WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A010900090001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 21, 2016
• Document Release Date: October 16, 2007
• Sequence Number: 1
• Publication Date: September 27, 1974
• Content Type: SUMMARY

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Secret
Weekly Summary
Secret
27 September 1974
State Dept. review
completed copy N2 59
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The WEEKLY SUMMARY, issued every Friday morning by
the Office of Current Intelligence, reports and analyzes signif-
icant developments of the week through noon on Thursday. It
frequently includes material coordinated with or prepared by
the Office of Economic Research, the Office of Strategic
Research, and. the Directorate of Science and Technology.
Topics requiring more comprehensive treatment and therefore
published separately as Special Reports are listed in the
contents.
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CONTENTS (September 27, 1974)
1 The Middle East
3 USSR-UN: Gromyko's Survey
3 Cyprus
MIDDLE EAST
AFRICA
6 Egypt: Looking Ahead
8 Ethiopia: Settling In
9 Lebanon: Government Resigns
10 Denmark: Government Survives
10 UK: Midway in the Campaign
12 Yugoslavia: Troubled Ties
13 USSR: Mine-clearing;
EAST ASIA
PACIFIC
15 South Korea: Opposition Stirring
16 South Vietnam: Military; Political Strains
17 Cambodia: Tensions in Phnom Penh
WESTERN
HEMISPHERE
18 Argentina: The Vendetta Syndrome
19 Brazil: Middle East Policy
20 OAS: The Cuba Sanctions
21 Colombia: Economic Reform
22 Atomic Energy: Concerned Conference
23 OECD: Economic Prospects
Comments and queries on the contents of this
publication are welcome. They may be directed to
the editor of the Weekly Summary,
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V JCL.rRC 1 1*010
PLO Representative Khaddoumi (1), Syrian Foreign Minister Khaddam (c) and Egyptian Foreign Minister Fahmi
THE MIDDLE EAST
[Egypt's President Sadat took a new ap-
proach last weekend to the problem of bringing
both the Jordanians and the Palestinians into a
coordinated Arab strategy for peace negotiations
LA tripartite meeting in Cairo among Egypt, Syria,
and the Palestine Liberation Organization ended
with the Egyptians acceding to PLO demands for
recognition as the "only legit~imate representatives
of the Palestinian people.'ifAt the same time,
however, Sadat is apparently continuing to sup-
port Jordan's claim to be the negotiator for the
Palestinian-inhabited West Banka.
LEgypt's agreement to the language of the
tripartite communique represents a reversal of
Sadat's acknowledgement, given to King Husayn
last July and strongly opposed by the fedayeen,
that Jordan speaks for Palestinians resident in
Jordan. The concession to the PLO appears, how-
ever, to extend only to the form, not the sub-
stance, of the dispute that has prevented Arab
agreement on who will negotiate for the return of
the Israeli-occupied West Bank. The communique
did not accord that role to the PLO, suggesting
that the Egyptians did not concede the key point:
that Jordan should take the lead in those
negotiations
-. [Sadat apparently came to believe that the
embarrassment he risked by backtracking on the
issue of who is called the representative of the
Palestinians would be tolerable if he could achieve
his ends by conceding the designation to the PLO
without denying Jordan the key role. At this
time, the success of the Egyptian leader's latest
tack is far from assured]
Jordanians Angered
I [Amman responded to the tripartite com-
munique by announcing it was "freezing" its
participation in inter-Arab negotiations, including
preparations for Geneva peace talks with Israel,
until the Arab summit now scheduled for late
next month. The Jordanians turned down an in-
vitation to meet with representatives of Egypt,
Syria, and the PLO, which was extended by
Syrian Foreign Minister Khaddam during a stop in
Amman on his return from Cairo]
NNevertheless, more recent public statements
from Amman suggest that the Jordanians may
understand Sadat's maneuveOCAn Amman radio
commentary early in the week rejected as
"sterile" the argument over who represents
whom, noting that the problem centers not on
who represents the Palestinian people but on who
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can realistically expect to sit opposite Israel at the
negotiating table and recover Arab land. What
Jordan fears, according to the commentary, is
that the Arabs will ignore the heart of the issue in
their concentration on applying labels
?2 [Despite Jordan's apprehension, its failure to
reject the tripartite communique categorically
and its apparent dismissal of the representation
issue as of minimal importance suggest that the
Jordanians might be brought to tolerate the PLO
nominally as the "only legitimate" representative,
so long as Amman retains the right to negotiate)
Fedayeen Interpretation
1 VPLO spokesmen, for their part, are interpret-
ing the Cairo communique as a rejection of any
Jordanian role in negotiations on the future of
the occupied territories. They contend that the
designation of the PLO as the only representative
of the Palestinian people denies Jordan the right
to represent any Palestinians and therefore to
negotiate with Israel for a withdrawal from the
West Bankl
;~. [Moderate leaders of the PLO are promoting
this version of the communique primarily to con-
vince the Arab states and the major powers that
the PLO must be included in future sessions of
the peace talks. They are also trying to counter
the arguments and appeal of fedayeen radicals,
who have been criticizing PLO Chairman Arafat
and his supporters for their conciliatory policies.
PLO leaders have been meeting in Damascus this
week to assess their position in the wake of the
Cairo meeting and to debate future policyf.
CAlthough PLO leaders have so far declined
to have formal contacts with Jordanian officials,
they may now conclude-in view of Amman's
summary rejection of Khaddam's invitation to
four-party talks--that a private expression of will-
ingness to consult with Jordan as part of a general
Arab coordinating effort would demonstrate
Palestinian responsibility and further isolate King
Husayn. Should the moderates take this step, it
would increase the likelihood that the radical
fedayeen groups would withdraw from the PLO]
[Israel joined Jordan this week in denouncing
the status accorded the PLO in the Cairo com-
munique. Israeli Foreign Minister Allon saw the
move as a step toward a UN General Assembly
resolution granting observer status to the PLO-an
act that Allon said would be tantamount to legiti-
mizing terrorist activities. At the same time, Allon
urged Jordan not to boycott the Geneva peace
talks, saying that the Palestinian problem can
only be solved by a peace treaty with Jordan)
( [Meanwhile, Prime Minister Rabin has been
continuing his effort to prepare Israeli public
opinion for the next step in the Middle East peace
negotiations and, in particular, for what Rabin
expects will be additional US pressures on Israel
in the tough negotiations ahead with the Arabs.
