WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001000080027-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 28
• Document Creation Date: December 27, 2016
• Document Release Date: May 11, 2010
• Sequence Number: 27
• Publication Date: June 6, 1975
• Content Type: REPORT

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Top Secret
meekly Review
Top Secret
Copy N2 658
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The WEEKLY REVIEW, issued every Friday morning by the
Office of Current Intelligence, reports and analyzes significant
developmc-nts of the week through noor, on Thursday. It fre-
quently includes material coordinated with or prepared by the
Office of Economic Research, the Office of Strategic
Research, the Office of Geographic and Cartographic
Research, and the Directorate of Science and Technology,
Topics requiring more comprehensive treatment and
therefore published separately as Special Reports are Ilsted
in the contents.
CONTENTS (.June 6, 1975) \a f ~~~
EAST ASIA
PH CIFIC
1 Middle East: Around the Canal
3 Laos: Redefining US Relations
4 China: Pro-US Commentary
7 North Korea- Courting the Nonaligned
8 Australia: Government's Stock Failing
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9 Portugal: Political Tensions
10 Poland: Administrative Reforms Enacted
11 Greece-Turkey: Leaders Meet
14 Italy: Regional Election Campaign
15 CSCE: Soviet Concessions
16 Western Europe: Aircraft Trouble
MIDDLE EAST
AFRICA
WESTERN
HEMISPHERE
17 Syria-Iraq: Water Dispute Abates
17 Spain: Saharan Initiative
19 Angola: Conflict Spreading
20 FTAI: Pressures for Change
21 Lebanon: Still No Government
22 Panama: Government Cracks Down
22 Regionalism Rises in Latin America
23 Argentina: New Economy Minister
24 Developing Cuban-Portuguese Ties
Comments and queries on the contents of this
publication are welcome, They may be directed to
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Last trapped ship to exit
Middle East: Around the Canal
With much ceremony, Egypt reopened the
Suez Cana; on June 5, : fter eight years of idle-
ness, two wars fought on its banks, and an
intensive year-long effort to clear it of accumu-
lated war debris. The long-awaited opening,
intended by President Sadat as a signal of his
desire for peace, was somewhat overshadowed,
however, by Israel's sudden announcement that
it wds reducing its forces rear the canal. The
two events came as Sadat concluded a meetino
in Salzburg with President Ford and as Prime
Minister Rabin prepared for a similar summit in
Washington nexi week.
Under the terms of the Israeli move,
announced by Rabin on June 2 and completed
two days later:
? Israel reduced by ;calf the number of
tanks located within 30 kilometers of the
Suez Canal.
? The Israelis will maintain no artillery
within 32 kilometers of the canal and will
position no missiles-except anti-tank mis-
siles-within 40 kilometers of the UN buffer
zone.
? Israeli troop strength in the limited
armaments area will be kept below half that
permitted by the Egyptian-Israeli disengage-
merit accord.
The move was primarily a political gesture
intended to show that Israel was willing to co-
operate in moves toward a Middle East settle-
ment. Militarily the steps are of little signifi-
cance, given the limited force that Israel had
been maintaining in the area.
Despite the political and propaganda
benefits to be gained, Rabin was apparently
reluctant to agree to the urgings of Defense
Minister Peres and Foreign Minister Allon that
the government announce a thinning-out of its
military forces in the Sinai as a reciprocal ges-
ture for the canal's reopening. Rabin reportedly
argurd that it was not up to Tel Aviv to come
up with new proposals or gestures.
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Subsequently, he was reported to have urged
that the announcement be withheld at least
until the results of th Ford-Sadat meeting were
in hand, and prefer: "ply until after his own meet-
ing with President cord.
His two ministers took the position that
Israel must make some early gesture to balance
the propaganda windfall Cairo would reap by
reopening the canal. They reportedly also main-
tained that such an announcement could create
a more congenial climate for Israel in Washing-
ton and Cairo, where important policy decisions
may be made over the next several weeks. Since
the Israeli announcement, Rabin reportedly has
concluded that it has, in fact, already created a
"more comfortable" atmosphere for his talks
with President Ford.
Egypt's reaction to the Israeli move has
been highly favorable. President Sadat, while
0 50
\ kilometers
still in Salzburg, hailed the action as a step in
the right direction that indicEtes IsraPI "has
started to reciprocate" in moves toward peace.
In the first public Egyptian acknowledgement
that Israel might be permitted to use the canal
in some way, Sadat said passage of Israeli
cargoes on ships of other nations will be no
problem "if the conduct of Israel is like it is
today." The Egyptians will not permit transit by
Israeli flag vessels, however, until the conclusion
of a final peace settlement.
Although the Israeli move does nothing
substantive to advance negotiations, it does
improve the atmosphere for talks and encour-
ages Sadat to continue his moderate course fot a
time. His meeting with President Ford also
seems to have raised Sadat's hopes that the US
will continue its diplomatic efforts. Sadat told
one American television interviewer that "Presi-
dent Ford has proved to me that he is with us in
this peace" and that the peace process will begin
to pick up momentum. Some of Sadat's other
public comments have been more reserved, and
the usually voluble Cairo media have refrained
from editoriali7 ng on the results of the meeting.
But Sadat seems at least to be content to wait a
while longer for the definitive US policy state-
ment he has been seeking.
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Laos: Redefining US Relations
Prime Minister Souvanra Phouma and his
Pathet i_ao deputy, Phoumi Vongvichit, met
with visiting Assistant Secretary of State Habib
,arty this week to discuss the future course of
Lao-US relations. They broke no new ground.
Both Lao leaders reaffirmed in positive terms
the communist-dominated coalition govern-
ment's desire to maintain "good" relations with
the US. They also made a strong pitch for con-
tinued US assistance, but with the standard
Pathet Lao caveat that such aid must be uncon-
ditional and given directly to the Lao
government.
In their conversations with Habib, neither
Souvanna nor Phourni was willing to come to
grips with the sharp differences between the US
position and Lao expectations regarding future
aid. Despite the reassurances of good will by
both Lao leaders, this question clearly will re-
main a fundamental and perhaps insurmount-
able obstacle in working out a new modus
vivendi between Vientiane and Washington.
Hanoi appears to share this view. A North
Vietnamese commentary on June 3 stated that
Habib's Asian trip "cannot reverse the course of
events in Vietnam, Cambodia, and Laos."
In his discussion with Habib, Phoumi es-
sentially reiterated a line he had taker, earlier
with the US charge and acting USAII) director.
He said that Laos was about to err bark on a
long-range economic development pi,,gram, rind
that US assistance would be welco pie-particu-
larly during a two-year "healing the wounds of
war" phase. Phoumi previously talked about
American aid in terms of war reparations.
Phoumi said he would personally supervise
negotiations on a new assistance agreement,
which, he hoped, would get under way as soon
as possible. He also indicated that he did not
"think" there would be any more "disorders"
directed against Americans in Vientiane, where-
for "convenience"-negotiations should be held.
Souvanna, however, indicated that either Vien-
tiane or Washington would be acceptable as a
site for talks.
Phouroi obviously prefers Vientiane as a
negotiating venue because of the proven ability
of the Pathet Lao to marshal large numbers of
students and other activists to demonstrate at a
moment's notice in support of the government's
In any case, before bilateral talks on a new
assistance agreement can begin, the current
round of negotiations on the dissolution of AID
and the turnover of all of its equipment and
facilities to the Lao government must be con-
cluded. Both US and Lao officials have agreed
to June 30 as the cut-off date for these negotia-
tions, but the talks-which began earlier this
week-already appear hopelessly bogged down.
