WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009600060001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 53
• Document Creation Date: December 20, 2016
• Sequence Number: 1
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
State Dept. review completed
Secret
30 June 1972
No. 0376/72
Copy N! 47
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COSVN, the Communist command in south-
errn South Vietnam, has ordered further offensive
::action on the military and political fronts, pos-
sibly in the belief that negotiations with the allies
may be in the offing.
be-
ginning sometime in June, Communist cadre in
;:he COSVN area were briefed on new directives
calling for strenuous efforts to seize territory,
(lain control over more people, undermine pacifi-
cation, and defeat the South Vietnamese Army.
all these victories
were to be achieved by Sep tember 1972 in order
'to ne otiate a political settlement and cease-
ire Communist brief-
ers acknowledged that their side would have to
make some concessions during any negotiations.
the
removal ot President hieu and the over row of
This line has cropped up only in the COSVN
urea; Communist spokesmen elsewhere continue
to assert the standard Communist position, al-
though their formulations have been extremely
va ue for months-
I he directives may be designed, as has some-
-:imes been the case in the past, to get one more
all-out military effort from Communist cadres by
holding out the prospect of a cessation of the war
after certain battlefield objectives are achieved.
[he briefings seem to go beyond such a purpose,
however. The reference to so sensitive a topic as a
possible Communist compromise on the con-
inued existence of the Thieu government sug-
gests that the Vietnamese Communists believe
I:here is a chance of extensive negotiations with
the allies in the not too distant future.
Communists feel a need to proceed with negotia-
tions before the US presidential elections, al-
though none implies that they think the need is
the
so pressing that a settlement must be achieved at
all costs by then. 25X1
cadres were told that President Nixon "must 25X1
beorced to change his policy and to accept a
political settlement to end the war during the
period from July to November 1972," ~ 25X1
the enemy will take advantage 25X1
of any cease-fire to prepare for future efforts to
"liberate" the South. Even though these state-
ments are partly rhetorical, they make it clear
that the Communists will be maintaining their
military pressure over the short run and that they
will be doing their best to keep open their mili-
tary options even if negotiations should get under
way.
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4F1ORTRR,,
VIETh)
Demilitarized Zone
a Quang Tri
~ou~4a r
My Chanh defensive line
..~-. '., -,....J ue
i '
THAILAN.~,_ .., A.
T48ldIF~s';
SECRET
BINH
DINH
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South Vietnamese Marine and Airborne
units launched a counteroffensive in Quang Tri
Province on 28 June designed to retake the pro-
vincial capital and at least portions of the prov-
ince. Two marine and two airborne brigades are
involved in the operation; the marines advancing
up the eastern side of Route 1 and the airborne
up the western side. Although enemy units are
resisting the government's advance, the counter-
offensive has proceeded largely as planned. Ini-
tially, the Communists have lost several tanks and
a number of artillery weapons.
The offensive follows a week of increased
enemy activity in northern Military Region 1. The
Communists have conducted heavy artillery and
ground attacks against government positions
north and west of Hue, attempting several times
late last week to breach the defensive line along
the My Chanh River. The attacks were repulsed,
but heavy shelling has continued along the north-
ern front. Farther south and closer to Hue, the
Communists are also conducting intensive artil-
lery attacks, sometimes accompanied by ground
assaults.
These attacks have poured daily totals of
about 1,000 rounds on government bases, show
no signs of abating, and are probably designed to
soften Hue's defenses. Indeed, the city's defenses,
particularly on the west, have been weakened by
the new government thrust into Quang Tri. One
airborne brigade and two army regiments have
replaced the marine and airborne brigades en-
gaged in the counteroffensive, but the redeploy-
ments leave Hue more vulnerable to a move from
western Thua Thien Province, a major logistics
area and headquarters for several enemy regi-
ments.
The military situation elsewhere in South
Vietnam is essentially unchanged. Fighting in
Kontum Province continues to center around the
blocked Kontum Pass and a government-con-
structed bypass; Phu My District town in Binh
Dinh Province on the coast is still subject to
harassment; and An Loc is under moderate shell-
ing, while the road south remains blocked at
several points.
Thieu Wins Emergency Powers
President Thieu finally gained legislative ap-
proval for his emergency powers bill this week
after a long and bitter struggle in the National
Assembly. The process seems certain to leave the
pro-government and opposition camps more di-
vided than before. Twenty-six pro-government
senators in the 60-seat Upper House passed the
measure unanimously in a controversial evening
session after the opposition and independent
blocs, including Senate Chairman Huyen, had left
the chamber. Huyen and other opponents of the
bill are charging that the session was illegal. They
may take-their case to the Supreme Court, but it
is unlikely that the court will overturn the legis-
lation.
The bill gives Thieu authority to rule by
decree in the fields of defense, security, and the
economy for a six-month period. In practice,
however, it adds little to his powers. The Pres-
ident plans to implement some new tax measures,
but he already has taken most of the actions he
deems necessary to deal with the military crisis
under his martial law authority.
Hanoi has begun to pelt the home audience
as well as its allies abroad with dire statements
about the threat of US bombing attacks on the
country's dike system. Recent articles in the
party newspaper call on the people to prepare "to
cope effectively with the flash floods" and warn
of the need for more extensive civil defense plan-
ning as a hedge against US attacks on a variety of
targets, including the dikes and dams. One com-
mentary concedes that the alleged US bombing of
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MORE WORK
ON THE PIPELINE 25X1
Work on the petroleum piPE25X1
line linking North Vietnam and
China has continued at a rapid
pace. Aerial photography
Oshows that an additional 41
miles of pipeline have been con-
structed between Dong Dang and
Kep in the past week. If North
Vietnam maintains the current
rate of construction, the pipeline
could be finished by early July.
When operational, the line will
provide the North Vietnamese
with an easy-to-repair means of
transporting petroleum from the
Chinese border to the Demili-
tarized Zone and into the Laotian
Panhandle.
25X1
such targets has not yet caused floods, but cau-
tions that any further step-up in the air attacks
could make breaks in the dikes "unavoidable."
Up to now, Hanoi has concentrated most of
this outpouring on the international audience in
the hope of generating sympathy abroad and
building pressure against an increase in the bomb-
ing. The new emphasis on preparing the home
front for the worst, however, suggests that the
posturing is not just for effect. There is no way to
gauge what impact the prospect of widespread
flooding might have on Hanoi's political deci-
sions, but there is little doubt that the leadership
now views the danger as a real one and is urging
the people to make contingency plans.
The government's rainy season offensive in
south Laos suffered its first setback last week
when three of the four irregular battalions at-
tempting to clear Communist units on the west-
ern edge of the Bolovens Plateau were dispersed
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by elements of the 9th North Vietnamese Regi-
ment. The government battalions are now re-
grouping and appear to have suffered only minor
casualties, but the setback has further impaired
the morale of the troops, many of whom are in
poor health after nearly two months in the field.
The offensive is going better in the Khong
Sedone area, but the irregulars are having trouble
securing the town. Elementsof the 39th North
Vietnamese Regiment are dug into the west and
Communist artillery strikes are still coming in
from east of the Se Done River. Three fresh Lao
Army battalions plus some artillery and heavy
weapons units moved into the town on 23 June
to reinforce the irregular battalions already there.
Sisouk to Stay?
The latest word from Vientiane is that Prime
Minister Souvanna has decided not to bow to
pressure from right-wing politicians; he will retain
Sisouk as finance minister in a new cabinet. The
right wingers, led by members of the Sananikone
family, are still scheming to oust Sisouk, but
Souvanna has moved to undermine their support
in the National Assembly. Late last week, the
cabinet reduced customs duties on milk, sugar,
and flour, and increased meat imports. These
adjustments should alleviate shortages of these
basic commodities and reduce the discontent the
Sananikones have been attempting to exploit.
Souvanna also agreed to submit the financial
transfer tax to the assembly for approval. His
critics in the assembly had argued that they did
not object to the fee itself, but believed that as a
"tax" it should have received legislative approval.
The Sananikones may raise a ruckus in the
assembly if Souvanna's new cabinet is not much
changed from the current one, but they almost
certainly do not have the votes to force a change.
Only a few days ago, Souvanna had been reluc-
tant to force such a confrontation. He may now
believe, however, that he has made enough con-
cessions so that the Sananikones can save face and
that anything more would be interpreted as a sign
of weakness by his critics, who would then chal-
lenge him on other issues.
With the monsoon putting a damper on an
already desultory war, Cambodians continue to
be preoccupied with politics. With the presi-
dential election out of the way, and the recrim-
inations and Monday morning quarterbacking
behind them, Cambodian politicos are now busy
organizing political parties in preparation for
September's legislative elections. At least five, and
perhaps as many as a dozen, parties may put
forward candidates for seats in the new National
Assembly.
The principal opposition parties are Sirik
Matak's recently formed Republican Party, a
resurrected Democratic Party headed by defeated
presidential candidate In Tam, and the Socialist
Party led by a leftist banking official. Stories are
circulating in Phnom Penh that the pro-Commu-
nist Pracheachon (People's) Party-which Si-
hanouk put out of business a decade ago-may
also be revived and registered. This seems un-
likely, however, since the Communists almost cer-
tainly would not want to help put the stamp of
legitimacy on the Lon Nol regime by participating
in a national election.
On the government side, the Socio-Repub-
lican Party is still the only political organization
that is clearly associated with Lon Nol. It is being
guided by Colonel Lon Non and First Minister
Son Ngoc Thanh. Several other pro - Lon Nol
parties are expected to surface soon, however,
including a Socio-Nationalist Party consisting
chiefly of teachers, and an as-yet-unnamed Khmer
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Krom party. These parties probably will be used
by the government to siphon off support from
the Republican and Democratic parties. In addi-
tion, these parties probably will also join Lon
Nol's latest political brainchild, a "national united
front." The President has announced that he
would head this movement, which would be
represented throughout the country by commit-
tees from the province level down to the hamlet.
At this point, it is questionable if any of the
nominally anti-government parties will rally to
Lon Nol's front. It is already being unfavorably
compared with the Sangkum-the political party
cum fraternal organization that Sihanouk used to
neutralize his opponents. One of Sirik Matak's
supporters claims that Matak wants no part of the
front, and Matak has widened the distance be-
tween himself and Lon Nol by giving up his
military titles and duties. The only formal link
Matak now has with the government is his largely
honorific position of "special adviser" to the
President.
Foreign Exchange Difficulties
Extraordinary demand for foreign exchange
fed by rumors of an imminent cease-fire and the
possible demise of the Exchange Support Fund
compelled the national bank on 26 June to sus-
pend trading in currencies. The suspension came
after a substantial devaluation of the riel failed to
stem demand for foreign exchange on the part of
importers.
