WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A011500030001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: December 21, 2016
• Document Release Date: June 9, 2008
• Sequence Number: 1
• Publication Date: January 21, 1977
• Content Type: SUMMARY

!' w
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
Secret
Weekly Summary
State Dept. review completed.
DIA review
completed.
Secret
CG WS 77-003
January 21, 1977
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
CONTENTS
1
Middle East
Egypt; Israel; Moroc-
co-USSR; Arab States;
Iran-Oman; Saudi Arabia -
France
3
Europe
Belgium-Libya;
France
Spain;
5
Western Hemisphere
Argentina
25X1
25X1
7 Cuba: Activity in the Eastern Caribbean
8 Algeria: Focus on Domestic Problems
10 Mexico: Land Reform in Perspective
12 USSR: Oil Recovery Program
C : ments and queries on the contents of this
I -- lication are welcome. They may be I
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
25X1
25X1
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
Iq
Next 2 Page(s) In Document Denied
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
SECRET
EGYPT
President Sadat's domestic political
position was seriously damaged this week
as a result of violent protest
demonstrations that erupted in reaction to
sudden steep price rises after austerity
measures were imposed by the govern-
ment on January 17. Much of the wrath of
the demonstrators was directed personally
at Sadat, who quickly suspended the
austerity program.
Peaceful demonstrations, mostly by
workers and students, that began in
Cairo, one of its suburbs, and Alexandria
on January 18 soon turned into rioting by
roving mobs numbering in the thousands.
After dying down at night, the rioting was
repeated on January 19. The government
responded by suspending the price rises
pending "reconsideration" of the austeri-
ty measures, imposing a, curfew, and in-
troducing army troops to the troubled
areas.
Although the government charged that
leftist agitators had provoked the distur-
bances, the demonstrators in fact initially
seemed to have little organization or
leadership, indicating a large degree of
spontaneity and a widespread depth of
feeling over economic grievances. By the
second day, however there were in-
dications that leftist organizers had mov-
ed in and were leading many of the
demonstrators.
The government's announcement on
January 17 that it would lower price sub-
sidies on many consumer goods and im-
pose much higher tariffs on others came
without warning and with no attempt to
ease the blow for consumers. The regime
did not even try to explain the need for
further austerity-Egypt. is faced with the
need to reduce a huge budget deficit-un-
til after the trouble had started. There is
some reason to believe the government
deliberately moved as it did in order to
demonstrate the dangers of such action to
officials of the International Monetary
Fund, who are currently in Cairo. The
Fund has been urging the Egyptians to
reduce price subsidies.
Prime Minister Salim may be fired as a
result of the government's ill-considered
decision to move ahead with the austerity
measures and the embarrassment caused
the government by having to reverse
them. Sadat may hope to deflect criticism
from himself by making Salim the
scapegoat. 4(/
Relations with Jordan ~' /
President Sadat and Jordan's King Hu-
sayn ended their year-long estrangement
during Husayn's visit to Egypt last week.
Sadat used the opportunity to explore
further his strategy for encouraging peace
negotiations by providing for a federated
relationship between Jordan and any
future Palestinian state.
A joint statement issued on January 15
at the conclusion of Husayn's visit called
for establishment of an independent
Palestinian state with strong ties to Jor-
dan and for the Palestine Liberation
Organization to participate as an equal
and independent party in negotiations.
The statement appears designed
primarily to underscore current Arab
solidarity and to maintain pressure on
Israel and the US to move toward serious
negotiations later this year. By enlisting
Husayn's support, Sadat hopes to dis-
courage Israeli leaders from believing
they can split the Arab camp on the issues
of PLO participation in negotiations and
Palestinian statehood.
At the same time, Sadat hopes to ease
the way to fruitful negotiations by
suggesting a compromise that would
satisfy Palestinian demands and, to some
extent, accommodate Israel's demand
that the Palestinian question be resolved
within a Jordanian context.
Sadat has clearly stepped up his
pressure on the PLO to accept both a
truncated Palestinian state and a com-
promise on linkage to Jordan. So far, the
Egyptian leader has not received an open-
ly negative response from the Palestinians
or the other key Arab states, but he must
nonetheless proceed cautiously.
Even his own advisers are somewhat
skittish at the prospect of negative
criticism of a strategy that comes close to
violating the established Arab policy of
declaring the PLO the "sole, legitimate"
spokesman for the Palestinians. Syrian
President Asad recently said publicly that
he would welcome Palestinian-Jordanian
linkage, but Sadat will not be able to press
the concept further without active support
and cooperation from the Syrians.
Apparently with this need for caution
and circumspection in mind, the Egyp-
tians are currently placing heavier
emphasis on accommodating the Arab
position-that is, on the need for Palesti-
nian independence-than on meeting
Israel's demands.
Thus, Foreign Minister Fahmi ex-
plained at a recent press conference that
the fact and the shape of any future
Palestinian-Jordanian relationship must
finally be decided by the parties
themselves and not be dictated by Egypt
or Israel. An independent Palestinian
state, he added, must come into existence
simultaneously with, if not before, any
determination of Palestinian-Jordanian
ties.
