WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001000080020-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 31
• Document Creation Date: December 27, 2016
• Document Release Date: May 11, 2010
• Sequence Number: 20
• Publication Date: April 25, 1975
• Content Type: REPORT

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Top Secret
meekly Review
Top Secret
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April 25, 1975 25X1
Copy N2 658
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CONTENTS (April25, 1975)
1 Vietnam: Collapse Imminent
2 The Middle East: Soviets; Egypt-Syria
nrcrrt :r?tcii c;,c:c., inovorls , nd analyzon significant
rd of through noon on Thursday. It fre-
i'i'_'S !iirdel'a! ac ordu.?ited v,,/ith or prepared by the
,_conornic ioao rci , the Office of Strategic
th-I Officc of r eoaraghic and Cartographic
:grid tiro Uir ;;to:ate o Sa unce and Technology.
li i a:; r; n.,irina more comprehensive treatment and
sooru alOly ,is Special Report:; are listed
n th?: con;~:mt
MIDDLE EAST
AFRICA
4 Jordan: Husay i Spreads His Bets
5 Libya-Egypt: F euding Again
7 Iraq: Kurds; Western Arms
9 Italy: Barricades and Bombs 25X6
10 Tha Paris Energy Talks
EAST ASIA
PACIF IC
14 Cyprus: Preparing for Talks
15 Romanian-Soviet Tensions
16 USSR: (____(Indochina
19 Korea: Kim II-song in Peking
21 Cambodia: Solidifying Control
22 Laos: "Saber-Rattling"
23 Philippines: Erasing an Image
WESTERN
HEMISPHERE
24 OAS: Old Reliable
25 Honduras: Lopez Ousted
26 Trinidad-Tobago: Taking the Initiative
27 OPEC Investment in the US 25X1
Comments and queries in the contents of this
publication are welcome. They may be directed to
the editor of the Weekly Review,
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I I
VIETNAM
Collapse Imminent
Despite a lull in heavy fighting at midweek
the fate of the Republic of Vietnam is sealed,
and Saigon faces imminent military collapse.
The timing is in the hands of the communists,
who now hold an overwhelming military advan-
tage over the government. While the respite has
given the government time to realign its forces
and strengthen defenses close to Saigon, senior
officia;s recognize the situation as hopeless, a.id
this mentality probably will lead to a rapid
unraveling once a major communist push begins.
Although the war is rapidly c )ncluding, the
communists this week quashed any lingering
hopes of a genuine compromise or a quick cease-
fire, which would provide the best circum-
stances for an order!y evacuation of Americans
and those South Vietnamese most vulnerable to
communist reprisal. Hanoi and the Provisional
Revolutionary Government dismissed President
Thieu's resignation-and Saigon's call for uncon-
ditional negotiations-as a "clumsy and de-
ceptive trick" designed by the US to forestall
Saigon's inevitable collapse. They are demanding
that the entire South Vietnamese government he
replaced by persons not associated with th'a pre-
vious Thieu regime.
The communists are now focusing their
harshest attacks on the US, demanding a total
withdrawal of the US presence in \ ietnam and
support for Saigon. In essence their message is
running along these lines:
? The American withdrawal should occur
immediately. An authoritative North Viet-ia-
mese commentary on April 22 saiu that all
Americans could be evacuated "in a very
short time, even in one day, without any
difficulty or obstacle."
? At the same time, Hanoi is exti emely
sensitive to prospects of a large-scale South
Vietnamese evacuation and is condemning
US expressions of concern about communist
reprisals in the South. Hanoi appears to be
warning that the communists will interfere
with any US effort to conduct a wholesale
exodus of South Vietnamese.
The communists are not promising mean-
ingful negotiations-even in exchange for a
totally new South Vietnamese government and
full American withdrawal-but only "the rapid
settlement of the affairs of South Vietnam." At
this point, the best a new government could
probably obtain woulu be a negotiated sur-
render under the guise of a "political solution."
Thieu's resignation led to two days of
political confusion and bickering in Saigon, but
by week's end the formation of a government
with some chance of dealing with the commu-
nists appeared imminent. Prime Minister Ca'.
and his entire cabinet designed Thursday, and
negotiations are now wider way between Gen-
eral "Big" Minh and President Huong to or-
ganize a new government. "Big" Minh is the
major political figure probably most acceptable
to the communists as a negotiating partner.
Assuming Minh gets his new government or-
ganized, he intends to seek and accept whatever
terms Tne communists offer. The South Vietna-
mese Ministry of Information already has or-
dered the removal of all anti-communist
banners, posters, and slogans in Saigon. There is
a good chance, however, that the communist
military timetable will allow little additional
time fo, tr;. political process in Saigon to pro-
duce a government with which the communists
might deal.
Administration of Conquered Lands
Information is sketchy as to how the com-
munists are administering the areas of South
Vietnam that have recently come under their
control. Nevertheless, they are apparently
wasting little time in consolidating their control
and dealing with local resistance. Their new ad-
ministration appears to have a distinctive mili-
tary cast, suggesting that some areas have been
placed under a sort of martial law.
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To date, the communists have called the
administrative bodies they have set up "revolu-
tionary committees," and the rnix of North
Vietnamese and South Vietnamese participation
roughly one North Vietnamese
civil servant in three has been sent south to
support the communist occupation effort.
The communists are making an obvioL's
effort to calm fears and prevent massive num-
bers of refugees from pushing south. A ten-point
manifesto broadcast on April 3 appealed to gov-
ernment civil servants to stay in their jobs and
guaranteed private businessmen that they could
continue in operation. From what little we
know about the formation of revolutionary
committees in cities like Hue and Da Nang, it
seems that at least a superficial effort in this
direction is under way.
On March 26, the Viet Cong radio broad-
cast a list of urgent tasks to be carried out in
newly liberated areas, especially urban centers.
One task was to punish severely anyone "con-
cocting schemes" to oppose the new administra-
THE MIDDLE EAST
The Soviets are meeting with a number of
Arab leaders in an effort to achieve a measure of
agreement before the reconvening of the Geneva
conference. The signs thus far suggest that fur-
the: talks will be needed.
Following the visit by Iraqi strong man
Saddam Husayn last week, Egyptian Foreign
Minister F-)hmi had extensive talks in Moscow
during the weekend. Moscow and Cairo agreed
that careful and serious preparations must
precede the conferenc,:~ but the communique
made no mention of timing. The Egyptians in-
dicated that the Soviets are talking privately of a
June opening. During the discussions, the So-
viets apparently made plain that thee, had no
interest in the Egyptian suggestion that the con-
ference be expanded to include France, the UK,
and at least one nonaligned country.
tion. The following day, a broadcast warned
that urban areas were good hiding places for
opposition elements and that "first of all"
troops should "eliminate all surreptitious acts of
resistance."
The scope and magnitude of the purges are
uncertain, but certain elements of the former
government. such as police, are particularly
vulnerable. Eyewitness accounts from refugees
and others who have escaped from communist-
held areas bear this out. Some of the initial
killing may have been local actions by individual
units, as opposed to a more general and sys-
tematic policy of purge and reps isal.
