CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A025600010001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 25
• Document Creation Date: December 15, 2016
• Document Release Date: November 28, 2003
• Sequence Number: 1
• Publication Date: November 8, 1973
• Content Type: REPORT

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Central Intelligence Bulletin
State Department review completed
Top Secret
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c 204
8 November 1973
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Central Intelligence Bulletin
EC - MIDDLE EAST: EC believes declaration on Middle
East will mollify Arab oil producers. (Page 4)
PORTUGAL: Arab oil embargo to Portugal. (Page 6)
USSR-MBFR: Soviets give preview of proposals. (Page 7)
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CAMBODIA: Enemy sets back government forces. (Page 10)
LAOS: Government edges closer to full implementation
o peace agreement. (Page 12)
EUROPEAN COMMUNITIES: Community's enlargement affects
compensation plan. (Page 13)
EUROPEAN COMMUNITIES: Community finance ministers
discuss economic and monetary union. (Page 14)
JAPAN: Controls on foreign capital inflows eased.
Page 15)
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USSR: New light tank. (Page 17
USSR - LATIN AMERICA: Soviet warships visit two
Latin American ports. (Page 18)
TURKEY: Ecevit unable to form new coalition. (Page 19)
DENMARK: New elections in the offing. (Page 20)
FOR THE RECORD: (Page 21)
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EC MIDDLE EAST: The EC foreign ministers ap-
parently believed that the generally pro-Arab dec-
larations they issued on 6 November would lead the
Arab oil producers to ease the fuel shortage facing
all EC members, particularly the Dutch.
During the discussion of the Arab embargo of
oil to the Netherlands and reductions in supplies to
other EC members, the British and the French report-
edly pressed the Dutch--who had the support of the
Danes, Belgians, and Luxembourgers--to abandon their
call for community solidarity on oil supplies. Ac-
The pro-Arab cast of the EC declaration is evi-
dent in the call on both Israel and Egypt to return
to positions they held on 22 October. This call im-
plicitly supports Cairo's insistence that withdrawal
is a prerequisite for movement on the prisoner of
war issue. In addition, the reference to the "legit-
imate rights of the Palestinians" goes beyond the
language of UN Security Council Resolution 242.
Initial public Arab reaction to the EC state-
ment has been favorable. A leading Cairo newspaper
has said the EC position will help to bring pressure
on Israel. The Palestinian news agency described
the statement as a step n the path to understanding
the Palestinian cause. While echoing Arab satis-
faction, an Egyptian of icial in Brussels asserted
that the declaration would not save the Dutch from
the embargo. Relaxing the boycott, he implied,
would signify Arab weakness. Should this Arab atti-
tude prevail, European press criticism that the Nine's
policy is not only "appeasement" but also:.futile':
is likely to grow. (continued)
8 Nov 73 Central Intelligence Bulletin 4
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PORTUGAL: Portugal, which normally receives
about 85 percent of its oil from Arab sources, re-
portedly has been embargoed by the Arab oil-producing
states in reprisal for its cooperation with the US
in the resupply of Israel. The embargo will not
cause insoluble difficulties, however, because Lisbon
has access to Angolan oil.
The Portuguese Fuel Board's claim that the coun-
try had 90 days of oil supplies on hand and another
15 days of supplies en route on 1 October may be some-
what exaggerated. Nevertheless, Lisbon has ample time
to divert Angolan oil to the home country. Angola cur-
rently produces about 145,000 barrels per day, com-
pared with metropolitan Portugal's needs of about
90,000. The diversion. of some Angolan oil away from
normal markets will not seriously affect any other
nation's supply.
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USSR-MBFR: The Soviets, having shown signs of
restlessness at the ""general" approach to the MBFR ne-
gotiations taken by the NATO countries so far, have
given US representatives a preview of proposals they
will make at today's session of the force reduction
talks.
Chief delegate Khlestov outlined a three-stage
program of reductions to be started in 1975 and com-
pleted in 1977. In the first stage, the direct partic-
ipants in the talks would reduce their forces by
20,000 men each, as a "symbolic" step. Forces would
then be reduced by 5 percent on each side, and finally
by 10 percent. The agreement covering all three
stages would be concluded as a whole. Governments
would give formal notice of the beginning and fulfill-
ment of the reductions.
In response to questions, Khlestov said that the
base line for all three phases would be "the forces
in the area on the date of the signature of the agree-
ment." All forces, including air forces, and by im-
plication nuclear-armed forces, would be included.