ISRAEL 1, ! 6)
Defense Minister Shimon Peres' deci-
sion, announced last week, to seek the
Israeli Labor Party's nomination for
prime minister almost certainly presages
a divisive leadership struggle at the party
convention to be held next month in
preparation for the national election in
May.
Former prime minister Meir and other
old-guard party leaders, who favor Prime
Minister Rabin, had hoped to dissuade
Peres from running. The suicide of Hous-
ing Minister Ofer, an ally of Rabin, and
Labor's poor showing in recent public opi-
nion polls apparently prompted Peres to
run. Peres was defeated by Rabin for the
prime ministership in a party election in
1974 by a relatively narrow margin.
Peres, however, will have to overcome
the opposition of Foreign Minister
Allon's faction as well as that of Meir and
Labor Party bosses, who still hold it
against him that he bolted the party with
former prime minister Ben-Gurion in
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
SECRET
1965. Mapam, Labor's left-wing coalition
partner, also opposes Peres.
Former foreign minister Abba Eban
has also declared his candidacy for the
nomination in an effort to woo party
doves away from Rabin and, paradoxical-
ly, lock up the nomination for the more
hawkish Peres. Eban has long harbored a
personal grudge against Rabin.
Peres as prime minister would adopt a
tougher, more independent line on Middle
East peace negotiations than would
Rabin. His main base of support is in the
right wing of the Labor Party. In the past,
moreover, he has been more favorable
than Rabin to the re-establishment of a
national unity coalition with the conser-
vative hard-line Likud faction.
In recent interviews, Peres has in-
dicated that he favors a resumption of the
step--)y-step approach to peace
negotiations instead of reconvening the
Geneva talks, which he probably believes
would bog down over the issues of Palesti-
nian participation in the negotiations and
Israeli withdrawals from the occupied
West Bank and Gaza strip.
Peres has said he prefers a "functional"
arrangement that would allow Jordan to
reassert its civil authority over most of the
West Bank but would permit the Israelis
to keep their armed forces there and to
continue to establish Jewish settlements.
As a possible gesture to party doves and
Mapam, however, Peres has hinted a
readiness to make territorial concessions
as well, but only when the Arabs are ready
in his view to make "genuine peace" with
MOROCCO-USSR
Soviet-Moroccan relations are im-
proving after reaching a low point last
year because of the USSR's tendency to
side with Algeria during the height
of the dispute between Morocco and Al-
geria over Western Sahara.
Several recent developments have
reflected the renewed interest, apparently
on the part of both countries, in bilateral
relations:
tentions, may think he can use his in-
creasing contacts with the USSR as a
lever in extracting more from the US.
Better relations with the USSR would
also deflate charges from other Arabs that
Morocco is too closely linked with the
ARAB STATES //.- /
Five wealthy Arab countries have
agreed to reinstitute for 1977 and 1978
special subsidy payments to the front-
line states in the struggle against Israel.
The donors are Saudi Arabia, Kuwait,
Qatar, Bahrain, and the United Arab
Emirates. The pledges were made at a
conference of their foreign ministers in
Riyadh on January 9 and subsequently
approved by the heads of the five states.
The foreign ministers met again on
January 18 in Cairo to work out details.
The announced pledges are roughly
equal to those made at the 1974 Arab
summit conference in Rabat: $570 million
each for Syria and Egypt; $200 million for
Jordan; and $28 million to the Palestine
Liberation Organization, which was
designated at Rabat as sole spokesman
for the Palestinians. These amounts are
apparently to be paid in each of the next
two years.
The front-line states hoped that the
Rabat payments would be made annually
on a continuing basis. The donor states,
however, made only one round of
payments. The question of possible
retroactive payments for 1976 may have
been deferred to an Arab summit to be
held in Cairo in March.
Agreement to resume the Rabat
payments is due mainly to the willingness
of Saudi Arabia, for the first time since
1967, to make a firm commitment to
provide cash aid for more than one year at
a time. A promise of subsidies over a
longer term serves Saudi purposes now
? A Soviet military delegation
visited Rabat last month to discuss the
sale of T-62 tanks.
? A Soviet geological delegation
also visited Morocco in December to
discuss a continuation of Soviet
prospecting for copper and oil.
? The USSR received approval for
an Aeroflot stop in Casablanca for
flights to Africa.
King Hassan's long-standing refusal to
receive additional Soviet military
technicians may complicate the signing of
a new arms agreement. Morocco's
willingness to go ahead with the talks on
geological cooperation is a reversal. Last
year, Morocco canceled scheduled dis-
cussions on the subject out of pique over
Moscow's stance in the Saharan dispute.
The Soviets are particularly interested
in Moroccan phosphates as a supplement
to the USSR's domestic production.
Hassan, however, is unlikely to allow
Soviet participation in the exploitation of
his country's extensive reserves while his
dispute with Algeria remains unresolved.
The King, who is still wary of Soviet in-
because it underscores Arab unity at a
time when the Saudis are pressing for
renewed peace negotiations in the Middle
2 WEEKLY SUMMARY Jan 21, 77
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
SECRET
Z
IRAN-OMAN
Iran has decided to reduce the size of its
3,500-man task force in Oman a year
after Iranian forces helped to defeat leftist
rebels in Oman's Dhofar Province. A con-
tingent of Iranian troops has been sta-
tioned in Oman since 1972. Iran will
leave no more than 700 troops in Oman,
according to a British official in London.
