that his government's position had modified a
great deal. He stopped short, however, of guaran-
teeing that all troops could remain. Agustsson
said that Iceland would remain in NATO and
honor its commitment, which includes the base at
Keflavik. Nevertheless, Agustsson added, Iceland
had joined NATO with the condition that no
foreign troops be stationed in Iceland during
times of peace. Admitting that it was difficult to
define "times of peace," the foreign minister said
his government was studying the question. It
would not, in any case, be able to undertake
negotiations on bases until the fishing-limits issue
is out of the way. Iceland intends to extend its
fishing limits to 50 miles offshore on 1 Sep-
tember.
The present center-left coalition has only a
two-vote margin, and this severely limits how far
it can go on the base issue. Its acceptance of US
funds to build a crosswind runway at Keflavik,
for example, nearly caused the coalition to break
up when the Communist Labor Alliance, a coali-
tion partner, objected to the US assistance. The
Labor Alliance can be expected to stand against
any subsequent bilateral agreement on the base
that falls short of complete withdrawal. Despite
the deep division on the runway issue, the Alli-
ance declined to pull out of the government,
claiming that its position regarding the runway
Foreign Minister Agustsson greets Secretary Rogers.
SECRET
Page 16 WEEKLY SUMMARY
12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
funding was well known before the coalition was
formed. The Communists could use the same ex-
cuse for staying in after losing a decision on the
base, but they would seriously damage their credi-
bility.
The Progressive Party could offer conces-
sions to keep the Labor Alliance from defecting.
Recognition of Hanoi, which would place Iceland
in step with the other Scandinavian countries, and
support for East Germany in world organizations
might temper Communist reaction to a decision
to let US troops stay. If the government were to
collapse as a result of a decision keeping US
troops on the base, the most likely successor
would be a more pro-American coalition includ-
ing the right-wing Independent Party and the So-
Representatives of OPEC and Western oil
companies this week held a second round of nego-
tiations on participation by OPEC's members in
the companies' operations within the members'
borders. Even though OPEC's hand may have
been strengthened by reports that Japan intends
to negotiate with that organization for the direct
purchase of oil, the complexity of the participa-
tion issue makes it unlikely that even a frame-
work for an agreement can be reached before the
next scheduled OPEC ministerial meeting in June.
Libya and Nigeria, which have recently accepted
settlements to offset losses caused by devaluation
of the US dollar, are only now turning their full
attention to the participation issue.
Saudi oil minister Yamani is representing the
Persian Gulf members of OPEC in this round of
discussions. The talks have centered on the timing
of 20-percent participation by OPEC members
and on the method of determining compensation
for the companies' assets. Since individual coun-
try-company agreements will have to be ham-
mered out after a general framework is estab-
lished, it is unlikely that any participation will be
implemented before the beginning of next year.
Japan's proposal to buy directly from OPEC
probably will be submitted to that organization
later this month. Although the plan would give
Japan more control over its oil supplies, Tokyo in
turn would be required to develop research organ-
izations and finance the construction of new oil
facilities, roads, and harbors in OPEC countries.
Even if Japan is able to bypass the Western oil
companies, which will be difficult because of
their deep involvement in Japan's oil industry,
Tokyo initially will purchase only a small part of
its petroleum needs directly.
The agreements Libya and Nigeria reached
with the oil companies for an 8.49-percent in-
crease in the posted price of crude oil to offset
dollar devaluation is the same settlement reached
in January by the Persian Gulf members of OPEC.
Libya's agreement, which is retroactive to 20
January, should yield about $170 million in ad-
ditional revenue this ear
In Venezuela, meanwhile, government con-
cern over a potential revenue shortfall resulting
from the depressed level of oil production evi-
dently is deepening now that the general election
campaign is in its early stages. To avoid the poli-25X1
tical embarrassment of budget stringencies, the
government has been urging the oil companies to
accelerate tax pa ments.
SECRET
Page 17 WEEKLY SUMMARY
12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
President Sadat's tour of North African
states from 4 to 10 May produced little beyond
continuation of his efforts to solidify the Arab
front.