Meanwhile, Souvanna's lack of touch with
reality and his acquiescence to Pathet Lao view-
points were evident in his discussion with Habib.
He repeatedly emphasized that, in his view,
"nothing had changed" in the Lao-American
relationship and argued that AID-not the US-
was the prime target.
Souvanna also maintained that there had
been no real change in Laos, merely an "evolu-
tion of attitudes." He said that in light of the
..new situation," he had "ordered" the two sides
to collaborate, "ordered" Phoumi and acting
Pathet Lao Defense Minister Khammouane
Boupha to purge the Royal Lao Army of "unde-
sirables" and integrate the communist end non-
communist armies, and "asked" Phoumi to staff
the coalition administration with civilian offi-
cials from Sam Neua.
The Pathet Lao, according to Souvanna,
have no intention of taking over Laos-at least
not for another "five or six years." The Lao
communi.;ts, he insisted, are "reasonable na-
tionalists"-not dictators-who respected the
monarchy and who had never formed a separate
government during their long years of isolation
in Sam Neua.
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CHINA: PRO-US COMMENTARY
Senior Chinese officials are stressing that
despite the outcome in Indochina, the US is still
the most important strategic counterweight to
Soviet power in Asia and Europe. Both Vice
Premier Teng Hsiao-ping and Foreign Minister
Chiao Kuan-hua have recently observed that the
US was overextended in Indochina; it can now
concentrate on more fundamental commitments
in Europe and Japan.
During his trip to France last month, Teng
stressed the importance of the US-European
partnership in countering Moscow's strategic
aims in Europe. In public he called for increased
European economic and political unity-
merica s own security, he 'dded, depends on
the defense of Europe. To idustrate the impor-
tance Peking attaches to US strength as protec-
tion against Moscow, Teng commented that in
China's eyes, Washington's relations with Japan
are much more important than Peking's.
The Cninese press gave unusually positive
treatment to the NATO summit and President
Ford's European trip. Peking's media stressed
statements that underline the US commitment
to NATO, the determination of the al!iancu to
remain militarily strong and politically cohesive,
and US assurances that detente with Moscow
would not detract from US interests elsewhere.
Prior to the President's trip, the Chinese press
had focused on recent statements by US leaders
warning Moscow not to test US resolve in the
immediat,. post-Indochina period.
Although they have concentrated par-
tirularly on the US role in Europe, the Chinese
have also made it clear that they do not expect,
or desir,:, Washington's withdrawal from Asia in
the wake of the Indochina debacle. The French
received the impression from Teng that China
was concerned that any further US drawback in
the region would result in a Soviet advance to
fill the vacuum. In particular, the French noted
that Teng passed up opportunities to denounce
the US military presence in Thailand-and the
Philippines as well.
The Chinese seem genuinely concerned
about the possibility that Moscow will in fact be
in a position to exploit the post-Vietnam situa-
tion in Asia; it is this concern that motivates
Chinese desires that the military balance in the
region not charge rapidly or decisively. Peking's
anxieties on this score have been fueled recently
by the continuing deadlock in Sino-Japanese
negotiations over a peace treaty, a deadlock
which resulted in part from Soviet pressure on
Tokyo-and by what the Chinese believe to be
Moscow's overly close friendship with Hanoi.
Peking is also concerned that ar uneasy govern-
ment in Taipei might see utility in seeking sane
sort of relationship with Moscow--a situation 25X1
the Soviets might be tempted to exploit. 25X1
In attempting to secure their northeastern
flank against putative Soviet machinations, the
Chinese, in the wake of Kim II-song's visit to
Peking, have been strongly insisting on the with-
drawal of US forces from Korea, but they have
been careful not to set a deadline for it. After
repeatinc, to the French the standard Chinese
formulation on this issue, Teng Hsiao-ping
remarked that he expects no change in the
Korean situation-a tacit acknowledgement that
China does not foresee early US disengagement
from the peninsula. Peking has made it clear
that it does not desire a blowup in the Korean
situation, and it probably continues to believe
that US forces provide an element of stability
there.
In some respects the Chinese have been
quite forthright in setting forth their position.
Within days of the fall of Saigon, Chiao Kuan-
hua implied to a group of British journalists that
Peking hopes Washington will play a more active
role in East Asia as a counter to the Soviets.
Chiao went so far in early May as to imply that
Peking and Washington might cooperate to deny
Moscow a military foothold in Vietnam-a move
that has been widely rumored but denied both
by Moscow and Ha.ioi.
Moreover, a Japan Socialist Party delega-
tion recently in Peking was "astonished" by
China's openly benign attitude toward the US.
The Chinese reportedly waved aside the
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E
Japanese party's proposal that the final com-
munique include a call for reunification of
Taiwan with the mainland and attacks on the
US-Japan Mutual Security Treaty and US policy
in Indochina. The communique did include an
attack on the issue of US forces in Korea, but
the embassy in Tokyo reports that the Japanese
believe the US was mentioned only as a conces-
sion-apparently in order to get the Socialists to
agree to anti-Soviet language regarding foreign
hegemony in Asia.
The Mayaguez affair provided another clue
regarding Chinese attitudes with respect to the
US position in Asia. As in the case of Korea,
Peking has an obvious interest in keeping rela-
tions with Phnom Penh warm. Nevertheless, the
Chinese reaction to the US rescue of the ship
and crew, despite an unusual reference to the
US as a "paper tiger," was low-keyed, relatively
restrained, and almost entirely ex post facto,
indicating that Peking wished to isolate the
affair. This suggests that China wants to
minimize most areas of friction with Washing-
ton, even in situations where the use of
American power tends to conflict with other
Chinese interests.
CAMBODIA: LEADERSHIP CONFERENCE
In a move that probably marks the comple-
tion of the initial period of domestic consolida-
tion, the new leadership late this week convened
a major gathering of communist officials in
Phnom Penh. Communist leaders will probably
outline their long-term policies and goals to the
party rank and file and may use the occasion for
a public unveiling of the new government and
for further pronouncements on Prince
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Sihanouk. So far the covert party apparatus has
been functioning as a shadow government-a
role it will undoubtedly continue to play even
after a government is formally installed.
Propaganda from Phnom Penh has almost
certainly exaggerated progress in restorinn
The party Tear ers and a relatively small
pool of trained o{f;_ ?als have had their hands
full trying to put in practice the massive changes
they have decreed fc': Cambodian society and to
cope with the ensuing problems. These preoc-
cupations may explain in part the delay in
installing a national administration.
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The US embassy in Bangkok has suggested
that a power struggle may have paralyzed the
leadership. A Thai newspa! _, recently carried a
story that Deputy Prime ,."nister Khieu
Sam,,han was kill--d in factional fighting it
Phnom Penh earl;er this month. Although
Cambodian spokesman in P?king-presumably a
member of Sihanouk's entoura
the story,
neither Kh amp an nor Information Min-
ister Hu Nim-the only two leaders to emerge
publicly since the communist take-over-has
issued a statement in over two weeks. If a power
struggle is under way, communiques or state-
ments issued when the conference adjourns may
provide some hints. 25X1 25X1
Sihanouk's future is sure to be discussed at
the conference. Communist leaders in Cambodia
consider the Prince an unscrupulous and adroit
political operator and doubtless want a com-
munist apparatus firmly entrenched before they
allow him to return. They may feel under some
pressure, however, to hurry things along. Com-
ments by communist troops during the brief
period when Western journalists were in Phnom
Penh indicate that the Prince is not without a
.