It is not clear why Iran chose to cut
back its military presence now, but
Omani Sultan Qabus may have requested
the reduction. The Iranian military
presence on the Arabian Peninsula has
been a source of friction between Oman
and other Arab states. Problems also have
occurred between Iran and Oman over
Tehran's failure to coordinate some of its
military activities in Oman.
Relations were strained in November
when an Iranian reconnaissance plane was
shot down by South Yemen along its
border with Oman. The flight had not
been cleared with Omani authorities.
Qabus, unhappy over the resulting
military tensions with the Yemenis and
renewed propaganda attacks on him by
Arab radicals, may finally have yielded to
his top military advisers, who have argued
for several months that the Iranian task
force should be reduced.
The Shah probably did not object.
SAUDI
ARABIA
OMA
/'SOUTH
YEMEN-
There has been no major fighting in
Oman for more than a year, and a small
force there will be sufficient to underscore
Iran's continuing commitment to the
Qabus regime. Neither the Shah nor
Qabus wants to end the Iranian military
presence entirely.
~i t
SAUDI ARABIA - FRANCE
France is about to sign a new three-year
agreement with Saudi Arabia that will
allow two French oil com-
panies-Elf-Aquitaine, owned entirely by
the government, and Compagnie Fran-
caise des Petroles, one-third government-
owned-to purchase directly 33 percent
more Saudi crude than under the agree-
ment the two countries concluded in 1974.
The new deal enables France to pur-
chase 240,000 barrels per day beginning
this year, compared with 180,000 barrels
per day previously. Negotiations have
been completed, and formal signing is ex-
pected during President Giscard's visit
to Saudi Arabia next week.
The earlier agreement-the first of its
kind between France and Saudi
Arabia-was concluded during the oil em-
bargo, when France was trying to circum-
vent the major oil companies and es-
tablish direct sales arrangements with
oil-producing countries. Paris hoped its
pro-Arab Middle East policy would help
it establish special relationships with the
producers. The failure of attempts to con-
clude a 20-year arrangement with Saudi
Arabia for a reported 800,000 barrels per
day caused the French to become dis-
illusioned with this tactic.
The new agreement appears to be large-
ly window-dressing for Giscard's coming
visit, but it indicates France's intention to
keep open its option of an independent oil
policy.
The deal will provide for only a limited
portion of the crude imported by France
from Saudi Arabia; major oil companies
operating there will continue to provide
the bulk. Altogether, French imports of
Saudi crude have jumped sharply, rising
from 620,000 barrels per day in 1973 to
870,000 barrels per day last September.
Saudi Arabia is now France's largest
source of crude oil, and provides more
than one third of French requirements.
Announcement of the new agreement
shortly after the recent price split among
OPEC states is apparently coincidental.
The increased access to Saudi oil should,
however, slightly reduce the average price
increase that France will sustain.
BELGIUM - LIBYA
Two Belgian arms manufacturers have
signed preliminary agreements with Lib-
yan President Qadhafi's regime to
provide Libya with a large arms-produc-
tion complex. The deal has created a
dilemma for the Belgian government, and
Foreign Ministry officials apparently
hope to delay the need to make a final
decision.
Under the agreement, Libya will pay
$2.1 billion for small arms, ammunition,
and explosives plants, and the parties are
to complete plans by midyear for support
facilities costing $3.3 billion. The complex
is to be finished in five years.
The Belgian government is concerned
over possible negative reaction from the
US and some Middle Eastern countries.
It does not want to provide Qadhafi with
the means to produce arms that he could
export and use to enhance his political
leverage.
The Libyans, however, have threatened
to stop purchasing all Belgian arms if the
contracts are canceled. This would have a
severe impact on the two firms and could
lead to several thousand workers losing
their jobs.
The Belgian government apparently
cannot legally prohibit the companies
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
SECRET
from pirticipating in the project, but it
could o:)struct final agreement by refusing
the two companies government invest-
ment insurance.
The cabinet discussed the issue last
week, but it is unlikely to reach a decision
The government of Prime Minister
Adolfo Suarez appears to be making
progress in its efforts to conciliate the op-
positiou parties and ensure broad par-
ticipation in the legislative election to be
held this spring.
Opposition leaders who met with
Suarez last week reportedly came away
satisfied that representatives of all parties,
including the Communists, would be
allowed to participate as candidates in the
election. Details of how the government
would accommodate the opposition on
this ke'i issue apparently remain to be
worked out; Suarez may have implied
that Ccmmunists would be permitted to
run as independents or as part of a
broader leftist alliance.
The government also appears to have
convinced the opposition leaders that it
intends to release political prisoners who
were excluded from earlier amnesties.
Most of the prisoners are Basques, and
the issue has fueled a series of clashes in
recent weeks between demonstrators and
police in the Basque provinces of northern
Spain. A Basque leader who participated
in the rieeting expressed confidence that
almost all the estimated 200 political
Leftist leaders following recent talks with Prime Minister Suarez. From the left:
Julio Jauregui, Basque nationalist; Joaquin Satrustegui, Liberal; Anton Canellas,
Catalan Christian Democrat; and Felipe Gonzalez, Socialist Workers'Party
detainees would be out by Easter.