In a recent press interview, Rabin cautioned that,
although US support for Israel continues, it
would be wrong to disregard the importance
Washington attaches to consolidating its position
with the Arabs. Rabin assessed US concern over
Arab use of the oil weapon as only one factor in
Washington's policy, but noted that it is neverthe-
less an element that does not work in Israel's
favors
tin a television interview on September 20,
the Prime Minister said that he would be prepared
to make concessions in order to achieve real
peace. While reiterating the government's stan-
dard position that Israel would not return to the
pre-1967 lines, Rabin did say that he would favor
a territorial compromise, and perhaps even a far-
reaching one, if there were a real prospect of
obtaining true peace with one or more Arab
states)
- IOn September 25, Rabin stated publicly that
he had a "clear and detailed Israeli peace map,"
but that he would disclose it only to Arab negoti-
ators in actual peace talks. In the past, Israeli
leaders have said that no maps would be prepared
until the time came to discuss with the Arabs the
details of possible Israeli withdrawals to agreed
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%low or-Ur 1
USSR-UN:
Gromyko's Survey
For those who find drama in the predictable,
For ign Minister Gromyko's speech at the UN
this week must have sounded like vintage Shake-
speare. For everybody else, it was clear from
Gromyko's remarks that the Soviets are approach-
ing the new UN session as an unavoidable chore
that should not be allowed to complicate more
serious work elsewhere.
Using generally moderate formulations and
stressing that international relations are domi-
nated by a desire for detente, the Soviet foreign
minister ticked off five urgent tasks facing the
world community:
? Opening of negotiations on Cyprus un-
der the auspices of a "representative", UN-
sponsored international conference, with the
aim of guaranteeing that country's sover-
eignty, independence, and territorial integrity.
? Resumption of the Geneva peace confer-
ence on the Middle East.
? Completion of the European security
conference at an early date and at the highest
level.
? Pursuit of definite results in SALT, the
European force reduction talks, and the UN
disarmament committee.
? Support for UN decisions strengthening
the economic independence of the developing
states.
In detailed discussion of the Middle East,
Gromyko broke no new ground and seemed to
equivocate somewhat on the Palestine issue. He
affirmed that representatives of the Palestinian
Arabs should take an "equal seat" at the peace
talks, but failed to specify whether the Pales-
tinians were to be treated as a sovereign nation.
At the same time, he hinted that "real" progress
toward peace in the area could open the way for a
resumption of relations with Israel, inasmuch as
the Soviet Union backed Israel's existence and its
development as an independent, sovereign state.
On arms control and disarmament issues,
Gromyko reiterated the long-held Soviet position
that the Vienna force reduction talks should not
diminish the security of either side. Perhaps with
India in mind, he announced the Soviet intention
to make the nuclear weapon test ban "general and
all-embracing." As for this year's Soviet "show-
case" disarmament proposal, Gromyko said little
more than that the Soviets favored banning mili-
tary uses of the environment. In the same breath,
he repeated earlier showcase proposals for a world
disarmament conference and for a worldwide
10-percent reduction in military budgets. He
noted that these proposals did not seem to be
making any headway.
Gromyko's hour-long address seemed to con-
firm that except in such areas as Cyprus and the
Middle East, where the UN is viewed as a useful
tool to promote Soviet influence, Moscow will
limit its UN efforts to blocking attempts to
reduce the role of the great powers and to in-
crease? the organization's budget.
CYPRUS
S- [Greek and Turkish Cypriot leaders agreed
this week to begin releasing all prisoners, but the
exchange was halted after a few days because the
Turkish Cypriots objected to the repatriation of
Greek Cypriot prisoners to the Turkish-controlled
north. The talks between leaders of the two com-
munities made little progress otherwise, and were
overshadowed by the current session of the UN
General Assembly, where high-level Greek and
Turkish officials have been lobbying for diplo-
matic support of their positions on the Cyprus
question
5 \The talks have been further complicated by
the activities of Archbishop Makarios, who is in
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New York this week preparing to address the UN
as president of Cyprus. Makarios has been giving
typically mixed signals regarding his future role
on the island. The Archbishop has not given up
on returning to the island, nor has he tipped his
hand as to the capacity in which he might return.
He said this week that he might return to the
island within two or three weeks; Acting Cypriot
President Clerides has told the press that he ex-
pects the Archbishop back after the present ses-
sion of the UN ends)
IClerides' remark may be designed to put
pressure on the Turks to be more conciliatory.
The prospect of an early return of the Archbishop
would be deeply troubling to nearly all parties in
the dispute and might make them more amenable
to compromise. The Turks, who hold the Arch-
bishop responsible for a decade of ill-treatment of
the Turkish Cypriots, much prefer to deal with
Clerides and can be expected to stiffen their nego-
tiating positions or even break off the talks if
Makarios returns. The Greek position toward
Makarios has been ambiguous-probably reflect-
ing Prime Minister Karamanlis' mistrust of the
Archbishop and Foreign Minister Mavros' support
of him. Athens, however, would be certain to
oppose any development that threatened to lead
to further instability on the island]
[The Greek Cypriots' ability to negotiate
authoritatively has already been damaged by
Makarios' public posturings and Athens' failure to
give Clerides strong public backing.
11 [Although Clerides does not want Makarios
back, he does not want him to resign either. The
Archbishop's resignation would require a new
election, and Clerides would like to sidestep this
requirement.
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%we JE ,r (L I
5 Lin both Athens and Ankara, political leaders
are anxious to hold new elections. Greek Prime
Minister Karamanlis wants to complete Athens'
full return to a democratic system as rapidly as
possible; Turkish Prime Minister Ecevit wants to
cash in on his current popularity to improve the
standing of his party in parliament]..
- ~-he Greek cabinet last week approved a new
election law providing for a single legislature of
300 members elected through a system of "re-
inforced proportional representation." The date
for a new election has not been announced, but it
is likely to be in November. Political parties-
including the Greek Communist Party, banned
since 1936-are now free to function. The Greek
left, which received 11 percent of the vote in the
last election in 1964, is badly divided. The Mos-
cow-backed Communist Party shows no incli-
nation to form an alliance with its dissident
faction or with other leftist forces, and this
should hurt the left's showing at the polls]
S [The other parties are still sorting themselves
out. Foreign Minister Mavros has been unani-
mously elected president of the Center Union;
Prime Minister Karamanlis is reportedly making
final preparations for launching his "new demo-
cratic" front, which he hopes will be broadly
based,
[in Ankara, Prime Minister Ecevit's attempts
to form a new government and to hold early
elections received a serious setback when the
right-of-center Democratic Party refused to join
in a coalition designed to expedite the holdinq of
early elections. The Democrats may still join in a
coalition, but only if Ecevit drops the idea of
early elections. Extensive political maneuvering
can now be expected. None of the possible alter-
natives-a minority government, a right-wing coa-
lition, or an "above parties" government-offers a
durable or stable alternative. Putting together a
government may be a painful and long-drawn-out
matter for Turkey, and this will tend to make it
less flexible in dealing with the Cyprus problem.