The communique suggests that neither the
Soviets nor the Egyptians have ruled out some
new attempt at a disengagement agreement-as
long as it is "decided on and implemented
within the framework" of Geneva. This goes
further than Cairo has in the past to affirm
Geneva as the venue for further negotiations,
but still does not completely rule out bilateral
Egyptian-Israeli Mks. Recently, ev'an some So-
viets have been speaking favorably of a renewed
attempt by Secretary Kissinger to achieve an
Israeli-Egyptian disengagement agreement, ap-
parently in the belief that this would give posi-
tive momentum to the conferenc..
The two sides seemed to agree that the
question of Falesti:iian representation at Geneva
should not blo:< a reconvening of the con-
ference, but here again their comments wore
ambiguous. They said that the Palestine Line a-
tion Organization should "have the same rights
as other partLipants," but did not specify the
otivi
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point at which the Palestinians should attend
nor did they close the door on PLO participa-
tion as part of another delegation.
Asad, who has consistently demanded that
Sads` refrain from unilateral agreements with
Israel and instead pursue an overall settlement
that satisfies all Arab territorial demands.
Although the atmosr'iere surrounding
Fahmi's visit appeared less ,rained than past
Soviet-Egyptian exchanges, the communique did
not suggest progress on such issues as debt re-
scheduling and military aid. Egyptian comments
prior to the visit indicated that Cairo had hoped
to use Moscow's interest in the Geneva con-
ference to press the Soviets on these issues. The
Soviets, however, apparently would have none
of this. Foreign Minister Gromyko, in effect,
told the Egyptians that Moscow still considered
Cairo's independent policies the major obstacle
to closer ties.
Syrian Foreign Minister Khaddam arrived
in Moscow hard on Fahmi's heels. In addition,
Soviet chief of staff Kulikov traveled to Damas-
cus this week to discuss military issues. The
primary purpose of the talks is probably to
ensure Syrian participation at Geneva, but
Damascus' dispute with Baghdad over the
Euphrates River will probably also be dis-
cussed.
Presidents Sadat and Asad appear to have
papered over some of their differences during
the two-day summit in Riyadh held under the
auspices of the new Saudi leadership. The ab-
sence of specifics in the communique issued on
April 23, however, suggests that there are still
serious disagreements bets 'een the Egyptian and
Syrian leaders.
The communique affirmed that "political
action during the coming stage demands the
establishment of the closest cooperation"
between the two countries. It noted that "any
action"-presumably meaning any negotiated
agreement with the Israelis-on any front should
be "part of" similar action on all fronts. These
assertions are obviously designed to mollify
The communique did not mention a re-
convened Geneva conference and made scant
mention of the Palestinians. This suggests that
the two presidents found little common ground
on these issues, which are basic to any formula-
tion of a joint strategy. The communique re-
ferred only in passing to ensuring the "legiti-
mate rights" of the Palestinians, but avoided
standard Arab formulations on establishing a
Palestinian state and guaranteeing the presence
of the Palestine Liberation Organization at
Geneva.
Sadat has been attempting to devise a
formula that would defer PLO participation in
the conference and, even when this is agreed
upon, obscure the PLO presence by absorbing it
in a broader Arab delegation. He has apparently
had no success in pressing this position on the
Palestinians and may have run into difficulty
with Asad as well. The Syrians have hinted
broadly in the past that they might boycott the
conference unless the PLO is invited to attend
from the start.
Saclat's assertions of a determination to
coordin; to more closely with Asad cost him
nothing at this point. He see, ?s to have no hope
that another Egyptian-Israeli disengagement can
be negotiated and thus sees the Geneva confer-
ence, where closer cooperation with Syria will
be necessary, as the only negotiating avenue still
open.
The two presidents established a new vehi-
cle for future coordination, which offers some
hope of an improvement in bilateral relations.
According to the communique, they have
formed a permanent coordination committee
under the joint chairmanship of the Egyptian
vice president and the Syrian prime minister. In
the past, contacts have been the province of the
two foreign ministers, whose abrasive personali-
ties and mutual antagonism further soured
Egyptian-Syrian relations.
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King Husayn, at 40 the congest ruling of
the Arab chiefs of state, arrives in Washington
next week for a discussion of Jordan's military
and economic needs. Husayn's fortunes, and
those of his country, have improved markedly
over the past year, largely as a result of his
decision to acquiesce in the Arab League's reso-
lution at Rabat last October that the Palestine
Liberation Organization should ultimately
assume control over the West Bank.
From that decision has flowed some $175
million in so-called Rabat payments from the
Arab League and a special Saudi grant of $57
million to cover "urgent and necessary require-
ments." The Palestinians have muted their
attacks on the King, and have grudgingly
acknowledged the Jordanian army's "vital role"
in the "battle for liberation" of the Palestinian
homeland.
After a period of moody introspection fol-
lowing the Rabat summit, the King-prodded by
Prime Minister Rifai-moved actively to mend
fences at home and abroad. He applied some of
the Arab subsidies to improve the conditions of
the army, and, with income from phosphate
exports rising, moved forward on some long-
dormant development projects. Jordan's diplo-
matic contacts with Arab states were upgraded
across the board; even Iraqi leader Saddam
Husayn was invited to Amman, and the King
went so far as to offer to meet with Libyan
President Qadhafi. King Husayn has grown par-
ticularly cozy with Syrian President Asad,
making a surprise visit to Damascus for a long
talk with A\' ad early in April.
Husayn and his aides gave US officials only
sketchy accounts of his meeting with Asad, but
from the King's chats
with his troops it appears that his strong desire
for an air defense system was a principal topic.
The subsequent appearance in Jordan of Syrian
air force officers has led some Jordanian officers
to conclude that the King asked for and received
Syria's agreement to extend its SAM umbrella to
cover north Jordan.
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The King is nevertheless determined to
press for US delivery of a Hawk missile detense
system at an early date. He and his prime min-
ister have dropped hints that if this cannot be
managed, he will try to "borrow" Hawks from
Saudi Arabia or, if necessary, get Syria to pro-
-tide Soviet SA-6s and SA-7s.
Husayn is also expecting US budget and
military support of $180 million this year. Al-
though he will remind Washington of Jordan's
long-term loyalty and his readiness to support
US policy in the area, Husayn and Rifai have
recently been spreading their bets. In the past
two months Jordan has:
? Developed a more intimate relationship
with Syria than ever before, including wide-
ranging economic and trade agreements and
active political and military consultations.
? Entertained several Soviet economic
and political delegations and lavishly wel-
comed Romanian President Ceausescu.
? Approved requests for diplomatic
representation by Yugoslavia, East Ger-
many, and North Korea.
? Rushed to congratulate Prince Siha-
nouk and promise recognition of his "gov-
ernment of national union."