Prospects for the early release of at least
some of the prisoners have been enhanced
by the government's recent abolition of
the controversial Public Order Tribunals.
Nevertheless, Interior Minister Martin
Villa was not well received in the Basque
region when he traveled there last week to
transmit personally the government's
presumably conciliatory views on amnes-
ty and on local autonomy. The an-
tagonism he encountered was at least
partly brought on by his banning of a
scheduled rally to avoid further distur-
bances.
The minister told a delegation of
Basque mayors who came to Madrid
on January 18 that while the present gov-
ernment is taking steps to sanction the
use of the Basque flag and language, the
question of autonomy must await the
election of the new legislature.
Suarez is planning additional meetings
with the opposition leaders between now
and the election. He apparently hopes
through such talks to try to neutralize, in
advance of the campaign, other potential-
ly divisive issues-such as the provisions
of the law that will govern the election and
the question of Spanish membership in
NATO and the European Community.
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
SCR wT
FRANCE 43' 44
The French have announced that their
fourth nuclear-powered ballistic-missile
submarine has entered active service. It is
the first French submarine to be com-
pletely equipped with the M-20 missile.
The M-20 has a range of 3,000
kilometers and is armed with a one
megaton warhead. The new boat carries
16 such missiles.
The French Ministry of Defense also
announced that a fifth submarine of
this class-of an originally planned
group of six-will to operational in
September 1979. Construction of the
sixth has been suspended.
The US defense attache in Paris has
reported that the French plan to make the
sixth the first of a new class of smaller,
more compact, and possibly faster
ballistic-missile submarines. The new
class will carry the M-4 missile, with
either a MRV or MIR`/ warhead and will
be able to attack targets at a distance of
5,000 kilometers.
The M-4 is still in the developmental
stage; the first static test firings are likely
early this year. The missile probably will
be operational by the mid-1980s, when the
first of the new class of submarines is ex-
pected to enter service.
ARGENTINA
The debate in Argentina over the
political role of the country's powerful
labor movement is sharpening, and the
outcome will be decisive for President
Jorge Videla.
A group of labor leaders has issued a
strongly worded document calling for the
swift normalization of union ac-
tivities-which have been suspended since
the military took over last March-and
for further, sizable wage hikes. The docu-
ment was signed early this month by some
70 union leaders and printed in a leading
newspaper.
The document denounced the austerity
measures that have been in effect since the
junta took power. The statement repeats
familiar Peronist themes in making its
case that workers have borne the brunt
of the economic recovery effort. It re-
fers caustically to the role of foreign
business.
Editorials in Argentina's leading
newspapers have lambasted the unions'
position, accusing labor leaders of re-
sorting to tired rhetoric to express a
one-sided and self-serving view of the
situation facing the nation. One journal
points out that it was the excessive de-
mands of workers during the administra-
tion of President Isabel Peron that in
large part led to the nation's present
financial straits.
Publication of these and other com-
plaints has already led to divisions within
the labor movement itself. Several union
leaders who supported the statement have
reportedly now resigned.
This latest manifestation of the debate
over labor is probably disconcerting to
military officers, both inside and outside
the government. The officers differ
seriously over what degree of accom-
modation with labor is acceptable. Some,
like President Videla and his supporters,
favor quickly restoring most, though not
all, of labor's former prerogatives.
Others, particularly within the navy and
air force, would retain many of the
restrictions now in effect.
Probably no officer truly believes that
labor can be won over and made to
cooperate indefinitely with the military
government. Videla, however, clearly
feels that his conciliatory approach would
at least avoid further worker alienation
and increase the chances for economic
progress. Others argue that workers
would take such concessions as a sign of
weakness and thus be inclined to increase
their demands.
If Videla has his way, he will have
gained an important psychological and
practical victory over the "hardliners,"
who have opposed him on this and other
issues. If he loses out to them, the result
will be to embolden those who, like navy
chief Admiral Massera and Planning
Minister General Diaz Bessone, would
like to change the government's po-
litical approach
Anima "
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
25
25
xi
xi
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
SECRET
Although many governments in the eastern Caribbean are
still suspicious of the Castro regime, Havana is making some
progress in expanding its influence in the area. The British
Associated Slates, Dominica in particular, seem to be receiving
special attention.
Cuba: Activity in the Eastern Caribbean
The Castro regime is trying to expand
its influence in the eastern Caribbean.
Cuban initiatives over the past several
months have been low key and have met
with obstacles and resistance, but Havana
has reason to be optimistic about its
prospects in the region.
Mounting Cuban interest in the British
Associated States, a group of internally
self-governing islands in the eastern
Caribbean, was reflected. last November
in Havana's decision for the first time to
send a high-level official to visit the area.
Osvaldo Cardenas, the senior Communist
Party official responsible for the Carib-
bean, went to Dominica to pay an official
call on Premier Patrick John.
with the local press during his visit,
Cardenas announced that a delegation
from Dominica would go to Cuba this
winter.