Denktash (1) and Clerides meet to announce second prisoner exchange
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SYRIA
Ff` -`sPa LEBANQIA 1:;,
e , rY.Dame/ycus
Tel Av Yafoi
' IRAQ
Baghdad,
ETHIOPIA
Addis A,ha,
EGYPT: LOOKING AHEAD
7 (President Sadat has recently initiated a long-
range strategy to increase Egyptian influence in
the Arabian Peninsula - Persian Gulf area. Over
the near term, his aim is to limit radical Arab
opposition to his efforts to achieve a peace settle-
ment with Israel. For the longer term, he is taking
out insurance against the possibility that Arab
cohesion and Egyptian political strength might be
dissipated once a settlement is achieved.
1Sadat's plan, undertaken in coordination
with Saudi Arabia, calls for:
Improved relations with Iraq, a leading
radical Arab state, on the understanding that
continued political differences need not in-
hibit cooperation in other matters, particu-
larly economic
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sI Sdat has some reason to fear that peace
with Israel might result in a shift in the Arab
center of gravity from Egypt to the oil states of
the Arabian Peninsula. A peace settlement would
remove the main force that brings the Arabs
together, that gives Egypt political dominance in
the Arab world, and that assures Cairo of substan-
tial financial aid from its neighbors. Sadat's stra-
tegy is thus an attempt to guarantee that Egypt
will share a post-settlement position of political
pre-eminence with the Arab financial giants
`l ~Sadat is also attempting to reinforce political
moderation in the peninsula-gulf area by under-
taking moves to contain the Soviet-backed radi-
calism that threatens stability in the conservative
oil states with which he is cooperating. He is
aiming for the political neutralization of Iraq and
South Yemen, both exporters of subversion in the
gulf, through a program of economic and tech-
nical cooperation.
7 SSadat is not unaware of the difficulties he
will encounter in pursuit of this strategy, and he
may have to make some adjustments in his origi-
nal goals. Arab leaders are not accustomed to
looking so far beyond the immediate horizon.
7 tSadat will also need a degree of forbearance
from the Soviets, who will see his efforts to
achieve rapprochements with Iraq and South
Yemen as designed primarily to undermine Mos-
cow's influence. Although Sadat's present aim is
in fact to wean these countries away from over-
riding Soviet influence, he may in the end come
to consider that the essentials of his strategy can
be achieved without a significant diminution in
Moscow's presence.
President Sadat (r), Deputy Premier Hijazi (c), and Interior Minister Salim
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ETHIOPIA. SETTLING IN
IThe military rulers appear to be settling in
for an indefinite period of authoritarian rule.
Thus far they have managed to fend off, without
any real trouble, civilian demands for a share of
power. The military may yet, however, have more
serious problems with its erstwhile student and
labor al I ie
It 1The military acknowledged publicly
week that supreme authority rests in the Armed with civilian officials)
Forces Coordinating Committee that is based in
Addis Ababa and made up of some 120 members II [Whatever the precise size and composition of
ranging from private to major, elected by the
military services and the police. The military com-
mittee in the capital appears to be linked with
similar committees at major military commands,
and an interchange of ideas or policy matters
the military ruling group, it unquestionably is
split along ethnic and regional lines. It also
appears to be divided on larger political questions,
such as the future of Haile Selassie and the
monarchial institution, whether and when power
should be returned to civilians, and Ethiopia's
future ties with the US. A faction of the com-
mittee is reported to be pushing for the continua-
tion of military rule for at least another two
years .J
AL-ast week, spokesmen for the military
government described the role of Lieutenant
General Aman as titular head of the government
and head of the cabinet, but not the head of the
ruling military committee. General Aman's actual
power relationship vis-a-vis the committee is still
unclear; he seems to be engaged in a contest for
power with the military committee. At present,
Aman appears to be a significant political force as
a result of his popularity among military person-
nel and among the public as a whole. During his
press conference last weekend he appeared confi-
dent and decisive
I I As it did prior to the emperor's overthrow,
the military committee is working through a cabi-
net made up predominantly of civilians. As a sop
to civilians demanding an immediate share of
power, the military this week announced the ap-
pointment of a 50-man civilian advisory board,
but this is unlikely to quiet oppositiorn7
[Up to now, the military has been able to
turn back civilian demands to share power
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appears to take place between the Addis Ababa
committee and the others,
1) Thus far, the military rulers have been suc-
cessful in keeping their operations and key figures
from public view. There are reports suggesting
that a small inner military group, possibly includ-
ing persons who are not formally members of the
committee, may be pulling the strings. A number
of committee members serve as designated links
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11
without having to resort to violence. It must soon
decide whether to reopen the university. Student
demonstrations which began on September 16
were easily contained, but the military has threat-
ened to use force to quell future demonstrations.
4 The students are poorly organized, and the
military's crackdown on the Confederation of
Ethiopian Trade Unions this week deprives the
students of allies. Labor leaders, like the students,
condemned the military committee as unrepre-
sentative of the Ethiopian people and demanded a
governing role for civiliansl he military
responded by arresting three lab leaders and
launching a propaganda campaign accusing them
of corruption and being holdovers from the old
regime. Largely because the military was able to
separate the leaders from the rank-and-file
workers, the confederation's general strike-called
for September 25-fizzled. Military threats to dis-
miss strikers apparently also dissuaded large num-
bers of workers. Although the military has won
the first round, the civilians can be expected to
continue agitatin for the military's early return
to the barracks.
LEBANON: GOVE NMENT R SIGNS
Il/e-- 7
[Lebanon's gove nment\m y be in caretakers'
hands for some time following Prime Minister
Sulh's submission of his resignation to President
Franjiyah this week. After 14 months in office,
Sulh stepped down when faced with the threat-
ened withdrawal of several cabinet ministers cri-
tical of the government's inability to deal effec-
tively with the country's persistent internal secur-
ity and economic problems.
