CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A020900030001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 14, 2016
• Document Release Date: June 19, 2003
• Sequence Number: 1
• Publication Date: January 6, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
State Dept. review completed
Secret
N2 042
6 January 1972
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No. 0005/72
6 January 1972
Central Intelligence Bulletin
LAOS: Intensified enemy attacks appear imminent in
Long Tieng sector. (Page 1)
SOUTH VIETNAM: Communists reportedly plan military
campaign in southern provinces. (Page 3)
MALTA-NATO: Britain is being pressed to reopen
talks with increased financial offer. (Page 5)
IRAN-IRAQ: Relations strained by expulsion of Iran-
ians from Iraq. (Page 7)
SINGAPORE-USSR: Singapore shipyard will refit sev-
eral Soviet merchant ships. (Page 8)
FINLAND: Formation of new government may take sev-
eral months. (Page 9)
USSR: Soviets buy sugar from non-Communist suppliers.
Page 10)
CHILE: Allende may announce personnel and policy
changes (Page 11)
INTERNATIONAL MONETARY DEVELOPMENTS: Outflow of
dollars smaller than expected (Page 11)
PERU: Measures to curb strikes (Page 12)
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LAOS: Plaine des Jarres Area
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C LAOS: Intensified enemy ground attacks in the
Long T nei g area appear imminent.
The government is continuing to redeploy its
forces around Long Tieng. Two more battalions from
northwest Laos arrived on 3 January and have moved
into defensive positions. Some increase in enemy
activity north of Luang Prabang and the continuing
threat of new attacks in south Laos will make it
difficult for the government.. to deploy additional
units to the Long Tieng area.
Additional facilities have been moved from the
Long Tieng Valley,, including some tactical naviga-
tion aids. US spotter planes are now operating
from the newly refurbished airstrip at Ban Son.
Lao Air Force T-28s are operating out of Vientiane,
a move that significantly reduces their time over
targets in the Long Tieng area.
6 Jan 72 Central Intelligence Bulletin
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THUA THIEN
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SOUTH VIETNAM: The communists may be preparing
for a fairly ambitious military and political cam-
paign in the southern provinces of the country, con-
sidering their current limited capabilities there.
A new directive from the Communists' COSVN
headquarters states that the campaign is scheduled
to peak in February,
In addition to countering tne gov-
ernments pacification program, the campaign is
said to aim at undermining President Nixon's trip
to China.
Forces under COSVN, which include most of
those in Cambodia and the southern half of South
Vietnam, reportedly are to strike hardest in prov-
inces near Saigon and in upper Military Region 4.
Significantly, however, the directive says that
targets will be chosen selectively, suggesting that
the enemy is well aware of his generally weak mili-
tary position in southern Vietnam. The directive
notes that Communist forces will subsequently have
to return to more routine operations, implicitly
acknowledging that the attacks are not expected to
change the security situation decisively.
The COSVN directive does not discuss attacks
planned for the central highlands or the area of
the Demilitarized Zone, two regions in the north-
ern half of the country where the Communists have
or are presently building their greatest offensive
capacity through infiltration and supply efforts.
This omission probably reflects the fact that
COSVN's tactical jurisdiction does not extend to
these areas and should not be construed as indi-
cating that the Communists will not attack there,
Available evidence still indicates that the strong-
est enemy thrusts in coming months are likely to
be made in the northern half of the country.
(continued)
6 Jan 72 Central Intelligence Bulletin 3
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a
if they are willing to take the casualties,
Communist forces nevertheless are capable of hitting
hard, largely for psychological impact, against a
limited number of carefully selected targets in the
southern COSVN region. Other reports have indicated
that Communist forces have been working steadily to
improve their position in the same target provinces
near Saigon mentioned in the report. The govern-
ment's defensive position in these provinces has
been weakened through allied withdrawals, but Sai-
gon is now taking steps to bolster its military
forces there.
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MALTA-NATO: Britain is being pressed in NATO
to reopen negotiations with Malta with an increased
financial offer.
At a special session of the North Atlantic
Council (NAC) on Tuesday, the Italians urged that
a hint be conveyed to Mintoff that the UK and NATO
could raise the current aid offer of about $26 mil-
lion. Rome would be willing to put up additional
cash, as would Bonn, if the UK and the US also do
so.
