CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A024700130001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 14, 2016
• Document Release Date: August 21, 2003
• Sequence Number: 1
• Publication Date: June 15, 1973
• Content Type: REPORT

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Central Intelligence Bulletin
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15 June 1973
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No. 0143/73
15 June 1973
Central Intelligence Bulletin
CONTENTS
INTERNATIONAL MONETARY DEVELOPMENTS: Dollar drops
as tra ers express skeptic-ism about new US policy.
(Page 1)
ARGENTINA: Peron returning from Spain to restore
order and unity to Peronist movement. (Page 2)
CHILE: Allende under new and conflicting pressures
from armed forces and his own coalition. (Page 4)
INDIA: The government's erratic performance reduces
support for Mrs. Gandhi's Congress Party. (Page 5)
LIBYA: Oil negotiations continue beyond government
deadline. (Page 7)
AFGHANISTAN-USSR: Kabul acquires new generation of
armored vehicles. (Page 9)
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INTERNATIONAL MONETARY DEVELOPMENTS: The
dollar closed lower in almost all European currency
markets yesterday, although substantially above
last week's low point. Traders demonstrated wide-
spread skepticism about the impact of the new US
economic policy and expressed fear that US plans
for controls on food exports and for reduced tariffs
on imports of scarce materials will set back im-
provement in the US balance of payments. This re-
action apparently was also influenced by the absence
of specific measures to strengthen the dollar's
market performance. The first high-level foreign
criticism of the new US measures was voiced by
Canadian Finance Minister Turner, who indicated
concern that other countries might retaliate against
US export controls.
The lira continues to decline under strong
market pressure. It depreciated against the dollar
by over 2.5 percent yesterday alone, and has fallen
by about 10 percent since the dollar devaluation
last February. Political problems, a high rate of
inflation, and Italian currency speculation through
manipulation of trade payments probably are all con-
tributing to the lira's fall. The Bank of Italy had
been selling dollars regularly in support of the
lira in the last half of May, but stopped intervening
in recent weeks when lira selling increased.
15 Jun 73 Central Intelligence Bulletin
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ARGENTINA: President Campora is traveling to
Spain today to escort Juan Peron back to Buenos
Aires next week. Peron's immediate task will be
to arbitrate the differences that have arisen within
the Peronist movement and to set a firm course for
the government.
The tirst ree
of the Campora government have been marked by at
least one armed clash between rival youth groups--
ostensibly Peronist--and by the seizure of various
government offices by groups seeking to hasten the
transition to Peronist administrators and, in some
cases, trying to force the appointment of a radical.
Even some of Peron's political opponents now
say that he is the only one who can restore order
and get things moving. Campora so far has been
unable or unwilling to challenge groups that have
occupied radio stations, hospitals, and universi-
ties, or to reduce the bickering that has stalled
appointments to several posts below cabinet level.
Only the new economic team headed by Finance Minis-
ter Gelbard has made any real progress, instituting
15 Jun 73 Central Intelligence Bulletin
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price controls and getting labor's agreement to
belt-tightening measures designed to slow Argentina's
high rate of inflation. Other measures pending are
aimed at controlling bank deposits and at returning
to Argentine control those firms that were acquired
by f o
1966.
15 Jun 73 Central Intelligence Bulletin 3
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CHILE: President Allende is under new and
conflc ni g pressures from the armed forces and
his Popular Unity coalition.
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The re-entry of the military into the cabinet
in force would probably sidetrack the plans of
some ranking officers to organize a coup. On the
other hand, the demand by military leaders for
real influence as ministers would be unacceptable
to some UP leaders.
The Communists and Socialists, both determined
to repress the increasingly troublesome opposition,
do not want the restraining influence of the mili-
tary in the cabinet. Some party strategists fear
that military support may be necessary for the UP
to stay in power, but even they want conditions that
would appear to be unacceptable to the military.
Allende, heavily dependent on both camps, has
worked out such "irreconcilable" differences before,
usually to his advantage. This time the task looks
much harder. In any event, impeachment proceedings
now under way in congress against three key minis-
ters--economy, labor, and mining--will force some
cabinet readjustments very soon.
Central Intelligence Bulletin
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INDIA: The government's erratic performance
in dealing with political and economic problems
appears to be reducing popular support for Prime
Minister Gandhi's Congress Party, although her per-
sonal political position remains secure.