Franjiyah could ask Sulh to add some new
faces and simply reorganize his cabinet, but the
President appears more likely to designate
another political leader to assemble a new group.
Because Lebanon has serious problems, Franjiyah
is under pressure to make a choice quickly. It
could take several weeks, however, to come up
with a slate acceptable to the several powerful
religious and political blocs represented in parlia-
ment. Franjiyah, a Christian, will follow the
Lebanese convention of appointing a Sunni
Muslim as prime minister.
Any candidate acceptable to Franjiyah
would hold to the same basically moderate
policies espoused by Sulh. The President may
conclude, however, that Lebanon's problems de-
mand that he now appoint a more assertive and
capable leader than the lackluster Sulh. A group
of powerful members of parliament met on Sep-
tember 24 and agreed on a program calling for the
appointment of a "strong" prime minister capable
of instituting widespread political, economic,
social, and administrative changes including a
clear-cut defense policy.
Kamal Jumblatt, leader of Lebanon's Druze
community and head of the Progressive Socialist
Party, led the attack on Sulh's government. An
armed clash between his followers and those of
the Christian Phalanges Party on September 22
highlighted the government's inability to control
the security situation and contributed to its
downfall, but religious strife was not the primary
cause of Sulh's resignation. Leaders of the pre-
dominantly Christian and Muslim parties, like
Jumblatt, had threatened to withdraw their repre-
sentatives from the cabinet. No influential
political figures came to Sulh's defense.
Palestinian leaders have played no direct role
in the fall of the government. Regular violations
of security restrictions by fedayeen forces,
however, have led to periodic Israeli violations of
Lebanese territory, demonstrated Beirut's in-
ability to protect residents of southern Lebanon
from either the fedayeen or the Israelis, and
stimulated criticism of the central government by
residents of the south.
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DENMARK: GOVERNMENT SURVIVES
M
li he Danish government managed to get
through another major test last week when a
controversial tax-reform package passed by a vote
of 88 to 40.3
f
1 IJhe final balloting came after a week of hard
bargaining and political maneuvering. Prime
Minister Hartling's Moderate Liberals, who con-
trol only 22 out of 179 seats in parliament, tried
in vain to compromise with the opposition Social
Democrats. The Social Democrats opposed the
$1.2-billion tax reduction on grounds that the
loss of government revenue would require cuts in
social and educational programs. Hartling also
tried to strike a compromise with Mogens
Glistrup's anti-tax Progessive Party, but failed
because Glistrup insisted on a larger tax cut?
Y \Because Hartling could count on only 84
votes, the Social Democrats and Progressives were
in a pivotal position. Hartling had announced
earlier that if the bill were defeated, he would call
elections. In the end, the Social Democrats
abstained and the Progressives split, providing
Hartling with the necessary margin]
[The tax-reform package is the third and final
stage of an economic program Hartling has de-
signed to boost the sagging Danish economy. Den-
mark is currently suffering from an enormous
balance-of-payments deficit and an inflation rate
expected to reach 15 percent this year. Getting
earlier phases of the plan through parliament
nearly toppled the government twice this yearl
1 c~ Fit has become clear since the vote on the tax
package that Hartling has forged an unofficial
alliance with the six non-socialist parties that
sup-7 ported him on September 20. Hartling got
another boost when three of the four members of
the Progressive Party who broke ranks to vote for
the tax package decided to resign from their
party. They are expected to remain in parliament
either as independents or as members of one of
the non-socialist parties, and presumably they will
support the government. With the non-socialist
support, Hartling can count on a one-vote ma-
jority in parliament and will not have to court the
socialist parties. The Prime Minister has survived
nine stormy months in the face of impossible
odds and he may be in for brighter days.
UK: MIDWAY IN THE CAMPAIGN
3 (o With elections two weeks away, the Labor
and 'Conservative parties continue to focus their
attacks on the weak points in one another's elec-
tion platforms. At the same time, the third parties
are demonstrating their determination to hold the
balance of power in Parliament after the general
election on October 10. Recent public opinion
polls give Labor a clear lead.
36 The campaign has so far avoided the
emotionalism of the election last February. The
only sour note has been Prime Minister Wilson's
complaint that the press is anti-Labor and that he
is the victim of a Tory smear campaign promoted
by several large newspapersj(Labor continues to
35East doubt on the Conservatives' ability to gain
the cooperation of the trade unions. Government
spokesmen charge that the Tory economic pro-
gram prescribes increased unemployment as an
antidote to inflation)
36 [The Conservatives are busy leveling charges
of their own. Raising the specter of unemploy-
ment resulting from probable cuts in the defense
budget, they continue to hammer at the govern-
ment's motives for postponing defense review
decisions. The. Tories also question the viability of
Labor's "social contract" concept of voluntary
restraint in wages and prices as well as the govern-
ment's ability to control workers' demands as
demonstrated by the current Ford Motor strike]
4 [The resignation of Lord Chalfont, a former
minister in Wilson's cabinet, on September 22
typifies the alienation of some moderate and
right-wing Laborites from policies dictated by the
trade unions and the party's left wing. Although
politically embarrassing for Wilson, the resigna-
tion will probably have little impact on the elec-
tion outcome.)
33 [Similarly, Chalfont's probable move to the
Liberal Party is not expected to have a marked
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giro, JLL F L I NMW
Opposition leader Heath campaigning
effect on the Liberals' political fortunes, but it j- Labor or the Tories winning a parliamentary
might strengthen their claim that they provide an majority. The Nationalists' election manifesto,
alternative to Labor and the Tories. The party published earlier this week, advocates-predic-
hopes to increase its parliamentary representation
by concentrating its funds and efforts in areas
where a small shift in voter preference would give
the Liberals the edge. Party leader Jeremy
Thorpe, who has pledged to break the two-party
system, is stressing the positive aspects of a
minority government. In most polls, the Liberals
continue to have the support of about 20 percent
of the respondents, although two recent polls
suggest they may be making slight gains)
)The Scottish Nationalist Party, like the
`Liberals, is also undermining the chances of either
tably-complete independence for Scotland. It
calls for the removal of all nuclear weapons from
Scotland and maps out a fairly liberal social
program intended to broaden the party's appeal
and cut into Labor's traditional strength in
Scotland. The Nationalists may also gain votes
from Scottish conservatives unhappy with the
Tories' weak commitment to greater Scottish
self-government. Many political observers predict
that the Nationalists will double their parlia-
mentary representation-now 7 seats-at the
expense of Labor and the Tories.
