WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A010800030002-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 28
• Document Creation Date: December 21, 2016
• Document Release Date: March 6, 2008
• Sequence Number: 2
• Publication Date: April 12, 1974
• Content Type: SUMMARY

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Weekly Summary
State Dept. review completed
DIA review(s) completed.
ARCHIVAL RECORI)
PLEASE RETURN TO
AGENCY ARCHIVES
Secret
Secret
12 April 1974
No. 0015/74
Copy N2
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69
25X1
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CONTENTS (April]-), 1974)
1 East-West Talks Adjourn
3 Syria-Israel: Talking While Shooting
EAST ASIA
PACIFIC
)ffice of Current Intelligence, reports and analyzes signif-
t developments of the week through noon on Thursday. It
UIce of Economic Research, the Office of Strategic
requiring more core prehensive treatment and therefore
ied separately as Special Reports are listed in the
4 Cambodia: Siege at Kampot
5 Laos: The New Political Look
6 Japan: Kyotoand the Left
7 Australia: Court of Last Resort
8 Korea: Students
11 EC Pondering Energy o icy
12 The Scramble for Enriched Uranium
13 Yugoslavia: Polemics on Two Fronts
13 Talks on Disarmament
15 Europe: F-104 Replacement Blues
16 Germans Expanding Ties
16 Warsaw Pact Summit
MIDDLE EAST
AFRICA
17 Jordan: Clinging to the West Bank
18 Israel: Golda Quits
19 Greece-Turkey: New Aegean Friction
20 Cyprus: Intercommunal Talks Stalled
20 Iraq: Kurdish Autonomy Simmers On
21 South Asia: Toward Better Relations
WESTERN
HEMISPHERE
25X6
23 Cuba: Preparing for the Party Congress
24 Ecuador: Economic Problems
Comments and queries on the contents of this
publication are welcome. They may h- di-I.d t.
the editor of the Weeki Summar
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 East-West Talks Adjourn
The Conference on Security and Coopera-
tion in Europe (CSCE) in Geneva and the Mutual
Balanced Force Reduction (MBFR) talks in
Vienna have both adjourned for Easter after ses-
sions marked by substantial progress in Geneva
but little headway in Vienna.
[Anxious to show some tangible results be-
fore the European security conference recessed
on April 5, the Soviets agreed to a last-minute
compromise on the principle of inviolability of
frontiers. The Soviets evidently were motivated
by a desire to move the negotiations along toward
a concluding third stage at a meeting of heads of
state in July. Brezhnev has taken a close personal
interest in winding up the conference this
summer]
Inviolability of frontiers means, for the So-
viets, Western acceptance of the postwar bound-
aries in Eastern Europe and, by implication, of
Soviet hegemony in the area. Moscow initially
sought an all-encompassing statement on the im-
mutability of frontiers. This was objectionable to
some Western delegations, particularly the West
Germans, who did not want to foreclose the pos-
sibility of eventual German reunification by
peaceful means. In the end, the Soviets got a
statement that was worded in such a way as to
imply a ban on changes of frontiers by forcible
means. Furthermore, a separate principle in the
agreement acknowledges the right of states to
change their borders by peaceful means.]
(Having passed this hurdle, the conference
can move on to the controversial problem of freer
movement of people and ideas when it reconvenes
on April 22. The West has stressed that an agree-
ment must include some specifics in this area so
that the conference can produce more than plati-
tudes on detente. The Soviets have been holding
back until the question of inviolability of fron-
tiers was resolved. They may now argue that,
since they retreated from their maximum de-
mands on that principle, the West should recipro-
cate and relax pressures for freer movement.
There is room for accommodation on the part of
both sides, and it seems likely that wording will
be found to satisfy both the West's interest in
"concrete" results and Moscow's desire to avoid
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any "meddling" in what it considers to be the
USSR's internal affairs.
? n Italian plan for a separate document on
European-Mediterranean relations has been tenta-
tively approved by the EC but not yet introduced
into the conference. The Mediterranean issue
could disrupt or delay a successful completion of
the conference by introducing the contentious
Middle East dispute into the negotiations and into
any follow-up arrangements that are adopted.
Both the US and Soviets can be expected to
oppose the plan, and the EC political directors
will take another look at the Italian proposal at
their April 18-19 meeting
- lUltimate acceptance by the West Europeans
of a summit-level finale is likely, but there will
still be some uneasiness about thus consecrating
the conference results, especially if it seems that
little has been pained in the force-reduction talks
by that time'
he West Europeans also hope for progress
on t e so-called confidence-building measures in
the area of military security through adoption by
the conference of a plan for prior notification of
major military movements. Fears have been ex-
pressed that the Soviets may try to win support
from neutrals and some allies for a partial solu-
i:ion of this question in order to isolate the US,
which would prefer to discuss this issue at MBFR.
The EC Nine generally remain cautious on ar-
rangements for follow-up procedures to the con-
ference, but may be moving toward acceptance of
proposals made by the neutrals that would entail
limited formalization subsequent to the con-
ference
MBFR: Little Headway in Vienna
The force reduction negotiations recessed
with `the NATO and Warsaw Pact participants still
far apart on how to achieve a reduction agree-
ment. Neither side has made substantive conces-
sions, but informal meetings have helped shed
light on the issues to be resolved and the need to
develop common data as a basis for further nego-
tiations.f
{ Each side now understands the other's posi-
tion better, but there are no signs of a meeting of
minds. The Warsaw Pact accepts the fundamental
NATO thesis that there is a ground force imbal-
ance favoring the East, but argues that, while
NATO has fewer ground troops and tanks, it has
an advantage in air and nuclear forces. The pact,
therefore, does not acknowledge the need for
asymmetrical reductions to reach a common ceil-
ing, as NATO has proposed. The East contends
that there is thus an over-all balance in central
Europel
The proposals put forward by NATO and
tNre Ijact both embody a concept of phasing, but
the resemblance ends there. NATO believes that
only US and Soviet forces should be reduced in
the first phase, while the Warsaw Pact wants the
forces of all direct participants to be involved in
each of three stages of reductions. The Soviets
have interpreted the NATO position as indicating
a reluctance on the part of the West Europeans to
reduce their forces. During the current recess,
NATO members will discuss ways to assure the
Soviets of their willingness to reduce forces with-
out abandoning their basic desire to reduce US
and Soviet forces fiist.1
In recent informal meetings, the Soviets have
ush d for Western acceptance of a symbolic re-
duction to take place in 1975. In an effort to
make this proposal more attractive, they have
hinted that air and nuclear forces could be frozen
during this phase rather than actually reduced.
The Soviet concept, however, still embodies equal
numerical reductions by each side as well as re-
ductions by all direct participants. This has been
rejected by NATO, which suspects that the So-
viets' apparent eagerness to conclude a symbolic
reduction may trap them into accepting prece-
dents that will be difficult,,o overcome in subse-
quent stages of negotiation.
IThe question of establishing agreed data on
force strengths was raised at the final informal
meeting. The two sides attempted to reach com-
mon definitions, beginning with ground troops.
This is another topic that both will mull over
during the recess.
