NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A027900010006-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 20, 2016
• Document Release Date: November 21, 2006
• Sequence Number: 6
• Publication Date: July 3, 1975
• Content Type: REPORT

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National Intelligence
Bulletin
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National Intelligence Bulletin
July 3, 1975
CONTENTS
LAOS: US charge reports attack
on embassy imminent . . . . . . . . . . . . . . . . . . . . .
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LEBANON: Fighting in Beirut
has diminished sharply . . . . . . . . . . . . . . . . . . . . . 4
PORTUGAL: Movement concerned
about worker take-overs . . . . . . . . . . . . . . . . . . . . 6
SPAIN: Labor organization faces
liberalization fight . . . . . . . . . . . . . . . . . . . . . . 7
AUSTRALIA: Cairns' dismissal from
cabinet could lead to party fight . . . . . . . . . . . . . . . . . 11
JAPAN - SOUTH KOREA: Miyazawa
to visit Seoul . . . . . . . . . . . . . . . . . . . . . . . . . 12
ANGOLA: Liberation groups doing
little to implement truce . . . . . . . . . . . . . . . . . . . . 14
ANNEX: British Anti-Inflation Struggle
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National Intelligence Bulletin
July 3, 1975
There are strong indications that communist-inspired demonstrators intend to
attack and possibly occupy the US embassy compound in Vientiane tonight,
according to the US charge.
The embassy is taking all necessary precautions to ensure the safety of the 22
official American personnel still in the Lao capital. US officials have formally
requested police protection for the embassy from the Pathet Lao - controlled
Foreign Ministry, but no assurances of such protection have been forthcoming.
Several senior coalition government officials, who probably are aware of the
possibility of impending demonstrations, are planning to absent themselves from
Vientiane today. Prime Minister Souvanna Phouma is scheduled to fly to the royal
capital of Luang Prabang with his half-brother, Lao communist leader
Souphanouvong.
Pathet Lao Deputy Prime Minister Phoumi Vongvichit remains in the Lao
capital, but has been described by his aides as "too tired" to see US officials. The US
charge has been attempting to gain an audience with Phoumi since he returned to
Vientiane on June 28, following a three-week strategy meeting of the Lao
Communist Party Central Committee in Sam Neua. In addition to trying to secure
Phoumi's cooperation in heading off the threatened demonstrations, the charge also
hoped to register a strong protest over the week-long occupation of four American
installations in Vientiane by Pathet Lao troops and armed civilian demonstrators.
The occupation is continuing.
Phoumi's "unavailability" could be politically motivated, but he reportedly did
suffer a mild heart attack in Sam Neua recently. British Ambassador Davidson, who
conferred with Phoumi on July 1, lends some substance to the heart attack story.
Davidson has told the US charge that he was "shocked" by Phoumi's physical
appearance, that the Deputy Prime Minister had lost weight, moved about slowly,
and obviously was not well. While not identifying his malady, Phoumi did tell the
ambassador that he had been hospitalized in Sam Neua for a week and intended to
take one to two months rest. Phoumi hinted that one of his "colleagues" from Sam
Neua might come down to Vientiane to take charge of the Foreign Ministry.
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National Intelligence Bulletin July 3, 1975
Fighting in Beirut diminished sharply yesterday as the major Christian, Muslim,
and Palestinian groups dismantled their barricades and security forces flushed out
snipers. Government spokesmen announced that major roads are open and called on
civil servants to return to work.
Radicals backed by Libya and Iraq continue to engage in hit-and-run attacks
designed to foment further clashes, but they are under pressure from Palestinian and
Syrian leaders to lay down their arms. Leaders of most of the fedayeen
,,rejectionist" organizations have grudgingly agreed to go along with the cease-fire as
endorsed by Palestine Liberation Organization leader Yasir Arafat.
Violence continued beyond the cease-fire deadline in other Lebanese
cities-particularly in the northern port of Tripoli-but by late yesterday afternoon
had diminished significantly. Army tanks reportedly were called in to halt fighting
between Christians and Muslims in one town in eastern Lebanon.
Prime Minister Karami and Interior Minister Shamun have said that the security
forces will patrol all areas of the city and fire on anyone who challenges them. This
is the first time in more than a year that Lebanese government leaders have given
explicit backing to the beleaguered security services. Their statements will do much
to improve morale and effectiveness.
In an effort to reassure the Socialists and Phalangists, Karami has reaffirmed
publicly that the current cabinet will as soon as possible be expanded or replaced by
a larger government of "national union" that will represent all political factions. In
the meantime, the existing cabinet, is expected to present a policy statement to
parliament and ask for a vote of confidence.