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YUGOSLAVIA-USSR: TROUBLED TIES
T1 {Belgrade is steadily leaking details aimed at
showing that the pro-Soviet "cominformists" re-
cently arrested in Yugoslavia had support from
Moscow. Among the recent allegations are that:
? The charge of the Soviet embassy was
directly involved and was recalled before the
Yugoslavs declared him persona non grata.
? The head of the illegal Cominformist
Party, formed at an underground congress last
spring, is Mileta Perovic, a Yugoslav emigre
resident in Kiev.
? Propaganda materials seized by Yugoslav
authorities came from Czechoslovakia, Hun-
gary, and the USSR.
3 T [Despite the implications of these allegations,
the Yugoslavs have sought to keep state-to-state
relations on a relatively even keel. Two high-level
delegations from the USSR, headed by Deputy
'b Premier Novikov and General Staff chief Kulikov,
met with their Yugoslav counterparts. They spent
little time in the capital, however, and neither was
received by Titoj
//
37 [Belgrade also delayed announcement of the
sentences given to 27 cominformists-ranging
from one to fourteen years "strict imprison-
ment"-until the Soviet officials had gone home.
Tito, however, is on record with a promise to
publicize fully the results of this and other trials.
This grand expose is presumably being held in
reserve for the opening round of full-blown
polemics, should it come to that]
$ tThe Yugoslavs may next take their case onto
the international Communist circuit. Last week,
Yugoslav party sources told Western newsmen
that Belgrade might raise its grievances against the
Soviet party at a preparatory session for an all-
`J / European Communist conference planned for this
fall in Warsaw. Already a Yugoslav party
delegation has been sent to Paris to discuss
international topics with specialists on inter-party
relations of the French Communist Party)
.77 {Stefan Andrei, the Romanian party's top
expert on international relations, arrived in Bel-
grade this week. He talked with Tito and de-
livered a personal letter from Ceausescu]
31 {Whether by coincidence or not, the Yugo-
slavs on September 20 also dispatched a parlia-
mentary delegation to China-the first in 17
years. Chinese officials, in an effort to increase
Moscow's problems with Belgrade, responded
warmly to the Yugoslav delegation even though
there are no party ties between Peking and Bel-
grade. In a toast at a banquet, a vice chairman of
the Chinese parliament went out of his way to
laud Yugoslavia's opposition to foreign inter-
ference, subversion, and threats
DESPITE THE TENSION, THE YUGO-
SLA VS HA VE SOUGHT TO KEEP STA TE-
TO-STATE RELATIONS ON A REL-
A TIVEL Y EVEN KEEL.
etI [There are good reasons for Tito to rethink
his relationship with the Soviets. The first is the
nature of the renewed cominformist activity on
Yugoslav soil and the mounting evidence of
Soviet collusion. Aside from the normal sensi-
tivity to such activity, Tito must view as a decep-
tion all of Brezhnev's assurances of the past three
years that Moscow has no ulterior motives toward
his country. Tito invested his personal prestige
heavily in efforts to convince Yugoslavs of an
essential change in Soviet goals. Now, on the eve
of the succession, he must tacitly admit he was
deceived and must warn his successors-and the
population-against dropping their guard against
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wase,
THE LENINGRAD HEADS HOME
LThe helicop`t rship Le rSgrad and a guided-
missile destroyer that were associated with mine-
clearing operations in the Strait of Gubal left on
September 22; they were sighted refueling near
Aden on September 25.
The Leningrad may go directly to its home
port in the Black Sea, which would take about
one month. By that time, the Leningrad will have
completed its longest voyage-both in time and in
distance. There is some possibility that the
Leningrad will visit Africa, Mauritius, or even
India before returning home. Reports in June
indicated that a Soviet carrier would visit India
this year, but this was linked to a joint Indo-
Soviet naval exercise, which reportedly now has
been postponed by the Indians.
The Soviets announced in early September
that a channel 20 nautical miles long and three
nautical miles wide had been cleared in the Strait
of Gubal. Although cargo ships are now able to
transit the strait, some mine-clearing activity is
continuing. On September 24 the Soviet charge in
Cairo stated that an additional two months would
be needed to complete the work. During their
mine-clearing operation in Bangladesh, the Soviets
conducted check sweeps in Chittagong harbor for
as long as six months, and the entire clearing and
salvage operation took over two years)
The Leningrad
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6E(-;HE I
MBFR NEGOTIATIONS RESUME
(UCH SOU keEy
The fourth round of force reduction nego-
tiations opened on September 24 in Vienna.
Although, Soviet Foreign Minister Gromyko has
suggested that Moscow will make new proposals,
most West European participants believe that
there will be little progress during this round. The
Europeans advocate that the West not offer any
further concessions to the Soviets.
During a meeting with West German
Chancellor Schmidt on September 16, Gromyko
repeated the standard Soviet criticisms of the
Western position in the talks. Objecting to the
West's "common ceiling" concept, he said that
Moscow would accept only equal percentage
reductions based on the present force rela-
tionship.
The Soviet foreign minister cryptically re-
marked, however, that the Soviets would take
"new initiatives" in the talks. West German of-
ficials believe that Gromyko was hinting only at
another and more explicit presentation of the
Soviet proposal for symbolic reductions. In its
draft treaty presented in November 1973, the
USSR proposed that East and West each make a
symbolic reduction of 20,000 men in 1975.
Earlier this year, the Soviet delegates modified
this proposal somewhat, but the Western delega-
tions have continued to reject it because it calls
for equal reductions by both sides and requires
Western states other than the US to participate in
the reduction process from the outset. The West
has argued that only US and Soviet ground forces
should be reduced in a first phase of reductions.
Most of the other Western negotiators share
the West German view that the Soviets will show
little flexibility. The West Europeans apparently
believe that the Soviets wish to continue to stall
in Vienna until a firm date is agreed for the
concluding phase of the European security con-
ference. Moscow wants to conclude that confer-
ence with a summit meeting, and the course of
the negotiations in Vienna and Geneva has shown
that Moscow is reluctant to move in the MBFR
talks until the West agrees to the summit meeting
for CSCE.
With the exception of the Netherlands'
representative, most West European negotiators in
Vienna agree that the West should avoid making
any substantive concessions during this round.
