WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01762A000300010015-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 33
• Document Creation Date: December 16, 2016
• Document Release Date: December 7, 2004
• Sequence Number: 15
• Publication Date: May 22, 1970
• Content Type: REPORT

Approved For Release 2004/12/16: CIA-RDP79T0176 A00030091 o0001 eCret 25
DIRECTORATE OF
INTELLIGENCE
W
25X1
]l~
W
Top Secret
519 25
22 May 1970
VIP
Approved For Release 2004/12/16 : CIA-RDP79T01762A000300010015-9
 25X1 Approved For Release 2004/12/16 : CIA-RDP79TO1762A000300010015-9
Approved For Release 2004/12/16 : CIA-RDP79TO1762A000300010015-9
 Contents
(Information as of noon EDT, 21 May 197
Page
THE WEEK IN PERSPECTIVE ................. .......... 1
Vietnam-Cambodia, COSVN, Buddhists I
Communists Grab Much of Cambodia's Northeast I
Asian Nations Meet in Djakarta to Discuss Cambodia .............. 6
Peking Postpones Warsaw Meeting .......................... 7
Communists Keep up Pressure in South, Hold Off in North Laos ...... 8
Marcos Switches to More Amicable Relations With US .
..
........ 9
Peking's Party Building Efforts Drag On ...........
..
....... 10
EUROP
THE WEEK IN PERSPECTIVE ......
E
......
.....
11
Moscow to Keep Presence in Phnom Penh ..........
..
....... 12
Eastern Europe Cautious in Response to Bonn's Overtures
..
....... 13
Eastern Europeans Worry About Relations With US ............. 13
Agricultural Prospects Dim in Eastern Europe ................. 14
Soviets Seeking Warsaw Pact Support Against China ............. 15
25
25X1
25X1
25
Page i WEEKLY REVIEW 2 May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176 A000300010015-9
 Approved For Rel
Franco-British Concorde SST Soon to Fly Mach Two ............ 16
Finns Resort to Nonpartisan Government as Stopgap ............ 17
Labor Agitation Tests Italian Government .................... 18
25X1
THE WEEK IN PERSPECTIVE ........................... 19
Lebanese Humiliated Last Week .......................... 22
Iran Faces Slower Economic Growth ....................... 23
Saudi Arabian Feud With Syria Revived by Tapline Break ......... 23
Moderates Have Edge in Ceylon's Parliamentary Elections ......... 24
WESTERN HEMISPHERE
THE WEEK IN PERSPECTIVE ........................... 25
Bolivian Moderates Improve Political Postion .................. 26
Chilean Presidential Campaign Swings Into High Gear ............ 26
Ecuadorean Government and Business Battle Over New Taxes ...... 27
Dominican Elections Strengthen President's Control ............. 28
Castro Blasts US, Admits Sugar Harvest Defeat
25X1
25X1
25X1
25X
Page ii WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T01762A000300010015-9
 Approved For R lease 200411-2116- - CIA A000300010015-9
The conflict in Indochina widened and deepened this week. Communist
forces in Cambodia solidified their control over most of the northeastern
provinces as they moved to keep open existing supply routes and establish
new, more protected ones farther inland. The Cambodia Army is receiving
considerable help from South Vietnamese forces in the border areas and in
the southeast. This assistance may continue for some ime, but it is not
without its drawbacks. Traditional animosities between the two peoples have
quickly cropped up with reports that South Vietnamese troops are engaged
in looting, rape, and even murder in some areas. At least some South
Vietnamese leaders welcome this opportunity to gain power over their
weakened neighbor.
In South Vietnam, Communist forces have sharply ncreased harassing
attacks, and the evidence indicates that similar waves of imited attacks will
extend through the summer. The Communists continue tc demonstrate that,
despite the attacks on their sanctuaries and the relocation of major elements
of their command structure farther inland in Cambod a, they retain the
ability to conduct disruptive raids at times and places of their choosing.
The situation in northern Laos is relatively quiet, and although the
Communists remain in strength within striking distance of the Meo tribal
stronghold at Long Tieng, there are signs they may be content to hold firmly
onto the Plaine des Jarres rather than conduct further offensive activity
during the next few weeks. In the south, however, Pathet Lao and North
Vietnamese forces are continuing to exert pressure on go ernment positions
around the Bolovens Plateau and can take the provincial capital of Saravane
any time they choose.
The Communist Chinese have been steadily reite
position on Indochina. They recently gave an extremely
Vietnamese party chief Le Duan, and a statement by N
May stressing the "protracted war" theme was repeatec
massive Peking rally in support of Sihanouk. The Chines
militance by canceling this week's session of the Sino-US 1
rating their tough
warm welcome to
ao Tse-tung on 20
1 the next day at a
e emphasized their
alks in Warsaw.
On the somewhat brighter side, President Marcos of the Philippines has
decided that his policy of encouraging anti-US activity is not paying off,
particularly after the US ambassador pointed out to him the value of US
bases to Philippine and regional security. As a result, Marcos has ordered
Philippine officials to reduce the irritations arising from the lawless con-
ditions that surround US bases and stepped hard on a F lipino congressman
who was trying to get a US base commander declared persona non
grata.
25X1
Page 1 WEEKLY REVIEW 2 May 70
Approved For Release 2004/12/16: CIA-RDP79T01766A000300010015-9
25
25
 Approved For Rel
25
Vietnam-Cambodia, COSVN, Buddhists
Saigon Seeks Wider Role in Cambodia
The South Vietnamese are broadening their
military activities in Cambodia, and there are
signs that the intervention may be prolonged.
Both President Thieu and Vice President Ky have
called for attacks against the Communists in Cam-
bodia as long as those forces threaten the security
of South Vietnam. They acknowledge that ar-
rangements for such operations must be worked
out with Phnom Penh but appear confident that
this can be done without serious difficulty.
Phnom Penh's acceptance of the extensive South
Vietnamese operations along the main Saigon -
Phnom Penh highway and more recently in the
southeastern provinces of Cambodia is likely to
bolster this belief.
President Thieu has been trying cautiously
to improve communications with the Lon Nol
regime ever since the March coup. Despite long-
standing animosities between the Vietnamese and
Cambodians, progress has been made and the two
countries probably will renew full diplomatic rela-
tions and exchange missions in the very near
future.
If the South Vietnamese and Cambodians
are to develop an effective working relationship in
a common fight against the Communists, how-
ever, many more obstacles will have to be over-
come. Friction and mutual resentment between
South Vietnamese and Cambodian officials al-
ready have cropped up in Phnom Penh and in the
field along the border. Cambodian sources are
reporting that South Vietnamese soldiers are
guilty of pillage, rape, and even murder, and
that the Cambodian National Assembly has been
discussing this problem.
Top leaders on both sides are trying to
smooth over the problems, but if traditional an-
tagonisms are to be kept in check, Saigon prob-
ably will have to take pains to assure the Cam-
bodians that South Vietnamese objectives in Cam-
bodia are limited. Right now, with Communist
forces threatening on many Cambodian fronts,
the Lon Nol government probably will accept any
assistance Saigon can give, whatever reservations
it may harbor regarding South Vietnam's longer
term intentions.
For its part, Saigon does not have a free
hand to help Cambodia, in part because of wide-
spread hostility in South Vietnam toward the
government in Phnom Penh. Students, some
Saigon newspapers, and opposition politicians
have vigorously criticized the Lon Nol regime for
its rough treatment of Vietnamese in Cambodia
and the Thieu government for soft pedaling the
issue. Thieu has, in fact, been glossing over re-
ports of mistreatment of Vietnamese in Cambodia
and stressing the need for a joint effort against
the Communists.
Buddhist Problem Simmers
The Thieu government encountered only
low-key protest activity this week from students
and veterans, but it may be facing more trouble
from the country's contentious Buddhist organi-
zations. The two principal rival factions are both
suffering from internal disagreements, and one of
them, the officially recognized Quoc Tu sect, is
now threatening to disband.
25X1
25
Page 2 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T01762A000300010015-9
 5X1
Approved For Rel .
the militant antigovernment An Quang faction.
They are particularly upset by the government's
refusal to help them oust a number of An Quang
monks remaining on their pagoda grounds ever
since the An Quang temporarily seized their head-
quarters earlier this month. Their threat is aimed
at forcing the government to resolve the dispute
in their favor and to bring the regime more solidly
behind the Quoc Tu. If they actually disbanded
their organization, the government would be left
without any formal Buddhist support and the An
Quang would be in a better position to assert
their influence over the country's largely Bud-
dhist-oriented population. Although the Quoc Tu
Buddhists have recently become rather inef-
fectual, the government, which is under fire from
several quarters, can ill afford to lose the al-
legiance of any organization.