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Syria-Israel
s shelling of Israeli positions on the Golan
HeigPits entered its fifth straight week, Syria's
delegation to the Washington disengagement
talks---led by army intelligence chief Shihabi-
finally arrived in the US. A day later President
Asad set down in Moscow for consultations with
Soviet leaders; an economic delegation had pre-
ceded him by a few days. Asad may be seeking
additional economic and military aid, but his visit
seems timed primarily to assuage Soviet sensi-
tivities about being excluded from the Washing-
ton talks]
[Syrian leaders, meanwhile, continued to take
a tough public stand on peace negotiations with
Tel Aviv. On the 27th anniversary of the Baath
party last Sunday, Asad emphasized once more
that Syria would settle for nothing less than
Israel's withdrawal from all occupied Arab ter-
ritory and implied that the shelling would con-
tinue until this objective is obtained. In a veiled
reference to Egypt and other Arab moderates,
Asad also criticized "some Arab brothers" for
characterizing Syria's position as "inflexible.'
Relations between Cairo and Damascus have
in fact become strained as a result of the lifting of
the oil embargo and the postponement of the
Arab League summit conference until September.
Syria had sought to have
the summit held this
month in order to obtain
the endorsement of other
Arab states for its nego-
tiating stancel Although
Asad believes that Cairo
has frequently acted uni-
laterally to Syria's detri-
ment, he is unlikely to
break publicly with Presi-
dent Sadat as long as he
sees some advantage in
maintaining the appear-
ance of a united front with
Egypt against Israel
Foreign Ministry official told a US Embassy of-
ficer in Tel Aviv last weekend that Israeli analysts
did not expect Syria to increase the current level
of fighting. Instead, the official thought the
shelling is designed to put pressure on Israel as
Egypt had done during its disengagement talks, to
satisfy Syrian hard liners who oppose Asad's ef-
forts to seek a disengagement accord, and to
impress upon the Soviets the seriousness of the
situation prior to Asad's visit to Moscow./
-7 FRecent reporting from the US defense
attache in Beirut tends to support this interpreta-
tion. the
Syrians seem to be deliberately avoiding in icting
"unacceptable" losses on the Israelis in order to
keep tensions within controllable limits. The
Syrian shelling has been scattered rather than
concentrated and has passed up vulnerable targets
such as Israeli troops at mess. The shelling also
has begun at almost the same time every day,
giving the Israelis time to take cover.?
.These interpretations may not be shared by
the Israeli military commanders, however, and
their strong reaction to Syrian ground probes last
weekend indicates that they are prepared to strike
hard at anything that looks like a Syrian intention
to attack. Controlling the level of violence in the
Golan Heights could be a difficult exercise for25X1
both sides as tensions rise and fall in response to
varying signals emanating from Damascus, Tel
Aviv, and Washington.
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CAMBODIA: SIEGE AT KAMPOT
1 _-P The situation eased at Kampot late this week
following heavy Khmer Communist attacks on
April 5 and 6. At one point, fighting occurred on
the city's northern outskirts, while steady Com-
munist shelling knocked out nearly half of the
garrison's artillery pieces. Although stepped-up
efforts by the Cambodian Air Force and the
timely arrival of reinforcements have for the
moment stemmed Communist ground attacks,
Kam pot remains cut off from resupply by sea and
subject to continued shellings.1
J , f The combination of stiff insurgent pressure
ad the army high command's preoccupation
with the defense of Kampot has forestalled any
further government efforts to recapture the town
of Oudong, northwest of Phnom Penh. Elements
of the 2,500-man task force that had been push-
ing toward the former royal capital from the east
have pulled back to a beachhead on the Tonle Sap
River in preparation for a return to the Phnom
Penh area. With the threat in the east eliminated,
Page 4
Khieu Samphan
Communist forces at Oudong may now turn their
attention to the isolated government outpost at
Lovek on Route 5 several miles north of Oudongl.
C' fOn the political front, Khmer Communist
"defense minister" Khieu Samphan continued his
tour of Asian Communist capitals. After spending
last weekend on an official visit to Pyongyang,
Samphan and his small delegation returned to
Peking-presumably to begin their journey back
to Cambodia
(, IAlthough Samphan predictably extolled the
Khmer Communists' battlefield performance in
their current dry-season campaign, he also hinted
that the insurgents' military prospects may not be
as bright as the Communists had hoped several
months ago. During one speech in Peking, for
example, he acknowledged that the insurgents are
now following a "flexible operational strategy"
and indicated that the fighting may continue on a
long-term basis.l
Tn other public remarks, Samphan re-
Iport dly stated that a final victory was not possi-
ble unless the Mekong River-Phnom Penh's
primary supply line-is closed. Admitting that it
would not be easy to cut the waterway com-
pletely because Lon Nol's US and South Vietna-
mese backers would do all in their power to keep
it open, Samphan warned that no military com-
mander should underestimate a foe that has Wash-
ington's support.
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LAOS: THE NEW POLITICAL LOOK
The new coalition government headed b
y
Prime Minister Souvanna Phouma held its inau-
gural cabinet meeting this week, in an atmosphere
of cordiality and propriety, but it is not expected
to get down to serious business until Lao New
Year festivities (April 13-16) are out of the way.
The coalition must grapple with a host of difficult
political problems, the most important and imme-
diate of which is the power relationship and divi-
sion of authority between the 25-member cabinet
resident in Vientiane and the 42-member advisory
political council based in Luang Prabang.
This question gained new prominence when,
in a urprise move, Pathet Lao leader Souphanou-
vong became council chairman rather than first
deputy premier, as had been widely expected.
I
nstead, that slot went to Phoumi Vongvichit,
Lao Communist Party secretary general and
Souphanouvong's plenipotentiary representative
during the protracted coalition negotiations.
Phoumi will also serve as foreign minister.
Souphanouvong's shift may have been moti-
atid in part by his aversion to being directl
y
subordinate to his older half-brother, Souvanna.
The move may also reflect a desire on the part of
the Communists to mold the council into a
vehicle for expanding the power of Communist
leaders in the Vientiane-controlled zone. Under
the terms of the protocol, the council is accorded
"equal and independent" status with the cabinet,
but its specific powers are ill-defined and appear
primarily consultative and legislative in nature.
The council could, however, turn out to be a
much more important body than the Lao accords
seem to imply'
7 fSouphanouvong's assumption of the chair-
manship lends additional prestige and political
clout to the council, whose leadership was already
weighted in the Communists' favor by the pro-
tocol. The Pathet Lao almost certainly hope to
use the council to compete with the cabinet in
the formulation of foreign policy and in such key
domestic olicy areas as the holding of general
elections.
FOn the Vientiane side, there are no un-
expected appointments. Only two members of
Souvanna's previous cabinet were dropped, and
only two new faces added. There was some re-
shuffling. Rightist Leuam Insisiengmay retained
his deputy premiership and his education port-
folio. The ministries of defense, interior, and
finance went, respectively, to Sisouk na
Phoumi Vongvichit (far left), Souphanouvong, and Souvanna Phouma
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Champassak, Pheng Phongsavan, and Ngon Sana-
nikone, while Khamphai Abhay retained his pub-
lic health portfolio
11 JIn addition to foreign affairs and public
works, the Pathet Lao control the ministries of
economy, information, and religion. Neutralist
politicians approved by both sides head the re-
maining ministries of justice and of posts and
telecommunications. Each of the ten Vientiane
and Pathet Lao ministers has a deputy from the
opposite side
k Of the four key ministries of defense, in-
terior, finance, and foreign affairs, three are
headed by powerful politicians from the Vien-
tiane side with weak Communist deputies, while
the fourth pairs a fairly flexible senior Pathet Lao
leader-Phoumi-with a capable Vientiane deputy
close to Souvanna. Apart from Phoumi and Gen-
eral Singkapo, the new public works minister, the
Pathet Lao's cabinet team is second rate. Four of
the ten ministers or deputy ministers are "dissi-
dent neutralists" with no clout in party councils.