The Hague, under domestic pressure to reduce
Dutch forces, has stated that it will do so only in
the context of a multilateral force-reduction
agreement, and hopes such an agreement can be
reached soon. The Dutch, therefore, would like
the Al lies to hint to the Soviets by the end of the
year that the West would be willing to reduce the
number of nuclear warheads and delivery systems
in return for the Soviets' acceptance of the West-
ern proposal that they withdraw 68,000 men and
1,700 tanks.
The British representative also advocates
giving such a signal at the end of this round. The
issue of introducing nuclear elements into the
talks is a potentially divisive one for the Western
Allies, however, and obtaining agreement for such
a move may prove difficult. Given the evident
desire of most West Europeans to go slow and the
lack of any firm indications that the East will
offer any substantial concessions, it is unlikely
that the many issues that divide East and West
will be resolved during this round of talks.
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SOUTH KOREA: OPPOSITION STIR RING
nts of President Pak Chong-hui's gov-
rOppone
ernment are stirring once again in the aftermath
of the Seoul-Tokyo diplomatic dispute. President
Pak has already taken a number of steps aimed at
heading off domestic criticism. Nevertheless,
there are likely to be confrontations with the
government, perhaps including action in the
streets, before President Ford visits Seoul in late
November.
During the past few days, student and Chris-
tian groups have resumed signature campaigns and
protest prayer meetings aimed at obtaining the
release of comrades imprisoned during the spring
and summer under the government's emergency
decrees. In the National Assembly, the major
opposition party has joined the call for pardons
for political dissenters.
The government's position is complicated by
economic problems. Last week, the largest and
most violent strike since 1972 took place at a
major industrial center near Pusan and officials
fear that a predicted 30-percent decline in the
harvest this year could cause food shortages.
President Pak, in moves aimed in part at
satisfying opposition claims, last month lifted two
of the four emergency decrees imposed earlier
this year, and last week he carried out a cabinet
shuffle. The cabinet changes did not presage any
significant policy shifts, but they did bring in a
number of new faces, pre-empt a planned opposi-
tion attack on government corruption, and
remove education and information ministers who
were unpopular with students and the press.
Additionally, in recent days a number of students
convicted under the decrees have had their sen-
tences reduced. A desire to deflect popular resent-
ment was one factor behind Seoul's harsh anti-
Japanese campaign of recent weeks.
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Kim Yong-sam
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Aft, SECRET Oft
Communist Incidents Up
IF-xcept in the elta, Communist-initiated
military activity increased throughout South Viet-
nam during the week. The weekly total of inci-
dents in the northern provinces was the highest of
the year, but most of the action consisted of
shellings and low-level harassing attacks. Commu-
nist sappers this week blew up two bridges near
important cities-one just outside of Saigon, and
another near Hue, which effectively cut off the
city for several days. The Communists also over-
ran a government outpost in the mountains of
Quang Ngai Province, giving them almost com-
plete control of Route 5 from the highland prov-
inces to the coastal lowlands.
There is tenuous evidence that the North
Vietnamese have introduced their SA-2 surface-
to-air missile system into the highlands. If con-
firmed, the South Vietnamese will be denied air-
space over much of the highlands, as they are now
over western Quang Tri Province.
The issue of government censorship stirred
up the political situation in South Vietnam
briefly this past week. The publishers of one of
Saigon's dailies began a public burning of their
Friday edition when the government threatened
to confiscate the entire publication. Police re-
portedly treated the demonstrators leniently, con-
tinuing the government's recent light-handed
approach in dealing with political dissent, but the
government did confiscate several other news-
paper editions last week.
The recent spate of protests, however, ap-
pears to be heightening personal rivalries in Presi-
dent Thieu's entourage.
South Vietnam's internal political diffi-
culties are still minor, however, and are having
relatively little effect on the bulk of the popu-
lation. Current Catholic protest demonstrations
did not spark significant popular response, and a
Main bridge on Highway I near Saigon
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recent government survey indicates that except
for some of the more educated people in the
cities, most people are unaware of the protests
and do not understand the issues under dispute.
Opposition groups appear determined, however,
to exploit or spark public frustration over infla-
tion, government corruption, and the recent
upsurge in fighting, so that demonstrations of one
kind or another will continue. Communist ex-
ploitation of any future protests will be a major
25X1 factor conditioning the government's response,
but it seems unlikely that the Viet Cong can do
much, given their own political weaknesses.
CAMBODIA: TENSIONS IN PHNOM PENH
~O -7D)
Public discontent, sparked ea 4 this month
by the government's dispute with South Vietnam
over offshore oil exploration, has now been in-
creased by a number of unpopular economic
reform measures. Although the reforms included
substantial salary increases for government em-
ployees and military personnel, these raises were
outstripped by a major devaluation of the riel and
at least threefold increases in the prices of basic
commodities such as rice and petroleum products.
Disgruntlement led to minor looting incidents in
Phnom Penh and the provinces during the week.
The always troublesome leftist teacher and
student agitators plan to exploit the situation.
Beginning this week, some student leaders-
including at least one member of the Khmer
Communist Party-plan to distribute tracts and to
display posters and banners protesting both the
economic reforms and the government's alleged
mishandling of the oil dispute. The activists also
hope to foment strikes and work slowdowns in
the capital. The anti-government campaign is
planned to culminate in street demonstrations
timed to coincide with Prime Minister Long
Boret's address to the UN General Assembly
around October 9. The government's closing of
the teachers' association headquarters on Septem-
ber 24 may prompt the activists to take to the
streets sooner.
Lon Non
The return to Phnom Penh last week of
Brigadier General Lon Non, President Lon Nol's
controversial younger brother, may inflame the
situation. Not only is Lon Non anathema to
leading politicians, he is also thoroughly disliked
and distrusted by the students and teachers, who
hold him personally responsible for the killing or
wounding of several demonstrators in March
1973. Lon Non reportedly was involved in the
decision to close the teachers' headquarters.
Although Lon Non has told some journalists and
friends that his visit will only be a brief "vaca-
tion," US officials believe that he will try to stay.
The moment of truth for Cambodia in the
UN General Assembly is nearing. The UN steering
committee voted on September 19 to recommend
the pro-Sihanouk resolution that was deferred last
year for inscription on the General Assembly
agenda this year. In the assembly, Sihanouk's
backers appear to have marshaled about a five-
vote margin in favor of their resolution. They are
pushing for an early decision, and a vote could be
called for soon after the plenary session begins on
October 14.