Socialist leader Kamal Jumblatt, who backed Karami but was disappointed
with the ultimate composition of his cabinet, has already called for its replacement.
Jumblatt has charged that the only virtue of Karami's cabinet is that it brought
down the military government
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National Intelligence Bulletin
July 3, 1975
Leaders of the Portuguese Armed Forces Movement, caught between the law
and their support for the working class, are having trouble responding to the growing
number of worker take-overs in Portugal.
Negotiations began on Tuesday to settle the dispute over the Socialist
newspaper Republica, which was closed by the government six weeks ago after
pro-Communist printers attempted to seize control of the paper. Socialist editor
Raul Rego characterized the first day of talks as "difficult." Much of the difficulty
presumably has developed because there are nearly 150 participants in the
discussions, including representatives of the newspaper's Socialist managers and
journalists, the Communist printers, the internal security forces, and the ruling
Revolutionary Council.
Resolution of the dispute may be further complicated by hard feelings between
the Communists and the Socialists over a French edition of Republica that published
an alleged Soviet document outlining the strategy of the Portuguese Communists.
Both Moscow and the Portuguese Communists have denied the authenticity of the
document, and the Portuguese Communists have promised to take the issue to court.
In the meantime, the Lisbon government, in an attempt to avert further discord
with the Catholic Church, has ordered leftist workers to return the church-owned
radio station to its legal owners. The workers, supported by other groups of the
extreme left, have refused to abandon the studios, unless expelled by force. The
Revolutionary Council reportedly met in emergency session yesterday afternoon to
discuss this and other pressing issues.
Despite the government's apparent desire to resolve these problems, early
solutions do not appear to be in sight. The Revolutionary Council agreed to return
Republica to its Socialist owners last month, but the security forces-openly
sympathetic to the workers-refused to carry out the order and allowed the printers,
not the management, access to Republica offices. Security troops also refused to
expel workers during the early days of the radio station take-over, although the
government announced that the seizure was illegal.
In what may be the first indication of a firmer position, the government
announced yesterday that it could not allow workers to create a "chaotic situation."
Security troops followed up the announcement by blocking the attempted take-over
of Lisbon's telephone system by striking workers. Anxious to preserve their
reputation among the workers, the security forces issued a statement regretting that
force had been necessary. They blamed the extreme left-wing groups behind the
strike for "acting negatively" and accused the strikers of refusing to negotiate with
the government.
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National Intelligence Bulletin
July 3, 1975
The significant victory of illegal leftist labor groups in the month-long
nationwide labor elections in June will set the stage for a battle over liberalizing the
government's tight control of the Syndical Organization-the only legal labor
organization in Spain.
According to press reports, nearly complete tabulations reveal that more than
75 percent of the 360,000 incumbent shop stewards-the lowest echelon in the
Spanish syndical system-were ousted. Indications are that most of the winners are
members of the illegal labor organizations, including the Communist-dominated
Workers' Commissions.
The winners favor radical transformation of a system which lumps workers and
management in an organization dominated by management and government.
Although they are clearly opposed to the regime, it is by no means clear that the
majority of the victors are Communists. In fact, the government took steps to
eliminate the most radical candidates through eligibility rules.
Balloting at the factory level is only the first phase in the elaborate syndical
electoral process. Elections will be held this fall for local, provincial, and national
positions in the Syndical Organization, as well as for labor representatives in
parliament. The results of this first round will make it more difficult for the syndical
hierarchy to manipulate these elections as they have in the past.
Prime Minister Arias favors limited reform of the syndical system to meet
worker discontent, but reform efforts until now have been sidetracked by members
of the conservative syndical bureaucracy who are supported by ultrarightists with
ready access to Franco. Failure to heed the results of the changes at the grass-roots
level will worsen labor tensions
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National Intelligence Bulletin
July 3, 1975
Prime Minister Whitlam's firing of Deputy Prime Minister Cairns from his
cabinet has put the Labor government under the most serious strain since it took
office two and a half years ago. A breakup of the government cannot be excluded.
Whitlam was dissatisfied with his deputy's explanation of questionable financial
dealings. The Prime Minister obviously felt that Cairns had committed inexcusable
improprieties, despite the fact that some of the evidence against him that appeared
in the press is known to have been fabricated.
Adding to disarray in the party, many Laborites are putting the blame on
Whitlam for Labor's crushing defeat in a by-election last weekend. Tensions could
reach the breaking point if Whitlam now tries to push the party caucus to replace
Cairns as deputy party leader.
