INTERNATIONAL NARCOTICS BIWEEKLY REVIEW

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CIA-RDP79T00912A001900010006-2
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December 3, 2008
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Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 _aE _?cw, ~~ I.au,uunu .:_a v a ~flflror Foreign t=A_ 9 Assessment Center ,14 International Narcotics Biweekly Review DOJ review(s) completed. State Dept. review completed Secret RP INRR 78-006 15 March 1978 COPY 2 0 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 INTERNATIONAL NARCOTICS BIWEEKLY REVIEW 15 March 1978 CONTENTS PORTUGAL: Clamping Down on Drug Proliferation . AFGHANISTAN-PAKISTAN: Narcotics Shipments Under International Convention . . . . . . NOTEWORTHY POLITICAL AND ECONOMIC DEVELOPMENTS 1. Turkey . . . . . . . . . . . . . . . . . . . 16 2. Pakistan . . . . . . . . . . . . . . . . . . 17 3. India . . . . . . . . . . . . . . . . . . . 19 4. Nicaragua . . . . . . . . . . . . . . . . . 22 5. Brazil . . . . . . . . . . . . . . . . . . . 24 BRIEFS . . . . . . . . . . . . . . . . . . . . . 30 INTERESTING READING . . . . . . . . . . . . . . . . . 34 This publication is prepared by analysts in the National Foreign Assessment Center for specialists in the Washington community who are interested in international narcotics matters. Comments and queries are welcome. Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Next 5 Page(s) In Document Denied Iq Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 PORTUGAL: Clamping Down on Drug Proliferation An epidemic of drug-related deaths and crimes has prompted Portugal's drug enforcement officials to step up public information campaigns and eradication efforts. The renewed effort achieved one spectacular success last month in dismantling the country's largest drug ring. Drug crime, however, continues to far exceed arrests and convictions, and many believe that despite the large amount of resources and energy being poured into the fight, real success will not come until some of Portugal's grave economic and social problems are re- solved. A Super Bust Last month's "super bust" was made by the Criminal Investigation Police, one of several agencies involved in the drug war. Seven ringleaders--all Portuguese--were arrested in various northern and central cities, capping a nationwide investigation begun last year. The ring apparently had Far Eastern connections and several kilos of heroin were confiscated. The bust will probably not dent the level of Portuguese drug trafficking. Police are aware of many similar trafficking operations, some of which serve as transit points for illicit drugs flowing to other Western countries. Publicity stemming from the arrests, however, should increase public sup- port for police efforts. Drug Control Mechanisms Portugal recently initiated a two-pronged attack against the domestic procurement and sale of drugs. The antiprocurement effort is headed by the Center for Drug Investigation and Control, while drug sales are watched by the Center for Studies on Drug Proliferation. A third national agency has been created to monitor and coordinate the activities of the other two. 15 March 1978 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 The Center for Drug Investigation and Control will collect and disseminate all drug-related information gathered from local and international sources. It will also train investigators, review drug enforcement tech- niques, and may conduct its own investigations in special situations. All three agencies will apparently have advisory and support links to other groups involved in the drug control effort, but existing organs will retain certain areas of specialization. Customs officials and border police, for example, will deal primarily with smuggling problems. The National Guard will assume special responsibilities in rural areas. The Public Security Police will continue to be mostly concerned with small-time local operations and users, while the Criminal Investigation Police will specialize in more extensive and sophisticated operations. It is too early to tell how well the new apparatus will work. From the scanty information available, how- ever, it appears that jurisdictional questions may easily arise, and this coupled with interagency competi- tion could hurt efficiency. In Portugal's oversized bureaucracy, accounting and control mechanisms may be made less effective by the creation of three new agencies. Patterns of Enforcement Portuguese police are most often criticized for their tendency to arrest individual users without appre- hending large suppliers. Police counter with claims that arrested users refuse to cooperate and that the public has not rallied behind law enforcement efforts. They also claim that their problems are compounded by the fact that many local drug rings are headed by respected local citizens. It appears that police involved in drug control do have a serious morale problem, which could be associated with the rapid proliferation of illegal drug sales and consumption even in small communities. Most of Portugal's drug seizures and arrests are made by customs and border police, but the volume of il- legal drugs that slip by is significant. One of the major problems is that Portugal adopted a more open border policy after the 1974 revolution. The infusion of drugs Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 SECRET from abroad, already a problem in the "hermetically sealed" Portugal of Salazar, increased dramatically after 1974. Increasing numbers of