NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A028300010043-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 20, 2016
• Document Release Date: June 28, 2006
• Sequence Number: 43
• Publication Date: November 26, 1975
• Content Type: REPORT

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National Intelligence
Bulletin
Top Secret
State Dept. review completed
DIA review(s) completed.
Top Secret
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National Intelligence Bulletin
November 26, 1975
CONTENTS
PORTUGAL: Anti-Communists in
military appear stronger . . . . . . . . . . . . . . . . . . . . 1
SPAIN: Enthusiastic reaction
to King Juan Carlos . . . . . . . . . . . . . . . . . . . . . . 3
LEBANON: Karami increases
attacks on Christian leaders . . . . . . . . . . . . . . . . . . . 5
USSR: Trade deficit in 1975 . . . . . . . . . . . . . . . . . . 7
CYPRUS: Effort to revive
intercommunal talks . . . . . . . . . . . . . . . . . . . . . . 9
UK-ICELAND: Naval protection
for British fishermen . . . . . . . . . . . . . . . . . . . . . 10
FINLAND: Caretaker government
asked to remain in office . . . . . . . . . . . . . . . . . . . . 11
ANGOLA: Communist support for
Popular Movement increases . . . . . . . . . . . . . . . . . 12
RHODESIA: Smith and nationalists
publicly agree to talk . . . . . . . . . . . . . . . . . . . . . 16
CHINA: Peking challenging
Hanoi over Spratlys . . . . . . . . . . . . . . . . . . . . . . 17
VIETNAM: Mounting propaganda
attacks against Thailand . . . . . . . . . . . . . . . . . . . . 18
NEW ZEALAND: Sunday's national
elections will be close . . . . . . . . . . . . . . . . . . . 19
MALAYSIA: Razak arrests
chief political rival . . . . . . . . . . . . . . . . . . . . . . 20
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National Intelligence Bulletin
November 26, 1975
Anti-Communists in the Portuguese military appear to be in a stronger position
following the rebellion yesterday by leftist paratroopers.
According to latest reports, government forces have retaken the three air bases
and the Lisbon region air headquarters that were occupied by the rebels. The
mutinous paratroopers, however, regained control over their home air base in
Tancos, some 77 miles north of the capital, after temporarily losing it to loyalist
forces. Radio and television stations taken over by leftist military groups yesterday
were cut off the air by the government, which substituted programs originating in
Porto.
Backed by several members of the Revolutionary Council-including a subdued
Otelo de Carvalho-President Costa Gomes last night declared that the Lisbon
military region was under a state of seige. He ordered a midnight-to-six curfew and
banned the publication of all newspapers in the region today.
The paratroopers' rebellion was apparently planned in advance, but not widely
coordinated with other leftist military or civilian groups. A few leftist soldiers tried
to use the Revolutionary Council's reaffirmation of Carvalho's removal as head of
the Lisbon military region to rally additional support, but the paratroopers
themselves focused only on calling for the removal of anti-Communist air force
officers on the Revolutionary Council and the ouster of air force Chief of Staff
Morais da Silva.
Yesterday morning, paratroopers succeeded in gaining entry into the three air
bases and the Lisbon air region headquarters, apparently with the assistance of the
extremist organization "Soldiers United Will Win." There were unconfirmed reports
that two other bases had declared for the rebels, but pilots at the affected bases
apparently escaped to the north with most combat aircraft.
Leftist officers of some Lisbon-based support units were also caught up in the
move and aided in taking control of Lisbon radio and television stations. No other
units joined in the effort, although the Lisbon light artillery unit reportedly took up
defensive positions on highways leading north from the capital.
Despite broadcast pleas for leftists and workers to come into the streets to
support the paratroopers, the only significant civilian participation was by
anti-Communists at Monte Real, some 75 miles north of Lisbon, where the
reportedly assisted in recapturing the local base from the rebels.
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The Communists' failure to join in the rebellion has prompted Labor Minister
Tomas Rosa to speculate that the party may have encouraged the feeble effort in the
hope it might spark a countercoup from the right. The Communists presumably
reasoned that the rightists would meet swift resistance and the Communists would
be able to reclaim some popular support.
