CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A025300140001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 15, 2016
• Document Release Date: November 28, 2003
• Sequence Number: 1
• Publication Date: October 3, 1973
• Content Type: REPORT

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Top secret
Central Intelligence Bulletin
State Department review completed
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Top Secret
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3 Octobe~? 19?3
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Central Intelligence Bulletin
CONTENTS
SOUTH VIETNAM: Fighting may pick up in the central
highlan s. Page 1)
NATO: Allies under new pressure to help reduce cost
of stationing US troops in Europe. (Page 3)
EUROPEAN COMMUNITIES: Paris has proposed adoption
o community-wi e wage-price freeze. (Page 4)
UK-ICELAND: Threatened diplomatic break averted.
Page 5
CHILE: Junta continues its war against the left.
Page 6)
EAST GERMANY: Changes in party leadership. (Page 7)
IRAN: Government claims it has uncovered plot
against Shah. (Page 8)
SOUTH KOREA: The economy is expanding at near record
pace. Page 9)
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SOUTH VIETNAM: Fighting in South Vietnam's cen-
tral highlands may continue at a relatively intense
pace during the next several weeks as a result of
moves by both sides.
Following the recent loss of the Plea, Djerang
Ranger camp in western Pleiku Province--the largest
government outpost to fall to the Communists since
the cease-fire last January--the Military Region 2
Commander, Major General Toan, believes himself under
pressure from Saigon to retaliate. Toan has decided
to target the Communist road system, logistic facili-
ties, and elements of the North Vietnamese 320th Di-
vision in the Duc Co area of the province. He also
will try to re-establish a government presence in
Plei Djerang.
Toan has established a forward headquarters of
the South Vietnamese 22nd Division, normally based
in coastal Binh Dinh Province, at Thanh An District
Town, southwest of Pleiku City. Two regiments from
the division are nearby, and a third from the high-
lands-based 23rd Division is in reserve. Various
tank, Ranger, and Vietnamese Air Force elements are
in position to play supporting roles. Some air
strikes already have been conducted against North
Vietnamese troops reacting to these deployments, and
Toan reportedly believes that additional enemy moves
will provide ample justification for his counterof-
fensive in the Duc Co area. Toan believes his opera-
tions in Pleiku will not escalate to the point of
having to call for reinforcements that could jeopar-
dize security in adjacent Kontum Provi_n,ce or the pop-
ulous coastal province of Binh Dinh.
Despite allegations by Saigon spokesmen, includ-
ing President Thieu, that the attack on Plei Djerang
signals a coming enemy offensive, there is little to
suggest that the Communists plan a major offensive :gin
the highlands at this time. Both North Vietnamese
divisions there are understrength and in no shape to
3 Oct 7 3 Central Intelligence Bulletin
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sustain large-scale fighting. General Toan has specu-
lated that the Communists took the Ranger camp to
facilitate their road construction activities, and
other sources believe the Communists wish to divert
attention from the coastal region of Military Region
2 where a con est for the rice harvest ma be in the
offing.