truckers, railroad passen- gers, immigrants, tourists, and even pilgrims are being identified as smugglers. The lack of communications between local authorities and national agencies more familiar with the ways in which drugs flow into and throughout the country aggravates the problem and is a major target of the envisioned cen- tralized system of control. Pharmaceutical drugs stolen or otherwise obtained from legal sources constitute a major portion of Portugal's illegal drug consumption and sales. A more efficient system for supervising legal distribution and sales of such drugs has been devised but is not yet fully imple- mented. Police regularly seize illegal stocks of phar- maceuticals at the local level, but there are no signs that illegal activity in, this area is slowing. Consumption Habits Hashish, supplied in part from Pakistan and North Africa, is the most frequently used illicit drug in Portugal. It is followed by morphine, barbituates, and amphetamines, which seem to appeal particularly to young people. Reports on individuals using or selling cocaine and marijuana appear less frequently in newspapers, and they are presumably less of a problem. Heroin's growing popularity is a matter of great concern, but efforts to control its use have not met with much success. When arrests are reported, they almost always involve only small-time operators and small quantities. The Market In many ways Portugal provides an ideal market for drug traffickers. Drug enforcement mechanisms are not yet well developed and, despite increasing antidrug propaganda, Portuguese citizens seem generally passive. Portugal has fairly large communities of students and immigrants clustered around larger urban centers. These groups not only have abnormally high consumption statis- tics, but their international contacts and frequent 15 March 1978 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 travels make them ideal sources for potential carriers. Their life style and environment seem especially con- ducive to the drug subculture. The propensity of these groups to consume and traf- fic in illegal drugs is enhanced by their precarious social and economic situations. Unemployment in both groups is widespread, and with future prospects bleak they are more inclined than other groups toward uncon- ventional outlets for frustrations and insecurity. Growing drug abuse among precollege teens and even young children has also been attributed in part to the social disorientation produced by revolutionary upheavals and postrevolutionary instability. So far little is being done to remedy the socio- logical and economic problems that contribute to Portugal's drug problem. A recent meeting of one of the country's prestigious professional organizations, however, gave salience to these factors, suggesting that little suc- cess can be achieved until the situation of especially vulnerable groups improves. This may eventually trans- late into a more comprehensive approach to Portugal's growing drug abuse problem. Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 AFGHANISTAN-PAKISTAN: Illicit Narcotics Shipments Under International Convention Afghan customs officials appear to have failed in an effort to impede the illicit shipment of Pakistani narcotics under Transport Internationale Routiere carnet. Under the TIR convention--to which Turkey, Iran, Afghan- istan and almost all European countries belong--a truck which has been inspected, sealed, and issued the carnet does not have to be inspected as it crosses international borders. Pakistan is not a member of TIR, and so Pakistani truck shipments are inspected in Afghanistan and issued the carnet there. The office responsible for the in- spections, however, has only three officers, and so is unable to do more than spot check Pakistani shipments. Because they suspected early this year that narcotics were slipping through, the Afghans refused to issue any more carnets for trucks from Pakistan. The prohibition lasted only three weeks. European owners of the shipping lines complained, and shipments bound for Afghanistan were held up. The Afghan Ministry of Commerce intervened, and shipments are now back to normal. One or two trucks a day carry goods--and possibly narcotics--to Europe from Pakistan and bear the Afghan customs TIR carnet after only a cursory inspection. Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Iq Next 2 Page(s) In Document Denied Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 NOTEWORTHY POLITICAL AND ECONOMIC DEVELOPMENTS (Editor's dote: These items, produced for mother CIA publication, do not deal specifically %. the international narcotics situation. They urn. included here, however, because they concern sevoloping economic and political situations hu could impact on the international narcotics .j?