Of the other six, Information Minister Souk
Vongsak and Economy Minister Soth Phetrasy are
party hacks with no special authorit or com-
petence in thei new fields.
JAPAN: KYOTO AND THE LEFT
The near defeat of their candidate in
Kyoto's April 7th gubernatorial election has
weakened the morale of Japan's Communist and
Socialist parties and sharply reduced prospects for
effective opposition cooperation against the rul-
ing Liberal Democrats in this summer's Upper
House election campaign.
The re-election of Torazo Ninagawa, candi-
date of the Communist and Socialist parties, to a
seventh term as governor of Kyoto is a bitter-
sweet victory for the left. Hampered by growing
public sentiment that he had been in office too
long, Ninagawa won with a margin of only 4,500
votes of the one million cast. For the Commu-
nists, who count Kyoto as their foremost local
stronghold, the hair-breadth victory was meager
reward for a massive campaign effort.
The Socialists backed Ninagawa in the belief
that his re-election was inevitable, but they pro-
vided only lukewarm support and suffered a loss
of prestige. Although the Socialists had helped
sponsor Ninagawa since 1950, they engaged in
nearly a year of acrimonious debate before doing
so this time. Even then, both the right wing of the
national party and the local chapter in Kyoto
rebelled, choosing instead to run a Socialist mem-
ber of the Diet's Upper House, Kazutaka Ohashi.
The maverick Ohashi-running with the additional
endorsement of the Democratic Socialists, the
Liberal Democrats, and the unofficial backing of
the Komeito-came very close to pulling off a
major upset.
The issue of Socialist support for Ninagawa
reflected not only the perennial struggle between
the left and right wings of the party, but also the
problem of balancing the short-term benefits of
cooperation with the Communists against the
long-term hazards. The hazards have been most
acute in local areas where Socialist electoral col-
laboration has helped the more aggressive Com-
munists to gain control of key city administrations.
The narrowness of Governor Ninagawa's vic-
tory will encourage the right wing of the Social-
ists to renew attacks upon the party leadership,
arguing that his re-election had been far from
assured and that Socialist backing of his candi-
dacy only played into the hands of the Commu-
nists. The Democratic Socialists and Komeito will
support this viewpoint by blaming the Socialists
for missing an opportunity to return Kyoto to the
hands of the more moderate opposition.
The disaffection of Komeito is a particularly
costly loss for the Socialists as they face Upper
House elections this summer. The Socialists had
hoped to win Komeito backing for some of their
candidates, but when the party broke an earlier
commitment by joining with the Communists in
Kyoto, Komeito froze negotiations for general
electoral cooperation. With this rift, the prospect
for any effective collaboration among the non-
Communist opposition parties has vanished, a
development that will work to the advantage of
the ruling Liberal Democrats.
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Australia's Labor government has had trou-
ble with much of its ambitious domestic legisla-
tive program, in part because the opposition
Liberal-Country coalition controls the upper
house of parliament. On April 10, the opposition-
controlled Senate failed to pass a procedural
motion dealing with essential appropriations bills,
and Whitlarn finally acted to dissolve both houses
of parliament and take his case to the voters.
Elections will be held on May 18.1
In many respects, this is not an auspicious
time for the Labor Party to hold elections. Public
opinion polls have shown a substantial slippage in
the government's popularity over the past
months, and some party figures fear the party
may lose seats in the new votin .
The opposition coalition is scarcely in better
shape as it heads into the elections. It is handi-
capped by infighting among its leaders and by its
lackluster public image. It is also vulnerable to
Labor Party charges of obstructing the passage of
needed social and economic legislation. Liberal-
Country politicians, however, will try to make
political capital of public exasperation with rising
inflation and continuous strikes]
J'Faced with the choice between the two
camps, the Australian public will have to base its
decision more on which group offers the most
promise for the future than which has had the
best performance to date. Public weariness with
the Liberal-Country coalition's 23 years of rule
brought Whitlam to power in the first place, and
he is probably counting on his more dynamic
style of leadership to carry the day once again
A NATIONALISTIC PETROLEUM POLICY
-- ' In an effort to gain greater control over
Australia's energy resources, the Labor govern-
Whitlam
ment is adding to the list of restrictions on for-
eign-owned firms in oil and other extractive
industries. The latest move is a proposal by Min-
erals and Energy Minister Connor for a new tax
aimed at fattening Canberra's share of the oil
companies' soaring revenues.1
tConnor's proposal is one more in a series of
policy changes intended to reduce the foreign role
in Australian mineral exploration. Over the past
`year, tax incentives and subsidies have been
eliminated, and foreign investors have been
required to deposit amounts equivalent to 30
percent of their investments in non-interest-
bearing accounts with the Australian Reserve
Bank. Moreover, all new development projects in
the energy sector have been reserved for
100-percent Australian ownership. Some govern-
ment officials favor channeling all future invest-
ments through an existing government-controlled
corporation,)`
Since the major international oil companies
hav e most of the money and technology for
energy projects, Canberra is in effect discouraging
exploration and development. One oil and gas
project was halted after Canberra announced it
would block exports from it until Australia's
long-term energy needs could be determined
Spending on petroleum exploration already
has begun to drop. Australia imports about 30
percent of its crude oil needs and, unless the
downward trend of foreign investment and
exploration in the energy sector is reversed, will
become increasingly dependent on imported
crude.
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t. The government crackdown on student and
other opposition elements last winter successfully
stifled open political dissent in South Korea. But
it was apparent, even then, that the government's
real test would come in the spring when the
nation's 175,000 college students returned to the
campus. In anticipation of renewed disturbances,
President Pak Chong-hui ordered a strengthening
of security forces and the preparation of addi-
tional measures--including a martial law decree-
that could be used to quell any renewal of open
opposition. Pak hoped that widespread knowl-
edge of this get-tough attitude would be enough
to intimidate potential dissenters, but such hopes
were dashed last week by a series of small demon-
strations primarily by Christian students in Seoul.7
a3 On April 3, Pak put in force some of the
toug regulations he had been holding in abey-
ance. The fourth emergency decree since January,
the latest one is a sweeping order banning all
student political activity and singling out for con-
demnation an organization called the "National
Democratic Youth and Student League," which
was branded as a tool of the North Korean Com-
munists. The new measure stopped short of a
declaration of full martial law, but provides severe
penalties, including death, for any members of
the student league who fail to turn themselves in
or who are otherwise engaged in political protest;
q5 The new laws have not stopped the protests.
Some students remain resolved to boycott classes
in defiance of the new decree, and on April 9 a
young Christian, under investigation for ex-
pressing anti-government sentiments, burned him-
self to death in a Seoul church. This suicide is
likely to set off further acts of protest on the part
of the more determined student and Christian
dissentersiffhe political atmosphere in Seoul will
remain tense-at least through April and probably
until the school semester ends in late May or early
June.
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FRANCE: RUNNING IN CIRCLES
^ four presidential candidates from the gov-
erning coalition parties to withdraw in his favor
underscores the lack of unity in the Gaullist
majority)
issued a statement on April 9 in
which he presented himself as the unity candi-
date, reminding French voters that President,
Pompidou had demonstrated his confidence by
reappointing him prime minister in February.