0
X1000300010015-9
that several enem base camps have been overrun.
One complex, les than five miles north of Tay
25
25X
iarge quantity
soldiers in the vi inity of the location on 6 May
of the main CO VN headquarters strongly sug-
gests another imp rtant base had been uncovered.
In South Vi tnam, the Communists sharply
increased harassi attacks in the I and IV Corps
regions during th week, but enemy ground forces
continue to ondrate in small units.I
a e
enemy plans to c rry out similar waves of limited
attacks throughout the summer.
25X1
25X
25X1
25X1
25X
Page 3 WEEKLY REVIEW 2; May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176 A000300010015-9
 Approved For R .
Cambodia: Current Situation
Chhnang
11 ~~ x ' COmbodians r ahi cor tro
Kgmpong Chm
1 .. .. a'onie Bet
-mpong Thom
.. ~_. ..I
Komp~
25X1 D
25X1
THAILAND
Phnom Penh
oin eu.g? l
AIRS i
d ve1o'
rc ; t - 111. Kompon~ Som4 Kam
N
Communist-controlled
Contested or under Communist
influence
`..;., *Saigon
T N A
Page 4 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79TO1762A000300010015-9
25
 Approved For Re
Communists Grab Much of Cambodia'
The capital of Stung Treng Province fell
before a sharp attack on 15 May as Viet Cong
forces increased pressure on the remaining iso-
lated government outposts in Stung Treng and
Ratanakiri provinces. The Communists now ap-
parently control the Se Kong - Mekong waterway
all the way from the Laos border to the outskirts
of Kompong Cham. Additional attacks against the
remaining government positions in the northeast-
ern provinces are almost a certainty, and it is
probably only a matter of time before the govern-
ment's presence there is eliminated completely.
The Communists' current drive to secure control
of these provinces is designed to ensure the main-
tenance of already existing supply routes from
Laos and to open up other routes farther inland.
25X1
Government forces, with South Vietnamese
support, regained control of Kompong Cham city
on 17 May, but they have been unable to move
east across the Mekong in the face of stiff enemy
pressure. A South Vietnamese force swept into
southern Cambodia on 17 May, relieved the
beleagured Cambodian garrisons at Takeo, Kep,
and Kompong Trach, and is moving west toward
the harassed coastal city of Kampot. Communist
control is now confined to a narrow belt of ter-
ritory just north of these operations, but, as in
other border areas, they will almost certainly re-
assert their control if the South Vietnamese pull
back.
In Phnom Penh, a top government official
reportedly believes the army has been making
progress against the Communists. He expressed
the view that current allied operations in Cam-
bodia and the upcoming rainy season would cause
the enemy offensive to falter. This official also
believes that, with a respite, the army can become
sufficiently equipped and trained to combat
future Vietnamese Communist military threats.
Not all C
optimism about
chief of staff, fo
what gloomier op:
of the Cambod
seemed to believe
military action w
under. In spite of
however, the moi
very low and de
lems. I
Northeast
am b odian leaders share this
the future, however. The army
example, has offered a some-
nion about the military prowess
ian Army, although he, too,
that US and South Vietnamese
)uld keep Cambodia from going
recent allied military assistance,
ale of the armed forces remains
fections continue to pose prob-
On 18 May Si! nou s headquarters in a ing
released copies of two letters purportedly sent
from the "liberated areas" by Sihanouk's min-
isters of defense, interior, and propaganda. The
letters report the election of committees for the
National United Front in the "liberated areas"
and great "voluntary contributions both in man-
power and mate ials" by the people of the area
for the overth ow of the Lon Nol govern-
ment.
25X1
25
25
25X1
25
Page 5 WEEKLY REVIEW 2 May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176 A000300010015-9
 Approved For R lease - 000300010015-9
25X1
Asian Nations Meet in Djakarta to Discuss Cambodia
Indonesian Fore* n Minister Malik's initia-
tive on Cambodia
me ou reasons y well.
he twe ve participants in the 16-17 May Dja-
karta conference put on a good show and pro-
duced.a statesmanlike communique.
The conference is not likely to have a meas-
urable effect on events in the Indochina area, but
it was never expected to do so. Its chief merit,
acknowledged from the beginning by all partici-
pants, is that Asian nations for the first time have
taken the initiative on an Asian problem and have
followed through to the extent of discussing it
among themselves and specifying future action.
Its principal weakness, which prejudiced its
accomplishments from the outset, was its largely
pro-Western complexion; the three Communist
nations and six of the nonaligned countries
declined to participate. Of the twelve nations
represented, only Indonesia and Singapore were
nonaligned.
The most significant point made in the
communique was the recommendation for a
broader international conference at a later date.
To this end, the communique directed the for-
eign ministers of Japan, Malaysia, and Indonesia
to begin "urgent consultations" toward convening
a conference similar to that already suggested by
the UN Secretary General and others. The three
foreign ministers are to approach the participants
of the 1954 Geneva conference and all other
interested parties. Otherwise, the communique
followed anticipated lines in calling for the
immediate cessation of hostilities in Cambodia,
the withdrawal of all foreign forces, respect for
Cambodia's sovereignty and neutrality, and reac-
tivation of the International Control Commission.
As expected, Indonesia and Japan played
key roles at the conference and were chiefly
responsible for the content of the communique.
Japan's contribution was additionally significant
in that, for the first time since World War II,
Tokyo engaged in a purely political regional con-
ference in contrast with its previous activities in
economic and developmental fields. Other major
participants were Thailand and Australia. Both
Australia and New Zealand were pleased at the
extent of their acceptance at an Asian conference
on an Asian problem.
The good organization and general smooth-
ness of conference procedure seemed to surprise
both participants and observers, particularly con-
sidering Malik's hasty, largely untested initiative
last month and the resultant pique in a number of
Asian capitals. Assistance from Japan and Aus-
tralia as well as Indonesia's traditional capacity
for extraordinary, eleventh-hour activity probably
accounts for the good performance
25X
25X
Malik, who had been censured domestically
for having compromised the nation's nonaligned
foreign policy in nurturing this largely pro-
Western conference, seems to have emerged
undamaged politically and perhaps with his posi-
tion slightly enhanced. He has a key role in fol-
low-up consultations aimed at developing a later
and more broadly based conference and thus has
provided Indonesia with the kind of symbolic
area leadership that Djakarta wants.
25X1
25
Page 6 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T01762A000300010015-9
 Approved For R ease 204/1 Z/1 b : - A000300010015-9
Peking's decision to cancel the Sino-US
meeting in Warsaw this week represents a tempo-
rary postponement designed to underscore
China's hard-line public posture against US ac-
tions in Cambodia while keeping open this
important channel of communication with Wash-
ington. Unlike China's last statement of cancella-
tion in February 1969, its announcement this
week was relatively mild in tone and clearly
implied that a new date for the next meeting
would soon be arranged through the normal
diplomatic mechanisms in Warsaw.
The Chinese obviously considered that to
meet while US troops were engaged in ground
operations in Cambodia would prove embar-
rassing and would tend to undercut the image of
resolve and militance Peking has adopted in
response to developments in Indochina. In par-
ticular, the Chinese probably believe that signs
they were "dealing with the enemy" on a busi-
ness-as-usual basis would raise questions in Hanoi
at a moment when China's influence in North
Vietnam is on the rise.
The Chinese over the past month have con-
sistently emphasized their hard-line position on
Indochina in order to encourage Hanoi to steer
clear of a negotiated settlement, persist in a "pro-
tracted war," and drive the US out of Southeast
Asia. At the same time, Peking has also seen a
golden opportunity to capitalize on Moscow's re-
cent equivocation over the Cambodian issue. Last
week, for example, the Chinese gave a warm wel-
come to Vietnamese party chief Le Duan, in-
cluding a meeting with Chairman Mao and Vice
Chairman Lin Piao. This is the first publicly re-
ported meeting of a North Vietnamese leader
with Mao since 1965. This Chinese demonstration
of support is in sharp contrast with the Viet-
namese leader's eirlier rather lukewarm send-off
from Moscow an was obviously designed further
to encourage Han is militancy at the expense of
the Soviets. Following up on what Peking clearly
believes to be it current advantage, a Chinese
central committe message to the North Viet-
namese on the o casion of Ho Chi Minh's birth-
day again stressed the "protracted war" theme.
