CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A019300020001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 14, 2016
• Document Release Date: June 10, 2003
• Sequence Number: 1
• Publication Date: June 14, 1971
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N?_ 040
State Dept. review completed
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No. 0141/71
14 June 1971
Central Intelligence Bulletin
CONTENTS
LAOS: The Bolovens Plateau area was quiet as both
sides recovered from last week's heavy fighting.
(Page 3)
LATIN AMERICA: The "200-mile club" could imperil
preparatory work for the 1973 Law of the Sea con-
ference. (Page 6)
CENTRAL AMERICA: Honduras' new president has adopted
a tong stan on regional problems. (Page 8)
LIBYA: Premier Qadhafi's latest speech has re-
emphiasized Libya's political independence. (Page 9)
JAPAN: World Bank bonds (Page 11)
INDONESIA EASTERN EUROPE: Debt rescheduling
Page 1
CHILE-USSR: Oil plant plans (Page 12)
BELGIUM-US: Landing rights controversy (Page 12)
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Area of
maps
Government-held location
Communist-held location
VIETNAM
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LAOS: No major action was reported in the
Bolovens Plateau area over the weekend as both sides
evidently recover from last week's heavy fighting.
Several government units that had been cut off
filtered back to friendly lines, but no firm govern-
ment casualty figures have yet been reported. It is
not clear whether the effort to retake the central
portion of the Bolovens will now be postponed in-
definitely, although the Communists have also taken
heavy losses as improved weather has facilitated US
and Laotian air strikes.
In the central panhandle, there is some evidence
that additional North Vietnamese troops may be pull-
ing back from the Dong Hene area. Government ir-
regular forces are moving eastward, and some patrols
have moved into the outskirts of Dong Hene. Heavy
rains are hampering overland movement, however, and
it may be some time before government troops can
take additional advantage of the reduction of Commu-
nist troop strength along Route 9.
In north Laos, reinforcements have been moved
into the Bouam Long guerrilla base, which has been
under heavy pressure for several weeks. Vang Pao's
troops are still located on the southern portion of
the Plaine des Jarres and have encountered only
light enemy resistance. They continue to uncover
small enemy supply caches, but have not yet moved
toward their primary objective, the high around
just west of the Plaine.
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LATIN AMERICA: The territorial seas issue is
gaining currency in several South American capitals,
and the emerging Latin American position could im-
peril the preparatory work for the 1973 Law of the
Sea conference.
Brazil, a recent entrant to the 200-mile club,
is actively proselytizing for the 200-mile stand
throughout Latin America and has warned all foreign
fishing vessels to leave its claimed waters. it
hopes to forge a strong united front approach to
the scheduled 1973 conference. During a visit to
Brazil, Colombian Foreign Minister Vasquez signed a
communique that, without recognizing the 200-mile
claim, agreed that nations should defend their
rights in their respective jurisdictions. Vasquez,
in a later interview, also responded to press ac-
counts of the US Congress' decision to delay US
participation in the International Coffee Agreement
because of Brazil's recent claim. He noted--
correctly--that the action will only provoke Latin
American solidarity.
Uruguay has announced it is undertaking an in-
itiative to create an organization for the defense
of the 200-mile limits claimed by Argentina, Brazil,
and Uruguay. The proposed group would parallel the
South Pacific Commission, which Chile, Peru, and
Ecuador established in 1952 to coordinate their own
200-mile stand. Peruvian Foreign Minister Mercado
has already commented favorably on the Uruguayan
plan and indicated Peru will propose a mechanism
for permanent coordination between the two groups.
Reflecting the already strong views of the
Latin American 200-mile claimants, Chilean UN dele-
gate Zegers maintains his group will pose serious
problems for the superpowers at the July meeting
of the UN seabeds committee, which is making prep-
arations for the 1973 conference. He asserts that
if the Latin Americans are not permitted to chair
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the subcommittee charged with recommending terri-
torial waters limits, they will seek priority con-
sideration of an international maritime organiza-
tion, a concept that deeply troubles the USSR. More-
over, the US would be confronted with discussion of
"peaceful uses" of the ocean--a delicate subject
that includes intelligence-gathering activities.
The Latin Americans could thus promote a disruptive
July session that would lead to postponement of the
1973 conference, and thereby afford them more time
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CENTRAL AMERICA: The newly inaugurated presi-
dent of Honduras, Ramon Cruz, has adopted a tough
and seemingly inflexible stance on regional problems.
Cruz has stated categorically that he will not
consider Central American Common Market issues until
the border dispute with El Salvador is resolved.
Moreover, he has indicated his preference for an in-
ternational judicial settlement, possibly through
the OAS or the International Court of Justice,
rather than bilateral negotiations. Because El
Salvador has a weaker legal case, it is not enthu-
siastic about border discussions in general, however,
and would be opposed to international arbitration.
