CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A020400080001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 14, 2016
• Document Release Date: March 21, 2003
• Sequence Number: 1
• Publication Date: November 9, 1971
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N?_ 042
9 November 1971
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No. 0268/71
9 November 1971
Central Intelligence Bulletin
PAKISTAN: East Pakistan guerrilla activities are
eroding morale of some West Pakistani personnel.
(Page 1)
ISRAEL: Cabinet considers defense budget. (Page 4)
IAEA-EURATOM: Talks on nuclear safeguards begin.
(Page
GUATEMALA: Government widens campaign against
Communists to deal with crime problem. (Page 6)
EAST GERMANY - WEST GERMANY: Bonn lifts ban on
steel imports. Page
ALGERIA: Boumediene's economic austerity heightens
discontent. (Page 8)
COMMUNIST CHINA - JAPAN: Chou En-tai on Taiwan
question (Page 1 ) -
JAPAN: Business delegation to Peking (Page 10)
CUBA-CHILE-PERU: Castro's trip (Page 11)
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Saidpur
H U T A N
?
to Barisal
0Chandpdr
Chittagong*
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PAKISTAN: Widespread guerrilla activity in
East Pakistan is beginning to erode the morale and
confidence of some West Pakistani personnel serving
in the province.
I the Mukti
Bahini openly controls the rural areas of Barisal
and Patuakhali districts.
the Mukti Bahini is attempting to elim-
inate ra ical leftist guerrilla bands in these
districts and possi_bl in Pabna and Jessore dis-
tricts as well, and there have been several
clashes.
The guerrillas have driven police and mili-
tiamen from the Kishorganj area, and although the
army still moves through the area, the Mukti Bahini
is in effective controlF -1
There are still frequent bombings in Dacca
and Chittagong. A member of the Provincial Assembly
was assassinated near Dacca on 7 :November, and ear-
lier two assembly candidates were badly wounded in
Chittagong. In Dacca so far this month there have
been three bank robberies attributed to the Mukti
Bahini.
In talking with Pakistani Army officers
received the impression that those be ow
the top command level are increasingly skeptical
that retaining East Pakistan is worth the effort
and the risk.
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ISRAEL: Defense Minister Dayan's budget re-
quest for the fiscal year beginning 1 April 1972
has been referred for intensive scrutiny to a
special ministerial committee headed by Prime Min-
ister Meir.
By taking this action, both Dayan and his
principal political antagonist, Finance Minister
Sapir, may hope to escape any personal onus that
could stem either from a cut that would weaken
Israel's defense posture or from a large defense
authorization that would intensify the need for
economies elsewhere. The committee approach also
serves to raise the budget question above the long-
time personal rivalry between Dayan and Sapir.
Dayan has requested $1.4 billion for his min-
istry. This amount, however, is reportedly $120
million less than Dayan previously had intended
to seek, and may merely represent an increase over
the current year's authorization sufficient to
offset the price rises resulting from domestic in-
flation and the devaluation of last August. Sapir
has conceded that defense-related imports should
not be reduced below $830 million, their approxi-
mate level for the last two years. Hence, even
moderate cuts in the total defense request would
appear to require sharp reductions in in-country
defense expenditures.
The government is under intense pressure to
increase spending, particularly for social welfare
measures, and to hold the line on taxes. Meanwhile,
the economy is overheated with prices rising at an
annual rate of about ten percent. Sapir has won
cabinet approval for a ceiling on spending just
under $4 billion, a level likely to leave domestic
outlays above tax revenues. With total budget re-
quests reportedly approaching $5 billion, it is
clear that sizable cuts must be made and that the
authorization of $1.4 billion for defense would
necessitate very sharp cutbacks elsewhere in the
government.
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IAEA-EURATOM: Representatives of the Interna-
tional Atomic Energy Agency (IAEA) and EURATOM meet
today in Vienna to begin negotiations on the nuclear
safeguards agreement required by the Nonprolifera-
tion Treaty (NPT) .
The NPT charges the IAEA with enforcing the ban
on diversion of fissionable material from peaceful
uses in the adhering nonnuclear-weapon states. These
states may negotiate with the IAEA either singly or
in a group; however, EURATOM is the only regional
entity with a safeguards system. Although the NPT
entered into force in March 1970, both sides have
had difficulty starting negotiations. IAEA members
finally agreed on safeguards guidelines last spring.
In September the six states which at present com-
prise EURATOM approved a mandate to begin negotia-
tions, having agreed that there would be no IAEA in-
spection of the nuclear activities of France, the
only nuclear-weapon state in EURATOM and its only
nonsignatory of the NPT.
The first round of talks is expected to last
for several days, with a second round likely to be
held in Brussels before January. Both sides are ap-
proaching the negotiations in an optimistic mood and
do not foresee major obstacles that would prevent
eventual agreement. There may be problems, however,
over the IAEA's right to verify international trans-
fers of fissionable material. within EURATOM, espe-
cially between any of the Five and France. The
EURATOM negotiators may also want less frequent IAEA
inspections than the IAEA safeguards committee con-
siders acceptable.
Conclusion of an IAEA-EURATOM accord is essen-
tial if an erosion of support for the NPT is to he
avoided. The nonnuclear-weapon states in EURATOM
will submit the treaty to their parliaments after
the agreement with. the IAEA is reached. Japan, a
key nonnuclear-weapon state that has signed but not
ratified the NPT, has said that it will consider
ratification only after the terms of an IAEA-EURATOM
accord are known.