_-rol e_'rort. ) TURKEY Turkey has devalued its lira by 23 percent against the dollar, bringing the official rate roughly into line with prevailing black market rates. This latest move, together with other austerity measures announced earlier, may meet International Monetary Fund condi- tions for a standby loan agreement. Ankara's program was weakened, however, by a decision to subsidize im- ports of oil and fertilizer to compensate for the effect of devaluation. The amount that would be available from the IMF itself in 1978--$110 million at most--is minuscule compared to Turkey's short-term debt of $4 billion to $4.5 billion. But an IMF agreement would open the door to refinancing of $2 billion to $2.5 billion in debts currently due and also to credits from other sources. Late last month, the recently installed govern- ment of Prime Minister Bulent Ecevit--benefiting from the experience in IMF negotiations of the former government headed by Suleyman Demirel--approved the Fund-recommended import ceiling of $4.85 billion and passed a 1978 budget in the Fund's acceptable range. IMF demands for explicit monetary targets probably will not present a problem, since monetary expansion is closely linked with the budget deficit. Measures 16 SECRET Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 SECRET announced earlier included interest rate hikes, re- strictions on forcign travel, and curtailment of duty- free imports by Turks returning from abroad. Ecevit apparently chose to enact austerity meas- ures before resuming talks with the IMF mainly to avoid the appearance of knuckling under to foreign demands. Recent measures will interrupt real GNP growth and aggravate the already serious problems of unemployment and inflation. They will be difficult enough to defend without seeming to be a result of government weakness. Fund experts will examine the Turkish targets and estimates closely to determine whether they are real- istic. In particular, budget estimates for legally mandated expenditures must be verified, and some re- visions are likely. PAKISTAN: The Decisionmaking Process The US Embassy in Islamabad believes that Chief Martial Law Administrator Zia-ul-Haq's power is being diluted as the military government evolves into a more permanent institution. When Zia seized power last July, his only goal was to hold an election and surrender power as quickly as possible, and his government dealt with only a narrow range of issues. Now, however, the military government has concerned itself with a much wider spectrum, and Zia--a weak manager and lacking the intellect and ex- perience to deal with many issues--is increasingly de- pendent on his military colleagues, his civilian advisers, and the bureaucracy in governing Pakistan. None of these groups, however, provides the political astuteness that Zia so badly needs from his immediate subordinates. Zia is also hampered by a lack of popular support. His coup was welcomed primarily because it ended months Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 of disorder, but since then many have become disil- lusioned with military rule. Particularly among the literate classes, Zia is characterized as a bumbler and criticized for his inability to inspire public confidence. Zia is less inclined than before to make quick decisions, but occasionally shoots from the hip, leaving it to the bureaucrats to repair the damage. Although Zia remains the final arbiter in Pakistan, the US Embassy notes important changes in the role of others in the government in the past few months. The Military Council--composed of Zia and the other three officers with four star rank--is still in theory the body that rules Pakistan, but its role has steadily diminished and it is now inactive and nearly powerless. The commanders of the six Army Corps remain--as a group--the most powerful men in the country. Zia demonstrated his preeminence in the military by changing commanders of the corps, but the US Embassy believes he may have had to make some promises to bring about the changes, and that, in any case, he has to take the corps commanders' views into account in making decisions. Al- though his leadership is accepted for the moment, he can- not count on the continued support of senior military officers. The new Council of Advisers--in effect a cabinet-- has assumed many of the day to day responsibilities of administering the country. A number of the advisers are technocrats, more expert in their fields than were members of previous cabinets and clearly more capable than the soldiers who earlier attempted to fill the posts. Several of them have been given considerable independence and authority. The civil servants distrust Zia less than they did when he first came to power and openly criticized them, but they are still keeping their options open. They view Zia as a temporary ruler, realize he is heavily dependent on them, andis unable to manipulate the civil service as former Prime Minister Bhutto did. 18 SECRET Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 The increased authority of Zia's subordinates has made it easier for them to impede actions they believe inadvisable. For example, Zia ordered raids on narcotics labs in the North-West Frontier Province, but was, in effect, overruled by local officials. The US Embassy believes that the military govern- ment has evolved into a workable system to manage Pak- istan, but one which will be of little help in the search for a remedy to Pakistan's political ills. It may further evolve into a system in which the Army has a permanent, institutionalized political role, if events, the politicians, the military, and the public allow Zia the time and authority to make further changes. INDIA: Indira Gandhi's Comeback Former Prime Minister Indira Gandhi's massive electoral victories recently in two important southern states--Karnataka and Andhra Pradesh--rep- resent a landmark in Indian politics. This first concrete affirmation of public support for Gandhi since she and the Congress Party were roundly defeated in national elections last March has refurbished Gandhi's image as a winner and clears the way for her to assume the role of undisputed leader of the opposition. The legislative elections in five of India's 22 states and a semiautonomous territory also decisively settled in Gandhi's favor a bitter fight for control of the "real" Congress Party. Gandhi had precipitated the split that occurred in January. In the elections the anti-Indira faction, headed by two of Gandhi's former cabinet members Brahmananda Reddy and Y. B. Chavan, was severely beaten in both Karnataka and Andhra Pradesh and in neighboring Maharashtra did slightly better than Gandhi, but still 19 SECRET Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 niu xa 6f [QNTApt AFGHANISTAN Jammu f A' { KAeuLM - > ~ ~ and ~ m ?n Y ISLAMABAD `Kashm+r ' NEW DELHP U ttarli Ptadesh PAKISTAN ~ssallr~tt5k' "I'll redssh j 3[Tfii Nadu Keialar 20 SECRET Aapa Banolad TAli India !SLAt-I S 3l ANDS t NC,;.) Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 SECRET failed to win a plurality. Reddy subsequently resigned as head of his demoralized faction. The group has chosen Swaran Singh, an old Congress Party stalwart, as its provisional president while contemplating its options, which include dissolution, absorption into Janata, reunification with Gandhi, or retention of a separate identity. Gandhi apparently will allow de- fectors to return, but she has made clear she will exercise absolute control over Congress Party affairs. The two groups are privately discussing some form of cooperation in Maharashtra in order to form a majority there, but Gandhi's insistence on defining the terms is making negotiations difficult. The Janata Party's best performances were in As- sam--one of the three less important areas in the northeast that held elections--and in Maharashtra, where it won pluralities. Janata may form a coalition government with the Communist Party/Marxists in Assam, and in Maharashtra it is feverishly competing with the Congress factions in trying to line up sufficient al- lies to form a majority. Janata's disappointment at the electoral results is tempered by the fact that it had no assured base in any of the states polled and still controls the pop- ulous states in the Hindi-speaking belt of north India. Janata leaders campaigned hard, however, hoping to gain a toehold in the south. A vigorous campaigner herself, Gandhi succeeded in exploiting the southerner's traditional resentment of the domination of the federal government by northerners and in portraying Janata as a party mostly of Hindi speakers. Gandhi also benefited from the fact that the south was less exposed than the north to the harsh measures imposed during her emergency rule in 1975-77. Center-state tension probably will increase, and language could again become a very con- tentious issue. Janata's viability as a relatively new party will be constantly tested by the sharp confrontational politics Gandhi is likely to employ during the remain- ing four years of Janata's parliamentary term. Janata's lackluster performance leaves it vulnerable on many fronts. Gandhi's challenge may foster unity among 21 SECRET Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Janata's five constituent parties as it did last fall when she launched her political comeback, but now it is more likely to aggravate intraparty tension and further impede efforts to deal with national economic and social problems. NICARAGUA: Deteriorating Situation President Somoza's announcement that he will retire in--and not until--1981 and the determination of young rebels to force change now define a political line that few Nicaraguans will be able to straddle for long. Guer- rillas are inciting much of the violence, but it is in- creasingly obvious that the general public supports change--a growing number would support even violent change, if necessary. Somoza still has considerable resources and a good chance of finishing his term; but the threat to him is greater than it has ever been, and the situation could deteriorate quickly. The explosion of long pent-up discontent triggered by the Chamorro murder in January radically altered Nic- aragua's prospects. Even the most contented have been jolted to the realization that the anachronistic pater- nalism of the 45-year-old Somoza dynasty must be altered. Nicaragua is set irreversibly on a path to change, so that the struggle is between the cautious and the im- patient. Somoza's ability to convince the public that an orderly evolution toward a new competitive system is the better choice is being increasingly undermined by the rebels' efforts to produce turmoil. Already Somoza is finding that he cannot ensure tranquility solely with professions of good will. He has tried to display tol- erance toward his opponents, offering to reason with critical members of the establishment. His attempts at statesmanship nevertheless repeatedly translate into new provocations to the opposition. 22 SECRET 25X1 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Every day it becomes more clear that a young gener- ation of Nicaraguans will not let this moment pass. They do not trust Somoza, and they do not accept the transitional political mode that their elders probably prefer.. Young, bright Nicaraguans will no longer coun- tenance a Somozaland, with or without the Somoza family. Nicaragua has maintained a hospitable commercial climate that has benefited an entrenched entrepreneurial class, but this is no.longer enough for a public awakened to its political retardation. Somoza will not be easy to drum out of office. He still can count on a loyal and effective security force, and while his Liberal Party is nervous, this constituency has not lost faith in Somoza's long-tested judgment and power of manipulation. Riding out the current assault on his regime may require draconian