Reductions would be made in the form of units, with
stationed (US and Soviet) forces to be withdrawn to
their homelands and national forces to be "demobilized."
The Soviet proposal gives the appearance of a
serious and precise approach, but as outlined by
Khlestov, is full of ambiguities and conflicts with
the NATO approach on a variety of issues. Although
the Soviets suggest a "phased" approach to~reduc-
tions, they do not distinguish between stationed and
national forces in the first phase. The US has won
NATO approval that US and Soviet forces would be re-
duced first. The NATO allies have also agreed that
a total of only 10 percent of theix:forces will: be
reduced. More importantly, the Soviet proposal im-
plicitly rejects the NATO view of Warsaw Pact advan-
tages in certain vital areas, and thus does not ad-
mit the need for the asymmetrical reductions NATO
8 Nov 73 Central Intelligence Bulletin 7
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C espouses-or even for their discussion. in addition,
the Soviet desire to include air forces is contrary
to the NATO negotiating position. The suggestion
that the US withdraw combat units is also likely to
meet with Western opposition.
Khle.stov.'s definition-of thetarea of reductions
appears to include the forces or territory of only
the direct participants. Hungary would thus continue
to be excluded. Except for a measure providing for
routine rotation of forces that would not increase
the overall level, the Soviet proposal does not ap-
pear to acknowledge any form of constraints--measures
limiting certain types of military activity--which
are an important aspect of the NATO negotiating po-
sition. Similarly--except possibly for the proposal
to give notification of the implementation of reduc-
tions--there is no mention of verification, another
sensitive matter for NATO.
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The initial reaction to the Soviet proposal by
the NATO allies was mixed, but most of them agreed
that the Western side should accelerate its discus-
sion of general topics related to force reductions
and present lon - 1.anned Western proposal sometime-
soon.
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Sala Lek
Pram
n~l
>mpong Thom
PHNOM PENH,
'`fompong
Speu
3
Tram/
Khnar 7
Srang 2
Abando ed
by govern en
CA M
Kompong Charff'l
wIr KO~r~
Villages retaken
-by Government
~Vihear Suor
Miles
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CAI"IBODTA: The Khmer Communists recently have
inflicted several setbacks on government forces.
The insurgents on 4 November forced government
troops out of the isolated town of Tuk Laak on Route
5, some 35 miles north of Phnom Penh. Of the ap-
proximately 750 troops that were at Tuk Laak, only
300 thus far have managed to work their way north
to Kompong Chhnang city. The Communists now hold
an 11-mile section of the highway north of Sala Lek
Pram. The government apparently does not intend to
make any mail r effort to reopen the road until early
next year. Government truck convoys are moving
over Route 4 on regular schedules,
Another military reverse occurred on 3 November,
when the Communists drove government units out of
Tram Khnar, 25 miles southwest of Phnom Penh on
Route 3. Tram Khnar had been isolated and under
pressure for almost two months. There were between
1,200 and 1,400 troops and about 3,000 civilians
at Tram Khnar, and only a few hundred of these have
made their way back to friendly lines near Route 4.
Yesterday the town of Srang, the last govern-
ment enclave in this area, was evacuated. There
were 700 troops and 4,000 civilians at Srang. Al-
though neither Tram Khnar nor Srang is important
tactically, their loss is bound to have some de-
moralizing effect on the Cambodian Army.
Closer to Phnom Penh, Cambodian Army units
have erased recent Communist gains on the east bank
of the Mekong River by retaking several villages
within ten miles of the capital. The Communists,
however, are continuing to harass Vihear Suor, the
government's main garrison in this area. Elsewhere
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in the Phnom Penh region, government operations to
retake ground along the capital's southern front
between Routes 2 and 3 are still stalled.
Meanwhile, the Khmer Communists continue to
call for an all-out military effort during the
forthcoming dry season. In a statement issued on
3 November, Sihanouk's in-country "defense minister,"
Khieu Samphan, called for attacks in "areas sur-
rounding Phnom Penh" and against outlying provincial
capitals, as well as intensified interdiction ef-
forts along the Mekong River and against Phnom
Penh's overland supply routes. He also emphasized
that the insurgents were "determined to hold their
destiny in their own hands" and "to wage the strug-
gle to the end without compromise."
Central Intelligence Bulletin 11
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LAOS: The government has edged closer to full
implementation of the peace agreement, but a number
of obstacles remain.