Some of the measures proposed to deal with
the foreign-exchange crisis could seriously damage
the stabilization program introduced in 1971.
Government officials have demanded that foreign-
exchange sales be limited to purchases from an
officially approved list of commodities.
Lon Nol personally, and apparently for
political reasons, lowered the exchange rate for
travelers-a move that contravenes both the spirit
and substance of the stabilization program.
The demand for foreign exchange may wane
in the coming days if it becomes clear that the
prospective foreign donors intend to make good
on their commitments to the fund, and if the
expectation of an immediate end to the war
proves to be misplaced. In any case, the national
bank governor has been urged not to accept the
new proposals as final until the International
Monetary Fund has been consulted. Keeping the
stabilization reforms intact is critical to mini-
mizing the expansionary effect of this year's
budget deficit, which is now expected to be some-
what larger than projected.
The anniversary of the outbreak of the
Korean war on 25 June is usually an occasion for
nasty propaganda exchanges between the two
Koreas. This year, however, the anniversary
occurred against the backdrop of efforts by both
sides to resolve some of the residual human mis-
ery left over from the war, and the level of vitriol
is noticeably down.
On 16 June, North and South Korean Red
Cross delegates ended nine months of tedious
negotiations, setting the stage for formal talks in
the respective capitals sometime this summer on
uniting families divided by the conflict. Although
focused on humanitarian considerations, this
move is a significant break in the frozen relations
between the two Koreas and was occasioned
chiefly by international political considerations.
Both Seoul and Pyongyang have felt it in their
interests to cast off the image of cold war
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Adversaries and get in step with the spirit of
accommodation prevalent among the major pow-
;.rrs. In acceding to the Red Cross negotiations,
however, both sides are endeavoring to protect
and further their respective political interests.
North Korea has pressed Seoul to expand
the Red Cross discussions into full-scale political
negotiations, a strategy given new impetus by
Premier Kim II-sung's recent interviews with US
and Japanese correspondents. Pyongyang hopes
That an expanded dialogue with Seoul will speed
up US withdrawal from South Korea, undermine
the rationale for UN involvement in Korea, and
eventually open up South Korea for expanded
North Korean subversive activity. Pyongyang's
pronouncements on the occasion of the war
anniversary, in fact, focused almost exclusively on
the necessity for an end to the US presence.
Seoul has remained cautious in its dealings
with the North, fearing that any rapid movement
Could weaken its international position and end
the US presence. The South Koreans are par-
Iicularly concerned about the domestic impact of
broader dealings with the North. Although Pres-
ident Pak has on occasion publicly raised the
possibility that the Red Cross talks could lead to
greater contact with Pyongyang, he has continued
to hammer away on the theme that the nation
roust be prepared morally and militarily to deal
with a hostile and aggressive North Korean re-
rlime. These points were again spelled out in his
address to the nation on 25 June, indicating that
while Seoul will continue to explore the possi-
bility of contacts with the North, rapid progress
cannot be expected.
Peking has apparently concluded a series of
central committee meetings that began in late
May. An unusually large leadership turnout on 24
June seemed designed to convey a message of
VIM
unity and stability-a notion that was reinforced
on 28 June when Mao I se-tunq reappeared after
an absence of several months.
The evidence pointing to central committee
meetings is fairly convincing. Most provincial
leaders have been out of sight since mid-May.
Moreover, the Chinese ambassador to France---a
central committee member-postponed his sched-
uled return to Paris, and Premier Chou En-lai
unexpectedly failed to appear at the Afghanistan
National Day reception on 27 May. In addition to
the normally ubiquitous Chou En-lai, many active
central leaders also have failed to appear on occa-
sions that would usually require their presence.
An official of the press section of the Ministry of
Foreign Affairs has stated that these absences
were caused by a series of high-level meetings that
were not related to Mao I se-tung's health.
The leadership gathering on 24 June and its
projected image of unity is the largest politburo
turnout since the Lin Piao affair last: fall and may
indicate that at least partial agreement has finally
been reached on some of the pressing domestic
political issues. The party anniversary on .1 July
will present an opportunity to surface new leader-
ship appointments or to publicize policy initia-
tives, if the regime has indeed resolved any of the
issues.
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J Gultr. 1
Peking may be moving toward a new rela-
tionship with Hong Kong. The Crown Colony-
Victoria Island and the immediately adjacent
mainland littoral of Hong Kong Bay-was ceded
to Britain in the mid-1800s; a more extensive
hinterland area on the mainland was leased to
Britain at the end of the 19th century. This leased
area, called the new territories," is due to revert
to China in 1997, and its loss would make the
China
Macao
Macao
(Port.)
Wong Kong
(U. K.)
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Page 8 WEEKLY SUMMARY 30 Jun 72
British position in the Crown Colony, which
already is partly dependent on the mainland for
water, wholly dependent on China for both water
and food. This Damoclean sword has hung over
the colony since the Communists came to power
in 1949.
Hong Kong's entrepot trade, however, has
been China's major source of hard currency
New ;i-'terntorles
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receipts, and in the wake of the agreement last
February to raise the level of diplomatic repre-
sentation in both countries to embassy level,
Peking seems to be exploring the possibility of
defining its relationship to the colony in a new
way. In an official letter to the UN Colonialism
Committee in March, the Chinese delegation de-
scribed Hong Kong as a part of China that had
been detached under now invalid "unequal"
treaties but allowed discussion of the question to
be deferred. Admission that Hong Kong is indeed
"detached" along with the fact that no distinc-
tion was made between leased and ceded territory
and Chinese reluctance to press the issue in New
York suggest that the Chinese are prepared not to
foreclose on the "new territories" if the British at
least tacitly acknowledge that the Crown Colony
itself is still in some residual sense a part of China.
Hong Kong authorities say that the UK con-
siders the Chinese formulation an "acceptable
basis" for eventual resolution of the colony's
long-term status. They add that London's ac-
ceptance of Peking's view was indicated by its
"deafening silence" in the UN in response to the
Chinese letter. The British are probably also
pleased because the Chinese position tends to
undercut possible agitation for independence by
Hong Kong Chinese. The tacit Sino-UK agreement
that the treaties covering Hong Kong are invalid
suggests that both sides may be looking toward
their eventual renegotiation on an "equal" basis,
but on terms that would preserve British adminis-
tration of Hong Kong, and hence the present
trade arrangements, essentially intact.
In this context, Peking may have probed for
more explicit British acceptance of its position
during the recent visit to China of UK Foreign
Affairs Undersecretary Anthony Royle. The
Chinese renewed a request-first made in 1965,
before the onset of the Cultural Revolution-to
establish an undefined official presence in Hong
Kong. When Royle declined the request, they did
Victoria City and Kowloon
not press the issue, and colony officials now be-
lieve that Peking instead will further upgrade the
status of the local NCNA bureau, which recently
has taken on some quasi-official functions. British
officials in Hong Kong believe that Peking did not
expect acquiescence in the request. The British
could claim that an official Chinese presence
would be inappropriate in light of Peking's own
admission that the colony is presently "detached"
from China, but their real concern almost cer-
tainly is to prevent a division of authority in the
delicate transitional period.
For their part, the Chinese almost certainly
see advantages in working out an accommodation
with London. Renegotiation of "unequal"
treaties would set a precedent Peking could point
to in its border dispute with the Soviets. An
arrangement in which the "occupying au-
thorities" acknowledged Peking's residual sover-
eignty while continuing local administration
would also be useful as a precedent in further
shaping the Taiwan issue to the Communists'
liking.
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The Kremlin is waging a major campaign at
home to explain and defend the Moscow summit.
At the same time, it is renewing the emphasis on
internal vigilance and the continuing struggle with
imperialism.
The thrust of the propaganda offensive is a
series of ten articles written by government of-
ficials; two have appeared thus far. In the most
recent article, published in Izvestia on 22 June,
USA Institute Director Arbatov observed that the
summit documents proclaim a switch by the US
from "cold war policies" to relations of peaceful
co-existence and mutual cooperation. Moreover,
Arbatov claimed that the President's visit could
open the way toward a "serious reorientation" of
relations.
The first article appeared in Pravda on 15
June. It was written under a pseudonym probably
by Chernyakov, chief of the Foreign Ministry's
press section. He lauded the summit, but his tone
was distinctly defensive. He declared that the
"politburo does not pursue a foreign policy based
on mere ad hoc considerations or whims" and
contended that "reasonable tactical compro-
mises" made at the summit are not a sign of
"weakness or softness." The article emphasized
that Soviet leaders went to the summit despite
"direct resistance" from those "artificially fo-
menting hostility and tension."
Quite a different tone was struck in the June
issue of the journal International Life, approved
for publication on 23 May-the day after Pres-
ident Nixon arrived in Moscow-and probably
circulated in early June. In it, critics of the leader-
ship warned that US policy is characterized by an
"aggressive course" and an "excess of militarism
carrying the threat of war." The article added
that "particular zig-zags or turns" in US policy
"in no way" diminish this threat. It also cau-
tioned that underestimating the threat "can prove
fatal." The publication of a polemic so out of
step with other propaganda defending the summit
is good evidence that there are powerful elements
convinced that the USSR is compromising too
much in dealing with the US.
Alert to this opposition and aware of the
need to balance what has become a deluge of
detentist propaganda, the leadership has moved to
restore "realism." At a banquet for Fidel Castro
on 27 June, party chief Brezhnev spoke out
strongly on the need to continue the struggle
against imperialism and to maintain internal vigi-
lance. His remarks on US military actions in
Southeast Asia were especially harsh.
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This more cautious line emerged at the local
level at least two weeks ago. Party meetings ap-
proved the "peace program" and the actions of
the central committee plenum in May, but also
placed considerable emphasis on ideological and
class struggle. Arbatov told such a meeting in
Moscow on 14 June that even the best agreements
do not negate "the immutable fact" that struggle
between socialism and imperialism will continue.
The contrast between the media's praise of
the summit and the growing stress on vigilance
highlights the dilemma posed by detente to the
Kremlin-how to relax tensions abroad without
making the Soviet people more vulnerable to out-
side influence and without appearing to sacrifice
principles.
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The Soviets orbited an unmanned Soyuz
spacecraft designated Cosmos 496 on 26
June. TASS announced that Cosmos 496 was
"intended for space research under a previ-
ously announced program," but failed to
identify the vehicle as a Soyuz spacecraft.
Such a description is typical for a space oper-
ation whose real purpose the Soviets wish to
conceal.
The Cosmos 496 flight appears to be an
engineering test of the Soyuz vehicle necessi-
tated by the loss of the Soyuz 11 crew last
year. That crew was killed during the re-entry
of the spacecraft after a 24-day mission
aboard a Salyut space station.