During a joint three-day visit to Algeria with
Libya's President Qadhafi, the rhetoric was
standard. The main themes were Arab unity and
the Palestinian cause. Even on these emotional
issues, however, the public remarks of Sadat and
Boumediene were relatively restrained and prob-
ably disappointed the more fiery Qadhafi. The
final communique was muted; the usual Arab
issues were raised, the promises of action were
limited and vague. Moreover, specific criticism of
the US was restricted to passing remarks about
American "aggression" in Indochina.
Sadat did manage to become the first Egyp-
tian chief of state to visit Tunisia. While there, he
was exposed to a strong dose of Bourguiba's
"logic and realism" regarding the Arab-Israeli con-
flict. The Tunisian President registered his
skepticism concerning the "efficacy of con-
ventional warfare to solve problems," a remark,
according to the US Embassy, that took some of
the wind out of Sadat's sails. Nevertheless, the
Egyptian chief of state quickly returned to fa-
miliar themes regarding the inevitability of war
and the unhelpful US role in the Middle East. The
final communique in Tunis was dominated by
Tunisia's moderate views. It included an appeal,
launched by Bourguiba and accepted by Sadat,
calling for US-USSR intervention in the Middle
East before the situation deteriorates further.
Following a stop in Libya, Sadat returned to
Cairo with little to show his people. The fact that
Egyptian military leaders accompanied Sadat has
raised some speculation that closer military co-
operation was one of the topics discussed in pri-
vate, and the Cairo media can be expected to play
up this vision. The swing through North Africa
was the peripatetic Sadat's latest move in a wide-
ranging effort to create the impression of greater
Arab solidarity in the face of continued Israeli
"aggression." Sadat's peregrinations are also in-
tended in part to provide a divertissement for the
Egyptian people, who are becoming a bit dis-
pleased over his failure to produce any movement
at all in the Arab-Israeli stalemate.
SECRET
Page 18 WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
hardly respond because of the vagueness of the bid.
fashion to his proposal and that he expects more formal responses. The Israelis have told
the US that they view this initiative as a non-starter and that they can, in any case,
AT THE UN
The flurry of activity at the UN regarding the Middle East situation ended abruptly
last week, and special envoy Gunnar Jarring returned to his duties as Swedish ambas-
sador to the USSR. His mission remains at an impasse, and neither he nor Secretary
General Waldheim expects any movement until after the Moscow summit. Waldheim,
however, now appears more inclined to push his own concept of a Middle East peace
conference under UN auspices. He claims that neither side has reacted in a negative
SECRET
Page 19 WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
SEGRE'1'
THE YEMENS: MORE MACHINATIONS
Sana, has been touted for leadership in the exiles'
National Unity Front organization or as a par-
ticipant in a government-in-exile.
is the rowing involvement of Libya's Prime Min-
ister Qadhafi.
I he newest wrinkle in the tortuous affair
h
Qadhafi told the prime minister of
ana
e was prepared to support Sana against
Aden with arms and money-which, incidentally,
have not yet materialized. The only condition laid
down by Qadhafi was that Abd al-Qawi Makkawi,
an exiled Adeni political figure, be given an active
role in anti-Adeni planning. Makkawi, now in
onan.an? BAHRAIN
QATAR
UNITED ARAB
EMIRATES
YEMEN YEMEN
(Sana) (Aden)
'S.-
SECRET
Page 20
WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
Prime Minister Qadhafi's offer of aid to Sana
and his alleged sponsorship of Makkawi are prob-
ably motivated by a desire to eliminate what he
considers the Communist-atheist government in
Aden, reduce Saudi influence in Sana, and en-
courage his own brand of Islamic socialism in the
two Yemens. Saudi Arabia has not yet reacted,
but King Faysal is not apt to look with favor on a
Libyan role in peninsular affairs.
25X6
The task of welding the ideologically diverse
and chronically disputatious exiles into a unified
military and political organization will be dif-
ficult, if not impossible. Efforts have been under
way in the past several weeks in Sana to refurbish
the National Unity Front-the nearly impotent
umbrella organization of exiles-and to select an
over-all political leader. Despite threats by the
Saudis to withhold funds, conservative tribal ele-
ments in the National Unity Front have refused
thus far to cooperate with what they describe as
the "political" component of the Front-largely
defectors from the ruling political organization in
Yemen Aden .