Although relations with the Soviets and the
North Vietnames are almost certainly the con-
trolling factor both in Peking's insistence on a
hard line with egard to Indochina and in its
decision. to poste ne the meeting in Warsaw, the
Chinese are clearly concerned about develop-
ments in Southeast Asia. Chinese attacks on
President Nixon, for example, have been espe-
cially bitter in the past several weeks, labeling him
a "malicious war criminal" and a "cornered dog."
This concern is till relatively limited, however.
Had Peking expected a sudden, serious worsening
of the situation in Indochina, it might well have
wished to meet in Warsaw to convey a private
expression of concern or warning.
Indeed, despite their strong verbal blasts, the
Chinese will probably be ready to resume the
talks once US forces have withdrawn from Cam-
bodia. For one thing, the Chinese statement
clearly tied the current postponement to the US
presence there. More importantly, Peking
definitely views the Warsaw sessions as an im-
portant source o much-needed political leverage
in its dispute with the USSR. The recent upsurge
in Soviet polemics against China, together with
Moscow's contin ing military build-up along the
Sino-Soviet frontier, almost certainly provides
sufficient incentive to dissuade Peking from any
prolonged suspension of the Warsaw talks.
25X1
25
25X1
25X
Peking Postpones Warsaw Meetin
Page 7 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176 A000300010015-9
 Approved For Rel - A000300010015-9
Communists Keep Up Pressure in South, Hold Off in North Laos
Communist forces during the past week con-
tinued to threaten the provincial capital of Sara-
vane and to exert pressure on government posi-
tions along the eastern rim of the Bolovens Pla-
teau. Unconfirmed reports of three North Viet-
namese battalions on the outskirts of Saravane
have caused most of the civilian population to
leave the town, but so far the Communists have
confined their military action to occasional
rocket fire and brief skirmishes around govern-
ment outposts. The garrison commander, believ-
ing an enemy attempt to seize Saravane is immi-
nent, has closed the town's airstrip to resupply
and evacuation flights. The Communists clearly
have the capacity to take Saravane by force but
may continue to employ largely psychological
tactics, as they did at Attopeu, to persuade gov-
ernment forces to surrender the town.
Communist. controlled territory
Contested territory
Com nu n lsiaand Neu~rainsi
control June 1962
25X1 D
Enemy troops remain in control of Attopeu
and the artillery site overlooking that provincial
capital. This week they also seized an important
guerrilla base about ten miles to the northwest
and told supporters that they would soon attack
the principal guerrilla base on the plateau.
Communist motivations in maintaining a
high level of military activity in this region remain
unclear. They may be seeking to broaden their
logistic routes to the south, but it is possible they
may only be making a show of force in the
panhandle to compensate for their difficulties in
achieving all their objectives in northern Laos.
Although a major push against the Meo
stronghold at Long Tieng cannot be ruled out,
time is running against the Communists. Enemy
forces did succeed in seizing several government
outposts north of Long Tieng this week, which
put the base, once again, within range of 122-mm.
rocket fire. But these actions appeared to be
designed to retard government efforts to expand
the Long Tieng perimeter rather than to gain
ground from which to launch an attack.
On balance, it appears that prospects for a
Communist drive against General Vang Pao's
headquarters before the end of the dry season are
dimming. The evidence suggests that the two
North Vietnamese divisions in the area are shift-
ing to a defensive posture to avoid a repetition of
last year, when, during the rainy season, Meo
irregulars easily took the Plaine des Janes from
the Communists.
If Vang Pao succeeds in clearing the area
south of the Plaine, he can sit tight around Long
Tieng and give his troops a much needed respite.
This strategy might include an effort to recapture
bases north of the Plaine and some harassment of
the enemy's rear areas, but it would avoid a major
Page 8 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79TO1762A000300010015-9
25X1
25
 Approved For R9leas 9 0 01 11 211 6 ? CI -RDP79Tn17EgA000300010015-9
25X1
wet season offensive. Such a course could con-
ceivably return the fighting in the north to the
pre-1969 ground rules, when the Plaine was more
or less a Communist sanctuary and the Commu-
nists refrained from driving toward Long Tieng
and the Meo heartland.
This course runs the risk of allowing the
Communists to maintain forward positions on the
Plaine from which they could mount a fresh of-
fensive toward Long Tieng in the fall. An offen-
sive to push the Communists from the Plaine once
again or to interdict Route 7 might set back
Communist plans but it would probably be more
costly than last year's effort.
Either way, it seems doubtful that the Meo
guerrillas can ext icate themselves from the war
of attrition in which they have been locked with
the Communists or the past decade.
25X1
Marcos Switches to More Amicable Relati4s With US
President Marcos, responding to pressure
from the US ambassador, appears to have moved
quickly to reduce the irritants in US-Philippine
relations that arise from lawless conditions
around US bases. The promised improvement
could be only temporary, however, because na-
tionalistic Filipino politicians and the Manila
press delight in ballyhooing incidents involving
Filipinos and US soldiers.
The general illegal activities of Filipinos
around the bases complicates US military opera-
tions and also poses a threat to US military per-
sonnel and their dependents. Local Philippine
officials have tended to ignore the negotiated
military base rights agreement that allows the US
to determine when a soldier is on or off duty and
thus which court, US or Philippine, takes jurisdic-
tion. In addition, they have dragged out the dis-
position of cases, frequently forcing servicemen
to remain in the Philippines beyond the end of
their tour of duty.
To ease the situation, Marcos has ordered
Philippine authorities to comply with the US-
Philippine agreement on jurisdiction. He has also
taken steps to diminish political exploitation of
the US military presence, particularly by Filipino
politicians who in a time-honored tactic draw
exaggerated attention to incidents involving US
servicemen several times each year as a way to
revalidate their nationalist credentials. On this
tack, Marcos has silenced a congressman who had
been pushing fo a congressional resolution that
would have labeled a US base commander persona
non grata. The P esident, however, has less lever-
age on the politicians than he does on government
officials, and the former are unlikely to keep still
for long.
These actions by Marcos, who has himself
played on anti- sentiment when he considered
it to his political advantage, reflect a re-evaluation
of the worth of US bases to the Philippines. His
switch to more micable tactics no doubt stems
from a fear that perating difficulties could impel
the US to lower is military strength in the Philip-
pines to a level hat Manila would see as reducing
the effectiveness of the US security umbrella.
Marcos had been increasingly worried over what
he saw as an overly quick reduction in the US
military present in Asia. He clearly views the US
operations in C mbodia as demonstrating an in-
tent to remain Iron 1 committed in Asia.
25X1
25X1
25X
Page 9 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176~A000300010015-9
 Approved For Release - A000300010015-9
Peking's Party Building Efforts Drag On
The Chinese Communists' campaign to re-
build their shattered party apparatus is still mov-
ing at a snail's pace even though a full year has
elapsed since the ninth party congress. Current
discussions in domestic propaganda indicate that
the principal obstacles to reconstruction are quar-
rels over staffing new party committees and re-
sistance to the party's resuming its previous lead-
ing role in local administrations. There are also
signs that these problems are being compounded
by intensified factional infighting between various
former Red Guard groups that are vying for domi-
nant positions in the new party organs.
Despite Peking's evident desire to speed up
the tempo of reconstruction, the majority of the
new party committees formed since the first of
the year have appeared only at the lowest levels
of administration, i.e., in communes, factories,
and production brigades. To date, less than one
third of the provinces have claimed that one or
more reconstructed party committees have been
formed as high as the county level. Not one has
been announced at the special district or provin-
cial levels, and only a single small city in southern
China has announced that it has formed a munici-
pal party organ.
25X1
For many months after the party congress,
party rebuilding was seriously hampered by insuf-
ficient guidance from Peking, but this is no longer
the case. Since last December, Peking has issued
several authoritative statements detailing the man-
ner in which the new party organs are to func-
tion. Nevertheless, the regime's moves in recent
weeks to reaffirm these guidelines attest to con-
siderable opposition to them in many localities.
Peking has stressed repeatedly, for example,
that party committees must exercise leadership
over revolutionary committees-the governing
bodies that were formed at nearly all levels of
administration during the Cultural Revolution.
