CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A024900020001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 15, 2016
• Document Release Date: November 25, 2003
• Sequence Number: 1
• Publication Date: July 17, 1973
• Content Type: REPORT

Approved For Release 2004/01/15 : CIA-RDP79T00975AO24900020001-3
25X1
Top Secret
Central Intelligence Bulletin
State Department review completed
Top Secret
c 204
17 July 1973
Approved For Release 2004/01/15 : CIA-RDP79T00975AO24900020001-3
 25X1 Approved For Release 2004/01/15 : CIA-RDP79T00975AO24900020001-3
Approved For Release 2004/01/15 : CIA-RDP79T00975AO24900020001-3
 Approved F
71777
July
Central Intelligence Bulletin
AFGHANISTAN: Coup returns Prince Daud to power.
(Page 1)
25X1
25X1
25X1
USSR - NORTH VIETNAM: Hanoi leaders apparently had
scant success winning more political and military
support from Soviets. (Page 3)
USSR: Poor weather clouds prospects for record
harvest. (Page 4)
USSR-JAPAN: Soviets seek financing for Yakutsk
gas fields. (Page 5)
IRAQ: Leaders consolidate power and signal desire
for improved ties with West. (Page 6)
Implications of the Recent Monetary Crisis: (Page 8)
FOR THE RECORD: (Page 12)
Approved For Release 2004/01/15 : CIA-RDP79T00975A0P4900020001-3
25X1
 Approved ror Release 2004/01/15 : CIA-RDP79T00975A024900020 01-3
CAFGHANISTAN: A nearly bloodless coup in Kabul
has apparently-brought Prince Daud, brother-in-law
of King Zahir, back to power.
Acting quickly, army units took over Kabul
early this morning. Some members of the royal fam-
ily, including the King's son-in-law, Sardar Abdul
Wali, are in custody. Zahir was last reported to
be in Italy on his way back from medical treatment
in England. There is no information about the fate
of Prime Minister Shafiq, No reports have been re-
ceived from other parts of the country.
The 64-year-old Daud went on Radio Afghanistan
to proclaim a republic, functioning under a military
government. He spoke harshly of Zahir's ten-year-
old "experiment in democracy" and criticized the
royal family for misusing its powers which, Daud
claimed, had paralyzed the nation's economy.
Daud was prime minister and virtual dictator
of Afghanistan from 1953 to 1963, when he was re-
moved by Zahir in preparation for a more democratic
government. He is described as a man of consider-
able ability and imagination, but also stubborn and
harsh toward his enemies. During his earlier period
in power, he made strenuous efforts to modernize
Afghanistan.
In the past, Daud has claimed that he followed
a non-aligned foreign policy. He was prime minister
when Afghanistan turned to the USSR for large scale
economic and military assistance, but most reports
indicate that he is a strong nationalist who sought
aid wherever it was available. While he was in
power, Afghan relations with Pakistan were severely
strained due to his strong support for creation of
an autonomous state for the tribal Pathans living
nn J--he Pakistani of the common border.
I I
Central Intelligence Bulletin
25X1
25X1
25X1
Approved Fort Release 2004/01/15 : CIA-RDP79T00975A024900020g01-3
 25X1 Approved For Release 2004/01/15 : CIA-RDP79T00975AO24900020001-3
Approved For Release 2004/01/15 : CIA-RDP79T00975AO24900020001-3
 Approved
(USSR - NORTH'VIETNAM: The communique issued
at the end of North Vietnamese leaders' official
visit to the USSR suggests the Vietnamese had scant
success in their efforts to extract more Soviet po-
litical and military support.
North Vietnamese Premier Pham Van Dong left
the USSR on 16 July for an official visit to Hungary,
but Le Duan remained behind, ostensibly on vacation.
Plans for a visit by Le Duan to Poland apparently
have been scrapped, and Dong will head the Vietnam-
ese delegation that is to visit Poland later this
month.
The communique reflected the Soviet interest
in pressing its case for better relations with the
West. There was no direct criticism of the US, and
the Soviets did not join with the Vietnamese, as
they have in the past, in demanding that Washington
and Saigon abide by the cease-fire agreements. Mos-
cow even succeeded in getting a general Vietnamese
endorsement of the USSR's detente policies.