25X1
Even if domestic sentiment favoring
Sihanouk's return is manageable, communist
leaders may realize that the longer he is kept
cooling his heels abroad, the greater the pos-
sibility that, apprehensive and humiliated, he
might end his association with the communists
and accept permanent exile. While this might
it
su
some leaders, others recognize that the
value of Sihanouk's foreign support-par-
ticularly that of China-argues for his early re-
t
ur
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North Korea
COURTING THE NONALIGNED
President Kim II-song's current tour of
African and East European capitals is the most
ambitious diplomatic swing ever made by the
North Kor,aan leader.
Kim's trip has had a distinct nonaligned,
Third World orientation. Since May 22, he has
been warmly welcomed in Romania, Algeria,
Mauritania, Bulgaria, and Yugoslavia. In his
speeches and press interviews, Kim strongly
emphasized nonaligned themes-the inde-
peridence, sovereignty, and common interests of
the smaller countries-and he roundly attacked
the US and UN presence ir. South Korea.
On several occz,'-rs, Kim repeated the line
that a war provoked by 'ie US and South Korea
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would result in reunification of Korea under
communism. He took pains, however, to project
a moderate image for North Korea, insisting that
Pyongyang's policy calls for peaceful reunifi-
cation and that he is prepared to move in
gradual steps toward that end.
Kim's immediate objective is to strengthen
political support for North Korea's participation
in the nonaligned conference of foreign minis-
ters in Lima this summer and for a pro-
Pyongyang resolution at the UN General Assem-
bly this fall. In both forums North Korea in-
tends to press for the removal of US forces and
the UN command from South Korea.
In Romania, Kim and Ceausescu signed a
"treaty of friendship and collaboration" be-
tween the communist parties of the two coun-
tries. Both leaders pursue an independent for-
eign policy arid have developed a close personal
rapport. Algeria and Mauritania provided Kim
with a good platform for appealing for UN votes
from Middle Ea '.ern and African states. The
stop in Yugoslavia is intended to enhance North
Korea's standing in nonaligned circles. In Bul-
garia, Moscow's closest ally in Eastern Europe,
nonaligned themes were muted, but Kim and
Zhivkov found common ground in "socialist in-
ternationalism."
A Soviet Foreign Ministry official told a
US diplomat on May 27 that Kim will not be
coming to Moscow "at this time." He said noth-
ing about a future visit, but a Soviet official in
Western Europe has said that planning is under
way for a visit by ine North Korean leader late
this month or early next.
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Australia
GOVERNMENT'S STOCK FALLING
The resignation this week of Defense Minis-
ter Barnard complicates the Labor government's
already difficult parliamentary position. Bar-
nard, who hid been rankling since he was eased
out as deput;' prime minister a year ago, will
take an ambassadorial post.
Barnard's parliamentary seat wi!l be con-
tested in a by-election on June 28 under cir-
cumstances unfavorable for Labor. Although his
constituency is traditionally a Labor district, the
state party organization is in some disarray, and
the probable candidate of the opposition Lib-
erals is a vigorous campaigner who will be a
formidable threat.
Loss of Barnard's parliamentary seat would
reduce Labor's working majority in the House
of Representatives to only two seats. This, on
top of the opposition-controlled Senate's block-
age of 25 pieces of legislation so far this year,
might force Labor to consider calling national
elections. This new situation may also encourage
the opposition, now recovered from the strains
of a change in leadership nearly three months
ago, to greater aggressiveress.
With public opinion polls showir,g that
Labor now trails the Liberal-Country opposition
by 13 percentage points, the Labo government
will face a difficult choice between national
elections under unpromising prospects or con-
tinued frustration of its legislative program. If it
is willing to tolerate continued obstruction by
the Senate, Labor can hold on until November.
At that time, however, annual consideration of
government appropriations takes place, rnd with
the opposition using its Senate majority to
block the government's operating funds, Labor
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PORTUGAL: POLITICAL TENSIONS
Socialist leaders have agreed to end their In contrast, the Communists and their sister
boycott of cabinet meetings and to resume par- organization, the Portuguese Democratic: Move-
ticipation in the four-party coalition govern- ment, together hold only 35 seats.
nient, provided that the dispute with Commu-
nist printers over the Socialist party newspaper A substantial portion of the constitution
is resolved by June 7. The solution is a tempo- that the assembly will draft has -,ready been
rary one at best, even if the military meets the dictate by the Movement and accepted by the
Socialists' deadline. major parties. The military has made certain it
will remain the dominant political power for at
The Socialists managed to back down least the next three years. The So-ialists, how-
gracefully from their challenge to the Armed ever, believe there are several important deci-
Forces Movement's political authority after mili- sions left for the assembly and plan to concen-
tary leaders promised to convince the Commu- trate on the areas of human rights, justice, and
nist printers to accept the reopening of the municipal governments. The assembly will de-
Socialist newspaper Republica. Information cide the date of elections for a legislative assem-
Minister Jesuino has said the government will bly and also for new municipal councils.
reopen the newspaper at any tir-ie the Socialist
management requests, but editor Raul Rego has There is speculation that moderates might
hesitated, fearing renewed opposition from the attempt to reserve Tart of th? assembly sessions
printers. for free debate on patio:ial problems. If the
moderates attempt to exceed the strict mandate
Prr,s reports indicate that the Socialists ae the Movement has given them, the papered-over
pressing the Movement to resolve the proL,em differences between the military and the parties
by setting June 7 as the deadline for the reopen- will resurface, possibly forcing the Movement to
ing of the paper. The US embassy believes the renew its threat to do away with the parties. 25X1
government is embarrassed by unfavorable re-
action abroad and is anxious to bring the dis-
pute to an early end.
The Movement managed to assuage the So-
cialists without taking concrete action on their
other demands-curtailment of Communist in-
fluence in the trade unions, mass media, and
local governments. The Movement did state its
recognition of "disproportions" in the political
structure and promisec' to correct them.
Military leaders also vowed to safeguard
the activities of the constituent assembly, which
opened on June 2. The Movement's assurance
dispelled last-minute fears that the assembly,
which is dominated by moderate political
parties, would not be allowed to meet.
The Socialists hope to use the assembly as
a public forum for expounding moderate ideas.
They should have little trouble dominating it
since they hold 116 of the 249 seats and their
candidate has been elected assembly president.
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The official explanations failed to mention
that the reforms will also enable Gierek to break
up some of the powerful p; ovincial fiefdoms
and to bring the local government and party
bureaucracies under greater central control than
at any time since the Communists came to
power.
Poland
ADMINISTRATIVE REFORMS ENACTED
Parliament last week enacted party leader
Gierek's plans for a massive restructuring of t:ie
territorial and administrative bureaucracy. Im-
plementation began on June 1.
The print+pal feature of the reorganization
is the division of 17 provinces into 49 smaller
units. Prime Minister Jaroszewicz justified these
changes by :aying that the old sy:'zm had be-
come outmoded and bogged down in red tape.
He added that Warsaw wants to bring the gov-
ernment close to the people and to tailor ad-
ministrFtion to recent social and economic
changes.
