CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A022800020001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 14, 2016
• Document Release Date: June 26, 2003
• Sequence Number: 1
• Publication Date: September 16, 1972
• Content Type: REPORT

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D
DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N2 042
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16 September 1972
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No. 0223/72
16 September 1972
Central Intelligence Bulletin
VIETNAM: Government forces claim victory in Quang
Tri. (Page 1)
CHINA: Campaign to discredit Lin Piao enters new
phase. (Page 2)
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YUGOSLAVIA: Foreign trade is strong but inflation
continues. (Page 5)
ALGERIA-USSR: President Boumediene to visit Moscow.
(Page 6)
MEXICO: More terrorist activity feared (Page 7)
UK: Trade recovery likely (Page 7)
GHANA: Greater fiscal responsibility (Page 8)
CHILE - EAST GERMANY: Pankow extends credits (Page 8)
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CITADEL.
-Gov*q ent fo rces-recaptt re
Base Area'4iO.
..Quan Loi
An Loc
Tien
Phuoc
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VIETNAM: South Vietnamese Marines claim to
have gained control of the citadel in Quang Tr.i City.
At least two Marine battalions are inside the cita-
del and an enemy command post for defense of the
fortress has been overrun. Fighting outside the
citadel was less intense, but the Communists have
stepped up their artillery attacks against Marine
and Ranger positions in the city's southern and
northern sectors.
Fighting was light in the other four provinces
of Military Region (MR) 1 on 15 September, although
the Communists are still trying to expand their
newly won footholds in the coastal lowlands.
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ern delta, and in Dinh Tuong Province where the
Communists already have amassed sizable forces in
In the southern half of the country, fighting
picked up somewhat in the An Loc area where govern-
ment troops are trying to recapture the city's
airport. Several sharp engagements have been fought
in this sector in recent days, and there are indi-
cations that the enemy may soon offer more determined
resistance.
Sharp contacts continued in the delta, with
enemy forces maintaining pressure against government
outposts close to supply and infiltration corridors.
Most of the action on 15 September was near the Cam-
bodian border in Chau Doc Province, through which
the enemy has been infiltrating units into the south-
Base Area 470.
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CHINA: The ongoing campaign to discredit for-
mer defense minister Lin Piao has entered a new
phase that appears to have as much current as his-
torical significance.
The new round was kicked off in August by an
authoritative article in the party theoretical jour-
nal, Red Flag. While calling for continued vigilance
against "class enemies," the article asserted that
intraparty strife will inevitably surface every few
years but that these periods of chaos are always
followed by order. The message in Red Flag and in
more recent provincial broadcasts seems to be that
the excesses of the Cultural Revolution, now being
blamed on Lin, are a thing of the past and that the
current struggle at the top will not be allowed to
disrupt life throughout the country.
These attempts to reassure jittery cadres, who
have been braced for another purge during the year
since Lin's demise, are falling short. The current
campaign itself is a double-edged sword, requiring
participants not only to expose Lin's misdeeds but
to examine their own political attitudes. Cadres,
perplexed that the anti-Lin campaign has continued
so long after Lin's downfall, apparently are inter-
preting the prolonged denunciation of Lin as a sign
that more heads will roll. Indeed, the regime's
failure to wrap up the anti-Lin drive has given rise
to grass roots speculation on the fate of a number
of provincial leaders. In recent weeks, party bosses
of three provinces in east China have been rumored
to be under arrest.
These and other rumors may not necessarily be
true, but local cadres seem convinced that the con-
flict among the top leadership has not ended with
Lin's downfall, and the new phase of the anti-Lin
campaign is likelv to fan their fears.
16 Sep 72
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YUGOSLAVIA: The strong performance of the for-
eign trade is continuing, but Belgrade is
having less success coping with inflation..