measures, but he will not hesitate to employ them. If the challenge to Somoza were contained within Nicaragua's borders, he might be invulnerable. But this year he has to contend not only with a clear-cut insur- gency problem, but with an international tide of re- vulsion against the kind of government he personifies. The global focus on human rights and the hands-off atti- tude from the once supportive US combine to weaken Somoza and hearten, his opponents. In this unfavorable contest, Somoza's gift for smart politics may be lost. The possibilities for temporizing may diminish as the government's energies are consumed in its effort to survive. A guerrilla campaign of brushfire-type violence has already taken a heavy toll. Guard forces will prob- abl.y.be more loyal to the regime--at least in the short term--now that the restraints heretofore imposed on them have been loosened. But they will be spread thin and could become demoralized. The longer the opposition chips away at Somoza's frontline security forces, the less staunch will be the remaining loyalty to the regime. Somoza's response to the current situation is-to field arms and men to quash the rebels. This may not succeed. The inevitable casualties will intensify the .human rights problem and raise Nicaragua to a higher level of international concern. Concomitantly, some 23 SECRET Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 besieged townspeople, whether or not they are swayed by the rebels, will almost surely have new grievances against the deeply resented Somoza forces. Somoza's best chances lie with the established pillars of society, whose vested interests are largely the same as his. The specter of young radicals shaping Nicaraguan events may be a threat sufficient to clarify, even for Somoza's political antagonists, the wisdom of acceding to his invitation to work together for a con- trolled transition. Even so, a considered rational response from es- tablished business and political groups and the Somoza- dominated Guard may give way to spontaneous reaction and finally panic if the revolutionaries seem to gain ground. While, therefore, the situation has not exceeded Somoza's manipulative abilities, the possibility for sudden col- lapse could emerge quickly. BRAZIL: The Succession Question President Ernesto Geisel recently designated his successor, General Joao Baptista de Oliveira Figueiredo, who will begin a six-year term in March 1979. Figueiredo will be the fifth military president to govern Brazil since the ouster of leftist Joao Goulart in 1964. There is little doubt that Figueiredo will take office as sched- uled, even though some top military men continue to com- plain that Geisel did not consult them as closely as has been the case in previous military successions. The transition process consists of two phases. In the first, Figueiredo will be "nominated" by the progov- ernment party at its convention next month. Then, in October, he will be formally "elected" by an electoral college consisting of the national congress and delegates especially chosen from the 22 states. There is no popu- 24 SECRET Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 lar participation in the process. Each stage is care- fully planned and closely scrutinized; there is virtually no chance that someone other than Figueiredo could be either nominated or elected. After 1964 the officers almost completely dismantled the civilian political structure, imposed a series of sweeping national security laws, and devoted their ener- gies--and the nation's resources--to rapid economic de- velopment. They were determined to suppress the give and take of politics and the pursuit of regional. or sectoral interests because they felt these only hampered the drive to industrialize and diversify the economy. They became completely absorbed in--and unconditionally responsible for--the conduct of national affairs. Because of the depth of their commitment and the magnitude of their efforts to recast the nation's economic and po- litical life, the officers are highly sensitive to crit- icism and to the prospect of their disengagement. from power. The regime has at its disposal a variety of means to limit the role of politicians. Mayors of state capitals and other key cities, for example, are appointed by the state governors, who in turn are handpicked by Brasilia and formally chosen by indirect, easily con- trolled means. One-third of the national senators are also chosen indirectly. Those candidates for congressional and local or state posts who are popularly elected are carefully screened and monitored by the federal govern- ment, particularly by the National Intelligence Service. Officials who provoke the regime can readily be removed and stripped of their political rights under the sweeping authority of the executive. President Geisel, as well as his predecessors, have made frequent use of this power. From time to time the rules governing elections are changed to guarantee that the government party receives a majority in Congress or to ensure government control elsewhere. Only during the Geisel administration has the re- gime begun to lessen restrictions on the expression of dissent and allow civilians to engage in "dialogue" with the government. By the time Geisel became president in 1974, the justification for continuing stringent security 25 SECRET Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 measures and tight controls on national politics was questionable at best, given the absence of a terrorist threat and the impotence of the left in general. Geisel