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SLC;Rh I
Police move in to break up flaming barricade
ARGENTINA: THE VENDETTA SYNDROME
President Peron hall for a end to violence
has fallen on deaf ears. There has been no let-up
in the frenzied pace of political murders and
bombings by extremists of both the left and right,
and the cycle of attack and retaliation will cause
further difficulties for the government.
Against the backdrop of stepped-up urban
terrorism, Peronist labor organized a mass rally to
trot out worker support for President Peron and
make a show of Peronist unity--something more
ephemeral than real these days. Although Maria
Estela Peron gave every appearance of being
determined to demonstrate her leadership and
bolster the sagging image of her government, she
offered little hope that solutions would be found
to the problems that plague the country.
Meanwhile, right-wing terrorists-intent on
matching the performance of the leftist subversive
organizations-have embarked on a campaign of
vengeance with equally chilling effect. A right-
wing murder squad billing itself as the Argentine
Anti-communist Alliance distributed a com-
munique taking credit for some of the gangland-
style killings of recent weeks, including the par-
ticularly brutal murders of a prominent congress-
man, a former vice governor of Cordoba Province,
and a former high police official. The group also
vowed to slay a score of other leftist figures,
including former president Hector Campora.
Adding to te climate of internecine struggle are
indications that labor groups identified with
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orthodox Peronism are fielding their own death
squads targeted against the left.
As both sides added new victims to their
tally this week, the Montonero guerrillas pulled
off a spectacular kidnaping in Buenos Aires,
seizing two of the country's most prominent-and
best-guarded-business executives, Juan and Jorge
Born. The two brothers head the third-largest
grain exporting corporation in the world.
BRAZIL: MIDDLE EAST POLICY
The Montoneros probably need additional funds
to sustain their terrorist activity, and they may
hope to emulate the success of the People's
Revolutionary Army, which has accumulated vast
sums of money from kidnapings.
So far, there are no indications that the
public sympathizes with either side in the con-
by the government tp control it.
flict. People in major urban areas are becoming
terrorized, however, and it may be only a matter
of time before Argentines-seemingly inured after
years of violence-begin to demand greater efforts
,l-~_C')
I'Foreign Minister 'Silveira, in his remarks to
the UN General Assembly, called again for Israeli
withdrawal from occupied territories and for a
settlement "attending to the rights" of the Pales-
tinian people. His statement was more bland than
some observers had expected, but served never-
theless to underscore Brasilia's continuing deter-
mination to strengthen ties with Arab oil
suppliers.
Until recently, Brazil had remained noncom-
mittal on the withdrawal issue. Concern over
access to crucial petroleum supplies and a desire
to attract Arab capital, however, led it to adopt
an openly pro-Arab line. Earlier this month,
Silveira, playing host to his Saudi Arabian
counterpart, issued his country's first clear call
for an Israeli pullback, breaking with Brazil's
formerly "equidistant" policy.
Silveira's overtures toward the Arabs prob-
ably did not meet with universal approval among
high government and military officials. Some may
well feel that Silveira's treatment of the visiting
Saudi was overly solicitous and that his state-
ments were too dramatic. Indeed, this factor may
have contributed to Silveira's moderate tone at
the UN. Nonetheless, he has publicly committed
Brazil to a position favoring the Arabs and has
not been openly contradicted by other members
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~c~rtC I
OAS: THE CUBA SANCTIONS
harp Latin Ameri&n reaction to publicity
concerning US involvement in Chile further
strengthens the prospects that OAS sanctions
against Cuba will be lifted when the foreign min-
isters meet on November 8. OAS members voted
unanimously last week to reconsider the 1964
resolutions against the Castro regime, and their
eagerness to get this issue behind them can now
probably be jeopardized only by the Cubans
themselves.
Despite the fact that a clear majority in the
OAS has wanted to remove the sanctions so that
members would be free to choose independently
concerning relations with Cuba, the strongly anti-
communist governments nevertheless harbored
some small hope of eking out the eight nays
required to prevent a policy change. The tide of
public protest over the Chile affair, however, has
now raised suggestions in Latin American media
that the US, like Cuba, should be held to OAS
judgment for subversion. None of the countries
inclined to vote against Cuba will want the for-
eign ministers meeting to degenerate into another
political controversy, this time over the US role in
the hemisphere. Therefore, the desire to debate
the Cuban issue in full is likely to wane substan-
tially.
The public furor in Latin America stems not
so much from stories of CIA activity per se. The
belief that CIA "meddles" around the globe is
widespread in Latin America, and the earlier news
stories fit the Latin preconception of a US intel-
ligence corps outside official control. The later
linkage of respected US leaders with the Chile
affair, however, has been received with rising con-
cern.
The Castro regime may yet tilt the foreign
ministers meeting in another direction. Cuban
President Dorticos' speech a week ago, during
honors for visiting Tanzanian President Nyerere,
seemed a deliberate attempt to make it more
difficult for the OAS to agree on lifting the sanc-
tions, originally applied because of Cuban support
for subversion. Dorticos made a point of lauding a
Cuban army officer who had served with anti-
Lisbon guerrillas in then-Portuguese Guinea and
promised that liberation movements would tri-
umph in Latin America despite "temporary set-
backs such as Chile." He further had warm praise
for Venezuelan President Carlos Andres Perez'
public reply to President Ford's UN address,
which he characterized as a threat against Vene-
zuela. He pledged Cuba's solidarity and moral
support against alleged US blackmail and for the
cause of liberation. Some foreign ministers may
interpret these remarks as evidence that Cuba is
still committed to the exporting of revolution.
The Castro regime prefers a sharp split in the
OAS on the sanctions question in the hope of
damaging the organization itself. Dorticos' kind
words for Venezuela were meant to tempt the
Perez administration to forgo joint action through
the OAS and instead to restore ties with Cuba
unilaterally-a move likely to compromise OAS
unity. Havana is confident that the sanctions, if
not lifted, will eventually be bypassed by most
OAS members, and it recognizes that a formal
agreement to lift them is aimed more at pre-
serving the OAS than at satisfying Cuba. A clearer
indication of how provocative the Cubans intend
to be is likely to come on September 28, when
Fidel Castro is scheduled to deliver a major ad- 25X1
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COLOMBIA: ECONOMIC EFORM
gS-- loa
President Alfonso Lopez Michelsen's clear-
cut election victory last April was based largely
on promises of aggressive measures to control the
economy. Last week, after a month and a half in
office, Lopez declared a 45-day state of economic
emergency. As justification, Lopez pointed to:
? The cost of living, which is rising at an
annual rate of 24 percent, twice the rate of
recent years.