The only pacts signed were an "agreement in
principle" on Soviet aid for the rehabilitation and
development of the North Vietnamese economy, and an
agreement absolving the North Vietnamese of current
economic aid debts to the USSR. Much of the Soviet
military aid was given gratis. By contrast, during
the recent North Vietnamese leadership visit to
China, the two countries signed the formal aid ac-
cords for 1974.
Moscow did make some limited concessions to
Vietnamese political sensibilities. The Soviets
agreed that the Provisional. Revolutionary Government
of South Vietnam "alone" represents the genuine as-
pirations of the South Vietnamese people, and they
joined with the Vietnamese in expressing "solidarity"
with the "Patriotic forces" of Cambodia.
I I
Central Intelligence Bulletin 3
Approved Fort Release 2004/01/15 : CIA-RDP79T00975A024900020p01-3
25X1
25X1
25X1
 Approved Fc
Heavy Rains Slow Grain Harvest
SWEDEN
Belorussian
SS.R.
Moldavian
ROMANIA
Gor'kiy.
R. S. F. JS. R.
Kazan'
i/ Igograd
l~I Heavy rains in early July
25X1
Approved For Release 2004/01/15 : CIA-RDP79T00975A024900020011-3 25X1
 Approve
USSR: Poor weather recently may have caused
substantial harvest losses in some important winter
grain areas, clouding prospects somewhat for a rec-
ord crop.
Heavy rains and winds apparently flattened
(lodged) winter grain in large areas of the Ukraine,
Belorussia, Moldavia, and the North Caucasus. Ac-
cording to a 13 July radio report from the Ukraine,
2 1/2 million hectares were flattened--one third of
the republic's winter grain area. These conditions
are causing "considerable" delay in the harvest com-
pared with last year.
Lodged grain is difficult to harvest without
losses and retains much moisture which could ulti-
mately reduce the breadgrain quality. Moreover, a
late harvest would be particularly serious this
year, since the crop matured sooner than usual.
Harvesting overripe grain could cause shattering--
that is, the kernels would fall from the heads and
be lost on the ground. A succession of dry, sun
days could save the situation.
Central Intelligence Bulletin 4
Approved For Release 2004/01/15 : CIA-RDP79T00975A02490002g001-3
25X1
25X1
25X1
 Approved For Release 2004/01/15 : CIA-RDP79T00975A024900020c101-3 25X1
USSR-JAPAN: The Soviet Union is now seeking
up to $150 million in foreign financing for explora-
tion of the Yakutsk gas fields. This time the So-
viet tactic is to have the US and Japan share equally
in the financing. Tokyo has indicated that it will
agree, but has conditioned its participation on US
agreement. The Soviet delegation now in Japan will
visit the US soon to discuss the project.
The Soviets claim that proven reserves of nat-
ural gas in the area total. 300 billion cubic meters,
and they estimate potential reserves at 1 trillion
cubic meters. Moscow estimates that the total proj-
ect will involve the investment of some $3 billion
by the US and Japan. If the project is to be eco-
nomically feasible, it will first be necessary to
establish that a significant portion of the reserves
is recoverable. Japan has cautioned that its pro-
vision of credits for exploration does not impl a
commitment for the development project itself.
Central Intelligence Bulletin 5
25X1
25X1
Approved For FRelease 2004/01/15 : CIA-RDP79T00975AO249000200Q1-3
 Approved F
IRAQ: President Bakr and strongman Saddam
Husayn Tikriti have taken steps to consolidate
their power and appear to be signaling a desire
for improved relations with the West.
Although the 15-member Revolutionary Command
Council remains constitutionally the "highest au-
thority in the state," Bakr's executive powers
have been substantially increased, Press claims,
however, that. Bakr has been given dictatorial
powers, and that he has assumed full civilian and
military control, are probably overstated.
Meanwhile, the purge of the ruling socialist
Baath Party and the internal security forces
triggered by the recent abortive coup attempt re-
portedly is still going on.
hundreds o party
members have been arrested an many in the se-
curity police, whose former chief led the coup
move, have been arrested, dismissed, or transferred.
Minister of Communications Rashid al-Rifai has
been appointed acting minister of defense, replacing
General Shihab, who was killed during the abortive
coup. Rifai, a political neutral in the Baath
Party, may have been chosen to fill the office tem-
porarily as a result of a compromise between rival
factions.