The government's response to the recent drought--
in particular the dislocation following the take-
over of wholesale wheat trade--has caused widespread
criticism. Mrs. Gandhi has recently come under at-
tack for alleged attempts to pack the Supreme Court
and muzzle the press. There are demoralizing rumors
of corruption at the highest levels of the adminis-
tration.
In several Indian states, the Congress Party
appears to be faltering. This is due in part to
the Prime Minister's earlier installation of trusted
functionaries, who lack firm control over the grass-
roots political mechanism, at the head of several
state governments.
The resignation on 12 June of the Chief Minis-
ter of Uttar Pradesh, Mrs. Gandhi's home state, and
imposition there of "President's Rule" bring to
three the number of states where Congress Party
governments have been replaced this year by direct
rule from New Delhi. The demise of the government
in Uttar Pradesh was hastened by the brief uprising
of provincial police in that state last month and
subsequent clashes between the police and the army--
the first such occurrences in India since independ-
ence.
Congress Party candidates in several recent
by-elections at various political levels have faredar
poorly, suggesting a general deterioration in popular
support for the party. Revived factionalism within
the Congress Party caused by ideological disputes as
well as by caste and personal rivalries, is further
15 Jun 73 Central Intelligence Bulletin
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weakening the party and eroding Mrs. Gandhi's leader-
ship. Meanwhile, the Communist Party of India, an
informal ally of the Congress, has for some time
been giving less than full support to the government.
Opposition parties, encouraged by the political trend,
have become more active.
Despite the recent setbacks, Mrs. Gandhi ap-
parently retains much of her personal popularity and
has no serious rival for power within the party.
Moreover, the initiative remains firmly in her hands.
National elections do not have to be held until 1976
and she can determine whether the new elections now
scheduled in several states for early 1974 take place
then or are postponed and "President's Rule" extended.
She can threaten to undertake a major cabinet over-
haul, a tactic she frequently uses to keep powerful
cabinet ministers in line. Revamping her adminis-
tration could also strengthen her somewhat tarnished
reputation as an administrator. More beneficial to
her and to the Congress Party, however, would be
developments over which she has no direct control--
a good monsoon in the next few weeks and the early
arrival of promised food grains from overseas.
15 Jun 73 Central Intelligence Bulletin
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LIBYA: The government's 12 June deadline for
Western oil companies to accept 100-percent parti-
cipation by Tripoli passed without incident, and
negotiations are continuing. Despite the vitriolic
demands made by Prime Minister Jallud in a meeting
on 9 June, the companies have not improved their
offer of a joint production-sharing arrangement.
Since that meeting, company representatives have
continued to discuss with Oil Minister Mabruk pos-
sible areas of compromise, but so far have been
unable to find any flexibility in Tripoli's position.
Company officials are concerned that the Libyans
are overestimating their negotiating strength and
may work themselves into a position where they would
view nationalization as the only olitically accept-
able alternative.
15 Jun 73 Central Intelligence Bulletin 7
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T-62 Medium Tank
now
BMP Infantry Combat Vehicle
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AFGHANISTAN-USSR: Moscow has introduced a
new generation of armored vehicles into Afghanistan.
Ten T-62 medium tanks and nine BMP infantry combat
vehicles have been observed for the first time near
the capital. Kabul is interested in improving its
military capabilities for prestige reasons, and be-
cause of long-standing frictions with Pakistan. The
equipment is likely to be deployed with key units
in the capital area.
The T-62 tank carries a more powerful gun and
is more advanced than the T-54/55 tanks that make
up the main force of Afghanistan's armor. The BMP,
a tracked, armored, amphibious vehicle carrying a
76-mm. gun and a Sagger antitank missile, will in-
crease the infantry's firepower and mobility. The
armored vehicles probably were ordered under 1971
arms accords, as were recently delivered armored
personnel carriers and MI-8 helicopters. The USSR,
Afghanistan's sole source of military supply, has
provided over $300 million of weaponry since the
late 1950s, ranging from small arms and ammunition
to jet fighters and surface-to-air missiles.
Afghanistan may have difficulty integrating
the new vehicles into its army. The receipt of
sophisticated equipment from the Soviets in the
past has presented Kabul with training and logistic
problems, despite the presepee of about 200 Soviet
advisers and instructors.
15 Jun 73 Central Intelligence Bulletin 9
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