SENIOR INTERDEPARTMENTAL GROUP

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00826A001200010049-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 20, 2016
• Document Release Date: February 3, 2006
• Sequence Number: 49
• Publication Date: September 19, 1966
• Content Type: IR

Releasrs O06/03/17 CIA-RDP79
00 7
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No 18f 8/ 6
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INTELLIGENCE Rt'0RT
:Prepared ?Weekly
for the
SENIOR INTERDEPARTMENTAL GROUP
DIRECTORATE OF INTELLIGENCE
State Department review completed
A proved } Release-2006/03/17
CWRDP79 10049=9
GROUP 1
Excluded from outomatlc
downgradins, and
declassification
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This document contains information affecting the
national defense of the United States, within the
meaning of Title 18, sections 793 and 794, of the US
Code, as amended. Its transmission or revelation
of its contents to or receipt by an unauthorized
person is prohibited by law.
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Page
1.
Poland . . . . . . . . . . . . . . . . . .
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2.
Rhodesia . . . . . . . . . . . . . . . . .
2
3.
Egypt . . . . . . . . . . . . . . . . . .
3
4.
Thailand . . . . . . . . . . . . . . . . .
4
5.
Malaysia . . . . . . . . . . . . . . . . .
5
6.
Uruguay . . . . . . . . . . . . . . . . .
6
19 September 1966
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F_ I
There is increasing evidence that moderate ele-
ments within the Polish regime have been given the
green light to work toward improving long-sagging
relations with the US.
During a talk on 1 September with Ambassador
Gronouski, Deputy Foreign Minister Winiewicz voiced
optimism over future relations and new hopes for a
Vietnam settlement. Subsequently the Poles have
indicated that "good news" will soon be forthcoming
on the protracted consular convention negotiations
and have shown some willingness to accommodate the
US on the issue of defense attache representation.
Warsaw has also responded favorably to a Ford Foun-
dation approach to resume its educational exchange
program there and has expressed interest in expand-
ing commercial relations.
The Polish press gave much publicity to an un-
usual meeting on 6 September between Gomulka and
Polish ambassador to Washington Drozniak, who is on
home leave. The meeting and its publicity may be
Gomulka's way of publicly indicating that any impend-
ing Polish moves vis-a-vis the US have his approval.
The Polish party hard-liners, centered in the
military-security apparatus, may yet again organize
anti-US incidents, using Vietnam as a pretext, to
offset moves friendly to Washington. However, the
proponents of better relations, known for their cau-
tion, probably would not have taken their recent ac-
tions unless they believed that they could prevail.
Ambassador Gronouski has sought to strengthen the
hand of the moderates by recommending that the US
persevere in its initiatives to improve relations.
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19 September 1966
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2. RHODESIA
Prime Minister Wilson has until Christmas to
attempt a compromise settlement with the Smith re-
gime in Rhodesia. If he fails, however, there are
serious pitfalls in the commitments he gave to the
recent Commonwealth Prime Ministers' Conference in
London.
Wilson promised that if the regime does not
end its rebellion he will withdraw all previous of-
fers of compromise made to it and "not thereafter
submit to the British Parliament any settlement
which involves independence before majority rule."
He previously had offered independence to the
white minority government, after a temporary re-
turn to nominal British rule, in return for guaran-
tees of African rights and progress.
Wilson did not commit himself in the communique
to a deadline for withdrawing the compromise offer,
and he will try to convince the Smith regime of his
maneuverability on this matter. He allowed African
leaders, however, to believe he meant the end of
the year. This interpretation seems to have stiff-
ened the will of white Rhodesians to resist.
Wilson also promised the conference that if the
rebellion is not ended by Christmas--and in this
case the deadline is explicit--he will agree to
selective, mandatory economic sanctions through the
United Nations. He hopes to limit these at first
to the import of Rhodesian pig iron and chrome, and
possibly tobacco--still purchased by American and
West German firms. Later, if necessary, he would
extend them to oil supplies reaching Rhodesia via
Mozambique.
African leaders hope once mandatory sanctions
on a selective basis are accepted they can rapidly
be escalated to full economic sanctions. This, how-
ever, would lead to the clash with South Africa
that London remains determined to avoid.
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3. EGYPT
Doctrinaire Arab Socialism apparently has won
out over more moderate economic views in the Cairo
regime.
This is implicit in the dissolution of the Muhi
al-Din cabinet and its replacement by one composed
of technicians headed by Muhammad Sulayman. Sulay-
man, a former High Dam minister, is a: capable
administrator with considerable experience in work-
ing with the Soviets. Muhi al-Din and long-time
finance minister Qaisuni had been holding extensive
conversations with IMF and World Bank officials, as
well as Western financial representatives, regarding
new financial infusions for Egypt's faltering econ-
omy. The repudiation of these men is viewed with
dismay in the Western financial community, despite
Cairo's official line that the change signifies no
political shift.