This plea got only a lukewarm reception, how-
ever. Christian Fouchet claimed that Messmer's
appeal did not apply to him because he is an
"opposition Gaullist"; Giscard d'Estaing said he
would "study the matter"; and Chaban-Delmas
demurred. The initial reaction of Edgar Faure, a
left-wing Gaullist, was to withdraw, but he made
it clear he might re-enter if the other three did
not follow suit. By day's end, Messmer had
"irrevocably" withdrawn his proposal]
$ Giscard, who at 48 is young enough to sit
out this presidential election, probabl would
have preferred to step aside for Messme4 xpect-
ing that Messmer would appoint him prime minis-
ter, thus paving the way for his eventual succes-
sion to the presidency.)
With his arch-rival Chaban-Delmas in the
race, however, Giscard must run to preserve his
political credibility.
4 For his part, Faure announced his with-
drawal on April 10 in an oblique tatement that
could imply support for Giscardl While backing
from Faure would help, the key to Giscard's
strategy is the endorsement of centrist leader Jean
Lecanuet, whom he has been wooing for some
time. Lecanuet, who might enter the race in order
to maximize his bargaining power, has not
announced his intentions. The filing deadline is
April 161
25X1
25X1
he coming and going of candidates has be-
om something of a joke in Paris, but it has also
caused serious speculation that the disarray will
cause a high abstention rate among voters who
normally support the governing coalition. Mean-
while, the appearance of unity in the left alli-
ance-the Communists, Socialists, and left Radi-
cals-is a p p a r e n t l y only skin depn
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Pierre Messmer
Apr 12, 74
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EC: PONDERING ENERGY POLICY
With studies moving along in the 12-nation
Energy Coordinating Group, French initiatives
have encouraged progress on community policy in
the energy field. French influence may be some-
what limited in the next few weeks by the inter-
regnum in Paris, but EC policy formulation now,i~
seems to have its own momentum p
preparations in the Coordinating Group for
producer-consumer talks have been moving at a
rapid pace in a number of sub-groups. Only the
work of the study group on international co-
operation on uranium enrichment has not begun
on schedule, apparently because Brussels was con-
cerned over possible objections from France,
which is Belgium's consortium partner in a major
uranium-enrichment project]
Paris has been stepping up its efforts over
the past month to galvanize the EC into estab-
lishing an energy policy, partly in response to
progress made by the Coordinating Group. At the
EC Council session last week, the French pre-
sented wide-ranging new proposals. Paris formally
suggested establishment of a European energy
agency to be called Eurenergie. It would have
responsibility for reducing petroleum consump-
tion and developing substitutes, and would serve
as the sole representative of the Nine in energy
discussions with other countries. Curenergie
would be financed by a common EC tax on
energy consumption; it would be a semi-auton-
omous body under council direction, but with
wide latitude and gradually increasing responsi-
bilities. In a broad statement of general policy,
the French representative proposed that the EC
organize both the supply and the functioning of
its energy market. The model appears to be one
generally opposed by the major international oil
companies. Paris also proposed moves to lessen
dependency on external sources'
EC members generally agree with Luxem-
bou g Foreign Minister Thorn, who advocates a
"go-slow" policy in dealing with the French
proposal. The eight want to avoid any conflict
SECRET
with the Coordinating Group, and some see addi-
tional hazards in Eurenergie.
'I the newly established EC Energy Commit-
tee met on April 5 to consider a commission
paper entitled "Toward a New Energy Strategy,"
which is now before the EC governments and may
eventually subsume the French proposal to some
extent. The paper, like all industrialized country
proposals, stresses the need to reduce foreign oil
consumption. The paper advocates an ambitious
program of development for nuclear energy to
provide half the community's electricity by 1985.
In addition, the use of natural gas would be
increased from the present 10 percent to 25 per-
cent of total energy consumption?
A The committee agreed that the commission's
roposals do not conflict with the work of the
Coordinating Group, which was also discussed.
Because of concern over this point, the establish-
ment of a formal link between the two energy
groups is under consideration
-4 iBecause the committee's discussion was
essentially on the strategy of a new energy policy,
little attention was given to the instruments of
the policy. Thus, there was no detailed discussion
of the French proposals or, specifically, of Cur-
energie. An effort is likely to be made to accom-
modate the French in order to ease the tensions
that have surfaced in recent EC meetings on the
energy question. France has been arguing that its
partners are disloyal to the concept of integration
because the commitments they make in the Co-
ordinating Group prove to be obstacles to devel-
opment-of a common policy among the Nine.
~ The new EC Energy Committee, meanwhile,
has' eliminated some of the bureaucratic proce-
dures of other EC entities. The meetings are con-
ducted informally by Commissioner for Energy
Henri Simonet, and decisions are made on the
basis of consensus rather than formal votes. Th(25X1
paper, after final committee action, will be sent
directly to the EC permanent representatives,
by-passing a usual intermediate step.
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THE SCRAMBLE FOR ENRICI-jED URANIUM
the US is losing its nonop`ly in performing
uranium enrichment services for Western nuclear
power plants. To some extent, stiff new US con-
tract terms announced in early 1973 spurred for-
eign customers to develop new sources for such
services. Western consumers of enriched uranium,
however, are primarily interested in finding a
secure source of enrichment services during
1975-85 when projected requirements will out-
strip capacity. The US share of the enrichment
market in non-Communist countries will decline
to about one half by the mid-1980s.
Scheduled growth in world nuclear electric-
generating capacity through 1985 is creating a
booming market for enriched uranium fuel.
Nuclear power capacity in the West will increase
by about 23 percent per year, and the demand for
enrichment will grow accordingly. Between $2
and $3 billion worth of enrichment services will
be needed annually to fuel Western reactors.
Enrichment capacity now in place or sched-
uled to be added in the West by 1985 will not
provide enough fuel for the nuclear generating
plants. Capacity will probably be sufficient
through the early 1980s, but some time during
the mid-1980s the demand for enrichment serv-
ices will exceed planned capacity. For example,
US capacity is expected to be fully committed to
foreign and domestic customers by early 1975.
Most of the nuclear energy programs now under
way or planned were drawn up before the current
energy crisis, so the dearth of capacity could turn
out to be even more severe.
West European countries have responded by
forming multinational ventures to build enrich-
ment capacity. West Germany, the UK, and the
Netherlands have formed Urenco/Centec, and
France, Italy, Spain, and Belgium have organized
Eurodif. These organizations will have about one
third of the estimated non-Communist enrich-
ment capacity now planned; South Africa also has
an ambitious program. Although the USSR has
surplus enrichment capacity and is seizing the
opportunity to sell enrichment services to non-
Communist countries, customers appear reluctant
to become too dependent on the Soviet Union.
New enrichment capacity beyond that al-
ready projected almost certainly will be built in
the 1980s. Governments are heavily involved in
expensive nuclear power programs and will move
vigorously to ensure that their nuclear power
plants have fuel. As it takes six to eight years to
build a large enrichment plant and place it in
operation, decisions concerning new capacity
must be made within the next few years to be
effective by the mid-1980s, w
sources of Supply will be required.