The government has yet to reassert control throughout the Lisbon region. The
effective performance of the loyal commando regiment, however, will probably
discourage leftist units from trying to regain the initiative soon. The Communists
must view the events of yesterday as a reversal, but the party still has most of its
political assets.
Anti-Communists in the military, as well as the non-Communist political
parties, are in a strong position to exploit the incident, just as the left exploited the
abortive rightist coup last March 11. The campaign to purge radical leftist officers
from the military should be given a strong boost.
Whether the anti-Communists are prepared to follow through, however, is
another question. President Costa Gomes appears to have read the trend yesterday in
time to side with the stronger force, but he prefers a balance of forces and may try
to rein in any group that seeks to capitalize on the situation.
The threat remains that rightists may make a move that would confuse the
situation. Exiles in Spain were apparently not ready to act during the tense hours
yesterday. Similarly, there was no effort yesterday by separatists in the Azores to
take advantage of the distraction caused by the rebel paratroopers. Either group still
could act in a way that might ultimately aid the left.
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National Intelligence Bulletin
King Juan Carlos' initial efforts have been primarily aimed at wooing the
military in the apparent hope that firm support in the armed forces will strengthen
his hand in the political sector.
US defense attaches in Madrid report that the reaction of the Spanish military
to the King has been enthusiastic so far. Juan Carlos assumed the rank of captain
general-the same rank Franco held-and took his oath as king in uniform. In
addition to stressing the importance of the military in his accession speech, the King
addressed a special message to the armed forces. He reiterated the role of the
military as the guarantor of the fundamental laws, noted especially the military
contribution in Spanish Sahara, and pledged to work closely with them. The formal
ceremony on Thursday honoring the King is expected to include a military review to
demonstrate military loyalty to the head of state.
While giving tentative signs that some degree of political liberalization will
eventually emerge in Spain, Juan Carlos is also paying attention to Franco's old
supporters. Having angered some elements of the far right by failing to mention
Franco's National Movement in his accession speech, the King moved to placate
them by giving his first official audience to the National Confederation for Veterans,
whose members include many ultrarightists.
The Catholic Church in Spain has offered its support to the King and called for
evolutionary change. This has been the message of proclamations by the president of
the Bishops' Conference and the archbishop of Barcelona, as well as in the funeral
oration given by the cardinal primate.
November 26, 1975
The initial reaction to the King among the political opposition has been mixed.
Some oppositionists expressed disappointment that the King did not announce
specific steps toward liberalization or an immediate amnesty for political prisoners
in his accession speech. Christian Democratic leader Ruiz Gimenez, however, said
that he thought the King said as much as he could before the Cortes, which is
dominated by right-wingers who would have been affronted by liberalizing gestures
on the eve of Franco's burial. Felipe Gonzalez, leader of the principal Socialist
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November 26, 1975
party, has said he will give the King a month to make clear his intentions for a
democratic transformation. On the other hand, Santiago Carrillo and some of his
colleagues in the Communist-dominated Democratic Junta coalition group called the
King's speech unacceptable.
Perhaps to counter this reaction, the King last night announced a general
amnesty that will reduce prison sentences on a sliding scale. Prison terms for
terrorist acts or monetary crimes such as forgery will not be reduced. More
significant, all death sentences will be commuted for crimes, including terrorism,
committed before Juan Carlos became King.
An indication that the present calm in Spain may not last came when the
mayor of a small Basque town was assassinated on Monday, apparently by members
of the Basque Fatherland and Liberty group. A communique issued later warned
that similar acts would follow because "the Spanish state has not changed."
The terrorist group may have acted in the fear that the recent gestures made by
Juan Carlos and the government to accommodate regional aspirations will diminish
the appeal of terrorism. The terrorists probably hope to resume the cycle of violence
and repression in order to keep alive Basque resentment against the central
government
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National Intelligence Bulletin
November 26, 1975
Prime Minister Karami in the past two days has intensified his attacks on
President Franjiyah and Interior Minister Shamun, the two key Christians in the
Lebanese government. Karami, a Muslim, has said he can do nothing to restore civil
order in the face of their "hostile attitude."
