CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A020400110001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 20, 2016
• Document Release Date: November 8, 2006
• Sequence Number: 1
• Publication Date: November 12, 1971
• Content Type: REPORT

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Secret
DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
State Dept. review completed
Secret
N2 042
12 November 1971
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No. 0271/71
12 November 1971
Central Intellzgence Bulletin
INDIA: Policy in crisis with Pakistan will be re-
viewed after Mrs. Gandhi returns. (Page 1)
SOUTH VIETNAM: Official concern over possible re-
duction in US economic aid. (Page 2)
CHILE: Allende's proposal for a unicameral legisla-
ture. (Page 3)
USSR-CUBA: Soviet naval force operating in Gulf of
Mexico and Caribbean. (Page 7)
CEYLON: Government plans austerity measures.
(Page 9)
JAPAN - EASTERN EUROPE: Tokyo considers trade
credits. (Page 10)
EGYPT: Sadat's speech. (Page 11)
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INDIA: New Delhi's policy in the crisis with
Pakistan should become clearer after an intensive
government review of the situation following Prime
Minister Gandhi's scheduled return to India tomor-
row.
Mrs. Gandhi retains ultimate control over pol-
icy, and officials in New Delhi reportedly have
little information on their government's course of
action in the immediate future. Initial Indian re-
action to Mrs. Gandhi's talks with Western leaders,
however, is generally pessimistic that progress
toward a political accommodation between East and
West Pakistan has been achieved. 17- 1
Stepped-up military incidents along the India -
East Pakistan border and accelerated guerrilla op-
erations inside East Pakistan have increased ten-
sion on the subcontinent during Mrs. Gandhi's three-
week absence. In Bonn, the final stop on her West-
ern tour, Mrs. Gandhi repeated her determination
to send the refugees back to Pakistan and again im-
plied that military force may be the only feasible
means of accomiplishina this. 7777 1
Central Intelligence Bulletin
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SOUTH VIETNAM: The possibility of cuts in US
economic aid has worried many Vietnamese despite
reassurances from some Saigon officials.
The US Senate defeat of the foreign aid bill
in late October has drawn increased calls for self-
reliance from some Vietnamese who long have resented
the country's great dependence on American support.
Informed Vietnamese aware of the need for US eco-
nomic backing, however, have been more prone to
read the Senate action as another sign of consider-
able support in the US for an end to American in-
volvement in Vietnam regardless of the consequences.
General uncertainty over the aid question
helped spur a rise in prices in Saigon during the
week. Some militant opponents of President Thieu
are trying to use the aid issue to attack the gov-
ernment, charging that it brings into question
Thieu's over-all policy on the war.
Most government officials have taken a fairly
calm and confident line on the aid question in
public. Last week Minister of Economy Ngoc said
he was certain aid would be restored. In more re-
cent statements, however, Ngoc reportedly warned
that some belt-tightening was in order. In private
conversations with members of the US Mission, Viet-
namese officials have expressed considerable anxiety
over the developments and some of their concern has
been reflected in the pro-government press.
In his "state of the union" address set for
Monday, President Thieu is likely to try to reassure
the country concerning US support while at the same
time he will call for some sacrifices and austerity.
Thieu reportedly intends to concentrate on the econ-
omy in his speech, unveiling the major features of
his economic reform package. The reforms would be
designed to stimulate economic development and im-
prove the morale of government employees, but the
severity of the reforms could cause some popular
discontent over the short term.I
Central Intelligence Bulletin
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CHILE: President Allende reportedly has adopted
a strategy that improves his chance of restructuring
congress to be more responsive to his political pro-
grams.
the President
believes that he has so formulated his proposal for
creating a unicameral legislature that it might be
passed by the present congress. His plans include
an updated reallocation of seats and other features
that appear to be logical reforms for the congress
and its cumbersome procedures; they do not include
provisions granting broad powers to a "people's as-
sembly" that were part of his Popular Unity coali-
tion's platform. Among the items that make Allende's
proposal palatable to opposition legislators, it
protects senators' terms that extend to 1976.
even conservative National Party
members take exception to only minor aspects of the
bill.
I Ihe
has tailored the bill to win e support o op-
position Christian Democratic Party (PDC), the
largest both in Chile and the congress. He said that
the bill contains "adequate guarantees" that the PDC
could not reject, a reflection of his several suc-
cesses in co-opting support from the party by strat-
agems that eventually work to its disadvantage. PDC
legislators have said that they could stall a uni-
cameral assembly bill up to a year by the lengthy
amendment process, but Allende reportedly plans to
avoid that by demanding that the legislation be
passed as submitted or rejected.