Nasir is reverting to an emphasis on expanded
industrialization, greater central direction, and
more "Arab Socialism." The over-all attitude is
one of go it alone. This shift comes at a time
when the IMF and World Bank are calling on Cairo
to undertake more stringent economic measures--in-
cluding devaluation of the Egyptian pound and the
cutting of subsidies. The make-up of the new gov-
ernment strongly suggests that Nasir is not willing
to pay this price.
Although the Soviets regard Sulayman as an ef-
ficient administrator, Moscow has indicated no par-
ticular enthusiasm for the change. Nasir, neverthe-
less, may hope that his appointment will loosen
Moscow's purse strings. Cairo has announced that
a high-level Soviet economic mission will arrive in
Cairo on 17 October.
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&JIld
Foreign Minister Thanat is pushing for a re-
evaluation of arrangements governing the US mili-
tary presence in Thailand.
On 14 September the Thais presented a formal
note to the US Embassy requesting the US to nego-
tiate "as a matter of grave importance and urgent
necessity" a mutual defense agreement which would
spell out the "rights and obligations" of the two
countries.
Thanat had earlier told US Ambassador Martin
that he had cabinet authorization to explore the
possibility of negotiating a "satisfactory" agree-
ment covering mutual military obligations. He
claimed he had the impression that the US military
was "doing as it pleased" in Thailand, although he
admitted that Prime Minister Thanom did not share
this view. Thanat also argued that continuing
criticism of Thailand by important segments in the
US led him to doubt the commitment of future US
administrations to defend Thailand. He has reacted
sharply in recent weeks to criticism of Thailand
in the US press.
Thanat's current hypersensitivity may result
from the lukewarm reaction of Asian nations to his
recent Vietnam peace initiative. He was portrayed
in some non-Communist Asian quarters as a "US
lackey" and not the logical person to sponsor a
negotiated settlement in Vietnam.
It is not clear how much support Thanat has
among Thai military leaders for his current cam-
paign. Although it is unlikely that they will
back a fundamental change in Thailand's military
arrangements with the US, some of them, including
Deputy Prime Minister Praphat, have in the past
criticized US military activities in Thailand.
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5. MALAYSIA
The current crisis in the Borneo state of
Sarawak, highlighted by the declaration of a
state of emergency on 15 September, underscores
the tenuous relationship of the component parts
of the three-year-old Malaysian federation (see map)
The crisis stems from the competing claims
for the Sarawak chief ministership of the incum-
bent Stephen Ningkan, whose faction favors more
autonomy for Sarawak, and Tawi Sli, who represents.
those willing to accept Kuala Lumpur's dominance.
Kuala Lumpur engineered Ningkan's replacement by
Tawi Sli in June, a move upset by the Sarawak
high court on 7 September. Ningkan meanwhile has
been attempting to obtain the backing of the
Sarawak United People's Party, many of whose
leaders are openly anti-Malaysia and some of whom
are Communist oriented.
On 19 September the Malaysian federal parliament
amended the Sarawak constitution so that the governor
can convene the assembly to remove Ningkan as chief
minister. As a sop to popular sentiment Malaysian
Deputy Prime Minister Razak has promised that elections,
will be held in Sarawak at some unspecified date.
Kuala Lumpur's state of emergency declaration
has apparantly made Ningkan a national hero and has
further strengthened the position of those favoring
autonomy. It will probably increase rather than
control unrest. In the long run it could create a
situation susceptible to exploitation by Indonesia,
which, despite the official ending of confrontation,
has not abandoned its ambition to separate the Borneo
states from the federation.
Another factor which may be expected to worsen
the situation is the replacement of British military
personnel in Sarawak by unpopular Malay troops from
mainland Malaysia. This move, now in progress.
to be completed by Christmas.
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The Communist-inspired general strike on 15 Sep-
tember closed most business and government offices
for 24 hours. It was the first major strike the
Communists have been able to engineer on primarily
political issues.
The Communists will view the strike as support-
ing their belief that legitimate economic grievances
can be channeled into support for party political
objectives. Although the aims of the strike included
better wages and benefits, its main objective was
political: to demonstrate labor's repudiation of
the constitutional reform proposal put forward
jointly by large factions of the two traditional
parties.
This joint proposal, which would substitute a
strong executive for Uruguay's ineffective and di-
vided nine-man National Council of Government, is
the only plan for governmental reform with a chance
to win approval in the 27 November general elec-
tions. There will be four proposals on the ballot,
and vote splitting may keep any reform from being
adopted. If reform fails, chances for a coup,
probably by frustrated groups within the governing
Blanco Party with some military backing, will in-
crease sharply.
Despite council president Heber's earlier
statements that he would not tolerate labor unrest,
the government took no measures to prevent the
strike. Communist labor leaders will almost cer-
tainly be encouraged by their success and by the
government's inertia. Increasing labor agitation,
perhaps including another general strike, seems
likely before the November elections. 25X1
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