CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A012900100001-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 15, 2016
• Document Release Date: December 2, 2003
• Sequence Number: 1
• Publication Date: January 16, 1969
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
DIA and DOS review(s) completed.
Secret
50
16 January 1969
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No. 0014/69
16 January 1969
Central Intelligence Bulletin
CONTENTS
South Vietnam: Situation report. (Page 1)
Israel - Arab States: no
evidence of an Israeli buildup for a major military
strike. (Page 2)
UK: An unexpectedly high trade deficit for Decem-
5er has brought increased pressure on the pound.
(Page 3)
Austria-Italy: The Austrians are optimistic that
a settlement of the South Tyrol problem may soon
be reached. (Page 5)
Nordic Economic Union: An economic union of Nor-
way, Sweden, Denmark, and Finland has been pro-
posed. (Page 6)
Colombia: A new struggle between the government
and la or leaders has broken out. (Page 7)
Kenya: Current efforts to oust noncitizen business-
men are not expected to damage the economy seriously.
(Page 8)
India-Iran: The Shah's visit to India apparently
was successful for both countries. (Page 9)
Rumania-USSR: CEMA meeting (Page 10)
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SOUTH VIETNAM
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C South Vietnam: Military action picked up
sharply in South Vietnam on 14-15 January.
Heavy Communist casualties were reported in
two clashes resulting from allied spoiling opera-
tions in the delta provinces of Kien Phong and Kien
Tuong along known routes of infiltration from Cam-
bodia. Allied losses in these engagements were
light; the Communists lost some 139 killed.
Another 122 enemy troops were killed in an
attempt to ambush a US convoy near Tay Ninh city.
US losses in the seven-hour battle were seven
killed and ten wounded, along with one armored
personnel carrier destroyed and two trucks damaged.
Communist mortar and rocket crews scored some
success on 14-15 January with two attacks on widely
separated allied bases. The US 9th Infantry Divi-
sion base at Dong Tam in the northern delta sus-
tained its third shelling in less than a week.
Some 20 120-mm. mortar rounds struck the installa-
tion, resulting in US losses of three killed, 28
wounded, and 15 vehicles damaged or destroyed. in
the western highlands, Pleiku Air Base was hit by
ten rounds of rocket fire, which caused the loss
of more than 100,000 gallons of aviation fuel.
(Map)
16 Jan 69 Central Intelligence Bulletin
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a.s+.a 1..3 yucll
buildup for a major military strike.
I no
ot a buildup or mobilization. There
have been some recent training maneuvers on the
West Bank, and Israeli military spokesmen said
there had been a routine partial callup of reserves
for training. The US attache suggests that this
selective callup may itself have been a reaction
to the high state of the Arab alert. On 13 Jan-
uary, an advanced stage of defensive readiness
was evident at one of Israel's principal military
airfields.
Prime Minister Eshkol made it clear in a
speech in the Knesset on 14 January that Israel
will continue to defend itself against Arab ter-
rorist attacks. He warned Lebanon and other Arab
states again that they would not be "immune" if
they allowed terrorists to operate from their
soil against Israel.
The Arab states remain extremely uneasy over
Israeli military intentions, and Cairo continues
to give prominent coverage in its press and radio
to reports of an imminent Israeli attack. Leba-
nese leaders are particularly nervous. Former
president Shihab recently told US officials that
the terrorist issue bedeviled efforts to form a
cabinet, and he again expressed fears that the
issue would result in Muslim-Christian conflict.
16 Jan 69
Israel - Arab States:
Central Intelligence Bulletin
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UK: An unexpectedly high trade deficit for
December has brought increased pressure against
the pound and contributed to a rise in gold prices
to record levels in London.
Although the December returns do not by them-
selves suggest any adverse trend, they underscore
the increasing urgency of a substantial improve-
ment in the UK's trade performance to reduce spec-
ulative pressures on sterling.
After allowing for seasonal influences, the
UK's merchandise trade deficit amounted to $132
million in December, compared with the remarkably
small deficit of $38 million in November.
The key factor in last month's returns was a
decline in exports, which has been ascribed to
temporary factors such as an extended holiday pe-
riod and fall offs in exports of ships, aircraft,
and diamonds. Merchandise imports, however, in-
creased only very slightly despite above average
deliveries of ships ordered by the British.
Measured in dollar terms, the over-all 1968
deficit in merchandise trade of about $1.7 billion
represents a slight improvement over the results
for 1967. A further improvement in the British
trade picture is likely during the first half of
1969 as the import-deposit requirement takes effect.
Much less certain is the prospect for the
second half of the year, however, when the regu-
lations governing import-deposits and the agree-
ments for wage restraint expire. In particular,
improvements in trade will become increasingly
difficult if the government's wage policy erodes
further and London thus continues to lose the
competitive edge derived from devaluation.
I
16 Jan 69 Central Intelligence Bulletin 3
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SECRET
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SECRET
Austrians See Settlement with Italy over Tyrol Dispute
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SECRET
Austria-Italy: The Austrians are optimistic
that a settlement may soon be reached with Italy
over the long-disputed South Tyrol.
Technical experts of both countries have ham-
mered out an agreement providing guarantees for
the German-speaking population of this northern
Italian area. Austria's foreign minister has said
that he believes another meeting of experts later
this month will complete work on the agreement and
on a timetable for carrying it out.
Chances for amicable settlement in the past
have been reduced by the nationalist sentiments
of many South Tyrolese and by terrorist activity-
against Italian civil and military installations
in the region. The Austrian Socialists have been
reluctant to approve any agreement that does not
have the full support of the Tyrolese.
