NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A027700010018-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 20, 2016
• Document Release Date: November 20, 2006
• Sequence Number: 18
• Publication Date: May 10, 1975
• Content Type: REPORT

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Top Secret
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National Intelligence
Bulletin
DIA review(s) completed.
State Dept. review completed
Top Secret
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National Intelligence Bulletin
May 10, 1975
LAOS: Prime Minister Souvanna Phouma obviously no longer
in control of events in Laos. (Page 1)
USSR: Soviets intend to display their supersonic trans-
port at Paris Air Show again and may exhibit MIG-23 as
well. (Page 4)
RHODESIA: Commonwealth leaders support black national-
ists efforts to achieve majority rule. (Page 5)
BRAZIL: Brasilia moves to expand economic ties with
Western Europe. (Page 11)
PORTUGUESE TIMOR: Lisbon to initiate discussions lead-
ing to transitional government in colony. (Page 12)
JAPAN: Measures under consideration to spur faltering
exports. (Page 14)
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National Intelligence Bulletin
May 10, 1975
The large-scale demonstration against the US embassy
in Vientiane yesterday and the continuing disturbances in
the southern rightist stronghold of Pakse--actions clearly
inspired by the Pathet Lao--are proof that Prime Minister
Souvanna Phouma is no longer in control of events in Laos.
His order of May 7--issued on behalf of the coalition
cabinet--banning further civil disorders throughout the
country is being ignored.
On the afternoon ot May 3, e appea e irec y
to the demonstration's organizers to call off their pro-
test, or at least to reroute their line of march away
from the US embassy, but the organizers refused.
Once the demonstration was under way, Souvanna imme-
diately contacted communist Deputy Prime Minister Phoumi
Vongvichit to tell him that the actions against the em-
bassy--particularly the pulling down of the American
flag--were "unacceptable" and that the US would view this
as a serious provocation. He urged Phoumi to bring the
protest to a halt before it got completely out of hand.
Phoumi--disclaiming any knowledge of the matter--offered
little help.
The US charge has registered strong protests with
both Souvanna and Phoumi over actions yesterday against
the embassy, citing in particular the inadequate police
protection afforded American personnel and installations
there and elsewhere in Vientiane.
In his conversation with Phoumi, the charge' asked
whether the coalition government supported the demonstra-
tors'. demand for an end to the US presence in Laos.
Phoumi apologized for the incident at the embassy and
told the charge that there was "no reason to leave the
country," since the situation would soon calm down. He
explicitly affirmed that the Pathet Lao were prepared to
continue to work "within the framework of the 1973
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National Intelligence Bulletin
May 10, 1975
Vientiane peace agreements" and that US economic and
military assistance would continue to be welcome, pro-
viding the aid was distributed equally to the two sides.
By his remarks, Phoumi seemed to be implying that
the Pathet Lao expect to maintain the coalition govern-
ment facade after they consolidate political power in
Vientiane. That moment drew much closer yesterday when
five prominent rightist cabinet members, including De-
fense Minister Sisouk na Champassak and Finance Minister
Ngon Sananikone, submitted their resignations. All had
been prime targets of recent Pathet Lao - instigated
demonstrations.
Sisouk reportedly has sought refuge in Thailand,
where he will shortly be joined by Prince Boun Oum and
other members of the southern rightist Champassak clan.
Ngon is said to be flying to Paris. An exodus of other
wealthy Lao, Chinese, and Vietnamese residents of Vien-
tiane is under way, and the Australian embassy ordered
the evacuation of dependents and nonessential personnel.
Vientiane quieted down late yesterday, but most
shops remained closed, and more demonstrations were re-
ported to be planned for this weekend--a three-day Lao
holiday. The US embassy plans to shut down during this
period in order not to provide a target for the demon-
strators.
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National Intelligence Bulletin
May 10, 1975
The Soviets intend to display the TU-144 Charger
supersonic transport at the Paris Air Show--scheduled
for May 30 to June 8--despite the crash of one during
the last show in 1973. The IL-76 Candid transport, the
TU-154 Careless trijet transport, and the Yak-40 Codling
light short-haul transport will also return to the Paris
show. Rumors are circulating that at least one MIG-23
Flogger multipurpose swing-wing fighter will be dis-
played.