Prior to Cairns' dismissal, the opposition Liberal-Country Party coalition had
not indicated an intention to use its parliamentary advantage to push for national
elections. Liberal leader Fraser has said that he was content to let Labor ride out the
remaining two years of its three-year term, unless "unforeseen and reprehensible"
events occurred. Should the Labor Party's scandals deepen, however, Fraser may
conclude that he cannot afford to pass up the opportunity to force the government
to the polls.
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National Intelligence Bulletin
JAPAN - SOUTH KOREA
July 3, 1975
Japanese Foreign Minister Miyazawa will visit Seoul later this month, but
relations are likely to remain cool.
Japanese government spokesmen are claiming that Miyazawa's main purpose is
to coordinate views with Seoul prior to Prime Minister Miki's visit to Washington in
August. However, Miyazawa's visit may be intended more as a sop to the Pak
government, unhappy over Tokyo's continued postponement of the joint ministerial
meeting to discuss economic assistance and other bilateral issues. Although some
technical level discussions on aid have taken place, the full-fledged ministerial
meeting has taken on considerable symbolic value for Seoul. Prime Minister Miki,
among others, is insisting that Seoul first make further amends for the 1973
kidnaping of South Korean opposition leader Kim Tae-chung from Tokyo, an
incident that stirred considerable resentment of the Pak government in Japan.
Tokyo's failure to ratify the Japanese - South Korean continental shelf
agreement during the current Diet session is also a source of friction. The agreement
was ratified by Seoul last year, but Tokyo is concerned about certain territorial
jurisdiction questions and did not want to risk tying up the Diet with a divisive
debate. Seoul has threatened to move ahead unilaterally to develop oil resources
thought to be present on the continental shelf if the agreement is not ratified
soon-a move which would generate further political frictions between the two
countries.
Non-governmental efforts to improve the atmosphere have helped a little.
Japanese business delegations continue to visit Seoul, and a large Japanese
parliamentary delegation will go to South Korea next week. Progress at the official
level, however, may be slow. No resolution of the Kim Tae-chung incident is now in
sight, although discussions on a compromise are continuing. Tokyo had previously
talked about having the ministerial meeting in September, but even this may not be
possible. Both sides, however, share strong mutual interests, and neither would like
to see their differences get out of hand.
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National Intelligence Bulletin
July 3, 1975
Although Angola's three competing liberation groups are doing little to
implement the terms of the truce agreement their leaders signed at a meeting: in
Kenya almost two weeks ago, the heavy fighting that prompted the meeting has
fallen off sharply. Partisans of the two major groups-the National Front for the
Liberation of Angola and the Popular Movement for the Liberation of
Angola-continue to skirmish occasionally in Luanda, however.
The Popular Movement is maintaining a blockade on shipments of foodstuffs
by road from Luanda to areas in northern Angola controlled by the National Front.
Northern Angola traditionally has depended on Luanda and low-level trade with
Zaire for food and consumer gods. To relieve the situation, Portuguese naval ships
are delivering some supplies to northern ports controlled by the National Front. The
Popular Movement's blockade also has discouraged the influx of migrant workers
from the south; they provide the bulk of the labor force for the coffee plantations in
the north.
The transitional government's cabinet, composed of Portuguese officials and
representatives of the three liberation groups, has been meeting since June 28 in an
effort to work out details for establishing a national army. No progress appears to
have been made. The agreement signed in Kenya called for an integrated army made
up of troops provided by the liberation groups and the disbandment of the separate
forces of the three groups. The original independence agreement signed with the
Portuguese last January also called for a national army, but allowed the groups to
maintain independent military forces too.
Nothing has been done to comply with one of the key provisions of the
agreement-disarming civilians. In past fighting, armed civilians have proved to be a
valuable auxiliary for the Popular Movement in areas, particularly Luanda, where its
regular military force has been outnumbered by National Front troops. The Popular
Movement controls the ministries responsible for disarming the civilians and is in no
hurry to implement the provision. Protracted delay, however, could prompt the
National Front to attempt to do the job with its own troops, a move that would
surely lead to renewed heavy fighting.
Portuguese officials in Luanda admit that the emigration of whites is climbing
sharply. About a third of the 300,000 whites living in Angola at the time the
transitional government was installed last January have already left. Officials expect
the majority of those remaining to go in the near future. Many officials doubt that
the emigres will return even if a peaceful transition to independence next November
can be worked out.
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National Intelligence Bulletin
British Anti-Inflation Struggle
July 3, 1975
Chancellor of the Exchequer Healey's threat to limit wage increases unless
labor agrees to voluntary restraints has forced union and industry leaders to face
up to the inflation problem sooner than they expected. The government plans to
issue a white paper next week outlining its economic program.