Cosmos 496 has maneuvered this week
and probably will be de-orbited in a few days.
If its flight is successful, a manned mission
may occur during the next several weeks.
There are already indications that the Soviets
are planning a mission similar to the joint
Salyut-Soyuz operation last year.
The French news agency in Moscow re-
cently published an article claiming that a
Soviet manned mission originally planned for
May had been postponed until mid-July. The
article stated that a Salyut space station
would be orbited and that later two crews
would be shuttled to the station. According
to the report, the first two cosmonauts to
man Salyut would be replaced by another
two-man crew after 30 days.
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Although many Maltese deplored Mintoff's
bargaining tactics, and some still fear lasting
damage to Malta's relations with Britain and other
European countries, the wily prime minister man-
aged to wring $36.4 million annually out of the
NATO allies instead of the approximately $23
million initially offered. Equally important, Min-
toff stimulated national pride by asserting Malta's
determination to shed its colonial ties. His travel
in Eastern Europe, his red carpet treatment in
Peking, and the substantial number of foreign
delegations to visit Malta have been viewed as
signs of the country's increased importance and
of Mintoff's own prestige. Moreover, Malta has
gotten about $283,000 in export orders from
Eastern Europe, $45 million in economic aid
from China, and promises of bilateral aid from
various NATO countries.
Mintoff will continue to press Malta to the
forefront whenever possible. He is now attempt-
ing to gain support-with little success thus far-as
a potential mediator in the Middle East crisis.
Such efforts, even if unsuccessful, tend to draw
attention from unresolved domestic problems,
such as the general economic situation. Un-
employment remains at the highest level since
independence was granted in 1964, and Mintoff's
failure to increase wages of such key groups as the
dock workers and civil servants has caused an
increasing volume of complaints. A recession still
grips the country, the budget for 1972/73 is
austere, and the average citizen will not soon feel
the effects of the increased income generated by
the agreement with NATO.
After a year in office, Prime Minister Dom
Mintoff can point to a significant foreign policy
success in the generous defense and financial
agreement he squeezed out of the UK and its
NATO partners. Negative entries in the balance
sheet include a sluggish economy and high un-
employment. Time is on Mintoff's side, however,
and the iron discipline he imposes on his sup-
porters strengthens the possibility that he can
serve his full five-year term despite his parlia-
mentary majority of only one.
Some of the prime minister's Labor Party
supporters are disgruntled because accession to
power has not brought immediate and abundant
economic benefits, but few are willing to re-
linquish that power after well over a decade in
opposition. Perhaps more important, the Na-
tionalist Party is still floundering without a co-
herent policy or an articulate leader. If defections
occur in parliament, they are most likely to come
from dis runtled Nationalists.
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Speculation against the pound sterling trig-
gered London's decision to float the pound, but
underlying the move is serious concern over the
adverse impact of continuing inflation on
Britain's competitiveness. The immediate intent
of the float was to prevent a run-down of the
country's large foreign reserves, which stood at a
record $7.2 billion at the end of May.
Deteriorating labor-management relations-
most recently a wildcat dock strike-plus remarks
by Labor shadow chancellor Healey that devalua-
tion was imminent helped to set off the wave of
speculation against sterling. Britain's rapidly de-
clining trade balance and inflation contributed to
the uneasiness. Despite highly expansionary
budgets, the economy is not responding as ex-
pected. Although unemployment continues to fall
from the extremely high levels reached in the first
quarter, industrial production is only about two
percent above the level of a year ago. Investment
has been sluggish as investors show a lack of
confidence in the medium- to long-term prospects
for the economy. A prestigious private research
institute now projects growth in real output
through mid-1973 at an annual rate of only 3.3
percent, significantly lower than the government's
projections in March.
The extreme demands of British workers
have imposed significant costs on the economy.
Although the government claims to have kept
public-sector wage increases under nine percent,
much greater increments have recently been
granted in the government-owned coal and rail-
way industries. Over-all, British wage earnings
rose 11.5 percent during the twelve months end-
ing in April, the largest increase since July 1971.
The government was hopeful that the Industrial
Relations Act could be used to minimize work
stoppages, but the act has been ineffective in
dealing with recalcitrant labor unions.
Rising labor costs are reflected in the high
rate of inflation, which is expected to accelerate
to an annual rate of between six and seven per-
cent by 1973. Inflation contributes heavily to
erosion of the UK position in international
markets. Despite markedly higher price tags, in
part the result of the revaluation of the pound in
the Smithsonian agreement, the value of exports
in the first five months of 1972 was only five
percent greater than during the corresponding
period in 1971. Britain's imports for the same
period increased by 12 percent, with the result
that the trade balance, in strong surplus last year,
deteriorated rapidly..
The Heath government is thus confronted
with both a currency crisis and a sluggish econ-
omy. The floating of the pound alleviates the
immediate pressures in the international eco-
nomic arena, but the inflationary spiral will con-
tinue to pose problems both for international
competitiveness and domestic economic growth.
The government may be forced to consider a
wage-price freeze or an incomes olic -measures
opposed by Heath up to now.
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 Andreotti (L.) Sworn in Before President Leone (R.)
Premier Giulio Andreotti's new center gov-
ernment offers little assurance of bringing polit-
ical stability to Italy. The three-party coalition
will depend on the promised support of other
parties for its vote of confidence on 4 July, and it
has all the appearances of a temporary, caretaker
adm in'ustration.
Andreotti attempted various combinations
without success before settling on the center
-ormula. The only alternative at that stage of the
negotiations was another Christian Democrat mi-
'iority government, similar to the administration
that had ruled since February, but few politicians
seemed to favor this solution. The other parties
Wanted to share in the power and patronage, and
some Christian Democrats, including Andreotti,
thought it better they also share in any blame for
the country's economic and social woes. These
difficulties will likely intensify next fall when the
contracts for over 4 million workers are renego-
tiated..
The government's prospects are bleak, not
only because of its slender parliamentary majority
but also because of the divisions within the coali-
tion itself. Andreotti originally wanted a four-
party alliance, including the Liberals but ex-
cluding the Socialists, who have been part of the
center-left coalitions that have ruled for the past
decade. Andreotti's own Christian Democrats had
serious reservations, however, and the party
leadership's vote to form the center coalition was
won by a narrow margin. The Republicans con-
c:luded that without Christian Democrat una-
nimity the coalition was doomed and refused to
join it. They did agree, after a bitter internal
quarrel, to support the remaining three parties in
parliament.
Andreotti's task was especially difficult be-
cause he could not deal with the largest parties,
other than his own, in parliament. The Com-
munists and neo-fascists have always been ruled
out of democratic coalitions, and the Socialists
refused to participate in a government without an
understanding that the Communists be allowed to
contribute to legislative programs. Now that the
Socialists have been stung by their exclusion from
government, they may renounce this philosophy,
which they call "advanced equilibriums," at their
party congress in October. This would pre-
sumably clear the way for their entry into a new
center-left government. Should Andreotti founder
before then, however, the 'Socialists might be
tempted to consider themselves indispensable to a
stable government and therefore less willing to
compromise on their "advanced equilibriums"
thesis.
Thus, the direction of Italy's government
will depend in many ways on the Socialists' at-
titude. If they sulk because of their exclusion
from government and develop closer ties with the
Communists, they could unite the center coali-
tion as nothing else could. They probably will be
more astute and offer constructive opposition,
downplay "advanced equilibriums," and en-
courage the considerable number of sympathetic
left-wingers within the center coalition to ur e
their return to the government.\
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How strong a grip Prime Minister Jacques
Chaban-Delmas has on his position is still un-
certain despite the National Assembly's over-
whelming vote of confidence in him on 24 May.
In recent months, a number of rumors have in-
dicated that President Pompidou plans to sack
Chaban-Delmas before legislative elections are
held next spring. This speculation has recentl
intensified.
Pompidou's primary concern is to ease
strains within the ruling Gaullist coalition over
the government's leadership and policies. During
recent months, the government has been beset
with financial scandals, unfavorable publicity over
alleged irregularities in Chaban-Delmas' tax re-
turns, and the failure to win massive support for
the referendum on Common Market enlargement.
A number of coalition backbenchers, including
several Elysee advisers, believe that keeping
Chaban-Delmas as prime minister will damage the
government's election prospects.
Minister of National Education Olivier
Guichard is a prime contender for the office,
should it be vacated. Guichard is an able adminis-
trator, with close personal ties to Pompidou. Un-
like Chaban-Delmas, whose strongly asserted
views sometimes lead to conflict with Pompidou,
Guichard shares the President's concept of the
supportive role of the prime minister. He could be
counted on faithfully to implement government
programs and is popular with rank-and-file Gaul-
lists.
Pompidou can be fairly certain that Chaban-
Delmas would not try to rally coalition members
if he were dismissed. He is a loyal Gaullist and
quite possibly would continue his political life as
the leader of the Gaullists in the National As-
sembly. Chaban-Delmas, however, has strong links
with the centrists and the ability to maintain
labor peace. Bearing this in mind, Pompidou may
conclude that he still needs Chaban-Delmas and
that a less drastic cabinet overhaul would suffice.
He could give new impetus to the coalition by
bringing in an experienced politician such as
Edgar Faure, a former centrist who is a proponent
of left Gaulllism.
The agreement reached this week by leaders
of the Communist and Socialist parties on a com-
mon program for governing lends urgency to the
drive for Gaullist unity. After months of nego-
tiating, both parties finally made the concessions
necessary to reach an accord in hopes of capitaliz-
ing on the disarray in the government camp. Even
though the agreement masks deep-seated differ-
ences over key issues, it makes more credible the
opposition claim to represent a workable alterna-
tive to the Pompidou government. 25X1
The three confessional parties that form
the core of the five-party Dutch Government
will attempt to merge into a Christian Demo-
cratic party by the next national elections,
April 1975 at the latest. Even if the merger
attempt fails, it should ensure the govern-
ment's continuation for another year. The
merger effort also should stop the current
flirtation between the Catholic Party, the
largest in the government, and the Labor
Party, the major opposition party. Without
Catholic-Labor collaboration, there is no real-
istic alternative to the present government.
Facing up to this, the Labor Party may renew
its interest in forming a progressive people's
party with two other opposition groups. The
opposition politicians estimate that such a
new party could not hope for a parliamentary
majority in less than a decade, however, and
the Labor Party thus may yet decide that
coalition with the confessional parties is the
surer road to power.
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i el Aviv's air strikes on southern Lebanon
on 21 and 24 June in response to fedayeen-
instigated incidents from bases in Lebanon have
been followed by threats of new reprisals. Deputy
Prime Minister Allon on 25 June warned that
Lebanon "must understand that we will not re-
concile ourselves to the Cairo agreement, which
allows terrorists to train on Lebanese territory,
cross the border, strike at Israel, and then return
to their bases."
