NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026600010055-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 20, 2016
• Document Release Date: May 22, 2006
• Sequence Number: 55
• Publication Date: June 15, 1974
• Content Type: REPORT

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Nationall Intelligence Bulletin
June 15, 1974
CONTENTS
USSR: Brezhnev gives measured appraisal of US-Soviet
relations. (Page 1)
ITALY: President Leone believes compromise between two
former coalition partners is possible. (Page 4)
NORTH YEMEN: Colonel Hamdi still has not reached accom-
modatioonwith tribal elements. (Page 9)
JAPAN: Balance-of-payments deficit widened in May.
(Page 10)
SOUTH AFRICA: Pretoria will construct full-scale ura-
nium enrichment plant. (Page 13)
FOR THE RECORD: (Page 14)
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National Intelligence Bulletin June 15, 1974
General Secretary Brezhne:v yesterday ended the So-
viet leadership's series of Supreme Soviet candidacy
speeches with a measured appraisal of US-Soviet relations.
Referring to the coming summit, he acknowledged
pessimistic forecasts in the West but said bilateral rela-
tions can and must continue to improve. Ruling out hasty
decisions on questions not ready for solution, Brezhnev
seemingly cautioned against high expectations for the re-
sults of the summit. He said US-Soviet relations must
proceed on a stable basis and "not be dependent on con-
siderations of expediency."
Brezhnev said the most important and complex prob-
lems are those in the field of arms limitation--the sub-
ject of heated debate. He presumably was referring to
debate in the US, but he did not make this explicit.
Apparently responding to Western charges that the
USSR is aggravating the arms race with its missile mod-
ernization programs, Brezhnev claimed that historically
the arms race has been forced on the Soviet Union.
Praising the strategic arms agreements of 1972 and 1973,
he called for further agreements to prevent the continu-
ation of the arms spiral.
Specifically, Brezhnev expressed willingness to
limit underground nuclear tests "down to their full ter-
mination according to a coordinated timetable." Pending
a halt to the arms race, Brezhnev assured his listeners,
Soviet defenses would be maintained "at the appropriate
level."
Brezhnev was also cautious on European issues. He
praised Prompidou and Brandt, but went no further than
noting that both President Giscard d'Estaing and Chancel-
lor Schmidt have said that they will continue the policies
of their predecessors. He also spoke of the possibility
of closer ties with Italy.
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National Intelligence Bulletin June 15, 1974
The General Secretary placed some emphasis on suc-
cessfully completing the European security conference,
with the participation of "top leaders" at its concluding
stage. He strongly implied, however, that Moscow would
not meet Western demands for the freer movement of peo-
ples and ideas. He also expressed Soviet willingness to
lake partial measures toward arms limitation, and hinted
that one such step might be in the offing on force re-
ductions in Europe.
Brezhnev said prospects had improved for eliminating
the hotbed of war in the Middle East, but he cautioned
that only the combined efforts of participants at the
Geneva conference would fully resolve the remaining
problems. He pledged continued support for this task.
On the topic of relations with China, Brezhnev
took the usual Soviet line. He condemned the Chinese
leadership and echoed earlier speakers in charging that
Peking is in open collusion with right-wing imperialists
in the West. He also made the standard references to
Moscow's desire for normalization of relations with
china and for friendship with the Chinese people.
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!National Intelligence Bulletin
ITALY
June 15, 1974
President Leone on June 13 refused to accept Prime
Minister Rumor's resignation because he is convinced
there is only a slight difference separating the coali-
tion parties on key economic issues.
Leone s
conclusion is supported by a US embassy source, who
maintains that the Christian Democrats and Socialists
were very close to agreement on fiscal and credit policy
prior to Rumor's resignation.
Leone is prepared to instruct Rumor to submit the
issues to parliamentary debate if the Prime Minister re-
ports that he cannot resolve the differences between
the Christian Democrats and the Socialists.
Meanwhile, political leaders may have been given
a short breathing spell by organized labor. The labor
federation which represents all of Italy's unions has
reaffirmed its support for the Socialist position but
has voted a temporary moratorium on politically moti-
vated strikes. The Communist-dominated union is follow-
ing a policy calculated to convey a responsible image
and thus supports Communist leader Berlinguer's campaign
for more formal consultations between the Communists
and the government. The leader of the Communist union,
for example, aided Christian Democratic labor leaders
in their effort to beat back a Socialist attempt to pin
responsibility for the current crisis on the Christian
Democratic Party.
