WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A010300030001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 25
• Document Creation Date: December 21, 2016
• Document Release Date: November 15, 2007
• Sequence Number: 1
• Publication Date: May 25, 1973
• Content Type: SUMMARY

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Secret
WEEKLY SUMMARY
Secret
25 May 1973
No. 0371/73
Copy N2 42
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The WEEKLY SUMMARY, issued every Friday morning by
the Office of Current intelligence, rep?5rts and analyzes signif-
scant deueloprr tints of ?fhe vueek through noon on Thursday.
It frequently includes material coordinated with or prepared
by the Office of Economic Reseaech, the Office of Strategic
Research, and the l irectorate of Science and Technology.
Topics .requiring more comprehensive treatment and there
25X1 fore published separately as Special Reports are listed in the
contents.
CONTENTS (25 May 1973)
1 Moscow Faces West
3 Argentina: Return of the Peronists
4 Iceland: Enter the Royal Navy
5 Indochina
6 Burma: Detour in the Road
7 Korea: Pyongyang's Gain
9 France: Space Launch Series
10 Romania: Ceausescu & Oil
11 Albania: Inoculating Youth
MIDDLE EAST
AFRICA
12 Arab States: Egypt; Oil; Lebanon;
Jordan
WESTERN
HEMISPHERE
16 Chile: Downward Spiral
17 Panama: New Canal Position
18 Uruguay: Watchful Respite
19 Bolivia: Aftermath of a Plot
Comments and queries on the contents of this
publication are welcome. They may be directed to
the editor of the Weeks summar
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moscow faces west
EMPHASIS ON DETENTE
[Last month, the CPSU Central Committee
resolved to carry out its foreign policy activities
in such a manner as to make detente with the
West an "irreversible" fact of life. Having so re-
solved, the Soviets have accelerated the efforts to
trace their current policy back to Lenin himself
and show that the policy has the firm backing of
all segments of Soviet officialdom.;
Although Moscow's formal treatment of
detente makes no distinction among the various
Western powers with which the USSR hopes to
improve relations, it is clear from Soviet behavior
that the US is central to Soviet calculations. For
the past several weeks, the Soviets have been
playing up everything positive in US-Soviet rela-
tions; they have even let the accent on the US
overshadow Brezhnev's historic trip to Bonn.7
F The importance the Soviets attach to rela-
trions with the US has been indicated in a number
of ways. Soviet media have given favorable cover-
age to the US and to official statements from
Washington, have played down vigilance themes
customarily directed against "imperialism," and
have given scant treatment of the Watergate af-
fair. Continuing problems in Indochina have been
largely ignored, and the top Soviet leaders have
gone out of their way to meet with visiting
Americans (most recent) r, Premier Kosygin's
talks with Mayor Lindsay),
While Moscow's behavior toward the US can
no doubt be attributed in part to Brezhnev's
coming trip to Washington, some of the propa-
Page 1
ganda, at least, suggests that the Soviet leadership
is engaged in an effort to convince its domestic
audience of the wisdom of its policy. For in-
stance, an article in Pravda last week by Yury
Zhukov seemed noteworthy not only as a testi-
monial to the Soviet need to deal with the US,
but also as a signal to various elements of the
Soviet bureaucracy to accept this need./
II (Zhukov said the Moscow summit last year
was of "paramount international significance"
and quoted Brezhnev as saying that the possi-
bilities for further improvement in relations with
the US are "real." In defense of detente with the
US, Zhukov recalled Lenin's own interest in
improving business relations with the US even
during the Soviet civil war when US military
forces were on Russian territory. Zhukov also
cited Lenin's demand in 1922 that Soviet officials
responsible for denying visas to American busi-
nessmen be severely punished?
Earlier this week in Bonn, Brezhnev called
the shift toward detente a radical turn in Soviet
policy that had been difficult to make. He
implied that the leadership consensus is now
solidly behind that decision and that he can speak
confidently on behalf of all Soviet leaders. In
effect, he was seeking to put the US on notice
that when he meets President Nixon in Wash-
ington next month, the US can expect to be
dealing with a politician who is in a strong posi-
tion to accept or reject agreements on their
merits. Despite this show of confidence Brezhnev,
like other political leaders, must be conscious of
more conservative colleagues who will be looking
over his shoulder.)
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WEEKLY SUMMARY 25 May 73
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'The billing of Soviet party leader Brezhnev's
sojourn in West Germany as a working visit was
no euphemism. Plans to squeeze some sightseeing
into the trip gave way early on as the business
agenda lengthened. His only remaining scheduled
jaunt outside the Bonn area was scrubbed when
security officials decided the risk of demonstra-
tions was too great. As a result, Brezhnev spent
about 30 of his approximately 100 hours in the
Federal Republic in conversation with Chancellor
Brandt. Their top advisers were equally busy./
The visit produced no surprises and was the
success everyone expected. Brandt and Brezhnev
added to the list of bilateral agreements con-
cluded over the last two years by signing pacts for
economic, industrial, and technical cooperation;
cultural collaboration; and air travel. They
opened the way for other agreements and ex-
changes in energy, sports, youth, tourism, and
medicine. The two leaders also agreed to meet
again and to schedule mor frequent political
consultations by subordinates
!The image of a convivial Brezhnev and his
stress on creating a new era of Soviet-German
friendship served the Soviet objective of showing
their great interest in European detente4Brezhnev
may not have been as successful in obtaining
commitments for economic cooperation, and
such commitments were the major Soviet goal.