? An anticipated budget deficit of $137
million, about twice as high as Bogota has
recently experienced.
? The recurrent need to postpone pay-
ment of salaries of government employees;
public employees' wages amount to 50 per-
cent of the operating budget.
? The need to restrain illegal exports of
staple commodities to neighboring countries;
since late 1973, the export of most agricul-
tural commodities has been banned, but
smuggling has occurred because of higher
prices paid over the border.
? A sharp drop in foreign-exchange earn-
ings, largely because world coffee prices have
fallen about 30 percent since February.
? Landslides late last June, which isolated
the agricultural eastern plains, a major source
of food supplies for Bogota and central Co-
lombia.
Under the state of emergency, Lopez has the
power to issue economic decrees without congres-
sional approval. One of his first moves was to
subject state-owned companies-except for elec-
tric, sewage, telecommunications, and public
health services-to all normal tax requirements.
This is not likely to have much impact, however,
since many of these companies show operating
losses, and the major hope of raising more tax
money lies in increased customs duties. He has
also raised sales taxes on many products, with the
tax on luxury items set at 35 percent. The cabinet
is considering major income-tax reform legisla-
tion.
In addition, Lopez has restricted expend-
itures by decentralized government agencies to
reduce the budget deficit, and has changed the
legal structures for natural gas development to
facilitate development of new energy supplies.
Lopez has taken additional measures not
based on his emergency powers. Prices for drugs,
tuition, and books have been frozen, for example,
while the wheat subsidy, which had been a heavy
drain on government funds, has been eliminated.
Lopez has also substantially increased the govern-
ment's control over the expansion of money sup-
ply.
The political impact of Lopez' economic
decrees has been strongly negative, particularly in
view of his almost two-to-one election victory.
His declaration of the economic emergency itself
antagonized the congress, whose pro-Lopez
majority would probably have approved the new
measures if they had been submitted as bills. In
addition, spokesmen for business deplore Lopez'
assault on profits by increasing taxes. Spokesmen
for labor, on the other hand, are protesting the
rise in prices that is expected to follow the elim-
ination of the wheat import subsidy. Even former
president Carlos Lleras Restrepo, an elder states-
man of Lopez' party, has spoken out against the
measures, possibly accelerating the party's break-
down into its pre-election factions.
Although Lopez' actions are likely to prove
beneficial to the economy, in part they appear to
contradict his campaign pledge to protect his mid-
dle- and low-income supporters from further
inflationary burdens. His large financial backers,
many of them political powers in their own right,
may also feel betrayed. It is clear that, after just
six weeks in office, Lopez' honeymoon is
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SECRET
ATOMIC ENERGY: CONCERNED CONFERENCE
[Presentations /'at the ntly concluded
_M_
annual conference of the International Atomic
Energy Agency in Vienna showed a growing
awareness of the possibilities as well as the
dangers of increased use of nuclear energy. The
proliferation of nuclear weapons remains a
constant concern in discussions of nuclear devel-
opment, but attention now has begun to focus on
the need for the agency, as the major interna-
tional organization with broad atomic energy
responsibilities, to ensure that nuclear develop-
ment proceeds in a manner that is safe, equitable,
and beneficial to all nations.
The energy crisis last winter and the sharp
rise in the price of oil provided the primary
impetus for this regard for the non-weapons
aspects of nuclear power. The developing coun-
tries, in particular, stress that nuclear power
provides the only alternative available to them if
they are to prevent future economic and tech-
nological dislocations. These spokesmen feel that
the agency should not only increase financial and
technical assistance, but should also improve its
procedures for transferring nuclear technology
and for training local technicians. The Iranians
have even suggested that the agency should
assume a major role in regularizing the fuel supply
situation.
This agitation by the developing countries
for expanded attention by the atomic energy
agency to their specific nuclear needs has not
overshadowed other important agency responsi-
bilities. The growing awareness of the dangers of
unchecked proliferation has led to calls for
stricter application of safeguards and for improve-
ments in the processing of safeguards informa-
tion, possibly by greater reliance on advanced
computer technology. At the same time, the
potential for theft or other diversion of nuclear
material has prompted a number of countries, led
by the US, to call for an active role for the agency
in drawing up guidelines for the physical protec-
tion of nuclear materials. These guidelines would
not only establish security standards but would
also specify where facilities should be situated to
minimize the risk of theft or sabotage.
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OECD: SHORT-TERM ECONOMIC PROSPECTS
(10G -- io
Economic prospects for the me ber coun-
tries of the Organization for Economic Coopera-
tion and Development are highly uncertain, and
growth will be slow, at best, through mid-1975.
Economic projections for the major foreign mem-
bers including Canada, France, Italy, Japan, the
UK, and West Germany indicate near stagnation
for the rest of this year and growth at about a
3-percent annual rate in the first half next year.
Inflation in all of the OECD countries is likely to
moderate, but will continue at unacceptable
levels. The aggregate trade deficit for the group
will improve little, if at all.
Consumer price increases in the OECD coun-
tries should average 15 percent from mid-1974 to
mid-1975, compared with an annual rate of 18
percent in the first half of this year. Price in-
creases will be due, in part, to tight supplies of
foodstuffs and rising oil costs. More important is
the momentum of large wage increases, which will
push labor costs and prices up, despite restrictive
government policies.
The overall trade balance for the OECD
)ountries probably will improve slightly in the
first half of 1975, if there are no price increases
beyond the 5-percent hike effective next week.
The trade deficit is projected to decline from
$14.6 billion in the second half of this year to
$13.3 billion in the first half of 1975. A further
increase of 2 percent in the price of oil, however,
would eliminate this anticipated improvement.
There is nothing on the horizon that is likely
to stimulate growth, and recent events have oc-
curred that threaten to hold growth below our
forecasts for the first half of 1975. Besides raising
prices for the last quarter of 1974, the oil pro-
ducers recently declared their intention to link
their prices to prices in the industrialized coun-
tries, beginning next January. Inflationary
psychology that has buoyed consumer spending
may increasingly give way to concern over the
future, depressing consumer spending. Further-
more, because of the inability of some countries
to finance payments deficits, some countries
further restrict growth or imports.
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'Roar NOW
Secret
Secret
Approved For Release 2007/10/19: CIA-RDP79-00927A010900090001-4