Some Jordanian officials profess concern
about the extent and direction of Jordan's
widening involvement in foreign affairs, which
stirs little popular interest. They fear the coun-
try will be drawn into politically dangerous
entanglements abroad when it should be con-
centrating on internal development. Field-grade
officers are said to be worried that, if the King
accepts Soviet air defense weapons from
Damascus, Syrian and perhaps Soviet advisers
may be stationed in Jordan and the country will
automatically be drawn into any new war with
Israel.
Husayn has done his homework well, how-
ever, and Prime Minister Rifai too has paid
attention to building domestic support for the
Page 5 WEEKLY REVIEW Apr 25, 75
government. Periodic meetings have been held in
the provinces to explain development projects
and advertise beneficial government programs.
Economic development is beinc given new
emphasis, focusing on agriculture and mineral
exploitation as well as tourism. The King him-
self, mindful of last year's army mutiny, speni
the early part of this month in ti aditional visits
to army units, reknitting his personal ties with
the troops. In marked contrast tc his perfunc-
tory reception at an army celebration a year
ago, Husayn this time was nearly mobbed by
L!BYA-EGYPT: FEUDING AGAIN
The gradually building tension between
Libya and Egypt flared up last week with both
sides threatening to sever diplomatic relations.
Similar acrimonious exchanges last summer
prompted the withdrawal of the Egyptian mili-
tary mission from Libya, the recall of Libya's
Mirage aircraft from Egypt, and the reinforce-
ment of border guards on both sides. This time.
over 200,000 Egyptian civilians in Libya have
become pawns in the dispute.
The Libyans, infuriated by President
Sadat's recent characterization of Qadhafi as
"insane," formally protested to the Egyptian
ambassador on April 16, warning that Sadat's
efforts to spl't Qadhafi from the ruling council
could lead to a break in relations. The Libyan
protest drew a quick communique from Cairo
rejecting the Libyan note and warning that with-
drawal of the Egyptian ambassador was being
contemplated. The communique also hinted
that Cairo may be considering the recall of
Egyptian civilian workers seconded to the
Libyan government.
Such a move would create serious problems
for both sides that each may want to avoid. The
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Libyan economy and most of its public institu-
tions would be seric_isly disrupted by the with-
drawal of the Egyptians, who form the back-
bone of the country's labor and professionai
furce. Cairo, on the other hand, must realize
that recalling its citizens could trign-., an anti-
Egyptian backlash from the traditi'nally hostile
Libyans, which neither Cairo nor Tripoli could
easily control. Scattered acts of violence against
Egyptians have already taken place in Libyan
border towns, according to the Egyptian press.
!:, such a highly charged atmosphere, prac-
tical economic and political considerations may
not serve as effective constraints. Having been
rebuffed repeatedly in his attempts to arrange a
meeting with Sadat, Qadhafi now probably feels
only the barest need for restraint. The Libyan
leader has little direct political leverage to use
against his neighbor, but he can continue harp-
ing on such sensitive issues as Sadat's close rela-
tions with the US and his "poor" handling of
Egypt's economic problems. Tripoli might also
use such assets as it may have among conserva-
tive religious factions and the armed forces
inside Egypt to foment problems for the Egyp-
tian leadership.
Sadat's recent outbursts against Qadhafi
probably stem from a concern that the Libyan
leader is willing and able to conduct subversive
operations in Egypt. When Sadat feels confident
of his position io the Arab world, ho ignores
Qadhafi. At other times, such as now when he is
under attack, Sadat feels more vulnerable and
worries about other Arabs joining forces with
Libya to upset his negotiating strategy. At such
times, Sadat tends to resort to scathing attacks
designed to isolate and discredit Qadhafi
further. Sadat has thus far not considered a
complete break with Libya, probably because he
believes this would heighten rather than
diminkkh fie threat from that quarter.
Sudan's President Numayri, who has been
trying for months to resolve the Libyan-
Egyptian dispute, sent an emissary to both
capitals earlier this week, presumably to try to
arrange yet another mediation effort. Inten-
sifica+ion of propaganda attacks from both sides
over the last few days suggests that neither
Qadhafi nor Sadat is interested at this point in
Numayri's good offices.
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The Iraqi army is reported to be in com-
plete control, but it is acting with restraint in
the northern areas that K; rdish forces had held
before their rebellion collapsed last month.
According to the British military attache in
Baghdad, who zccompanied other attaches on
an extensive tour of Iraqi Kurdistan this month,
there is no substance to stories in the Western
press-apparently inspired by Kurdish sources-
of devastation and large-scale army reprisals
against the Kurdish population.
The British attache confirmed earlier re-
ports that Iraqi forces had met little resistance
in the surprise drive toward the Iranian border
they launched immediately after Baghdad and
Tehran signed their reconciliation accord in
Algiers on March 6. Iraqi army officers told the
attache that their forces had succeeded in taking
key high grounr; all along the front by March 13
when the cease-fire requested by Iran went into
effect. The officers saw this offensive along with
Tehran's abrupt withdrawal of its support for
the Kurds in fulfillment of the terms of the
accord as key factors in breaking the back of the
rebellion.
The attache says 200,000 Iraqi troops,
both regulars and militia, are currently engaged
in re-establishing Baghdad's authority in the
area; a reduction of this force will probably
begin in about two months if all goes well. The
army's victory came so suddenly that the gov-
ernment has not hid time to develop a plan to
administer the region. The auth =:-ities do seem
to be making a serious effort to provide relief
services to the population and are spending
liberally to improve roads and communications
systems. Although a few villages are completely
destroyed, most population centers sustained
only moderate damage from the many Iraqi air
strikes.
The Kurds themselves are said to be passive
and very apprehensive at this point. They appear
to be baffled at the absence of reprisals and may
fear that punitive measures are still in store.
Centuries-old animosities between Arab and
Kurd remain, and incidents are likely, partic-
ularly if military rule is prolonged. The govern-
ment may encounter resistance if it attempts to
follow through with reported plans to regroup
the Kurds in large villages for purposes of secu-
rity and economy, or to resettle them in other
parts ' F the country.
The estimated 9,000 Kurdish fighters who
vowed last month to continue the struggle have
thus far not made their presence known.
they are lightly armed, have
limited supplies, and-lacking outside support-
could do no more than harass government units.
The tripartite teams that are monitoring
the border between Iraq and Iran-made up of
Iranians, Iraqis, and Algerians-are said to be
performing effectively. They told the attache
that their principal mir,.;,)n i to make sure that
Kurdish refugees who decide to ret'irn from Iran
are well treated and are transported back to
their villages in Iraq. Altogether, between
150,000 and 200,000 of Iraq's 2 million Kurds
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fled to Iran between March 1974, when the
most recent Kurdish rebellion began, and March
31 of this year, when the flow was ended by
agreement between Iran and Iraq. Tehran would
like to see a large number of the refugees take
advantage of Baghdad's offer of amnesty to
those who return by the end of this month.
Most of the refugees fear harsh treatment ifi they
return home, however, and Iraqi authorities
acknowledged to the attache that only a few of
tha Kurds have come back.
