CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A012700040001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 15, 2016
• Document Release Date: August 4, 2003
• Sequence Number: 1
• Publication Date: December 5, 1968
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
50
5 December 1968
State Department review completed
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No. 0331/68
5 December 1968
Central Intelligence Bulletin
CONTENTS
Vietnam: Situation report. (Page 1)
Israel-Jordan: Israel's reprisal tactics are likely
to become even more drastic. (Page 3)
Venezuela: Delay in declaring a presidential election
winner causes general uneasiness. (Page 4)
Ecuador: Cabinet reorganization will do little to
ease difficult political situation. (Page 5)
Chile: Students at three universities have clashed
with police during the past ten days. (Page 6)
USSR: Near-record grain crop expected this year. (Page 7)
USSR - European Communities: Moscow has initiated
formal contact with the communities. (Page 8)
United Kingdom: The balance-of-payments outlook is
not encouraging. (Page 9)
Burma: General Ne Win moves slowly toward including
more civilians in the government. (Page 10)
UN - South Africa: General Assembly Committee votes
to expel South Africa from the UN Commission on Trade
and Development. (Page 11)
West Germany - Berlin: Federal Assembly meeting (Page 12)
Czechoslovakia: Economic guidelines (Page 12)
Cyprus: Intercommunal talks (Page 12)
Dominican Republic: Bosch's maneuvering (Page 13)
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!ay Ninh
s~y
ThG; ,_
Nang
CORPS
In i!net
SOUTH VIETNAM
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C Vietnam: Heavy fighting erupted on 3-4 December
in northern III Corps.
An estimated battalion of North Vietnamese on 3
December hit a company of the US lst Air Cavalry Di-
vision shortly after it had been airlifted into an
area some 13 miles from Loc Ninh in Phuoc Long Prov-
ince. The battle lasted for more than four hours
with the enemy breaking contact shortly after the ar-
rival of US reinforcements. US casualties were placed
at 25 killed and 65 wounded. The enemy force is known
to have lost only one man.
The Communists also shelled a US position near
the Katum Special Forces Camp on 4 December. Some 100
rounds of 82-mm. mortar fire along with heavy small
arms fire resulted in 18 US wounded. Enemy losses
were 37 killed.
5 Dec 68 Central Intelligence Bulletin
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Israelis Continue Strong Retaliatory Strikes
Israeli-occupied territory
,:'JE01I'ERRANE.4N
E111
1 LEBANON
Akk?~'*
Haifaj- ISRAEL
and airstrikes
1-2 December
Bet Shea Irbid`~ Heavy airstrikes
Valley
At a~ yy bah 4 December
,
Nablus IF-
/`/
Tel Aviv-Yafo /
IIJ~~~ 1 As Salt
'Al.Qunaytirah
S Y R I A
? Amman
Jericho Karama
`y -
7Jerusa
BethleIe
Beersheba
ISRAEL
Elat
(
Al Wm, i ri
SEA J O'` R D A N
SEA
.AI Karak
Two bridges destroyed
in commando raid
1 December
SAUDI
ARABIA
C?=5 5 MILES
25 50 hILOM ETFRS
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Israel-Jordan: Israel's most recent reprisal
tactics are likely to get even tougher if the terror-
ists in Jordan continue their present pace of activity.
Early yesterday Israeli aircraft attacked sev-
eral areas in northern Jordan, in action directed
primarily against Iraqi troops that the Israelis
claim have shelled their settlements. The heaviest
damage was apparently inflicted on Al Mafraq, an
Iraqi base but also the site of the Jordanian Army's
largest airfield. The Jordanian Air Force was at
Amman at the time and did not scramble.
Although Jordan claims to-have shot down three
Israeli planes with antiaircraft fire, the Israelis
concede only one plane lost, a French-built Super
Mystere. No final casualty figures have been re-
ceived but the Jordanians probably lost a number of
people in the populated areas that were hit.
King Husayn's obvious inability to oppose the
Israeli attacks only encourages further terrorist
activity, thus continuing the present vicious cycle.
5 Dec 68 Central Intelligence Bulletin
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Venezuela: The armed forces have tightened secur-
ity measures in Caracas. General uneasiness there and
in other major cities has been aroused by the delay in
declaring a winner in the tight presidential election.
Christian Democrat Rafael Caldera's slim margin
over Gonzalo Barrios, the presidential candidate of
the governing Democratic Action Party, is beginning
to shrink slightly after holding steady for the past
few days. Returns from Venezuela's rural areas--a tra-
ditional source of government support--probably account
for the attrition of Caldera's strength.