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GUATEMALA: The government's ongoing campaign
against the Communist insurgency is being widened
to deal with the severe crime problem.
in recent months the law and order image of
President Arana has been jeopardized more by the
high crime rate in Guatemala than by the terrorist
activities of the extreme left. The administration,
under increasing pressure to lift the year-old state
of siege, finally is giving priority to crime fight-
ing and is now using army troops and vehicles armed
with machine guns to supplement normal police pa-
trols.
This ostentatious effort, which commits govern-
ment prestige and raises popular expectations for
quick results, is unlikely to succeed. It might
erode confidence in Arana by graphically demonstrat-
ing the government's ineptness. If this is accom-
panied by continued demands for the restoration of
constitutional guarantees, government frustration
might lead to the adoption of an increasingly extra-
legal approach to criminals and retard the halting
steps away from such a policy with regard to left-
ists.
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EAST GERMANY -- WEST GERMANY: Trade relations
are not likely to improve desp to Bonn's lifting
of the ban on steel imports from East Germany.
West Germany :Last August suspended steel im-
ports from East Germany, except those under exist-
ing contracts, in response to flagrant attempts by
Pankow to transship Bulgarian and Romanian steel
illegally into West Germany. Although Pankow's
action was motivated ostensibly by a desire to
avoid default on its contracts with West German
customers despite steel shortages, it violated the
tariff and tax-free provisions of the interzonal
trade (IZT) agreement and the special inter-German
trade provisions of the European Community (EC)
treaties. Bonn acted swiftly to ensure compliance
with the IZT agreement, in part because of earlier
complaints from Bonn's EC partners about violations.
The FRG has cut by one half the quotas for
1972 steel imports from the GDR, apparently in
response to exaggerated complaints by West German
steel producers that these imports are aggravating
their financial troubles. This action, however,
fits in with the "tit-for-tat" nature of bilateral
trade relations and is not likely to improve the
atmosphere.
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ALGERIA: Boumediene's recent call for "more
austerity" has heightened discontent.
Ever since Boumediene seized power in mid-1965,
the economic austerity he imposed has become more
onerous. Wages have remained static, unemployment
high, prices controlled, and consumer goods scarce.
A handful of enterprising officials, however, man-
aged to prosper, and corruption has flourished in
some ministries in spite of continuing efforts to
root it out.
Controls were tightened when the ambitious
four-year industrialization plan was launched in
1970. They were expanded even further last spring
by the boycott of French oil companies, which re-
taliated against Algerian nationalization of 51
percent of their assets by cutting off imports of
Algerian crude oil.
A marked rise in discontent, particularly
among the bureaucracy and the ministers themselves,
was touched off last month when Boumediene bluntly
warned that austerity for the urban consumer would
continue. Addressing an audience on 19 October in
a depressed area, Boumediene stated that the urban-
rural imbalance and the overriding priority of in-
dustrialization "demand new sacrifices, not on the
part of the disinherited masses but on the part of
those who profit from their superior standing."
Boumediene's remarks have stirred considerable
controversy even though he has since amplified and
moderated them. Many members of the government
argue that the people will not accept his brand of
"austerity" and that his economic policies are not
only too rigidly applied but are paving the way
for increasingly dangerous popular discontent.
Boumediene
faces a serious pro lem in controlling some members
of his government.1 11
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I consider his
increasing rigidity dangerous for Algeria's politi-
cal future. The mutual hostility of these critics,
however, has thus far prevented their collaboration
in any attempt to remove him.F_
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NOTES
COMMUNIST CHINA - JAPAN: China's continuing
concern with the T wai an question was expressed by
Chou En-lai in a recent interview with Japanese
newsmen: Chou took a forceful line against alleged
official Japanese involvement with the dissident
Taiwan Independence Movement, emphasizing that this
involvement represented the "biggest obstacle" to
Sino-Japanese friendship. He added that improved
state relations would be impossible so long as
Tokyo continued to sanction the movement's activi-
ties in Japan. In the aftermath of Taipei's ex-
pulsion from the UN last month, Peking has given
urgent attention to forestalling the possibility
that Japan or the US might attempt to build up the
movement in order to foster a sovereign state on
Taiwan free from mainland control.
JAPAN: A group of prominent Japanese business
leaders will leave for Peking on 12 November to
explore ways of establishing channels of communica-
tion in the absence of formal diplomatic relations.
The mission is of particular significance because
it represents the major business and financial in-
terests in Japan; all of its members have intimate
connections with the ruling Liberal Democratic
Party. While the delegation will have no formal
agenda and is traveling in an unofficial capacity,
the results of its soundings undoubtedly will be
conveyed directly to Prime Minister Sato and should
play a major role in the government's current re-
assessment of its China policy. The members of
the mission hope to maintain their economic ties
with Taiwan while expanding trade with the main-
land.
(continued)
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CUBA-CHILE-PERU: Havana's decision to publicize
the details of Fidel Castro's arrival in Chile prob-
ably stems from a desire to reap the greatest prop-
aganda advantage from the outset of the visit, al-
though the degree of real enthusiasm among Chileans
for it remains uncertain. According to official
announcements from Havana and Santiago, Castro will
n a vance party of security officials, headed by
Cuba's chief of protocol, arrived in Chile on 5
November. Castro will probably meet Peru's Presi-
dent when the Cuban airliner stops briefly in Lima
for servicing.
9 Nov 71. Central Intelligence Bulletin
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SecraA
Secret
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