In a speech to parliment yesterday, the Prime Minister condemned Christian
leaders in general for their refusal to allow political reform and the references some
of them have made to the possible partition of Lebanon. Karami acknowledged that
his government's failure to restrict the flow of arms to all combatants had
contributed to the resumption of heavy fighting, but defended his continued refusal
to call in the Lebanese army.
Shamun acknowledged publicly yesterday that his militia is involved in the
fighting. He told parliament that the private Christian militias have taken matters
into their own hands because government security forces are inadequate to restore
order or to prevent "destructive elements" from overthrowing the government.
The unrestrained activity of Shamun's group apparently embarrassed even the
right-wing Phalangists. Party leader Jumayyil has tried to calm Muslim tempers by
playing up the importance of the national dialogue committee, and his party has
issued a statement urging an end to "ideological quarrels."
The two largest Christian political parties, the Phalangists and the National
Liberals, share the same long-range goals, but their political and military leaders
often have difficulty cooperating. The larger and sometimes better disciplined
Phalangist militia is at the moment upset with the National Liberals for allegedly
attempting to establish footholds in Phalangist-controlled areas of Beirut. A dispute
yesterday over a roadblock in a Beirut suburb grew into an armed clash between the
two.
The fighting between the Christian militias and the Muslim leftists is still heavy
and widespread, although it has not yet reached the level of late October. This time,
there has been sporadic fighting but no sustained clashes in the hotel district.
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According to press reports yesterday, Palestinian forces in one refugee camp.
used their antiaircraft guns to shell a Christian enclave in Beirut. The large
Palestinian militias that control security in the camps have infrequently used this
tactic to counter unusually heavy rocket and mortar fire directed at the camps or
adjoining Muslim areas.
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Syria may soon revive its efforts to mediate the Lebanese dispute as a result of
the increased fighting and reports from Beirut that Egypt may attempt to negotiate
a settlement. According to press reports, Egyptian Foreign Minister Fahmi-who
earlier this month called for a three-month truce-is planning to travel to Beirut on a
"conciliatory mission."
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National Intelligence Bulletin November 26, 1975
We expect the Soviet hard-currency trade deficit in 1975 to be close to $5
billion, considerably higher than earlier estimates. A weak gold market this fall has
forced Moscow to borrow heavily in Western money markets, and the Soviets are
already lining up credits for 1976. If Soviet exports continue to be sluggish, Moscow
may be forced to trim imports some time next year.
The USSR has continued to increase imports at a time when growth in its
exports has been limited by recession in the West. Total imports for 1975 are
estimated at $12.8 billion. In the first nine months of the year, imports from its six
major Western trading partners were running 58 percent above last year. Imports of
machinery and equipment are up about 70 percent over last year's $2.3 billion, and
may reach $4 billion in 1975. Imports of grain will be about $1 billion-roughly
double the 1974 figure. Steel purchases may also reach record levels.
Soviet hard-currency exports probably will rise by no more than 5 percent, to
an estimated $8.1 billion. Exports to the USSR's six major Western trading partners
in the first eight months of this year were down 6 percent from the same period last
year. We expect a considerable rise in the final four months because of reduced
Soviet prices on diamonds, platinum, and palladium; stepped-up exports of Soviet
oil; and the gradual revival in economic activity in the West.
The USSR will finance its 1975 deficit through a combination of Western
credits, gold sales, revenues from shipping and tourism, and a probable reduction in
foreign exchange holdings. Arms sales should provide substantial earnings this
year-perhaps $300 million in hard currency.
The USSR may earn about $1 billion from gold sales in 1975. Confirmed and
rumored sales through July totaled 125 tons, valued at roughly $675 million. We
believe that Moscow continued to sell gold in August-perhaps 20 tons worth $100
million. Sales probably were small in September when gold prices plunged. The
USSR may have reentered the market in October when prices partly recovered and
appeared to stabilize at approximately $145 per troy ounce. Sales of 20 tons per
month in the last quarter, a reasonable prospect, would yield Moscow another $275
million.