Tel Aviv also has hinted that it may occupy
portions of southern Lebanon if Beirut does not
move against the fedayeen. The former director
of Israeli military intelligence, Chaim Herzog, last
week described the Arqub region of southern
Lebanon, where most of the fedayeen are con-
centrated, as a no-man's land that has been aban-
doned to the commandos. Israel, said Herzog, as a
neighboring country being attacked should have
as much right in this area as others.
Developments along the Israeli-Lebanese
border parallel the situation along the Jordan
River a few years ago. As anxious as it is to see
that Israel's threats are not carried out, Lebanon,
unlike Jordan, howevet cannot move swiftly to
crush the fedayeen. Perhaps as much as one half
of Lebanon's population would not support such
a move and many Lebanese might take up arms
against the government Faced with this prospect,
the Lebanese Army is resisting an all-out show-
down with the guerrillas. Beirut therefore has
restricted itself to stop-gap measures designed to
prevent firing into Israel. Nevertheless, there have
been some minor clashes between the Lebanese
Army and the commandos. In the end, Beirut is 25X1
likely to seek an accommodation with the feda-
yeen that will survive until the next cycle of raids
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ANOTHER ARAB CONFEDERATION SUMMIT
The meetings last week at Mersa Matruh of
the confederation's presidential council, attended
by Presidents Sadat and Asad and Premier Qa-
dhafi, produced no momentous decisions. On the
contrary, preliminary reporting suggests that this
latest round of talks was more rancorous and less
productive than the first three. The leaders of
Egypt, Syria, and Libya apparently failed even to
agree on a public position regarding Israel's latest
incursions into Lebanon. One novel feature of the
bi-monthly presidential conference was the pres-
ence of Uganda's President Amin, dramatizing his
closer alignment with the Arabs.
The absence of a resolution condemning the
Israeli strikes into southern Lebanon provided
little comfort to the fedayeen, who had called
upon the heads of state to draw up "a plan to
fight." The Egyptian press treatment of the coun-
cil's "secret decisions" has been unconvincing and
has given no clues of a new plan of action to
break the Middle East log-jam.
The main business transacted at the meeting
was the establishment of a supreme court and the
passage of other non-controversial decrees, such
as the reduction of air fares between the three
states. Executive and legislative machinery had
already been set up.
Meanwhile, Egypt's southern neighbor, Su-
dan, seems more resistant than ever to joining the
confederation. President Numayri, who appeared
on the verge of adhering to the grouping when it
was formed early last year, has since disengaged
from Arab concerns. During a discussion with the
head of the US interests section last week,
Numayri frankly exposed his views of the Egyp-
tian and Libyan leaders. He described Qadhafi as
"undisciplined" and a "megalomaniac." He said
he told Qadhafi when he met with him last month
that his Wheelus evacuation speech amounted to
"a declaration of war on the world." Turning to
Egypt, Numayri said he was puzzled by Sadat's
harping on the war theme when "no one else in
Egypt" believed fighting would break out. In
spite of constant pressure from Cairo to join the
confederation, Numayri said he told both Sadat
and Qadhafi that he had sufficient problems of
his own without taking on those of the other
Arabs.
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'YEMEN (ADEN): MOUNTING PROBLEMS
Yemen (Aden), the most radical of all Arab
states, last week quietly marked the third anni-
versary of its move to the extreme left. Politically
and economically, Aden's troubles are mounting.
'The prisons are packed with opponents of the
regime and some dissidents have been killed while
"'evading arrest." The National Front, the ruling
political organization, is split between the fol-
lowers of the party secretary general, Abd al-
Fattah Ismail, and those of Salim Rubay Ali, the
country's chief executive. Ali's faction-usually
described as pro-Peking-has been in the ascend-
ancy since it won a majority of party committee
seats at the National Front Congress last March.
The Ismail faction, which is pro-Moscow, contains
many northern Yemenis. The traditional regional
rivalry is an important factor in the split.
Numerous Adenis have migrated-many to
neighboring Yemen (Sana)-because of the eco-
nomic blight that has befallen Yemen (Aden)
since 1967, when the Arab-Israeli war led to the
closure of 'the Suez Canal. In addition, the Na-
tional Front has gone further with nationalization
than any other Arab state. "Spontaneous" take-
overs by workers, probably at the behest of All,
have taken place in other economic enterprises,
including some small businesses. The workers'
committees that have developed to run the busi-
nesses have proved difficult to control, even for
government officials. Following numerous peas-
ant uprisings against large landowners, agricultural
output has declined; the government is now mov-
ing toward 'the establishment of cooperatives and
state farms. Taxes are increasing and new levies
have been imposed on all kinds of goods and
services. The once bustling city of Aden has slid
into lethargy and poverty, with an estimated one
third of its labor force unemployed.
Yemen (Aden) also finds itself in a cold war
with its neighbors, largely because of a series of
border incidents with Yemen (Sana) and Aden's
assistance to leftist rebels in Oman. King Faysal
of Saudi Arabia is committed to the destruction
of the Aden regime, but his efforts to encourage
Adeni exiles to overthrow the government have
been ineffectual. Only the Baathist regime in Iraq
regularly and openly supports Aden's domestic
and foreign policies.
With the economy stagnant, foreign aid has
become indispensable and Aden looks to the
Communist countries for the bulk of its assist-
ance. Peking is the main supplier of economic aid,
accounting for $55 million of the $106 million
extended by Communist states since 1968. The
Chinese program has proceeded slowly, with less
than ten percent drawn by the end of 1971. Work
on the main project, a highway linking three
towns, has been stepped up and is receiving sub-
stantial local publicity. Most of the remaining aid
has come from East Germany ($24 million),
Romania ($11 million), and Bulgaria ($5 million).
The USSR has extended only $11 million, chiefly
for irrigation projects and the fishing industry.
Communist military assistance has come
largely from the USSR and appears -to be gaining
momentum. Since mid-1968, Moscow has ex-
tended $27 million in military assistance, pri-
marily to preserve access to the refueling facilities
at Aden for Soviet merchant and naval ships as
well as to counter growing Chinese influence.
There are from 150 to 200 Soviet military ad-
visers in Aden, most of them providing technical
assistance to the army. More than 200 Adenis
have gone to Communist countries for military
training, including 160 aviation and naval trainees
that were sent to the USSR in 1969, one of the
largest contingents from a non-Communist coun-
try.
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The threat of increased Muslim dissidence,
including possible terrorist attacks in the capital
city, has President Tombalbaye unnerved. Given
his proclivity for irrational behavior, Tombalbaye
could resort to some action that would only ag-
gravate Chad's problems and further test the
patience of his French mentors.
Dissidence has actually been at a low level
since 1970, with most action in central and
eastern Chad. The far north remains restive, how-
ever; in early June, two more French soldiers
were killed in an ambush there. Rebel activities
usually increase with the onset of the rainy season
in July, but the government is especially con-
cerned this year. Sizable quantities of arms were
brought in from Libya last spring and the French
are phasing out their three-year counter-insur-
gency effort, leaving the renovated but untested
Chadian military in charge.
On 1 July, the Chadian General Staff as-
sumes full control of field operations. The last
French units are to be withdrawn from combat
and, after 1 September, emergency assistance by
the forces permanently based in Fort Lamy will
be given only with the approval of Paris. Logistics
support by the French Air Force is to continue
but the number of seconded field advisers will
drop by 180 to a total of 450.
Tombalbaye, a non-Muslim from the south,
is nervous about the vulnerability of Fort Lamy,
the predominantly Muslim capital, to guerrilla
attacks. One sabotage raid
was thwarted earlier this
mon
E a an icipates further attempts. Strict
security measures were temporarily imposed
along with a search for fifth-column suspects.
In the wake of the Pearce Commission's re-
port last month that most Rhodesians opposed
the independence accord worked out by the
British and Rhodesian governments, a settlement
has become even more elusive than before.
Neither London nor Salisbury, however, has ruled
out further talks. Prime Minister Smith is well
aware that Rhodesia's pressing economic prob-
lems make an accord highly desirable, but he is
not in a position to resume negotiations soon.
London, on the other hand, believes Smith must
make the next move and will probably do nothing
until he does.
With the Heath government preoccupied
with Northern Ireland and other problems closer
to home, Rhodesia has been moved to the back
burner, at least until the Conservative Party con-
ference this fall. Conflicting views over whether
to continue economic sanctions, which come up
for renewal in November, will almost certainly be
aired then. Despite suggestions in the British press
last winter that Heath disavow further responsi-
bility for Rhodesia and allow sanctions to lapse,
his government now seems certain to ask Parlia-
ment to renew the embargo for another year.
The Rhodesian economy-a big factor in
bringing Smith to the bargaining table last year-
has improved somewhat but continues to give
Salisbury cause for concern. Commercial agricul-
ture, tourism, and construction all improved by at
least 17 percent in 1971, and real income in-
creased by an impressive 10 percent. Nevertheless,
serious problems remain. Last year's balance of
payments, for example, was almost $26 million in
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~r I)ICr, 1
the red, and the economy continues to suffer
from a severe foreign-exchange shortage. In order
to replace worn-out machinery and rolling stock
as well as aging aircraft, Rhodesia needs a large
influx of foreign capital, which will come only
after a negotiated settlement. Otherwise, it must
replace these items piecemeal. Looming in the
background are the potentially explosive prob-
lems of rapid African population growth and ris-
ing African unemployment.
Smith has stated that he will make no more
concessions. Nevertheless, he has not closed the
door on further discussions with London, and this
is probably as forthcoming as he can be at this
time. As a result of the Pearce Commission's
negative report, Smith is under pressure to push
ahead with a number of racially retrogressive
policies. A past master at appeasing his right wing
while keeping his options open, Smith will prob-
ably shift to the right and wait for an opportunity
to probe London's position.
The unusual political calm of the past two
months was dramatically shattered last Sunday
when a key legislative official was assassinated in
a restaurant in front of his wife and friends in a
scene reminiscent of The Godfather. It has not
been definitely established who ordered the kill-
ing of Oliverio Castaneda, first vice president of
congress, but suspicion seems to be focused
within the government camp rather than on the
political opposition. The incident has already
raised political tensions, and is almost certain to
aggravate relations between Arana and Mario
Sandoval, president of congress and head of the
governing National Liberation Movement.
Castaneda gained prominence as head of
civilian vigilante groups in 1967-68 when he
teamed up with Arana and Sandoval to root out
Communists and guerrillas in northeastern
Guatemala. Of late, Castaneda had hitched his
star to Sandoval, who aspires to be the next
president of Guatemala. Arana does not regard
the Sandoval candidacy with favor, a view prob-
ably shared by a majority within the military. If
Sandoval begins to interpret the assassination as a
direct challenge to his presidential ambitions, a
split would be precipitated and a crisis in execu-
tive-legislative relations could ensue.
