CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026400180001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 15, 2016
• Document Release Date: March 31, 2004
• Sequence Number: 1
• Publication Date: May 16, 1974
• Content Type: REPORT

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Top Secret
Central Intelligence Bulletin
Top Secret
C
May 16, 1974
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May 16, IST4
Central Intelligence Bulletin
CONTENTS
ISRAEL-FEDAYEEN: Israel almost certainly will retal-
iate for raid on Maalot. (Page 1)
PORTUGAL: For the first time in Portuguese history,
Communists are in the government. (Page 3)
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PAKISTAN-IRAN: Pakistan acquires US-built C-130s
from Iran. (Page 7)
INDONESIA-VIETNAM: Jakarta has misgivings about its
continued participation in ICCS. (Page 8)
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JAPAN: Balance of payments improve in April. (Page 10)
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DENMARK: Minority government survives crisis. (Page 12)
DOMINICAN REPUBLIC: Opposition group withdraws in
protest from today's general election. (Page 13)
FOR THE RECORD : (Page 14)
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ISRAEL-FEDAYEEN: The attack on Maalot yesterday
will not in itse f seriously affect the substance
of negotiations for an Israei-Syrian disengagement
agreement, but it will sharply increase tensions in
the area. It is almost certain to result in Is-
raeli raids on fedayeen concentrations in southern
Lebanon that will oblige Syria to offer rhetorical
support for the terrorists and will cause a new dip-
lomatic fracas between Israel and Lebanon.
Lebanon's Prime Minister has charged that the
Israelis have no evidence that the perpetrators of
the Maalot attack infiltrated Israel from southern
Lebanon. He suggested that they had come, as they
claimed, from within Israel and the Israeli-occupied
territories. A student released by the commandos
provided some evidence for this assertion. She
stated that the students believed that one of the
guerrillas, who spoke Hebrew, was an Israeli Arab
who worked in Safed, the Israeli town from which
the hostages had come.
The Palestinian press also claims that the ter-
rorists came from within the occupied areas and that
they belonged to the Popular Democratic Front for
the Liberation of Palestine. This Marxist organiza-
tion has a rudimentary organization and a number of
adherents in the Israeli-occupied West Bank and has
in the past carried out a number of relatively minor
hit-and-run attacks. It has not been involved in a
major terrorist incident for some years, however,
and recently has been among the fedayeen groups favor-
ing a negotiated settlement in the Middle East.
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(continued)
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Israel's ambassador in Washington warned at a
press conference yesterday that the attack on Maalot
will increase Israeli apprehensions over "bringing
tens of thousands of Arabs closer to Israel" in a
Golan Heights agreement. Such fears are widespread
in Israel, and the government is again being criti-
cized for failure to halt the growing number of
terrorist attacks and to provide adequate security
for the Israeli border settlements. The widely
publicized incidents at Maalot and Qiryat Shemona
are the most spectacular of a number of attacks in
recent months on Israeli personnel and installations
both in Israel proper and in the Israeli-occupied
May 16, 1974
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*PORTUGAL: For the first time in Portuguese
history, communists are in the government.
A few hours after General Spinola assumed the
presidency yesterday, the junta announced the mem-
bers of the provisional government. Alvaro Cunhal,
secretary general of the Communist Party, was named
minister without portfolio; Communist Party member
Avelino Pacheco Goncalves was named minister of
labor.
The junta had indicated earlier in the week
that Communist participation was essential to demon-
strate the junta's dedication to open political par-
ticipation.
The new prime minister is former bar association
president, Adelino da Palma Carlos, a wealthy lawyer
and professor who is not aligned with any political
party. The foreign ministry went to Socialist Party
leader Mario Soares. Other Socialists receiving min-
isterial posts are: Antonio de Almeida Santos, min-
ister of interterritorial coordination; Francisco
Salgado Zenha,minister of justice; and Raul Rego,
minister of information. The other eight portfolios
apparently were given to members of center parties
or to persons who are not aligned with any political
group.
In an inaugural address, President Spinola warned
against excesses of enthusiasm and bestowed lavish
praise on the Armed Forces Movement. He was espe-
cially complimentary to the "younger cadres" whose
"nobility rescued the country from national tragedy."
Although Spinola seems to be in control, this rhetoric
may resurrect rumors that the junta is the hostage
of the so-called Captain's Movement.
In contrast to the blandishments Spinola lavished
on the younger officers, the junta announced yesterday
that 42 senior officers had been placed on the reserve
May 16 , 1974 Central Intelligence Bulletin 3
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list, bringing to 66 the number of high-ranking offi-
cers who have been purged since the coup. Among
those purged are several prominent conservatives who
do not support Spinola's notions of self-determination
for the African territories.
The junta also announced that all members of the
now disbanded general directorate of security who have
not yet reported to the authorities must do so by
May 18.
*Because of the shortage of time for preparation of this item, the analytic
interpretation presented here has been produced by the Central Intelligence
Agency without the participation of the Bureau of Intelligence and Re-
search, Department of State.