In the interview Cardenas said his visit
was part of a "friendship tour to assess
possibilities of building amicable and
mutual relations with territories of the
region." He later stopped in St. Kitts but
apparently did not meet with local
authorities.
Dominica will almost certainly become
independent in the fall. Premier John,
who is indecisive and impressionable, is
convinced that he has to move leftward to
remain in power. The Cubans probably
reason that even a small amount of
assistance would have a significant im-
pact. With only 80,000 inhabitants and a
per capita gross domestic product of $300,
Dominica is the most sparsely populated
and, along with St. Vincent, the poorest of
the Associated States.
Havana has also made overtures to
Aruba
(Neth.) Curacao
;.-. (Neth.) Bonaire I
,-z (Neth.) /
some of the more middle-of-the-road
governments in the region. Premier
Milton Cato of St. Vincent was recently
offered the services of Cuban teachers and
health specialists, and the Cubans have
volunteered assistance in agricultural
development to the Adams government in
Barbados and invited the minister of
agriculture to visit Cuba.
ANGUILLA
IUKISt Martin (Guaaeloupe)
St. Maarten Z) \.: St Barthelemy (Guadeloupe)
(Net') ( Saba (Meth.)
St Eustatius-.
(Seth )
{ ST. KITTS
(tt K.)
4
ANTIGUA IU.K.1
MO NTSERRAT (U.K.1
Gyadeloupe
(Fr.)
N
P
A
O
it
Martinique
(Fr.)
[/) ST. VINCENT
(U.K.)
BARBADOS
Q
GRENADA
:'Toda9o
TRINIDAD AND TOBAGO
doe
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
SECRET
The Cubans have cultivated leftist op-
position leaders in the area, and their in-
terest in most cases has been reciprocated.
For example, Ralph Gonsalves, a leftist
professor and activist based in Barbados,
recently told a meeting of St. Vincent's
radical Youlou United Liberation Move-
ment that Cuba is the "beacon of light in
the Caribbean."
Athough most of these opposition
groups are small, their potential for
developing a strong political base and for
providing a realistic challenge to
traditional leaders cannot be dismissed. In
the recent election in Grenada, for exam-
ple, a coalition dominated by the radical
New Jewel Movement came close to win-
ning power.
The Cubans continue to maintain close
contact with the communist parties in
Martinique and Guadeloupe-as they
have since the 1960s-and to press for the
independence of those islands, although
this issue apparently has limited popular
support. Cardenas attended the con-
ference of Martinique's Communist Party
in late October. The second-ranking of-
ficial in the American Department of the
Cuban Communist Party, Ulises Estrada,
represented Cuba at the conference of
Guadeloupe's Communist Party in late
December and returned to Cuba with the
party's secretary general.
Friendship Societies
Cuban "friendship societies" have been
formed in the past year in both
Guadeloupe and Martinique, and the
cultural events they have sponsored have
been so well received in the urban centers
that they may expand into the coun-
tryside. In recent months, these societies
have also promoted a number of tourist
flights to Cuba from the French Antilles.
There are nevertheless some obstacles
to greater Cuban influence in the region.
In many of the islands, the image of Cuba
as an exporter of revolution lingers among
the political elite. St. Vincent's attorney
general, for example, said that if
Cardenas had tried to visit St. Vincent he
would have been turned away.
Even in Dominica, suspicion exists. In a
statement that probably exaggerates his
fears, Premier John told the US embassy
in Bridgetown, Barbados, that he was
concerned that the Cubans might be in-
volved in attempts to subvert his govern-
ment. Nonetheless, given the region's
pressing social problems and Cuba's
willingness to provide timely and well
directed assistance, the prospects for
Cuban advances seem good.
Domestic discontent is causing President Boumediene to
focus increasingly on internal political and economic problems.
Boumediene's opponents, however, appear too weak and di-
vided to challenge his supremacy.
Algeria: Focus on Domestic Problems
A geria's prominence as a leading
spokesman for nonaligned and developing
states has faded in the past year as Presi-
dent Houari Boumediene has turned in-
creasingly to domestic concerns. Faced
with widespread popular dissatisfaction
and criticism of his policies even within
his inner circle of advisers, Boumediene
has sought to shore up and place a stamp
of legitimacy of his authoritarian re-
gimt.
A ter ruling by decree since seizing
power in June 1965, Boumediene
promoted the adoption last November of
a new constitution and ran unopposed in a
presidential election on December 10. The
new Constitution institutionalizes strong
presidential government and relegates
Algeria's only political party, the
National Liberation Front, to a minor
role. The National Assembly, inactive
since 1965, is to be restored through elec-
tions next month but will remain insignifi-
cant.
The Algerian public has reacted with
little enthusiasm to the regime's political
campaign. As long as Boumediene con-
tinues to retain the support and con-
fidence of his senior military com-
manders, however, his position is likely to
remain secure. Boumediene's preoccupa-
tion with problems at home probably will
restrain him from pressing his long-
standing dispute with Morocco over
Western Sahara to the point of open
military confrontation, and he is
likely to continue focusing on do-
mestic politics over the near term.
Domestic Malaise
Popular disillusionment with the
meager benefits of Algeria's "revolution"
and Boumediene's stewardship apparently
is growing and could in time lead to an
erosion of his support if he continues to let
matters drift.