Theoretically, this transfer of power should pro-
ceed smoothly because the new party organs are
required to draw the majority of their member-
ship from the revolutionary committees. An in-
creasing number of radiobroadcasts devoted to
party leadership problems, however, have been
complaining that elements who are on existing
revolutionary committees and who have been
denied membership in the party are unwilling to
submit to its leadership in local affairs.
25X1
Disgruntled former Red Guard activists have
been particularly virulent in their opposition to
party leadership. Moreover, their discontents ap-
pear to have been heightened by Peking's recent
injunctions that Cultural Revolution activists do
not automatically qualify for party membership
and that all former Red Guard factions in a given
area will not necessarily be awarded equal repre-
sentation on new party committees. Thus, in
many areas, competing factions appear to be en-
gaged in a scramble for the relatively small num-
ber of party posts open to them.
rival factionalists for posi-
tions on yet to be ormed county and municipal
committees has sparked considerable political in-
fighting and even some armed struggles-
develonmen
I
ion-suggest that in a number of other locales
members of weaker factions are using the party
building campaign as perhaps a last resort in their
efforts to achieve a share of power and
influ-
ence.
25X1 25X1
25X1
25X
25
0
Page 10 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T01762A000300010015-9
 Approved For Rel
A000300010015-9
ase 900411 .1165 _- CIA-R. IR'779TO177 -
Moscow's recent behavior underscores its preoccipation with coun-
tering the challenge from China. Pravda set the tone on 18 May with the
USSR's most scathing indictment of Peking since last August. Pravda blamed
China for the "latest events in Indochina, taking the line that Chinese
obstructionism weakens socialist unity, thus opening th way for imperialist
aggression.
The Russians continue to wait and see on the m tter of support for
Cambodian Prince Sihanouk, mostly because they fear that he may be in
Peking's pocket. Meanwhile, Moscow sees clear advantage in keeping a hand
in Phnom Penh and has decided for the present not to break with the Lon
Nol government.
The USSR is also agitating to bring its East European allies more solidly
into line in support of Moscow's stand against the Chinese. The Soviets
abruptly summoned Romania's top leaders to Mosco this week for two
days to discuss this and other points of difference. Thee was not much sign
of give on either side, and there are hints that Moscow's patience may be
wearing thin.
Although Prime Minister Wilson claims that he d cided last month to
call for a general election, he was almost certainly influ nced by the massive
swing toward Labor in last week's public opinion polls. ondon bookies-not
noted for throwing away money-quickly established -1 odds for a Labor
win on 18 June. The election will unquestionably be harp fought, despite the
Conservatives' lackluster leadership, and may turn o t to be one of the
closest since World War 11.
The French Communist Party (PCF) this week formally expelled party
intellectual Roger Garaudy. Garaudy, who had already been ousted from the
politburo and his local cell for sharp criticism of PCF policy, touched off a
public controversy by revealing that party leaders had provided the Czech-
oslovak Government with a document that could be used against former
Czech party boss Dubcek. These actions by the PCF ill succeed in further
alienating both French youth and potential allies of the non-Communist left.
25X6
25X1
25X1
25
25X
Page 11 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176 A000300010015-9
 Approved For Rel ase -
Moscow to Keep Presence in Phnom Penh
25X1 The Soviets have apparently decided not to
break diplomatic relations with Lon Nol's govern-
ment in Cambodia.
25X1
aecision means in effect that
25 oscow's determination to retain its freedom of
maneuver in Indochina has taken precedence over
other considerations.
25XI
The Soviet decision suggests that Moscow is
uncertain about Sihanouk's prospects, and more
importantly, wary of his dependence on the Chi-
nese. In the present situation, the Soviets clearly
believe it unwise to make a premature commit-
ment that would limit their options. If Sihanouk
should leave Peking, Moscow is free to review and
modify its position.
Moscow's present posture, however, leaves it
vulnerable to Chinese charges that the USSR fol-
lows a policy of only "sham support" for the
Communists in Indochina, and at the same time
places further strain on its relations with Hanoi.
The Soviets have already anticipated
Peking's charge, however, and in private con-
versations with diplomats and in propaganda they
are claiming that China is obstructing united
Communist action in Indochina. In the Pravda
article of 18 May (which was Moscow's response
to Peking's Lenin anniversary polemic), Moscow
implicitly accused the Chinese of being re-
sponsible for US actions in Cambodia, a charge
that had already been made explicit in less
authoritative propaganda.
The Russians no doubt are trying to per-
suade Hanoi that, in the end, its best interests
might be served better if Moscow preserves for
the present a degree of flexibility on the question
of the future shape of the Cambodian govern-
ment. The North Vietnamese, however, are dis-
pleased at this current Soviet posture. Le Duan's
failure during his recent stay in the USSR to line
up full backing for North Vietnam's current
policies clearly disappointed Hanoi's leaders and
gave Peking a new issue to exploit against Mos-
cow. Pham Van Dong made clear in a speech on
19 May that North Vietnam's sympathies at the
moment lie more with Peking than with Moscow.
Heretofore, the North Vietnamese had always
been careful to balance the praise given their two
giant allies, but this speech was clearly more
effusive toward the Chinese than the Soviets. The
Soviets have apparently calculated, however, that
so long as they provide strong-if not uncondi-
tional-political backing and the necessary
economic and military aid, they will not eo
ardize their over-all position in Hanoi.
25X1
25X1
25
25X1
Page 12 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79TO1762A000300010015-9
 25X1
Approved For R ease - 700300010015-9
Eastern Europe Cautious in Response to Bo
n's Overtures
A number of Eastern European regimes are
now negotiating or getting ready to talk with
Bonn about improving relations.
The East Germans last week prepared for the
second round of political talks with the West
Germans. Party boss Ulbricht and Premier Stoph
met with General Secretary Brezhnev and other
Soviet leaders in Moscow on 15 May, un-
doubtedly to elicit a demonstration of Russia's
solidarity with Pankow and presumably also to
discuss the implications of Chancellor Brandt's
expected proposal for the establishment of com-
missions to carry the negotiations further. Pan-
kow recently accelerated its propaganda in a
final-hour effort to convince Bonn that a con-
tinued inter-German dialogue is dependent upon
West German recognition of East Germany under
international law.
The West Germans, who signed a 1970 trade
protocol with Poland on 13 May, have announced
that negotiations on a long-term agreement cover-
ing trade and aid will be "intensified." This sug-
gests that both sides now are willing to resume
the discussions that were interrupted last January.
Warsaw has implied that it would like to conclude
the major part o these talks before the fourth
round of political consultations begins on 8 June
in Bonn.
Czechoslova
tions are schedul
has also agreed
German Foreign
- West German trade negotia-
d to open on 25 May. Prague
o a "quiet visit" by a West
4inistry official, thus renewing
r the first time since the Soviet
1968. No date has been set for
political contact f
invasion in Augus
the visit, but a C
that Moscow has
echoslovak trade official claims
iven Prague the green light for
The Hungari ns, meanwhile, apparently have
made a series o maximum and inflexible de-
mands, hoping that the Brandt government will
grant broad concessions to expand trade, espe-
cially by lifting restrictions on Hungarian goods.
Like other East Europeans, the Hungarians are
watching for a reakthrough in Polish - West
German and Soviet - West German talks before
starting serious negotiations.
25X1
Eastern Europeans Worry About Relat
ons with US
Four of the eight Eastern European govern- that US-Soviet relations might deteriorate as a
ments have privately told US officials that they result of Cambodia, thus setting back the pace of
hope their public opposition to US policy in European detenteJ.
Cambodia will not cause lasting damage to rela-
tions with Washington.
US contacts on the diplomatic level are con-
While a steady drumfire of anti-US propa- tinuing to proceed normally with the four govern-
ganda on the issue is emanating from all of East- ments, although there have been minor surface
ern Europe, Yugoslav, Romanian, Polish and Hun- gestures of disapproval of US actions in Indo-
garian spokesmen have pointed out that they have china. There have been no demonstrations against
other obligations: Romania to defend its inde- US missions, however, except for some vandalism
pendent stance vis-a-vis Moscow, Yugoslavia to its at the USIA installation in Belgrade for which the
nonaligned friends, and the others to Moscow. Yugoslav Government made amends.
There appears to be apprehension among the four
25X1
25X1
25
Page 13 WEEKLY REVIEW 2 May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176;A000300010015-9
 Approved For Rel - 000300010015-9
25X1
Agricultural Prospects Dim in Eastern Europe
For the third consecutive year the outlook is
unfavorable for significant growth in Eastern
Europe's agricultural production. Grain prospects
are currently not as good as a year ago and the
output of livestock products, especially meat,
shows no sign of improvement. As a result, there
will be little change this year in consumer avail-
abilities of quality foods or in foreign exchange
earnings from agricultural exports.