May 16, 1974
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PAKISTAN-IRAN: The Pakistani air force is nearly
doubling its present transport capability with the
acquistion of four US-built C-130s from Iran. Islam-
abad had been negotiating with Iran for additional
transports for over a year and finally signed a con-
tract on May 11. Only three or four of Pakistan's
six C-130s are currently operational, and Islamabad
has borrowed two from Saudi Arabia.
During the war with India in 1971, Pakistan had
to make extensive use of civil transport aircraft to
ferry troops to the east. The new additions will
still not eliminate Pakistan's need to mobilize civil
transport aircraft in an emergency.
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INDONESIA-VIETNAM: Jakarta has again warned that
its continued participation in the International
Commission for Control and Supervision should not be
taken for granted. Saigon and the Viet Cong's recent
suspension of political talks in Paris and Military
Commission talks in Vietnam probably triggered the
warning by Indonesia's information minister on May 14,
although Jakarta has had misgivings about the Vietnam
situation for some time.
Indonesia has found itself in an uncomfortable
position on the ICCS and has recently been the target
of intense public criticism from Hanoi for unilat-
erally investgating alleged Viet Cong cease-fire
violations. Jakarta feels that Iranian ineffective-
ness as an ICCS participant further complicates
Indonesia's problems with the Communists.
May 16 , 1974 Central Intelligence Bulletin
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,JAPAN: The balance of payments improved markedly
last month as the overall deficit declined to $760
million from $1.02 billion in March.
The trade deficit increased only slightly to
$380 million, largely because exports performed
strongly, registering a 50-percent increase compared
with April 1973. As expected, the high cost of oil
boosted the import bill more than 90 percent above
the level of a year ago. Although oil imports were
up only 5 percent in volume, their cost was 300-per-
cent higher than last year.
Tokyo's continuing efforts to curb the movement
of long-term capital abroad were quite successful,
cutting the net amount to $160 million compared with
$325 million in March and $728 million in April 1973.
Government institutions are restricting the amount of
money available for overseas investment, and domestic
firms are being permitted to borrow abroad on a lonq-
term basis for the first time in three years. The
surplus on the short-term capital account increased
as a result of Tokyo's encouraging short-term
borrowing abroad.
Because of these improvements and some use of
private dollar holdings, official reserves increased
by $272 million.
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 DENMARK: Prime Minister Hartlinq's minority
government survived its most serious crisis yester-
day when a majority was finally scraped together
in parliament to approve the government's contro-
versial tax measures. Hartling had threatened to
call elections if his economic proposals were voted
down.
After postponing the vote three times so that
inter-party negotiations on a compromise economic
package could continue, the opposition Progressives
and Radical Liberals finally gave the government
the majority it needed. The final vote was 106 to
73.
Although the details of the compromise are still
not clear, the Progressives and the Radical Liberals
probably received significant concessions from Hart-
ling. Both parties had indicated that they would
not support the government's original tax package,
Hartling's original tax measures would have re-
duced income taxes by approximately 17 percent and
increased sales taxes on luxury items and imports
by about 20 percent. Nationwide wildcat strikes
and demonstrations in Copenhagen calling for Hart-
ling's resignation had further threatened the five-
month-old government.
May 16, 1974
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DOMINICAN REPUBLIC: The only remaining opposi-
tion group of any consequence has withdrawn all of
its candidates from today's general elections and
has charged the government with election fraud.
Several minor parties had pulled out of the race
earlier after making similar charges. The one tiny
fringe group sticking it out would do well to garner
one percent of the vote.
President Balaguer had hoped to avoid running
alone. On several occasions he had met with parties
of the principal opposition group, the Santiago Ac-
cord coalition, to assure them that the elections
would be honest. Nevertheless,, the coalition de-
cided yesterday to call a, boycott after the govern-
ment failed to meet fully the coalition's eleventh-
hour demands for safeguards against fraud and for
the release of all "political prisoners."
The coalition, whose members range from right
to far left, appeared to be on its way to winning
a number of congressional seats and several key
mayorships before its decision to abstain. Its
presidential candidate was running a poor second
to the President, however. Balaguer probably would
have won nearly 60 percent of the popular vote.
The opposition's withdrawal will tarnish Bala-
guer's electoral victory somewhat, but aside from
a high voter-abstention rate, few immediate reper-
cussions are likely.
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North Vietnam: Truong Chinh, Hanoi's second-
:anking Polithuro member, departed on May 14 on a
visit to Czechoslovakia and Hungary? Chinh's National
Assembly delegation has already passed through Peking
and almost certainly will also transit Moscow en
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USSR-China: The USSR and China yesterday signed
=their bilateral trade agreement for 1974. As usual,
no figures or specific goals were published. Accord-
ing to a Soviet embassy official in Peking, however,
the USSR expects trade in 1974 to be limited to
about $350 million. Actual exchanges during 1973
r..eached only $274 million.
may 16, 1974 Central Intelligence Bulletin
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