Iraqi purchases of conventional arws from
Western suppliers continue to mount. Baghdad
will uurobably continue to rely on the USSR for
major armaments, but procurement of some
sophisticated weapons systems from the West,
such as French Mirage jet fighter aircraft, cannot
be ruled out. Baghdad wants to diversify its
sources of military equipment and reportedly is
somewhat dissatisfied with communist assist-
ance.
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ITALY: BARRICADES AND BOMBS
With important nationwide regional and
local elections less than two months away, a
new outbreak of extremist violence has height-
ened political tensions ;n Italy. Srrall-scale
clashes between the It-'lian police ari political
extrem,.,ts have become commonplace in recent
years, but only occasionally have they triggered
a cycle of violence. This was the case last wee!,,
however, when the murder of a left-wing stu-
dent i;; Milan, reportedly by a neo-fascist,
brought thousands of left-%virig demonstrators
into the city's streets. Tl.e authorities had
trouble controlling the protesters, who threw up
barricades and firebombed neo-fascist party
offices and other right-wing "targets. '
There was more trouble as a result of the
nationwide demonstr;itions called by the labor
unions to protest the situation in Mil-,n.
Scattered violence continued into this week, ,nd
could hit another high point on April 25 in
connection with the observance of the 30th
anniversary of the partisan uprising in northern
Italy.
Political violence in Italy is largely the
work of extremists outside the regular parties.
The question of how to deal with the problem,*
however, has become a matter of dispute as the
parties prepare for the elections on June 15.
Christian Democratic leader Amintore Fanfani
has latched on to the law and order issue in his
effort to prevent further losses to the left by his
Police clash with demonstrators in Rome
party. The tactic could pav off if Fanfani can
convince voters that his pasty-which has played
the major role in all of Italy's postwar govern-
ments--is brit equipped tj put an end to polit.
ical violence.
Fanfar.i faces an uphill fight, however.
Christian Democratic setbacks it several key
constituencies last year suggest that many voters
no longer have that much confidence in the
party. Then, the electorate in then; areas seemed
to be holding the Christian Democrats respon-
sible for Italy's economic problems. Now, the
Communists and Socialists--%vho condemn
violence as forcefully as Fanfa ii--are trying to
rudge the voters toward the same conclusion
about the periodic breakdowns in public order.
Meanwhile, Fanfani cont1nues to maintain
that recent international events should alert
Italians to the dangers of granting more
influence to the Communists. Until recently,
Fanfani has pointed mainly to the Portuguese
example, bui this week he broadened his case to
include the Vietnam situation, ass:rting that it
proves there are "no valid accords" for the
Communists.
Communist chief Beilinguer has openly
criticized the Portuguese Communists. He is
reported to be "as frustra.ed as he ever gets"
over the implications of the Portuguese issue for
his party's chances. The : ommunist leader has
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also taken several other steps to underline his
party's claim to autonomy from Moscow. Never-
theless, Berlinguer has reportedly found that his
relations with Christian Democratic officials-
even those who are sympathetic to closer ties
with the Communists-have cooled.
Despite these problems, the Communist
electoral campaign still centers on Berlinguer's
call for an "historic compromise" that would
eventually bring the two parties together as gov-
ern'-rent partners. He is stressing, however, that
this is a long-t2-m goal as far as the national
government is concerned. The immediate
Communist aim is to score sufficient gains in the
local elections to force the Christian Democrats
into coalitions at the munici al t)rovincial- and
regional levels.
THE PARIS ENERGY TALKS
The developed and developing states that
participated in the Paris energy talks, which
broke down last week, have avoided extreme
positions in their comments. As they analyze
the collapse of the conference and consider the
next steps, three aspects of the Pars talks stand
out:
? The developing states and the oil pro-
ducers showed a high degree of solidarity
behind Algerian leadership.
? The industrialized states were more
united in resisting the demands of the devel-
oping states than at any time since last year
during the special session of the UN on
development and raw materials.
? In spite of their sharp differences, the
two sides were able to avoid bitter public
recrimination, both during and after the
Paris talks. In fact, most of the participants
said they would continue to seek ways to
hr;ng oil producers and consumers together.
As originally conceived by French Presi-
dent Giscard, the Paris talks were intended to
lay the groundwork for a later conference to
examine energy and related problems. The
Algerian-led coalition demanded that, in draw-
ing up the ag3nda, the industrialized states agree
to give raw materials and economic development
issues equal treat rent with energy. The in-
dustrialized states maintained that the con-
ference should be restricted to a discussion of
energy issues.
The developing and oil-producing states
blamed the failure of the preparatory talks on
the industrialized states. Algeria, wi+n leadership
ambitions in both OPEC and the Third World,
insisted that the developing statrs had nothing
to gain from a conference that discussed only
oil. The Algerians, who lobbied it tensively, were
able to maintain unity because roost developing
state., are concerned with finding a way to tie
earnings from their raw materials to the price of
goods they import from developed countries.
Saudi Arabia arid Iran, who are generally loath
to accept Algerian leadership, went along be-
cause it enabled them to demonstrate their sup-
port for developing countries at little immediate
expense. Both may have expected, as apparently
did the Algerians, that more than one prepara-
tory conference would be necessary before a
major conference of oil producers and con-
sumers could convene.
While expressing some disappointment at
the breakdown or L,je talks, thi developed states
believe th?t the oil-consuming nations could not
have Hide further concessions without capit-
ulating to the demands of the Algerian-led coali-
tion. Some of the West European participants
even maintain that Algeria intended from the
start to force the collapse of the talks. They
believe that the Aioerians were more interested
in bolsterinc their claim to leadership of the
Third World i'ian in negotiating. Others attrib-
ute the collapse to over-optimism by France ard
to a misunderstanding of the purpose of the
talks on the part of the developing states. In any
case, a number of West European officials now
believe that the failure of the French-sponsored
meeting',il: strengthen the International Enemy
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PORTUGAL: TO THE POLLS
Over six million Portuguese are expected to
go to the polls today to participate in an elec-
tion that has lost much of its meaning. Although
not likely to affect the composition of the gov-
ernment or significantly alter its policies, the
balloting will provide the first indication of pop-
ular attitudes toward the leftward course Portu-
gal's military leaders have charted.
Rumors circu.ating in Lisbon that the con-
stituent assembly elections might be canceled
were in large part laid to rest earlier this week
when the results of the investigation into the
coup attempt on March 11 did not clearly im-
plicate moderate party leaders. They had feared
that the report would give the Armed Forces
Movement an excuse to either cancel the elec-
tion or prevent the moderate parties from par-
ticipating.
local election boards have been set up. The
moderate parties reportedly will have adequate
representation in nearly every precinct to guard
against election irregularities. In addition, if
Communist supporters attempt to vote early
and then obstruct their moderate opponents-a
tactic leftist extremists reportedly have been
considering-all ballots in the precinct will be
declared invalid, and anothm vote taken later.