Adverse weather through the end of last
month makes production prospects for the im-
portant winter grains-wheat, rye, and barley-less
favorable than a year ago. Drought last fall was
followed by a long, severe winter and by excessive
moisture this spring. These conditions reduced
the area seeded to winter grain and caused above-
normal damage to these plantings in many coun-
tries. Spring planting also was set back by as
much as four to six weeks. Shortages of seed
potatoes may also reduce acreages of this im-
portant crop in the northern countries. More
favorable growing conditions in the coming weeks
could improve crop prospects, but attainment of
above-average yields is unlikely.
Growth in livestock production will be lim-
ited by the smaller number of productive live-
stock available at the beginning of 1970 and by
fodder shortages. Output and procurement of
livestock products such as pork, eggs, and butter,
which fell in 1969, are not expected to improve
before the last quarter of 1970, if then. The
northern countries have programed increased im-
ports of feedgrains and high-protein supplements
during the year ending 1 July 1970 to prevent a
significant drop in livestock herds and meat pro-
duction. Grain imports may exceed last year's
5.8-million tons by a half million tons. Some 40
percent of total grain imports may come from the
free world.
Increased outlays for such purchases as well
as reduced earnings from exports of food prod-
ucts are likely to occur this year. Czechoslovakia
and East Germany will have to increase hard
currency expenditures for meat, potatoes, and
animal feed. Hungary and Poland anticipate
smaller net gains in foreign exchange earnings
from Western trade in agricultural products.
The population and money incomes will
continue to increase faster than retail supplies of
the quality foods most in demand. Thus, un-
satisfied consumer demand for such foods, par-
ticularly animal products, can be expected
throughout 1970.
25X1
25
Page 14 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79TO1762A000300010015-9
 Approved For Release - A000300010015-9 25
Soviets Seeking Warsaw Pact Support A
Moscow appears to be making a determined
effort to involve the Warsaw Pact states more
directly in support of its interests outside the
European continent-particularly in the running
dispute with China. The Soviet leaders seem in-
creasingly disturbed by what they consider a
provincial attitude on the part of some of their
allies and a reluctance to get involved outside of
Europe. Moscow is now talking of remedying this
situation, to the apparent distress of Bucharest,
and perhaps others.
The USSR is placing much stress on the
reciprocal nature of bilateral treaty obligations
between Moscow and the Warsaw Pact states. This
was most recently manifested in the Soviet-
Czechoslovak friendship treaty of 6 May, which-
like treaties signed with Bulgaria and Hungary in
1967-omitted the limitation of mutual defense
obligations to Europe. Thus, these three states at
least now would appear formally bound to fight
with the Soviets in an Asian war.
Moreover, there have been recurrent rumors
that the Soviets have already succeeded in
maneuvering some of their allies into establishing
a token military presence in Soviet Asia. At the
turn of the year, there were several reports that
some Polish Air Force units had been transferred
to Soviet Central Asia.
25X1
None of these reports has been confirmed,
and there would be little military advantage to
the Soviets in establishing an East European
presence there. However, the Soviet leaders might
25X1
ainst China
see considerable political advantage in this kind of
tactic as a devic to bring reluctant East Euro-
peans more solid ~y into line in the dispute with
China.
There have also been indications that the
Soviets would like to reorient the Warsaw Pact to
take account of Soviet interests in Asia. They
have begun in re ent weeks to speak more and
more frequently ~f an alleged Pact responsibility
to defend the cau e of peace and socialism "any-
where"-in blatant contradiction to the published
text of the Warsaw treaty itself.
The Romani ns have been the main obstacle
to these ambition . Bucharest made its opposition
to any effort to reorient the bases of the Warsaw
alliance dramatica ly clear in an editorial article in
the party daily Sc'nteia last week. Presumably in
reaction to recent Soviet tactics, the article
pointedly stressed that the Pact's area of responsi-
bility applies "only" to Europe, and that in giving
orders, national command structures cannot be
bypassed.
25X1
Differences c
one of the factors
Romanian leaders
May. Although the
the determination
Bucharest into Iii
there is still no in(
of a mind to mak(
differences may al
ing of Pact defy
week. I
25X1
n these points may have been
that led to the sudden visit of
to Moscow for talks on 18-19
se talks undoubtedly reflected
of the Soviet leaders to force
e on these and other issues,
ication that the Romanians are
significant concessions. These
o affect the course of a meet-
;nse ministers in Sofia this
25X1
Page 15 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176 A000300010015-9
 Franco-British Concorde SST Soon to Fly Mach Two
The British are installing more powerful
engines on the UK-built prototype Concorde and
plan to begin Mach 2 flight tests this month.
Mach 2 testing-which will help to establish
the economic feasibility of the aircraft-will be a
crucial phase of the test program. To date, tests
have progressed smoothly and have brought re-
newed optimism to officials associated with the
Concorde program. The British plane had been
scheduled to fly 18 times in the last series of tests
before the new engines were installed. Progress
was so good, however, that the various tests were
completed in only 6 flights.
The French-built prototype Concorde al-
ready has approached Mach 2 for short periods,
but the highest sustained speed achieved so far
has been Mach 1.54. It will begin Mach 2 tests
shortly after the British plane. In addition to the
two prototypes now flying, two preproduction
aircraft are under construction and scheduled for
maiden flights in the spring of 1971.
To date, $975 million has been spent by the
French and British governments on development
of the Concorde and an estimated $800 million
more will be spent before the production stage is
reached. The unit price of the Concorde being
quoted to the airlines is about $19.5 million, but
Sud-Aviation and British Aircraft Corporation,
the manufacturers, are reserving the right to alter
that figure when contracts are actually negoti-
ated.
So far, 16 airlines, including 7 in the US,
hold options to purchase 74 Concordes. The US
lines account for 38 of the options. These 16
airlines presently carry 70 percent of the passen-
gers on the world's scheduled airline routes. In
late 1969, pilots from Air France, BOAC, Pan
American, and TWA went to Toulouse to test fly
the Concorde. They reported that the aircraft was
easy to fly, did not impose an excessive workload
on the pilot, and should present no problems in
training airline pilots and engineers in the han-
dling of the aircraft.
25
25X
Page 16 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T01762A000300010015-9
 Approved For Releaase 2004/12/16 : CIA-RDP79T017624000300010015-9
The Concorde, however, is not without its pro lems, the most intractable being
excessive weight and noise. The weight difficulty i largely a result of unanticipated
changes and additions to the structure and equipment-problems normally en-
countered in the development of an aircraft incorporating new technology. The
developers of the Concorde continue to wrestle with the problem of keeping the
maximum weight at 385,000 pounds while incorp rating the necessary changes in
the aircraft. One change has been a reduction in lanned passenger payload from
140 to 120.
On takeoff, the plane reportedly can be heard to a distance of some 20 miles.
This noise level is well beyond the limits impose at most international airports,
including those in the US. Noise, however, is endemic to supersonic transport
aircraft and some compromise in the operation of he Concorde may ultimately be
necessary to alleviate the problem before the plane enters service-now scheduled for
1973.
25X1
Finns Resort to Nonpartisan Governme It as Stopgap
The nonpartisan cabinet named by President
Kekkonen is a stopgap measure aimed at provid-
ing Finland with a government during the Presi-
dent's forthcoming trip to Moscow as well as
during the approaching parliamentary recess.
Negotiations for a new political government are
expected to resume in the fall.
Kekkonen took this step after attempts to
form a majority government reflecting the sharp
swing to the right in the parliamentary elections
of 15-16 March were repeatedly stymied.
The cabinet is expected to play essentially a
"caretaker role," concerning itself with everyday
duties and preliminary work on the next budget.
There will be no vote of confidence, and the
government will exist with the "toleration" of
rather than the active support of parliament.
In line with the officially neutral complex-
ion of the government, the known political loyal-
ties of the mini ters are divided evenly between
the moderate rig it, the center, and the moderate
left. Named as rime minister is Helsinki Mayor
Teuvo Aura, a ember of the Liberal Party; the
deputy prime m nister is a conservative, and the
foreign minister a Social Democrat. Both the
Rural Party of the radical right and the Commu-
nists have been 1 ft out of the cabinet, as have all
the present mem ers of parliament.