German firms, for example, are ready to build a
steel-rolling mill and a machine-tool factory in the
USSR. But the Soviets wanted long-term commit-
ments and low-interest credits that the Germans
feel they cannot grant. German industrial leaders
expressed interest in "medium-term" planning in
some fields, but when Brezhnev denigrated inter-
est rates as unimportant, he turned off German
ban leers/
Plain, hard bargaining characterized the
talks. The communique's wording on the Confer-
ence on Security and Cooperation in Europe and
on mutual and balanced force reduction talks was
carefully weighed. Given the Soviet aversion to
"balanced," for example, the two leaders settled
on the phrase not jeopardizing...security."
Brezhnev made his expected pitch that the secu-
rity conference be concluded with a summit
meeting, but, in the face of Brandt's caution,
settled for "at a level corresponding to its inter-
national importance."r
!Although the three agreements contain a
,)clause extending them to West Berlin, the com-
munique does not reflect any softening in the
Soviet attitude toward West German ties with the
city. The two sides agreed on the need for "strict
observance and full implementation" of the
Quadripartite Agreement on Berlin: a scant im-
provement over the language used during Brezh-
nev's visit to East Germany on 12-13 May. The
inability of the two sides to agree on a clause on
Berlin prevented signature of agreements on
science and environment that had been drafted
for the visit(
i'! IBrezhnev could not have been expected, in
any event, to embarrass the East Germans by
agreeing to West German desires on Berlin in a
public document, and Brandt probably did not
anticipate that he would do so even in private
conversation. Brandt, Scheel, and Bahr got the
point across in the advisers' meetings, and Bonn
can only hope to see results in future Soviet and
East German actions.!
`l n general, the Germans were pleased with
r the results of the visit and apparently believe they
have made a big stride forward on the inter-
national stage. They see both the US and the
USSR as being interested in close ties with West
Germany, and this has added to a growing sense
of self-confidence in Bonn
,,} JThe West Germans found Brezhnev an inter-
._Yesting, if somewhat bizarre, guest. He clearly
dominated the Soviet delegation, and the Ger-
mans had some difficulty in making their points
as the Soviet leader held the floor.
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"`SECRET
ARGENTINA
;The inauguration of Hector Campora as Pres-
ident of Argentina on 25 May propels the Peron-
ists back to power after nearly 18 years in the
political wilderness. The return to an elected
civilian government, which Argentines hope will
give birth to a new era of cooperation and prog-
ress, is being celebrated throughout the country
by Peronist and non-Peronist alike.'
The presence of high-level delegations from
abroad adds dignity to the ceremonies and pro-
vides the opportunity for significant meetings
among the various foreign leaders. Secretary of
State Rogers winds up his tour of South Ameri-
can countries in Buenos Aires, returning to the
US by way of Jamaica. President Allende of
Chile, Cuban head of state Dorticos, and Uru-
guayan President Bordaberry are also in Buenos
Aires. Several other Latin American states have
sent foreign ministers, including Tack of Panama,
who hopes to convey to Secretary Rogers his
country's hope of renewing the canal negotiations
soon.
Juan Peron, the man most responsible for
Campora being sworn in as Argentine president,
stayed in Spain, preferring, he says, not to divert
attention from Campora. It is also true, although
he does not say so, that hiis presence on the stand
when Campora receives the presidential sash
would be like rubbing salt into the military's
wounds and might stir up trouble. Peron's ab-
sence should not be viewed as indicative of the
future. Campora, long Peron's "obsequious serv-
ant," has so far given no indications that he can
act or make decisions independently of his
mentor.
IThe cabinet that Campora will bring into
power with him is a tightly held secret, which
could mean that Peron has not yet told the fledg-
ling president who will get what post. Campora
has, however, been working on the Radical Party
and may hope to entice a Radical or two into his
cabinet. Even without the Radicals, Campora
should have little difficulty pushing his program
through congress, where the Peronists hold a com-
fortable majority on their own. His major prob-
lem does not lie in finding a working relationship
with the opposition, but in holding his own diver-
gent coalition together. Minor party members of
Peron's election coalition have shown signs of
disquiet, and within the Peronist movement itself,
differences between middle-aged moderates and
young radicals could easily flare into serious prob-
lems,?
JCampora has also avoided discussing in any
concrete terms the policies he plans to follow.
Campora Greets Supporters
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SLUHL I w
Indications are that he will pursue basically mod-
erate policies on the domestic front in the hope
of obtaining some form of "national accord." On
the issue of amnesty for "political prisoners," he
will likely urge legislation that in theory provides
for sweeping amnesty but in fact requires that
each prisoner's case be considered separately. In
addition, he is apt to announce, with considerable
fanfare, across-the-board wage increases while ask-
ing labor to make sacrifices in the fight against
inflation.'
t! 'i,t the same time, he will try to placate
extremists and radicals with nationalistic rhetoric,
policies aimed at restricting the profits and activ-
ities of foreign businesses, and a more independ-
ent approach to foreign affairs. Among the new
government's first initiatives will be the estab-
lishment of diplomatic relations with Cuba, prob-
ably followed closely by recognition of North
Vietnam, North Korea, and East Germany. The
Peronists are also likely to move Argentina into
the forefront of those Latin Americans calling for
an OAS that excludes the US.)
