RESPONSE TO NSSM NO. 188 A REVIEW OF MAJOR INTERNATIONAL DEVELOPMENTS DURING 1973

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79B01737A002400040001-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 70
• Document Creation Date: November 16, 2016
• Document Release Date: November 15, 1999
• Sequence Number: 1
• Publication Date: November 1, 1973
• Content Type: REPORT

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Response
to
NSSM No. 188
A Review of Major International Developments During 1973
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Area Issues and Developments
1. Europe . . . . . . . . . . . . . . . . . . . . . . . 1
II. US-USSR Relations . . . . . . . . . . . . . . . . . . 12
III. Asia and the Pacific . . . . . . . . . . . . . . . . . . 13
IV. US-PRC Relations . . . . . . . . . . . . . . . . . . . 18
V. South Asia . . . . . . . . . . . . . . . . . . . . . . 19
VI. Middle East . . . . . . . . . . . . . . . . . . . . . . 22
VII. The Americas . . . . . . . . . . . . . . . . . . . . . 24
VIII. Africa . . . . . . . . . . . . . . . . . . . . . 28
Security Issues and Developments
IX. Strategic Policy and Forces . . . . . . . . . . . . . . . 31
X. General Purpose Forces . . . . . . . . . . . . . . . . . 32
XI. Arms Control . . . . . . . . . . . . . . . . . . . . . 33
XII. Security Assistance . . . . . . . . . . . . . . . . . . 35
International Economic Issues and Developments
XIII. International Monetary Affairs . . . . . . . . . . . . . . 36
XIV. International Trade Matters . . . . . . . . . . . . . . . 39
XV. Foreign Economic Assistance . . . . . . . . . . . . . . 40
XVI. Meeting Energy Needs . . . . . . . . . . . . . . . . . 41
International Institutions and Developments
XVII. United Nations . . . . . . . . . . . . . . . . . . . . . 43
XVIII. Law of the Sea . . . . . . . . . . . . . . . . . . . . 44
XIX. Multilateral Cooperation . . . . . . . . . . . . . . . . 46
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NATO Europe
In 1973, the NATO allies were deeply involved in multilateral negotia-
tions on the political and military aspects of security in Europe and in
drafting a declaration in response to Secretary Kissinger's call for a new
Atlantic charter. But the allies seemed to find it easier to deal with problems
related to the Communist world than to respond to the US. The Middle East
war added strains to the relationship between the European members of
NATO and the US.
In early July, the allied foreign ministers and their colleagues from
other West and East European states approved the results of the preparatory
talks for a Conference on Security and Cooperation in Europe and agreed to
hold further negotiations. The second stage of talks began in September. The
motives and goals of the participants differ. The Western countries want
agreements that will enable people and ideas to move freely across national
boundaries. The USSR and its allies seek guarantees of existing borders in
Europe. Little progress has been made in reaching specific agreements, but
the conferees have avoided polemics and have indicated they intend to get
on with the job. Although the conference is unlikely to produce agreements
of great immediate practical effect, it could help establish a basis for greater
trust and confidence in Europe. The MBFR conference also opened this
year.
In response to Secretary Kissinger's speech of 23 April, the NATO allies
sought to draft a declaration outlining the principles of the Atlantic partner-
ship. The task proved difficult. The latest proposal-based on a French
draft-reaffirms the importance of the NATO alliance and restates that the
allies will continue both to maintain a common defense and to pursue
detente. The exercise of drafting this paper revealed some important differ-
ences between the US and the European concepts of the Atlantic relation-
ship.
During the Middle East war, the Europeans expressed shock and dis-
pleasure that the US had put its military forces on alert without advance
consultation. Effective presentations by US officials helped calm the pro-
tests, but the Europeans will continue to press the US to consult with them
before taking any actions which could affect their interests.
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The alliance retains a credible defense posture in Europe and has also
demonstrated its usefulness to member states in non-military affairs. The
Committee on the Challenges of a Modern Society continues to discuss and
coordinate research on international environmental problems.
United Kingdom. In the UK, inflation topped the Heath government's
list of problems, even though the country has been under wage-price controls
for over a year. Unemployment declined and, for the most part, there has
been industrial peace. The unions, however, are now pressing for a resump-
tion of collective bargaining and elimination of wage controls. Neither the
government nor the opposition Labor Party has done well in several by-elec-
tions during the past year or in the public opinion polls, while the resurgin
STATINTL Liberals have made surprising gains.
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The UK began the year by joining the EC and ended the year by
backing away from supporting Israel. The general public still questions the
benefits of EC membership and the Labor Party is pushing for "withdrawal."
London's self-proclaimed "even-handed" policy toward the Middle East,
led the Arabs to place the UK on the
non-em argoe list for oil. Nonetheless, the UK declared a state of emer-
gency and introduced measures to reduce oil consumption. Relations be-
tween the USSR and the UK have changed little, and the British are still
skeptical of Soviet motives in the MBFR talks. Prime Minister Heath is
scheduled to visit Peking in early January. Difficulties with Malta were
partially resolved early this year, permitting a continued Western military
presence on this strategic Mediterranean island.
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STATINTL
France. President Pompidou's position was weakened in 1973 by
rumors that he is seriously ill and by Gaullist dissatisfaction with his
leadership. Although the Gaullists are now more dependent on the Inde-
pendent Republicans as a result of losses in the parliamentary elections in
March, the relationship between the coalition partners has been strained.
Independent Republican leader Giscard d'Estaing has come under sharp
Gaullist criticism, both because of his presidential ambitions and the policies
he has promoted as economics and finance minister. A continued high rate
of inflation, the failure of Pompidou's constitutional amendment reducing
the presidential term from seven to five years, and France's inability to play
a wider role in world affairs have put the government on the defensive.
The center opposition parties have not been able to exploit these signs
of weakness and have had no success in presenting themselves as a viable
alternative either to the Gaullist coalition or to the left alliance. The
Socialist-Communist alliance is in no danger of collapsing, but substantial
differences on key policies persist.
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France was still the fastest growing economy in West Europe. The
government, however, remains under strong pressure to reduce inflation
without restricting income. Labor leaders have made clear that they intend
to call a general strike if the government attempts to exploit any EC
agreement on economic and financial matters to impose domestic wage
controls.
In foreign policy, Pompidou's concentration on European affairs was
highlighted by his call on 31 October for regular EC summits to "harmo-
nize" views. The French show signs that they may be more flexible toward
European unity, but they still want to carve out a leadership role for France
in the enlarged European Community and. to mold Europe along French
guidelines. Pompidou's official visit to China and his summit with Brezhnev
demonstrated his continued interest in contacts with the East. The French
view of US-Soviet detente, however, has soured. They suspect the super-
powers intend to impose faits accomplis in areas of key interest to West
Europe, such as the Middle East. There, Gaullist policy remained solidly
pro-Arab, and Paris hopes eventually to play a part in guaranteeing a
settlement. Former French colonies in Africa further loosened their ties to
Paris when they renegotiated the cooperation agreements binding them to
France.
Iceland. During the recent Cod War with Britain, Iceland's contribution
to NATO and even its continued membership in the alliance were called into
question. The two-year fishing agreement with London and prospects for a
similar accord with Bonn have improved chances for retaining the US-
manned base at Keflavik, and talk of withdrawing from NATO has subsided.
Icelandic Communists, included in the present three-party coalition, have
made inroads in the country's political life, but should the government
founder, there is a strong possibility that a center-right government would be
restored.
Italy. In early July, Italy, under Christian Democrat Mariano Rumor,
revived the coalition formula that has provided most of the country's
governments over the last decade-a center-left alignment of Christian Demo-
crats, Socialists, Social Democrats, and Republicans. The new government
was installed after the resignation of Giulio Andreotti's year-old centrist
coalition, which had replaced the Socialists with the conservative, business-
oriented Liberal Party.
Although the new coalition partners have serious differences over
domestic policy, they have set these aside, at least temporarily, in an attempt
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to take effective action against the most pressing economic problem, the
country's soaring inflation. The coalition has had considerable success in
holding down prices through a series of stop-gap measures featuring a
three-month freeze on the prices of key commodities. Government efforts
were aided by what the country's powerful Communist Party called a
"different" type of opposition. As part of a more constructive approach to
the government, the Communists used their influence with organized labor
to discourage major strike activity. Thus, a guardedly hopeful atmosphere
prevails in Rome. The government will still face serious difficulties in the
months ahead as it seeks to find more permanent solutions for the country's
economic woes while trying to implement a series of long-promised social
reforms.
The Netherlands. In the Netherlands, the nine-month old left-center
government under Socialist Prime Minister den Uyl is trying to preserve its
fragil unity by rallying public opinion in the face of the Arab oil boycott.
The lack of assistance from EC partners and the need for continuing strong
relations with the United States have prompted a rethinking in political
circles of Dutch security policies.
Belgium. With the implementation of programs granting greater auton-
omy to Flanders and Wallonia in economic and cultural affairs, traditional
linguistic disputes have become less volatile political issues. Leaders of the
tripartite government believe that Soviet-American detente and the Middle
East crisis have raised more immediate problems, including the future of the
Atlantic Alliance.
Norway. The Scandinavian romance with socialism cooled slightly
during the past year. Recent elections in Norway resulted in the greatest
losses the Labor Party has encountered for many years. Labor's slump
derives from popular dissatisfaction over burgeoning welfarism and its result-
ant high taxes and inflation. Nevertheless, the party still emerged as the
country's largest. It will try to govern by drawing on the left for support on
domestic issues and relying on the center-right for a majority in foreign
policy areas.
Denmark. In Denmark, the only Scandinavian EC member, the socialist
government is experiencing many of the same problems as Norway. The
Social Democrats, who commanded a one-vote majority with the coopera-
tion of a small left extremist party, lost their edge in November and resigned.