The new ca inet consists generally of a mix
of high-level bureaucrats, businessmen, and poli-
ticians whose only common characteristic is close
personal friendship with Kekkonen. The contro-
versial appointment of a vocally pro-Soviet Social
Democrat as fo eign minister probably reflects
the President's d sire to reassure Moscow regard-
ing Finnish co perativeness. Distaste for this
appointment and widespread dissatisfaction
among the politi al parties with Kekkonen's stop-
gap arrangement give added weight to assurances
that this government will be short-live
25X1
25X1
25
25
Page 17 WEEKLY REVIEW 2 May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176 A000300010015-9
 Approved For Re
Labor Agitation Tests Italian Government
Organized labor is pressing Mariano Rumor's
center-left government, now two months old, for
social and economic reforms. The disruption
arising from short general strikes staggered by
region throughout the country has been inten-
sified by a number of strikes in specific occupa-
tions, particularly in the service sectors of the
economy.
Union leaders in direct negotiations with the
government are demanding curbs on rising prices,
better housing, tax relief, and reform of the state
health service and transportation. Leaders of the
three major confederations, both Communist and
non-Communist, are seeking to maintain a united
front, although conflicts within the labor move-
ment evidently continue. The Communists are
reportedly in favor of further agitation, a develop-
ment that could help them, as the chief opposi-
tion party, in regional and local elections on 7
June. The non-Communist labor leaders, who
have links to the government parties, are pressing
for a specific reform program within a definite
time frame. The government is trying to identify
relevant measures that can be put into effect
immediately as an earnest of its serious attention
to the wide-ranging reforms that union leaders
seek.
Interest in union-government negotiations is
heightened by the approaching regional, pro-
vincial, and communal elections, which will have
more significance than previous local elections. In
belated compliance with the 1948 Constitution,
regional government is being established in much
of Italy for the first time, providing a measure of
decentralization. Each party hopes to read en-
dorsement of its policies and positions in results
of the elections, the outcome of which could
force changes in the national government.
25
25X
25X1
25X1
Page 18 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T01762A000300010015-9
 Approved For Relea
25X1
The UN Security Council this week passed by an 11-0 vote a resolution
condemning the Israeli incursion into Lebanon. The resolution did not-even implic-
itly-condemn the fedayeen raids. The mission of Gunnar Jaring, Secretary General
Thant's special representative for the Middle East, will probably not be reactivated
soon. I
There have been rumors-nothing more-that a coup ma
in Baghdad last week. The rumors are based on unconfirmed
tank movements in the Iraqi capital on 10 May.
have been attempted
reports of gunfire and
In the Maghreb, Morocco, Algeria, and Tunisia seem rea y to go ahead without
Libya to hold the oft-postponed economic ministers' conference. King Hassan and
Premier Boumediene probably will discuss Maghrebian problems and may also take
up their disputed border issue when they meet next Monda . Meanwhile in Tunis,
the trial of former economic chief Ahmed ben Salah and several supporters began
last Tuesday. President Bourguiba, whose prestige has been to nished by the denigra-
tion of Ben Salah, is expected to commute the anticipated stiff sentences.
Congo (Kinshasa) has publicized the expulsion of four S viet Embassy person-
nel, described as "influential diplomats," on charges that the Soviets were propagan-
dizing among students and operating an extensive es ion e network.F
25X1 he publicity may intended as a sharp
warning against meddling in Congolese affairs as Mobutu's off cial party prepares for
parliamentary elections in December.
In West Africa, Guinea's radical President Toure is continuing his efforts, under
way since March, to patch up his long-standing quarrels with Ivory Coast and with
France. In a speech last week he called for "complete reconciliation" with Houphou-
et-Boigny's conservative Ivorian regime and extended the olive branch anew to the
French. Both Abidjan and Paris are responding positively, and an early meeting
between Toure and Houphouet appears likely.
India's Naxalites, pro-Peking Communist revolutionari s, are continuing to
cause concern both in New Delhi and in several state capitals. Originally peasant
oriented, the Naxalite movement has gradually attracted student and limited worker
support with the result that violence has been introduced into urban areas. Police
action against the Naxalites has been increasing, particularly in West Bengal-scene
of some of the most widespread violence in recent weeks-bu , with socioeconomic
conditions continuing to deteriorate in that state, the outloo for further growth of
the movement is good.
25X
25)
25X1
Page 19 WEEKLY REVIEW 2 May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176A000300010015-9
 Approved For Release 2004/12/16 : CIA-RDP79TO1762A000300010015-9
Next 1 Page(s) In Document Exempt
Approved For Release 2004/12/16 : CIA-RDP79TO1762A000300010015-9
 Approved For Release 2004/12/16: CIA-RDP79T01762
Lebanese Humiliated Last Week
Claims by the fedayeen and Lebanese Army
that they achieved a great military victory over
the Israelis during last week's battle have begun to
backfire.
25X1
25X1
Disillusioned by what it considers highly
exaggerated official accounts of the battle, the
Organization of Lebanese Socialists, a grouping of
Communists and leftist parties, is debating
whether to publish accounts exposing "the
cowardice of the commandos and Lebanese
Army."
25X1
25X1 Although the real and imagined actions of
the fedayeen and the Lebanese Army have this
comic opera aspect, both Palestinians and
Lebanese drew pride and comfort from having
fought together to defend the area. When, as it is
almost bound to, an exposition of the true details
of the incident gains common currency, it will
lead to mutual recriminations and a further dete-
rioration in relations between the fedayeen and
government forces and their respective parti-
sans.
25X1
Page 22 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T01762A000300010015-9
 Approved For Rele
Iran Faces Slower Economic Gr
The recent agreement with the Western oil con-
sortium will give Iran an 11-percent increase in oil
revenues this year. These payments will ease Tehran's
expected balance of payments difficulties and will
slow the decline in the growth of the economy.
High government expenditures, caused largely
by heavy public investment under Iran's ambitious
development program, have kept foreign exchange
reserves under pressure since 1967. Annual imports
since the Iranian year beginning March 1966 have
risen by 21 percent, while foreign exchange earnings
from nonoil exports and oil revenues have increased
only about 18 percent per year. To finance the esti-
mated $366-million gap for the year ending March
1970, Iran has been borrowing increasingly on short
term at high interest rates. As a result, its annual
external debt repayment burden increased dramat-
ically during the past year, totaling an estimated $254
million, or 18 percent of total foreign exchange earn-
ings.
Military needs are competing increasingly with
development programs for foreign exchange. Last
year the government decided to raise current expendi-
25X1
tures by some $1.5 billion during the remainder of
the Fourth Plan period (1968-73). Over half is to be
for military pure ses-reflecting the Shah's concern
with Iran's military posture following the scheduled
British withdrawn from the Persian Gulf in 1971.
Largely bec use of balance of payments con-
straints, government investment, which grew 14.2
percent in the year ending March 1969, increased
only 9.7 percent last year and is not expected to
expand by more than 5.5 percent for the year ending
next March. As he rate of investment slowed, the
growth rate of eal gross national product (GNP)
declined from a high of 12 percent in 1968 to 9
percent last year. It is expected to be about 8 percent
this year.
The govern ent-consortium agreement will in-
crease Iran's oil revenues by more than $100 million
over last year, allowing increased imports of develop-
ment goods. The government hopes that by next year
it will have adequate funds to increase investment to
planned levels, th s meeting the targeted 9.4-percent
average annual i creases in real GNP during the
Fourth Plan pe od.
Saudi Arabian Feud With Syria Revived by
A new quarrel is building between Saudi Arabia
and Syria over the recent rupture of Tapline, the
pipeline carrying Saudi Arabian oil to the Mediter-
ranean. The political effects of the quarrel have al-
ready become disproportionate to the monetary loss,
and the incident is fast becoming a classic example of
Arab inability to achieve even a modicum of unity in
the face of petty intramural quarrels.
On 3 May a Syrian bulldozer pierced a section of
the underground Tapline, causing a spill of 15 to 20
thousand barrels of crude oil to run into plowed
fields before the automatic shutoff closed down the
Tapline Break
line. The repair job is simple, estimated to require
about 12 hours work, but Syrian authorities are refus-
ing to allow imm diate repairs because of the danger
of new spillage.