On 6 November the National Assembly passed a
resolution generally supporting the peace agreements
and the principle of a new coalition government.
The resolution is a good deal less than a ringing
endorsement, but Prime Minister Souvanna will no
doubt interpret it as fulfilling the constitutional
requirement of having assembly approval before a new
coalition government can be invested by the King.
Souvanna has not yet been able to draw up the
list of his new cabinet. The Communists have said
they will not provide the names of their candidates
until all their security and administrative person-
nel have arrived and been properly lodged in Vien-
tiane and Luang Prabang. The Communists have stated,
however, that once the current airlift is completed
on 16 November, they will then agree to activate the
Joint Committee to Implement the Agreement (JCIA).
This should satisfy some military leaders, who see
the JCIA as the only legal mechanism for controlling
the movement of Communist personnel in Vientiane and
Luang Prabang.
Although the assembly adjourned on 7 November
and would not normally reconvene until next spring,
Souvanna's problems with the body may not be over.
The resolution of 6 November calls for continued
consultation between Souvanna and the assembly, and
some deputies believe he will have to obtain assem-
bly approval--presumably by calling a special ses-
sion--when he is ready to form his new government.
Some deputies clearly hope to use this resolution
to promote their own ambitions for a place in the
new government, but Souvanna, with the King's back-
ing, has the constitutional authority to choose his
ministers without consulting the assembly. The dep-
uties could still cause him trouble, however, if
they take their complaints to some of the top mili-
tary leaders, who already are annoyed with Souvanna's
unilateral dealings with the Lao Communists. I
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EUROPEAN COMMUNITIES: The EC foreign ministers
have agreed on the major part of proposed tariff
concessions to compensate non-EC countries for trade
losses that resulted from Community enlargement. Of
the 30 commodities proposed by the EC Commission, 22
have been fully accepted, and only minor objections
remain on four others. France, Italy, and Ireland,
however, continue to balk at concessions for kraft
paper, citrus fruit, and frozen meat. If the Commis-
sion can resolve outstanding differences through pri-
vate consultations, a formal offer may be made by the
end of the month.
The proposed concessions cover several commodi-
ties of interest to the US--notably trucks, plywood,
kraft paper, and citrus fruit--but the offer probably
will fall considerably short of US requests. Quan-
titative tariff reductions are likely to be less
than desired by Washington, and no concessions on
cereals are being offered. The EC apparently intends
to present its offer as final--as France has demanded--
but other members may be willing to consider a re-
appraisal if third-country reactions require it.
C A high French official has assured the US Em-
bassy that EC agreement on a list of offers is now
certain. In what probably presages further diffi-
culty from the French, however, he claimed that the
Community position would indeed be put on a take-it-
or-leave-it basis.
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EUROPEAN COMMUNITIES: Community finance minis-
ters are meeting today to begin discussions on the
second stage of the EC's planned economic and mone-
tary union. The meeting, which comes a scant seven
weeks before the second stage is scheduled to begin,
probably will not produce any significant agreement
among EC members, whose views remain sharply divided
on crucial issues.
The Germans, Dutch, and French, each for their
own reasons, do not want to move into the second
stage at this time. The failure of the first stage,
as illustrated by the difficulties that have plagued
EC efforts to maintain fixed currency rates, strength-
ens Bonn's position that progress must take place
simultaneously in all areas, such as reduction of
currency margins and harmonization of economic policy.
The French remain unwilling to give up domestic eco-
nomic policy prerogatives to the EC. The Dutch,
realizing that further progress can be accomplished
only with more powerful Community institutions, see
this as a prerequisite to entering the second stage.
The EC Commission, reminding the members of the time-
table set at the summit meeting in October 1972, is
urging the members to take positive action.
The result will probably be some compromise that
will represent only token progress toward the second
stage. On the parallel issue of regional aid, the
Council may eventually agree to a program, but with
less funding than the UK, Ireland, and Italy want.
.On the other tough issue, currency reserve pooling,
the Community may agree to increase the present swap
lines rather than give up 20 percent of their re-
serves to Community control, as presently proposed
by the Commission. The US Mission in Brussels notes
that the Council may be under considerable pressure
in the next several months, for political and psycho-
logical reasons, to make a start toward reserve pool-
ing. F7 I
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JAPAN: Controls on foreign capital inflows are
being modified in response to the weakening of the
yen and the decline in official. foreign-exchange
holdings. Tokyo has removed all limits on stock pur-
chases by foreigners and has eliminated the require-
ment that foreign bonds sold in Japan be converted
into dollars. In addition, the limit on prepayments
for exports will be eased.