From $2.5 billion to $3 billion of the hard-currency deficit will probably be
financed by a combination of Soviet borrowing in the West and a reduction in
foreign exchange holdings. The USSR appears to have secured adequate financing to
meet this year's obligations.
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Soviet efforts to raise loans in Europe and in the US have shown a marked
upswing since midyear, probably aimed at meeting next year's anticipated
obligations. Grain imports, judging from purchases already made or anticipated, will
amount to between $3 and $4 billion in 1976.
The size of next year's deficit will depend largely on the ability of the Soviet
Union to stimulate hard-currency exports to the West. Recent discussions indicate
an increase in Soviet oil exports in 1976, and signed contracts call for a sizable
increase in Soviet natural gas deliveries to Western Europe. Moscow can also be
expected to intensify current efforts to boost export earnings by shaving prices and
pressuring Western governments to correct current trade imbalances.
Use of Eurocurrency borrowing for grain purchases may reduce Soviet access to
the Eurocurrency market to finance capital goods purchases. Moscow may be forced
to pay higher rates for Eurocurrency loans and be more selective in its Eurodollar
borrowing. As a result, Moscow may push for even larger commitments from
Western governments for subsidized credit lines to cover Soviet purchases in the
1976-1980 period.
Soviet medium- and long-term debt will grow substantially during 1975-76 as a
result of the massive borrowing-perhaps to more than $7 billion by the end of 1975
and to nearly $10 billion by the end of 1976.
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November 26, 1975
French Foreign Minister Sauvagnargues will meet today with the Greek and
Turkish foreign ministers-who are in Paris for a Council of Europe meeting-in an
effort to revive the moribund Cypriot intercommunal talks. The French initiative is
a follow-up to President Giscard's visit to Athens and Sauvagnargues' visit to Ankara
earlier this fall.
Sauvagnargues is likely to find the Greeks in favor of resuming the negotiations
now that the UN General Assembly has favorably considered their case. Cypriot
President Makarios declared his readiness on Monday to resume intercommunal talks
on the basis of the UN resolution which, among other things, called for the removal
of foreign troops from Cyprus "without further delay."
The Turks, however, are piqued at the UN's treatment of their case, and they
will be reluctant to agree to an early resumption of the talks. Ankara nevertheless
has again rebuffed Turkish Cypriot leader Denktash, who has called for a declaration
of independence for the Turkish Cyptiot zone. Turkey will probably veto his threat
to oust UN forces from the zone.
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London's decision to send naval vessels to Icelandic waters will almost certainly
increase the likelihood of incidents at sea, and dim hopes for an early renewal of
negotiations on a fishing agreement.
Confrontations between Icelandic coast guard and Royal Navy ships will
further embitter public opinion. There may be some anti-NATO spillover, with
opponents of a fishing agreement arguing that Iceland should leave the alliance if its
members refuse to support the country on this vital national issue. The worsening
political climate could also endanger the recently concluded fishing agreement with
West Germany that was scheduled to be debated yesterday in the Icelandic
parliament.
The decision to send three frigates into the area came after British fishermen
threatened over the weekend to abandon Icelandic waters if they did not receive
naval protection. Icelandic patrol boats have engaged in various harassing actions and
cut the lines of six British trawlers in the last 11 days.
Negotiations between Iceland and Britain collapsed last week after the two
sides were unable to agree on the size of the British catch. London wants an annual
catch of 110,000 tons, and Reykjavik has refused to budge beyond 65,000 tons. The
last round of talks was complicated by the personality of British negotiator
Hattersley, whom the Icelanders found abrasive. A Foreign Office spokesman
indicated that Hattersley is not the government's regular negotiator, but stopped
short of saying that another official would take over for the British if and when talks
resume.
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National Intelligence Bulletin
November 26, 1975
President Kekkonen yesterday asked Finland's caretaker government to remain
in office after repeated attempts to form a majority government had failed.