. ,ln all these areas, the guiding hand of Juan
Peron will be evident, although he will probably
shun any involvement in the day-to-day functions
of government. Instead, Peron seems bent on
carrying his message of Latin American unity and
integration to everyone who will listen. He sees
himself as a political figure of world importance
whose primary theater of operations is Latin
America. To assure his place in history as a true
revolutionary and to give substance to his claim
that Latin America must either be united in
nationalism and socialism or be "dominated by
the imperialists," Peron may press to move Ar-
gentina toward more radical policies after he has
consolidated his hold on power 25X1
ICELAND
ENTER THE ROYAL NAVY
"There are occasions when, greatly "daring, it is neces-
sary to raise a small and diffident voice in favor of the
rights of the strong against the weak." UK Labor
Party MP.
The introduction of British warships into the
fishing dispute has again raised questions in Ice-
land about the usefulness of its membership in
NATO. All Icelandic political parties condemned
London's move and expressed disappointment at
NATO's failure to prevent it. Public support for
the US-manned NATO base at Keflavik has prob-
ably been eroded.
On 19 May, two British frigates sailed into
Iceland's unilaterally declared 50-mile fishing
zone. Their mission was to protect the British
trawlers there. Reykjavik prudently ordered its
coast guard not to engage the British ships, but
closed all Icelandic airfields, including Keflavik,
to British military aircraft and recalled its ambas-
sador to London. The Icelanders say they will not
negotiate as long as the warships remain in the
disputed waters, and the British say they will not.
withdraw the warships as long as Iceland is likely
to harass trawlers.
On 21 May, the government asked all Ice-
landic political parties for advice on a possible
course of action. One proposal under considera-
tion is to request the UN Security Council to
meet to consider Iceland's charge that the British
move was an act of aggression. While a British
veto in the council would prevent UN action, the
Icelanders probably would hope to gain interna-
tional sympathy in the process. Iceland may also
ask for a NATO review of the British action, in
accordance with that organization's guidelines for
the resolution of disputes among its members.
Norway has offered to mediate. All else failing,
the two adversaries might even get back to the
negotiating table without outside help. The Brit-
ish reportedly are concerned that Reykjavik may
decide to withdraw from NATO.
The tense situation provides a far from ideal
atmosphere for the visit of presidents Nixon and
Pompidou to Iceland next week. Icelanders who
were expected to demonstrate against the base
may now be joined by their more moderate
countrymen who feel the US and other NATO
states have deserted Iceland in the fichinn
dispute.
SECRET
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-`SECRET ""'
'Communist military activity this week was
at the lowest level since the cease-fire began.
Much of the Communist action that took place
was in response to South Vietnamese security
operations.
are numerous gaps in its implementing detail.
Further details are expected soon, along with
announcements concerning a government reorgan-
ization and administrative reforms)
?,i Communist mortar and rocket fire against
the outer government defense line west of Hue
appears to reflect such a response. Heavy fighting
has been reported just north of Kontum City
following a government move to replace an army
regiment that had arranged a local truce.'
The Communists have been openly aggres-
sive only in several troublesome delta provinces,
and much of their action there seems to be aimed
at protecting Communist infiltration routes. Most
of the Communist attacks have been concentrated
in Chuong Thien and Dinh Tuong provinces and
involved shell fire directed at government out-
posts and other fixed positions.
Elsewhere, the Communists have limited
themselves to minor harassment and terrorism.
The railroad in Military Regions 2 and 3 has been
hit frequently as have the major highways. Several
terrorist attacks have resulted in heavy civilian
casualties.'
Thieu Announces Economic Program
The Saigon government is beginning to im-
plement a series of measures largely designed to
improve its standing in the countryside. Last
weekend, President Thieu announced general
goals for post-war economic recovery and devel-
opment, which call for economic self-sufficiency
by 1980. Citing the establishment of funds for
refugee relief, reconstruction, and rehabilitation,
Thieu emphasized the need to develop agricul-
tural production as a basis for future economic
growth. He was not precise about foreign support,
but large amounts of Free World aid will be
needed to achieve the extremely ambitious 1980
targets. l
Although the government program repre-
sents a good first effort to chart the country's
economic course, it is not an integrated economic
plan. His targets are unrealistically high, and there
Hanoi is increasing the emphasis on recon-
struction. North Vietnamese leaders focused on
this theme in May Day speeches, and recent
reports indicate the rhetoric is being converted
into new guidelines for using more of the man-
power pool to rebuild the country.)
new bill- 25X1
boards in the capital urging young men to join
"reconstruction brigades" have replaced military
recruitment posters, suggesting that reconstruc-
tion has been accorded a higher priority than
conscription General Giap hinted on May Day
that the North Vietnamese Army would play a
prominent role in rebuilding the country, and an
editorial}jin the army newspaper on 16 May indi-
cates that local militia and self-defense forces will
be the first military units to join the reconstruc-
tion effort. The editorial urged them to serve as
the "shock forces in labor productivity" and to
take on difficult long-term projects involving land
reclamation and irrigation. ]
i [Although the North Vietnamese have started
to r allocate at least unskilled manpower to the
rebuilding of the country, Hanoi expects difficul-
ties in the transition to a civilian economy and is
proceeding slowly with the implementation of
plans for reconstruction and economic expansion)
CAMBODIA: FIGHTING RESUMES
X1.3
)The brief lull in Khmer Communist military
activity in the Phnom Penh region ended this
week when the Communists attacked Cambodian
positions on the east bank of the Mekong River
near the government base at Neak Luong. The
Communists also attacked government positions
on the Mekong's east bank midway between
Phnom Penh and Neak Luong and along the west
bank opposite Neak Luong. Although US air
strikes helped government troops hold their
ground, there are indications that the Commu-
nists will try to keep pressure on Neak Luong. If
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ShUKb I "r
the lightly defended base were to fall, the Com-
munist threat to Mekong resupply convoys would
increase considerably.