The moves are being made to avoid further large
losses in official reserves., which declined by $750
million in October and suffered another big drop the
first week of November. The mounting sales of dol-
lars by the Bank of Japan convinced Tokyo that the
extremely tight controls on capital inflows had out-
lived their usefulness.
The supply of dollars entering the Tokyo money
market is likely to rise, and downward pressure on
the yen will ease. If the yen does not stabilize
a further loosening of restrictions is likely.
8 Nov 73 Central Intelligence Bulletin 15
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C USSR: The Soviets made the first public show-
ing of a new light tank yesterday during the mili-
tary parade marking the October Revolution. The new
tank is similar to the BMP armored personnel carrier
that has been in service with Soviet ground forces
since 1967. Both vehicles have a 76-mm. gun, a
7.62-mm. machinegun, and a launcher for the Sagger
antitank guided missile.
The new tanks, which will provide increased
mobility and firepower to Soviet airborne divisions,
will probably replace the older PT-76 armored per-
sonnel carriers now in use in the reconnaissance
elements of Soviet tank and motorized rifle divisions.
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USSR - LATIN AMERICA: The Soviet Navy is in-
creasing its visibility in Latin American waters.
A Soviet submarine tender and a naval oiler
have completed port calls in Peru and Ecuador and
are now returning to home waters. The ships are
more than 1,000 miles west of the Galapagos Islands,
heading northwest. The ships left Vladivostok in
late August on a midshipmen's training cruise to
the eastern Pacific. Their scheduled visit to San-
tiago, Chile, was canceled by Chile's military gov-
ernment after the coup of 11 September, but they
did call at Callao, Peru, and Guayaquil, Ecuador, in
October.
This is the second visit by Soviet naval ships
to Latin America since last winter, when another
tender with midshipmen aboard called at Rio de
Janeiro and later at Cienfuegos, Cuba. The Soviet
Navy uses these training cruises as a low-key method
of showing the flag in Latin America.
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TURKEY :Republican Peoples Party leader Ecevit
has fai to form a coalition government and has
asked President Koruturk to relieve him from respon-
sibility as formateur.3
The left-of-center Republican Peoples Party,
which won a plurality in last month's elections,
had been turned down earlier by the other parties.
It had been negotiating with the National Salvation
Party (NSP) since 27 October, when Ecevit was desig-
nated Prime Minister and asked to form a government.
The two parties reportedly could not agree on the
allocation of cabinet posts, especially the key In-
terior Ministry.
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President Koruturk could now ask a leader from
the center or right to form a government. If no one
can put together a majority coalition, political
leaders might agree on an "above parties" government
modeled after the regime of the last two years. A
prolonged political crisis might increase the risk
of the type of intervention by the military that
forced former prime minister Demirel out in 1971.
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C DENMARK: The resignation of parliamentarian
Erhar Jakobsen from the Social Democratic Party
cancels the government's one-vote majority and will
force Prime Minister Anker Jorgensen eventually to
call new elections. Jakobsen said he would continue
to support the government on most issues but abjured
the Social Democrats' housing policy--the most im-
portant issue facing this session of parliament.
Jakobsen's declaration of partial loyalty may allow
the government to control the timing of the gover-
ment's collapse, perha s postponing new elections
until next spring.
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Pakistan-Afghanistan: Kabul has returned the
five members of a Pakistani paramilitary group who
entered Afghanistan last month and killed an Afghan
soldier while allegedly pursuing smugglers. Kabul's
action, however, removes only one of many irritants
in Pakistani-Afghan relations.
Iraq-USSR: Moscow has agreed to make available
$200 million of credits for various Iraqi development
projects. Some of the aid will be used to build two
power plants and a cement plant, as well as for elec-
trification and irrigation projects. It is unclear
whether any of this aid is new or merely represents
a further allocation for projects covered undeSo-
viet credits of $222 million extended in 1971.
West Germany - Czechoslovakia: Talks between
the Fe eral Republic of Germany and Czechoslovakia
on the establishment of diplomatic relations were
resumed yesterday in Prague. The talks had been
recessed since September.
*These items were prepared by CIA without consulta-
tion with the Departments of State and Defense.
8 Nov 73 Central Intelligence Bulletin 21
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