Kekkonen appointed former governor Martti Miettunen on October 29 to form
a broad-based majority government. The attempt failed because the Social
Democrats and the Communists refused to participate. Both the Social Democrats
and the Center Party subsequently declined to put together minority governments.
Kekkonen had little choice but to ask the current non-political government
headed by Keijo Liinamaa to stay on. He had wanted a majority coalition, including
the Social Democrats and the Communists, that would have had the necessary
parliamentary backing to make the difficult decisions on the country's economic
problems. After a poor election performance in September, however, the Social
Democrats decided they needed more time to reorganize. The Communists are
deeply divided and would rather remain in opposition than assume a share of
responsibility for enacting difficult economic legislation.
The Liinamaa government is in no position to adopt tough measures to deal
with the country's pressing economic problems. It will fall to a successor
government to reduce inflation-now running at an annual rate of 18 percent-and
cut the trade deficit of $2 billion.
There is little indication that an election will be held within the next few
months. Most parties would like a breather from the current political turmoil. The
next serious effort to form a coalition based on the present parliament may not
come until February, and some Finns speculate a "political" government may not
emerge until next fall.
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National Intelligence Bulletin
November 26, 1975
Communist support for the Soviet-backed Popular Movement for the
Liberation of Angola is increasing.
Brigadier General Julio Casas, a deputy minister of Cuba's armed forces, is
reportedly in Angola, probably to direct logistic support for the Cuban force that
may now number an estimated 3,000 personnel. He served on Raul Castro's staff in
the fight against Batista and has had numerous logistic assignments with the Cuban
military since the early 1960s. Other ranking officers may also be in Africa. Cuban
publications have reported changes in seven positions in the Armed Forces Ministry
since September, including the replacement of Casas as chief of services. Each of
Cuba's three army commanders was replaced during the fall. One or more of them
may have been sent to Africa.
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National Intelligence Bulletin
November 26, 1975
Prime Minister Ian Smith and Joshua Nkomo, the leader of a major faction of
Rhodesian nationalists, may soon publicly sign a "declaration of intent" to engage in
early substantive negotiations on a possible settlement of the Rhodesian question.
The declaration apparently would incorporate an agreement on procedural
matters, including immunity for nationalists participating in settlement talks. A
conference at Victoria Falls last August between Smith and a broad coalition of
nationalists broke down over Smith's refusal to grant immunity from detention to
all the nationalist leaders.
Both Nkomo and Smith have stated publicly that they have made progress in
their private talks over the past several weeks.
According to the US embassy in Pretoria, the two leaders
were planning to sign the ec aration when Smith returns to Salisbury from his
current South African vacation on December 2. Nkomo is now pressing, however,
for an earlier signing-this Friday or even sooner-and hopes the South Africans will
persuade Smith to agree.
With word of the procedural agreement beginning to leak out, Nkomo is
anxious to deny rival nationalists such as Bishop Muzorewa and Ndabaningi Sithole
time to mount a campaign against it before it is even surfaced. Sithole has already
denounced Nkomo for selling out Rhodesia's blacks.
Smith is now said to be ready to grant immunity to negotiators named by
Nkomo. The Prime Minister apparently believes-there may indeed be an
understanding-that Nkomo will try to broaden his support by inviting Muzorewa
and his followers to participate in the talks, but will exclude Sithole, who is
anathema to Smith.
Following his recent talks with Smith, Nkomo has been seeking support for the
declaration from the four African presidents who have been trying to arrange a
Rhodesian settlement in collaboration with South African Prime Minister Vorster.
Nkomo apparently can count on the backing of Zambian President Kaunda and
Botswanan President Khama. He reportedly secured the agreement of Tanzanian
President Nyerere, who has been sympathetic to Muzorewa and Sithole, not to
oppose efforts to negotiate a peaceful settlement.
Yesterday, Nkomo was due in Lourenco Marques to try to get similar
assurances from Mozambican President Machel, who also favors Muzorewa and
Sithole.