250,000 people, including 110,000 party
workers. Of the latter, 50,000 are slated for
retirement. Six provincial party first secretaries
have already been removed-three of whom re-
ceived important jobs in Warsaw-and new prov-
ince governors have been announced. There are
rumors in Warsaw that the powerful party first
secretary in Katowice, Zdzislaw Grudzien, will
move up to the party Secretariat and Politburo.
Although no organized opposition to the
reforms has emerged, there is considerable dis-
satis`action among officials who stand to lose
their posts or find their powers reduced. One
bureaucrat recently told a US diplomat that the
best officials in the old administrations will re-
sist being relocated, and that less qualified peo-
ple will come into many of the new local posi-
tions. He also said that local facilities were
inadequate for the new governmental units, and
that it might take two years before "some
semblance of order" could be restored.
25X1 25X1
Gierek's hopes of creating a more efficient
bureaucracy will be complicated if reports of
Deputy Premier Mieczvslaw Ja ielski' illness
prove accurate.
IJagielski is
the Politburo member responsible for national
economic planning, the ranking deputy premier,
and chairman of the State Planning Commission.
His loss would deprive Gierek of one of Poland's
most experienced and able economic planners
and managers.
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 GREECE-TURKEY: LEADERS MEET
The Greek and Turkish prime ministers
met at the NATO summit in Brussels last week-
end for their first talks since the Cypi us crisis
last summer. Nothing concrete was -'.ecidad
upon during the three-hour meeting, Alt the
atmospherics were favorable, producing some
improvement in the troubled relations between
the two countries. Each side publicly declared
itself pleased with the outcome.
Duririg the foreign Ministers' meetings in
Rome last week, the Turks appeared to back
away from referring the Aegean dispute to the
World Court, but the prime ministers have now
agreed to this step. In the final communique,
both sides pledged to resolve their differences
peacefully through negotiations and to sLrpport
the Cypriot intercommunal negotiations in
Vienna, which resumed on June 5. Some mem-
bers of the Greek delegation, who had come to
the Brussels summit genuinely concerned that
the Turks had war on their minds, were particu-
larly relieved at the outcome.
The Turks have been emphasizing that
Prime Minister Demirel is in too weak a position
to make concessions because of the fragile
nature of the coalition he heads. They have been
insisting that Athens make the first move by
stating specifically that it will accept a bizonal
solution in exchange for return of a certain
percentage of Greek Cypriot territory held by
the Turks. The Greeks have been unwilling to
Prime ministers of Greece and Turkey
k,n?,nrr,rrrlis acrd l)wrriro /
commit themselves until they have a better idea
of Turkish views on the final shape of a settle-
ment.
Turkish Foreign Minister Caglayarrgil envi-
sions Cypriot negotiations encompassing three
stages; intercommunal talks in which Turkish
Cypriot leader Denktash allegedly will have full
authority to negotiate; Athens-Ankara discus-
sions during which the powers of the Cypriot
central government will be determined; and dis-
cussions among Greece, Turkey, and the UK
during which the future international status rtf
Cyprus will he decided. Perhaps because of the
domestic political situation, however, Ankara is
not disposed to be flexible and is expected to
keep Denktash on a short leash during the inter-
communal talks in Vienna.
Other problems between Greece and Tur-
key are just as complicated as the Cyprus issue
and, initially at least, will be dealt with sepa-
rately. Experts from the two count ;es will meet
to discuss their differences over control of air-
space in the Aegean. They will also examine a
Turkish proposal for joint exploitation of the
resources of the Aegean and a compromise text
on the Aegean dispute to be forwarded to the
World Court. The experts will probably make
some progress on the airspace dispute, but the
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NATO: REACTION TO THE SUMMIT
West European leaders who attended last
week's NATO summit meeting have generally
been satisfied. Most were gratified with Presi-
dent Ford's assurance that the US will continue
to fulfill all its commitments to NATO. Press
reaction to the summit has been mixed, but
many European papers complained that the
heads of government only discussed problems
and did not arrive at solutions.
Positive public comments have been made
by several leaders. Luxembourg Prime Minister
Thorn commented that President Ford has
calmed European fears that US reverses in In-
dochina would lead to a disengagement from
Western Europe. Turkish Prime Minister Den1irel
made similar remarks. West German Foreign
Minister Genscher said the summit was an
impressive confirmation of the resoluteness of
the NATO allies. Danish Prime Minister Jor-
gensen played down the summit as "un-
dramatic," but said he was satisfied with it, and
Italian President Leone privately stated that he
was satisfied with the outcome.
Portuguese Prime Minister Goncalves used
the summit and several press conferences to
stress that Portugal will remain in the alliance
and is determined to meet its obligations. Re-
acting to expressions of concern about the
leftist tendencies of the rulers in Lisbon, Gon-
calves asked the allies for more "comprehension
and less apprehension" about Portugal. Hr; also
stressed several times that Lisbon will not be a
"Trojan horse" within the alliance. Goncalves,
treated to a hero's welcome on his return from
Brussels, said that the Portuguese delegation had
scored an important victory in a "veritable in-
formation battle." Admiral Coutinho, however,
who accompanied Goncalves to Brussels, was
said to be disappointed with the results of the
summit.
Greek Prime Minister Karamanlis and Turk-
ish Prime Minister Demirel also commented
positively on the summit and on the private
meeting they held to discuss bilateral problems.
Both men described the latter meeting as useful
and indicated thai their dialogue will continue. 25X1
French officials have not commented in
much detail. They probably would prefor not to
arouse new debate in France over whether Paris
is moving closer to or divorcing itself further
from the Alliance. Foreign Minister Sauvag-
nargues has tried to reassure the public that
President Ford's comment regarding the need
for no partial memberships in NATO
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ITALY: REGIONAL ELECTION CAMPAIGN
After two full weeks of campaigning for
the regional and local elections to be held on
June 15, debate remains focused on the implica-
tions of the vote for the national political situa-
tion. All parties view the elections as a crucial
test, since they will be the first definitive meas-
ure of popular sentiment since the 1972 parlia-
mentary race; more than 95 percent of the elec-
torate will go to the polls to choose new offi-
cials in 15 of the 20 regions, 86 of the 94
provinces, and 6,345 of the 8,000-odd munici-
palities.
The Christian Democrats, who have domi-
nated postwar politics with an average 38-40
percent of the vote, are struggling to avoid a
repeat of the sharp losses they suffered to the
left last year in Sardinia and scattered local
contests. The Christian Democrats' prospects
appear to have improved lately, but the party is
still in danger of dropping to 35 percent or less
for the first time in the postwar period.
The campaign is dominated by discussions
of how power , hould be distributed in the next
national government, what the future role of the
Communist opposition should be, and who is
best qualified to stop the dramatic increase in
crime and political violence.
With the exception of the law and order
issue, these are essentially the same questions
that divided the center-left governing pai ties last
October and November during Italy's longest
postwar government crisis. The imminence of
the elections was the main reason political
leaders were reluctant to come to terms then.
Instead, they set up the Moro government, a
Christian Democratic - Republican coalition
dependent on Socialist and Social Democratic
parliamentary support, as an interim solution
that would at least keep the four parties work-
ing together.
With so much at stake, the campaign has
turned into a free-for-all. The center-left parties
for the most part are running against each other,
despite the fact that cooperation among them
remains the only workable alternative to Com-
munist participation in the government. Re-
storing such cooperation after the elections will
be made more difficult by the harsh exchange
now taking place between the two key parties-
the Christian Democrats and the Socialists.