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National Intelligence Bulletin
June 15, 1974
Prime Minister Rumor will probably convoke a meet-
ing of the center-left party leaders this weekend to get
negotiations started and to prepare for a possible at-
tempt by the Communists to force a debate on the crisis
when parliament convenes on Monday. Rumor is not likely
to make much progress toward resolving the dispute, how-
ever, prior to next week?s regional council elections
in Sardinia. Both the Christian Democrats and the
Socialists are hoping for an outcome that can be inter-
preted as endorsing their respective positions in the
dispute.
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National Intelligence Bulletin
June 15, 1974
The Command Council under Colonel Hamdi appears to
be in control of the capital, but it has yet to receive
pledges of support from powerful tribal elements in the
north that on Thursday threatened to occupy Sana.
Hamdi's chances of consolidating his take-over will
be enhanced if the Saudis can and do restrain Sheikh al-
Ahmar and the other tribal leaders subsidized by Riyadh.
The Saudis do appear well disposed toward Hamdi, whom
they regard as an anti-Communist nationalist.
In a public statement of support for the new regime,
Saudi Arabia warned South Yemen against "external inter-
vention" in North Yemen. The South Yemenis could well
be tempted to exploit the North Yemeni army's preoccupa-
tion with the tribes by initiating military moves along
the border.
When and if Hamdi works out an accommodation with
the tribes, his next challenge will be to unite the var-
ious political factions behind his regime. The Command
Council has made a vague commitment to restore civilian
leadership, but such a move does not appear imminent.
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National Intelligence Bulletin
JAPAN
June 15, 1974
The balance-of-payments deficit widened in May, pri-
marily reflecting an increase in the trade deficit. The
trade deficit last month was $580 million and for Jan-
uary-April amounted to $2.8 billion. The overall bal-
ance-of-payments deficit for the first five months is
nearly $6 billion.
The trade deficit grew in May even though exports
soared 63 percent, compared with May 1973. Price in-
creases accounted for nearly two thirds of export growth,
while volume increased 20 percent. Led by higher oil
costs, the import bill rose 88 percent. Excluding oil,
the trade balance showed a $600-million surplus, about
$100 million higher than in May 1973.
A small surplus was registered in the capital ac-
counts--the first such surplus since late 1972--reflect-
ing tight controls on long-term capital outflows as well
as increased short-term borrowing overseas by Japanese
firms. Despite the payments deficit, official foreign
exchange reserves grew $450 million to $13.2 billion,
largely because Tokyo drew down some of its nonofficial
reserves.
Given the strong export outlook in the coming
months, Tokyo will be able to maintain the level of re-
serves.
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National Intelligence Bulletin June 15, 1974
SOUTH AFRICA
Pretoria intends to construct a full-scale uranium
enrichment plant with financial assistance from "overseas
interests," according to recent statements by the head
of the government-owned South African Enrichment Corpo-
ration (UCOR).
A South African study of the economic feasibility
of a new method for enriching uranium is scheduled to be
completed by the end of the year. The UCOR official
stated that if the process proves economically viable,
Pretoria will construct a full-scale production plant
capable of producing about $375 million worth of reactor-
grade enriched uranium annually. A plant with this ca-
pacity could be operational by the early 1980s.
A large facility designed to provide the South Af-
ricans with operational experience in the use of their
enrichment process has been under construction at
'Valindaba, near Pretoria, since September 1970. This
plant has been repeatedly referred to by the South Af-
ricans as their "pilot plant."
The South African official claimed that new invest-
ors abroad had been brought into UCOR as partners to
assist in the financing of the production plant. The
cost of this plant is estimated to be close to $1 bil-
lion. The new partners, according to UCOR, will assure
a market for the plant's enriched uranium and will pro--
vide a means for South Africa to share its enrichment
technology with the "free world." A West German elec-
tric firm is already involved in the project.
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National Intelligence Bulletin
June 15, 1974
France-UK: London and Paris have announced record
trade deficits in May--$1.2 billion for the UK and $635
million for France. The French deficit was up 60 per-
cent over the April figure, with capital goods imports
contributing significantly to the already large deficit
caused by higher oil prices. The announcement from Paris
came just two days after the government adopted an auster-
ity program designed to curb imports of oil and capital
goods and to spur exports.
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