Inflation, unemployment, rapid pop-
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
SECRET
ulation growth, and the shift of more peo-
ple to the cities have all added to the
government's burden and exposed its in-
ability to cope with these problems.
Strikes and work slowdowns, even in the
public sector where they are illegal, have
become more frequent.
Man; Algerians have privately criti-
cized the waste and corruption that
permeates the government. There is also
general unhappiness over what many
believe to be the government's misguided
efforts to "Arabize" the country by
promoting Arabic language and culture.
Most professionals, who are products
of a basically French education system,
think their country should remain
oriented toward Europe and consider
Arabization as a step backward. The
program also annoys much of the urban
working class, which has little knowledge
of Arabic.
Opposition Ineffective
Boumediene's opponents outside the
government are too weak and disorgan-
ized to capitalize on this discontent. The
President also has been able to keep his
immediate subordinates--who resent his
monopoly on power-divided and unable
to challenge his supremacy openly.
The military remains the key to any in-
ternal power struggle. Boumediene, who
serves as defense minister, has cultivated
close ties with his senior military officers.
He also has relied extensively on his
security apparatus to monitor the ac-
tivities of officers and enlisted men to dis-
cover and destroy potential threats to his
position within the military. Although
some small cliques of disgruntled officers
probably exist in the lower ranks,
Boumediene does not appear to face any
formidable challenge from that quarter at
present.
Foreign Policy
Boumediene effectively exploited his
titular leadership of the nonaligned move-
ment to increase his prestige for most of
the three years he held that position.
Algeria still retains a strong interest in
third world causes, but since the transfer
of nominal leadership of the nonaligned to
Sri Lanka at the movement's conference
oc1
in Colombo last August, Algeria has
played a much less prominent role.
Boumediene's primary preoccupation
in foreign policy is his dispute with
Morocco and Mauritania over Western
Sahara. Although Morocco and
Mauritania partitioned the former
Spanish territory last April, Algeria con-
tinues to demand that the Saharans be
allowed to determine their future. The
Algerians support the rebel Polisario
Front, which seeks the territory's in-
dependence.
The Algerians oppose the Moroc-
can-Mauritanian takeover of Western
Sahara, with its large phosphate deposits,
because it enhances Moroccan wealth and
prestige and could reduce Algerian
predominance in North Africa.
Algeria has become increasingly
isolated as a result of the dispute, and
Boumediene has lost prestige both at
home and abroad because of his failure to
restrain Morocco. Some of the
President's key advisers oppose continued
support for what appears to be a losing
cause.
This evidently has prompted
Boumediene to seek some face-saving
compromise. He apparently asked Saudi
Arabia last fall to undertake a low-key ef-
fort to mediate the dispute. The Saudi in-
itiative is continuing, but it has made no
significant progress. Achieving a
negotiated settlement will be a long and
difficult process, probably requiring
Saudi financial inducements to bring all
sides together.
Economic Ties with the West
As long as the dispute continues,
Algeria will be critical of the US for, in
Algeria's view, siding with Morocco.
Bilateral political relations will remain
strained. In the absence of major
hostilities with Morocco, however, the
dispute is unlikely to affect Algeria's
economic relations with the US because
of the importance of the US as a source of
capital and technology and as a market
for Algerian oil and natural gas.
Although professing to be a militant
leader of the nonaligned and developing
countries, Algeria will continue to be
pragmatic in its international business
dealings. The government generally has
followed a businesslike approach in its
dealings with the US and other Western
countries; contract obligations are
routinely met, and the Arab boycott of
companies that deal with Israel is not en-
forced.
The country's relatively good economic
performance to date-and its economic
future-depend on foreign exchange
earnings from oil and gas. Algeria
hopes that such revenues will permit
more rapid industrialization and pro-
vide jobs for the growing work force.
Oil production is not likely to be
increased as reserves are limited and
new recovery schemes expensive. Gas,
on the other hand, is considered the
key to financing future economic de-
velopment.
Until gas exports reach significant
levels in the early 1980s, however, Algeria
faces balance-of-payments difficulties
that are likely to limit imports of some
capital goods programmed under its
economic development plan
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
SECRET
Since the revolution that began in 1910 many Mexican
presidents have implemented extensive land redistribution
measures, primarily for political reasons. Jose Lopez Portillo,
who was inaugurated last month, may at some point do the
same, but for now he apparently intends logo easy as part of his
policy of emphasizing increased agricultural output.
Mexico: Land Reform in Perspective
Land reform in Mexico historically has
been undertaken for political rather than
economic reasons, and the measures
taken last year were no exception.
In the violent first decades of the rev-
olution that began in 1910, when peas-
ant armies not controlled by the central
government roamed the countryside, land
reform was used as a means of settling the
fighters and pacifying the nation. In later
year;, after Mexican leaders recognized
that there was not enough land to satisfy
more than a small portion of the peasants,
it was used to maintain rural stability by
co-opting rising peasant leaders through
gifts of land. During all periods, land
reform has been used by Mexican
presidents to gain popularity and reaffirm
their revolutionary credentials.