On 7 May, h wever, Syria informed Tapline that
the break could not be repaired for "security rea-
sons," and it became evident that Damascus was
engaged in some sort of a power play against the
other Arab states the precise goal of which remains
obscure. Observes speculate variously that it is an
attempt to extrac large damage payments from Tap-
line, that Syria is attempting to top Nasir's May Day
Page 23 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176 A000300010015-9
I
 25X1
Approved For R - 2A000300010015-9
speech by crippling US oil interests, or that Syria is
hoping to blackmail Saudi Arabia into giving Damas-
cus a share in the subsidies it now pays to Egypt and
Jordan.
Whatever Syria's purpose, Saudi Arabia has ac-
cused it of deliberately staging the accident and has
barred Syrian truck traffic into Saudi Arabia. Syria
has retaliated by denying Syrian air space to Saudi
planes. Tapline, recognizing the long-term seriousness
of the quarrel, has rebuilt its pumping system so that
two fields that formerly fed oil only to Tapline can
now pump to the terminal in the Persian Gulf.
Saudi Arabia has stated that its loss of revenue
affects all Arabs and now is saying privately that, if
the line is not repaired by early June, the subsidies, to
Egypt at least, will be cut. No doubt King Faysal
hopes to shift the Syrian pressure onto Nasir's
shoulders. Nasir, too, has always distrusted the
Syrians, but his greater influence in the Arab world
will enable him to deal with Syria in ways not avail-
able to Saudi Arabia.
Whatever the ultimate result, salt will be rubbed
in old wounds and the occasional unity of the Arabs,
lately revived by the hard-line Israeli policy, will once
again be dissipated by deep-seated, traditional enmi-
ties within the Arab world.
25X1
Moderates Have Edge in Ceylon's Parliamentary Elections
Prime Minister Dudley Senanayake's United Na-
tional Party (UNP) holds a slight lead in the campaign
for crucial parliamentary elections on 27 May, but
the outcome could depend on minor shifts in up to
50 closely contested seats out of a total of 151.
Although the campaign has been free of violence, the
opposition might yet decide to play on latent com-
munal antagonisms between the majority Sinhalese
and the minority Tamils in a last-ditch effort to
achieve victory.
The only significant opposition to the UNP is
the United Front, a leftist coalition headed by Mrs.
Bandaranaike, a former prime minister. The coalition
is composed of her nationalist Sri Lanka Freedom
Party, the Ceylon Communist Party/Moscow, and the
Lanka Sama Samaja Party, a Trotskyite group. The
front's election manifesto calls for the nationalization
of remaining private banks and increased state control
over both imports and the wholesale distribution of
all "essential" commodities. It also promises the es-
tablishment of "people's committees" at various
levels of government to supervise the bureaucracy. In
foreign affairs it endorses recognition of some Com-
munist countries.
The UNP has vigorously criticized the totali-
tarian aspects of this manifesto and has pledged con-
tinued communal harmony and economic growth.
Ceylon's economic outlook is mixed, however, and
25X1
the opposition may reap advantage from rising living
costs and urban unemployment. The United Front
scored an initial psychological victory when one of its
candidates was declared an uncontested winner fol-
lowing the disqualification of a progovernment in-
dependent. An apparent opposition ploy to discredit
the UNP, however, by alleging that the armed forces
were preparing to seize power if the UNP loses seems
to have been largely ineffective. The UNP has also
won pledges of support from the Ceylon Workers'
Congress, the country's largest union and one that
controls a crucial swing vote of up to 20 seats.
The UNP and its allies will clash head on with
United Front candidates in only 47 constituencies. A
Sinhalese nationalist party is fielding 5 1 candidates
and may unintentionally aid the UNP by drawing
strength away from the coalition. The presence of
over 80 independents clouds the prospects for both
sides. At present the UNP appears to have over 65
solid seats and is leading in about a dozen other
constituencies, while the United Front probably can
count on slightly over 40 seats. If the UNP and its
allies cannot muster a majority, the Tamil-based
Federal Party could become the decisive factor; al-
though this party left the UNP-led government in
1968, it would probably support the UNP rather than
Mrs. Bandaranaike, whose party has a history of anti-
Tamil bias.
25X1
Page 24 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79TO1762A000300010015-9
25
 Approved For Releo
Fidel Castro early Wednesday morning delivered a scathing attack on
the US. He accused Washington of planning and launching exile attacks,
threatened to withdraw the Swiss Embassy's privilege ena ling it to represent
US interests, and indicated that he may take over the former US Embassy
building in Havana and so bring to an end the refugee airlift. Castro also
announced that the ten-million-ton sugar harvest goal will not be reached,
admitting that this is a bitter defeat because "the honor of the revolution is
at stake." In another speech that night he attempted to rationalize the size
of the harvest and said that a goal of nine million tons could be reached.
25
25
25X1
On 15 May, Peru's military government decreed harsh new controls on
foreign exchange. The measure has dealt a severe blow to business and the
wealthy and will further weaken the economy. Penalties fr violations of the
decree are extremely severe. The wealthy and middle-class businessmen thus
far have reacted with uncertainty and fear, but the actionI could solidify the
heretofore fragmented and ineffective opposition to the military govern-
ment.
In Barbados, Prime Minister Barrow has banned the Second Regional
Black Power Conference scheduled for July, probably because of the ex-
pectation that it would be accompanied by disturbances and violence.
Conference organizers now intend to seek permission from Guyana's Prime
Minister Burnham to hold the conference there.
A student demonstration in Mexico late last week to protest US action
in Cambodia soon turned into an attack on the government and on presi-
dential candidate Luis Echeverria. This is the first major protest against the
government since the riots on the eve of the 1968 Olympics, and it has
encouraged students to plan further political rallies during the World Cup
soccer matches scheduled for Mexico City in June.
Marco Antonio Yon Sosa, the last of the original uerrilla leaders in
Guatemala, was killed by Mexican authorities on 16 Ma\ near the border.
Communist terrorists will probably try to avenge his deat with some type
of violent retribution. Right-wing counterterrorism, which began after the
assassination of the West German ambassador in April. continues, I
25X1
25
Page 25 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T0176 A000300010015-9
 Approved For
Bolivian Moderates Improve Political Position
The moderates in President Ovando's cabinet
appear to have been strengthened as a result of
the resignation of radical leftist Minister of
Energy Marcelo Quiroga this week.
The departure of Quiroga could herald the
eventual removal of the remaining leftists in the
government, including Information Minister
Bailey and Planning Minister Ortiz. These radicals,
with Quiroga as their recognized ideological
leader, are believed by the military to be responsi-
ble for the Ovando government's leftward drift.
There has been considerable pressure on the Presi-
dent from the armed forces to replace them and
the other civilians in the cabinet.
With Quiroga's departure, Minister of In-
terior Ayoroa now remains the single most
important figure in the Ovando cabinet. As min-
ister in charge of the police and security forces,
Ayoroa operates from a considerable power base,
which is strengthened by his close contacts with
Army Commander Miranda and other military
leaders. It is still not clear whether this week's
developments have affected Ovando's position as
president. It is clear, however, that Ovando,
through luck or cunning, has been successful once
again in forestalling a serious confrontation with
the armed forces.
25X1
Chilean Presidential Campaign Swings Into High Gear
With the presidential election less than four
months away, the campaign now is proceeding in
earnest, and some political alliances and strengths
appear to be shifting. From the beginning of the
campaign it has been apparent that independent
conservative Jorge Alessandri is the front runner.
Socialist Salvador Allende, running with Com-
25X1
munist support, has been considered a strong sec-
ond, and Radomiro Tomic, candidate of President
Frei's Christian Democratic Party (PDC), a poor
third. Although Alessandri is still in front, some
believe that he may be losing ground to Allende
and Tomic. Tomic himself appears to be running
a much stronger campaign than he had earlier.
25
25
25
Page 26 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T01762A000300010015-9
 Approved For Rele
Two weeks ago Allende's campaign suffered
a setback when he suddenly became ill. Although
a heart attack was rumored, he claims that it was
merely a severe case of grippe with accompanying
heart difficulties. Even if the illness was relatively
mild, it seems certain that his campaigning will
have to be curtailed somewhat.
Tomic, apparently convinced that Alessandri
will continue to lead, now seems to be trying to
make as strong a hold on second place as possible.
Under the Chilean constitution, if no candidate
wins a majority of the popular vote, Congress
chooses between the two top contenders: In the
past, Congress has chosen the candidate with the
plurality. Tomic, however, hopes to reinforce the
PDC votes in Congress by strengthening his own
ties with other leftist congressmen. Last week he
refused to permit PDC members of parliament to
strike a deal with conservative groups that would
have set up a PDC-Radical leadership in the
Chamber of Deputies. As a result, a new leader-
The government may be facing a showdown
with Ecuador's most powerful economic groups
over the emergency taxes imposed last week to
help cover its budget deficit.