Million Separative Work Units
60 r-
Non-Communist
Enrichment Services:
Planned Capacity and
Projected Demand
1975 1980 1985
'Excluding US preproduction stocks. Such stocks amounted to 17.1 million
separative work units on 1 July 1973, are expected to reach; a maximum of 33.7 million
separative work units during fiscal year 1978, and to be completely exhausted
by the end of 1982. 555622 4-I4
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YUGOSLAVIA: POLEMICS ON TWO FRONTS
Belgrade is continuing its war of words with
Rome on the issue of Yugoslav sovereignty in
Zone B, but there are some signs that Yugoslav
leaders want to wind down the controversy. At
the same time, increased polemics with Bulgaria
may herald a shift of Yugoslav concern over "ir-
redentism" to the south.]
Belgrade is showing its concern over Zone B
by the continued presence there of the regular
army units placed on alert early this month.
Moreover, Yugoslav media continue to protest
Italy's questioning of Yugoslav sovereignty in
Zone B, and to reiterate Belgrade's determination
"to defend every inch of Yugoslav territory." 7
~. \mong the signs that the Yugoslavs may be
ready to tone down the controversy is the deci-
sion to release reservists who were called up
especially for the Trieste "crisis." Furthermore,
there are hints that Belgrade may be thinking
about resuming quiet bilateral talks with Rome.
Stane Dolanc, the front runner to succeed Tito in
the party, said his country "will do everything
possible to settle the situation," thou h he barred
any "unprincipled concession-;_"
L jAs the Zone B affair simmers, a renewed
fare-up of the Macedonian dispute is drawing
Belgrade's attention southward. Yugoslavia has
been denouncing Sofia's refusal to recognize
Macedonians as a non-Bulgarian nationality. This
has now reportedly led to a cancellation of a visit
to Belgrade this spring of Bulgarian leader Zhiv-
kov. A newspaper in the capital of Yugoslavia's
Macedonian Republic has also criticized Moscow
for its alleged support of Sofia's position F
?-International boundary(1976)" ,
25X1
TALKS ON DISARMAMENT
IThe 26-member Conference of the Commit-
tee on Disarmament will convene in Geneva on
April 16. The US still backs the committee-
which is a non-UN body under the co-chairman-
ship of the US and USSR-as the best forum for
the consideration of multilateral arms control
measures. Its lack of any substantial progress on a
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broad range of issues considered over the past
years has undermined the confidence of partici-
pating states, however, and possibly threatens
further continuation of the CCD. Another sterile
session at this time, coupled with the increasingly
vocal demands of the nonaligned for real progress
in disarmament negotiations between the super
powers, could generate new pressures for transfer-
ring the debate to a UN forum which would be
more amenable to nonaligned control.)
' 4n agenda for the conference has not yet
been drawn up. The two Germanies have indi-
cated their interest in joining the committee; to
balance their admittance, the nonaligned have re-
quested additional slots for Asian, African, and
Latin American representatives. The expansion of
membershi to 31 is likely to meet with little
opposition
A potentially divisive issue, however, is the
Japanese draft treaty on chemical weapons, which
has been submitted for consideration at this ses-
sion. A perennial submission, the chemical-
weapons issue has received much attention in the
committee over the years, but the insistence of
the US and other Western powers on the necessity
of verification procedures has blocked any at-
tempts to draft a new protocol. The US has
meanwhile come under increasing criticism for its
research and stockpiling of chemical-warfare
agents; the discussion of chemical-weapons con-
trol may be pushed by a number of delegations. It
can also be expected that the super powers will
again be taken to task for lack of progress on a
comprehensive nuclear test bani
he status of the committee as a forum for
disarmament debates has been increasingly eroded
in recent years by the proliferation of similar
conferences and groups under the aegis of a vari-
ety of international organizations. Soviet initia-
tives for a world disarmament conference and an
experts group to discuss the reduction of military
budgets have attracted nonaligned support and
are being pursued at the UN. The Law of War
Conference sponsored by the International Red
Cross, which recently concluded in Geneva, has
scheduled a follow-up conference to be held in
June specifically to discuss certain weapons, such
as incendiary and napalm devices. The first pre-
paratory committee for the 1975 Non-Prolifera-
tion Treaty Review Conference has just adjourned
in Geneva, and in New York nuclear and disarma-
ment questions have recently surfaced in connec-
tion with discussions of the Indian Ocean "z ne
o f eace.
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EUROPE: F-104 REPLACEMENT BLUES
I ffhe competition over what aircraft will re-
place the US F-104G Starfighter in Belgium, the
Netherlands, Norway, and Denmark has been nar-
rowed to the French Dassault Mirage Super F-1
and three American contenders of which the Nor-
throp Cobra P-530 is currently the favorite. The
decision will channel billions of dollars into the
manufacturing country and could have ramifica-
tions that significantly affect US-European rela-
tions. The choice underscores the dilemma of
NATO allies who want to preserve defense links
to the US while supporting "European" under-
takings. It is particularly difficult for such
staunch Europeanists as the Dutch and the Bel-
gians, who feel trapped in a position where any
decision must antagonize either France or the US.
Defense ministers of the four will meet soon to
discuss the matter furtherl
cross-service capability, and reduce unit costs.
This goal has been strongly endorsed by all except
Belgiuml
a; j Leaders of Belgium's caretaker government-
incl ding the prime minister and the ministers of
defense and economic affairs-have denied recent
rumors that the cabinet has already made a uni-
lateral decision to buy the French Mirage. Belgian
officials have conceded that they have narrowed
the choice to the Mirage and the Cobra, and they
have further admitted that Dassault made "very
interesting proposals on compensation and coop-
eration." They insist, however, that no formal
decision will be taken until a new government is
formed.
belgium's attitude is critical because it is
likely to be the first of the four to commit itself
on a replacement. Since Belgium could be the key
to world-wide sales that might amount to as much
as $10 billion, the French have applied intense
political, economic, and personal pressure on
Brussels to choose the Mirage. There is apparently
fierce disagreement within the Belgian bureauc-
racy, but most of the signals that have appeared
so far suggest that the Mirage is the front-runner.]
The Dutch, referring to an "agreed position"
of the four countries to consider all competing
offers before making any decision, have expressed
we muicdOOns mat nign-
Mira e would reduce European dependence on pressure French sal
t
ti
es
ac
cs have been counter
the US while strengthening the European aircraft productive in the Netherlands. The Dutch de-
industr
P
d
i
i
i
f
y.
,
ec
s
on
n
avor of the US aircraft
would encourage continuation of military ties be-
tween America and Europe, and would provide
for transfer of the latest US aircraft technology to
Europe. It would also demonstrate the willingness
of the four countries to cooperate in offsetting
the US balance-of-payments deficit incurred by
stationing US forces in Europe
-11 The Secretary General of NATO has urged ,j
ll NAT
a
O countries requiring new aircraft to seek
a common replacement, as standardization would
enhance cooperation among NATO forces, ensure
cision will be delayed until a crucial defense
White Paper has been approved by the cabinet,
which may not occur before next fall.
\i
25X1
Although the Germans are no irec y in-
volved, they are intere.
enga ed in Euro e.
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Bonn and Pankow are making progress in
fleshing out their bilater l relations despite differ-
ences over Berlin issued The two states will take a
major step toward recognizing the division of
Germany for the foreseeable future when they
exchange missions in early Maya
Their agreement last month on this step
"opened the dam, and since then the two sides
have agreed on additional bilateral accords regu-
lating "practical and humanitarian" matters. A
sports agreement was tentatively concluded on
25X1VIarch 20, and negotiations on health and non-
commercial payments agreements were concluded
last week. The details of the latter two a ree-
.ments have not been made public
_JAII three accords will probably be signed
later this month.
cision to double the minimum currency exchange
requirement for visitors. This step has reduced by
nearly half the number of visits by West Berliners
since last fall.