The government's policy of stimulating exports
and restricting imports has helped to reduce Yugo-
slavia's chronic trade deficit. Exports have cov-
ered more than 70 percent of imports so far this
year, in contrast to less than one half of imports
last year. The continued growth in earnings from
tourism and remittances from workers abroad has led
the National Bank Governor to predict that Yugoslavia
will realize a current account surplus this year for
the first time since 1965.
On the domestic front, stabilization efforts
are meeting with less success. The federal govern-
ment's inability to control spending at the republic
level, coupled with strong increases in personal in-
comes and the money supply, has fueled the persist-
ent inflationary trend. Despite a price freeze that
was in effect from November 1971 through March 1972,
prices probably will rise by almost 15 percent this
year. In the past, large price increases have
brought about worker demands for another round of
wage increases.. _
Largely as a result of the government's restric-
tions on imports, some enterprises are experiencing
shortages in supplies of raw materials which, in
turn, may slow economic growth. If the shortages
persist, the government's export drive may be threat-
ened in the latter part of 1972 and early next year.
In addition, larger than normal imports of wheat,
corn, and vegetable oil will be necessary to s
ment the mediocre 1972 harvest.
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ALGERIA-USSR: President Boumediene reportedly
has accepted an invitation to visit the USSR some-
time during November and he may also travel to East-
ern Europe.
Boumediene would like to engage in serious ne-
gotiations for more favorable terms for Soviet aid.
To impress this point on the Soviets, he is sending
Minister of State Cherif Belkacem to Moscow on 2
October for eight days of preliminary talks.
Belkacem, who is also president of the Soviet-Al-
gerian Friendship Society, has been instructed to
grant a Soviet request to stage a film and graphic
arts exhibit in Algeria this fall.
The major purpose of the President's travels
is to obtain economic aid without making any major
concessions. Also important is Boumediene's appar-
ent need to bolster his image at home as an influ-
ential international figure and thereby divert ub-
lic attention away-] from domestic problems.
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NOTES
CMEXICO: Security officials fear that more
bombs will be exploded in outlying sections of the
capital today while President Echeverria reviews
the Independence Day parade in the main plaza. No
particular group has yet claimed credit for the bombs
that rocked downtown Mexico City yesterday
Meanwhile, the army
is eeping a wary eye on Guerrero State where Lucio
Cabanas and his guerrillas are expected to attempt
another "spectacular" sometime this weekend. Two
army patrols have been ambushed in recent weeks,
and there have been rumors that Cabanas might
to occupy an urban er in a show of force.
* * *
UK: The change in Britain's trade position
from a surplus in July to a near-record $473-million
deficit in August reflects both the dock strike and
statistical aberrations. Most of the deficit re-
sults from customs reporting procedures that under-
stated exports. The trade account should improve
appreciably in coming months as the backlog of ex-
port goods from the strike is reduced. It will also
benefit from the drop in the value of sterling since
th
e currency was floated in late June.
(continued)
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GHANA: Accra's budget statement for the fiscal
year endzng in June 1973 calls for a $34-million sur-
plus to slow inflation, but this may not be possible
to achieve without foreign aid. The budget appar-
ently incorporates suggestions made by World Bank
officials and is evidence of Ghana's intention to
pursue greater fiscal responsibility. This could
open the door to constructive consultation between
Accra and its foreign creditors and donors regard-
ing cooperative efforts to resolve the nation's for-
eign debt problems and meet its economic development
needs. Ghana's Western creditors have been awaiting
the budget statement because it will play a signifi-
cant part in creditor discussions set or early Oc-
tober in London. F77 I
CHILE - EAST GERMANY: Some features of East
Germany's first credit extensions to Chile should
be particularly welcome to Santiago, which is ex-
tremely short of foreign exchange. Although an-
nounced as a $20-million development credit repay-
able over eight to ten years, two contracts amount-
ing to more than one third of the pact have been
signed for medical instruments and tractors. These
items probably will be delivered during the next
year. In addition to the development credit, Pan-
kow extended a $2-million short-term credit to
cover Chilean imports of East German foodstuffs.
16 Sep 72 Central Intelligence Bulletin
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