Efforts have also been mad(: to avoid fraud in
the vote counting, but so ne irregularities are
likely to occur.
The Portuguese election situation is unique
in a number of respects. There have been no
meaningful prior elections to serve as a guide;
public opinion polling is an undeveloped art,
and there r?imains an unknown proportion of
the electorate that will cast blank ballots or
abstain.
Fears of election-rigging have been dis- Given an election relatively free from
pelled to some extent by the manner in which tampering, the moderate, non-communist
Socialist Party leader Mario Soares (foreground) during recent campaign rally in Lisbon
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parties will almost certainly receive a clear
majority. Such a result would clearly not be a
vote of confidence for the Movement, but it
would not be viewed as a decisive defeat either.
The moderate part!, s have already agreed to the
Movement's conti,iued rule for the next three to
five years, and all but the Social Democratic
Center have platforms that advance many of the
same policies as those espoused by the Move-
ment.
Leftist leaders of the Movement, however,
fear that a large vote for the moderate parties
will strengthen moderates in the Movement
itself. Indeed, a resounding moderate victory
could encourage moderates within the Move-
ment to become a more effective counterweight
to the influence of the Communists upon that
body. This would probably not be immediately
evident, but it would signal a shift in the power
balance among the various factions that exist
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Clerides
CYPRUS: PREPARING FOR TALKS
Glafkos Clerides' decision last week to con-
tinue as negotiator for the Greek Cypriot side
ensures that the intercommunal talks will
resume as scheduled in Vienna on April 28.
Both sides appear to be adopting more flexible
positions than in previous sessions, but mutual
suspicions cc. Bald lead to more snags.
Clerides apparently decided to stay on
after President Makarios reaffirmed his nego-
tiating mandate in the coming talks. The Greek
Cypriot negotiator appears to have been upset
by reports that Makarios had made a com-
mitment to the extremist hierarchy of the
Church of Cyprus to refuse to sign any settle-
ment negotiated by Clerides and instead to
adopt the strategy of a "long struggle" against
the Turks. Clerides had also been discouraged by
the harsh reaction to his conciliatory speech on
April 1 in which lie argued for a realistic nego-
tiating strategy and suggested that the Greek
Cypriots might have to accept Turkish Cypriot
proposals for a bi regional federation in return
for concessions in other areas.
Clerides' statement on April 19, when he
said that he was prepared to discuss the Turkish
Cypriot plan for a bi-regional federation as well
as the Greek Cypriot proposals for a multi-
regional federation, suggests that he has per-
suaded Makarios to at least consider the Turkish
Cypriot plan if, as seems likely, the ,reek
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Cypriot scheme is rejected by the Turks. It is
doubtful, however, that Makarios would commit
himself in advance to a bi-regional federation
unless the Turkish Cypriots are willing to give
some idea of the amount of territory they are
prepared to give up and the number of Greek
Cypriot refugees that would be allowed to
return to their homes.
So far, the new government in Ankara-
with some prodding from the US-appears
willing to pull back from some of the territory it
controls on Cyprus, but it has been reluctant to
provide specific details and has emphasized that
no concessions will be made before the start of
negotiations.
The Turkish Cypriot constituent assembly
is expected to complete its work on April 25th
on a draft constitution that could provide the
legal framework for an independent Turkish
Cypriot state if a settlement appears out of
reach. Turkish Cypriot negotiator Rauf
Denktash has come under strong criticism in the
assembly. His critics charge that the original
draft, which was largel, formulated in Ankara,
could lay the basis for an authoritarian regime.
They have succeeded in substantially reducing
the powers of the presidency, which Denktash is
expected to assume.
In the meantime, Greek Cypriot women
are continuing their protests against Turkey's
failure to honor UN resolutions that call for the
withdrawal of fo,n;,fn troops from Cyprus and
the return of refugees to their homes. A peace-
ful mass demonstration was held on April 20
near Famagusta at which time a delegation of
foreign and Greek Cypriot women attempted
unsuccessfully to present a petition to the
Turkish commander and to gain entrance to
Famagusta.
is creating new strains between Bucharest and
there are mounting differences over
the European security talks, closer integration
within CEMA, the Kremlin's goals at the Euro-
pean communist conference, and Soviet efforts
to expand the political coordinating role of the
Warsaw Pact. Bucharest views "coordination" as
a particular threat to its freedom of maneuver in
the international political arena.
The Soviets are allegedly pushing for the
establishment of a permanent pact committee of
foreign ministers and are calling for regular
meetings of the pact's political consultative
committee. Moscow also apparently wants to set
up a pact secretariat similar to NATO's political
committee and headed by a Soviet secretary
general. The adoption of these measures would
strengthen the pact's supranational character
under Moscow's suzerainty.
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The Romanians, who bitterly oppose such
an arrangement, reportedly have been unable to
win other pact members over to their side.
over the Tong
run, Bucharest will be forced to compromise on
some points. Once the European se-.urity
conference is over,
the new emphasis on conformity
Moscow will put even greater stress on ideo-
logical orthodoxy for all pact members.=
would be intended in part to offset Soviet
commitments at CSCE on the freedom of
movement of peoples and ideas.
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Romanian diplomats in Budapest have
told US officials that they believe recent
Hungarian attacks on nationalism are in part
directed toward Bucharest, at Moscow's
Soviet pressure for closer political and
economic policy coordination in Eastern Europe
Page 15 WEEKLY REVIEW
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Apr 25, 75
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HAILING EVENTS IN INDOCHINA
With their eyes firmly fixed on what the
drw~lupnic'nts in Indochina porte'ld fur Ihenr-
as one of the addressees. More to the point, Tass 25X1
aruiorirrced that the USSR would send humani-
tarian aid to Cambodia. Two days later, on April
21, Kosygin received the Khmer charge in
Moscow; this is the first meeting between a
Soviet leader and a Khmer official since Siha- 25X1
nook's ouster in 1970.
selves and the Chinese, the Soviets arc trying The Soviets clearly put a high priority on
hard to ingratiate themselves with the victorious keeping in step with Hanoi. In its inure authori-
Khrner Connull ists and to Maintain their close tative comments, Moscow has avoided direct
ties with North Vietnam. rtt l "C
ac
S
MOSCOW may see Peking's strong endorse-
ment of Sihanouk as an opportunity for it to
establish close ties with the Khrner comntr
rr,ists,
who are Sihanouk's rivals. General Secretary
Brezlinev, Premier Kosygin, and President
Podgorny sent congratulations to Cambodian
leaders Sihanouk and Penn Nouth, but also
listed Khmer communist leader Khieu Samphan
.t, on
POI 1(-Y ;n Vietnam; otheiA,ise,
however, the Soviets have been playing Charlie
McCarthy to Hanoi's Edgar Bergen. They have,
for instance, taken Hanoi's line that Thieu's
resignation changes nothing and that the entire
Saigon regime, along with all US forces, must go
l;efore negotiations will be possible. lass also
picked tip the commmnist assurance that US
evacuation (If fort, x',(?a,r -+ be hindered.