The Social
Democratic - controlled city government in West
Berlin, nevertheless, faces elections early next
year, and intends to harp on the issue to demon-
strate that it is an effective defender of the cj?ty's
interest.
Warsaw next week to discuss detentq.jThe session
may well issue a call for faster movement in the
,European security and force reduction talks 1An
?East European diplomat claims that special atten-
tion will be given to the effects of detente on the
East European countries-7
composed of Soviet and East European party
chiefs and government leaders will convene in
Negotiations on at least five other subjects
are currently in progress. Talks on a cultural
agreement remain deadlocked because of differing
interpretations over what constitutes the cultural
traditions of the "German" nation. Pankow wants
to restrict cooperation in this field as part of itst
policy of establishing a German state that has
little in common with the political and cultural
traditions of the Federal Republic. Many officials
in Bonn are skeptical that an agreement will ever
be concluded. Negotiations on a legal assistance
agreement also pose many difficulties because of
I tThe gathering may also discuss the renewal
Iof the Warsaw Pact treaty, which formally expires
next year but is automatically renewable for a
ten-year period unless renounced by May 14,
1974jf1n this connection, the session could also
the large number of political snares in providing q revive'an old propaganda theme designed to por-
such aid to West Berliners) tray the pact as a champion of peace.. The partici-
o pants might express some willingness to dissolve
i ommerce between the two Germanies will the pact upon the conclusion of the European
rema n under the aegis of the Interzonal Trade security talks and then call on NATO to respond
agreement. West Berlin officials are pleased by,,.,, in kindjfThe Warsaw Treaty provides for its auto-
Pankow's agreeing to let the Interzonal Trade
administrative office remain in West Berlin rather
than requiring that it be transferred to Bonn's
new mission in East Berlin
'The right of West Berliners to visit East
Berlin and East Germany remains the most
troublesome issue in inter-German relations.
West Berlin officials complain that Bonn has not
done enough to press Pankow to rescind its de-
`matic dissolution after the establishment of an
appropriately vague "European collective security
system," part of which is a general European
security treaty
he pact's Political Consultative Committee,
The session was evidently initiated by Mos-
cow'and is expected to last only a day or two:
The last such meeting, held in Prague in January
1972, issued a maior statement on force reduc-
tions.
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StUKt i
rr 1 )King Huisayn campaigned for support of his
approach to i:he West Bank problem in a round of
visits to Egypt, Syria, and Saudi Arabia during the
past week. Although the King is clearly willing to
concede a role to the Palestine Liberation Organi-
zation at the Geneva peace talks, he appears as
determined as ever that Jordan be the agent for
the recovery of the territory from Israeli
1Nevertheless, from all indications, the
Husayn-Sadat talks took place in a friendly at-
mosphere. According to the official communique,
Jordanian-Egyptian contacts will continue, and
the Jordanian press has indicated that Sadat
agreed to visit Amman in the near fut re for the
next meeting between the two leaders
On April 9, Husayn took his case to Syria.
While in Cairo on April 5-6, Husayn did not _President Asad has been highly critical of the
fulfill predictions in the Arab press that he would 'J4withdraw I of Jordanian troops from Syria last
align Jordan with the other Arab states by pub-lV _Januaryl:Fol lowing the visit, however, the Jor-
licly recognizing the Palestine Liberation Organi-' danian press quoted Husayn as saying the talks
zation as the "sole representative of the Palestin- were "positive" and reported unanimity of views
ian people." In an interview with the semi-official between the two leaders. Asad was said to have
Egyptian newspaper Al-Ahram, the King said only!') agreed to visit Amman soonl
that he did not oppose the Palestinian organiza-
tion being represented at Geneva and that he had
offered it places on the Jordanian delegation.
Husayn's position apparently was tougher than
Cairo had anticipated. This may make it more
difficult for President Sadat, who wants both the
organization and Jordan represented at Geneva,
to persuade the Palestinian group to attend the
talks)
f' 10 )Husayn arrived in Saudi Arabia on the 11th.
It is unlikely that King Faysal raised any opposi-
tion to Husayn's position on the West Bank, but
Oahe may press Husayn to hold fast against making
any territorial concessions-especially on Jeru-
salem-to the Israelis at the Geneva talks.
Arabs and Jews rub shoulders in a market place
While others try to represent them
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tPrime Minister Meir's resignation on April
11, barely a month after she had laboriously
patched a coalition cabinet together, opens up the
prospect that Israel may have to limp along with a
caretaker government for an extended period.
The likelihood of continuing instability and un-
certainty on the domestic scene will further com-
plicate the difficult process of achieving a Middle
East settlement. f'
Mrs. Meir's decision was apparently based on
her inability to bridge differences in her Labor
Alignment over political responsibility for the
military and intelligence failures outlined last
week in the Agranat Commission's partial report
on its inquiry into the government's conduct of
the October war. As wrangling over the issue
continued, Mrs. Meir apparently came to the con-
clusion that she no longer exercises the political
control within the Alignment necessary to govern
effectively. Leaders of Mrs. Meir's party have
asked her to reconsider, but it seems unlikely that
she willt~She has, however, agreed to head a
caretaker government until a new cabinet can be
formed:'
Assuming Mrs. Meir sticks by her decision,
third are two possibilities for resolving the gov-
ernment crisis: President Katzir, after consulta-
tions with the political parties, taps someone else,
presumably from the Alignment, who is able to
form a government; or the Knesset votes to call
elections on a date it specifies. The Alignment
leaders will probably try to avoid early new elec-
tions; most of them fear that the party risks
losing more voter support and needs time to get
its own house in order. Should it prove impossible
to form a new coalition cabinet under Labor's
leadership, however, the Alignment factions
would have no choice but to face the electorate
for the second time in less than a year
'The oft-postponed search for a successor to
Mrs. Meir has now begun in earnest within her
party. Finance Minister Pinhas Sapir-long con-
sidered Labor's "king-maker" and next after Mrs.
Meir in influence within party circles-is being
touted by some party leaders as the logical choice
to take over. There are strong pressures, however,
from the public and from within the Alignment
for a completely new leadership, preferably one
untainted by the controversy over the govern-
ment's conduct of the war and above internecine
party strife. These pressures tend to work against
the old, traditional front-runners such as Sapir or
Deputy Prime Minister Alon, and favor men like
the popular Yosef Almogi, former minister of
labor and recently elected mayor of Haifa.
Almogi has been spearheading efforts over the
past week to keep the Alignment together. I
Likud leader Menahem Begin has announced
that` he will attempt to mobilize support for a
national unity government. The Alignment is
highly unlikely to support such an attempt, how-
ever, and Begin probably could not induce suffi-
cient defections from the Alignment to form a
government:/
The outlook for any breakthroughs in the
Middle East peace negotiations is dim until the
current political crisis is resolved. This could take
months, particularly if new elections eventually
have to be called. A caretaker government could
still pursue the negotiations, pending the forma-
tion of a new cabinet, but it would not be willing
to commit Israel to any binding arrangements
beyond perhaps an initial disengagement on the
Syrian front. The negotiating position of the care-
taker government is likely to harden, however,
thus diminishing the prospects for obtaining even
the Syrian disengagement.