Both candidates continue to claim victory. There
reportedly have been minor clashes between party sup-
porters, but press accounts of widespread shooting and
firebombing in Caracas have been exaggerated. The mil-
itary have reaffirmed their intention to respect and
guarantee the transfer of power to the legal winner,
and several tanks have been stationed around the presi-
dential palace in a previously planned precautionary
measure.
government
o icia s have warned Christian Democrat leaders not
to permit any activity by party supporters that would
upset the electoral processes. The Christian Democrats
have not questioned the honesty of the electoral com-
mission. Nevertheless, some party leaders are calling
for an investigation in the counting of the votes, and
Caldera has warned against any attempt to falsify the
returns.
5 Dec 68 Central Intelligence Bulletin
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Ecuador: President Velasco's reorganization
of his cabinet on 3 December will do little to im-
prove the difficult political situation building up
in Ecuador.
The important Ministry of Government went to
the former education minister, leftist Hugo Larrea.
Larrea may seek an accommodation with students and
other extremist elements, although Velasco is under
pressure from powerful interest groups to curb their
growing lawlessness. Velasco wanted to name an ex-
treme leftist to the Education Ministry, but was
forestalled by pressure from within his own party
and probably from the military.
Velasco reluctantly dropped at least one min-
ister annoying to powerful business interests but
retained for the present his controversial leftist
finance minister. Two of the three new ministers
are ambitious and capable politicians without party
affiliation at present.
The absence of any Liberal representation in
this cabinet indicates difficulties in the working
arrangement with the Liberal Party that had given
Vel
'
asco
s minority government a majority in the
5 Dec 68 Central Intelligence Bulletin
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Chile: Students at three universities have
clashes with police over various issues during the
past ten days.
The most recent incident occurred on 2 Decem-
ber when students of the State Technical University
(UTE) fought with police after a march to downtown
Santiago was dispersed. The students have been on
strike since 19 November, protesting the government's
withholding of financial support to the university.
The controversy at UTE is primarily political.
The Communist rector of the university is placing
Communists in important positions in the university
administration and attempting to consolidate Commu-
nist control over the student federation. The Min-
istry of Education in an effort to hinder the Com-
munists' plans is withholding funds that the rector
claims are due.
5 Dec 68 Central Intelligence Bulletin
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USSR: This year's near-record grain crop will
permit the USSR to meet domestic demand, fulfill ex-
port commitments and supplement grain reserves.
The total usable grain crop this year--consid-
erably greater than predicted earlier--is estimated
to be 130-135 million metric tons, just short of
the record crop of 140 million tons harvested in
1966. The harvest of bread grains (wheat and rye)--
estimated at 80-85 million tons--was also the second
largest on record. Grain supplies will be ample to
meet domestic requirements for high quality bread in
1969.
The excellent grain harvest also will enable
the USSR to be a net exporter of grain for the sec-
ond year in a row. Moscow is expected to provide
at least 5.5 million tons of grain during the 1968-69
trade year to East Europe, Cuba, North Vietnam, North
Korea, Egypt, and Algeria.
These countries probably will press the USSR
to increase its grain exports inasmuch as the total
demand of these countries for grain is projected at
about li million tons. The USSR, however, may pre-
fer to increase its earnings of foreign exchange
through greater sales of grain in hard currency areas.
Four million tons of grain remain to be pur-
chased by the USSR from Canada under a three-year
agreement concluded in 1966. This commitment prob-
ably will be honored, although the terms may be re-
negotiated by extending the contract beyond 1969.
If exports are held to the level stipulated in
current agreements, the USSR will be able to make
significant additions to its reserve stocks of grain,
raising them to an estimated 20-25 million tons by
mid-1969. Stocks of this size would enable the So-
viets to overcome a moderately poor crop year with-
out importing large amounts of grain.
Central Intelligence Bulletin
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USSR - European Communities: Moscow has ini-
tiate its first formal contact with the Commission
of the European Communities (EC).
A first secretary of the Soviet Embassy in
Brussels paid a call early last month on the commis-
sion official responsible for EC trade with Eastern
Europe. The visiting Soviet said that Moscow con-
sidered the communities to be of major significance
for the political development of Europe, and that
this role far outweighed the economic one.
This diplomatic gesture and the comments of
the embassy officer are in marked contrast with Mos-
cow's past line which has been critical of the com-
munities and has studiously avoided any de facto
recognition. If these represent the first signs of
a fundamental shift in Moscow's attitude toward the
communities, that shift probably will come slowly,
however.
At present, Moscow is intent on tightening
controls in Eastern Europe, and would not wish to
risk actions which would jeopardize this policy.
Although Moscow might be seeking some leverage with
the EC on East-West trade matters, it will be wary
lest its behavior encourage those East European na-
tions which already have sought closer economic
ties with the EC.