South of Phnom Penh, Cambodian troops
took advantage of the withdrawal of some Com-
munist units from the Takeo area to expand that
city's defensive perimeter and to clear a short
section of Route 2 below Takeo. Other govern-
ment forces met little resistance in clearing Route
3 between Phnom Penh and the village of Tram
Khnar. Farther west, government units cleared a
section of Route 4 some 20 miles northeast of the
seaport at Kompong Sorn; the highway is now
open to truck convoys. I n the northwest, how-
ever, government clearing operations along Route
5 continued to make little headway. Some six
miles of that highway are still under Communist
control.
BURMA: DETOUR ON THE ROAD
The government has shifted away from its
rigid) pursuit of the Burmese road to socialism
that has characterized economic policy during the
past decade. The shift follows the Ne Win govern-
ment's belated recognition of the severity of
Burma's economic problems. Production, invest-
ment, and exports are stagnant, and foreign ex-
change reserves have dropped to their lowest level
in the past 25 years. Rice exports this year are
likely to be the smallest since World War 11 as a
result of drought and the government's inept rice
procurement program.
Burma is hopeful that oil will help turn the
economy around. It has invited US oil companies
to compete with Japanese and other foreign firms
for rights to conduct offshore oil exploration.
Previously, Rangoon had insisted that financing
from abroad come exclusively from governments
not private companies.
Rangoon is also
prepared to negotiate an agreement with the US,
which would permit the US Overseas Private In-
vestment Corporation to issue political risk
insurance to US investors in Burma. Rangoon
recently obtained two development loans from
the World Bank to improve railroad and inland
water transportation. The two loans total about
$30 million and are the first Burma has received
from the World Bank since General Ne Win came
to power in 1962. Burma's joining of the Asian
Development Bank demonstrates its interest in
expanding economic relations with its neighbors.
On the domestic side, Ne Win last month
called on all citizens-including those previously
forced out of business by his government-to
involve themselves in developing the nation's
economy. Subsequently, some 380 businessmen,
who had been jailed for economic crimes, were
released. The government, after seven years, is
getting out of the internal trade in food grains.
This move is intended to induce farmers to release
their stocks of rice and alleviate the current short-
age.
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???r JCUMt I IMW'
KOREA: PYONGYANG'S GAIN
'North Korea's admittance into the World
Health Organization last week will bolster Pyong-
yang's determination to seek a wider international
role and will open the door for entry into other
UN agencies. Observer status at the General As-
sembly this fall is now all but assured.l
[The North has, of course, gained in stature
by entry into its first major international organi-
zation, and this success is encouraging wider dip-
lomatic recognition. This week, Iceland recog-
nized Pyongyang, while Denmark and Finland
opened talks on diplomatic relations.)
(Seoul's setback in the World Health Organi-
zation will probably prompt it to move cautiously
toward acceptance of two Koreas and a realistic
adjustment to the changing situation in which it
finds itself. It will almost certainly lead Seoul to
accept some change in the way the UN handles
the Korean issue, including possibly an end to UN
political involvement in Korea as represented by
the UN Commission for the Unification and Re-
South Korea Votes in World Health Organization
habilitation of Korea. Seoul is not likely, how-
ever, to allow diplomatic setbacks to lead it to
compromise on issues it considers vital, such as
the stationing of US forces in the South and the
continuation of the UN command.
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FRANCE: SPACE LAUNCH SERIES
/An attempt early this week to orbit two
scientific satellites from the French Guiana space
center ended in failure when the third stage of the
Diamant B launch vehicle did not function cor-
rectly.: 'The last in a series of five Diamant B
launches, the abortive try was the second failure
in a row after seven consecutive successes over
nearly eight years. The other failure came in
December 1971 when a malfunction occurred in
the second-stage engines.w
j France will not resume launch operations
from its space complex until early next year. Al
that time, a new launch vehicle-designated the
Diamant B/P4-should be ready. That launch
primarily will be to test the new vehicle, which
will carry only a technology test satellite.rA sci-
Yientific satellite will first be orbited by the new
Diamant B/P4 in late 1974. The new launch
vehicle will have a more powerful second stage
than the present one. The vehicle's performance
should be about equal to that of the improved US
Scout, the present work horse of the US space
program.,1
,; 1 )The French have been trying to interest
other European countries in using their Diamants
on a fee basis. To date, they have found no
takers. Paris still hopes to launch satellites for
other countries and believes its new Diamant will
prove more attractive, particularly to Western
Europe. Outside business would help France
amortize not only the cost of the launch vehicles
but the large investment in its space center in
French Guiana]
}./ !The center was also set up to handle
lunches of space vehicles built jointly with other
European countries. The only cooperative Euro-
pean launch vehicle programs-the Europa II and
III--have been canceled, and a new European
launcher program is not likely to produce a new
vehicle until 1980. Meanwhile, the largest of the
three launch pads at the French space complex
robabl will be standiing idle.