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GREECE-TURKEY: NEW AEGEAN FRICTION
k F?'JThe prospect of extensive oil deposits in the
Aegean seabed has fueled a dispute between
Athens and Ankara over conflicting offshore ex-
ploration rights. Turkey is pressing for bilateral
talks, but so far the nationalistic junta in Athens
has shown no inclination to negotiate and may
welcome the controversy as a diversion from
domestic problems and a means of unifying th
army:
Offshore oil reserves recently discovered
near'-the Greek island of Thasos, which may yield
some 500,000 barrels per day, are not in dispute,
but have encouraged the Turks to plan prospect-
ing activities in areas that Greece considers to be
part of its continental shelf. This week a spokes-
man for the Turkish Foreign Ministry announced
a cabinet decision giving Turkey's national petro-
leum company the go-ahead to explore near four
other Greek islands. The official said this will
begin after the decisio is published in his govern-
ment's official gazette.1
it, fAnkara's action, probably designed to smoke
out a response from Athens to an unanswered
Turkish diplomatic note of late February, could
well be viewed by the Greek junta as a challenge.
The Greek military regards the Aegean seabed as a
qvital economic preserve and has been taking a
tough stance on the dispute, presumably to con-
vince the Turks to take seriously Greece's claims
to exclusive oil exploration rights
thens is saying that the issue should be
I''
resolved on the basis of the 1958 Geneva conven-
tion on the continental shelf, which would give
Greece extensive rights in the Aegean, and that no
political negotiations are necessary. The chairman
of the committee preparing for Greek participa-
tion in the Law of the Sea conference this week
confirmed the Greek position to the US Embassy
SECRET
in Athens, stating that the Greeks and Turks
would continue to talk, but there was "nothing to
negotiate," as "no country could ne otiate its
own sovereignty."
25X1
JOfficial Turkish pronouncements have been
relatively moderate, but the Turks seem deter-
mined to get what they believe is their share of
Aegean oil. They are not a party to the 1958
convention and apparently maintain that, in any
event, the Aegean is a special case and agreement
should be reached on a basis of equit )7
II, F5ince oil exploration is still in an early stage,)
there is time for further assessment and maneu-
i}( ,vering by the two sides. The US Embassy in
Ankara believes, however, that with possible new
sources of wealth and a historic rivalry involved
both governments are probably pre ared to run
high risks to establis their claims.
ploreti?n are V
25X1
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CYPRUS: INTERCOMMUNAL TALKS STALLED
The six-year-old UN-supervised talks on a
syste to govern relations between the majority
Greek Cypriots and the minority Turkish Cypri-
ots were adjourned abruptly last week without
setting a date for the next meeting. None of the
parties involved appears bent on ending the nego-
tiations, but the talks are in a difficult phase
caused by a recent hardening of positions and
President Makarios' heightened concern about
Athens' intentions toward his regime':
The current impasse was precipitated by the
Greek Cypriots, who chose to make an issue of
Turkish Prime Minister Ecevit's public statement
in late March advocating a federal system for
Cyprus. Federalism is anathema to the Greek
Cypriots, who insist that talks are pointless unless
the object is the creation of a unitary, independ-
ent Cyprus. Turkish Cypriot Vice President Denk-
tash and the Turkish ambassador in Nicosia have
tried to play down Ecevit's statement, claiming he
was misinterpreted and denying that there has
been any change in Turkish policy toward Cy-
prus. The issue of federalism was apparently not
raised directly in the talks, but the spokesmen for
Ankara and Athens reportedly were both taking a
harder line shortly before the negotiations were
suspended.7
independent, unitary Cypriot state. President
Makarios fears, however, that the nationalistic,
anti-communist junta in Athens may be plotting
against him and clandestinely supporting enosis,
which aims at the union of Cyprus and Greece.
He has recently tried to increase his control over
the Greek-officered Cyprus National Guard,
Nhich has been implicated in pro-enosis incidents.
The US Embassy in Nicosia also suspects that
Makarios, in order to shore up his position, en-
couraged recent Soviet demarches-delivered to
Greece, Turkey, Britain, and the US-that pro-
fessed to see rus' soverei nt endan-
gered.
IRAQ: KURDISH AUTONOMY SIMMERS ON
The government has made little progress to-
ward winning Kurdish support for the autonomy
plan announced a month ago, but Baghdad ap-
pears determined to push ahead. A substantial
military force has been moved into the Kurdish
area to assure government control of urban and
industrial centers. The rebels have largely aban-
doned these areas for more defensible positions in
the mountains to the north and east. Reports of
intermittent clashes-some involving artillery,
- mortars, tanks, and even aircraft in limited num-
Ibers-remain mostly unconfirmed, but skir-
arty are on record
vit and his
h E
h
I
p
,
ce
oug
t
l
as favoring federalism for Cyprus, this presumably . mishes will probably continue. Kurdish claims of
represents Ankara's maximum bargaining posi-1 heavy government losses probably are exag-
tion. Similarly, the Greek Cypriots' decision to gerated.1
stall the talks at this time is probably essentially a
tactical gambit, although they are obviously de-
termined to bury the idea of a federal solution.
President Makarios has declared that if the dead-
lock is not broken, the Cyprus issue should be
returned to the UN Security Council. The UN's
special representative on Cyprus is trying to work
out a formula that will allow early resumption of
the intercommunal talks. I
i _E Athens last week repeated its standard
policy line of support for the talks and for an
J Both sides have launched propaganda cam-
paigns designed to win support for their positions
on the autonomy issue. The government has
"played up alleged progress in implementing its
autonomy plan for the Kurds. The Kurds have
reactivated a clandestine broadcasting station and
have sent representatives abroad to explain their
cause and seek foreign aid. The rebels' continuing
IL3attention in domestic propaganda broadcasts to
ma
ests the
t
di
y
y
e sugg
spu
the specific issues in
yet be willing to negotiate their differences with
the government'
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JCIsKt I
whlvll~
ic
Baghdad has two main options, neither of crimes that may have been committed." Pakistan
has much prospect for early success. It can also agreed to re-examine the cases of some
move to consolidate its hold on the urban Kurd-
ish areas it now controls, while launching limited 3
.
sterritory held by rebel leader Barzani. Alter-F2-7tional Biharis will probably be admitted to Pak-
natively, Baghdad can try to break the impasse Stan as a result, but the total number finally
with an all-out military offensive. The govern-I', ccepted will remain a fractio of the some
ment probably still regards this as a last resort, 400,000 who still wish to relocate
but it may feel compelled to follow such a course
if a more gradual approach ties down a large
military force in prolonged and unproductive skir-
mishing in the north
2 Although the government might be able to
subdue the Kurds with the forces and weapons
already available in the area, any such attempt
could drag on inconclusively as in the past. An
unsuccessful military campaign against the Kurds
could strain relations between the Baath govern-
ment and the armed forces, which would bear the
brunt of intensified Kurdish resistance.