Significantly, government and National
Liberation Movement spokesmen have not ac-
cused the far left of the killing. In a press inter-
view, for example, Sandoval pointedly ignored
the suggestion that the blame might rest with the
guerrillas. There is already speculation that the
National Liberation Movement might leave the
government if the crime is not fully investigated.
Castaneda, himself, will have few mourners.
As one of the right's foremost practitioners of
political violence and a man who used his official
position to advance his own private business in-
terests, he had built an impressive and bipartisan
list of enemies. His rapid rise in party circles
antagonized older party members, while more
moderate elements within the National Liberation
Movement felt he blackened the party's already
questionable reputation. The political opposition
resented his strong-arm tactics and his ideology,
businessmen feared he was involved in extortion,
and extreme leftists considered him their fiercest 25X1
foe. Indeed, despite temporary problems,
Castaneda's passing has rid the country ( f one of
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SECKr l'
The restoration of Juan Peron"s political
rights this week coincided with his being named
its the Justicialist Party's presidential candidate
for the elections next March. The turbulent two-
day Peronist convention also coincided with an
outbreak of student violence in the provincial city
of Tucuman that by 27 June had spread from the
major interior cities to Buenos Aires.
]-he Peronist national congress held in
Buenos Aires on 25-26 June unanimously pro-
claimed the former dictator as its candidate for
president, but beyond that the representatives of
the various Peronist sectors were able to agree on
very little. The powerful labor arm of the move-
ment clashed with the political segment over the
distribution of positions on the Justicialist na-
t:ional council. Peron instructed the meeting to
divide the seats evenly among the political, youth,
workers', and women's sectors. Labor's demand
for greater representation was finally beaten
down, but the labor bosses so far are refusing to
participate in party leadership.
Youthful party activists,, however, may have
viewed the demonstrations and violence that
spread from Tucuman as an opportunity to bring
more pressure on the military government and
perhaps even to start the popular uprising that
would carry Peronism to tower.
Fhe rioting began on 23 June in the pro-
vincial city of Tucuman when police broke up
student demonstrations in support of striking
public employees. The death of a student on the
next day prompted sympathy demonstrations in
several other cities, and the local labor confedera-
tions in Tucuman and Cordoba called general
Weekly Summary Special Report, 9 June 1972
Peron's nomination was followed by an an-
nouncement that a federal court had authorized
the restoration of the old dictator's political
eights. Although all legal barriers to Peron's return
to power have now been removed, it is doubtful
that he will come back to Argentina to participate
in the electoral process. Peron and his followers
may hope that after coming this far they will be
swept into power by an irrepressible popular
surge, but Peron, political tactician that he is, is
certainly aware that the best chance of a Peronist
return to power lies in negotiating with the mili-
tary_ He also knows that the leaders of the armed
forces will never permit him to regain the presi-
dency they forced him out of 17 years ago. Thus,
the proclamation of Peron's candidacy is prob-
ably primarily intended as a holding action to
maintain some semblance of party unity and
strengthen the Peronist bargaining position.
The violence in Argentina this week was not
directly related to the Peronist convention.
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:strikes in support of the students and to protest
the high inflation and rising unemployment. By
.28 June, the sixth anniversary of the military's
seizure of power from President I Ilia, the violence
had spread to Buenos Aires. Under orders to
avoid harsh repression, the military and police
clamped tight restrictions on Buenos Aires,
,Cordoba, and other provincial cities, and ap-
parently were successful in preventing an ma or
flare-ups without creating new martyrs.
copters, and communications and other support
equipment.
Chilean military officers see both technical
and political problems in purchasing Soviet hard-
ware. Unfamiliar equipment would add to the
logistics and training problems of the services but,
with their already varied sources of supply, the
Chileans could cope with the incorporation of
Soviet equipment more easily than other forces
problem is political.
might. Some officers have been impressed with
equipment they have seen in Cuba and the USSR,
and price quotations are attractive. The greatest
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The recent visit of the navy chief to the
USSR to inspect ships obtainable under a Soviet
credit offer has again forced Chilean military
leaders to focus on the political implications of
purchasing Communist military equipment. None
of the armed services wants to become dependent
on the USSR for weaponry, but the long-har-
bored desire for modern equipment and the
dwindling supply of Western credits make the
Soviet offer tempting. This may be especially true
now because the projected needs of the armed
forces are for support equipment rather than
modern offensive weaponry.
Chile has been modernizing its military
equipment for several years, and the Soviet offer
comes at a time when some first-priority items
have already been contracted from American and
European suppliers. The navy has purchased a
reconditioned Swedish cruiser, and British ship-
yards will be delivering two guided-missile frigates
and at least two submarines over the next two
years. The air force is increasing its inventory of
subsonic Hawker Hunter jets. The army is getting
tanks from the US and other supplies from
Western Europe. Remaining needs include an oil
tanker, research vessels, air transports, heli-
to show interest only in items that would not
require a constant flow of spare parts and could
be operated without Soviet training. They can
afford to wait, and believe time is on their side.
The political implications of Soviet arms are
greatest for the army. Its need for modern equip-
ment is greatest, and it has been traditionally
closer to politics than have the other services.
While the army commander is the only service
chief not to have visited the USSR, a high-level
army mission did go to Moscow in August 1971
and army officers were part of a military dele-
gation that visited Cuba last January. Army com-
manders would like to maintain Western sources
of supply, but Chile's balance of payments prob-
lems are rapidly closing off commercial credits.
The US Foreign Military Sales program, very
important for the army, is unlikely by itself to
meet Chilean needs. The army is aware that any
serious program of acquiring Soviet materiel
would imply an expectation of continued access
to Soviet spares and acceptance of friendly
political relations with the Communist
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BRAZIL: CABINET CHANGES RUMORED
President Medici's determination to assure a
successful record during the remaining two years
of his administration, especially in providing a
tranquil political succession and substantial eco-
nomic gains, has boosted his dissatisfaction with
several members of his cabinet-including his star
performer, Finance Minister Delfim Neto.
Rumors that Medici might replace Delfim
first surfaced in April, in the aftermath of a
speech by the President calling for a change in
economic priorities. Although government offi-
cials, and Delfim himself, have tried to quash the
rumors, a resurgence of talk that Delfim was on
the way out caused another wave of uneasiness in
Brazilian financial circles last: week.
The talk about Delfim's dismissal has been
fueled by indications that the President is dissat-
isfied with progress in cutting inflation and with
the failure of large areas to obtain the benefits of
the country's over-all economic progress. Medici
has ordered his cabinet to give top priority to
these problems. Delfirn's plan to visit the im-
poverished northeast soon indicates that he has
taken the President's directives to heart, although
he continues to assert that there has been no basic
change in the priority he has given to economic
development.
The priority on economic development that
has produced Brazil's economic miracle" is so
closely identified with Delfim that rumors of his
dismissal sparked a seven percent drop in the Rio
de Janeiro stock market. For this reason, al-
though the finance minister is certainly not in-
dispensable, Medici may decide that replacing him
will cause more troubles thane it would cure.
Medici apparently views the problems of in-
flation and unequal income distribution as long-
run threats to the nation's political stability,
which has been achieved at great cost. He aims to
present his government as insuperable in eco-
nomic matters, able to deliver on its promises,
and thus avoid giving potential opponents
grounds for criticism. The President probably sees
this as necessary to maintain his :strong hand in
the selection of his successor. Although the
transfer of power does not take place until 1974,
the selection process unofficially has already
begun.
The possible replacement of Justice Minister
Alfredo Buzaid is of lesser significance. Buzaid is
reportedly not considered "enough of a poli-
tician." This probably means that Medici does not
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New Apartments in Brazilia
either of these officials is replaced, it will likely
be because the administration feels a need for
dynamic ministers who can obtain political
support for the administration.
Fidel Castro finally arrived in Moscow on 26
June, almost two months after leaving Havana on
his extensive ten-nation journey. It is his first visit
to the USSR since 1964.
The visit comes at a time when the Cuban
leader has been clearly dissatisfied with the
USSR's response to US moves in Vietnam. In all
of his speeches leading up to the Moscow visit,
Castro has called for renewed socialist unity in
the face of "US aggression." In addition, the
success of the summit conference has greatly con-
cerned him because of the possible implications
for Cuba's security.
The Soviet leaders, obviously aware of
Castro's uneasiness, have tried to reassure him.
After a warm welcoming reception at the airport,
Castro was awarded the Order of Lenin. In a
speech at a dinner in Castro's honor on 27 June,
Brezhnev pointedly accentuated continuing So-
viet support for Cuba. He also announced Soviet
readiness to increase "all around" cooperation to
new and higher levels, raising the possibility of
increased Soviet economic: assistance despite
Soviet unhappiness with Cuban management.
Although Brezhnev strongly denounced US ac-
tions in Vietnam, he also made clear Moscow's
commitment to its detente line by defending the
summit talks and their results as reflecting "the
regard him as an effective force in the effort to real state of affairs in the world." While Castro's
ensure the administration's ability to choose the fears have probably been somewhat allayed by
next president. Buzaid, along with Labor Minister the Soviet performance, conclusive evidence of
Barata, whose dismissal is also being rumored, is continued support will probably be necessary to
considered a mediocre member of the cabinet. If alleviate his concerns substantially.
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~L ASL 1
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The EC finance ministers' agreement on 26
June to uphold the Smithsonian realignment has
allayed at least temporarily the heavy speculation
against the dollar that was precipitated when
Britain floated the pound.
After the float was announced on 16 June,
European central banks had to absorb about two
billion worth of US dollars before all major Euro-
pean foreign exchange markets were forced to
close. The EC finance ministers believed, how-
ever, that the speculative surge was irrational and
that they could defend the existing fixed rates for
their currencies with strengthened capital controls
and support for the dollar. Since the EC exchange
markets reopened, the dollar has held firm, well
above central bank intervention levels.
The most difficult issue resolved by the EC
finance ministers was the preservation of the new
narrow-band system inaugurated just two months
earlier. This system limits the range for member
currencies to fluctuate to only half that provided
for in the Smithsonian agreement. Ireland and
Denmark were the only other countries of the ten
present and prospective EC members to withdraw
from the narrow-band system after the pound was
floated. Although their actions caused some in-
convenience, they did not threaten the system as
(lid the Italians, who wanted to suspend their
commitments and float the weakened lira down-
ward. As a special concession to maintain EC
solidarity, Italy was permitted to repay in dollars
whatever debts it incurs defending the lira up to
mid-July. Heavy dollar intervention has been nec-
essary to support the lira above its EC band floor.