New elections scheduled for December may result in greater political frag-
mentation, as voters are expected to disperse ballots among a plethora of
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new parties. A succession of weak, minority governments could result. In the
past year, Copenhagen displayed diplomatic talent and political initiative in
acting as host of NATO conferences and chairing the EC council.
Greece. The prominence of the military in Greek political affairs was
raised another notch in late November when a group of military officers
ousted the regime of President George Papadopoulos. These officers, led by
the chief of the military police General loannidis, saw their revolution being
STATINTL betrayed by Papadopoulos' personal ambitions, his declaration of a republic
The immediate cause of the move appeared to be loannidis' view that
Papdopoulos had mishandled the November student riots by acting too late
to prevent bloodshed.
The regime showed its hand when it announced that it was scrapping
the planned elections and stressed the need to return to the goals of the
April 1967 revolution to create the prerequisites for restoring a healthy
parliamentary life. The prospects for even a "guided" democracy within the
foreseeable future thus appeared dim at the end of 1973.
Turkey. Turkey faced a political crisis this spring when the Turkish
parliament failed to elect a president expeditiously, and there were fears that
the Turkish military might resolve the issue by seizing power. After a 25-day
deadlock, however, the major parties agreed to elect Fahri Koruturk, a
retired Admiral and former Senate member. The election of Koruturk
indicated a shift in the balance of power in Ankara from the military
commanders back to parliament; many, though not all, military officers had
backed the presidential candidacy of former General Staff Chief Gurler.
Subsequently, those officers considered interventionist were either retired or
reassigned to less strategically located posts.
In parliamentary elections on 14 October, Turkey returned to fully
representative government after more than two years of military-backed
non-partisan coalition governments. No incidents marred the elections, but
the vote was split among the eight competing parties so that no party won a
majority. The left-of-center Republican Peoples Party, led by Bulent Ecevit,
won a plurality. Efforts to form a coalition government have failed. Signs of
uneasiness are appearing as the crisis drags on, but there have been no signs
that the military will intervene again to resolve the impasse.
European Communities
With the admission of Britain, Ireland, and Denmark in January, the EC
became the Nine, and confronted an ambitious program of internal and
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STATINTL
external policies set down at the summit last October. Progress has been
especially tortuous on internal matters. The new members have failed to
membership has, however, brought new awareness of the discrepancy be-
tween the lag in economic integration and the political ambitions of the EC.
France's call for a summit of the Nine in December 1973 and for regular
summits thereafter reflects a general concern that "Europe," despite its
economic power, is failing in its world role. Paris has gradually begun to
place greater weight on Europe in formulating its foreign policies; the shift
was not unrelated to the changed power relationships within the enlarged
EC. Still, Paris and its partners are tempted to look first for national
advantage in EC policies and remain divided on the degree of sovereignty
they are willing to relinquish to the community's institutions.
When measured against the large undertakings of the EC summit in
1972, the EC performance in 1973 has been poor. Important decisions on
regional, agricultural, energy, and transport policies and on economic and
monetary union are yet to be taken. The Commission has made proposals on
these questions, and also in several areas of industrial policy, but the
advances were modest as the Nine's main interest was, as usual, a desire to
avoid a bruising confrontation.
The EC performance was better on external matters. It is clear that
challenges from the outside are exerting more pressures for unification than
are the exigencies of internal affairs. One achievement was the agreement on
a common EC position for the multi-national trade negotiations. At the
Nairobi international monetary meeting, the Nine were more willing than
before to speak with one voice. Negotiations to reach a new agreement with
the EC associates and potential associates in Africa, the Caribbean, and the
South Pacific got under way. The Nine's political consultative mechanism
functioned well in coordinating positions on the European security confer-
ence and was brought into play-somewhat belatedly-to respond to the US
initiative for an Atlantic declaration. Despite considerable differences of
emphasis between the French and the others, a growing sense of "European
identity" pointed toward a joint position on an Atlantic concept.
The declaration on the Middle East issued by the Nine during the crisis,
the first on that area, was inspired more by a common sense of dependence
on Arab oil than on any real unity of policy. The selective Arab use of the
oil weapon, particularly the embargo of all shipments to the Dutch, strained
relations among the EC members. The Middle East crisis illustrated the
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standing EC dilemma: the dependence of the Europeans on initiatives of the
US runs up against the desire to operate as an independent political force.
The EC, nevertheless, is the only instrument through which the West Euro-
peans can hope to form an independent decision-making center and express
the European component of Atlantic or world-wide policy-making. This is
the common thread running through the debates of the Nine: with the US in
the context of the "Year of Europe" and with each other on how to respond
to the Middle East conflict or on how far to institutionalize their economic
and monetary union.
Western Europe Outside NATO
Spain. Generalissimo Franco, who turned 81 this year, moved to
prepare for a smooth transition of power by relinquishing his position of
prime minister to his vice premier, Admiral Carrero Blanco. Although
Franco's health has been declining in recent years, there is no indication that
the decision to promote Carrero was prompted by health problems. Franco
continues to exercise power in his role as chief of state, with Prince Juan
Carlos, named by Franco in 1969 as king-designate, ready to take over the
chief of state role when Franco dies.
In the economic field, private long-term capital investments and remit-
tances from Spaniards working abroad added to Spain's large balance-of-pay-
inents surplus. Nevertheless, anti-inflationary measures failed to halt infla-
tion, which surpassed 15 percent during the year. In January, Madrid
forestalled economic problems arising from British entry into the EC by
signing a protocol with the EC that permits Spain to continue trading with
the three new EC members while negotiations for a permanent trade agree-
ment are in progress.
In foreign policy, Madrid has assumed a tough stance toward both the
US and the UK. The Spaniards broke off talks with the British on the future
of Gibraltar. The Spaniards issued a policy statement saying its agreement
with Washington does not include the right of the US to use facilities in
Spain in a conflict between the Arabs and the Israelis.
Portugal. Prime Minister Caetano continues to govern Portugal with a
firm hand. The government was unopposed in the National Assembly elec-
tion in October; opposition candidates withdrew to protest election restric-
tions. Caetano subsequently reshuffled his cabinet, which now has only two
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holdovers from the Salazar era. Caetano is expected to keep up Portugal's
counterinsurgency efforts in the African provinces; on the home front he
will probably attempt to improve social benefits and avoid repressive meas-
ures in dealing with student unrest.
The Portuguese Government has indicated that it is dissatisfied with the
present agreement with the US, which permits Washington to maintain naval
and air facilities at a base in the Azores Islands. Negotiations have begun to
renew this agreement which expires in February 1974.
Austria. The Socialist government has taken advantage of domestic
economic prosperity and a firm control of parliament to devote more
attention to foreign policy. Austria is host to the MBFR negotiations. The
Austrians were the first European neutral to attend a conference of non-
aligned nations. They have also urged participants at the Conference on
European Security and Cooperation to address directly the security and
energy problems posed by the Middle East crisis.
Finland. Finland recently joined Sweden, the other Nordic neutral, in
signing a free trade agreement with the EC. The accord constitutes one of
the most significant foreign policy moves by Helsinki since it concluded a
"special" treaty with the USSR in 1948-a treaty which has since hampered
Finnish cooperation with the West. The Finns must still be careful to
"balance" their East-West relations.
Sweden. US diplomatic relations with Sweden hit a new low in early
1973 because of Vietnam, but Stockholm has begun to show signs that it
wants the climate to improve. The election in September resulted in a
parliament split right down the middle-one half Socialist, the other non-
Socialist. Unpopular domestic programs nearly ended more than 42 years of
Socialist domination in Sweden. New elections are likely in the spring.
Ireland. The victory of the Fine Gael - Labor Party coalition in the
February election ended 16 years of Fianna Fail rule. Prime Minister Cos-
grave has followed his predecessor's moderate, gradualist approach to Irish
unity and has moved energetically to try to prevent the IRA from using the
Republic as a base for terrorist operations in Ulster. The agreement to form a
coalition government in Ulster paves the way for creation of a council of
Ireland that would have powers to deal with non-controversial problems
facing the whole island. Dublin views a council as an evolutionary mechan-
ism for fostering conditions necessary for Irish unity. The year marked the
retirement from public life of President Eamon de Valera after over 50 years
of service to the nation. Erskine Childers, a London-born Protestant, was
elected to succeed de Valera.
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Eastern Europe
The practical job of making detente work to their advantage occupied
most East European countries in 1973, and some pitfalls began to appear.
Concern over the foreign and domestic impact of better relations with the
West produced some second thoughts. As the individual regimes focused on
European security, force reduction, and improved relations with the US,
they were jarred by renewed Middle East hostilities that for a while seemed
to them to threaten to turn back the clock on East-West relations.
The Middle East war also raised questions about relations between
Eastern Europe and Washington. Romania, the only East European country
to maintain diplomatic relations with both Israel and the Arab countries,
stood its ground against Soviet pressure. The other Warsaw Pact countries
followed Moscow's lead and provided moral and some material support to
the Arabs, and one country-Poland-agreed to send a peace-keeping contin-
gent for the UNEF. Yugoslavia was the most vehement supporter of the
Arab effort.
Yugoslavia's relations with the US underwent strains not only because
of opposing views on the Middle East crisis but also because of a sharp
anti-"imperialist" campaign in Yugoslavia after Allende's fall. Despite the
difficulties, Yugoslav officials maintained a firm line that bilateral ties need
not be harmed.
Romania continued to press its claim to being an equal and independ-
ent European nation. In the European security and force reduction talks, its
delegates more than once adopted positions contrary to those of both the
USSR and US. The Romanians, nevertheless, maintained their drive for
better relations with the US, particularly the granting of MFN status which
Ceausescu hoped to get during his US visit.