Healey told parliament this week that unless labor volunteers to help reduce
the rate of inflation to 10 percent by next year, the government will limit the funds
available to the nationalized industries for wages and, through price controls already
on the books, will limit the ability of private employers to pass the cost of pay
increases to consumers. In this way, the government would control wages and prices
without putting controversial wage-control measures on the books. The unions
would be faced with the dilemma of choosing between higher unemployment or
limited wage increases.
Most union leaders recently have become more aware of the need to lower the
current rate of inflation and have been talking about keeping wage and price
increases next year to about 15 percent. As a price for this restraint, they want the
government to take steps to reduce unemployment and to cut or freeze salaries of
top earners.
Likely Government Action
The government probably will have no choice but to follow through with its
threat to limit wage increases because a voluntary restraint program is doomed from
the start. The government knows that leaders of the Trades Union Congress have
practically no control over militant unions, and leaders of those unions are unable to
keep the rank and file in line. Individual unions will be afraid that if they comply
with government guidelines, their wage levels may fall below what they might be
able to negotiate freely and their wage position relative to other unions would
deteriorate. Rising unemployment, however, could serve to soften union demands.
The miners are likely to present the most immediate threat to the government's
endeavor to get voluntary compliance. They have already announced that they will
be seeking wage increases of up to 65 percent. Healey told Ambassador Richardson
last week that he expects the miners to press for a large sum and that the
government is preparing now for any eventuality by beginning to stockpile coal.
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National Intelligence Bulletin
July 3, 1975
Healey may foresee a period of labor unrest if the government acts. He
commented yesterday that his government is opposed to the application of criminal
sanctions against the unions or individual workers. Party leaders are always
conscious of the fact that much of the financial and electoral support for the Labor
Party comes from the unions.
Political Consequences
Despite the magnitude of the problems he faces, there are several reasons why
Prime Minister Wilson is likely to remain head of the party and government at least
until some time next year.
--Wilson still has an effective majority of one in Commons and even if that seat,
which is now in jeopardy, is lost, he can rely on the support of many Scottish and
Welsh nationalists and on one Ulster vote for much of his legislation. Many Tories
too can be expected to vote along with the government on legislation aimed at
solving the country's economic problems. Even if the left-wing Laborites in
Parliament disagree with Wilson's proposals, they prefer him to a Tory prime
minister.
--Wilson himself is not likely to call an election now. Although the Tories have
offered no alternative economic program, the general voter dismay with the
deteriorating economy would lead to a defeat for Labor. Wilson got this message in
the recent by-election which resulted in a Tory victory. Wilson also remembers that
former prime minister Heath lost an election fought over similar economic issues.
--Wilson is likely to remain party leader even though many of the left wing
would like to dump him. The left has no candidate acceptable to the rest of the
party and to the electorate at large. The party headed by a left-winger would be at a
disadvantage should it face a general election.
--The Tories would not want to force an election in the near future, even if
they had the parliamentary strength to do so. They cannot agree on how to solve the
country's economic problems; two years ago when Heath imposed statutory wage
and price controls, many Tories opposed his program. They also have a new and
untested leader in Margaret Thatcher. Many Tories found her performance
disappointing during the campaign before the EC referendum.
--A coalition government composed of the Labor, Conservative, and possibly
even the Liberal parties is not in the cards at this time, although the British press has
been speculating about such a possibility for over a year. Britain's troubles are not
yet of the same magnitude as they were during the Great Depression or World War
II, and no politician hoping to lead his or. her party to victory is prepared to
participate in a coalition at this time.
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Economic Consequences
The new anti-inflation policies proposed by Healey would reinforge the current
decline in demand by limiting government spending at a time when private spending
is declining, but would not have a substantial effect on key indicators until late this
year or early 1976. Wages for most workers for the rest of this year have already
been negotiated, so tighter controls would not begin to affect labor costs until late
in the fall. Large cost increases already in the pipeline, because of the depreciation
of the pound as well as record wage settlements, have not yet been fully filtered
through to consumers. As these costs are reflected in market prices, the purchasing
power of consumers will be squeezed.
Weak and declining demand for output, as well as the possibility that tighter
wage-price controls will squeeze corporate profits, make it unlikely that the upward
trend in unemployment will be reversed soon. There are already 900,000
unemployed, and by early 1976 there are likely to be 1.5 million Britons out of
work. This would raise unemployment to its highest level since the end of the
depression. Britain's best hope for recovery in the near future lies in an upturn in the
world economy that will lead to sharply higher exports from the UK.
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