The Socialists, who generally get around 10
percent of the vote, have been running on the
theme that the only way the voters can guaran-
tee social and economic progress is to give more
support to them and less to the Christian Demo-
crats. That, the Socialists argue, would allow
them to force new policies on the Christian
Democrats, who have set the terms for every
Communist leader Berlinguer
An eve toward government
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25X1
coalition in which the two parties have partici-
pated since the Socialists joined the government
in 1963.
Christian Democratic leader Fanfani coun-
terattacked this week by criticizing the Social-
ists for running on joint tickets with the Com-
munists in several hundred small towns. Fanfani
pointed to this as evidence that the Socialists are
trying to prepare the way for Communist entry
into the national government. For the first time
he explicitly urged the voters not to support the
Socialists; Fanfani previously had told his audi-
ences to vote for at least one of the Christian
Democrats' potential allies if they could not
support the Christian Democrats themselves.
The Socialists, in fact, are walking a tight-
rope on the Communist issue. Local conditions
make it difficult for them to avoid allying with
the Communists in certain areas, but the Social-
ist campaign stresses that the time is not ripe for
a deal with the Communists at the national
level. The Socialists' advertising, for example,
advises the electorate that a vote for their party
is a "vote without compromises"-a thinly
veiled jab at Communist chief Berlinguer's de-
sign for an "historic compromise" that would
eventually bring his party into the government.
Fanfani, meanwhile, is highlighting his
party's leading role in pushing tougher law and
order measures through parliament last month.
The Socialists and Communists are trying to
make the same issue work for them by charging
that it is the Christian Democrats who are re-
sponsible for the deteriorating situation, since
they have controlled the Interior Ministry's law-
enforcement apparatus for most of the past 30
years.
Berlinguer's campaign is built around the
theme he has stressed since launching the "his-
toric compromise" proposal in late 1973: that
Italy's problems cannot be solved until his
party, the country's second largest, is granted
more influence. Berlinguer is emphasizing in par-
ticular the Communists' reputation for efficient
administration in the three north-central regions
where they hold the balance of power.
It is obvious, however, that Berlinguer feels
vulnerable on foreign policy issues: Fanfani con-
tinues to cite the Portuguese situation to bolster
his arguments against concessions to Italy's
Communists. Berlinguer took advantage of an
interview this week to re-emphasize his claim
that the Italian Communists are "inspired by a
different vision" than their counterparts in
After weeks in which seemingly inevitable
Soviet concessions were repeatedly deferred, the
European security conference is moving closer
to resolution. On May 28, the Soviets offered to
modify tl--eir position on certain humanitarian
issues, part of the subject matter of so-called
"Basket 111" that had kept the conference stale-
mated.
The Soviets moved closer to accepting
Western texts facilitating international travel
and restricting the expulsion of journalists en-
gaged in legitimate professional activity. They
also agreed to drop a statement on national
responsibility for international radio and tele-
vision broadcasts.
The Soviet moves came in response to a
Western "global initiative" intended to reduce
the number of disputed issues to manageable
proportions and to identify the significant ones.
The in;tial Soviet reaction to the Western pro-
posal had been chilly, but the Soviets suddenly
changed their tactics when it became clear that
more stonewalling would probably kill the
chances for an early windup of the conference.
The Soviet shift was probably timed to
influence the NATO summit meeting at Brus-
sels. NATO members, while anxious to conclude
the conference, have been put off by the
Soviet's rigidity on Basket I I I and are reluctant
to face public opini )n with so little to show for
their efforts.
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Moscow's concessions have kept alive the
possibility that the this J and final stage of the
conference can be held this summer. The Soviets
have not pressed for-and have no chance of
getting-the June 30 date proposed by General
Secretary Brezhnev earlier this year, but they
appear anxious to wrap up the conference be-
fore the August vacation season in Europe. The
Finns are prepared to play host to the final stage
on four weeks' notice.
Despite the progress last week, significant
obstacles to a rapid conclusion remain. There
are still many differences-some minor, some
substantial-on humanitarian issues. In addition,
compromises must still be reached on military-
related "confidence-building measures," such as
how much advance notice must be given prior to
military maneuvers, what size of maneuvers
require advance notification, and what geo-
graphic area is covered by these provisions.
If the Soviets follow past practice, they
will hold out until the last minute on the re-
maining issues and then make only minimal con-
cessions. In fact, there is already evidence that
the Soviet representatives have gone back to
their tough bargaining tactics. The differences
could be resolved in time to organize a summit
session in July, but if this were to happen, the
scenario would be straight out of "Perils of
WESTERN EUROPE: AIRCRAFT TROUBLE
The West German - British - Italian project
to develop a European Multirole Combat Air-
craft (MRCA) is still encountering serious dif-
ficulties. Although the British claim that widely
publicized engine problems are being solved, the
West Germans apparently are deeply concerned
at the continuing delays.
The German air ford MRCA systems
project officer reportedly has noted the con-
tinuing design and production problems with
the Rolls Royce RB-199 engine and has ex-
pressed interest in General Electric's F404-400
engine, which will power the US navy F-18. He
says the Ministry of Defense is under gro" ing
pressure to get the MRCA into the air, 'gut it
must have a proven engine soon in order to meet
parliamentary requirements concerning costs
and deadlines.
The engine problem may also have influ-
enced the decision not to show the new fighter-
bomber at the Paris air show this week. The
official explanation is that the appearance
would take too much time away from prototype
testing, already several months behind schedule.
After the first two prototype aircraft flew
in 1974, all three nations agreed to continue
development work for 18 months and to make a
final decision in early 1976 whether to go into
full production. Because of rising costs, how-
ever, all three nations have since considered
either cutting back their purchase! or opting out
of the program.
After an extensive review of its defense
needs and obligations, the UK decided to go
ahead with the purchase of all 385 MRCAs it
has on order. The proposed production and de-
livery schedule is being extended, however, to
help relieve British funding problems. Mean-
while, the Bundestag has appropriated money
for the project, but only if the plane will not
cost more than $9 million each. Most estimates 25X1
indicate this ceiling will be exceeded, but the
potential setback to Germany's aircraft industry
and the amount of money already invested may
weigh heavily against a decision to abandon the
project. As for the Italians, Rome has S:nerally
followed the lead of the other two partners and
probably will continue to do so.
Although the project is still shaky, it ap-
pears to have a better than even chance to
succeed. If it fails, the UK and Italy, both eco-
nomically hard pressed, may decide not to buy
any new aircraft-a move that would seriously
weaken NATO tactical air capabilities by the
1980s. The West Germans probably would pur-
chase some other, less expensive aircraft tailored
for s ecific missions- F-16.
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SYRIA-IRAQ: WATER DISPUTE ABATES
DamascU5' announcement early this week
that it wouldd, release more Euphrates River
water to Iraq as a gesture of good will should
help ease the tension that has developed over
the past three months between the two coun-
tries' rival Baath regimes. It will not, however,
end either Iraqi political intrigue in Syria or
President Asad's antipathy for the men who rule
in Baghdad.
A Syrian government spok,asman, portray-
ing the gesture as a product of the mediation of
Saudi Oil Minister Yamani, indicated that
Damascus now hopes a permanent agreement on
sharing the water can be reached. Until the
announcement, Damascus press and radio had
kept up a daily propaganda barrage against the
"fascist Iraqi right." Last week the Asad govern-
ment closed Iraq's consulate in the commercial
center of Aleppo, and Baghdad claimed that the
Syrians had placed a ban on the movement of
Iraqi goods through the Mediterranean port of
Latakia.