The year was a successful one for East Germany. After being recognized
by nearly 100 nations, it entered the UN jointly with West Germany on 18
September 1973. Among the major powers, only the US was without
diplomatic tics with East Germany, and negotiations to that end are under
way.
Poland continued to seek a role for itself as the leading spokesman for
detente in Central Europe, but it suffered some setbacks in 1973. The
steadily improving relations with the US, which were marked by President
Nixon's visit to Warsaw last year, were set back in the spring because of
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Poland's activities on the Vietnam peace-keeping force. The Poles hope that
their Middle East involvement will not have a similar effect and stress that
they want to improve relations with the West in general and with Washington
in particular.
Hungary is the only other East European member of the Vietnam ICCS
and it, too, has shown bias there. Early in the year, Deputy Premier Valyi
became the highest ranking Hungarian official to visit the US since World
War II. He signed a claims agreement negotiated earlier and expressed
Budapest's desire to work out accords in the cultural and scientific fields.
Like Romania and Bulgaria, Hungary is anxiously awaiting the granting of
MFN and is predicting that large bilateral trade increases will follow. After
several years of negotiations, Hungary finally gained membership in GATT, a
step of major importance to a country heavily dependent on foreign trade.
Bulgaria, with an eye on MFN, also pressed its efforts to improve
relations with the US during 1973. In January, Sofia signed the most
comprehensive agreement on combating illegal drug traffic yet reached
between Washington and an Eastern European country. Bulgaria's more
positive attitude toward the US is in harmony with Soviet foreign policy
goals, but the Bulgarians also have their own economic objectives in mind.
When Sofia's deputy foreign trade minister visited the US in July, he voiced
the hope that his government could sign contracts for $100-150 million
worth of goods by mid-1974.
Czechoslovakia's year-long effort to break out of diplomatic isolation
was enhanced by the visit in July of Secretary Rogers (the first such visit
since the war) to sign a consular convention. His visit paved the way for
negotiations on long-standing mutual financial claims, and talks on cultural
and other exchanges are on the docket. Elsewhere, Prague's diplomatic
efforts resulted in burying of the hatchet with Yugoslavia and Romania.
Both had been cool toward the Czechoslovak regime since 1968. Prague also
spread its wings in the non-Communist world when various Czechoslovak
leaders visited Finland, India, Japan, and Turkey.
Only Albania has, not unexpectedly, stood aside from this detente-
related diplomatic activity. Tirana ignored the offer of improved relations
that was extended by Under Secretary Rush in April and has continued its
anti-US vituperation.
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II. US-USSR RELATIONS
US-USSR relations improved over the past year, and the prospects for
further improvement are good. The Middle East crisis in the fall has not
shaken the US resolve to move ahead in this direction; it has demonstrated
that intensive joint efforts as well as good-will are going to be required to
build a more durable relationship and a more stable international order.
During Brezhnev's visit to the US last June, competitive ideologies and
cold war legacies were set aside, and ten agreements, based on months of
sound preparations on both sides, were signed. The diversity of these joint
undertakings attests to the resolve of both countries to find common areas
of interest despite the competitive nature of the relationship.
The achievements at the summit include agreements covering the peace-
ful uses of atomic energy, cultural and commercial relations, cooperation in
the fields of agriculture and transportation, and study of the world's oceans.
In addition, an important agreement was signed on the prevention of nuclear
war, and each side renewed its commitment to seek more complete measures
limiting strategic offensive arms. The documents on SALT envisage a
permanent agreement on strategic offensive arms by the end of 1974 with
the possibility of some accords supplementing the existing Interim Agree-
ment before then.
The trend in relations since the Washington summit has been favorable.
The war in the Middle East, the first real test of the policy of detente,
produced some temporary strains in US-Soviet relations, but it also demon-
strated that joint actions toward a negotiated settlement provide the surest
means of advancing US-USSR relations and the interests of all states.
High-level contacts and the exchange of many delegations to implement
existing agreements continued this year. Both sides are fulfilling the obliga-
tions they have assumed, and this should contribute to the atmosphere of
mutual trust necessary for broader undertakings in the future.
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US-Japan Relations
Prime Minister Tanaka considers his mid-summer visit to the US a high
point of his administration. Although Tanaka has not recovered the broad
public support he enjoyed when he entered office, the outcome of his trip to
the US was well-received in Japan. Tanaka followed up his successful visit to
Washington with trips in the fall to Western Europe and the USSR. Good
Japanese-US relations bolstered Tanaka's determination to stand fast against
Soviet political pressures during his summit discussions in Moscow.
The Middle East crisis and the subsequent Arab oil supply cutbacks
have not reduced Japan's desire for close relations with the US. The Japanese
consider their ties with the US of primary importance and have thus far
sought to minimize any friction with the US by meeting Arab demands for
political support with only minimal shifts of policy.
Japanese officials and considerable segments of the public continue to
be committed to the US-Japan Mutual Security Treaty, and public opposi-
tion to such activities as the homeporting of the USS Midway has been
limited. The treaty is, in reality, no longer an issue in Japanese politics. The
consolidation of remaining US bases in Japan is reducing local objections to
the presence of US forces in the country.
Cambodia. The Lon Nol government continued to demonstrate its
durability last year in spite of steady Khmer Communist military pressure,
serious economic problems, and ebbing popular support. Although it was
better equipped than before, the Cambodian Army's general combat ef-
fectiveness remained limited. The indigenous Communist military forces
have grown larger and have displayed an increasing offensive capability.
Communist successes in periodically cutting the country's major trans-
portation arteries put heavy economic pressure on Phnom Penh, forcing the
government to depend on foreign aid, even for rice. The Communists also
made some progress in building up local political organizations in the
countryside-a task made easier by the absence of government forces in
many rural areas.
The government is still finding it difficult to maintain political cohesion
and stability. Several important and able individuals rejoined the government
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during the year, but they have been increasingly irritated. by Lon Nol's
authoritarian style. If Lon Nol does not change his ways, he risks losing their
support and that of at least some senior military leaders. Without such
support, his ability to retain power would be significantly weakened.
Laos. The Souvanna Phouma government and the Laotian Communists
have agreed to form a new coalition government after a decade of fighting. A
cease-fire, which was part of the peace agreement reached last February, is
holding up well. Negotiations aimed at forming a new government are
moving ahead slowly, but both sides remain optimistic that agreement will
be reached without further bloodshed. The new government will be headed
by Prime Minister Souvanna with as yet unnamed deputy prime ministers
from each faction. Hanoi, on the other hand, sees its basic interests as
protected under the current scenario, and as a result has indicated its support
for the peace accord.
Vietnam. The Paris Accord, signed on 27 January 1973, set a limiting
framework for activity in Vietnam the rest of the year. Strict observance of
the agreement was never really achieved, and military operations persisted.
Hanoi continued to move men and materiel south, and no meaningful
progress was made toward a genuine political settlement in South Vietnam.
If the agreement did not produce a real cease-fire, it did bring about a
condition of "lessfire," which enabled the Thieu government to strengthen
its political position in the South.
Just before 28 January, the Communists initiated a sharp burst of
military action in the obvious hope of gaining additional territory before the
cease-fire began. In succeeding weeks, however, Saigon's forces pushed the
Communists back and in many cases went on to take ground from the other
side. Military action in succeeding months followed a similar pattern as the
two sides pressed for tactical advantage along the ill-defined line that
separates them.
In the last half of the year, notwithstanding the signing of a supple-
mentary cease-fire agreement between the US and North Vietnam in June,
military exchanges in the South became more intense. North Vietnamese
forces took a number of government outposts in South Vietnam's central
highlands, government ground forces kept up their pressure on Communist-
held territory, and the pace of South Vietnamese bombing was stepped up.
The struggle for access to the rice harvest also grew more intense, with the
Communists mounting strenuous local efforts to counter Saigon's campaign
to deny them rice supplies. As the year drew to a close, there was every
reason to believe that military activity would grow more intense in succeed-
ing months.
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Partly because of a continuing reinforcement and resupply effort,
Hanoi, at year's end, had more troops and far more firepower in South
Vietnam than at the beginning of the 1972 offensive. Given the commitment
of the North Vietnamese to the take-over of the South and given the bleak
prospects for Communist success in the political arena, it appears likely that
at some point Hanoi will try once again for a military victory, or at least for
military gains extensive enough so that the Saigon regime would negotiate
with them. The question that remained unanswered as 1973 drew to a close
was whether the push would come in the spring of 1974 or would be
postponed until the next dry season.
The Thieu government strengthened its hold in South Vietnam often at
the expense of non-Communist as well as Communist opposition. As a result
of decrees issued late in 1972 that set exacting criteria for political organiza-
tions, most of the formal opposition parties have disappeared. Pro-
government slates had no trouble winning the senatorial elections in August
1973. Thieu's power base in the military and the government bureaucracy
was as strong as ever, and his Democracy Party is well on its way to
pre-eminence in South Vietnamese politics. Thieu may not be a popular
politician in the Western sense, but he enjoys a broad measure of respect,
and many of his severest critics prefer him to the Communists.
The South Vietnamese economy experienced rough spots throughout
1973, largely as a result of the rapid reduction of the US military presence,
the need to maintain an army of 1.1 million men, and the lingering after-
effects of the 1972 offensive. Inflation persisted through much of the year.
The problems were of manageable proportions, however, and did not lead to
serious unrest and did not become so serious that conditions on the Commu-
nist side of the line began to look good by comparison. Communist prose-
lytizing efforts met with minimal success throughout the year.
East Asia and the Pacific
China. In 1973 the People's Republic of China made progress in
reconstructing its party and mass organizations, but was still unable to find
the formula for unity among its top leadership. Although the tenth Party
Congress in August elected a new Politburo and adopted a revised party
constitution, the unusual brevity of the congress indicated that party leaders
avoided a full discussion of controversial issues. A pre-congress debate in
domestic media over where China ought to go and how it should get there
has intensified. This controversy may be delaying the convocation of the
National People's Congress, which will rubber-stamp a new governmental
apparatus and might result in changes among Peking's leaders.