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
In the parliamentary elections completed
last week, the traditional politicians, who have
dominated parliament and whose success depends
on regional, clan, and religious ties, were returned
in large numbers. A few leftists were elected, and
the relatively large leftist vote should serve as a
warning that public patience with the system's
inability to cope with economic and social prob-
lems is wearing thin.
Lebanon's most prominent leftist, Kamal
Jumblatt, was re-elected along with many of his
supporters. They had the undivided support of
the Druze religious community. In parliament, he
will continue to serve as the rallying point for
anti-regime criticism, especially if, as in the past,
the traditional politicians are unable to submerge
their personal rivalries long enough to enact
needed reforms.
At the same time, the center bloc of dep-
uties, the main source of President Franjiyah's
support in parliament, has been greatly strength-
ened as a result of the elections. Consequently,
the government should find it much easier to
push its programs through parliament. Tempo-
rarily, at least, nearly all factions will cooperate
with the government in the hope of getting some
representation in the new post-election cabinet.
The biggest losers in the elections were the
right-wing Maronite Christians, in general, and
former president Chamoun, in particular. Al-
though he himself was re-elected, all but one of
his running mates were soundly defeated by
Jumblatt's supporters.
The elections were no more violent than in
the past and were for the first time almost totally
free from government interference. Foreign inter-
ference was also considerably less than in the
past, primarily because the new leaders of Egypt
and Syria seem less inclined to use Lebanon as an
arena for pan-Arab ideological struggles. The
fedayeen, apparently fearing government re-
prisals, generally remained aloof.)
Prime Minister - designate Suat Urguplu has
not yet named his government, and there is no
indication when he will be able to do so. Desig-
nated on 29 April to form a new government,
Urguplu ran into problems almost immediately
when he tried to tie the timing of national elec-
tions to the implementation of reforms. Urguplu
may also wait for the leadership and policy direc-
tion of the Republic Peoples Party to be re-estab-
lished following the power struggle now under
way between the leftists and moderates in the
party. The chief of the party, Ismet Inonu, re-
signed on 8 May after suffering a sharp defeat at
the hands of the party's leftist faction. The party,
which had been led by Inonu for 34 years, was
left in disarray.
Meanwhile, the caretaker government,
headed by Minister of Defense and acting Prime
Minister Ferit Melen, is carrying on the daily
business of government. Parliament is meeting as
usual and passing legislation, including a law in-
tended to discourage members of the armed
forces from involving themselves in politics. The
new land reform bill, introduced by Melen shortly
after he became acting prime minister, is under
committee consideration.
25X1
The acts of violence that surrounded the
execution on 6 May of three terrorist leaders
appear to have subsided for the time being.n
Should
terrorism increase again and Urguplu remain un-
able to form a government, the military's suf-
ferance of a civilian-run government may come to
SECRET
Page 21 WEEKLY SUMMARY
12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
SECRET
BURUNDI: ALL OVER, BUT-
The government has bloodily suppressed a
terrorist insurrection in southern Burundi after
two weeks of intense fighting although isolated
pockets of resistance remain. Chances for an early
return to political stability are slim, however.
The insurrection involved about 1,000 Hutu
dissidents; some of them took part in an abortive
attempt to overthrow the Tutsi-dominated gov-
ernment in 1965. The dissidents, armed mainly
with machetes and mystical powers, laid waste
large areas of southern Burundi before being over-
come by the army and local militia. As many as
15,000 refugees are reported to be in Tanzania
and several thousand more may have fled to
Zaire. An international relief effort is under way,
but so far has been unable to meet the refugees'
needs.
Through widespread arrests among Hutu
government officials, the government has accumu-
lated what it considers irrefutable evidence that
the insurrection was a planned attempt to spark a
general uprising by the Hutu majority against the
Tutsi-run government. The US Embassy estimates
that better than 100 of these officials have now
been executed. Although the government has not
captured all the rebel leaders, it suspects a former
SECRET
Page 22 WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
SECRET
commandant of the gendarmerie who fled to
Rwanda in 1965 of being a major figure. Another
suspect, a former economics minister relieved of
his portfolio in a cabinet shuffle early last year,
has been killed, according to the army. President
Micombero is convinced that the dissidents were
supported and trained by Chinese and North
Korean agents in Tanzania. We have no evidence
that this is so, and the Chinese almost certainly
have had no hand in the affair.