More Syrian military units were pulled
away from the Golan front last week and moved
toward the Tabaqah Dam on the Euphrates,
allegedly to discourage Iraqi military adventures.
By last weekend, two armored divisions, half of
Syria's SA-6 missile defense system, and some
MIG-21s and 23s had been reoriented from the
south-near Damascus-toward the northeastern
part of the country.
Iraq will be relieved if the Syrians do re-
lease significant quantities of water; the cutback
hid threatened the livelihood of thousands of
Iraqi farmers. Baghdad had reacted with re-
straint to Syrian harassment and propaganda
charges, apparently believing that Asad would
drop his campaign against Iraq once it had
served his purposes.
It is not clear why Syria decided to open
the sluices at the dam. Asad may have con-
cluded he had amply demonstrated that Syria
can exert severe economic pressure on Baghdad
any time the Iraqis try to meddle in Syrian
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Irrigation canals fed by the Euphrates
SPAIN: SAHARAN INITIATIVE
Madrid's announcement on May 23 that it
is prepared to speed up the transfer of sover-
eignty over Spanish Sahara if the process of
self-determination in the territory is delayed
introduces flexibility into its policy. Only three
weeks earlier, Foreign Minister Cortina had
stated publicly that the only solution to the
problem of Spanish Sahara was a UN-supervised
referendum to let the people there determine
their political future. The new approach, with
its reference to Madrid's wish to take into ac-
count the legitimate aspirations of "interested
countries" in the Sahara, appears to signal a
willingness to negotiate. Preliminary contacts
may already be under way.
The government statement aroused the
concern of Morocco and Mauritania by noting
the possibility of a unilateral Spanish with-
drawal if the situation k: the territory deteri-
orates. The announcement was expressed in
terms which make it unlikely, however, that
Madrid contemplates immediate withdrawal. In
a letter to the UN Secretary General, the For-
eign Mir-istry stated that:
? Spain wishes to end its presence with-25X1
out creating a vacuum; 25X1
 25X1
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m All parties to the process should be
invited to work for a smooth transition
under the auspices of a UN-sponsored con-
ference, but if this fails Madrid will set a
deadline for withdrawal;
? Spain requests the UN to dispatch
observers to follow developments in the
Sahara; and
Madrid reserves the right to report to
the Security Council if peace is threatened.
Several developments probably contributed
to Madrid's abrupt shift away from insistence on
a referendum, which it was convinced would
result in a vote for an "independent" state that
Spain could itinue to control. Recently there
has been growing concern in Madrid about its
ability to handle the situation. A militant anti-
Spanish organization has emerged as the
dominant political force in the territory,
insurgent attacks on Spanish forces have oc-
curred recently, and the civil population and
even the Saharan armed forces and police have
shown a lack of sympathy for Spain.
Pressures from the Spanish military may
also have been an important factor.
the military, mindful o t e
Port t.! experience, wishes to avoid a
colonial war at a time when the country faces
domestic problems such as Basque terrorism and
the uncertainties of the coming post-Franco era.
These developments apparently enabled Prime
Minister Arias and officials in charge of the
Sahara to prevail over the foreign minister. Aries
reportedly favors a negotiated settlement that
would take into account Moroccan King
Hassan's determination to annex the Sahara.
Moroccan and Algerian Positions
Morocco last week expressed surprise at
the Spanish statement, accused Madrid of
creating a "climate of confusion," and con-
cluded with a veiled warning that Rabat would
use force if necessary to uphold its claim to
Spanish Sahara. The Moroccans have also
charged that Spain is trying to bypass considera-
tion of the dispute by the International Court of
Justice and to undercut the mission of a UN
investigating team now in Mauritania on the
final leg of its visit to the area.
The Moroccans Fear Spain may grant Cie
territory independence before a political settle-
ment acceptable to Rabat can be negotiated,
and they suspect collusion between Madrid and
Algiers to block Moroccan annexation of the
territory. Algeria's open support of a pro-
independence party in the Sahara has further
antagonized Moroccan officials. As a result,
King Hassan has intensified diplomatic efforts in
Madrid and Algiers to head off rapid moves
toward independence lest he is forced to take a
stand that might lead to a confrontation with
Algeria.
Mauritanian Reaction 25X1 25X1
Mauritania welcomed Madrid's willingness
to hasten the decolonization process, provided it
is carried out in close consultation with the
interested parties. In a recent interview, Presi-
dent Moktar Ould Daddah chided Spain for
threatening to hand over sovereignty of the
region to an entity unilaterally chosen by
Madrid. Ould Daddah asserted that Spain has a
moral obligation to maintain political stability
in the territory and should remain until the ICJ
has rendered a decision.
Mauritania seeks a partitioning of Spanish
Sahara and claims to have reached agreement
with Morocco. It accepts Algeria as an interested
party but places it in a special category because
Algiers has made no territorial claims. Although
lacking the military and political clout of
neighboring states, Mauritania can be expected
to step UP its diplomatic campaign in pursuit of
partition.
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ANGOLA: CONFLICT SPREADING
Forces of the Popular Movement for the
Liberation of Angola clashed during the week
with troops of the National Front for the
Liberation of Angola. The clashes occurred in a
number of towns north and cast of Luanda,
where both groups have been rapidly building
up their military forces, and in the exclave of
Cabinda. I{ was the third round of major fight-
ing in two months between the two principal
nationalist groups in Angola's transitional gov-
ernment and the first outside Luanda, the
capital.
The clashes in Angola proper apparently
resulted from a coordinated offensive by the
Popular Movement aimed at driving the National
Front out of areas where the Movement's ethnic
support predominates and at disrupting the
Front's supply routes from northern Angola
into Luanda. The Front is setting up a major
base in northwestern Angola in an area where it
has strong tribal support. The base is to replace
the extensive training and support facilities long
maintained by the Front in neighboring Zaire.
The fighting in Cabinda was apparently
restricted to the capital of the exclave, which is
administered as a province of Angola. The
operations ; f Gulf Oil, which produced 150,000
barrels a day from Cabinda last year, were
apparently not affected. The company has
evacuated dependents and support personnel.
At present, the Front continues to rely
heavily on Zairian President Mobutu; he has
long supported the Front but recently has had
to cut back because of his government's pressing
financial difficulties. China also provides im-
portant assistance, but not enough to meet the
Front a 7; 'I of training and equipping a force of
at least 10,000 troops. The Front reportedly is
trying to improve its military capabilities by
recruiting former Portuguese army officers in
Angola who have been purged by the Armed
Forces Movement because of "political unrelia-
bility."
The Popular Movement, which last winter
appeared militarily weaker than the Front, ap-
pears to have scored significant gains in the
latest fighting, as it did in the clashes that oc-
curred in Luanda in late April. It is now well
supplied with arms by the Soviet Union, its
principal foreign patron. In Luanda, large num-
bers of well-armed civilians can be mobilized to
support the Movement's regular forces; in the
countryside, its troops seem better armed and
more experienced than those of the National
Front. The Front has not been intimidated by
its recent setbacks, however; it s trying to even
the score in areas where it has strong tribal
support.