NATO Secretary General Luns supported the Ital-
ian position, expressing concern that Malta's loss
to the West would lead to more press allegations
about NATO's deteriorating military position. In
addition, the representative of NATO's military com-
mittee reported that the committee considered the
potential cost of relocation or replacement of the
facilities on Malta to be "significant" and suggested
that the allies weigh this factor in their decisions.
The British representative maintained strongly that
the best course now was to remain firm, but Luns
scheduled another NAC session for today and asked
that the representatives seek instructions from
their governments.
Meanwhile, the British continue to prepare for
withdrawal. Maltese civilians employed by the UK
have been given termination notices, and British
officials announced that the evacuation of all mil-
itary dependents, expected to begin Saturday, would
be completed by 15 January. Britain hopes that the
adverse economic effects of its withdrawal will
create enough disenchantment among Mintoff's sup-
porters to cause him to temper his demands, but at
least some British officials doubt that this strat-
egy will work. The deputy high commissioner in
Valletta told US officials on 3 January that he is
not certain that moderate members of the ruling
Labor Party have an effective influence on Mintoff.
(continued)
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SECRET
There are rumors of friction among Laborites i
but Mintoff appears
to nave a solid grip on e Labor Party and the op-
position's attacks have been unavailing.
A dispute has developed over control of the
facilities at Luqa, Malta's principal airfield.
Earlier this week, Mintoff announced that a group
of technicians, who had arrived from Tripoli, were
going to help Maltese officials run the facilities
at Luga now operated by Royal Air Force (RAF) per-
sonnel. The British believe the technicians are
Egyptians. Subsequently, Valletta requested that
the UK turn over control of Luqa "as soon as possi-
ble." The British replied that they must remain in
charge of the airport until the withdrawal is com-
pleted. A British official in Valletta told US
diplomats that London is prepared to grant nominal
control of Luqa to the Maltese as long as the RAF
continues in de facto control.
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IRAN-IRAQ: Large-scale expulsions of Iranian
residents from Iraq are increasing tension between
Tehran and Baghdad.
Baghdad has reportedly expelled 60,000 Iranian
residents of Iraq, presumably in reaction to Tehran's
occupation of three Persian Gulf islands in late No-
vember. Some 30,000 were sent across the border on
29 and 30 December alone, according to press reports
and Iranian official sources. There were estimated
to be some 200,000 Persian-speaking residents before
the expulsions began. During a period of strained
relations in 1969, about 12,000 Iranians reportedly
were expelled.
Iranian Prime Minister Hoveyda canceled a
scheduled visit to the US next week ostensibly be-
cause of the potential seriousness of the situation.
Except for this, Iranian reaction has been rela-
tively restrained. Religious leaders have called
for a half-day strike today to protest alleged
Iraqi persecution of Shiite religious leaders and
their followers. The government has brought the
situation before the UN, but has refrained from re-
questing a meeting of the Security Council for the
time being.
Kurds, as well as funding and directing dissident
about
800 expellees have been identified as possible or
likely Iraqi agents. This could easily cause a
step-up in cross-border clandestine operations
against the Baathist regime in Baghdad. Such oper-
ations would probably include increased aid to the
and disgruntled Iraqis now in exile in Iran.
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SINGAPORE-USSR: An agreement has been reached
for Singapore to refit several Soviet merchant ships.
The government-owned Keppel Shipyard will re-
fit three ships of the Soviet Antarctic whaling
fleet at a total cost of over $1 million. Although
Soviet commercial ships in the past have undergone
minor repairs in Singapore's shipyards, this is the
first large-scale maintenance contract. The first
ship entered the yard on 24 December, and the other
vessels will arrive for refitting over the next two
months. The high amount of the contract probably
is due to the large quantity of sophisticated equip-
ment on board the vessels.
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FINLAND: It may take several. months to form a
new government following the national election on
2-3 January.
The balance of political power was not signif-
icantly changed by the election. The four parties
that made up the government that fell late last year
retained their eight-vote majority in parliament.
In a limited shift to the left, the Social Democrats
gained three seats, giving them more deputies than
their three non-socialist partners combined, and
strengthening their claim to take the post of prime
minister away from the Center Party.