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KOREA: KIM IL-SONG IN PEKING
Kim II-song's visit to Peking should be
viewed as a serious effort to move Pyongyang's
20-year campaign to take over South Korea off
dead center-in particular to explore the possi-
bilities of a Chinese-supported diplomatic initia-
tive to secure a complete US military with-
drawal from the peninsula. It is worth noting
that the last high-level North Korean - Chinese
meeting-Chou En-lai's 1971 visit to Pyong-
yang-resulted in the unveiling of the initiative
for North-South talks.
In the psychological sphere, Kim's flam-
boyant presence was an attempt to identify his
regime and its cause with the current tide of
communist success in Indochi is and to generate
at least the appearance of firm Chinese support
for unifying Korea on communist terms. Kim's
main target in this effort was the South Ko-
reans, whom he doubtless sees as peculiarly
vulnerable to such posturing at this juncture.
In material terms, Kim and the top military
officials who accompanied him to Peking almost
certainly requested a step-up in military assist-
a,ice from China. Chinese military aid to North
Korea, negligible through most of the 1960s, has
increased substantially since 1.971 and may now
equal the Soviet contribution in dollar terms if
not in sophistication of hardware.
Probably most important among Kim's
objectives in going to Peking- it is still unclear
whether he was invited or invited himself- was
to sound out the Chinese leadership on the state
of Peking's rela,;ons with the US and to get
Peking's reading on the matter of US willingness
to stick closely to the Pak government. Kim
may reason that if Sino-US detente is not going
well, Peking would have fewer objections than
before to some minor military adventure on his
part.
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Kim 11-song waves to Peking crowd
Kim is probably not thinking in terms of a
major military assault--across the DMZ toward
Seoul, for example. He undoubtedly calculates
that the presence of US forces in that sector
virtually guarantees a prompt US military
response, including air attacks on the North
itself. Nor is Kim sure that such attacks would
succeed to any important extent; South Korean
strength along the DMZ must still command his
respect.
But Kim might believe that, in the wake of
Indochina, a lesser probe of South Korean and
US military intentions and capabilities-one he
could hope to control and contain-might serve
important purposes. Such probes might include
more aggressive North Korean responses to the
air and sea incidents that occcar from time to
time along North-South border zones; a North
Korean attempt to shoot down low-flying US
reconnaissance aircraft presently operating
south of the DMZ; and, at higher levels of risk,
an attempt to seize and hold one or more of the
Yellow Sea islands controlled by the UN
Command but garrisoned by South Korean
forces.
Kim II-song might calculate that attacks of
this sort, if successful, would demoralize the
South Koreans and, if US responses seemed hesi-
tant, could generate new frictions between
Seoul and the US as well as new arguments in
Washington on the advisability of US forces
remaining hostage to the acts of the competing
Korean regimes.
In discussing Peking's views on US policies
in the Pacific, Kim would probably argue for the
position that, all things considered, the time
might be propitiorns for a major diplomatic ini-
tiative, strongly supported by Poking, to win US
troop withdrav:dl from South Korea; Kir;'s
interest would be in face-to-face talks with
Washington. At worst, in Kim's view, the initia-
tive would stir up dissension within the US
government and further shake South Korea's
faith in its ally.
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Cambodia became a closed society this
week as the couniry's new leaders consolidated
their control behind a curtain of silence. Deputy
Prime Minister Khieu Samphan and Information
Minister Hu Nimm issued statements congratu-
lating their forces for "final victory... in the
people's war" and thanking international allies
for their support. The two leaders called for
"natiu,ial unity" to build ar, "independent,
nonaligned, and prosperous" Cambodia but pro-
vided no hints on conditie in Phnom Penh or
on the new regime's p .,os. The statements
omitted any specific call for reconciliation with,
or amnesty for, those who fought or served on
the side of the previous government.
the communists are
moving ruthlessly government
officials and Cambodian army officers in at least
some par'L, of the country.
Khmer communist leaden leng Sary (I) and Khieu Samphan
munists have also evacuated large numbers of
people from Phnom Penh, apparently to ease
the strain on food stocks and to facilitate the
administration of the capital.
There is still no firm evidence on the fate
of senior figures captured by the comm,anists-
including Long Boret, Sirik Matak, and Lon
Non-and most Westerners ire the capital have
taken refuge in the French emuassy compound.
The mood in the capital is far from hospitable,
and the 15-mom Red Cross team that elected to
remain behind now wants to leave.
apparatus to become firmly established.
the prince from stealing the "victory" show and
to allow time for the communist administrative
Sihanouk at midweek was still showing no
signs of preparing to leave Peking, and members.
of his entourage, in fact, have complained bit-
terly that they are not being kept informed on
developments in Cambodia. Sihanouk's vague
and somewhat testy response to questions about
his travel plans suggest that the new leadership is
deliherately delaying his return, both to prevent
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Pathet Lao troops have become increas-
ingly aggressive in recent weeks, but there is no
persuasive evidence at this point that the com-
munists are planning to scuttle the year-old co-
alition in favor of a military solution.
The communist-initiated actions, concen-
trated largely in northern Laos, have been
limited and localized. The most significant fight-
ing has taken place in and around the strategic
crossroads town of Sala Phou Khoun, which lies
astride the only overland route betwean the
twin capitals of Vientiane and Luang Prabang.
Sala Phou Khoun was controlled by the non-
communists at the time , F the cease-fire in
February 1973.
According to the northern region com-
mander, General Vang Pao, Pathet Lao forces
supported by artillery last week attacked and
overran all non-communist positions along
Route 7 cast of Sala Phou Khoun. They also
briefly occupied the town itself. Vang Pao has
saturated Pathet Lao troop concentrations in
the area with T-28 air strikes, but counter-
attacks by his ground forces have foundered in
the face of stiff resistance.
There are unconfirmed reports that a
North Vietnamese army "battalion" supported
the estimated two Pathet Lao battalions in-
volved in the Sala Phou Khoun actions, and the t
at least two light PT-76 tanks were employed by
communist forces.
It is difficult to account for these blatant
cease-fire violations. One theory making the
rounds in Vientiane is that the communist ac-
tions are simply retaliation for recent aggressive
operations by the Royal Lao army designed to
curb Pathet Lao inroads into another area some
15 miles north-northwest of Vientiane. Non-
communist Defense Minister Sisouk na Cham-
passak takes a more somber view of the situa-
tion, one that is doubtless shared by Vang Pao
himself. Sisouk believes that the Pathet Lao
either are seeking to fulfill their long-standing
objective of controlling Sala Phou Khoun or
that they are creating a diversion there in prep-
aration for possible attacks against Vang Pao's
headquarters complex at Long Tieng, southwest
of the Plaine des Jarres.