In the political arena, both groups have
been courting the National Union for the Total
Independence of Angola, the smallest of the
three liberation groups in the transitional gov-
ernment. Union president Jonas Savirnbi has
refused to be drawn into the conflict, seeking
instead to convene a meeting with the leaders of
the two groups to discuss their political differ-
ences. So far he has not succeeded. 25X1
Clearly, neither Holden Roberto nor Pop-
ular Movement leader Agostinho Neto is willing
to share political power. Any compromise they
might agree to in the near future is likely to be
only for the purpose of buying time in prepara-
tion for a final showdown. The 24,000 Portu-
guese troops-most of whom are stationed in
and around Luanda-are spread thin in the coun-
tryside and may not be able or willing to inter-
vene between the two groups in the event the
fighting continues to spread
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FTAI: PRESSURES FOR CHANGE
The somnolence that has long enveloped
the French Territory of Afars and Issas-one of
the last colonial remnants in Africa-has been
disturbed in recent weeks by internal and ex-
ternal developments.
Many members of the Afar tribe, which
composes about half the total population and
dominates the local scene, are demanding im-
provements in economic conditions and the in-
clusion of younger, better educated Afars in
politics and administration. Much of their crit-
icism is directed t the French-installed regime
headed by Afar leader Ali Aref, who is president
of the territorial council. Popular pressure for
the removal of Aref and his conservative, tradi-
tional Afar advisers is mounting.
The regime's opponents do not yet form a
united front, and most are probably undecided
about long-range goals. Some would be satisfied
with increased economic benefits within a
French administration, while others want in-
dependence. The leaders of the predominantly
Afar African Peoples Independence League re-
cently visited Paris to press for independence.
The league will seek recognition by the UN
Decolonization Committee, and the leader of
the league is seeking Arab support.
French officials note that they may even
have to reckon with Ali Aref, once considered
their pawn. The French are worried that, in an
attempt to steal his opponents' thunder, Aref
may make a sudden call for independence in the
local assembl;', where he controls the vote.
Last week, bloody clashes between Afar
and Issa tribesmen erupted. Sixteen persons
were killed and some 250 injured, including 12
French gendarmes, in several days of rioting.
Some opponents of French rule probably tried
to keep the riots going as a means of gaining
publicity and embarrassing France.
The French are also feeling heat from
Somalia, which claims the territory on the basis
of ethnic ties to the Issas. In recent months,
President Siad has increased his polemics against
the French presence and has received a sympa-
the~ic hearing in Arab and African circles. In
April, the Arab League Council passed a resolu-
tion urging independence for the territory and
fog med a ministerial committee to make con-
tb,:ts with France. The Organization of African
Unity has voiced support for the territory's lib-
eration, and African leaders are expected to
reiterate their call for independence at the OAU
summit in July.
Ethiopia has played down its claims, recog-
nizing that French withdrawal might make the
territory a battleground between Addis Ababa
and Mogadiscio. The Ethiopians are satisfied at
present with the arrangement allowing them to
use the port of Djibouti, the terminus of Ethio-
pia's only railroad.
The beginning on June 1 of what may be a
full-scale revolt by Afar tribesmen in Ethiopia
against the ruling military council in Addis
Ababa poses a new threat to stability in the
French territory. Sultan Ali Mirah, leader of all
the Afars and Ali Aref's tribal overlord, has left
his capital in Ethiopia and taken refuge tempo-
rarily in the territory. The French almost cer-
tainly will not allow him to use the territory as a
sanctuary or as a base for dissident activity
against the Ethiopian government, but France
could face problems with its Afar if it tries to
Ethiopia.
NORTH
YEMEN
SOUTH
YEMEN
Of// f or
AUFN
French Territcry
of the Afars and Issassiibouti
Addis Ababa
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Lebanon's cabinet crisis shows no sign of
ending soon. Prime Minister - designate Rashid
Karami claims to have made some progress to-
ward assembling a cabinet acceptable to the
country's many political and religious blocs, but
he has been unable to convince leftists to drop
their demand that the right-wing Phalangists be
excluded film any new government.
Karnal Jumblatt, head of the Progressive
Socialist Party, is promoting what he calls a
compromise under which representatives of his
party and of the Phalanges Party would stay out
of the government. The new cabinet, he main-
tains, should be composed of civilians who are
not members of parliament and of retired mili-
tary officers. Phalangist leader Pierre Jumayyil
has rejected this suggestion. He is supported by
former president Camille Shamun, who has de-
clared that his National Liberal Party will not
join any government from which the Phalangists
have been excluded.
Under ordinary circumstances, Karami
would be tempted to endorse Jumblatt's pro-
posal, since it would create a weak cabinet that
Karami could easily dominate. As a result o1 the
continuing civil unrest, however, he almost cer-
tainly will continue to seek a solution that can
win the active backing of Jumayyil and Shamun;
Looking for snipers
it was their withdrawal of support that forced
former primer minister Rashid Sulh to resign
last month. Karami's strategy at present is to
delay forming a government in the hope that, in
time, tempers will cool and both sides will be
willing to compromise.
Karami is working closely with the care-
taker military cabinet to create buffer zones in
Beirut between those areas controlled by the
Phalangists and those controlled by the radical
fedayeen. Sporadic shooting continued in the
city this week, despite somewhat more aggres-
sive patrolling by joint Lebanese-Palestinian
security units. Approximately 130 persons have
been killed since the Vest round of fighting
began on May 20.
Economic activity in Lebanon has fallen
off significantly as a result of the fighting this
year; the gross national product for 1975 will
probably be about 2 percent less than antici-
pated. The economy has not suffered irreparable
damage, however, and will rebound strongly, as
it did after the extended closure of the Leba-
nese-Syrian border in 1973.
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PANAMA: GOVERNMENT CRACKS DOWN
The Torrijos government has placed tough
restrictions on the media in an effort to stifle
domestic criticism during what it considers a
crucial period in the canal treaty negotiations
with the US. The crackdown is evidence of the
government's concern over the impact of recent
criticism by business organizations, student
groups, and the media, and its fear that any sign
of disunity at home may be exploited by domes-
tic and foreign opponents of a new canal treaty.
It also reflects the administration's growing
tendency to adopt a "for us or against us"
attitude.
The new restrictions were imposed on
radio and television stations, which previously
have been under less direct control than the
press. The stations were instructed not to com-
ment, without prior consultation with the
authorities, on "sensitive" subjects, including
the treaty negotiations, student affairs, public
services, or the restrictions themselves. The fol-
lowing day, a "clarification" indicated that the
restrictions were intended only to caution the
stations rather than to order them to comply,
but the message remained the same.
For several years, the Torrijos govern-
merit's prohibition of political activity has en-
abled it to act with little fear of criticism by
organized groups. During the past month, how-
ever, members of the business community who
have always been opposed to Torrijos have ag-
gressively attacked the government's economic
policies.
Criticism by ultranationalist students is
even more worrisome for the administration,
which has always considered Panama's youth
among its staunchest allies. Antigovernment
students represent only a small minority of the
student population, but they have made effec-
tive use of demonstrations and radiobroadcasts
to attack the government for the nation's educa-
tional shortcomings and for its handling of the
treaty negotiations.
The government, not wanting to use open
repression against the radicals, apparently has
decided to rely on pro-Torrijos students to si-
lence the criticism. Recently, a group of high
school students briefly took over an oi'ending
radio station, charging that it was a mouthpiece
of "reactionary" businessmen and the CIA. The
government's next step may be to turn its stu-
dent allies loose on the radical youth groups.