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Tensions at home have not spilled over into the foreign-policy arena.
Chinese foreign policy continues to be flexible, pragmatic, and highly suc-
cessful. China seems intent on pursuing and improving state-to-state relations
with other countries; the revolutionary elements of its policy seem at
relatively low ebb, although the rhetoric of revolution has not disappeared
entirely from Chinese propaganda. In the United Nations, Peking has fre-
quently championed causes of the Third World, but seems more intent on
developing relations with Europe, its neighbors in Asia, and the US. Distrust
of the Soviet Union, a mainspring of Chinese policy, has not slackened.
North and South Korea. Negotiations between the two Koreas made no
marked progress during 1973. The talks were, in fact, suspended in mid-
summer, the result of Pyongyang's increased demands for military and
political concessions from the South. Still, the existence of the dialogue
helped Pyongyang gain international respectability. North Korea achieved
observer status at the UN and opened diplomatic relations with a number of
non-Communist states. Seoul launched a campaign to establish ties with
Communist governments, particularly Moscow and Peking, but as yet with-
out success.
The kidnaping of opposition leader Kim Tae-chung in Tokyo by ROK
security elements hurt Seoul's image among its friends abroad and stirred
student opposition at home. Seoul's support in the UN, however, remained
largely unaffected, and a compromise agreement removed the Korean ques-
tion from the General. Assembly for another year. The agreement's strong
endorsement of the North-South talks rekindled efforts by both Koreas to
resume the negotiations. Pyongyang has made it clear that its major imme-
diate objective in the talks continues to be an end to the UN and US military
role in the South.
Thailand. A new civilian government came into power this fall with a
mandate to draft a new constitution and hold elections for a legislative
assembly some time in 1974. Although probably only an interim govern-
ment, Prime Minister Sanya has made a good start in attacking a number of
domestic problems like inflation and insurgency. The new government wants
to carve out an independent foreign policy, but not at the cost of severing
Bangkok's close ties with the US. It is likely that the new government will
move more vigorously to improve relations with Peking than did its predeces-
sor.
Philippines. Although Marcos has brought a measure of political sta-
bility to the Philippines, he faces severe economic tests that in the end may
erase his political accomplishments. In the final analysis, the outlook for US
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economic and military interests depends on the ability of Marcos to forestall
widespread popular disaffection that could be exploited by his political
enemies, including the nation's small but growing Communist movement.
Marcos' declaration of martial law on 22 September received widespread
popular support, primarily because of a general feeling that dramatic action
was needed to deal with mounting problems.
The rural population is generally content with the new regime and the
improvements it has brought in law and order. Unemployment, food short-
ages and impending oil shortages may revive urban discontent. Radical
students, the militant clergy, and opposition politicians could decide to
organize protests against the regime. Marcos must also reckon with the
enhanced political power of the military in the civil administration. Any
serious threat to national stability could precipitate a military take-over.
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IV. US-PRC RELATIONS
Relations between Washington and Peking improved further over the
year. Highlights were the formal establishment of liaison offices in each
capital and the visit of Secretary Kissinger to China in November. The
communique issued at the conclusion of the Kissinger visit brought the US
and China still closer to full diplomatic relations. Peking clearly wants to
expand ties with the US in all fields.
Cultural exchanges continued to grow, with over a dozen US groups
visiting China and close to a dozen Chinese groups visiting the US. The
Chinese included journalists, scientists, librarians, and computer specialists;
the US delegations included athletes, scholars, doctors, educators, and
musicians.
Trade between the US and China expanded again, reaching close to a
billion dollars. The Chinese purchased not only agricultural products like
grain and cotton, but also aircraft, electronics and communications equip-
ment, and fertilizer plants. A number of US businessmen were invited to
attend both the spring and fall trade fairs in Canton, and business was
conducted in a cordial and friendly atmosphere. A steady increase in Sino-
US trade can be expected in the future.
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V. SOUTH ASIA
The nations of South Asia were buffeted by natural calamities and
governmental changes in 1973, but, as the year ended, the region appeared
to be edging toward greater stability, both economically and politically.
In 1973, India, Bangladesh, and Sri Lanka all suffered from food
shortages resulting from drought, but prospects look better, for the harvests
in 1974 and for meeting food requirements in the three nations. The
monsoon rains, welcomed by most South Asians, caused some flooding in
India and massive destruction in Pakistan. The Indus Valley, for example,
suffered its worst floods in the 20th century. The United States took a
prominent part in the relief effort, providing transportation equipment, food
and emergency supplies, and trained personnel.
Politically, the most encouraging event of 1973 was the successful
negotiation of the New Delhi pact in late August by Pakistan, India, and
Bangladesh. The agreement resolved many of the humanitarian problems
remaining from the Indo-Pakistani war of 1971. Pakistan agreed to release all
Bengalees who wish to go to Bangladesh and will accept Pakistanis caught in
Bangladesh by the war and a portion of the non-Bengalces of Bangladesh
who wish to emigrate to Pakistan. Bangladesh, in turn, permitted the release
of all the 93,000 Pakistani prisoners of war and civilian internees, housed in
India since the war, except for 195 accused of war crimes. The fate of these
195 is to be determined by three-party negotiations after the repatriation of
the others is completed.
Once the prisoners of war are returned, there is hope for better
relations between India and Pakistan. The Kashmir issue was largely on ice
last year, but it is not a dead issue as the student demonstrations in
Indian-held Kashmir last November show. Assuming good will on both sides,
moves toward increased economic and transportation ties appear likely in
1974 and full diplomatic relations may even be re-established.
Pakistan has steadfastly refused to recognize Bangladesh until the 195
remaining prisoners of war are released. Dacca, in turn, has announced that
no discussions on the fate of the 195 can be held except after recognition.
The impasse has been continued in the Security Council of the United
Nations where China, on behalf of Pakistan, has opposed granting UN
membership to Bangladesh.
Prime Minister Indira Gandhi continues to dominate Indian domestic
politics. In mid-1973, her political strength as shown by public opinion polls
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was waning, but the trend appears to have been reversed following the
excellent monsoon. Her Ruling Congress Party remains the leading political
force in the nation; its strength will be tested in several state elections early
in 1974.
India-US relations improved considerably in 1973. Negotiations for an
agreement on the disposition of large US holdings of rupees in India-the
result of earlier economic assistance programs-were near success late in the
year. Less Indian criticism of US actions and policies was noted than in
previous years.
In Pakistan, the constituent assembly by almost unanimous vote ac-
cepted a new constitution in April; the constitution was promulgated in
August. Difficulties between the governing party of Prime Minister Bhutto
and opposition parties in the Northwest Frontier Province and in Baluchistan
have brought some instability, including minor insurgent actions in Baluchis-
tan. As the year ended, there appeared no sign of reconciliation between
Bhutto and his opponents, but in the past serious confrontations have
generally been avoided by last-moment compromises.
The continuing closeness of relations between Pakistan and the United
States was symbolized by the very successful visit of Prime Minister Bhutto
to the US in September.
As a result of a coup in July, Afghanistan's monarchy and 10-year-old
"experiment in democracy" were eliminated. Former Prime Minister Daoud
returned as president. Daoud shares power with a Central Committee made
up, in part, of military officers who were instrumental in the coup. The new
government faces economic problems at the same time that it is struggling to
establish firm control over the nation.
Afghanistan's foreign relations since the coup have been dominated by
problems with Pakistan. Afghanistan has long posed as protector of the
tribes along the Afghan-Pakistan border and has urged greater autonomy for
tribesmen living in the Northwest Frontier and Baluchistan. Islamabad re-
gards the Afghan efforts as interference in Pakistan's internal affairs. This
situation could lead to serious trouble in 1974. The US has urged both
nations to resolve the dispute peaceably.
Bangladesh, under the leadership of Prime Minister Mujibur Rahman,
continued its slow recovery from the destruction and confusion that accom-
panied its birth in 1971. Bengalees returning from Pakistan were integrated
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into the hard-pressed civil service and armed forces. Most transportation
routes have been repaired, and the economy, helped by a good monsoon, has
begun to improve. Some instability was demonstrated by an increasing
number of attacks on police stations and other government installations.
Mujib's support among the population, nevertheless, appeared strong, and his
party won an overwhelming victory in the national election in March.
US relations with Bangladesh have improved after a series of incidents
in January in which USIS property was destroyed. Leaders of both the
government and the ruling party spoke of the need for friendship with the
US, and the US continues to provide food and economic assistance to
Bangladesh.
Sri Lanka was relatively quiet in 1973. The government, displaying
considerable political courage, took steps in October to reduce some social
welfare measures that had caused severe fiscal problems and contributed to a
stagnating economy. As 1973 ended, Sri Lanka faced recurrent shortages of
food in the new year, but a fair monsoon and the government's decisive
action in October gave promise that the economic situation will improve.
Relations with the United States remained cordial throughout 1973,
with Washington continuing to provide economic assistance and, toward the
end of the year, emergency food aid.
There were no dramatic changes in Nepal during 1973. The govern-
ment, under King Birendra, maintained Nepal's independence between its
two giant neighbors. Nepal was one of the nations chosen to provide troops
for the UN force in the Middle East. US relations with Nepal were good.
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The Syrian-Egyptian surprise attack on Israel in October brought to a
head issues that had been simmering in the Middle East since the inconclu-
sive Arab-Israeli war of 1967 and once more brought the threat of a great
power confrontation. The October war also led to an Arab oil embargo
against the US and other supporters of Israel and left hanging the prospect of
yet another round of fighting made possible by the rapid resupply of the
belligerents with newer and more destructive weapons.