was acutely aware of this, and working closely with his chief political adviser, General Golbery, proceeded to liberalize the regime somewhat, albeit within definite limits. Geisel and Golbery, leading members of the "intellectual" school of army generals, closely studied their country's complex society and apparently concluded that Brazilians, ruled by successive unelected generals and having to cope with a sharply increased cost of living, needed at least a token "escape valve." To be sure, Geisel neither promised nor attempted to replace authoritarianism with populism. But he did relax press censorship, seek a dialogue with leading liberal clergy- men, and remove some of the more prominent hard-line mil- itary men from sensitive positions. Geisel, moreover, allowed local and congressional elections to take place relatively unfettered, even though the results were sure to go against the government. The subsequent outpouring of criticism from students, clergy, civil rights groups, and politicians unsettled the military. The two formerly docile parties the regime had set up to provide the trappings of representative government have proved particularly embarrassing. The nominal "opposition" some time ago began campaigning on a frankly antiregime platform and made impressive gains at the polls. Even the so-called pregovernment party is offering its own civilian presidential "candidate," though it knows full well that the military's rules preclude his success. Most unsettling of all, perhaps, is the fact that members of the business community, largely based in the influential state of Sao Paulo, have expressed serious disillusionment with the regime's economic policies and have begun to suggest that a civilian government could do at least as well for them. Businessmen miss the sus- tained, spectacular economic boom of the late 1960s and early 1970s--the years of the so-called "economic mir- acle"--when the growth rate averaged over 10 percent. Moreover, they are concerned by the growing tendency of the regime in recent years to stress state participation in important sectors of the economy, such as steel, oil, 26 SECRET Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 and communications, and the tendency toward greater in- terference with market mechanisms. Business and indus- trial interests were perhaps the most enthusiastic sup- porters of the 1964 conservative coup and the major ben- eficiaries of the regime's program of incentives to in- dustry and aggressive promotion of exports. The ques- tioning of the regime's worth by Sao Paulo interests has come as a major blow to the officers. Uncertainty is the order of the day as Brazilians increasingly wonder what will come next in the regime's evolution. This is a natural development, given the advancing age of the military government and the fact that its major successes are well behind it. Today's economic picture is by no means poor, but current in- flation and growth rates do not compare favorably with those registered during the "miracle" years. Leftist terrorism ceased to be a problem after the officers waged a highly successful campaign against the virulent guerrilla movement that sprang up in the late 1960s. Brazil's quest for world power status also is uncertain, largely because its growing economic competitiveness and attempts to acquire advanced nuclear know-how have brought it up against major nations not willing to cede their privileged positions. Problems in these areas were only just beginning to appear when Geisel took office. Now, having experienced a measure of frustration and disappointment, Brazilians wonder what more the re- gime can do for them. Some of Geisel's liberalizing moves did not sit well with hard-line officers, and public criticism may well have proved more extensive than he had anticipated. Whether because of pressure from the hard-liners or be- cause of his own sensitivities, the President saw fit to reassert his authority by recessing Congress last spring, decreeing that one-third of national senators would hence- forth be elected indirectly, and lengthening the presi- dential term to six years, beginning with his successor. On balance, however, the political situation Figueiredo will inherit is noticeably more open and considerably more complex than that which'greeted Geisel when he took over. Students and workers have openly ex- pressed their grievances without being slapped down. 15 March 1978 27 SECRET Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Politicians, though discouraged by the regime's rigging of the rules against them, have in fact been allowed more latitude than at any time over a decade. It would be exceedingly costly for the regime to reverse the po- litical "opening" that has begun, since to do so would engender serious popular opposition that could not be contained without resort to force. Whatever the future holds for Brazil, the fact re- mains that in the years since the military takeover, the country has grown impressively and made its presence felt in more places and in more ways than ever before in its history, even though major nation status is still not a reality. Critics contend that this could have happened even if the military had not intervened. The officers assert that they saved Brazil from chaos at the hands of demagogic, unprincipled civilian politi- cians who served the interests of the left. However one views the military intervention, it is hard to escape the conclusion that the officers have neither institutionalized their rule nor begun laying a firm basis for