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`"' SECRET
President Ceausescu has taken over direct
supervision of the nation's economic development
and will do likewise with police and security
affairs. These steps tighten his already firm grip
on the country and put his prestige on the line in
economic and security matters, where perform..
ante has fallen short of Ceausescu's demands.l
;_ ; jOn 16 May, Ceausescu named himself head
6f the new Supreme Council for Economic and
Social Development. The council, first proposed
last year, is designed to increase economic effi-
ciency and to ensure quick implementation of
party programs and directives. Virtually all top
leaders with economic responsibilities have been
named to executive positions on the council and
are, of course, responsible directly to Ceausescu.]
j-, Ceausescu set up the council because of con-
y tinued economic inefficiency and balance of pay-
ments difficulties. By taking over the council him-
self, Ceausescu will have greater control, but will
also be more vulnerable to criticism in the event
of serious economic difficulties./
~eausescu also plans to take a direct hand in
supervising the nation's police and security ap-
paratus. He has fired the minister of interior and
i 5the party secretary responsible for military and
security affairs. Colonel General Coman, former
head of the army's political directorate, will take
over the responsibilities but not the title of party
secretary; Coman will report directly to Ceau-
sescu.;
11
Ceausescu has been concerned over inef-
ficie cy and corruption in the security apparatus
for some time. The failure of the officials in
power to respond to his orders to weed out the
incompetent and dishonest apparently prompted
Ceausescu's move.
Romanian Aid Extended to Third World
Oil Industries (1956-72)
Country
Total Aid Extended
(In Million US$)
Type of Aid Provided
Iraq
35
Exploration and development
Indonesia
30
Exploration; refineries
Egypt
27
Exploration; machinery and
equipment
India
21
Refineries; drilling equipment
Brazil
8
Drilling equipment
Chile
6
Drilling equipment
Argentina
3
Drilling equipment
Sudan
3
Exploration and development
Tunisia
3
Exploration and development
Ghana
1
Exploration
Morocco
1
Exploration
Yemen (Aden)
1
Exploration
Syria
a/
Oil equipment
TOTAL 1391]/
J Less than $500,000.
/ Does not include oil aid extended as part of large economic aid credits.
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SECRET
Stories are still circulating in Bucharest
about additional leadership changes, but Ceau-
sescu's activities suggest that most of the changes
he means to make have been made. On 21 May,
he was confident enough to take time out from
his duties to become the first Romanian chief of
state to visit Rome since the close of World War
II.?
AID TO OIL INDUSTRIES
~ln early May,' Romania signed a $6-million
contract to provide oil development assistance to
Chile. This aid reflects Bucharest's growing in-
terest in helping the less developed countries find
and exploit oil deposits. Since 1956, Romania has
extended $140 million to 13 developing countries
to finance petroleum exploration and develop-
ment. Most of this has been extended in the last
five years. More than 2,000 Romanian oil workers
have been employed abroad, and at least 1,000 oil
technicians from developing countries have
trained at Romanian facilities. Romania also sells
petroleum equipment and provides oil expertise
primarily to developing countries and other Com-
munist states.
In the beginning, Bucharest's involvement in
petroleum development in the Third World was
limited to countries with little or no production
and to those in which Western oil companies
showed little interest. In recent years, however,
Romania has concluded agreements with more
important producers that have nationalized their
oil industries.
Many of these agreements-including those
with Iraq, Algeria, and Libya-stipulate settle-
ment of accounts in petroleum, and Romania is
acquiring crude oil, primarily to refine and export
as oil products. The agreements also are opening
additional markets for Romanian oil equipment.
Romania is a distant second to the US as a world
exporter of such equipment.
Although Bucharest still is a net oil exporter,
it began importing crudde oil in 1968 and last year
imported some 3 million tons. About half of this
came from Iran and the remainder was obtained
from Algeria, Iraq, Libya, and Saudi Ara-
Tirana is taking stern new measures to com-
bat ndesirable Western influences. The measures
are aimed largely at young Albanians and reflect
the leadership's concern that ideological con-
tamination could result from increased exposure
to the West.
The latest in the series of xenophobic moves
was an attack on symbols of Western youth
culture like long hair and "elephant-bottomed"
pants. The number of visitors to Albania, already
small, will dwindle further because the regime is
refusing entry to long-haired and modishly attired
travelers."
Tirana has also moved to make sure that
popular Italian and Yugoslav radio and TV
programs cannot be received in Albania. A
teacher has been put on trial for encouraging
nonconformist-i.e., Western-behavior among
young people as the first step in the formation of
a spy network.'
The campaign has been accompanied by
exhortations to Communist orthodoxy, Albanian
style, by calls for a purely national literature, and
by an extra measure of anti-religious vituperation.
This rigorous line suggests that the leadership is
contemplating a modest increase in its diplomatic
and economic relations. Cultural agreements are
already being negotiated with several countries,
including Italy. In addition, cultural contacts with
Yugoslavia have been increased, and there are
signs that Albania is looking for ways to expand
its foreign trade;
Such contacts could slowly ease Albania out
of its long period of self-imposed isolation. By
cracking down now, Tirana is trying to limit the
risks in advance. The leadership fears that if the
country's youth pick up Western ways, the
country would face a monumental generation
gap. Its concern is well founded because more
than half the country's population is under 19
years of age.