As the Arabs wished, the war led to more involvement of the great
powers in the process of establishing recognized borders between Israel and
the Arab states. As the prospect for a new outbreak of fighting and further
cutbacks of Arab oil production grew, Palestinian irredentists found them-
selves as unprepared as ever to agree on a common policy for the settlement
of their claims. Their Arab patrons, intent on pressing their own territorial
demands, appeared ready to let the Palestinians fend for themselves, and
Moscow took the unprecedented step of inviting the heads of all the
fedayeen organizations to a conference aimed at achieving a unified stand on
the objectives of the Palestinian nation.
The leaders of the Arab states demonstrated an unusual degree of unity
in supporting, first, the armed conflict and, then, the oil embargo. But some
of the usual divisiveness remained. The secrecy with which war plans were
made and executed (which was the key to their success) brought recrimina-
tions from those riot in on the plans, particularly the Iraqi, Libyan, and
Algerian leaders. President Sadat's agreement to a cease-fire without con-
sulting even the Syrians brought more criticism and widened the rift between
Sadat and the more radical Arabs.
To balance off these divisions was the solidarity achieved by Sadat with
King Faysal and the leading sheiks of the oil-producing states of the Arab
Gulf.
Outside powers have had a significant impact on developments in the
Middle East. One of the most active was the Soviet Union which gave
large-scale economic and military aid to the Arabs and established an
imposing military force in the Mediterranean. The war created new oppor-
tunities for the Soviets, which they moved quickly to exploit; they are
insisting on full participation in negotiations for settlement of the problems
of the area.
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On the Arabian Peninsula, the guerrilla war in western Oman and the
disruptive role of the Marxist regime in Aden continue to be troublesome. In
Oman, the government is making a real effort to sponsor economic develop-
ment and introduce reforms, but it is hampered by the need to spend a
substantial part of the country's limited revenue on combating an Aden-
backed and Soviet-armed guerrilla movement. Oman is being helped by the
UK, Iran, and a number of Arab states.
Aden not only backs the guerrillas in Oman, but it also poses a threat to
the government in Sana (northern Yemen). Although the two Yemen govern-
ments last year talked sporadically about eventual union, the prospects that
a single Yemen will be formed peacefully are not good.
Saudi Arabia is the paramount power on the peninsula and keeps a
close watch on developments there. Faysal continues to give some financial
and material aid to the moderate regimes, although a border dispute with
Abu Dhabi remains unresolved. The small Arab states of the Gulf are eager
to preserve their own identities, and this has posed some problems for those
seeking to develop regional security arrangements or other forms of coopera-
tion.
The Shah of Iran has been pressing for some form of regional security
pact, but so far he has had little success. Senior Iranian and Saudi officials
consulted several times during the year; their exchanges were "useful," but
broke little new ground. Religious and ethnic differences and the markedly
different perspectives of King Faysal and the Shah are likely to forestall
cooperation. At home, the Shah is continuing his ambitious programs to
modernize and expand Iran's economy and its armed forces. His guns-and-
butter approach is absorbing all of Iran's rapidly growing oil revenues and
more. He has found ready creditors in the West and Japan, and he has made
it clear that despite the Arab embargo and production cutback, he will
continue to extract oil at the rate he deems most advantageous to Iran.
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VII. THE AMERICAS
In 1973, Latin American countries were preoccupied with what they
regard as the vital need to find new ways to attack the complex problems of
economic and social development. This preoccupation frequently led to
divergencies of opinion between Latin American states and the United States
(and to a lesser extent the world's other industrialized nations) over just
what are the proper obligations of industrialized countries to developing
countries. The countries of the inter-American community undertook to
overhaul the machinery of the OAS so as to make it more responsive to the
concerns and needs of the 1970s. The US has been a willing and active
participant in this process, but changes are not likely to be implemented
without considerably more effort.
In the search for means to develop better relations with the US, Latin
American governments agreed to meet to clarify the issues. The foreign
ministers or other representatives of 23 American states gathered in Bogota,
Colombia in November and drew up a list of topics to serve as the basis for a
dialogue with Secretary Kissinger early in 1974.
The military coup that overturned the Allende government in Chile on
11 September 1973 was widely viewed in Latin America and elsewhere as an
event that will have important and enduring repercussions. Latin Americans
have often tried to imitate Chilean political practices because they were
regarded as among the most advanced in the area. Under Allende, who
delighted in suggesting that his Marxist-Socialist government represented a
major turning point in Latin American political evolution, this interest
became even more intense.
The months preceding the coup saw a rapid worsening of the economic
and political problems besetting Chile under Allende. The military, which
had supported Allende through previous troubles, became restless. The
infiltration of the navy by the left, the manipulation of high-ranking officers,
the economic mess, the widening ideological divisions and growing frustra-
tions finally moved the military to act. Chile's present rulers have set as their
priorities the reconstruction of the economy and the reuniting of Chilean
society, which was badly polarized during the Allende years.
Allende's fall has had reverberations throughout the hemisphere. While
many deplore the method of President Allende's downfall and his own
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personal fate, a number of governments may feel a sense of relief now that
they see Chile as no longer a focal point for subversion in the hemisphere.
Because of the coup, Marxists throughout the region probably are now under
more concerted attack than in many years. The take-over may well make
Latin military elites more assertive and affect approaching elections in a
number of countries.
Chile was not the only major Latin American country struck by
turbulence last year. In Argentina, military leaders worked out an under-
standing with the followers of Juan Peron. The result was the election of a
long-time Peronist, Hector Campora, to the presidency in March. Dissension
and violence between right and left-wing Peronists brought about Campora's
resignation and Peron's election as president in September. Conflicts within
his movement continue to distract Peron. He is 78 and in poor health so it is
not surprising that sharp questions about who will succeed him are being
raised. Argentines are also asking what domestic and foreign policy changes
might be expected if Peron goes. One especially important issue to be faced
is Argentina's relations with Brazil. Competition between these rivals for
South American leadership increased in 1973. Both countries were active,
for instance, in offering financial and other aid to the new government in
Chile late in the year.
Venezuela's effort to get the OAS to remove its sanctions against Cuba
was one of the Caldera government's chief preoccupations last year. Caracas
did not press this view in the OAS since a majority of the organization still
does not support its position. But as the year ended there were growing
indications that Venezuela would soon move unilaterally to re-establish full
relations with Cuba.
As the implications of the world's growing energy shortage began to
unfold, the question of the continued availability of Latin American-es-
pecially Venezuelan-petroleum took on new importance for the US. Presi-
dent Caldera assured Washington that his government would not reduce
petroleum sales to the US. Meanwhile, Ecuador joined the Organization of
Petroleum Exporting Countries, and there were hopes that its oil exports,
although not substantial, might help.
Difficulties relating to Law of the Sea matters-fishing rights, the use of
claimed waters by US-owned ships, and the territorial seas questions-again
marred relations between the Ecuadorean Government and the United States
in 1973. Solving these issues will be difficult. Ecuador will need help in
expanding her fishing fleet and in the development of processing capacity,
and US assistance in this area may help solve these problems.
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Relations with Peru's revolutionary government have been complicated
by problems stemming from its expropriation of several US-owned com-
panies without compensation. Discussions on this issue have dragged on for
several years, but a solution may be within reach.
In Uruguay, a military revolt in mid-February left the armed forces in
control of the government. President Bordaberry remains as president but
Congress and the country's largest labor confederation were dissolved in
July.
Fidel Castro's Cuba pressed ahead with efforts to regain international
respectability and broaden its diplomatic, economic, and cultural contacts
with other countries, particularly those of the Western Hemisphere, the
Middle East, and Africa. By mid-1973, full relations were established be-
tween Cuba and nine of its hemispheric neighbors, with Argentina the most
recent addition.
Castro's increasing subservience to Moscow was displayed to the leaders
of less-developed nations and to the world when the Cuban leader heaped
lavish praise on the Soviet Union during the Nonaligned Conference in
Algiers in August. The island's dependence on the USSR was made clear
when Castro, shortly after returning from a quick trip to Moscow at the
beginning of the year, announced large new Soviet economic credits, and
when Soviet leader Leonid Brezhnev paid his first visit ever to Cuba in
December.
Mexican President Luis Echeverria's activities in international affairs
last year emphasized his country's claim to a position of influence among the
nations of the "third world." On a trip to Canada, Europe, the Soviet Union,
and China he sought support of his proposed charter of "economic rights
and duties" of all nations. The charter deals with the key questions of
relations between the developed and developing nations from the standpoint
of the latter. The consolidation of friendly ties with the US was significantly
advanced in 1973 when a mutually satisfactory settlement of the long,
complicated dispute over the salinity of Colorado River waters reaching
Mexico was negotiated.
Panamanian aspirations about the Canal were spotlighted and accorded
international support during a brief meeting of the UN Security Council in
Panama in March 1973. Panama's leader, General Omar Torrijos, went to
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Europe to speak out on the Canal. The appointment of Ambassador Ells-
worth Bunker as US negotiator spurred hopes in the US and Panama that a
new Canal treaty acceptable to both sides might be concluded.
A new sovereign state joined the ranks of Western Hemisphere nations
in July 1973 when the Commonwealth of the Bahamas gained independence
from Britain. In September the new nation was warmly welcomed to UN
membership by the US and most other members of the organization.
STATINTL
Prime Minister Trudeau's minority government remained in office by
gaining the informal support of the moderately socialist New Democratic
Party, which holds the balance of power in the House of Commons. The
Liberals' 1973 program was influenced by both their own desire to increase
the party's popularity with the electorate and the need to maintain the New
Democrats' parliamentary support. Popular legislation reducing personal
income taxes, reforming the welfare system, and dealing with the effects of
inflation have been passed. Other bills regulating foreign investment and
campaign financing are in the legislative hopper. Some cracks had begun to
appear in the Liberal - New Democratic relationship by the end of the year,
and it is widely expected that national elections will be held this s
STATINTL
The Trudeau government continued to pursue an independent foreign
policy, with particular stress on energy matters. Ottawa's national energy
policy will doubtless concentrate on the protection of Canadian consumers.