Business organizations from both the com-
mercial center of Guayaquil and the capital of
Quito are attempting to have the new revenue-
producing measures struck down by the courts as
unconstitutional. Businessmen have threatened a
general commercial strike to enforce their de-
mands, a threat that is not to be taken lightly
because such strikes have helped to bring down
two governments within the past ten years.
President Velasco is reacting vigorously with
name calling, a publicity campaign stressing the
need to "soak the oligarchy," and threats to
resign if he is defeated on the fiscal issue. There
are no indications that the government is pre-
pared to back off on even part of the fiscal
measures.
25X1
ship consisting o a leftist Radical, a Communist,
and a Socialist as elected. He may believe that
he thus could cqunt on leftist votes in a contest
with Alessandri.
Another n 'w factor in , the campaign has
been provided b a recent public statement by
the army comma der, General Schneider, that the
armed forces wo ld support the right of Congress
to choose the ca didate with the second highest
popular vote. Thi1s statement has been attacked as
favoring Tomic's campaign, although it also theo-
retically gives a boost to Allende. It probably was
made in consultation with Defense Minister Ossa,
a confidant of President Frei.
Frei has opposed Tomic's attempts to make
deals with the leftists. The government and party
now appear to b? uniting in his campaign, how-
ever, preferring patronage with Tomic and ties
with the left to maintaining an independent posi-
tion and being out of power.
Ecuadorean Government and Business Battle Over New Taxes
Page 27 WEEKLY REVIEW 22.
Approved For Release 2004/12/16: CIA-RDP79TO176
An extra session of Congress to upset the
new tax decrees h s been called for by economic
interests and by opposition political parties. It
appears unlikely that Congress will convene,
however, as electi ns for deputies are due next
month and the lover house does not want re-
sponsibility for the problem.
The armed f
creases would be
from the new taxes
Velasco. If unrest
with an unfavoral_
Court, his principa
will increase their
assume new powers
orces, whose recent pay in-
ended by revenue generated
are squarely behind President
evelops, or if Velasco is faced
le ruling from the Supreme
military and civilian advisers
probably extraconstitutional.
Despite the strong reaction to the taxes, a
compromise is pos ible. Opposition groups nei-
ther want to push elasco into a dictatorship nor
to see him replaced, because they see no alterna-
tive candidate who more attractive.
I
[ay 70
A000300010015-9
25X
25X1
25X1
25
 Approved For R A000300010015-9 25~
Dominican Elections Strengthen President's Control
President Balaguer's sweeping re-election
victory on 16 May, buttressed by overwhelming
congressional and municipal majorities, puts him
in a commanding position. Although the admin-
istration will continue to be plagued by signifi-
cant public order problems, Balaguer is unlikely
to face a serious political challenge in the near
future.
Balaguer's 56-percent majority in the five-
man race was a rude disappointment for his
opponents. The two leading opposition candi-
dates have predictably charged the government
with fraud and have threatened retaliation, but
they lack both the political and military muscle
to carry through with their threats at this time.
Moreover, the OAS observers publicly gave the
elections their stamp of approval.
that, despite its support of the popular incumbent
mayor of the capital, he lost to the President's
candidate.
President Balaguer
Still-unofficial returns indicate that Bala-
guer's supporters also won control of 26 of the 27
Senate seats and 60 of the 74 seats in the Cham-
ber of Deputies, and captured 75 of 77 mayor-
alties. This showing increases the already formi-
dable majorities at. all levels. Only Balaguer's
Reformist Party had the organization and re-
sources necessary for an effective campaign.
The total vote, less than 1.2 million, does
not match the 1966 total of 1.34 million and falls
substantially below the 1.8 million eligible voters.
Juan Bosch's Dominican Revolutionary Party
(PRD), which abstained, will cite these figures as
proof of its continued strength. The low voter
turnout, however, can be partially explained by a
lack of voter interest. The PRD's vote getting
potential is also called into question by the fact
25X1
25
The PRD nonethe-
less remains the major
opposition, if only by
default, on the basis of
the poor performances
of the other parties. The
party will continue to at-
tract significant popular
support in the cities as
long as it has the mag-
netic Bosch at the helm,
but it is no match for
the President's combined
political and military
strength. Balaguer, as he
has done in the past, will probably bring some
opposition figures into the government, and this
action may further isolate the PRD.
Balaguer, having stepped down temporarily
from the presidency, will probably reassume
office within a few days. His formal inauguration
is scheduled for 16 August. The administration
will face a significant public order problem in
June, when the OAS is scheduled to meet in
Santo Domingo. Bosch has already begun attack-
ing the meeting and may urge demonstrations in
an attempt to embarrass the government. Bala-
guer, however, has been able to use massive mili-
tary patrolling to shut off serious disorders in the
past, and the government will make extensive
securit preparations in advance of the con-
clave.
Page 28 WEEKLY REVIEW 22 May 70
Approved For Release 2004/12/16 : CIA-RDP79T01762A000300010015-9
 25X1
Approved For Rel ase 2004/12/16 : - 000300010015-9
Castro Blasts US, Admits Sugar Harve
Fidel Castro took. a particularly aggressive
stance toward the US in a speech delivered early
on 20 May celebrating the return of the fishermen
kidnaped earlier by anti-Castro exiles.
A major portion of Castro's address was
devoted to lambasting the US. He stressed the
theme that the "principal party responsible for
these deeds" was the US Government. He also
reprimanded the British for allowing the Bahama
islands to be used as sanctuaries by the exile
groups. Castro said the British should demand
that "the US Government stop using these islands
as bases from which to attack our country." He
went on to report to the Cuban people the steps
he had taken in order to secure the return of the
fishermen, but he constantly returned to his basic
theme that the exile attacks were being planned,
supported, and launched by the US.
Castro has overreacted to this recent flurry
of exile activity-beginning with the Alpha 66
landing on 17 April. The kidnaping incident has
brought forth his most vociferous protest. Castro
is probably genuinely concerned about the vul-
nerability of his extensive fishing fleet to more
than just harassing attacks by exile arouns.
He also probably wants it made quite clear
that his government will not be blackmailed into
making deals and hopes this will put an end to
such tactics. If they continue, he warned, Cuba
will "seek every means to pass from the defensive
to the offensive." Castro also complained that his
air searches were cut short by the "very limited
range" of his MIG-21s and lamented that "un-
fortunately our country does not have long-range
aircraft." These statements may be a prelude to a
possible announcement of new military assistance
t Defeat
from the Soviet 1 1 nion and may also represent an
implied threat o Guatemala and Nicaragua,
which he charge with supplying "bases for ag-
gression."
On other
He said that the
the building and
atters, Castro referred to the
y building on several occasions.
ime was not ripe to take over
hat it would suffice for Havana
as representative
the Swiss Embassy its status
US interests in Cuba." He also
operated Cuban r
as the refugees a
Embassy. Moreov
country would be
once the Swiss ha
is action would doom the US-
;fugee airlift program inasmuch
e processed through the Swiss
;r, he threatened that no other
permitted to represent the US
e ceased to act on its behalf.
Castro used the celebrations to deliver some
bad news about the sugar harvest. He announced
that "we will not reach the ten million (tons)."
He admitted that his was a bitter defeat because
the honor of the revolution had been at stake, but
he added that "tr e revolutionaries" learn from
failures as well as from victories. Castro praised
the Cuban people for doing as well as they al-
ready have in ac ieving a record harvest. There
was no attempt t blame the US or anyone else
for Cuba's failure to meet the ten-million-ton
goal. He said that "our goal was too high" and
urged the Cubans to an even greater effort in the
remaining days of the harvest. In another speech
made less than 24 ours later, Castro dwelt exten-
sively on the reasons for the failure to reach his
original sugar harvest goal. He did not resume the
strong anti-US lie emphasized in his earlier
speech.
25X1
25X
25
25
Page 29 WEEKLY REVIEW 22 Iay 70
Approved For Release 2004/12/16 : CIA-RDP79T0176 A000300010015-9
 Top ejrrefd For Release 2004/12/16 : CIA-RDP79TO1762A000300010015-9
25X1
Top Secret
Approved For Release 2004/12/16 : CIA-RDP79TO1762A000300010015-9