Political recovery from the violence is likely
to be slow. Micombero still has not formed a new
cabinet to replace the one he hastily dismissed on
Only about 20 percent of the $500 million
in emergency relief pledged to the Bangladesh
Government for this year has been delivered. So
far, about 600,000 tons of food have arrived-
well below the UN target. Clogged limited ports,
harbor facilities, a lack of storage space, and in-
adequate internal transport have impeded distri-
bution. Receipts of food and other supplies may
increase as the ports return to normal, but tor-
rential rains this month and into the fall will
make distribution difficult. Relief commitments
continue to grow and are only about $60 million
short of the UN goal for 1972. India and the US
have assumed the major share, and most of the
current supplies come from these two sources.
Most of the USSR's $10 million in relief--about 2
percent of the total-has already been delivered.
In spite of Moscow's poor showing in relief,
it leads in offering development assistance. Some
$42 million for industrial installations and geo-
logic exploration have been re-allocated from
credits extended to Pakistan before the creation
of Bangladesh. The Soviet commitment accounts
for about half the total. Development assistance
cannot be implemented on any large scale, how-
ever, until emergency assistance becomes more
effective and transport problems ease
29 April, at the time the violence broke out. The
main targets in the cabinet dismissals were the
powerful ministers of justice, foreign affairs, and
information, whose growing influence Micombero
was moving to curb. These ministers-leaders of a
radical faction within the government-have con-
sistently advocated a harsh stand against the
Hutus. The violence of the past weeks may
generate wide support for their position. In any
case, Micombero faces an extended period of
factional infighting within the governing Tutsi 25X1
oligarchy before he can form a cohesive cabinet
and return a degree of political stability to the
country.
SECRET
Page 23 WEEKLY SUMMARY
12 May 72
16 12 11 10
Sweden Norway Japan USSR
i= I
Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
SECRET
Diverging interpretations of the proper role
of the church in society have led to further
trouble between the Catholic hierarchy and the
military-backed government. Bishop Lorscheiter,
the secretary general of the National Council of
Brazilian Bishops, reportedly believes that the
administration, with the specific approval of Pres-
ident Medici, is waging a systematic campaign to
prevent the church from conducting any of the
civic or pastoral functions called for under recent
papal directives. The bishop believes that the cur-
rent difficulties of a French-born priest, Father
Francois Jentel, will convince many prelates that
this is so.
The Brazilian press reported in early March
that 50 settlers, led by Father Jentel, had at-
tacked and wounded several policemen in a village
in largely undeveloped Mato Grosso State. The
priest denied participating in the battle and
placed responsibility for the incident on a gov-
ernment-sponsored land development company
that was trying to evict the settlers from their
land. He accused the local police of corruption
and of aiding the land company to invade proper-
ties and burn homes. The cleric also charged that
powerful economic interests had bought off fed-
eral officials who came to investigate the situa-
tion. He said the only solution to the problem
was a thoroughgoing agrarian reform program,
which the government has the capability-but not
the will-to carry out.
Government and military officials, on the
other hand, view Father Jentel as a dangerous
agitator. On 19 April, a federal police official told
Bishop Lorscheiter that the government intended
to expel the priest from Brazil. Many of Father
Jentel's colleagues would regard such a move as
totally unjustified; his immediate superior has
warned the press that the police are hunting down
the cleric to expel him "for his heroic service to
Indians and settlers." Father Jentel apparently
has gone underground, probably with the assist-
ance of other Catholic clergymen.
Even before this issue came up, church-state
relations were at a low point. Among the other
current sources of friction are the four to eight
months' delay before the government grants visas
to foreign missionaries, and the outright refusal to
permit the entry of some foreign clergymen. A
series of discussions between certain government
officials and Catholic prelates and laymen have
yielded nothing. Indeed, the meetings reportedly
have deteriorated into acrimonious exchanges of
charge and counter-charge between the two sides.