The Canadian decision to withdraw from the International Commission
for Control and Supervision in Vietnam was supported by all opposition
parties and reflects the general shift in public opinion away from peace-keep-
ing operations. Canada was nevertheless willing to contribute troops to the
UN Emergency Force in the Middle East. Prime Minister Trudeau's trip to
Peking demonstrated the importance Ottawa attaches to maintaining good
relations with China. Ottawa's interest in European affairs centered on
ensuring Canada a role in re-defining the Atlantic relationship-politically,
economically and militarily-as well as participating in the MBFR and CSCE
negotiations.
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South of the Sahara
Much of the sub-Sahara was in disarray this past year. Tribal hatred in
Burundi at times threatened to engulf that tension-filled country in violence
once again. Political stability eluded a number of countries, though only one
coup-in Rwanda-took place. In west and north-central Africa, the serious
drought inflicted hardship on many Africans despite massive outside relief
efforts. Insurgencies dragged on in several areas, and a new one took hold in
white-ruled Rhodesia.
The long-standing territorial dispute between Ethiopia and Somalia
intensified last year. Somalia was more strident in its claims to a large part of
eastern Ethiopia, while Ethiopia steadfastly refused to consider anything
more than a demarcation of the present ill-defined border. Ethiopian con-
cern over Somali intentions has been heightened by continued Soviet mili-
tary deliveries to Somalia. Although both Emperor Haile Selassie and Somali
President Siad apparently want to avoid a conflict, both sides have strength-
ened their military positions along the border. Despite efforts by the OAU,
there seems little chance of bringing the two countries together. In the
troubled Ethiopian province of Eritrea, insurgents regained some of the
momentum lost during two years of internecine feuding and were able to
carry out a few terrorist incidents despite government precautions. The
serious illness of the Emperor's constitutional successor, Crown Prince Asfa
Wossen, cast a cloud on the future of Haile Selassie's Ethiopia.
Uganda's General Amin continued to be the unpredictable gadfly he has
been since he took power in 1971. The US closed its embassy in Kampala
after Amin made a series of verbal attacks against the US, threatened US
citizens in Uganda, and ordered the expulsion of the embassy marine guard.
Amin seems to have improved his relations with Uganda's East Africa
neighbors, especially Tanzania, during the year. Although presidents Nyerere
and Kenyatta remain suspicious of Amin, they seem more willing to tolerate
him.
In 1973, Nigeria became the world's sixth largest oil producer and the
second largest source of imported crude oil for the US. General Gowon's
importance as an African leader was recognized when the OAU chose him as
its current leader. At home, Gowon continued to pursue a vigorous program
of economic nationalism by taking measures to gain greater control over
Nigeria's resources. Politically, the country was placid, though little progress
was noted toward the return to civilian rule Gowon has promised for 1976.
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The impasse between Britain and Rhodesia's breakaway white regime
persisted. In November, Parliament voted to maintain economic sanctions
for a ninth year. Trade bans have proved to be largely unenforceable, and the
Rhodesian economy has continued to expand. Accumulating needs for new
foreign capital have influenced Prime Minister Smith to keep up his low-
keyed efforts for a settlement with Britain, but the possibility of meeting the
basic British criterion for a settlement-an accommodation between whites
and blacks-appears as remote as ever.
In South Africa, the National Party completed 25 years in power.
Although Prime Minister Vorster has maintained white supremacy, he has
shown some tactical flexibility in handling the chronic social tensions that
have been heightened by economic growth. Nevertheless, the government has
not hesitated to apply suppressive measures against dissenters among all
races. The dialogue with UN Secretary General Waldheim concerning South
African administration of South-West Africa (Namibia) has not been fruitful.
Pretoria has continued its policy of separate development for the tribal
homelands in the territory despite opposition from tribal groups within
South-West Africa.
Last year the Portuguese maintained effective control in Angola,
Mozambique, and Portuguese Guinea. In Angola, insurgency was at a low
level, confined to remote, thinly populated areas. In Mozambique, insurgents
were able to carry out some small-scale harassment against the big Cabora
Bassa hydroelectric project. In Portuguese Guinea, the military situation
changed but little, despite the acquisition of some new and more sophisti-
cated weapons by the rebels. Portugal controlled the main urban areas, while
the guerrillas operated with considerable freedom in remote areas along the
border with the Republic of Guinea. In September, the insurgents pro-
claimed the "Republic of Guinea Bissau," which was accepted as a member
of the OAU and recognized by the USSR, China, India, a number of eastern
European countries, and nearly all the African countries.
Over the past year the Africans have made a special effort to present a
unified front. In the economic field, a degree of solidarity has been reached,
particularly in developing common principles on which to negotiate the
countries' future relationship with the EC. In West Africa, there was a revival
of interest in new forms of subregional cooperation that could lead to ties
transcending cultural and economic barriers.
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STATINTL
Since the attempt on his life in August 1972, King Hassan has some-
what strengthened his position by adoption of pro-
grams long advocated by the political opposition, and public appearances. He
has dealt harshly with subversives involved in rural violence last March and
has set aside proposals to liberalize the regime. He has also effectively
divided and dispersed all major military units and sent potential trouble-
makers off to Morocco's expeditionary forces in Syria and Egypt. How long
King Hassan can hold on to power remains doubtful, however, given in-
creased disaffection in the military officer corps and his unwillingness to
share power, provide representative political institutions, or improve the
efficiency of his administration.
In Algeria, President Boumediene was still in undisputed control. The
President's domestic and international stature was significantly enhanced
when he was host of the Fourth Nonaligned Summit Conference last Sep-
tember. Boumediene began a campaign to revive the mass organizations that
had been allowed to languish since the Ben Bella years, in part to build
popular support for agricultural reform and socialist management of enter-
prises. The most important of these organizations, the National Liberation
Front, is still leaderless, and the announced revitalization of the party has
yet to materialize. The Algerian Government continued to use its rich
natural gas and oil deposits to underwrite ambitious industrial development
programs.
President Bourguiba continued to direct Tunisian policy despite his
questionable health. Last August, Bourguiba offered political amnesty to
opponents of the government living overseas, provided they returned to
Tunisia before the end of the year and renounced all political activity, but
few if any accepted his offer. The President's announcement that he will run
for re-election in 1974 once again postponed any action on long-pending
constitutional amendments to facilitate presidential succession and
strengthen the authority of the Council of Ministers and the National
Assembly.
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CIA's contribution on this question will take the form of comments on
statements concerning foreign forces and programs that may appear in a
consolidated draft of this section.
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CIA's contribution on this question will take the form of comments on
statements concerning foreign forces and programs that may appear in a
consolidated draft of this section.
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A large number of arms control measures were proposed in 1973, but
no significant agreements were reached. In two sessions in Geneva, the
Conference of the Committee on Disarmament failed to make any progress
toward breaking the long-standing East-West stalemate on a comprehensive
test ban. Moscow insisted on verification by national means alone while the
US maintained that there must also be on-site inspection. Although much
attention was given to indirect verification methods, no formal agreements
were reached. Japan played host to an additional meeting to re-evaluate
seismological technology, technical aspects of earlier comprehensive test ban
proposals, and the problems of verification. This informal session promoted
an exchange of scientific information, but was politically uneventful.
Lack of progress in Geneva and the absence of the French and Chinese
have spurred some to search for other forums. Thus, items such as a draft on
chemical weapons from nonaligned countries and a Swedish proposal to ban
napalm and similar weapons languished in Geneva and were raised at the UN
General Assembly. A special committee to study the prospects for a World
Disarmament Conference, an alternative to the Geneva talks strongly favored
by MOscow, held only one abortive meeting in 1973. Moscow again pro-
posed that a disarmament conference be held and found considerable sup-
port among the smaller non-nuclear states in the UN General Assembly.
Various nonaligned states pressed for a reconstitution of the UN Disarma-
ment Committee, despite Soviet and Chinese opposition. Another proposal
would establish an ad hoc special committee to exchange views on a World
Disarmament Conference; yet another would convene a Non-Proliferation
Treaty Review Conference to assess progress in nuclear disarmament.
Eighty-two states have now ratified the Non-Proliferation Treaty and
have concluded or are negotiating safeguards agreements with the Interna-
tional Atomic Energy Agency. The conclusion last spring of the safeguards
agreement between Euratom and the International Atomic Energy Commis-
sion gave an important boost to enforcement arrangements. Nevertheless,
several important states are still among the holdouts. Although Japan con-
siders the Euratom safeguards agreement a workable model, two rounds of
negotiations between Tokyo and the Atomic Energy Agency were incon-
clusive. West German ratification has been delayed, but approval is expected
this spring.
The Geneva talks on strategic arms limitations have assumed a pivotal
role in the US-USSR relationship. Success in the talks will lead to a further
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relaxation of international tensions and may contribute to a more productive
utilization of both countries' resources. At the summit in Washington,
President Nixon and General Secretary Brezhnev pledged to try to reach a
permanent strategic offensive agreement by the end of 1974. In the mean-
time, both sides envisage the possible achievement of other agreements to
supplement the existing Interim Agreement, which expires in July 1977. The
talks in Geneva since the summit have been constructive and businesslike.
After several months of preliminary talks, representatives from twelve
NATO states and seven Warsaw Pact states met in Vienna on 30 October to
begin negotiations on reducing forces and armaments in Europe. The Soviet
delegate, acting on behalf of the Warsaw Pact, introduced a draft agreement
calling for equal reductions of forces and armaments in three stages. The
Western allies believe that reductions in the Pact states should be greater
than those in the NATO states. Both sides have indicated a seriousness of
purpose, but the complexity of the subject seems to rule out simple and
quick agreement.