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6 Talk of war from Cairo has abated somewhat
as Egypt continues its diplomatic maneuvers in
preparation for the forthcoming UN Middle East
debate, scheduled to begin on 4 June. The Egyp-
tian UN representative has been in Cairo this
week discussing strategy for the debate, and
Egyptian officials are active in attempts to but-
tress their position with other nations. Presiden-
5 -stial adviser Hafiz Ismail returned on 21 May from
a one-week visit to Paris and Madrid, and Foreign
Minister Zayyat will travel to Moscow for a two-
day stop on 27 May. President Sadat will attend
the summit conference of the Organization of
African Unity this weekend in Addis Ababa,
where he apparently hopes for a resolution on the
Middle East that will further aid his position at
the UN.!
i The Egyptians have not yet given a clear idea
of their strategy in the Security Council-particu-
larly, whether they will urge a re-interpretation of
Resolution 242 or will press only for further UN
mediation. They apparently wish to avoid a US
veto, however, and thus will probably steer clear
of provocative debate. A Foreign Ministry official
has noted that Egypt is interested in maintaining
US "neutrality" as far as possible and will work
for a positive, non-condemnatory resolution/
`1 Israel will go along with the debate as a
necessary evil and professes confidence that
Egypt will not attack the US for fear of ulti-
mately weakening its position by arousing a crisis
atmosphere without achieving conclusive results.
The Israelis are on guard, however, against a reso-
lution that redefines Resolution 242 or expands
the UN mandate in the Middle East dispute. The
Israeli press has expressed some misgivings that
'''the UN secretary general's Middle East report,
issued this week, will lead to just that)
TOn 17 May, the Lebanese Government came
to terms with the Palestinian liberation organiza-
tions. The "protocol," as the agreement is called,
reflects Beirut's tougher policy in regulating feda-
yeen activity and is, in effect, a statement of the
sovereignty of Lebanese law over Palestinians re-
siding in Lebanon.)
SECRET -
C IThe agreement stipulates that:
? fedayeen units will not be permitted in
refugee camps situated near populated areas;
? fedayeen patrols are responsible for se-
curity inside the camps;
? criminals within the camps must be
turned over to the Lebanese police;
? heavy weapons are to be removed from
the camps;
? military training is to be restricted to
Syria and eastern Lebanon.
Earlier restrictions that continue in force are
a prohibition against the fedayeen entering the
area near the Israeli border and a Ilan on fedayeen
cross-border operations into Israel;
While there has been no serious effort thus
far tosabotage the accords, the real test is yet to
come.- I Further trouble would not be long in
coming if the fedayeen attempt to block army
efforts to follow through with full implementa-
tion of the agreement. The army seems likely to
try to remove from the camps at least some of the
rocket launchers and mortars that fired on army
positions during the fighting earlier this month.
There would be considerable sentiment in feda-
yeen ranks, especially among the extremists, to
oppose such an effort;
OIL AND POLITICS
Libya, Kuwait, and Iraq took part in a brief
oil stoppage on 15 May as a gesture backing the
Arab struggle against Jsrael and protesting US
support for Tel Aviv.t)The three states were re-
sponding to a call by a`conference of Arab profes-
sional unions for a one-hour oil-pumping stoppage
and a one-day boycott of US interests by all Arab
states
`j )'The call met little other response, and even
the three respondents did not follow the call to
the letter. Saudi Arabia a d Abu Dhabi refused to
'participate, and Algerizdespite press reports to
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-'- SEC"I RET --
.the contrary-failed to join/Although Libya ex-
tended its narticinatinn to 24 hnurc it rim not
part, signifies that the political climate is increas-
ingly favorable for efforts of this kind/
,q [King Husayn is worried that Jordan will be
caught in the middle if another Middle East con-
flict breaks out. His advisers have told US officials
that the King is beginning to take Sadat's talk of
LI' war more seriously and that the King believes
Syria may be planning military action against
Israel along with Egypt. Although Husayn would
like to remain a spectator, he fears Jordan would
be dragged into the fighting-if Syrian forces cross
Jordan to attack Israel. 7
( _j [Husayn is especially concerned right now
about his relations with Damascus. He is afraid
that President Asad will again close the Syrian
border to commercial traffic and take other
steps in conjunction with Cairo to isolate Jordan.
At present, these worries seem exaggerated.?
Husayn faces some real economic problems.
Jordan is having its usual difficulties making ends
meet and has been hit by one of the worst
droughts in recent memory. Government spend-
ing is threatening to spiral out of control. The
defense budget alone is already as large as-and is
growing faster than-total government revenues,
excluding foreign aid. Husayn has shown no in-
clination to apply the brakes In fact, his appetite
for more and better military equipment seems to
have grown since his return from Washington last
March .7
boycott all US interests and it only stopped load- I.) IThe council of ministers has also failed to
ing operations into oil tankers; pumping was not come to grips with the problem; indeed, the
affected, and damage to oil company interests' ministers recently added to it by raising their own
was minimal. Kuwait stopped loading operations 1t- salaries. Husayn is aware that the government is
for one hour in what amounted to a symbolic drifting and that popular discontent with its "do-
move~/no oil tankers were scheduled for loading nothing" policy is on the rise.
on 15 May, and the Kuwaiti action had no tangi.
ble effect. Despite the minimal damage and the
failure of many large producers to take part in the
boycott, the gesture, particularly on Kuwait's
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Ultimately, the Jordanians are likely to turn
to the US to bail them out.
ordanian hand wringing-although
a reflection of genuine concern-is probably also
intended to elicit assurances of continued US
support.