Although both the administration and the
Catholic hierarchy would really like to avoid
confrontation, the Jentel case shows how a
seemingly minor incident can grow into a serious
problem. Each new incident tests the restraint of
the two sides, and the time may come when those
counseling moderation will not prevail.
SECRET
Page 24 WEEKLY SUMMARY
12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
SECRET
URUGUAY: BORDABERRY UNDER FIRE
Despite reports that President Bordaberry
enjoys the full cooperation of major opposition
leader Wilson Ferreira, Bordaberry may be losing
the legislative initiative to the Blanco chief.
Senator Ferreira, whose coalition controls
two thirds of the Blanco congressional seats, has
supported the government's state of internal war,
which is due to expire on 15 May. Ferreira has
indicated that his continued cooperation depends
on Bordaberry's moving against rightist terrorist
groups. To underline the point, Ferreira sided
with the leftist Frente Amplio to suspend several
of the President's emergency powers in the last
two months. Although Bordaberry received con-
gressional approval for a temporary suspension of
some constitutional guarantees to deal with ter-
rorist violence, the government was forced to
release approximately 150 prisoners last week in
compliance with a legislative ruling on how long
suspects may be held. Again, Ferreira sided with
the Frente.
Ferreira's ability to play the pivotal role in
major issues has prevented the Frente Amplio
from moving effectively to discredit the adminis-
tration and the Blancos. While individual Frente
Amplio senators have succeeded in occasionally
embarrassing the administration on the issue of
counter-terrorism, the leftist coalition has been
unable to develop a unified strategy. This failure
can be attributed in part to internal dissension
produced by the efforts of non-Communist
leaders such as Zelmar Michelini and Enrique Erro
to form their own blocs within the Frente. In
addition, Frente spokesmen are divided regarding
continued association with the Tupamaros. While
the coalition has avoided defining its stand on the
terrorist issue, since the recent violence several
Frente leaders, including defeated presidential
candidate Liber Seregni, have sought to dissociate
themselves from the Tupamaros by publicly
denouncing terrorism. Because of these splits
within the organization, Frente spokesmen have
Page 25
not been as forceful critics of the administration
as Ferreira.
Although Bordaberry is showing more
political skill than many expected, he will have to
move decisively and skillfully if he is not to lose
out completely in policy matters to Ferreira-
especially if the senator agrees to come into the
administration. Ferreira rejected an earlier pres-
idential offer to participate in the administration.
Bordaberry has continued to press for Blanco
cooperation, and Ferreira may change his
Former dictator Marcos Perez Jimenez is
emerging slowly but steadily as a serious pres-
idential candidate for 1973. Despite a widespread
belief that he is too much the coward to leave
golden exile in Madrid and face the security
hazards of a personal campaign, Perez says he will
do so and plans to travel to Caracas later this
month to sign the electoral register. His failure to
attend to this technicality laid the basis for the
Supreme Court annulment in 1969 of his election
to the senate.
Late last month, over 400 supporters from
the myriad political groups claiming to be "his"
party met with Perez to seek unity and set the
groundwork for a coordinated campaign. Wily as
ever, Perez encouraged all but made no real com-
mitments.
In Venezuela, which Perez ruled for ten
years until his ouster in 1958, his unsavory record
seems largely forgotten-one of many signs that
the electorate is disenchanted with things as they
are. Recent surveys confirm indications that large
SECRET
WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927A009500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
blocs of votes are there for the taking by a new
face or someone from outside the establishment.
Only 11 percent of a group polled early this year
claimed to belong to a party, and these affilia-
tions were diffused among many groups. The high
portion of uncommitted voters clearly is fertile
political ground for Perez, whose supporters have
already used to good effect the slogan, "Thirteen
years of democracy: Had enough?"
With a showman's timing, Perez plans to be
in Venezuela on 22 May, his mother's birthday,
to visit her grave and remind the Perez-watchers
that she died while he was in prison and that the
then-governing Democratic Action party denied
him a visit during her last days. Moreover, he may
arrive in the country about the same time as his
archenemy, Democratic Action leader and former
president Romulo Betancourt, who himself is re-
turning from voluntary exile to take political
25X1 soundings for 1973.