During a lengthy interview with Western cor-
respondents last week, Tikriti said that Iraq de-
sires an early rapprochement with the UK and, to
a lesser extent, with the US. He also stressed
that Baghdad would soon begin to ensure greater
popular participation in government.
Approved
(continued)
Central Intelligence Bulletin 6
For Release 2004/01/15 : CIA-RDP79T00975A024900020
25X1
25X1
25X1
 Approved F r Release 2004/01/15 : CIA-RDP79T00975AO24900020 01-3 25X1
The regime has indicated that it wants more
Western participation in Iraq's economic develop-
ment. As evidence of this desire, Baghdad has
approached Intercontinental about building a hotel
at Basra on the Persian Gulf, recently purchased
several American-built aircraft for its commercial
air fleet, and reportedly has shown increased in-
terest in tapping Western oil technology.
Central Intelligence Bulletin 7
25X1
25X1
Approved ForiRelease 2004/01/15 : CIA-RDP79T00975A02490002g001-3
 Approved tor Release 2004/01/15 : CIA-RDP79T00975AO24900020001-3 25X1
Implications of the Recent Monetary Crisis
The recent turmoil in international money mar-
kets is the fourth in a series of crises that have
come with increasing rapidity since December 1971,
when the Smithsonian Agreement was concluded.
The monetary crises last year and this reflect
in part not only continuing US balance-of-payments
problems, but also a change in the psychology of
international currency traders. Money managers,
representing the large multinational firms and com-
mercial banks and some less developed countries in-
cluding the oil producers, came to believe that
further currency realignments were likely. Wind-
fall profits could be made with limited risk or the
value of assets could be protected by shifting from
dollars into the stronger currencies. To the ex-
tent that traders acted on their belief, it became
a self-fulfilling prophecy.
The repeated money market crises have not pro-
duced the worldwide recession that many feared.
Despite continuing international monetary instabil-
ity and the growing weakness of the dollar, world
trade is expanding rapidly. Indeed, it has acceler-
ated in line with the current worldwide economic
boom. Exporters and importers have taken steps to
reduce their exchange risks through contract adjust-
ments or dealings in the exchange market, but this
has generally resulted in only a small increase in
trading costs.
Continuing international monetary instability
has, however, exacerbated the inflation problem in
countries that are the object of speculative capi-
tal inflows. West Germany in particular has had to
absorb massive currency inflows--first dollars and
then guilders, French francs, and Danish crowns--
and this has complicated Bonn's policy of slowing
the growth in the money supply. Because of the anti-
inflationary consequences of revaluation and subse-
quent monetary stability, Germany has generally been
more willing to revalue than other countries.
(continued)
17 Jul 73
Central Intelligence Bulletin
25X1
Approved Fot Release 2004/01/15 : CIA-RDP79T00975AO24900020p01-3
 Approved
The impact of the dollar's continuing devalua-
tion on the trade balances of our major trading
partners has so far been small. In part this is be-
cause most of their trade is not with the US and be-
cause of lags in the adjustment process. The dol-
lar's devaluation lowers the price of US exports
in foreign markets, but this leads to an increase
in US sales only after customers adjust their pur-
chases to the new prices.
The current worldwide economic prosperity has
also reduced and masked the impact of the continu-
ing currency realignments. The US economy and the
economies of most of our major trading partners are
expanding rapidly--too rapidly in some cases. This
has lessened concern about the potential impact of
cheaper US goods.
These factors explain the lack of strong coun-
termeasures so far against the devaluation. Only a
handful of new foreign export subsidies and tax in-
centives have been introduced. Nevertheless, some
Europeans, the French in particular, feel that the
dollar has been driven down too far and that the
US has been given an unfair competitive advantage.
The US, after an adjustment period, will bene-
fit from the increased foreign demand for its now
cheaper exports by devaluation. Investment in this
country also has become more attractive to foreign-
ers. Both of these factors will help create jobs
and reduce unemployment in the US. To a lesser ex-
tent the UK and Italy, whose currencies also have
depreciated, will similarly benefit.
On the other hand, US imports are more expen-
sive because of devaluation, and this contributes
to domestic inflation. The price of oil imports in
particular has increased because of successful con-
tract renegotiation by the oil-producing countries
as well as through. the direct effects of the devalu-
ation.