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SUDAN: CRACKS IN THE SOUTH
' 6
)Fourteen months after the end of the
southern rebellion, the facade of solidarity is
beginning to crack. Old tribal animosities are
re-emerging in the south and popular discon-
tent is on the rise as a result of food short-
ages, governmental inefficiency and corrup-
tion.
)At present, the unrest does not appear to
pose a serious threat to the peace accord.
Much of the dissatisfaction, in fact, is focused
on southerners who run the regional govern-
ment rather than on the north or President
Numayri, whose personal popularity remains
high. Numayri reportedly has considered a
shake-up of the southern government, but a
shake-up would involve him in the thankless
task of trying to balance the myriad of con-
flicting tribal interests. He may therefore
leave it to the southerners to sort out their
own problems unless civil unrest threatens to
get out of hand.
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SECRET 1WW
fPresident Allende's triip to the inauguration ~~.:copper complex is now in its second month. The
of Argentine President Carnpora will give him a government refuses to negotiate, believing that
welcome respite from problems at home. Under ,,the wage demands are excessive and prejudicial to
Allende, economic and political relations with less-privileged workers. The struggle at El Ten-
Chile's old adversary, Argentina, have substan- ' iente has its political ramifications, and leftist
tially improved. He probably hopes the peronistas'.1 X extremists and Christian Democrats are both
will be even easier to deal with than their military encouraging the strikers to hold out against the
predecessors.? Communist labor and finance ministers.
?_ Allende left the outgoing foreign minister,
Clodomiro Alme da, in charge of an unhappy and
uneasy country r-Even sympathetic observers are
appalled by the Chilean economy's downhill slide'
and by the government's inability to deal with its
''?problems. Allende assumed some of the blame for
the economic situation in a curiously low-key
State of the Nation speech to the new congress
this week; he announced no new economic meas-
ures. Help from several countries such as Mexico,
West Germany, and Czechoslovakia has been wel-
25X1 come, but is no more than a stopgap. Develop-
ment Minister Vuskovic is almost certainly seek-
ing more help during his current trip to Moscow,
can
while, the costly strike at the huge El Teniente
El Teniente Mine
Strike bound
rr
JAdditional serious strikes are threatened,
and private bus owners stopped operations on 22
May. This could be the first move by Allende's
opponents to combine business shutdowns with
blue-collar labor disputes and winter-worsened
shortages. They may hope to cause disruptions
worse than those brought by last October's pro-
longed shutdown. The goal, ultimately, is the
downfall of a government they accuse of deliber-
ately fostering economic disintegration as the
quickest path to socialism and absolute power. It
is true that the Allende administration's control
of the economy has grown even as the economy
had deteriorated. Economically inspired chal-
lenges have often led to take-overs of the offend-
ing enterprises. Since the military ministers re-
signed in March, the cabinet has overruled the
comptroller general's decision that many of the
take-overs were illegal. Few of the businesses
seized have been returned to their owners, and
even fewer are efficiently run.(
)Although the latest bus strike was immedi-
ately effective in Santiago, the government
' promptly put the companies under control of an
X army general. Thus, the government has public
irritation over transportation shortages as well as
the army working for it,
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SECRET
t>( General Torrijos has taken a hand in shaking
a new position paper on canal talks out of a
recalcitrant Foreign Ministry. The statement of-
fers a slight concession on the issue of duration--
Panama will now accept a treaty on the present
canal running to the end of the century---but it
holds fast to other Panamanian demands. The
statement is generally moderate, and the Pana-
manians have even referred to the "positive tone"
of President Nixon's State of the World message-
)'The new statement, which is in the form of a
letter from Foreign Minister Tack to US Ambas-
sador Anderson, retains Panama's insistence on
blanket recognition of its full jurisdiction and
effective sovereignty over all territory. This is a
matter of principle, according to Tack, and agree-
ment on it must precede discussion of the details
of concessions that Panama would make to the
US for the operation, maintenance, and "protec-
tion of vital installations" of the canal(. JAll that
f \ , Panama appears willing to negotiate is the sched-
uling of US withdrawal.(
1(; [ Tack was even less accommodating on thei
question of a new canal. He has announced that
Panama has commissioned its own study of pos-
sible routes and will use that study as the basis for
deciding where any new canal will go. Tack ap-
pears willing to allow the US to build a new canal
for Panama, but only if Washington decides to do
so quicklyl.''In the evens: the US were to build a
new canal, Panama would retain full jurisdiction
over all land and water areas and would prohibit
foreign military bases. In any case, Tack has said
Panama will not even discuss the subject until its
route study is finished next yearl7
;'fI Tack, who advocates a policy of confronta-
tion, has presented this statement to Ambassador
Anderson at General Torrijos' insistence. Torrijos
and President Lakas have been anxious for the
canal talks to resume, and they have discussed the
appointment of a single negotiator as a means to
that end. This method would bypass the Foreign
Ministry, though it has not been demonstrated
that such a negotiator would be able to go beyond
Tack's new position paper. A broad interpretation
of the "protection of vital installations" would
offer limited prospects for satisfying US security
interests, but there seems little basis for reconcili-
ation between the US wish for long-term control
of an interoceanic waterway and Panama's in-
sistence on quickly obtaining full jurisdic-
tion.