Past efforts to solve bilateral and Common
Market problems appear to have foundered because
too narrow an approach was taken and possible trade-
offs were thereby precluded. Cruz may be falling
into the same trap with his stress on a single issue
and on a "legal" rather than a "political" settle-
ment. Unless a new sense of realism is developed
soon, the beginnings of the Salvadoran election
campaign next month will further erode chances for
an agreement before 1972.
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LIBYA: Premier Qadhafi's latest speech, which
blaster great powers and Arab states alike, has re-
inforced Libya's independent political stance.
The speech on 11 June--the first anniversary
of the US evacuation of Wheelus Airbase--was tai-
lored to the local audience and directed against
US policies. Qadhafi raked up the well-worn threat
that relations cannot continue if the US "scorns
Arab interests" and pursues its policy of supplying
arms to Israel. A new and perhaps ominous note was
sounded by his reference to "the course of action"
that the Libyan people will want to take against
the US. To date, US interests--primarily oil com-
panies--have survived under Libya's strongly held
concept of nonalignment. As Qadhafi's sense of
impotence in Arab politics grows, however, his
mounting frustration may well find a convenient out-
let in some anti-US gesture.
The two positive aspects of the speech--the
offer of diplomatic recognition to Communist China
and the announcement of the future formation of the
Arab Socialist Union (ASU) as Libya's sole polit-
ical organization--fell somewhat flat. The back-
handed recognition of Communist China was cast in
uncomplimentary language and there is no evidence
of official contacts prior to the speech. Peking
radio reported the recognition offer without com-
ment, but the Chinese probably will take diplomatic
soundings now to discover what Libya has in mind.
The ASU, which Qadhafi had promised earlier as a
means to develop popular participation in policy-
making, presumably will be as much a rubber stamp
as its counterpart in Egypt.
The Premier also dealt harshly with the Soviet
Union, associating it with a potential threat of
imperialist domination of Arab countries and boast-
ing that only Soviet diplomatic personnel were resi-
dent in Libya. Libyan friendship with the USSR re-
mains dependent upon Moscow's dealing with Arab
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nations as equals, he said. Egypt was implicitly
criticized for its recent treaty with the USSR
which, Qadhafi intimated, commits Cairo to live
under Soviet influence.
Relations with the British might still be
worked out, Qadhafi said, if they withdraw quickly
from the Persian Gulf and settle the current arms
contracts squabble with Libya. France alone of the
great powers was not mentioned. Lesser Arab states--
especially Jordan--were castigated for their laxness
in pursuing the Libyan goal of pan-Arab unity.
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JAPAN: The government has agreed that World
Bank bonds worth $30 million may be sold in the
Tokyo money market for the first time. In addition,
Japan soon will make a direct $20-million loan to
the bank, bringing such extensions to the bank dur-
ing the. past two years to nearly $600 million.
These transactions increase Japan's capital out-
flows, thereby somewhat relieving foreign pressure
to reduce balance-of-payments surpluses without re-
sorting to less popular trade liberalization meas-
ures or revaluation of the yen.
INDONESIA EASTERN EUROPE: Indonesian Foreign
Minister Ma .ik as successful-ly` concluded agreements,
mainly on Indonesia's terms, to reschedule debt pay-
ments totaling over $240 million to East Germany,
Hungary, Czechoslovakia, and Poland. Although terms
have not been made known in every case, it is likely
that in all cases they conform to the agreement al-
ready arrived at with the USSR, which accounts for
more than a third of the $1.6 billion owed in total
principal. This agreement provides for a 30-year
repayment period for principal covering all short-,
medium-, and long-term debt, and repayment of con-
tractual interest over a 15-year period beginning
in 1985. The East European willingness to accept
Djakarta's terms presumably was based on the realiza-
tion that payment on Indonesia's terms is better
than no payment at all.
(continued)
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CHILE-USSR: The Chilean National Petroleum
Enterprise (SNAP) is going ahead with plans to build
a lubricating base oil plant financed largely by a
long-standing $42-million Soviet credit. ENAP plan-
ning and engineering specialists.are now in the USSR
discussing the project, and a Soviet group is sched-
uled to visit Chile in the near future to begin a
feasibility study. The plant, which will take two
to three years to build, will be Chile's first for
the manufacture of lubricating base oils. Such base
oils are currently imported into Chile by US com-
panies for formulation into finished lubricants i
their own plants. F77 I
BELGIUM-US: The long-smoldering Belgian re-
sentment over unwillingness of the US to grant
landing rights in Chicago to Sabena Airlines has
finally culminated in a retaliatory move. Belgium's
Ministry of Communications announced the abrogation,
beginning in October 1972, of the civil air agree-
ment that permits reciprocal landing rights in Brus-
sels and New York for airlines of the two countries.
Although partially designed to assuage domestic
criticism of governmental inaction, the Belgian tac-
tic probably aims mainly at providing leverage for
a change of US policy.
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