eventual return to civilian rule. No two presidential successions have occurred in precisely the same way. The regime has, with embarrassing fre- quency, blatantly manipulated the rules each time it per- ceived a threat to its authority. It justifies its authoritarian measures on grounds of "national security," a concept the officers, even Geisel, stretch to encompass far more than would be the case in other Western nations. Because they have carefully manipulated the political system they have created, that system has developed little "life" of its own and remains clearly artificial. There is speculation, fueled by Figueiredo, that the President- designate will create two or three more parties, clearly under the close supervision of the government. The net result of such a move could be to dilute further the limited influence of the existing parties. The electorate has had little opportunity to demonstrate that it knows more now than the military thought it did 14 years ago about how to choose "responsible" leaders. It is diffi- cult in this environment to see how the military will de- cide when Brazil will be "ready" for a return to repre- sentative rule, which the officers consistently say is 28 SECRET Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 their ultimate goal. Moreover, with the civilian in- stitutions weakened, it is difficult to foresee just how a return to civilian rule will be carried out once a de- cision is made. For these reasons, it seems certain that the transition will necessarily be very gradual and sub- ject to numerous difficulties. 29 SECRET 25X1 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 ECUADOR: NARCOTICS PROBLEM WORSENS. Supreme Council President Poveda is meeting this week with a team of Washington officials to discuss bilateral drug control efforts. In a conversation last week with representatives of the US Embassy in Quito, Poveda noted that he chairs his government's domestic coun- cil and that he will follow "with great interest" efforts by the Ministry of Government to combat illicit drug trafficking. Poveda noted that the narcotics problem in Ecuador is getting worse and that his country will wholeheartedly support Wash- ington's "war on drugs." He cited as evidence of his government's commitment to drug control the re- cent judicial reorganization which was undertaken largely to weed out corrupt judges. COLOMBIA: AIR FORCE TO MOVE AGAINST NARCOTICS TRAFFICK- ERS. The Colombian Air Force (FAC), in support of President Lopez' continuing war against drug traf- fickers, has announced that it will intercept sus- picious foreign and domestic aircraft in Colombian airspace. The Colombian Civil Aeronautics Author- ity is preparing an official "Notice to Airmen" (NOTAM) warning that the FAC will intercept unauthor- ized aircraft and, if the intruding planes do not respond to internationally recognized signals, the Air Force will fire on them. The US Embassy in Bogota believes that effective execution of this policy will have a deterrent effect on the use of aircraft operating from clandestine strips in nar- cotics trafficking. PERU: NEW DRUG-CONTROL LAW NOW IN FORCE BUT SOME PRO- VISIONS MAY BE DIFFICULT TO ENFORCE. The long- awaited Peruvian drug control law was finally pro- mulgated on 2 March, about a week after it was ap- proved by the Council of Ministers. The new law provides for an executive office and a multisectoral committee for drug control. The executive office for drug control will be created within the Ministry of the Interior. The major responsibility for the repression of drug trafficking is given to the In- vestigative Police. Under the terms of the law, 15 March 1978 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 commercial coca production will be controlled by the state and will be gradually reduced as substitute crops are developed. The new law also provides stiff penalties for unauthorized coca cultivation and especially for trafficking in illicit drugs. The Embassy expects Peru's "ambitious and compre- hensive" new drug law to impact on at least two broad areas of US interest in international nar- cotics control: on the eradication of coca leaf cultivation, accompanied by a crop substitution pro- gram; and on international trafficking in coca paste, cocaine, and possibly opium. The Embassy believes that the new law, which creates a high level policy formulation group and a coordinating office, should make the Government of Peru more responsive to US overtures. It has expressed reservations, how- ever, as to how effective the Peruvian Government will be in enforcing the many provisions of the law. SWEDEN: GOVERNMENT TO INCREASE AID TO UNFDAC. Sweden "almost certainly" will contribute an additional $450,000 to the UN Fund for Drug Abuse Control in 1978. there are good prospects for even larger contributions from 1979 on. IRAN: PRESS CLAIMS BRACTEATUM POPPY TO BE PRODUCED COM- MERCIALLY. The Iranian English-language newspaper .Kayhan International noted on 22 January 1978 that Iran will soon begin producing the "black poppy"-- papaver bracteatum--commercially for medicinal pur- poses. According to the press, it will be grown under a project drawn up by the Agricultural Develop- ment Bank--a government institution--on the recom- mendation of the Farah Pahlavi Foundation. The al- leged plan provides for the poppy crop to be cul- tivated in an area totaling 100 hectares on the lower slopes of the mountains in western Iran where a high-grade variety of the plant was discovered growing wild a few years ago. According to the press, the