Whatever the real motivation for the at-
tacks at Sala Phou Khoun, there is growing
speculation on the part of senior pion-commu-
nist military leaders and the diplomatic corps in
Vientiane that the Pathet Lao have been em-
boldened by communist successes in Cambodia
and South Vietnam into adopting a more mili-
tant posture in Laos. While the Pathet Lao will
almost certainly continue to nibble away at non-
communist holdings in remote or contested
areas when the opportunity arises, there are no
present indications that they are preparing for a
major resumption of hostilities. Indeed, recent
public statements by Prince Souphanouvong and
other senior Pathet Lao leaders in both Vien-
tiane and Sam Neua suggest that the Lao com-
munists are reasonably satisfied with the
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coalition government's evolution over the past
year or so and that, by and large, they remain
committed to pursuing their interests in the
political arena rather then on the battlefield.
For his part, Prime Minister Souvanna
Phouma has taken steps to defuse the situation
at Sala Phou Khoun. Earlier this week, he issued
urgent orders to Souphanouvong and Sisouk to
bring all military activity of their respective
sides to an immediate halt. By midweek, fight-
ing in the Sala Phou Khoun area appeared to be
tapering off, but it was not known whether the
Pathet Lao har, obeyed Sou-?anna's instructions
to return to their original positions
President Marcos is taking advantage of US
problems in Indochina to intensify his drive for
an independent foreign policy that will erase
Manila's image as an American client state.
Despite an increase in rhetoric that seems to cast
doubt on the future of US-Philippine ties, the
fundamental bilaterE I arrangements are unlikely
to change radically i,i the foreseeable future.
Questioning the value of the mutual de-
fense treaty or the presence of US bases is not a
new tactic for Marcos. He has raised the issue
before when he felt Washington was not re-
sponding sufficiently to his diplomatic, eco-
nomic, or military reads. Talks on the future
status of US bases in the Philippines have in fact
been stalled for some time because Marcos him-
self has demurred on scheduling the high-level
negotiations needed to grind up the agreement.
Marcos apparently now wants to establish a
definite quid pro quo for the bases-either an
annual rent or a long-range military aid package.
He may assume that chances of greater US mili-
tary assistance will increase once the Vietnam
wa is over.
Marcos' recent critical remarks about the
US are also part of his continuing effort to
create a more balanced foreign policy. Since
declaring martial law in 1972, Marcos has in-
creased his contacts with communist as well as
Third World states. He has established diplo-
matic relations with the East European coun-
tries and last week played host to his first com-
munist head of state, Presiden. Ceausescu of
Romania. Manila has held preliminary discus-
sions with Moscow and Peking on establishing
diplomatic relations. It also 'ias joined its col-
leagues in the Association of Southeast Asian
nations in recognizing the new regime in Phnom
Penh and is planning to open a dialogue with
Hanoi.
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Despite his public campaign to put distance
between himself and the US, Marcos privately
has often been more cooperative with US in-
terests since n: irtial law than before. Without an
opposition party or an independent press to
point up the discrepancies, Marcos will continue
to have the luxury of speaking one way for the
record while acting a different way in private. In
the future, however, Marcos will probably be
even more assertive and independent in his rela-
tions with the US, if only to make certain that
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THE OAS: OLD RELIABLE
Latin American and Caribbean govern-
ments will probably make an intense effort to
formulate a joint strategy fo,* the OAS General
Assembly' that opens in Washington on May 8. A
backwater of inter-American activity over the
past year and a half, the OAS is regaining
respectability, not only as a permanent pan-
American forum but also as the one reliable
arena in which to capture US attention.
Last year, the General Assembly agenda
was backbench business, as the hemisphere's for-
eign ministers focused on Secretary Kissinger's
informal "new dialogue," which they envisioned
as a series of productive sessions with the secre-
tary. With the spotlight elsewhere, ORS com-
mittee work was desultory; most substantive
and administrative issues under study therefore
remain far from resolution.
By now, though, the perspe:tive on inter-
American affairs for many Latins has reverted
largely to the adversary view that prevailed
before the new dialogue was attempted.
Repeated Jisagreements between the US and
Latin America on economic matters, suspicion
of US clandestine activity in the region, and
dismay over what many consider to be a hard
line in the current US approach to foreign
affairs have combined to convince many Latins
that the US is insensitive to their problems and
cavalier toward friendly but "unimportant" gov-
ernments in the hemisphere. Cancellation of the
Kissinger trip to the region this week may have
been the final blow to the remaining hopes that
something might come of the dialogue.
The Latin Americans believe there is
evidence that fnrr1;ulating joint positions with
which to corJront the US can be successful.
They interpret the current effort in Washington
to "correct" tr':) restriction on OPEC countries
in the Trade Reform Act as a response to their
united criticism in an OAS forum and tend to
see this as a model for future strategy. Even the
strident Yankee-baiting governmer:ts, such as
the V ilasco regime in Peru, favor keeping the
OAS intact, although at the same time they may
support initiatives to set up new Latin-only
alliances.
It seems likely that the delegations to the
General Assembly will make a concerted effort
to work for their objectives in a cool, business-
like manner, but several contentious issues on
the agenda could provoke anti-US outbursts: the
Trade Reform Act, the effect of high oil prices,
the continuing problem of OAS sanctions
against Cuba. Members seem agreed on the need
to end the sanctions issue, but some are still
bitter over US abstention in the abortive effort
to accomplish this last November. An effort is
being made to eliminate many formal proce-
dures, especially the long-winded speechmaking
designed for home consumption, so that the
focus will remain on the real issues under dis-
cussion. The withering of the dialogue probably
has added to the general determination to
streamline the OAS and make it a more func-
tional and less rhetorical forum in which to
exert pressure on the US. There is a good
possibility that he diminished expectation of
special treatment frcm the US-added to the
concern throughout Latin America about the
worsened condition of inter-American rela-
tions-will make this OAS meeting more than
just another in the long series of Latin-US con-
Page 24 WEEKLY REVIEW
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HONDURAS: LOPEZ OUSTED
Chief of State Lopez, buffeted by a major
scandal and the determined opposition of a
group of reform-minded lieuterant colonels, was
ousted this week by the Superior Defense
Council of the armed forces. His replacement,
Colonel Juan Alberto Melgar, is likely to play
only a figurehead role and could soon become
another victim of the anti-corruption campaign
being waged by the younger officers.
Melgar may ultimately come under the
cloud of corruption that characterized the
Lopez government. He has been associated both
with Lopez and the other senior colonels of
General Lopez' . gime, almost all of whom are
now out. The new chief of state will be retained
at least temporarily by the ascendant lieutenant
colonels, if only because they have not yet
agreed on a member of their own group to
replace him.
It is not clear how strong a role the lieu-
tenant colonels will play in the new administra-
tion. Although they are relatively young and
ioexperienced, they have based their justifica-
tion for assuming power on the need to
eliminate corruption in government, improve
the efficiency of the armed forces, and better
the living conditions of the people.
In a lengthy communique, the officers
promise a progressive and vigorous approach to
the country's domestic problems. The officers
resent Honduras' reputation as a corrupt
"banana republic" and have resolved to improve
it. They are eager to modernize their country,
but may lack sufficient administrative ex-
perience to achieve that goal.