The Charger crash, in which six crew members and
15 French people on the ground were killed, is believed
to have been caused by pilot error. Because of the dis-
aster, this year's flight activity by all aircraft will
be reduced considerably. The French government has pro-
hibited demonstration teams, jet formation flights, and
acrobatic maneuvers. Informal aerial exhibitions will
be presented each day, but only one formal flying exhibi-
tion will be allowed during the show.
The Soviet air attache in London stated several
months ago that his country planned to bring the Flogger
to this year's show. Soviet officials have not listed
it as an exhibit, but sometimes in the past they have
withheld the identity of an exhibit until just before it
landed at the display location. The appearance of the
Flogger in Paris would mark the first time a Soviet com-
bat aircraft has appeared at the show, which affords
manufacturers an opportunity to display and market their
aircraft. The Flogger has already shown promise of be-
coming a popular export.
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National Intelligence Bulletin
May 10, 1975
Leaders of the Commonwealth countries at their meet-
ing in Jamaica this week gave new support to the efforts
of Rhodesia's black nationalists to achieve majority
rule. The firm language of the final communique almost
certainly resulted from intense lobbying efforts by the
African heads of state and Rhodesian nationalists who
attended the session.
The conference endorsed both the nationalists'
strategy of seeking majority rule first through negotia-
tions and their contention that armed struggle is inevi-
table if nonviolent methods fail. More specifically, the
conferees agreed to seek financial assistance for Mozam-
bique to induce that country to apply UN sanctions
against Rhodesia after Mozambique becomes independent
on June 25.
This assistance would be needed to help Mozambique
offset the loss of revenue from Rhodesian trade that
passes through the country. Mozambique derives some
$50 million annually in port and railway revenues from
the Rhodesian traffic. This sum does not take into ac-
count indirect losses, such as higher unemployment, that
would result if the traffic were cut off.
The Front for the Liberation of Mozambique, the
group that dominates the present transitional government,
will come under heavy pressure from other African gov-
ernments to apply sanctions against Rhodesia when the
Front assumes complete control in Lourenco Marques upon
independence. Mozambique's economic problems are serious,
however, and the Front has clearly indicated a need for
compensation if Mozambican ports are closed to Salisbury.
Application of sanctions by the Front would be a
severe blow to Rhodesian Prime Minister Ian Smith's ef-
forts to stall. meaningful negotiations on a constitutional
settlement with the black nationalists. The two sides
have not talked since they held two exploratory meetings
last February.
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National Intelligence Bulletin
May 10, 1975
Brazil is making a strong bid to expand its economic
ties with Western Europe. The move is part of an overall
effort to diversify trade relations as much as possible
and lessen reliance on the US, long Brazil's most impor-
tant trading partner. Brasilia, moreover, is urgently
seeking new sources of foreign exchange to alleviate a
serious balance-of-payments problem.
Brazil's most significant accomplishment to date is
the negotiation of a multibillion-dollar nuclear deal
with West Germany. Foreign Minister Silveira is to
travel to Bonn next month to sign the agreement, which
will cover construction of eight nuclear plants in Brazil
and provision of fuel-enrichment technology. Brasilia
also is seeking sizable German financing for a planned
expansion of its steel industry. I
Other initiatives in Western Europe include:
--a series of seminars on investing in Brazil, held
in European capitals;
--two European trips by Finance Minister Simonsen
and another planned later this month;
--the appointment of two highly regarded former fi-
nance ministers as ambassadors to the UK and France;
--plans for Foreign Minister Silveira to visit Paris,
possibly in June.
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National Intelligence Bulletin
PORTUGUESE TIMOR
May 10, 1975
Lisbon has announced that it is beginning negotia-
tions this week with representatives of political organi-
zations in Portuguese Timor toward establishing a tran-
sitional government for the colony. The discussions,
apparently taking place in Macao, will reportedly be fol-
lowed by talks next week with representatives of the
Indonesian government.