The issue which brought down the last govern-
ment--agricultural support levels-.-remains to be re-
solved, however, and other difficult economic policy
decisions should be made this month and next to re-
new Finland's economic stabilization program. With
the elections showing so little shift in voter sen-
timent, it remains to be seen whether the parties
have the will to compromise enough to negotiate a
government program.
There also remains the question of including
the Communists in the next government; they increased
their standing marginally. There is probably some
support for doing so on the grounds that this would
please the USSR and that the party is less of a
threat inside the government than out. The Commu-
nists, however, are badly split--a circumstance that
forced them to drop out of a previous government--
and with a fractious party congress looming in March
may themselves be in no position to make a decision.
A somewhat similar situation prevailed after
the 1970 elections, when after two months of party
wrangling President: Kekkonen appointed a non-polit-
ical government that ruled for two months. Finland
has had a non-political government since early No-
vember while the parties campaigned, and it could
be continued until political conditions change to
allow the parties to agree.
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USSR: A decline in the domestic sugar beet
harvest combined with reduced imports from Cuba and
rising commitments has led Moscow to buy sugar from
a number of non-Communist suppliers.
The Soviets have recently bought 450,000 tons
of Brazilian, Australian, and Caribbean sugar. In
addition, they have purchased 300,000 tons from
other unspecified countries. These deals apparently
will compensate in part for the fall-off in ship-
ments from Cuba last year, which are estimated at
about half of the 1970 record level of more than
three million tons.
The USSR's growing consumption requirements
and export commitments will reach more than 11 mil-
lion tons in the 1971/72 consumption year. The do-
mestic harvest last year, however, probably was be-
low average for the third year in a row. The So-
viets nevertheless are believed to have substantial
stocks of sugar which can be drawn down to some ex-
tent. Depending on the level of reserves that Mos-
cow wants to maintain, the Soviets may make addi-
tional purchases on the world market.
The recent contracts will add an estimated
$110-120 million to the USSR's hard currency require-
ments this year. Soviet purchases of sugar in turn
are exacerbating the USSR's shortage of foreign ex-
change by helping to drive world sugar prices to
their highest level in seven years, including a
doubling during the past six weeks.
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CHILE: President Allende is evidently planning
important personnel and policy changes to strengthen
his position. In a speech to be delivered within
the next few days, Allende will announce cabinet and
other official shifts, according to a well-informed
Santiago daily. Following an upsurge of opposition
activity, Allende's recent speeches reflect determi-
nation to take new initiatives. Simultaneously with
public challenges to his opponents, Allende and his
advisers appear to have been conducting backstage
bargaining with cooperative Christian Democrats and
influential dissident Radicals, possibly with a view
to bringing them into his administration.
INTERNATIONAL MONETARY DEVELOPMENTS: Since
the Smithsonian agreement, major foreign central
banks have sold only about $1.5 billion of the
estimated $20 billion worth of US dollars absorbed
during the currency speculation in 1971. Since 1
January there have been no net dollar outflows from
central banks, as foreign exchange markets have be-
come increasingly quiet and the major currencies
have moved above their respective intervention
rates. The outflow of dollars has been signifi-
cantly smaller than had been expected. Many cor-
porate financial managers who had, exchanged dollars
for stronger currencies during the currency up-
heaval are awaiting further developments in the
quest for an international economic settlement.
They are particularly wary of the possibility that
the US Congress may not be satisfied with the trade
concessions made by the EC, Japan, and Canada and,
consequently, will not pass legislation permitting
devaluation of the dollar against. gold. In addi-
tion, higher interest rates in most other major
countries are preventing a substantial return of
dollars to the US.
(continued)
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PERU: The government has issued two new de-
crees designed to curb damaging miners' strikes.
All labor contract disputes lasting more than 30
days are to be referred to the Ministry of Labor
for settlement and, beginning in 1973, these gov-
ernment-imposed contracts will be in effect for a
minimum of two years. These measures may have been
precipitated by a violent strike last November at
Cerro de Pasco's Cobriza mine, where five workers
were killed. Moreover, strikes by the Communist-
controlled mining unions have cost Peru about $80
million in export earnings and $20 million in tax
revenues since January 1970.
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