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A strongly worded People's Daily article yesterday is tantamount to an open
challenge of North Vietnamese occupation of the Spratly Islands.
Much of the article was devoted to a justification of China's claim to
"indisputable sovereignty" over all islands in the South China Sea.
Hanoi is not specifically mentioned in the article, but it noted that "many of
the islands" are still not in Chinese hands, an obvious reference to Vietnamese
occupation of the Spratlys. Emphasizing the importance China attaches to its claim,
the article linked Peking's determination to "liberate" Taiwan with its demand that
all islands in the South China Sea be returned to Chinese control.
The issue of sovereignty over the islands has troubled Sino - North Vietnamese
relations since January of last year when China took over the South Vietnamese -
controlled Paracel Islands, 500 miles north of the Spratlys. The dispute assumed
greater importance to Peking last spring when the North Vietnamese took control of
several of the Spratlys from the former Saigon government.
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Vietnamese propaganda attacks against Thailand are again mounting as Hanoi
presses its demand that Bangkok abandon cooperation with the US on security
matters.
A recent Vietnamese broadcast, for example, has labeled as "nonsense" Foreign
Minister Chatchai's recent condemnation of Hanoi's public support for the Lao
communists during last week's Thai-Lao border clashes. The broadcast maintained
that Bangkok, by attempting to connect Hanoi with the clashes, was seeking to
justify continued Thai "collusion" with the US.
The North Vietnamese recently have gone well beyond their earlier demands
for the return of aircraft flown to Thailand during the last stages of the Vietnam war
by now publicly pressing Bangkok to end U-2 flights from Thailand and remove the
vestiges of the US military presence there.
Foreign Minister Chatchai's talks in Washington will hit on some of these issues,
and the North Vietnamese obviously are interested in driving their message home at
this time.
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National Intelligence Bulletin November 26, 1975
The outcome of New Zealand's triennial national election on Sunday will
probably be close. Polls show the Labor government has narrowed the opposition
National Party's strong early lead.
The depressed economy has been almost the sole campaign issue, but the
contrasting styles of the rival party leaders, Labor Prime Minister Rowling and
National Party leader Muldoon, have made personalities a key factor.
The Nationals are banking on widespread concern over economic problems to
restore them to power. Although New Zealand has been less affected than many
countries by world economic difficulties, New Zealanders have been receiving lower
prices for agricultural exports and resent the current reduction in their accustomed
prosperity. National Party leaders blame the Labor government for the state of the
economy and accuse the Laborites of mortgaging New Zealand's future by
unprecedented overseas borrowing to offset a large trade deficit.
Although Labor was voted in with a massive parliamentary majority in 1972,
the economic turndown has left the government open to charges of mismanagement.
Rowling is defending Labor's general economic policies on the grounds that they
have successfully maintained a high level of employment, and he has made no
apologies for overseas borrowing.
Foreign policy has figured only tangentially in the campaign. Both parties are
committed to maintaining close ties with the US under the ANZUS alliance,
although a National government might be more inclined to avoid the irritants that
have cropped up under the Labor government. Muldoon, for example, has said he
would lift the government ban on port calls by nuclear-powered vessels. He has also
indicated that he would drop Rowling's call for a South Pacific nuclear-free zone
closed to vessels carrying nuclear arms. Both of these Labor policies have been
depicted by the Nationals as limiting military cooperation under the ANZUS
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National Intelligence Bulletin
November 26, 1975
Prime Minister Razak has followed through on his threat to arrest his chief
political rival, Selangor state chief minister Harun,on corruption charges.
Free on bail until the case is brought to court on January 12, Harun says he
welcomes a public airing of the charges against him.
its case, however, public recriminations between
considerable strain within the government.
Even if the government wins
arun and Razak could cause
Militant Malays in the ruling party's youth wing, which Harun heads, may
organize street demonstrations that, considering ever-present Malay-Chinese
tensions, could lead to racial incidents. Some 400 of Harun's hard-core supporters
reportedly have entered Kuala Lumpur; they undoubtedly are being watched closely
by internal security forces alerted by Razak
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