If it is rejected, he intends to call a pleb-
iscite on the matter, but to cast it in terms of
capitalism versus socialism rather than between de-
mocracy and Marxism, on which the Christian Democrats
could make an effective campaign.
(continued)
Central Intelligence Bulletin
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Allende's remark that a plebiscite must be held
within six months because economic problems could
bring down his administration within a year appears
to be hyperbole to impress his listeners with the
need for belt tightening.
Central Intelligence Bulletin
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~lassau
v9 Ake
Cayman Islands
(U. K.)
NavassaI.
(U.S.)
CUBA
loo
Nautical Mllaa
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USSR-CUBA: Since leaving Havana three days
ago the Soviet naval task force has been operating
in the Gulf of Mexico and the Caribbean.
During their first day out of port the Kresta
and Kashin, along with the two F-class submarines,
conducted operations northwest of Havana with Cuban
Navy subchasers and aircraft. Following this, one
of the submarines went into the port of Mariel and
is still there.
Early this morning the ships were strung out
west of Havana after splitting into three groups fol-
lowing refueling operations on 11 November. Travel-
ing alone, the Kresta was some 100 nautical miles
southwest of Havana while the Kashin, in company
with the remaining submarine, was located farther
north in the Gulf` of Mexico. The tanker and a So-
viet intelligence collection ship that joined the
group on 10 November are now in the Caribbean.
If the ships follow the pattern of past naval
visits, they may call at Cienfuegos for a short
before heading into the Atlantic.
F77
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CEYLON: The government plans to initiate
limited austerity measures to ease its heavy wel-
fare burden.
In his budget speech to parliament on Wednes-
day, the finance minister proposed an increase in
the price of the weekly rice ration from two cents
to 17 cents. The price of flour and postage rates
also would be raised. For the first time a fee
would be charged for medical treatment and supplies.
Apparently to soften the public's reaction to the
austerity measures, Prime Minister Bandaranaike
announced that an extensive land-reform program
would be undertaken to redistribute income in favor
of the poor.
The proposed budget, however, includes an in-
crease of over 50 :percent in defense expenditures--
primarily to contain the insurgency problem--that
will heavily offset savings from the austerity
measures. Continuing restrictions on the private
sector, moreover, are likely to undermine the gov-
ernment's program contained in the five-year plan
unveiled this week to increase investment and
thereby accelerate economic growth.
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JAPAN - EASTERN 'EUROPE: Tokyo, facing increasing
resistance in its tra itional export markets, is try-
ing to expand sales to Eastern Europe by extending
liberal trade credits.
Japan intends to agree to Yugoslavia's request
for a $10-million trade credit. This is part of an
estimated $600 million worth of credits and debt re-
payment postponements Belgrade is attempting to nego-
tiate with Japan and the West. Tokyo also is exam-
ining possibilities for extending trade credits to
Romania, Bulgaria, and Hungary.
Government officials cite developments in US
relations with Moscow and Peking as the reason for
the move, but Tokyo probably is motivated by appre-
hension over recent US import restrictions as well
as West European moves to prevent a diversion of
Japanese exports from the US to Europe. The credits
probably would be used to finance sales of Japanese
machinery, steel, chemicals, and textiles. Japanese
exports to East European countries last year totaled
only $149 million, while imports amounted to $114
million.
12 Nov 71 Central Intelligence Bulletin
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C EGYPT: President Sadat, in his address to the
nation yesterday, closed no doors in the search for
a middle East settlement but held the US accountable
for the deadlocked negotiations.
In what was billed as a major policy statement,
Sadat for the most part hewed to well-known Egyptian
conditions for an accommodation with Israel. Among
other demands were the 1967 requirements for total
Israeli withdrawal from territory seized during the
war and the restoration of the rights of the Pales-
tinians. He again called for a clear linkage be-
tween an interim agreement and a comprehensive set-
tlement, a limited cease-fire of six months follow-
ing an interim agreement, and the occupation of the
east bank of the canal by Egyptian forces. As a
necessary first step, he said, the Israelis must
respond to Ambassador Jarrinq's request to state
their conditions for a final settlement.
Sadat dwelt at length on his rationale for the
failure, thus far, of US mediation efforts. He
sharply castigated Washington both for succumbing
to "Zionist pressure" from within the US and for
using Israel as a. "tool" for American interests in
the Middle East. In a clearly intended contrast,
he lauded the Soviet Union, "a friend in war and a
friend in peace," which "withheld no assistance to
strengthen our military ability."
Sadat's confidant, Muhammad. Haykal, had given
a preview of the address to the US interests section
in Cairo. Haykal, complaining bitterly that he
could not understand the current. US approach to the
negotiations, urged, as a favor to Sadat. a temper-
ate US response to the speech..
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