Thus far, the group has shown no inclina-
tion to alter the general ideological direction set
by the Lopez government. In a recent conversa-
tion with US Ambassador Sanchez, Melgar
described himself and a 'majority" of the
lieutenant colonels' group as "right of center."
Some in the group may seem more nationalistic
than their predecessors because of their
impatience to tackle problems, but the group as
a whole can be expected to maintain Honduras'
close ties with the US.
ably have to wait a long time for this-the new
military leaders have declared their intention to
Civilian political leaders have welcomed the
removal of Lopez and hope that the change will
eventually lead to free elections. They will prob-
remain in power indefinitely.
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Trinidad-Tobago
TAKING THE INITIATIVE
Emerging from a long period of administra-
tive inertia, Prime Minister Eric Williams has
moved decisively to counteract the paralysis of
the key petroleum and sugar industries resulting
from a two-month strike. He is also using the
repercussions of the strike to further his own
political ends.
On April 9, Williams ordered military and
police personnel to begin delivering petroleum
products and sugar to the public. This move
alleviated shortages that had brought an outcry
from consumers, businessmen, the press, politi-
cal opponents, and even members of his own
People's National Movement.
Several factors probably were responsible
for the Prime Minister's long delay in dealing
directly with the problem. For one, remaining
isolated and enigmatic during a crisis is part of
his personal political style. He tends to brood
over problems and to make decisions without
consulting anyone. Moreover, during the period
he had a severe depression requiring psychiatric
treatment. When he experiences such an epi-
sode, it significantly interferes with his function-
ing as an executive. His exercise of decisive
leadership once again suggests that his depres-
sion responc'ed to the treatment.
Williams is also looking at tha strike as a
way to improve his already strong position in
preparation for the election, which he is likely
to call for late this year. Moreover, he wants to
preserve his party's dominance even after he
eventually leaves office. He sees the United
Front of black oil workers and East Indian sugar
farmers and workers as a potential nucleus of a
political organization that in future years could
challenge the siIoremacy of his People's National
Movement.
Williams apparently believes that the best
way to deal with this potential political chal-
lenge is to split it up at an early stage. By letting
the strike drag on and create shortages, Williams
built up public support for using the military
and police to dilute the strike's impact. He also
used the strike to justify acquiring a degree of
government control over the Texaco subsidiary,
whose workers are on strike. The Prime Minister
announced on April 13 that the government
would take over Texaco's distributing operation
and would acquire some participation in its
350,000 barrels-per-day refinery. Williams prob-
ably will now press Texaco to settle with the oil
workers, thus isolating them from the sugar
workers and weakening the base of their sugar
union's leaders. Some press reports suggest that
the sugar workers may already be backing off
from some of their demands.
With the strike apparently on the way to
settlement, Williams can look ahead confidently
to the elections. The labor leaders are almost
certain to decide that they are in no position to
field a candidate against the Prime Minister this
year, leaving the thrust of his opposition to
come from the traditional political ranks. He has
led the nation since its independence in 1962,
and now that its economic horizons have be-
come bright, he seems to have no intention of
Page 26 WEEKLY REVIEW Apr 25, 75
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OPEC INVESTMENT IN THE US
Holdings of US assets by OPEC countries-
mostly in bank deposits and government securi-
ties--jumped $11.8 billion during 1974. At the
end of the year, US holdings totaled $14.5
billion and made up 20 percent of OPEC's for-
eign assets, compared with 13 percent a year
earlier. In addition, OPEC countries had ear-
marked substantial funds for future investment
in the American economy. At the end of the
year Kuwait held at least $1 billion in Nassau,
pending selection of suitable long-term US
investments.
Saudi Arabia, Venezuela, Nigeria, Kuwait,
and Iran accounted for 85 percent of OPEC's
US assets at the end of 1974, but the com-
position of each country's holdings differed
substantially:
? Saudi Arabia held about 50 percent in
government securities, half of which were
medium and long term.
(The US Treasury Department estimates
OPEC assets in the US were some $14 billion at
the end of 1974. The $500-million difference
apparently arises from conflicting reports on the
disposition of Kuwaiti funds held in a Nassau
account.)
The current account surplus of OPEC
members totaled $71 billion last year and, with
a $13 billion lag in oil payments, the producers
had an investable surplus of about $58 billion.
At least $52 billion of this was placed :n foreign
official assets. Of the remainder, $2.7 billion
was used to reduce liabilities and to fund multi-
lateral aid institutions set up by producers. We
cannot specifically identify where the remaining
$3 billion '':ant.
The share of OPEC's foreign assets held in
the US rose throughout 1974. New investment
reached its high point of 26 percent in the
second quarter, tollowing the removal of the
Arab oil embargo. Investment in American
assets remained strong in the second half, pri-
marily because of the growing weakness of
sterling and the increasing reluctance of Euro-
banks to accept additional short-term deposits
from the OPEC states. At the end of 1974, bank
deposits and short-term gov-rnment securities
accounted for just over 80 percent of OPEC
assets in the US. The percentage had declined
gradually since mid-1974, largely as a result of
falling short-term interest rates.
OPEC Countries:
Estimated Foreign Assets
Billion US S (.7.t
End of Pi onth Data
Total OPEC
Foreign Inveslnn:nt:;
Non-US Assets
US Assets
1-l
23.7
86%
18.4
87?6
Dec
1973
5577574 75
Mar
1974
46.2
81%
51.8
80%
32.0
83%
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? Vonetuela kept amore. Ilion 90 percent
in hank deposil5, rrros(Iy lime dop05il'.
e Nigeria place( about 95 pc r.,'nt in
short-term government 5ecroitie'.
? Kuwait hold almost '15 percent in tin'
form of equities, real estate, loan,,, and cor-
porate bonds.
? Iran placed 90 percent in short-term
assets, divided about equally between gov-
ernment securities and bank deposits.
Among OPEC members, Indonesia and Vene-
zuela had the largest share of their assets in the
US, 67 percent and 41 percent respectively.
Il(ldin(p by Algeria, I,nnclr,r, and (Jalar were,
ne.gli(pole.
he flow of OI'iC iiveslnlenl ,ilnrur,l (c'1-
lainly will decline durincl 111051 0f as de-
for Oil renl,iilr, wc',il< ,ind the ( 0lrnb u',
continuo l0 00051 i,npnnI". avail,1hlc',1rr-
pllr, for 1915 will app1.)Xinlate 1,55 hilliml,
c.,nlpare(1 with 'J,5R billion in 1914. I he ()S
sho11ld attract a substantial portion of lhc5c
funds in spite of the recent decline in US int(rr-
est rate', relative to rates in Lurope and the drop
in the value of the dollar. Marring a serious
deterioration in Arab-(1S relations, 0M .C ?,tate'
will probal:'J invest another 1,10 billion in the
US in 1975, raking their US holdings to nearly
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