The findings of the observer sent by the
OAS to British Honduras this week will mark the
closing episode of the recent flare-up involving
Guatemala's territorial claim to the colony. The
territorial dispute has not, of course, been solved,
but an unspoken moratorium on the issue seems
likely to maintain the peace.
Fear of a military incident arising from the
build-up of troops by the Guatemalans in the
Peten region adjacent to the colony and by the
British across the border had all but dissolved by
the end of April as the antagonists concentrated
on the OAS. An OAS observer was finally dis-
patched to determine the number of British
troops now in the colony. The Guatemalans had
claimed the British had moved in twice the 600
actually in British Honduras.
The Guatemalans, who judge they did well
in the confrontation, will try to give the im-
pression that the lower troop count resulted from
their initiative. They have already painted the
OAS vote to send an observer as a show of
solidarity with them against the few English-
speaking Caribbean states openly advocating self-
determination for British Honduras. In truth, the
vote was in the long OAS tradition of useful
ambiguity with only four states fully supporting
Guatemala's position that territorial integrity
supersedes self-determination, the rest groping for
some way to get the adversaries back to the
negotiating table. For all their ostensible faith in
the Hispanic fraternity, the Guatemalans prob-
ably have come to recognize that their territorial
aspirations will never be realized through the OAS
mechanism.
All sides have expressed hope that talks can
be reinstituted, but negotiations are likely to be
more symbolic than serious. The threat of a mili-
tary engagement brought a clearer appreciation of
the territorial situation to the three parties, and a
fresh standoff has been achieved. Both the British
and the British Hondurans know more certainly
that peace for an independent British Honduras
requires some arrangement with Guatemala. The
Guatemalans have at the very least secured tacit
assurance from the British that independence will
not be granted soon. Although a few Guatemalan
hawks undoubtedly had hoped that the in-
cumbent right-wing government in Guatemala
would be the one finally to oust the British from
Guatemala's "lost territory," President Arana
clearly wishes, like his predecessors, to pass the
problem along.
Minor strains continue because the Guate-
malan Army is still holding exercises in the Peten
region, but the seasonal rains this month should
remove this last obstacle to tran uilit .
SECRET
Page 26 WEEKLY SUMMARY
12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
SECRET
The Soviet ballistic missile submarine has
left the Bay of Nipe following a week-long visit to
Cuba. Accompanied by a Soviet destroyer that
has been in Cuba since 5 March, the G-II - class
diesel submarine entered the Atlantic early last
weekend, apparently en route to home waters.
During the entire time it was in Cuba, this
submarine-the first ballistic missile unit to visit
HAVANA
Mariel
Cienfuegos
any foreign port-remained moored alongside a
Soviet submarine tender in the Bay of Nipe.
The destroyer and the submarine were on a
northeasterly heading northeast of the Dominican
Republic on 11 May. Their departure reduces the
number of Soviet combatants in Cuba to one, an
F-class diesel attack submarine in Mariel. The
submarine tender moved to Santiago on Cuba's
southern shore after the G-ll left the Bay of Nipe.
Antilla' / Bay of NiPe
Santiago
de CubA.
Fidel Castro was warmly received in Guinea,
Sierra Leone, and Algeria, the first stops on an
extensive barnstorming tour that will take him to
most of Eastern Europe and eventually the USSR.
Castro arrived in Guinea, the center of
Havana's activities in sub-Saharan Africa, on 3
May and promptly launched into a speech aimed
at developing the parallel between Cuba and
Guinea as young, revolutionary, and anti-
imperialist nations. The Cuban leader assured a
mesmerized audience that the Guinean people
^
Guantanamo
could count unconditionally on Cuban support.
Following a side trip to call on President Stevens
of Sierra Leone, with which Cuba recently estab-
lished diplomatic relations, Castro arrived in
Algeria on 8 May for a ten-day stay. The Algerian
Government shares much of Cuba's political
ideology, especially concerning liberation move-
ments, but there is no evidence of joint support
to any subversive group.
So far, Castro has been circumspect in his
remarks, but this could change if he sees his visit
being upstaged by events elsewhere.
SECRET
Page
27 WEEKLY SUMMARY 12 May 72
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 25X1 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
 Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2
Secret
Secret
Approved For Release 2008/07/07: CIA-RDP79-00927AO09500070001-2