Nationalization
L@.st year's widespread land invasions
and outgoing President Echeverria's
nationalization of 100,000 hectares of im-
prov,;d commercial farmland were in this
context. There is always some spon-
taneous rural unrest during a change of
administration in Mexico, but in this case
peasant activists probably received at
least tacit approval from the central
government.
Although Echeverria may have been
impelled in part by idealism and a regard
for his place in history, his strongest
moti'iation was probably a desire to strike
a blow against the wealthy landowners
and their industrial allies in northern
Mexico.
He had come increasingly to consider
members of this class as his personal
enemies and perhaps as enemies of Mex-
ico as well. He almost certainly felt
justified by the fact that the size of many
northern landholdings violated the spirit if
not the letter of Mexican law.
Land reform measures have usually
brought Mexican leaders the political
dividends they sought. The economic
effects of the measures, however, have
over the years been hotly debated by par-
tisans and opponents.
Partisans of land reform point out that:
? It has enabled-or at least
allowed-Mexico to maintain a
growth rate in agricultural output far
better than that of other third world
countries.
? It utilizes labor not otherwise
needed and makes few claims on the
rest of the economy.
? Any failure is traceable to the
lack of government support in the
form of credit, education, and
necessary public facilities and services.
Opponents stress that:
? Large private holdings produce
most of the country's output using only
a small fraction of the land.
? Land redistribution has become
increasingly inefficient as marginal
land has been brought into the
program.
? Land reform inhibits the produc-
tion of cheap food for the urban poor
while failing to lessen poverty in the
countryside significantly.
? The threat of further redistribu-
tion makes commercial farmers less
willing to make needed investments.
President Jose Lopez Portillo, who
assumed office last month, is committed
to land reform in principle-it being part
of his country's national ideology. He is
likely, however, to define reform in such a
way as to emphasize economics over
politics. He has stated that he wishes to
avoid creating additional uneconomical
land units. He favors combining small
plots into more viable farms.
His action in allowing his predecessor's
nationalization to go to the Supreme
Court, where it may well be reversed, will
give encouragement to commercial
farmers and convey strong positive signals
to the domestic and foreign business com-
munity.
The Course of Land Reform
The Mexican Revolution resulted in a
massive change in land tenure patterns.
Before 1910, landholding had become
highly concentrated; 90 percent of rural
families were said to be landless. Since
then, nearly 97 million hectares have been
distributed to about 2.7 million farmers.
The number of landless peasants fell to
2.3 million in 1950, but rapid population
growth outpaced redistribution, and an
estimated 4 million peasants are now
landless.
Although land reform succeeded in
creating a more even distribution in Mex-
ico than exists in most Latin American
countries, Mexican agriculture is still
characterized by a few relatively large
commercial producers and a large number
of subsistence farmers. Subsistence and
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
SECRET
near-subsistence farming accounts for 56
percent of farm income on 81 percent of
the cropland.
At the other extreme, less than 10 per-
cent of the farms produce 44 percent of
farm income on less than 20 percent of the
cropland. Under the law, but not always
in practice, individual holdings are limited
to 100 hectares of irrigated land or 200
hectares of unirrigated land. Larger
holdings are legally permitted, primarily
on semiarid grazing lands where farms
must be large enough to support 500 head
of cattle.
Following the revolution, there were
two peak periods of land reform. During
the administration of Lazaro Cardenas in
the thirties, about 20 million hectares
were turned over to peasants. Under
President Diaz Ordaz 30 years later, 23
million hectares were redistributed.
As land suitable for expropriation
became scarce, the government turned in-
creasingly to opening new areas, often
with marginal cropland or no cropland.
Before the most recent expropriation, the
Echeverria administration had
redistributed 16 million hectares of
generally poor quality government land.
Despite a continuing public commit-
ment to land reform, Mexican
governments since 1940 have emphasized
increasing agricultural production and
commercial agriculture. This support was
a primary factor in the 6.7-percent
average growth of agricultural output
between 1940 and 1965, which enabled
Mexico to achieve a large export surplus
in agricultural goods and a temporary
self-sufficiency in basic grains during the
1960s.
Commercial farms were encouraged by
public investment in rural areas, par-
ticularly in irrigation projects, which
brought large tracts of new land under
cultivation. About 50 percent of the
growth in output was due to increased
land area. The government also raised the
limits on the size of priivate farms and
often ignored violations of agrarian laws;
commercial and official credit was ex-
tended primarily to large farms. Another
important factor was that relative
1915/34
Cardenas 1934/40
Avila Camacho 1940/46
Aleman 1946/52
Ruiz Cortines 1952/58
Lopez Mateos 1958/64
Diaz Ordaz 1964/70
Echeverria 1970/76
Does not include expropriations in mid-November 1976.
agricultural prices were generally
favorable during the period.
Current Situation and Outlook
Since 1965, increases in agricultural
output have dropped to 2.1 percent an-
nually-considerably below the 3.4-per-
cent growth of population. The most im-
portant factors causing lagging output are
limited availability both of easily ex-
ploitable water resources and of new land.
The fear of expropriation has inhibited in-
vestment by large commercial farmers,
while the 90 percent of the farmers with
small plots rarely have access to the
resources necessary to increase produc-
tivity.
The uncertainty of land tenure had an
especially detrimental impact on
agricultural production during 1976.