French Foreign Minister Schumann used an-
other EC meeting to accuse Britain of bad faith in
creating monetary turmoil prior to formal entry
into the EC. Although this tone was also taken in
the French press, most reaction was more under-
standing of the British position. Some officials
even pointed out that the European agreement to
maintain narrowed bands was itself a cause of the
drain on sterling.
Britain, for its part, assured its future EC
partners that it intends to end its float as soon as
possible, hopefully at the Smithsonian fixed rate.
Some British officials have confided, however,
that the floating pound-already five percent
below its central rate-could continue for several
months. In fact, the Heath government may take
advantage of this opportunity to achieve what it
considers an essential devaluation before joining
the EC in January. The UK's current account
balance is now in surplus, but the government
feels that a deteriorating current account balance
may constitute justification for a formal devalua-
tion later this year.
The compromises worked out by the Six
show that they are extremely reluctant to appear
to be moving backwards on the monetary front.
The French will doubtless continue to argue,
however, that the new crisis shows again the need
for progress on monetary union, including forma-
tion of a separate European monetary identity,
but they may be less doctrinaire than in the past.
The German thesis that monetary union is impos-
sible without substantial economic policy har-
monization has been given new support by the
British action. On balance, the crisis may inject a
new realism into the planning both for monetary
and economic union, and may also reduce the
propaganda value of the issue in the political
tug-of-war over the scheduled summit meeting of
the Ten in the fall.
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SLUKt1'
The acrimonious 1971-72 COCOM List Re-
view discussions ended recently in Paris with
many important items left unresolved. The List
Review, a periodic exercise to examine the level
of Western strategic embargo controls, followed
its usual pattern. At the insistence of the other
members, a number of items were deleted; on
others, the embargo was relaxed.
The COCOM embargo list consists of about
150 general categories of items. These items are
divided into three lists: International List I, which
embargoes items that have dual civilian and mili-
tary use; the International Atomic Energy List;
and the International Munitions List. The List
Review resulted in minor deletions from the
Atomic Energy List and the Munitions List. Most
pressure for relaxation was directed against List I
items, which account for the bulk of potential
sales to Communist countries. Most other
COCOM countries believe these dual-use items no
longer should be embargoed. A number of ma-
chine tools were eliminated from List I. The
embargo definitions for a vast majority of the
remaining items were relaxed.
COCOM was unable to agree on about a
dozen major categories. Outstanding items in-
clude: computers, semiconductor production
equipment, communications equipment, and
computer-run machine-tool systems. During the
review, the split between the US and its COCOM
partners focused particularly on the easing of
restrictions on communications equipment. The
UK walked out in protest during one of the
sessions, declaring that liberalization was one of
the touchstones of success of the review. As pres-
sures mount for increased Western trade with the
Soviet Bloc and China, the fact that most Euro-
pean allies support substantial relaxation of the
embargo forecasts increased friction in discussions
on the pending items and future reviews. Typi-
cally, the US is attempting to maintain strict
controls over these items-mainly sophisticated
electronics-while most other member nations are
pressing for liberalization. Over the past few
years, export of this type equipment constituted
the major area of disagreement. Communist coun-
tries have been anxious to obtain advanced elec-
tronics from the West, and most COCOM mem-
bers have been anxious to supply them. The US,
however, has opposed or delayed a number of
major deals.
Another contentious issue faced in the re-
cent List Review was the China Differential. The
differential, establishing stricter controls on
exports of strategic goods to China than to the
USSR and Eastern Europe, was imposed on about
45 items during the 1968-69 List Review. During
the 1971-72 List Review, the Japanese were par-
tially successful in reducing drastically the China
Differential. The United States and several other
member nations pressed for retention of the dif-
ferential on several key items, and they succeeded
in securing a de facto differential on presses,
rolling mills, and wind tunnels. These items now
include end use controls that the Chinese prob-
ably will not accept; therefore, they will not be
able to import these items. Three other differ-
ential items remain unresolved. The China Dif-
ferential was abandoned for the remaining 40 or
so items.
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Secret
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`'W Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Chinese Aid in the Third World
Secret
N?_ 47
30 June 1972
No. 0376/72A
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Chinese Aid
in the Third World
Pakistan Burundi
Tanzania Burma
Somalia Ceylon
Yemen Afghanistan
Ethiopia Zambia
Guinea Chile
Sudan Mali
Nepal Rwanda....
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SECKE I ,
China moved from the isolation of the Cul-
tural Revolution in 1969 to recoup its diplomatic
losses and compete for major power influence.
The Chinese economic aid program in the Third
World was revived after being stagnant, in terms
of new commitments, for some five years. Chi-
nese aid commitments of nearly $1.6 billion in
the past two years have more than doubled
Peking's previous total. Aid allocations thus far in
1972 maintain the pace of the previous two years,
indicating the priority given to economic aid di-
plomacy. Military aid, although totaling only an
estimated $440 million, has become important
for some recipients.
Peking has at the same time sought to re-
move the subversive taint many Third World
countries associated with Chinese aid. Ideological
rhetoric has given way to the pragmatic considera-
tion of expanding Chinese influence. Peking real-
izes that its earlier tactics, such as aiding dissident
groups seeking to overthrow the host government,
impede normal state-to-state relations. Peking is
making compromises with monarchies and mili-
tary juntas and is courting non-revolutionary re-
gimes in Ethiopia, Iran, Kuwait, and Turkey. The
Chinese have even warmed to the Numayri regime
in Sudan, which decimated the Sudanese Com-
munists in mid-1971.
Economic Aid Step-Up
Some 60 percent of the nearly $2.6 billion
worth of aid extended under Peking's 16-year-old
program has been committed during the past two
and a half years. During this period aid has been
extended to 27 countries, many of them new
recipients.
Of the peak extensions of nearly $710 mil-
lion in 1970, about 60 percent was allocated for
the Tan-Zam Railroad while some $200 million
went to Pakistan. About one fifth of the $553
million extended in 1971 went to Somalia alone.
Peking also revived $57 million of unused credits
to Burma and extended an additional $24-million
commodity credit in an effort to normalize rela-
tions with Rangoon. Last year also saw China's
first economic aid commitments to Chile, Ethi-
opia, Iraq, Peru, and Sierra Leone.
Special Report
The pace has quickened this year with nearly
$305 million already extended to ten countries.
Burundi, Guyana, Malta, Mauritius, and Rwanda,
accepting their first Chinese aid, received almost
half. The largest Chinese credit to a Latin Amer-
ican country also was recorded this year when
$65 million was committed to Chile.
About 40 percent of Chinese aid has been
allocated for the construction of railroads and
roads. More than $400 million has been extended
for the Tan-Zam Railroad, the largest single Com-
munist financial commitment for an aid project in
a less developed country. The Chinese also have
built roads in Nepal, Pakistan, Yemen (Aden),
and Yemen (Sana), and others are scheduled for
Somalia and Sudan.
A third of total Chinese aid has been in the
form of commodities and foreign exchange, con-
trasting with less than five percent of Soviet aid
devoted to these purposes. China has committed
at least $160 million in hard currency, of which
almost $60 million has been supplied since early
in 1970.
Light industrial projects such as textile,
plywood, paper, food processing, and agricultural
implement plants, which are simple to operate
and maintain and require a minimum of imported
raw materials, account for about 15 percent of
Chinese aid. The only heavy industrial project
under China's foreign aid program is a machine-
building complex and foundry-forge plant in
Pakistan. The balance of Peking's aid has been for
agricultural and multipurpose projects, sports
stadiums, conference halls, schools, hospitals,
theaters, and hotels.
The repayment terms of Chinese aid are al-
most unbeatable among world assistance offers.
All credits are extended without interest and are
repayable in goods over ten to 30 years after
grace periods of five to ten years. The Tan-Zam
railroad agreement, for example, calls for repay-
ment over 30 years beginning in 1983. The
lengthy repayment periods are intended to ensure
that the projects financed by the credits will pay
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Chinese -aided textile factory in Yemen (Sana).
for themselves. Projects usually are scheduled for
full-scale operation long before repayments fall
due.
The Chinese characteristically flood their aid
projects with their own personnel, including
semi-skilled as well as skilled workers. This has
speeded construction of Chinese projects, because
it avoids many labor problems encountered under
Western and Soviet programs which depend on
local workers to perform all but the highly skilled
and professional tasks. The number of Chinese
technicians in less developed countries has grown
from 25 in 1957 to some 20,000. More than 90
percent are in Africa.
Despite this growth, the number employed
has fluctuated sharply and has been determined
largely by the demands of a few labor-intensive
Special Report
construction projects. The 1,000 working on the
Sana - Al Hudaydah road in 1961 represented
more than 70 percent of all Chinese technicians
abroad at that time. During the mid-1960s large
numbers were used to construct a road in Nepal
and several plants in Guinea and Mali. The num-
ber of technicians abroad increased fivefold from
1968 to 1971 as work on the Tan-Zam Railroad
accelerated. By mid-1972, an estimated 15,000
Chinese were in Tanzania and Zambia, nearly
three fourths of all Chinese in the less developed
countries.
The presence of Chinese technicians costs
the host country little. Peking pays all of the
foreign exchange costs, such as transportation and
salaries. This contrasts with Soviet and most West-
ern aid programs, which usually require hard cur-
rency repayment for technical services. China asks
only that the recipients pay room and board and
other local costs, and these usually are covered by
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SLC:KI I
Chinese Economic Aid Extended 1956-June 1972
Europe
2% (44) Latin America
1 5% (115)
Africa
49% (1,265)
Tanzania (256)
Zambia (218)
Somalia (132)
Algeria (92)
Ethiopia (84)
Sudan (82)
Guinea (79)
Other (322)
Pakistan (352)
Sri Lanka (87)
[Ceylon]
Other (140)
South Asia
22% (579)
Special Report
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Chinese technician in Guinea teaches operation of Chinese
machinery.
commodity imports under the Chinese credit.
Furthermore, Peking requires its technicians to
live at the same standard as their local counter-
parts, keeping expenditures to a minimum.
Military Aid-Small but Selective
Military assistance has played a compara-
tively small role in the Chinese aid program. Only
about $440 million has been provided since 1956.
Most of this has gone to legitimate governments
and only a negligible amount to revolutionary
movements. About $300 million went to Pakistan
and nearly $40 million to Tanzania, the only
countries which have developed some dependence
on Chinese arms.
Pakistan, apparently concerned over its de-
pendence on US arms, began seeking an arms aid
relationship with Peking in 1965 even before that
year's Indo-Pakistani war, during which the US
Special Report
Local and Chinese personnel work on Tan-Zam Railroad.
halted its arms shipments. During the war, Pak-
istan negotiated an agreement
million worth of arms-
The following
year China provided an additional military aid
grant of $42 million. Through 1971 several other
pacts totaling $130 million were concluded.