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SECRET ""'
URUGUAY: WATCHFUL RESPITE
4i JA guarded calm has descended on Monte-
video after a period of brinkmanship by the mili-
tary and Blanco Party politicians over who should
have the final word in government decisions.;
The confrontation was provoked by a mili-
ta/y demand that the congressional immunity of
leftist Senator Enrique Erro be lifted so that he
could be tried for collaborating with the once
powerful Tupamaro guerrillas. Even though Erro
has long been recognized as a public spokesman
for the Tupamaros, the largest faction of the
Blanco Party decided that the time had come to
challenge the armed forces' encroachment into
government.,
[The services stood firm in their request,
ap arently because of growing concern in the
ranks that the armed forces are losing the initia-
tive gained in mid-February when they won a
larger voice in running the government. As a show
of military determination, about 1,000 troops
were brow ht to the capital city during the con-
frontation/
I; t )After weeks of jockeying, a showdown was
averted when the Senate declared itself incom-
petent to decide Erro's fate, and left it open for
the Chamber of Deputies to begin impeachment
proceedings against him. Some senior military
officers may have supported the Senate's move.
Others believe that in accepting it the military is
compromising with discredited politicians and
permitting an erosion in the military's new-found
prestige. Their criticism may be tempered by
recognition that the vote is likely to go their way
now that the issue has been reduced from a
contest for power between the military and the
congress to an issue of guilt or innocence of an
individual senatorf
"='/ IThe more important issue of who is to con-
trol the government remains undecided and unless
an effective dialogue is established between the
military and congress there are likely to be uglier
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Jtuht:I qw,
i 1) ]President Banzer's government has been
shaken by the death of an accused coup plotter,
and it will be difficult for the President to rebuild
the carefully nurtured facade of unity and tran-
quility within the government coalition;]
The initial announcement of the arrest and
accidental" death of Colonel Andres Selich was
e problem enough. He was publicly charged with
i4 heading a coup group composed of military of-
ficers, dissident members of the right-wing
Bolivian Socialist Falange, and other exiles. The
far-rightist coloration of the group was enough to
confirm the worst fears of many members of the
moderate leftist Nationalist Revolutionar Move-
Y
ment that the conservatives were out to grab I)! INow that it is public knowledge that some
power for themselves alone. When Interior Min- 4 rightists were scheming to seize power, the mod-
ister Arce later admitted that Selich had died erate leftists in the government can be expected
from a police beating and named the allegedlyi/?%to increase their own discussions about their
guilty parties, it was time for the right to squirm, future. The top leaders of the parties may still go
as they controlled the ministry until recently l through the motions of claiming unity, but their
juniors, never enthusiastic about the "oil-and-
water" coalition in the first place, will be even
)16 [The Falange leaders voted to leave the gov- less so now. The military probably will grow more
ernment if Arce was not fired as minister, and the dissatisfied with both political parties./
armed forces commander publicly expressed the
"consternation" of the military. Banzer had little
~,'~choice but to remove Arce, and a military man NV /The press and some politicians are already
was named to replace hirn. The President is furi- y calling for a public examination of what they
ous with military leaders for expressing an inde-believe to be other skeletons in Banzer's closet.
endent stand Anything but the most limited investigation into
Rumors of Selich's death could easily snowball, with un re-
Banzer's imminent resignation or replacement by dictable results for the overnment.
a junta have been denied
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INTERNATIONAL MONEY
The dollar, under pressure again on 21 May,
has strengthened somewhat since.
? Since 7 May, when the dollar was at its
strongest level in recent months, it has depre-
ciated by about 3.5 percent against the Euro-
pean joint float currencies;
? The free market gold price peaked Mon-
day at $112 an ounce, up $22 since May 7,
but it has since fallen off slightly.
The absence of intervention by the European
central banks apparently has reduced the volume
of trading on the currency exchanges, but has
resulted in sharper movements in exchange rates.
The major impetus for the wave of dollar selling
last week could have come from a number of
quarters. US banks, multinational corporations,
and Middle East interests have been cited by one
source or another as the largest sellers.
The European joint float initiated on 19
March has easily weathered the storm on the
currency markets. The floating currencies are all
strong relative to the dollar, and only modest
Exchange Rate Changes Since 19 March
(in percent)
interventions have been required to maintain the
band. If the dollar continues to depreciate, how-
ever, substantial interventions could become
necessary and internal pressures on the European
joint float would increase.
Strong differential pressures among the cur-
rencies would mean that member nations would
have to choose among even greater interventions
to maintain the band, dropping out of the band,
or adjustment within the band. According to EC
officials, if an EC currency were to come under
strong pressure and if the necessary credits and
support were not forthcoming, exchange rate ad-
justments within the band would be more likely
than a withdrawal from the float. This solution
probably would be acceptable to Sweden and
Norway, whose currencies have been the strongest
in the joint float, but not to Bonn, which prob-
ably would prefer to float the mark independ-
ently rather than resort to still another revalua-
tion. Despite the rapid appreciation of the mark
in recent weeks, it remains at the bottom of the
band and thus has more room for further appreci-
ation than other currencies in the joint
7 May 15 May
21 May
23 May
Mark
-0.9
+2.0
+3.1
+2.8
Guilder
-2.1
+1.0
+2.0
+1.9
French Franc
-0.4
+2.6
+3.4
+2.9
Sterling*
+1.3
+4.3
+4.5
+3.9
Swiss Franc*
0.C)
+3.4
+4.9
+5.0
Yen*
-0.3
+0.5
+0.2
+0.7
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Secret
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