According to an official statement on May 2, sepa-
rate meetings will be held with Timor's pro-Indonesia
party and its pro-independence coalition to discuss:
--recognition by Lisbon that the Timorese people
have a right to independence;
--establishment in October 1975 of a transitional
government;
--formation in October 1975 of an ad hoc consulta-
tive assembly to distribute government portfolios
and write an electoral law;
--holding of elections in October 1975 for a con-
stituent assembly empowered to draft a proclamation
on independence and a constitution.
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National Intelligence Bulletin
9T00975A027700010018-5
May 10, 1975
Jakarta has not commented publicly on this scenario,
despite the fact that Indonesian officials earlier were
adamant in their opposition to any Portuguese resolution
of Timor's status leading to ultimate independence for
the colony. The apparent change of heart in Jakarta may
be the result of recent talks the Indonesians have held
with both Portuguese and Timorese leaders. The Indone-
sians evidently have decided that everyone now tacitly
agrees Timor will definitely join Indonesia, although
it is by no means certain that the other parties inter-
preted the recent talks the same way.
Since P1arch, Jakarta has been fairly upbeat about
the prospects for absorbing Timor peacefully. Indonesia
believes it has assurances from Lisbon that the Portu-
guese will give Jakarta carte blanche to influence the
course of events in Timor. Indonesian optimism has been
reinforced by recent meetings in Jakarta between Murtopo's
advisers and Timorese pro-independence leaders, who gave
Murtopo the impression that they could be brought to
terms.
it is possible the pro-independence Timorese have
decided that joining Indonesia is inevitable, but it is
equally likely that in their talks with Murtopo they
engaged in stalling to buy time and prevent a military
invasion of the colony. If the Timorese were in fact
misleading Murtopo, a solution to the Timor problem has
only been postponed. If it becomes apparent that there
is in fact no "understanding" on Timor, Suharto will be
hard pressed to withstand the militants in his government
who have been calling for immediate invasion.
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National Intelligence Bulletin
May 10, 1975
Tokyo is considering measures to spur faltering
exports. The volume of exports has been declining since
reaching a peak last October. Even so, Japan is still
running one of the largest trade surpluses of any major
country.
The export-promotion package includes increased
funding for Japan's Export-Import Bank and improvements
in the export insurance system. Government officials
are also discussing the possibility of placing restric-
tions on goods from countries, such as Australia, that
have put up barriers against Japanese exports.
Special trade-stimulating measures will apparently
focus on East Asian countries--especially Taiwan and
South Korea. Although full details are not available,
the program would involve an increase in purchases of
their products by the Japanese in order to stimulate East
Asian demand for Japanese goods. The bulk of East Asian
imports of intermediate products come from Japan, which
takes a large share of their exports.
Flagging sales to East and Southeast Asian countries
are largely responsible for Japan's weakening export
performance. The value of exports on a seasonally ad-
justed basis fell at a 12-percent annual rate during the
first three months of this year, compared with the fourth
quarter of 1974. Most of the drop reflected lower export
volume, although prices also slipped as Japanese firms
attempted to improve their competitive position in for-
eign markets.
This decline is in contrast to Japan's trade per-
formance last year, when exports rose 50 percent in
value--faster than any other industrial country. Those
gains occurred primarily in trade with less developed
and communist countries. The East Asian countries were
important growth markets in the first half of 1974.
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National Intelligence Bulletin
May 10, 1975
Sales to other industrial countries have remained
weak because of the general economic slump. Exports to
the US, for example, fell 13 percent in value on a sea-
sonally adjusted basis during the first quarter of this
year.
Despite falling exports, Japan's seasonally adjusted
trade surplus was $1.9 billion in the first three months
of this year. The surplus has remained large because
imports are falling as fast as exports, reflecting the
severity of Japan's economic slump. Purchases from
abroad are likely to continue declining, because some
Japanese firms have large inventories of raw materials
that account for the bulk of imports.
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