By mid-1972, China had delivered an esti-
mated $200 million worth of military equipment
to Islamabad. Ground force materiel included 750
medium tanks, about 700 artillery pieces and
anti-aircraft guns, more than 50,000 small arms,
ammunition, communications and other support
equipment, and spare parts. The Pakistani Air
Force received about 165 MIG-19 jet fighters, at
least four IL-28 jet light bombers, and various jet
trainers. Chinese-supplied equipment currently
accounts for about half of Pakistan's air and
ground force inventories.
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MIG-19 supplied by Chinese to Pakistan.
China has also become Tanzania's chief
source of military aid. Peking has delivered light
tanks, patrol boats, landing craft, anti-aircraft
guns, and large quantities of small arms and other
military-related equipment. In addition, it has
constructed an arms repair facility and a police
training school.
Chinese Military Aid to
Less Developed Countries
1956 - June 1972
Million US $
Pakistan
300
Tanzania
3S
I ndonesia
21
Cambodia
14
Ceylon
F6
Congo
3
Syria
2
Guinea
2
Burundi
2
Sudan
2
Not including Algeria, Ghana, Iraq, Mali,
Sierra Leone, Uganda, and Zambia. Military aid
has been provided to these countries, but there is
no information on its magnitude. However, the
Total is not believed to be significant.
Special Report
Dar es Salaam's decision to unify its main-
land and Zanzibar armed forces and to place the
servicing of its military establishment largely in
the hands of the Chinese apparently was made
early in 1969. Within a year, Canadian and Soviet
programs were pushed out. The number of Chi-
nese military advisers and technicians rose from
220 in 1969 to an estimated 735 in 1971.
Advisers are attached to infantry, artillery, logis-
tic, and communications units of the Tanzanian
Peoples Defense Force on the mainland, and some
are training Tanzania's newly authorized Peoples
Militia. Chinese engineers also are supervising con-
struction of a naval facility at Dar es Salaam,
scheduled for completion this year. In addition,
almost 350 Tanzanians have gone to China for
one to two years of naval training, half of whom
have returned.
China also is developing an air defense sys-
tem for Tanzania, including the construction of
an airfield some 90 miles from Dar es Salaam.
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About 240 air force trainees are undergoing two
Years of training in China; at least 20 are pilots
and the rest presumably are support personnel.
An undisclosed number of jet fighters will be
;provided after the airfield and training are com-
aleted this year.
Two new military aid clients already have
been added this year-Burundi and Sudan. The
Sudan, looking for a way to eliminate its depend-
ence on Soviet arms, is receiving MIG-17 jet
fighters and tanks, and China is to train Sudanese
in the use and maintenance of Soviet-built ground
forces equipment. The agreement with Burundi
provides for Chinese assistance for the construc-
tion of military barracks and probably the supply
of some engineering equipment and small arms.
Foreign aid will continue to serve as a key
instrument of Peking's policy in Third World
Chinese-built cigarette factory in Mali.
Special Report
countries. Aid in each case has reflected the gen-
eral warming of relations between China and the
recipient and has most often followed diplomatic
recognition. It has been China's means of estab-
lishing a presence in many Third World countries
and promises to remain the most effective tool
for expanding Chinese influence in these coun-
tries.
New aid commitments are likely to fluctuate
with political considerations and new opportuni-
ties, but over the next few years, are likely to
remain at a high level. Chinese programs will
continue to emphasize labor-intensive projects,
and are expected to continue to focus on Black
Africa, where Peking can meet aid requirements
and effectively challenge Soviet and Western in-
fluence. While the emphasis remains on Africa,
more Chinese economic and military aid may
flow to Asia, the Middle Last, and Latin America,
but in those areas it is not likely to be as great as
Soviet aid.
(See chart on reverse)
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Chinese Economic Aid to Less Developed Countries,
Extended and Drawn
Million US $
2,500
Extt
1956 Drawn
400 600 800
Million US $
Special Report
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Secret
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DIRECTORATE OF
INTELLIGENCE
Secret
25X1
WEEKLY SUMMARY
Special Report
Zaire: Mobutu c "Return to Authenticity"
Secret
N2 47
30 June 1972
No. 0376/72B
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New Zaire flag unfurled.
he exhibits the confidence of a leader who knows
what he wants and is determined to get it.
"Return to Authenticity"
In his nearly seven years as president, Mo-
butu Sese Seko has given Zaire a degree of inter-
nal security, political stability, and economic
prosperity that is remarkable considering the
turmoil that followed independence in 1960.
Nevertheless, he has only begun the massive task
of transforming his country into a modern na-
tional state. To reach this goal, Mobutu is pro-
moting a philosophy he calls "the return to
authenticity," which he hopes will spark a sense
of national identity among Zaire's disparate tribal
and regional interests. The organization charged
with taking this philosophy to the people is the
Popular Movement of the Revolution, Zaire's off i-
cial political party.
Mobutu's success depends on his ability to
transform the party-still basically a fledgling
organization-into a mass movement capable of
mobilizing grass-roots support for the govern-
ment. Against this transformation he will have to
balance the demands of an erratic economy
largely dependent upon the fluctuating interna-
tional copper market, restiveness within the mil-
itary based on the justifiable belief that Mobutu is
turning away from the army as a base of political
strength, and disquiet in the countryside stem-
ming from inadequate development and admin-
istrative inefficiency. Despite these obstacles,
Mobutu controls the levers of power in Zaire, and
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"...authenticity entails the rediscovery of our dignity
as Zairians. This dignity compels us to be proud of
belonging to the Zairian nation, proud of our cultural
heritage, and proud of our personality. "
Mobutu Sese Seko, May 1972
Mobutu bases his philosophy of authenticity
on the premise that African nations must depend
upon traditional institutions which, at least for
Zaire, are no less democratic and certainly more
applicable than the Western democratic institu-
tions imposed by colonialism. In place of the
Western political concept of inter-party competi-
tion and the loyal opposition, which Mobutu con-
siders divisive, he offers the African tradition of
dialogue and cooperation carried out under one
chief (Mobutu) and within a single national move-
ment (the party). Mobutu's philosophy basically
is a reworking of a standard theme in African
nationalism that Mobutu is picking up a decade or
so after it came into vogue.
On 27 October 1971, Mobutu formally
launched his campaign to Africanize the symbols
of Zaire's national identity; he changed the coun-
try's name from the Democratic Republic of the
Congo to the Republic of Zaire and renamed the
Congo River to conform with the new country
name. Copper-rich Katanga Province became
Shaba, the Swahili word for copper. At his direc-
tion, a redesigned national flag was unfurled on
24 November, the sixth anniversary of his seizure
of power, and a new national anthem was intro-
duced the following month.
He accompanied these changes with legisla-
tive action designed to assert Zaire's cultural in-
dependence and give his government broader
controls over national institutions and resources.
The National Assembly, Zaire's unicameral legisla-
ture, passed a revised national property law giving
the government the right to repossess conces-
sioned lands inadequately developed. The assem-
bly also gave the government powers to regulate
religious establishments and set up a commission
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to revise the Belgian-inherited civil code to bring
it more in line with customary law. The assembly
also issued a regulation requiring all Zairians to
adopt African names and making it easier for a
person of mixed parentage to become a citizen.
In justifying these steps, Mobutu urged
Zairians to revive their national identity and free
themselves from the social and political connota-
tions of their colonial past. In addition to per-
sonal name changes, he ordered that all colonial
street and place names be Africanized and that all
pre-independence monuments be removed to
museums. Mobutu set an example by adopting
the African names of Sese Seko, which reflect
both his own image of himself and the one he
wishes to project. Sese means "earth" and Seko,
his grandfather's name, means "unconquerable
warrior."
Mobutu's actions were not greeted with
enthusiasm. Senior politicians and army officers
resented Mobutu's failure to consult with them
beforehand, particularly on the issue of renaming
the country. Many observers, in Zaire and abroad,
noted gleefully that the word Zaire originated
with the Portuguese and is also the name of a
district in the neighboring Portuguese province of
Angola and thus connotive of colonialism. Com-
mercial interests, particularly in Kinshasa and
Shaba, were disturbed over the expense that the
changes would entail. Some members of the po-
litical community accused Mobutu of creating a
side show in order to divert attention from the
declining economy, as he may well have had in
mind.
Authenticity and the Party
Pr?rhaps the most symbolic of all the changes
was the redesigned national flag. By incorporating
motifs from the party flag, Mobutu produced a
constant reminder of the important role the party
is to play in spreading authenticity. Another
symbol of the party's status will be the new party
headquarters in Kinshasa that was begun last
month; by law, it is to be the tallest building in
the capital.
Mobutu established the Popular Movement
of the Revolution in 1967 to fill the void created
by the moratorium on political activity he im-
posed upon taking power in 1965. As founder
and head of the party, Mobutu retains all author-
ity, despite a semblance of participation by poli-
ticians and the general public. The party func-
tions as a legitimate source of patronage and
perquisites thus ensuring a loyal bureaucracy. In
his keynote address this spring to the party's
national congress, Mobutu reminded the delegates
that the party must imbue the people with a sense
of national identity and active support for the
government. The party's role as a mass movement
has been increasing steadily since 1970, when it
conducted a successful campaign in preparation
for the presidential and legislative elections held
that year. Although Mobutu and the party-
approved slate of legislative candidates ran unop-
posed, the overwhelming mandate for Mobutu
showed that the party could mobilize the people.
In 1971 the National Assembly declared the
party Zaire's "supreme institution," and its polit-
ical bureau, of which Mobutu is director, dictates
national policy and approves all candidates for
elective office. In late 1971 the party absorbed
representatives of the army, the national police,
the national labor union, and the court system
into its executive committee and into similar
committees at the provincial level and below. The
Mobutu lays first brick at local party headquarters.
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move provides much-needed administrative con-
trol over these representatives, who often act
independently and compete with one another,
particularly outside the capital.
Despite its position at the top of the hier-
archy, or perhaps because of it, the party has yet
to become a truly popular movement. As an or-
ganization that works from the top down, it has
been only partially successful in carrying out the
mass infusion of local-level cadre necessary to
foster a grass-roots movement. Mobutu has tight-
ened the party's administrative structure on the
national level-in 1972 he cut the political bureau
in half-but the party remains top-heavy.
Picking Off the Opposition
The party's growing authority has provoked
little overt opposition from Zaire's political elite,
despite a vague feeling among some groups that
Mobutu is garnering too much power. So far, only
the Catholic Church has struggled openly with
Mobutu. Although senior army officers question
the party's role and privately fear that it may be
given some sort of administrative control over the
army, they have accepted Mobutu's wishes. Uni-
versity students, once the government's most
vocal critics, have remained subdued over the past
year or so.