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NATO US Senate amendments dealing with force
levels Europe have placed the allies under new
pressure to come up with multilateral ways to reduce
the costs the US incurs from stationing troops in
Europee
Ambassador Rumsfeld thinks that the allies are
now convinced that the administration cannot rely on
Senate support for maintaining current troop levels
in Europe until a force reduction agreement has been
achieved between NATO and the Warsaw Pact? According
to a senior West German Foreign Ministry official,
the Senate actions produced "considerable shock" in
Bonno He remarked that the "extraordinarily arbitrary
character" of the actions has led West German offi-
cials to question whether it will be possible to
resist pressure. for unilateral troop cutso The Senate
votes reportedly have produced similar nervousness
in the Bundestaga
NATO Secretary General Luns has emphasized that
the Senate action lends new immediacy to the alli-
ance's "burden-sharing" efforts, and there have been
some positive signs in the recent deliberations of
the study group dealing with the problem There is
wide support for separating the US military deficit
from other balance-of-payments figures so that it
might be treated on a priority basism Also? the
UK recentlyahas not been pressinments lossesto off-
set Britain s own balance-of-pay
Nevertheless, NATO still has far to go before
coming to grips with this problemo The West Germans
show no sign of being more willing to participate
in a multilateral scheme to help reduce the U5 mil-
itary balance-of-payments burdeno They have been
trying hard to prove that Bonn is already carrying
its fair share in bilateral offset arrangementso
While the burden-sharing study group will probably
succeed in sending its initial report to the North
Atlantic Council in mid-October, it will be largely
concerned with defining precisely the amount of
balance-of-payments damage the US sufferso There
has been little discussion of ossible solutions
so far
3 Oct 7 3
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EUROPEAN COMMUNITIES: French Finance Minister
Giscar Estaing, in a sharp policy shift, is at-
tempting to persuade the other eight EC members to
agree to a communi -wide wa e- rice freeze b the
end of this month
The EC does not have a community-wide anti-
inflation program at this time, primarily because
the French rejected two earlier EC Commission pro-
posals for joint action. These proposals were de-
signed to reduce the cost of imported goods through
selective tariff reductions, but Paris viewed this
as a bad tactical move in view of the coming multi-
lateral trade negotiations. In their national ef-
forts, the British have a program of wage-price con-
trols, the French are relying on a progressive
tightening of monetary policy, and the Italians se-
lectively froze prices last July but not wages.
Only the Germans have a concerted program aimed at
reducing demand in all sectors through fiscal and
monetary measures.
Paris, fearing the effects of inflation on the
European joint float, may hope to use unified EC
action as a rationale for enacting a wage-price
freeze in France. Most of the other EC members,
however, probably will not want to participate in
such a restrictive program. Moreover, the Germans,
who have found it politically feasible to enact a
stringent program of their own, have repeatedly
pointed to the ineffectiveness of wage-price con-
trols. Although the other EC members almost cer-
tainly share French fears that inflation will cause
continuing problems for the European joint float
and damage their export capabilities, Paris prob-
ably will ucceed in etting EC acceptance of
the plan.
3 Oct 7 3 Central Intelligence Bulletin
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UK-ICELAND: London's eleventh-hour decision to
withdraw its warships from the disputed waters around
Iceland--and thus avoid a break in diplomatic rela-
tions--is the first positive move in the stalemated
cod war since negotiations broke off last May.
Reykjavik had vowed to sever relations at mid-
night last night if the ships remained. 'London an-
nounced yesterday, however, that the "protective
vessels"--three frigates and three sea-going tugs--
were being withdrawn on the assumption that Iceland
would not harass British trawlers in the area. The
warships are to remain just outside Iceland's de-
clared 50-mile fishing limit, ready to re-enter the
area if Icelandic patrol craft resume harassment of
British fishing boats. In the meantime, the British
have invited Iceland to resume negotiations in London
in mid-October. The Icelandic Government responded by
announcing that it would not break relations, and ac-
cepted the offer to negotiate.
Following the personal intervention of NATO
Secretary General Luns, the British waived their pre-
vious demand that Iceland agree formally not to har-
ass the trawlers if the warships were withdrawn. The
scheduled break would have coincided with the arrival
of Icelandic Foreign Minister Agustsson in Washington
for negotiations on the U5-manned NATO base at Kefla-
vik. While prospects for retention of the base in
its present form are still in jeopardy, a relaxation
of tensions in the cod war will reduce anti-NATO sen-
timent in Iceland and create a better atmosphere for
compromise on the base issue.
The truce at sea, however, may be of short dura-
tion. Icelandic leftists are certain to keep on at-
tacking the government if it permits the British to
continue fishing inside the 50-mile limit. It will
be difficult for the shaky leadership to resist such
pressure for very long and, unless the British accept
t ea
s
t
d
s a
en
Icelandic fishing restrictions, the inci
are likely to resume.
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CHILE:- Security considerations remain predomi-
nant i~he junta's policy decisions. Its economic
plans, while reflecting a basic commitment to the
idea of equitable distribution of the nation's
wealth, also are designed to counter heftist appeals
with the prospect of concrete social and economic
progress. In addition, the junta continues the
harsh measures it deems necessary to rid the country
of Marxist influence.