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United Kingdom: The outlook for significant im-
provement iii the UK's'balance-of-payments is far from
encouraging a year after the devaluation of the pound.
The devaluation of November 1967 has been moder-
ately successful this year in stimulating British ex-
ports, which have risen more or less in line with orig-
inel estimates. Imports, however, have not fallen be-
cause London failed to adopt policies to cut domestic
consumers' demand effectively. As a result the deficit
this year in the balance-of-payments will be about $1.4
billion, up considerably from 1967.
A continued rise in exports coupled with a slow-
down in imports as austerity measures finally take ef-
fect may lead to a moderate surplus in the UK's inter-
national payments next year. Such contingencies as
renewed inflation if the government is unable to re-
sist demands for higher wages and prices and a fall
in world demand for British exports, however, could
upset this forecast. Moreover, a devaluation of the
franc probably would result in heightened pressure
on the pound.
A surplus next year in the UK's balance-of-pay-
ments would not mean a respite from international pay-
ments pressures on Britain. Future surpluses--perhaps
until the mid=1970s--have been mortgaged because of
the enormous debt accumulated in the losing battle
to defend the pound at its arity before the deval-
uation
of November 1967.
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Burma: General Ne Win may be taking serious
steps toward the eventual inclusion of more civilians
in the government.
The general has in characteristic fashion im-
posed a secrecy lid on his current talks with ci-
vilian politicians. The four days of discussions to
date, however, have reportedly been harmonious, and
the politicians are said to be organizing to take
advantage of a possible political breakthrough.
Any political changes will probably be slow in
developing. Although Ne Win now may be disposed to
carry through on earlier intimations of greater ci-
vilian participation in the government, he clearly
does not intend to be hurried. He has told the ci-
vilian conferees to be prepared for discussions
lasting as long as six months.
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UN - South Africa: The Economic and Financial
Committee of the General Assembly has voted to expel
South Africa from the United Nations... Commission on
Trade and Development because of its policies of
apartheid.
Despite strong opposition from the US and from
the Secretary General's legal adviser, the resolu-
tion for expulsion passed by a vote of 49 in favor
and 22 opposed, with 23 abstentions and 31 absences.
The plenary session of the Assembly will vote in a
few days on whether or not to adopt the Financial
Committee's action. Considering the unusually high
number of absences and abstentions, the plenary
might take the unusual step of refusing to ratify
the action of one of its committees.
This is the first time that an attempt has been
made to oust a nation from a subsidiary organ of the
General Assembly in which all the UN members are
represented. The UN's legal counsel holds that such
action would violate the principle of sovereign
equality under the UN Charter and would create a
dangerous precedent. It could well lead to similar
efforts in other UN agencies and organizations against
South Africa, or any member in disfavo ith partic-
ular groups.
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West Germany - Berlin: Bonn leaders seem on the
verge of picking West Berlin as the site for the Fed-
eral Assembly which, early next year, will elect a
successor to retiring President Luebke, even though
the meeting might touch off Communist harassment.
Major party leaders are to meet today with Bundestag
president Gerstenmaier, who will make the final deci-
sion. There is strong support for Berlin in all the
parties, and Chancellor Kiesinger is said to feel
that his opposition to this choice is futile.
Czechoslovakia: A leading Czechoslovak econo-
mist has challenged the leadership to define the
limits within which the country's economic reform
can be pursued. He has called upon the government
to establish guidelines before the Central Committee
meets later this month to discuss economic reforms.
Liberal economists, such as the author of this ap-
peal, claim that revitalization of the economy is
dependent on modernization of production facilities,
greater emphasis on consumer goods production, de-
centralization of decision-making, and increased
trade ties with the West.
Cyprus: The second round of the talks between
the Greek and Turkish Cypriot communities is scheduled
to end later this month, but progress continues to
be very slow. The governments of Turkey and partic-
ularly Greece are prodding the leaders of their re-
spective communities on the necessity for compromise
to regain the momentum of the earlier stages of the
discussions. The degree of local self-government
that might be allowed the Turkish Cypriot community
remains a key issue. Another round of the talks is
scheduled to open in mid-January.
(continued)
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Dominican Republic: Former president Juan
Bosch, operating in his usual highly personal style,
apparently is attempting to lead his Dominican Rev-
olutionary Party in a more radical direction. Bosch
has reportedly urged that the party's leadership be
turned over to its Communist influenced youth wing.
He also recently threatened to resign as an active
member of the PRD, as a means of persuading the
party to accept his views. One party leader is
said to view the resignation as a publicity stunt
designed to force the so-called "conservatives" out
of the party. Bosch himself has indicated that he
wants th become "the National Liberation
Front."
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