Also, government spokesmen will probably step
up the campaign against the opposition, portray-
ing the government's critics as servants of for-
eign interests who want to sabotage the negotia-
25X1 25
REGIONALISM RISES IN LATIN AMERICA
Latin leaders who are encouraging new
forms of area cooperation are taking pains to
sustain the momentum of the regionalist spirit
as well as to keep pressure on the developed
world.
Ten countries now appear ready to put
their money behind a shipping fleet venture that
has been under discussion for only a few
months. Mexico, Nicaragua, Costa Rica, Pan-
ama, Jamaica, Cuba, Colombia, and Venezuela
have already signed the pact to establish the
Multinational Caribbean Fleet. Guyana and
Trinidad and Tobago are also expected to be
charter members. Each will contribute equally
to an initial $30 million fund, and new members
will be assessed a like amount. This system of
equal shares, rather than some proportional as-
sessment based on relative wealth, may have
won over Trinidad, which had been leery of
domination by the big countries. The othe. Con.
tral American and Caribbean governments are
yet to be convinced that the venture can be a
success.
The act creating the shipping enterprise
empowers it to commission and operate all
types of merchant ships, to construct or acquire
shipyards and related facilities, and to buy or
charter ships and appropriate material. The first
move evidently will be to rent five freighters,
which the consortium would like to see begin
operating by the end of the year. If this is
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successful, the group will consider moving into
passenger lines and oil transport.
Venezuela and Mexico appear ready to
move forward also on their other all-Latin and
Caribbean scheme, the Latin American Eco-
nomic System. This system so far has little defi-
nition beyond its outline as a vehicle to encour-
age regional cooperation on a variety of eco-
nomic and development questions, but like the
proposed multinational fleet, it seems likely to
take some shape fairly rapidly, at least as a
paper organization.
On the pressure side, there are signs that
some governments may be contriving a joint
declaration condemning illegal activities of mul-
tinational corporations. Several Latin govern-
ments have recently been embarrassed by
bribery scandals involving official payoffs by
large US-based firms. Peru has reportedly asked
for an OAS Permanent Council discussion on
this subject and may already have the backing of
Bolivia, Ecuador, Venezuela, and Honduras.
Earlier this year, Venezuela and Ecuador
secured Latin support for similar OAS denuncia-
""" 25X1
ARGENTINA: NEW ECONOMY MINISTER
By engineering the replacement of highly
respected economy minister Gomez Morales,
presidential adviser Lopez Rega has given an-
other indication of his power-but the move has
dimmed the country's economic prospects.
Early this week Celestino Rodrigo, for-
merly an official in the Social Welfare Ministry,
supplanted Gomez Morales in the top economic
post. Rodrigo's transfer extends the influence of
Lopez Recta, who is minister of social welfare, as
well as presidential adviser. Lopez Rega has fa-
vored accommodating the demands of organized
labor through wage increases and extensive wel-
fare spending. Gomez Morales lost out because
he advocated restraint and austerity in the face
of mounting inflation.
The replacement of Gomez Morales by a
lackluster successor is certain to hamper Argen-
tina's efforts to secure financial assistance
abroad. Although Rodrigo has made a bland tail
for decreased spending and increased productiv-
ity, it is clear that he has no particular economic
program of his own. His primary function will
be to carry out Lopez Rega's instructions.
The latest move not only emphasizes
Lopez Rega's growing power-he also arranged
recent changes in the army's command struc-
ture-but points up the government's desire to
maintain its populist image as the administration
assumes an increasingly authoritarian posture.
For similar reasons, Lopez Rega this week re-
sponded for the first time to growing popular
revulsion over the activities of a right-wing coun-
terterrorist group b-' announcing that the organ-
ization would be investigated. The annour ce-
ment may be no more than a calculated gesture,
however, since the group is widely thought to
have at least tacit approval of the government.
There is considerable speculation in Buenos
Aires that more cabinet changes are imminent.
Indeed, the success Lopez Rega has had to date
may encourage him to press the extension of his
influence to the maximum permitted by the
'
nation
s final political arbiter-the military.
Thus far the officers do not appear disposed to
rein in the ambitious minister, despite wide-
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DEVELOPING CUBAN-PORTUGUESE TIES
The announcement by the Portuguese
Armed Forces Movement last week that it in-
tends to establish an alliance with popular or-
ganizations has focused attention on the increas-
ingly close ties between Portugal and Cuba.
Some Portuguese leaders apparently believe
that Cuba's revolutionary experience, particu-
larly its mass organizations, provides an appro-
priate example for their efforts to promote mass
participation in national affairs. The Cubans will
attempt to take advantage of this Portuguese
interest by offering to send advisers to set up
mass organizations. Portuguese radicals-in their
search for suitable political models--may p-ove
receptive to Cuban initiatives. Cuba hopes
through the development of closer relations to
coax Lisbon leftward and to get support from
the Portuguese in international forums.
Relations between the two countries were
long marked by bitter enmity. Cuba aided insur-
gents in Portuguese Africa during the late 1960,
and in 1969 Portuguese troops captured and
imprisoned a Cuban military officer who was
advising guerrillas in Portuguese Guinea. Rela-
tions began to improve following the coup that
overthrew the Caetano regime, and Cuba served
as an intern, 'iary in re-establishing ties be-
tween Moscow and Lisbon. The final irritant in
Cuban-Portuguese relations as removed last
September when Portugal released the Cuban
guerrilla adviser.
The foiling of the coup attempt in March
made the Cubans more optimistic about the
prospects for a "socialist" victory in Portugal,
and greatly sparked their interest in expanding
their influence there. On April 1 Jesus Mon-
tane-a member of the Cuban Communist
Party's Central Committee and a confidant of
Fidel Castro-stopped in Lisbon to deliver a
personal message from Castro to Prime Minister
Goncalves. Deputy Prime Minister Carlos Rafael
Rodriguez-the Castro regime's highest foreign
affairs official-visited Lisbon briefly in mid-
May and met with Goncalves, Foreign Minister
Antunes, and Communist Party leader Alvaro
Cunhal. Raul Castro, number-two man in his
brother's regime, reportedly will visit Portugal
this year.
The Cubans have also tried to gain influ-
ence by cultivating important Portuguese mili-
tary offiLers. An example is the treatment given
to Colonel Varela Gomes, radical deputy chief
of the Fifth Division of the Portuguese Arrn^c
Forces General Staff, who headed a military
delegation that visited Cuba from April 21 to
May 5. The delegation met with high-level
Cubans, including the Castros and Rodriguez,
attended meetings of mass organizations, ob-
served units of the Cuban military, and visited
the offices of the party's daily newspaper
G ran in a.
The Cuban interest in Varela Gomes prob-
ably stems from his position in the military unit
that plays a central role in disseminating propa-
ganda. He was reportedly impressed by Cuba's
"revolutionary brigades"-apparently a refer-
ence to the Committees for the Defense of the
Revolution and civilian militia. The Cubans have
invited another P'rtrrguese military delegation
to visit.
Another radical officer attracted to the
Cuban model for mass mobilization is General
Otelo de Carvalho, head of Porto,), -I's security
forces. Carvalho, sharing the fear of a wrmber of
the radical Portuguese leaders that an economic
blockade may u e imposed on Portugal at US
instigation, admires Cuba's success in with-
standing the US economic denial program.
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