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t the left has not been total y neu-
th
a
Concern
tralized probably explains the junta's apparent will-
ingness to alienate some support at home and suffer
a bad press abroad. when the junta concluded that
the university rectors were not willing to undertake
a thorough ideological housecleaning, for example,
it decided to appoint military "delegates"' to do the.
job regardless of the disillusionment this would
cause in the important Christian Democratic Party.
Communist Party chief Luis Corvalan is on trial for
treason before a military court and the death pen-
alty may be handed down ess of its effect on
international opinion.
3 Oct 73
Central Intelligence Bulletin 6
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EAST GERMANY: East German party leader Erich
Honecker continued the process of gradually consoli-
dating his control over the party yesterday as sev-
eral new members were elected to the Politburo and
Secretariat.
Following the recent example of the Soviet party,
the East Germans elected their defense minister, Gen-
eral Heinz Hoffmann, to the Politburo. The party
Central Committee also elected two district party
leaders, Werner Felfe from Halle and Konrad Naumann
from East Berlin, the editor of the party's main
press organ, Neues~ Deutschland, and two other func-
tionaries to be can idate members of the Politburo.
Elected to the important Secretariat were an-
other district party leader, Werner Krolikowski, and
the head of the Central Committee's department for
party organs. The district party leaders in par-
ticular owe their political positions and influence
to Honecker and they, as well as other members of
the Politburo and Secretariat elected since Honecker
became party leader, can be expected to support him
fully.
Guenter Mittag, a major architect of East German
economic planning, was removed as a member of the
Secretariat, but was appointed first deputy premier.
His appointment to that government job may indicate
that Premier Willi 5toph will be elected today by
the parliament to succeed the late Walter Ulbricht
as Chairman of the Council of State. Stoph heads
the list of possible candidates for that honorific
post, and it has been anticipated that if he did gain.
it First Deputy Premier Sindermann would succeed him
as premier.
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IRAN: The government yesterday announced the
arrest of 12 persons on charges of plotting to kid-
nap or kill the Shah and other members of the Imperial
family. A cache of firearms and explosives also was
seized in the round-up of what government officials
claim is the entire ring.
The conspirators, who are reportedly members of
the outlawed Tudeh (Communist) Party, are said to
have confessed to a plot that included kidnaping the
Shah, Empress Farah, the crown prince, and possibly
others; seizing an airliner to flee the country; and
demanding the release of political prisoners in ex-
change for the royal hostages. According to the gov-
ernment, the group also had considered an assassina-
tion attempt on the Empress at a public ceremony
later this month.
Members of the ring included newspaper employ-
ees, filrn:-makers, and a member of a well-known mer-
cantile family, as well as a man who served over
two years in prison for his part in an attempt on
the Shah?s life in 1965. If the charges are true,
these are not typical Iranian terrorists, Members
of the middle-class elite have rarely engaged in
anti-regime activity. Those responsible for the
rash of bombings and other violent incidents which
have occurred in recent years--such as the assassina-
te been young
~
tion of a US Army officer in .Tune-- ave
"
fanatic "Islamic-Marxists.
3 Oct 73
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SOUTH KOREA: The nation's economy achieved a
real annualgrowth rate of 19.2 percent in the first
half of this year. Seoul expects the growth rate
for the year to be 14-15 percent, or double the
7-percent increase registered last year. Industrial
production in the first six months of 1973 was 30
percent -above the 1972 level, and construction ac-
tivity doubled.
Foreign trade also is expanding rapidly with
overseas sales expected to increase by at least half
to over $2.5 billion. Imports are likely to grow
almost as fast. Although sales to the U5 are con-
tinuing their rapid growth, Korean purchases from
the U5 also are accelerating. As a result, the
$170-million trade surplus with the U5 in the first
half of 1972 has shifted to a small deficit during
the first half of this year. Seoul is trying to
expand purchases from the US, especially as a sub-
stitute for Japanese imports. A purchasing mission
is now in the US, the first such mission sent abroad?
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