Throughout the year, organized peasant
groups moved onto private farms in Mex-
ico's productive areas demanding land.
Echeverria's expropriation of nearly
100,000 hectares in the northern part
of the country in mid-November aggra-
vated the tension and increased the
number of peasant land invasions,
particularly in the north.
Confusion and uncertainty caused
farmers to hold back investment and
delay planting. Largely as a result of
reduced wheat seeding, about 500,000
tons of wheat will probably have to be im-
ported in 1977, nearly double the amount
imported in 1976.
Despite President Lopez Portillo's ap-
parent emphasis on production, progress
will be slow. Increasing output in the com-
mercial farming sector by bringing new
land under cultivation and extending
irrigation has neared its natural limits in
northern Mexico. Development of
tropical lowlands in the south would be
expensive and require sophisticated
techniques.
Output in the subsistence and
traditional sectors will be held down by
undercapitalization and the poor educa-
tion of the farmers, even if the govern-
ment greatly increases the resources
devoted to extension services and farm
credit. Moreover, attempts to boost
production in this sector through con-
solidation of small plots may run afoul of
the individual peasant's feeling for his
own land.
As long as Lopez Portillo maintains his
emphasis on output, there is little
likelihood that extensive land redistribu-
tion will take place. His first priority will
be to assure commercial farmers of the
security of their land holdings. The Presi-
dent will, however, keep land reform as a
political option, and small redistributions
may be undertaken to buy off potential
peasant leaders and maintain peace in the
countryside.
11.1
20.1
6.0
5.4
5.8
9.0
23.0
16.21
Page 11 WEEKLY SUMMARY Jan 21, 77
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
SECRET
The Soviets are beginning a program to obtain more oil
from known reserves by using special recovery techniques, but
the effort is unlikely to increase production in the near future.
USSR: Oil Recovery Program
Because of the high cost of developing
oil reserves in remote regions, the USSR
is planning a high-priority program to
recover more of its known oil reserves
throi.gh intensive use of enhanced
techniques. The Soviets' goal is to in-
crease; recovered oil by 10 to 12 percent.
The effort is an ambitious one.
Implementation of the program will be
very costly and will require the applica-
tion c f rigid controls and large amounts of
special chemicals and equipment. At best,
considerable time will be required before
substantial increases in production could
be expected, even if the Soviets decide to
import the needed materials and
technology from the West.
The Committee on Science and
Technology of the Council of Ministers is
coordinating the new plan, which calls for:
? Timetables for adopting new
recovery methods throughout the
USSR.
? Creation of a special association
? MOSCOW
Boryrlav
within the Ministry of the Petroleum
Industry to develop and introduce ad-
vanced methods of oil recovery.
? A special fund to reimburse oil
production enterprises for the higher
costs of the new technologies.
? Construction of new plants to
produce special chemicals in quantity.
? Mass production of specialized
equipment, and training of workers in
the new equipment and technology.
The USSR already uses waterflooding
in about 85 percent of its total oil produc-
tion. Waterflooding is commonly used in
other countries as a secondary recovery
method, but the Soviets use it to maintain
pressure soon after oil production begins
They inject large volumes of water at high
pressures, which often causes damage to
the reservoirs and subsequent loss of
recoverable oil.
The Soviets have only limited ex-
perience with most other enhanced
recovery techniques, although they have
tried every major secondary and tertiary
recovery technique on an experimental or
pilot basis at at least one oil field.
Two areas in which the Soviets have
considerable expertise are nuclear
stimulation, in which an atomic blast is
used to crack the rock, making it easier
for the oil to collect in the reservoir, and
the recovery of very heavy oils.
Steam injection has been employed in
fields at Okha, Boryslav, and Baku. Inter-
nal combustion, in which oil at the
periphery of the deposit is set on fire, to
heat the rest of the oil, making it flow
more easily, has been used in Baku and in
other regions with heavy oils. The usual
practice is to lower an electric heater into
the wells to ignite the oil.
Hot water injection methods have been
used in regions where high paraffin con-
tent causes the oils to flow poorly at
temperatures below 30 degrees cen-
tigrade. In other cases, extremely viscous
oils have been recovered by using a com-
bination of underground mining with
steam and combustion techniques.
The research and test programs needed
to support the latest enhanced recovery
program will be conducted by ten regional
oil field research laboratories under the
direction of the All-Union Oil and Gas
Research Institute in Moscow. Each
regional laboratory will focus on tech-
niques having direct application to oil
fields within its region. The older oil
fields near Baku have apparently been se-
lected as the major testing ground for
many of the techniques to be developed.
The Soviets' goal in the present
five-year plan is to increase crude oil
production, including gas condensate,
from the 1975 level of about 491 million
tons to 640 million tons in 1980. The an-
nual 30-million-ton increase needed to
meet this goal is unlikely to be attained.
Reserves in the older producing regions
are being depleted, and new discovery has
not kept pace with the rate of increase in
production. The drilling alone that would
be required to provide 530 million tons to
540 million tons of new production
capacity-including at least 390 million
tons to offset depletion of old fields-is a
huge task.
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
 Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3
Secret
Secret
Approved For Release 2008/06/09: CIA-RDP79-00927A011500030001-3