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CIA's contribution on this question will take the form of comments on
statements concerning the military assistance programs of other nations that
may appear in a consolidated draft of this section.
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XIII. INTERNATIONAL MONETARY AFFAIRS
The dollar has appreciated substantially on world markets in recent
months, and--with the turnaround in the US trade balance-the outlook for
continued strength is promising. The markets themselves have become
calmer, in part because of the dollar's performance. Nevertheless, uncertain-
ties still cloud the horizon. Most prominent of these is the potential impact
of the energy problem on the major industrial nations. In addition, only
limited progress was made toward monetary reform despite intensive nego-
tiations over the past year.
For much of the first half of 1973, the dollar was under sharp selling
pressure. These crises, like those in 1972, reflected not only continuing US
balance-of-payments problems, but also a change in the psychology of
international currency traders. Money managers and speculators decided that
further currency realignments were likely, and that windfall profits could be
made at limited risk or that the value of assets could be protected by selling
dollars. To the extent that traders acted on this belief, it became a self-ful-
filling prophecy.
Even a 10-percent dollar devaluation in February-the second in little
over a year-brought temporary relief. A renewed run on the dollar soon
followed, and major exchange markets were closed. Emergency meetings of
the major nations' finance ministers produced another significant change in
the world currency picture.
Most of the major EC nations decided to float their currencies relative
to the dollar and other currencies while maintaining a band of fixed ex-
change rates among themselves. This arrangement, called a joint float, was
made to insulate the participants' trade, as well as the Common Agricultural
Policy, from currency upheavals. The UK, Italy, and Ireland did not join the
joint float, feeling that their currencies were weaker than the other EC
members and would require massive central bank intervention to stay within
the fixed band.
With Japan and Canada already floating their currencies, albeit under
tight control by national monetary authorities, the fixed exchange rates
within the joint float became one of the few remaining vestiges of the old
system. Indeed, because it maintained relatively fixed rates, the joint float
became a target for money managers and speculators. Largely by selling
dollars and buying the stronger European currencies, they were able to
precipitate further revaluations by the participating nations that wanted to
maintain the float intact. The mark, Dutch guilder, and Norwegian crown all
have been revalued since the joint float was established.
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Pressures on the dollar did not ease until July, when major foreign
central banks reached agreement to increase the funds they would make
available to Washington to support the dollar. There was also moderate
intervention to support the dollar, principally by the US and West German
central banks. The dollar's recent strengthening, however, reflects more the
improvement in the US trade and payments positions, plus the realization
that Arab oil actions could harm European and Japanese economies more
than the US.
As for gold, free market prices were volatile in 1973, reflecting the
money problems and uncertainty about gold's future. Speculators drove
prices up from about $64 an ounce at the beginning of the year to a high of
$127 an ounce in early July. The dollar's return to favor led to a gold price
decline that received added impetus in November when the two-tier gold
system was ended through international agreement. Central banks now have
the option to trade in gold on the open market. There is no sign that the end
of the two-tier pact will lead to substantial sales in the near future, but there
are indications that gold settlements among central banks will resume at or
near the free market price, especially in the European Community.
The calming of the money markets which accompanied the dollar's
improvement reduced some of the pressures for international monetary
reform, but the wide differences on complex issues among the major na-
tions-particularly between the US and France-have been the main obstacles
to progress. The annual International Monetary Fund meeting in Nairobi,
originally planned to mark the halfway point in the schedule for world
monetary reform, merely underscored the continuing disagreements. A new
deadline of July 31, 1974, was set for general agreement on reform, with the
technical details of implementation to be worked out afterward. Many
capitals are skeptical that even this schedule can be met.
Basic disagreements center on the allocation of responsibility in periods
of substantial disequilibrium between nations having balance-of-payments
surpluses and those having deficits. These differences show up on such
questions as currency convertibility, a payments adjustment mechanism, and
the future role of gold. The oil problem probably will further impede
monetary reform; nations will be unwilling to move forward until their
economic prospects become clearer. Moreover, there is widespread recogni-
tion that a rapid return to a system of fixed exchange rates would not be
practical.
The problems in the money markets have not resulted in the world-
wide recession or reduction in trade that many feared. The phenomenal
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growth in trade that was facilitated by the fixed rate system continued and
even accelerated as did economic growth world wide. Exporters and im-
porters took steps to reduce risks through contract adjustments or dealings
in the exchange market, but such steps resulted in small increases in trading
costs. International investment-direct and portfolio-also has taken money
market problems in stride.
The substantial devaluation of the dollar has provoked only limited
concern abroad for several reasons:
? Most of our trading partners' foreign commerce is with countries
other than the US so that the effective over-all appreciation of
their currencies-and, hence, their over-all loss in trade competi-
tiveness-is far less than indicated by the appreciation against the
dollar alone.
? Rapid US economic growth for most of the period held down
the availability of some US goods for export, while foreign growth
made imports from the US desirable to aid in the battle against
inflation.
? There were the normal lags in adjustment associated with exist-
ing trade contracts and with delayed response to currency changes.
The downturn now apparently beginning in most major economies,
together with the increased impact of the dollar devaluations, has made the
dollar's recent strengthening welcome. The slowdown also means that an-
other significant weakening of the dollar for any reason would trigger a more
severe foreign reaction.
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CIA's contribution on this question will take the form of comments on
statements concerning the foreign aspects of international trade that may
appear in the consolidated draft of this section.
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XV. FOREIGN ECONOMIC ASSISTANCE
CIA's contribution on this question will take the form of comments on
statements concerning the economic assistance programs of other nations
that may appear in the consolidated draft of this section.
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XVI. MEETING ENERGY NEEDS
The US faced an energy challenge of considerable magnitude long
before the recent Arab-Israeli conflict and the decision of the Arab nations
to utilize the "oil weapon." US oil production peaked in 1970, but con-
sumption of petroleum products continued to increase at about 6 percent
annually. Coal production and natural gas output leveled off. At present, the
US with some 6 percent of the world's population consumes more than 30
percent of its energy. The industrialized nations of the West as well as many
developing nations have increased their energy use even faster than the US.
The US became a net oil importer in 1946 and now imports about 36
percent of its consumption. By 1980, according to some projections, it will
be importing more than half of its supplies. While US dependence on imports
has been increasing, the availability of crude oil from Western Hemisphere
sources has been decreasing. Both Venezuela and Canada appear to have
reached the limits of their productive capacity unless very expensive sources,
such as the Orinoco Tar Belt in Venezuela and the Athabasca Tar Sands in
Alberta, are exploited. The chances of Canada's discovering oil in "frontier"
areas like the Arctic and off the east coast are good, but exploration in these
areas has proved a disappointment thus far. As a result of all this, the US is
faced with both relative and absolute decreases in its Western Hemisphere oil
imports.
During the next three or four years, the Persian Gulf is the only source
from which the US and the rest of the world can obtain oil in the quantities
necessary to maintain projected consumption. The Persian Gulf states
account for at least two thirds of the world's proved oil reserves and 40
percent of its production. By 1980 these states could be producing as much
as 50 percent of world output-if they decide to do so. Although some
Persian Gulf producers, like Iran and Iraq, will need to expand output to
finance ambitious development programs, others, including all-important
Saudi Arabia which has 35 percent of the area's reserves, have no economic
incentive to increase production. If Saudi Arabia should elect not to expand
its production, there is no way that world output could meet expected
demand. Consumption would have to be curtailed or other energy sources
expanded.
The petroleum supply situation has been complicated by the latest
Arab-Israeli war. For more than a year, Arab leaders had been hinting that
the "oil weapon"-the cutback of Arab oil production and exports-would
be used to pressure Israel to restore Arab lands taken in the 1967 war. On 17
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October, I 1 days after the new outbreak of Arab-Israeli fighting, the Organi-
zation of Arab Petroleum Exporting Countries carried out this threat. The
initial agreement to cut back by 5 percent monthly was soon enlarged and an
embargo was instituted against the United States, the Netherlands, the Union
of South Africa, Portugal, and other "friends of Israel." By the end of
December, Arab production is planned to be 29 percent below September
levels and 35 percent below previously projected levels for December. The
total loss would be more than 7.5 million barrels per day-about 20 percent
of the oil that would have normally been in international trade in December.
Although some Arab states, including Iraq and Libya, appear to be
dragging their feet in the implementation of the cutbacks, Saudi Arabia and
Kuwait-by far the most important producers-are implementing all
measures fully. They are unlikely to change their stand unless substantial
progress is made toward fulfilling the conditions of UN Resolution 242 as
interpreted by the Arab states.
The use of the oil weapon marks the end of an era in international oil
affairs. Before 17 October, the maneuvers of the major oil producers in the
Middle East and elsewhere had essentially economic purposes-higher prices
and greater control over national resources. Now that oil has been used as a
means of influencing non-oil-related foreign policy issues, it is likely the
strategy will be repeated.
Even if Middle East problems are resolved, there are other areas where
the oil weapon can and probably will be used. Indonesia, for example, is
using oil to press Japan to revise its policies concerning natural versus
synthetic rubber. Rumblings from Caracas and Ottawa indicate that there
may be a political price to pay for Western Hemisphere supplies. The
question of using Soviet natural gas in the US has political implications for
both Washington and Moscow that overshadow economics.
The politicization of oil is making the maintenance of independent
foreign policies difficult for many nations. Of the major countries, only
Russia and Communist China are relatively independent of foreign energy
sources, and only the US and the UK have the potential to become so. Until
new energy sources are developed-and this is a matter of decades-Western
Europe and Japan will have to develop their foreign policy with one eye
toward the oil-producing nations.