(continued)
Central Intelligence Bulletin 9
Approved For Release 2004/01/15 : CIA-RDP79T00975A02490002g001-3
25X1
25X1
 Approved
or Release 2004/01/15: CIA-RDP79T00975A0249000
The price advantage gained by US agricultural
and other raw material exports through devaluation,
and what apparently has been a desire--at least in
Japan--to convert unwanted dollars into commodities,
has probably also played a role in the disruption of
world commodity markets. Although the large grain
purchases by the USSR were more significant, the re-
sultant introduction of controls on US commodity ex-
ports has dampened US balance-of-payments prospects,
intensified pressures for a further dollar devalua-
tion, and undercut the long--held US advocacy of freer
access to foreign agricultural markets.
Some of the advantages of the dollar deprecia-
tion to Washington are disadvantages for our trading
partners. Although their trade position has been
little damaged so far, in the longer term cheaper
US goods and increased investment in the US rather
than in their domestic economies will mean more job
opportunities in the US while at the same time bring-
ing significant adjustment problems for certain
countries.
As a result, it is likely that US trading part-
ners will become increasingly agitated if interna-
tional monetary instability and the weakness of the
dollar continue. Since a downturn is inevitable,
if only because of action by foreign governments
to bridle the accompanying domestic inflation, a
slowdown in their exports to the US and an increase
in their imports and foreign investment (because of
the currency realignment) will exacerbate the slow-
down in their domestic economies.
The growing concern of our trading partners
will adversely affect progress toward trade and
monetary reform. The monetary situation has clearly
helped Paris in its insistence that the multilateral
trade talks take account of the advantages Washing-
ton may gain from a devalued dollar, and this could
emerge as a very difficult problem in the final
trade bargaining. Progress toward international
Central Intelligence Bulletin 10
Approved Fpr Release 2004/01/15 : CIA-RDP79T00975AO2490002Q001-3
25X1
25X1
 Approved
monetary reform in the ongoing discussions under
the auspices of the International Monetary Fund al-
ready has been made more difficult by foreign con-
cerns resulting from the dollar's decline. Diffi-
culties in the economic negotiations will also com-
plicate political and military negotiations between
the US and its allies. In both Europe and Japan,
the continuing monetary crises are likely to make
achievement of US political objectives more diffi-
cult.
Central Intelligence Bulletin
25X1
25X1
25X1
Approved For Release 2004/01/15 : CIA-RDP79T00975AO24900020901-3
 Approved F
FOR THE RECORD*
Egypt: President Sadat spoke yesterday to the
central committee of the Arab Socialist Union (ASU)
in an apparent prelude to his scheduled Revolution Day
address to the nation on 23 July. The speech was un-
remarkable except for Sadat's references to a vague
and undefined "ideological document," still in the
preparatory stages, which will outline Egypt's policy
for "the next 25 years" in the light of US-Soviet
detente and its effect on Egypt's future actions.
Sadat envisages a summer of debate on the document
at all levels of the ASU before it is given official
sanction.
25X1
Italy-USSR: The Italian firm Montedison has
agreed to construct seven chemical plants in the USSR.
At least part of the Soviet payment will consist of
products from these plants. A possible source of
financing is the three-year credit line for $600 mil-
lion that Ital extended to the USSR in February.
Iraq-USSR: Iraq plans to reorganize the recently
formed joint Iraqi-Soviet oil transport company. Only
two of the nine tankers which the Soviets were to sup-
ply the company have actually been delivered. One of
these caught fire and exploded soon after delivery.
As a result, the company plans to charter tankers from
other sources to meet deliver schedules for Ira '
expanding oil production. s 25X1
Nepal: Nagendra P. Rijal heads the new 16-member
cabinet that was announced in Kathmandu yesterday. The
46-year-old Prime Minister is an experienced politician
and has filled many government posts. Rijal's prede-
cessor, a carry-over from the late King Mahendra's reign,
'
s
had been at odds with King Birendra since the latter
succession in January 1972. The cabinet is subservient
to the King and no policy changes are expected.
*These items were prepared by CIA without consultation
with the Departments of State and Defense.
Central Intelligence Bulletin
25X1
Approved Igor Release 2004/01/15 : CIA-RDP79T00975A024900020041-3 25X1
 25X1
Top Secret
Approved For Release 2004/01/15 : CIA-RDP79T00975AO24900020001-3
Top Secret
Approved For Release 2004/01/15 : CIA-RDP79T00975AO24900020001-3