The clash between the Catholic Church and
the government was precipitated by Mobutu's
order that Zairians drop their Christian names and
reached a climax when he insisted that all semi-
naries have committees of the party's youth wing.
Both Belgian and Zairian clergymen rejected the
order as contrary to Canon Law. The Archbishop
of Kinshasa-a long-time Mobutu critic who led
the attack-went so far as to challenge publicly
the basic premise of authenticity. He also rebuked
the party for using religious metaphors to build
up Mobutu's image. The government in turn ac-
cused the archbishop of treason, suspended pub-
lication of the church's influential news weekly,
and forced the archbishop into temporary exile in
the Vatican. The church was also forced to accept
the party youth committees in its seminaries.
The government's offensive was designed to
undercut the church's autonomy and bring it in
line with national policies. The church was virtu-
ally the only independent institution remaining in
Zaire and, despite a considerable degree of Afri-
canization since independence, it retained in
Mobutu's eyes a close identification with the
colonial structure. Mobutu distrusts its close asso-
ciation with the people, which he views as com-
petition for the party, and he is well aware that
the clergy often dabbled in politics despite a ban
on such activity.
The position of the Protestant churches in
Zaire has also been undercut. The new religious
law passed last year primarily affects the Protes-
tants because it allows the government to regulate
the proliferation of denominations. Only those
denominations fulfilling certain organizational
and membership requirements and willing to
accept the administrative control of the Church
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Ex-stude . In the army now.
of Christ of Zaire-a government-recognized
ecumenical council that supports authenticity-
will be allowed to operate. Thus, through the
Church of Christ of Zaire, the government can
monitor Protestant activities in the field, where
missionaries have traditionally aroused govern-
ment suspiicions.
Zaire's university students hardly responded
at all to the call for authenticity. Once the most
vocal of critics, they are steadily being boxed in
by the government. In the wake of student dem-
onstrations in June 1969, during which at least a
dozen students were killed by army troops,
Mobutu ordered the students to disband their
organizations and join the youth wing of the
party. Following a student demonstration in June
1971, Mobutu drafted all students into the army
and instituted a major reorganization of the uni-
versity system designed to give the government
centralized control. Last February Mobutu pro-
moted most student draftees to corporal, throw-
ing them a crumb in the form of slightly higher
pay but also reminding them who controls their
fate.
From all appearances, the party's youth
wing is assuming unchallenged authority over the
university students and is extending its activities
into the primary and secondary levels as well. The
government quickly mobilized the party youth
apparatus during its confrontation with the Cath-
olic Church; the youth wing took over the major
seminary in Kinshasa and occupied the arch-
bishop's residence.
Side-stepping the Army?
Mobutu's emphasis on the party has un-
settled the army high command. Senior officers
fear they are being shunted aside and will lose
influence with the President, both to their own
detriment and the army's. They also fear that in
some way Mobutu might use the party to control
the army. In some respects their fears are justi-
fied. Over the years, the army's ability to assume
administrative and security responsibilities
throughout the country has been uneven. As com-
mander since 1961, Mobutu is well aware of the
army's shortcomings; he recognizes its lack of
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discipline and its justified reputation for bru-
tality. Consequently, he has sought to dissociate
himself from the image of an army strong
man-he temporarily gave up his rank when nomi-
nated for president in 1970--in favor of an image
that conforms with African traditions of chief-
tainship. In so doing, he has concentrated on
building up other sources of power to lessen his
dependence on the army-
Army leaders, however, view the army as an
integral part of the policy-making apparatus be-
cause of the army's leading role in Mobutu's seiz-
ure of power in 1965. They resent his failure to
consult them on matters of national significance,
and they have urged him to confide more closely
in them.
Adding to the military's uneasiness is Mo-
butu's hope of "integrating" the army into the
party. Prior to the party congress, the President
held a major staff meeting designed to offset the
growing anxiety of the high command. He assured
the staff that no party committees would be
established within army units, although he left
himself a loophole by adding that wives of mil-
itary personnel would be free to form party com-
mittees. He did not indicate, however, how such
committees might be set up or how he intends
them to function, and may have more extensive
measures in mind for the future.
Mobutu wants to draw the army into the
mainstream of national development, but appar-
ently without goading the army to seek the aid of
political malcontents in opposing him. Although
the party congress rescinded the rule that army
and police personnel may not vote, the long-
standing prohibition against personal contacts
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between army officers and civilian politicians
remains in effect.
Mobutu has been able to keep army leaders
from becoming overly disgruntled, however.
When needed, he can restore the army's self-
esteem or play on personal motives. For instance,
he placated senior officers with spot promotions
when they showed signs of restiveness over the
party being declared Zaire's "supreme institu-
tion." Moreover, he is a master at exploiting rival-
ries among his key military subordinates. He is
willing to recognize these rivalries as inevitable
and allows them wide leeway so long as they do
not threaten to upset political stability.
Nevertheless, rivalries pose a source of
potential trouble. For some time Mobutu has
been considering retirement for a number of in-
competent senior officers. These include the com-
mander in chief, who has been on the inactive list
for almost two years because of ill health, and the
acting commander, who is loyal to Mobutu but
has a poor professional reputation. Any signifi-
cant number of retirements would inevitably
produce a major staff and command shuffle that
could seriously disrupt the army. Mobutu recog-
nizes this factor, however, and apparently is tak-
ing his time about making changes.
Reaching the Provinces
Central authority over the provinces remains
uneven. Most rural Zairians have had only mini-
mal contact with the central government since the
collapse of the Belgian administrative structure.
Special Report
During the early years of Mobutu's regime, the
need for internal security led to a strong army
presence throughout the countryside, although
the delegation of authority in local jurisdictions
was often divided among tribal chiefs, govern-
ment administrators, the army, economic interest
groups, and after 1967, party officials.
Over the past few years, however, the center
of authority has been shifting to government
administrators. Increasingly, local administrators
are also party members, and with the party select-
ing regional representatives to the National
Assembly, the ties between the central govern-
ment and local administrators have been steadily
improving. Party cadre are becoming increasingly
visible throughout the countryside. Mobutu him-
self is taking an increased interest in local sensi-
tivities and has begun to make provincial tours on
a regular basis.
Mobutu realizes that the provinces present
major problems. Although he has called for an
end to tribal nepotism within the bureaucracy, he
must still rely upon tribal chiefs in many parts of
the country. At the same time, he is attempting
to undercut their authority by attacking many
tribal traditions as antithetical to modernization,
but the influence of tribal chiefs remains strong.
Party cadre in local jurisdictions spend much of
their time working to gain the support of local
chiefs.
With the exception of Shaba Province, local
development remains limited. Much of the coun-
try is still agriculturally oriented, and poor trans-
portation and a lack of development funds have
hampered agricultural development. Although the
new property law gives the government authority
to reclaim and develop land not being properly
exploited by private interests, the government
does not have the resources necessary to take
advantage of the law.
Mobutu has checked the potential for po-
litical opposition arising in the countryside. Local
politicians who fall out of favor or who appear to
be developing a personal following are rotated,
sent into exile, or clapped into prison. Between
June 1971 and January 1972' Mobutu regaled the
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country with details of one anti-government plot
after another. At the end of that period, there
was hardly an active politician left who could be
considered a dissident. During his provincial tour
in late 1971, Mobutu clearly warned that politi-
cians risk severe punishment if they step out of
line.
The anti-foreign theme of authenticity
extends into the economic arena. In his keynote
speech to the party congress, Mobutu dwelt on
the drawbacks of Western economic enterprise.
Introducing the euphemism "underequipped" to
replace the terms "backward" and "under-
developed," he argued that what underequipped
nations need is assistance that will help them
develop their own resources, and they should not
have to rely on foreign developers who take more
than they give. He said that Zaire would not "be
satisfied with being a reservoir of primary mate-
rials to be exploited by developing nations for
their own well-being." During a tour of the prov-
inces in late 1971, he singled out the Belgians for
"squeezing" the country and broadly hinted that
foreign interests were intent upon sabotaging his
efforts to protect the economy. As an example,
he pointed to the large numbers of West Africans
and Asians the government expelled earlier that
year for diamond smuggling.
Much of Mobutu's anti-foreign rhetoric is
designed simply to take the pressure off the gov-
ernment. A slump in the international copper
market has forced him to invoke tight budgetary
controls over national development, the army,
and the populace at a time of persistent inflation
and steadily increasing demands for material ben-
ef its.
For the past two years Mobutu has been
seeking to broaden Zaire's sources of foreign as-
sistance, largely to offset the symbiotic nature of
its relations with Belgium. Mobutu apparently
feels that Zaire does not derive adequate benefit
from Belgium's broad mining and subsidiary inter-
ests. Moreover, he harbors a frustration over con-
tinued dependence upon Belgian managerial and
technical skills. For these reasons he keeps the
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Belgians in a whipsaw by alternately threatening
and placating their economic interests in Zaire. In
late 1970, he upset Brussels by awarding two
mining concessions in Shaba to an American-led
consortium. He recently mollified Belgian feel-
ings, however, by promising to review requests for
exemptions to the revised national property law.
Within the past year he has also obtained consid-
erable development assistance from Japan and
modest aid from France and Taiwan. Moreover,
he is apparently reconsidering the possibility of
assistance from the Soviet Union and Eastern
Europe, particularly Romania. Romanian Presi-
dent Ceausescu received a friendly welcome from
Mobutu earlier this year and Foreign Minister
Gromyko plans to visit Zaire this year.
Will Authenticity Succeed?
Despite the changes of last fall and the rhet-
oric of Mobutu's speeches since then, authenticity
has failed to make much of an impression
throughout the country. It remains little more
than an intellectual justification for presidential
power. Mobutu is not likely to garner mass sup-
port for authenticity unless he can demonstrate
that it carries solutions for local problems, partic-
ularly in the economic sector.
Moreover, Mobutu may find himself working
against the tide by trying to impose a mass move-
ment from above. Such movements have a long
history of failure in Africa. Although in theory
every Zairian belongs to the party, in fact there is
minimal popular identification with the party.
Even so, Mobutu apparently regards the party as
easily adaptable to the task of mobilizing the
people in support of his philosophy. The fact
remains, however, that the party was established
to buttress and make legitimate Mobutu's power,
and the party still exists primarily for that
purpose.
In any context, nation-building, which is es-
sentially what authenticity is all about, is a long-
term process. Although Zaire under Mobutu has
come a long way, it has a long way to go before
the people have any real sense of national iden-
tity. Mobutu might well run out of steam before
authenticity has taken hold and content himself
with using it simply to preserve his position at the
top.
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