Vienna's current optimism stems from an at-
mosphere improved by its efforts to reduce terror-
ism and from a recent agreement among South Tyro-
lese leaders that the proposed settlement should
be supported. Vienna also has decided not to press
for international "anchoring" of the agreement,
which the Austrian Socialists have been advocat-
ing, but to accept, instead, the Italian position
that a bilateral agreement is sufficient.
Italy's Foreign Minister Nenni has publicly
recommended an agreement, and no doubt believes a
settlement would give his ministry an auspicious
start. Vienna hopes that Nenni's status as a
Socialist leader will further undercut any opposi-
tion to the agreement by the Austrian Socialists.
I(Map) )
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Nordic Economic Union: An economic union of
Norway, Sweden, Denmark, and Finland has been pro-
posed in a report released in the four countries'
capitals.
The union, which would operate within the frame-
work of the European Free Trade Association (EFTA),
would seek to harmonize trade and economic policies
and establish a customs union and joint administra-
tive institutions. The senior civil servants who
drafted the report avoided detailed proposals con-
cerning a common agricultural policy.
The recommendations have met with a varied re-
action in the four countries. The Danes, disap-
pointed over their stalemated application for Com-
mon Market membership, regard the Nordic proposals
as overly modest and favor a tighter union. The
Swedes and Finns back the proposed looser coopera-
tion. They estimate that for the short term such
an arrangement would be easier to bring about and
would forestall individual Nordic countries from
making separate arrangements with the European
Communities. Norwegian economic interest groups
are reluctant to approve the idea of the union,
but have decided to go along for the present to
test its feasibility.
Although the proposed union would be limited
to the economic field, questions have been raised
in some Norwegian official circles over the impli-
cations for Oslo's foreign and security policies
including its NATO obligations.
The prime ministers of the four countries will
take up the proposals on 18-19 January, and the
interparliamentary Nordic Council will discuss
them when it meets in March.
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Colombia: President Lleras has accused labor
leaders of attempting a revolution by calling for
a general strike next week.
The strike is sponsored by a union front rep-
resenting many political viewpoints. Top non-Com-
munist labor leaders are cooperating with Com-
munists, in part because of their deepening resent-
ment against Lleras' hard line toward organized
labor. They also believe they must protect their
positions against Communist efforts to capitalize
on public opposition to recent hikes in bus fares
and utility rates.
Apparently hoping to avoid a showdown, Lleras
has suspended the rate increases in Cali, the
southern industrial city where violent protest
demonstrations last week led the government to
impose martial law. In a speech on 13 January,
he was less caustic toward organized labor than
in his other recent comments, and he has instructed
the labor minister to negotiate settlements to
split the strike front. Lleras emphasized, how-
ever, that the government will not tolerate con-
tinuing public disorder and implied, that he holds
the Communists responsible.
C Violence broke out again on 14 January in Cali
and may recur when students begin classes on 20 Jan-
uary.]Troops have been told to prepare to move
quick y into the cities to maintain order if nec-
essary, as was done in Cali.
Central Intelligence Bulletin
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Kenya: The current phase of the drive to
oust noncitizen businessmen is not expected to have
a major adverse impact on the economy, although
some distribution problems may arise in the com-
mercial sector.
On 1 January the government notified several
hundred Asian shopkeepers that they would not be
issued trade licenses this year, but that they
would be given up to six months to settle their
affairs. The overwhelming number of those affected
are British rather than Kenyan citizens, and have
been the target of Africanization measures for
some time. For the most part they are small rural
traders who own stalls that Africans can easily
take over and operate successfully.
Africanization measures stimulated the exodus
from Kenya of several thousand Asians last year.
Little damage to the economy resulted, however,
mainly because the government allowed skilled
Asians to remain. The government can regulate
the pace of Africanization by withdrawing measures
if the economy takes a serious downturn or by
hardening its line if no adverse effects develop.
16 Jan 69 Central Intelligence Bulletin
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India-Iran: The Shah's recent state visit to
India was successful from the Indian viewpoint and
probably satisfactory to the Iranians.
The 12-day visit, which included talks in New
Delhi and a week-long tour of India, topped off a
series of high-level Indo-Iranian exchanges over
the last year. Since early 1967 the Indians have
been cultivating Iran in hopes of reducing the
close Iranian-Pakistani relationship, and they
gave the Shah the full red carpet treatment. They
chose to play down Iran's policy of support for
the UN resolutions on Kashmir and Iranian member-
ship in CENTO--both major irritants in their cool
relations in the past.
The Shah's strong desire to play the peace-
maker in South Asia was gently rebuffed by Mrs.
Gandhi, who insists that India's problems with
Pakistan must be settled on a strictly bilateral
basis. The Indians did, however, risk damaging
their highly valued relations with the Arabs by
recognizing that "preservation of peace and sta-
bility in the Persian Gulf is the exclusive re-
sponsibility of the littoral states." The Shah,
in turn, acknowledged in the final communique
that bilateral negotiations are the pre-eminent
means for settling issues between states. The
Shah's performance throughout the visit and his
approach to world and regional problems reportedly
impressed the Indians.
On the economic front, it was agreed that
"immense" possibilities exist for closer collab-
oration, especially in the exploitation of petro-
chemicals. A joint ministerial commission on
economic, trade, and technical cooperation is to
be created.
Central Intelligence Bulletin 9
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NOTE
Rumania-USSR: Rumanian opposition to the
agenda of a summit meeting of the Council for Eco-
nomic Mutual Assistance (CEMA) has contributed to
the postponement of the conference until A ril,
"Pre-
iminary discussions will be held this month,
_
Bucharest
remains opposed to the supranational and integra-
tive proposals being advanced by Moscow and its
other allies.
summit meeting o the Warsaw Pact, reportedly
scheduled for this month.
Central Intelligence Bulletin
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