actual sowing of the poppy seed will not begin until September which is the best time of the year to plant bracteatum poppies. The crop requires 25X1 25X1 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 between two and three years to mature and produces high-grade thebaine which can be processed indus- trially to obtain codeine. The advantage, from a control point of view, is that bracteatum is not a direct source of morphine which can relatively easily be converted into heroin. Several countries other than Iran have been experimenting with brac- teatum, including the United States, but because of the current world oversupply of opiates there is widespread opposition, both bilaterally and through the UN, to any commercial development of bracteatum as a new source of opiates. The strength of the opposition was reaffirmed during the recent session of the UN Commission on Narcotic Drugs meeting in Geneva. The Iranian press probably was a bit pre- mature in its disclosure of government intent to begin commercial cultivation of bracteatum; the relatively small area being considered suggests that the planned crop probably is part of the gov- ernment's ongoing experimentation program. ECUADOR: OPIUM POPPY FIELD DESTROYED. According to in- formation received from the Embassy in Quito, the National Police reportedly destroyed an illicit opium poppy field on 14 February. The alleged field, about one acre in size, was said to be located about 20 miles from the Peruvian border near the small town of Sabiango. No arrests were reported, but the police are said to be looking for the owner of the field. Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Ecuador is usually viewed as part of the cocaine problem rather than the opium problem. It has traditionally been regarded as a major transit point for shipments of cocain to the'United States from Peru and Bolivia. In view of the extensive opium poppy eradication effort in Mexico, it would not be surprising if would-be nar- cotics traffickers experimented with poppy culti- vation in other parts of Latin America./ As more Western Hemisphere countries become involved in the international narcotics con- trol effort, however, there probably will be an in- creasing number of isolated reports of poppy fields being cultivated. Until a reliable method for identification and monitoring over a vast area in a relatively short period of time is perfected, poppy cultivation--even to the point of harvesting the raw opium--will remain a distinct possibility, especially in remote areas. 25X1 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 INTERESTING READING PORTUGAL--Official Discusses Portugal's Drug Control Problem--TNDD, No. L/7635, pp. 108-110. "Public Security Police activity in combating drug traffic and consumption was emphasized during a press con- ference by the Center for Drug Investigation and Control. Established in 1976, basically to combat the drug market on all fronts and not merely from the standpoint of criminal investigation, the CICD is an integral part of a tripartite functional sys- tem to study and find solutions for the drug scourge and to provide an adequate response to it. CICD's director referred to 'dramatic drug abuse incidents' to Pxnlain the activity and coals of the agency." ARGENTINA--Police Smash Four-Nation Cocaine Ring--TNDD, No. L/7635, pp. 73-74. "An international drug traf- ficking ring was discovered (last month) by Argen- tine police. Investigations indicated that Jorge *US Joint Publications Research Service (JPRS) Transla- tions on Narcotics and Dangerous Drugs. Published by JPRS, 1000 Glebe Road, Arlin ton, Va. 22201. Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Villarino headed the ring from Milan, Italy, where he resided while directing the drug organization which had brances in Chile, Bolivia, and Argentina. The organization's operational epicenter was in Santa Cruz de la Sierra, Bolivia. There the orga- nization had its own crops and laboratories to make cocaine hydrochloride which was then sent through various routes to Milan. According to police re- ports, Villarino was supplied with 110 kilograms of almost pure cocaine during a 10 month (period)." HONG KONG--Taking a Hard Line on Soft Drugs--TNDD, No. 11. L/7649, 7 March 1978, p. 51. . . an amendment to the Dangerous Drugs Ordinance is being considered to tighten up the law regarding cannabis. Mari- juana can be dangerous and harmful to the health and mental well-being particularly of young people. Its adverse reactions can include anxiety, fear, rapid heartbeat, labored breathing, crying depres- sion, suspicion, dissatisfaction, depersonalization, disorientation, confusion, paranoia, delusion, and murderous hallucinations." Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 ARGENTINA--Official Gives Details of 'South American League'--TNDD, No. L/7649, pp. 99-101. This article in the Buenos Aires Clarion is the text of an inter- view with the Chief of the Federal Police Drug De- partment concerning current investigations into the drug ring called the "South American League." BRAZIL--Rio Police Operation Nets Cocaine, Marijuana, Ammunition, Boats--TNDD, No. L/7649, pp. 112-116. "About 400 kilograms of brick marijuana and 200 grams of cocaine were seized by police in a single operation in January. The marijuana was found at the bottom of oil drums in the garage." Approved For Release 2008/12/03: CIA-RDP79T00912A001900010006-2 Secret Secret Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2 Approved For Release 2008/12/03: CIA-RDP79TOO912AO01900010006-2