Biharis-non-Bengalee Muslims-seeking to emi-
rate from Bangladesh to Pakistan, whose ap-
plications had previously been rejected
Addi-
he accord moves reconciliation between
wl a were, before the 1971 war, the two "wings"
of Pakistan, an important step beyond the simple
recognition Islamabad accorded Bangladesh last
February. The two nations can now begin ne-
gotiations on various bilateral matters apart from
the Bihari issue, including the establishment of
trade and communication links and the division
of pre-war Pakistan's assets and liabilities. At
some point, diplomatic relations will be estab-
lished:I
? 7 u Indo-Pakistani relations also made limited
progress at New Delhi. India, which successfully
/ .L played a mediatory role in the trilateral dis-
cussions, concluded a separate bilateral agreement
SOUTH ASIA: TOWARD BETTER RELATIONS with Pakistan defining priorities for future dis-
cussions to implement the 1971 Simla agreement
[The agreement reached in New Delhi on between Prime Ministers Gandhi and Bhutto.
April 9 by the representatives of India, Pakistan, Talks will begin shortly on the resumption of
and Bangladesh, resolves the most serious prob- postal and telecommunications links and the res-
lem standing in the way of a normalization of toration of travel facilities, particularly forpil-
relations among the adversaries in the Decemberl_7grims. Presumably, discussions will come later on
1971 war. Some thorny issues remain, however, the restoration of diplomatic relations, which Is-
and will be the subject of further hard bargaining lamabad had once insisted must come first, and
on economic ties
(though the accords contain face-saving
elements necessary to satisfy domestic political
requirements, particularly in Bangladesh, Pakistan
achieved its major objective in the trilateral ne-
otiationI'lDacca agreed to the unconditional,
speedy repatriation of 195 Pakistani prisoners of
war who have been held in India for possible war
crimes trials in Bangladesh. In return, Islamabad
made what amounts to a public apology for any
','7 The New Delhi accords should pave the way
for Bangladesh's early entry into the UN. The
Chinese, who were committed to keeping Dacca
out of the UN until the issue of the 195 POWs
was resolved to Pakistan's satisfaction, may now
recognize Bangladesh and no longer oppose its
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ARGENTINA: SUCCESSION POLITICS
[President Peron's age and fragile health,
along with the turbulent nature of the internal
political situation, seem to be fostering concern
and anxiety over the presidential succession. The
mood of uncertainty in the country encourages
pulling and hauling among the Peronists as they
struggle for position in the event of Peron's
absence or deathl
-Meanwhile, it is still unclear whether Peron
will go to Spain before the onset of the Buenos
Aires winter. He probably would like to seek
medical attention and rest and to escape the
damp inclement weather, but he obviously is
trapped by the political entanglements caused by
terrorism and the quarreling among his followers.
His hesitancy may also stem from a conviction
that his departure would create a dangerous vac-
uum. His doubts are not unfounded, since it is
highly probable that. politically inspired violence
would intensify in his absence-regardless
assumed his mantle.
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Cuba:
PREPARING FOR THE PARTY CONGRESS
;7,C 1
, /Although the Cuban Communist Party's
first congress will not be held until some time
next year, the Castro regime is already involved in
vigorous activity aimed at ensuring the event's
success. Success in this case means maintaining
undiminished Fidel's hold on power-by no
means a sure thing. Creeping institutionalization,
brought about both by Soviet pressure and by the
demands of efficient government, is rapidly reach-
ing the point where Fidel's old free-wheeling style
of rule, were he to attempt to revert to it, would
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meet significant organized opposition within the
regime leadership. Fidel's ultimate authority in
the decision-making process is still unchallenged
(in large degree because he has voluntarily re-
treated from many of his more extreme posi-
iSimilarly, the seventh national conference of
tions), but he apparently is determinedly carrying the Young Communists League (the party's youth
1
out meticulous preparatory political work to pre- 4 -arm) held from March 31 to April 4 was domi-
vent the congress from being a vehicle by which ?ated by those owing their allegiance to the Cas
he is kept in a high position as "revolutionary't m
. ros. If these political organizations remain largely
window dressing but deprived of his supreme in Fidel's camp, those hopeful of placing re-
authority] straints on his rule will have an uphill battle in
Ever since 1970, Castro has been reducing
his interference in day-to-day administrative and
economic matters, and thus reducing the da-
maging impact of his injudicious meddling in
affairs best left to better-qualified subordinates.
In the past four years, he has inclined much more
toward the appearances of group leadership, and
he has delegated responsibility and authority to a
greater degree than ever before during his admin-
istration. At the same time, he has relaxed his
resistance to the creation and development of
political, legal, and administrative structures that
are the prerequisites of efficient and successful
government-the same structures that could be
used to limit his heretofore unchecked authority.
The party congress, of course, will be a key event
in this process of institutionalization and it is
there-where a new political bureau, secretariat,
and central committee probably will be se-
lected-that the forces opposed to Castro's total
domination are most likely to attempt to place
formal restraints on himl
idel-working primarily through his
, brother, Raul-is determined to prevent the in-
stitutionalization process, and the congress in par-
ticular, from being used against him. He has
turned to his main source of strength-the mili-
tary-which held its third party organization
meeting from April 3 to 6. The sessions were
dominated entirely by members of the Sierra
Maestra guerrilla elite-those who served in
combat with the Castros during the revolution-
and by those who owe their position to Fidel or
Raul. By guaranteeing the continued loyalty of
the party leadership in the armed forces, the
Castros will be assured of considerable control
within the party itself because the military has
overwhelming influence in the party central com-
mittee and, through it, the entire party rank and
file'!
`=
engineering a political hen the con-
gress is eventually held.
ECUADOR: ECONOMIC PROBLEMS
( 131 - 14 V-)
In less than
two years, Quito's fiscal position
has changed dramatically. Last year, the first full
year after completion of the trans-Andean pipe-
line, central government revenues increased by 49
percent to about $312 million. About half the
increase came directly from the petroleum in-
dustry, and much of the rest was from secondary
effects of the larger oil income, mainly taxes on a
much larger volume of imports. At the current
reference price of oil, the government's petroleum
revenue will increase to over $600 million this
year, bringing total revenues to an estimated $900
million. Foreign-exchange reserves, which were
down to only $12 million in 1972, have climbed
to about $250 million. To most Ecuadoreans,
however, these new riches have meant little more
than higher prices.
The consumer price index rose 17.5 percent
last year, a sharp increase in a country where
economic stagnation and conservative monetary
policies had kept prices stable. Inflation has been
aggravated by a slump in agricultural production,
resulting in the need to import high-priced food.
Fiscal policy has not been geared to stabilizing
prices-the 1974 budget calls for increased spend-
ing of 36 percent above the 1973 budget. New
measures decreed on March 25 are unlikely in the
short run to dampen inflationary pressures. In an
effort to increase agricultural production, the
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140, SECRET
government raised prices paid to farmers, which
should transfer about $120 million from con-
sumers to agricultural producers, and modest
wage increases were decreed for low- and middle-
income workers in both the public and private
sectors. The new measures also included a price
freeze on a wide range of consumer items, efforts
to discourage foreign borrowing, and measures to
increase credit available to the agricultural and
housing sectors.
While the government has been aware of the
danger of inflation, it has been slow to attack
basic causes. The government is apparently
seriously divided on the issue of whether to grant
wage increases to compensate for inflation, or to
deny them for fear of starting an inflationary
spiral. Token wage increases decreed last month
have done little to satisfy workers. Further in-
creases in food prices, coming after increases of
about 25 percent in 1973, will be felt particularly
by the politically volatile urban classes. The new
price freeze is likely to be ineffective because
Quito does not have the ability to supervise
present price controls. Aware of the need to deal
with popular discontent, the government will 25X1
probably placate the demands of workers who
complain the loudest, but this will onl f r
add to inflationary problems.
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fflwq~
Secret
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