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XVII. UNITED NATIONS
The most significant accomplishments of the UN in 1973 were in the
Middle East. In the wake of the Arab-Israeli war, the UN proved itself a
valuable instrument of negotiations and peace-keeping. In addition, the
Third UN Law of the Sea Conference got underway with a brief organiza-
tional meeting, several new disarmament proposals were drafted, the two
Germanies were added to the membership, and the UN role in Korea was
reduced. Nonaligned states, often supported by China, were particularly
active on Middle East issues and other contentious questions, such as
Cambodian representation, Guinea-Bissau membership, and the Panama
Canal negotiations.
Prior to the Arab-Israeli war, the UN was involved in a series of
unsuccessful efforts to break the Middle East stalemate. In June and July, an
extensive Security Council debate on the Middle East produced familiar
accusations and bitter rhetoric. Secretary-General Kurt Waldheim had little
success in a subsequent "good will" trip to the area. During the October war,
however, the UN was an important forum. In a series of three resolutions,
the Security Council called for a cease-fire in place and authorized a UN
Emergency Force, which promises to be a valuable asset in supervising the
cease-fire.
Other areas of perennial UN attention have remained generally stale-
mated. No significant progress was made toward controlling terrorism. The
familiar African issues of apartheid and Namibia were subjected to much
debate, but little significant action. The Security Council approved a resolu-
tion supporting Zambia in its border dispute with Rhodesia, but otherwise
offering little more than sympathy. The continuing talks between Secretary-
General Waldheim and South African Foreign Minister Muller on the future
of Namibia apparently brought the problem no closer to solution, but the
nonaligned states can be expected to continue pressing for measures against
the white regimes of southern Africa.
Nonaligned states-an increasingly cohesive force in the UN-were in-
volved in several other contentious issues. In the General Assembly, they
supported Guinea-Bissau and Prince Sihanouk. In the Security Council, their
support enabled Latin American states to call a special session of the
Security Council in Panama. Although the official topic was peace and
security in Latin America, the meeting focused on Panama's demands for
nationalization of the canal. This was only the second Security Council
session outside of New York, but there is concern that other regions will
press for local meetings to dramatize their specialized concerns.
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The long-planned third UN Conference on the Law of the Sea got under
way with an organizational meeting in New York during December 1973. A
ten-week substantive meeting with representatives from over 140 nations will
be held in Caracas, Venezuela, in the summer of 1974.
Much of the need for international agreement has come from recently
developed technology that has made possible the exploitation of new sources
of critically needed petroleum in the continental margins and metallic
nodules on the deep seabeds. Rules are needed to guarantee efficient and
equitable exploitation of these resources. International solutions are also
required for sound conservation and management of world fishing grounds
and to guard against growing threats to the marine environment.
The UN Seabed Committee, which has been laboring long and hard,
could not agree last year on draft treaty articles for the major political issues.
Nevertheless, a widespread common understanding on the outlines of a new
Law of the Sea Treaty emerged, including:
? a maximum limit of twelve miles for territorial waters;
? adequate guarantees of transit in straits used for international
navigation;
? broad control over seabed and living resources beyond the
territorial sea by coastal states;
? a balancing of interests of coastal state and the international
community in scientific research and the protection of the marine
environment;
? creation of an international authority to oversee the deep seabed
and to take account of the interests of consumers and states.
Though progress has been made in isolating the issues and identifying
the specific areas for accommodation, strong and divergent views are still
held by many countries and groups of countries on the law of the sea.
Differences are apparent on such issues as "innocent passage" in straits used
for international navigation, the outer limits to be ascribed to the "economic
zone" controlled by coastal states, regulations governing fishing areas, estab-
lishment of environmental standards for seabed pollution, obligations for
the conduct of scientific research in the areas beyond the territorial sea, and
the make-up and powers of an international seabed source authority.
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Most countries recognize that the issues under negotiation affect their
economic, political, and military interests and thus attach great importance
to the coming conference in Venezuela. Nonetheless, reaching agreement on
all of the complex problems will be a slow and difficult process.
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XIX. MULTILATERAL COOPERATION
Hijacking and Terrorism
The scope of the threat posed by international terrorism did not
diminish in 1973. Terrorists demonstrated a growing ability to obtain and
use sophisticated weapons and techniques in their operations. In September,
for example, security forces in Italy confiscated two light-weight Soviet-
made launchers for ground-to-air missiles from Arab commandoes who
evidently planned to use these weapons against a civilian airliner. Other
advanced weapons may still be in terrorist hands. Another unfortunate
development was an increase in the number of organizations and individuals
willing and able to employ terrorist tactics. To some degree, this trend has
been abetted by the intense publicity accorded dramatic acts of international
terrorism.
On the plus side, a rather vague international pre-occupation with
terrorism in 1972 was replaced in 1973 by a growing determination on the
part of some nations to act collectively and positively. Progress was limited,
but nonetheless real. New ways were devised for like-minded nations to share
information about known terrorists and their methods, and new techniques
to frustrate or limit the use of various tactics were pooled.
The international forums concerned with terrorism remained largely
frozen in the face of narrow national interests. The International Civil
Aviation Organization conference last summer failed to draft effective regu-
lations against air terrorism; it produced only a general condemnation of air
piracy. The ad hoc Committee on International Terrorism established by the
27th session of the United Nations General Assembly failed to agree on any
recommendations to present to the 1973 session of the assembly. A UN
proposal to enact an international convention for the protection of diplo-
mats will probably be rendered meaningless through disabling amendments
in the Legal Committee.
Some progress was made last year in reducing aircraft hijackings. The
US in particular benefited, largely as a result of more rigorous security
procedures at airports and of an agreement reached with Cuba in February
that requires the extradition of hijackers from either country. In 1972, there
were 63 hijackings of civil aircraft involving 24 countries; some 32 of these
involved US territory or US aircraft. By late 1973, there had been only one
attempted aircraft hijacking in the US. Elsewhere in the world, hijackings-
motivated by personal as well as political reasons-continued at rates not
appreciably different from those of recent years.
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Political motives, however, lay behind the growing number of kid-
napings of diplomats and other prominent foreigners. The most barbaric
incident was the capture and subsequent murder of the US ambassador, the
US deputy chief of mission, and a Belgian diplomat in Khartoum, Sudan by
Black September guerrillas in March. Foreign businessmen were frequent
targets of extremist groups bent on extorting funds. In Argentina alone, well
over 100 such hostages, many of them prominent foreigners, have been
seized and some were killed.
Terrorism in the Middle East took a back seat to open military conflict
between Arabs and Israelis in late 1973. As a result of the war and
continuing divisions of opinion among Palestinians over their best course, the
number of terrorist acts sponsored by fedayeen has decreased somewhat.
There is little doubt, however, that those who espouse terrorism have merely
paused temporarily.
Pollution
Two major conferences were held in 1973 to further the program of
international cooperation to control pollution initiated by the 1972 Stock-
holm World Conference on the Human Environment. The first was the
annual meeting in June of the Governing Council of the United Nations
Environment Program, established by the Stockholm Conference. The
58-member council unanimously approved a report to the General Assembly
and the Economic and Social Council on the establishment of a program and
priorities for improving the human environment, on progress in creating an
international environment fund, and on a plan to convene a conference-
exposition on human settlements in Vancouver, Canada in 1974. The council
will meet again in March 1974.
Sixty-eight nations, including all the world's major maritime states,
were represented in London at the UN Marine Pollution Conference. The
conference, sponsored by the Intergovernmental Maritime Consultative Or-
ganization, agreed on a convention to establish measures to help free the
world's seas from pollution by ships. Under the terms of the convention,
signatory states will be required to punish pollution violations by ships flying
their own flags and to punish violations in their waters by foreign-flag
vessels.
The General Assembly this fall considered three resolutions on pollu-
tion. One called for a preparatory committee to complete arrangements for
the 1974 Conference on Human Settlements, the second directed the Secre-
tary General to undertake a comprehensive study on multilateral financing
of housing and human settlements, and the third called for cooperation
among countries in sharing natural resources.
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Space
Eleven European governments last August accepted a US offer to
participate in the post-Apollo Space Shuttle plan through development of a
manned orbiting workshop to be carried in the US space shuttle. The
Europeans will thus gain access to the considerable American technology
necessary for building the workshop. The interdependence of the space
shuttle and the spacelab will result in unprecedented collaboration between
the US and Europe in space activities.
The UN, on the other hand, was unable to make any significant
progress on the draft moon treaty or on the draft convention on registration
of objects in outer space. The General Assembly's Committee on the Peace-
ful Uses of Outer Space found all new proposals blocked by the East-West
impasse that has obstructed the committee's work for several years. The
General Assembly, therefore, adopted its usual omnibus resolution on outer
space-a compromise statement reflecting no change of positions.
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The federal international narcotics control program has made encour-
aging strides and is now an indispensable part of the campaign to curb drug
abuse in the US and abroad. The measure of our progress in this field is
visible in several areas. (For example, shortages of heroin have developed,
notably on the East Coast..) A number of governments have responded to our
initiatives and are taking vigorous enforcement action in cooperation with
us.
The ominous fact remains, however, that as we make inroads into the
traditional trafficking routes, new ones will open up unless we are vigilant. It
is essential that the availability of heroin and other drugs on our streets not
return to the levels of 1970. To ensure that this does not happen, new
initiatives beyond current and projected programs are under consideration,
and the international narcotics control effort will continue to be closely
watched.
The International Narcotics Control Board-a UN organ which super-
vises and coordinates the international drug control system-met twice
during 1973. Focusing primarily on South America and the Middle East, the
board examined new problems arising from drug production, illicit traffic,
and non-medical use. The board also renewed its appeal for contributions to
the UN Fund for Drug Abuse Control.
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