WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000300020024-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 25
• Document Creation Date: December 27, 2016
• Document Release Date: February 15, 2011
• Sequence Number: 24
• Publication Date: May 23, 1975
• Content Type: SUMMARY

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-Secret_
Weekly Summary
Secret
No. 0021/75
May 23, 1975
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The WEEKLY SUMMARY, issued every Friday moi.nIng by the
Office of Current Intelligence, reports and analyzes significant
developments of the week through noon on Thursday. It fre-
quently Includes cr Merin' coordinated with or prepared by the
Office of Economic Research, Cle Office of Strategic
Research, the Office of Cieographic and Cartographic
Research, and the Directorate of Science and Technology.
Topics requiring more comprehensive treatment and
therefore published separately as Special Reports are listed
in the contents.
CONTENTS (May 2.), 1975)
MIDDLE EAST
AFRICA
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EUROPE
1 Vietnam: Slow Road to Reunificatioi
2 Thailand: Mayaguez Implication:
3 Laos: Communists Consolidate Contr
5 Cambodia: Peking Has an Early Role
6 China
7 Egypt: Promoting Solidarity
8 Lebanon: Prime MinMer Resigns
9 Spanish Sahara: UN Visitors
10 Geneva: NPT Conference Continues
11 Portugal: Military Challenged
12 Hungary: New Premier
13 Western Alliance Week
15 F-104 Replacemen! Still Mu dl
WESTERN
HEMISPHERE
isrung Talks
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19 Argentina: Power Play in the Army
20 Cuba: Regional Party Conclave
21 Chile: Thinking Ahead
21 Bolivia: Gulf Oil
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*In
Vietnam
SLOW ROAD TO REUNIFICATION
With the end of the war in Vietnam, atten-
tion quickly shifted to the question of Hanoi's
future political strategy in the South and
whether it would opt for a rapid integration of
the two Vietnams or for a more gradual reunifi-
cation process. The Vietnamese communists
themselves have carefully avoided any precise or
definitive announcements regarding the nature
or likely duration of the currr:i t communist
administration in the South. During the past
week, however, celebrations in Saigon and
Hanoi honoring the communist victory in South
Vietnam and Ho Chi Minh's birthday appeared
to shed some light or Hanoi's general approach
to the South's future political course.
The celebrations, for example, made it
fairly clear that, at least for the time being,
many of the top personalities involved in the
wartime communist administrator) in the South
will continue to play leading roles in the new
political process.
Pham Hung was listed first among the
Southern dignitaries welcoming a North Viet-
namese delegation to the ceremonies, and he
apparently is to be Hanoi's senior man in South
Vietnam. A member of the North Vietnamese
Politburo, he has been Hanoi's senior official
managing the communists' complex political
and military organizations in the South since he
assumed command of the Central Office for
South Vietnam in 1967. He was identified as a
member of the Central Committee of the Viet-
Military Malinement Committee members
nam Workers' Party, "secretary of the South
Vietnam Party organization," anc; "political
commissar of the South Vietnam PLAF Com-
mand." This is the first time in several years that
Hung has been identified publicly. Indeed, there
had been some sr,,eculation that he had either
been killed or had fallen out of favor wil.h the
Hanoi regime. His appearance as the party's
Southern chieftain, however, indicates that
Hanoi intends to exert direct control over the
Southern par v, government, and military
apparatus.
Behind Hung, Nguyen Huu Tho emerges as
the next man in the lineup as head of the
National Front for the Liberation of South Viet-
nam. A man of lesser stature in the communist
power structure, Tho apparently will continue
to head the Front?or something closely
resembling it?and probably will be in charge of
forming the administrative apparatus.
Huynh Tan Phat, president of the Provi-
sional Revolutionary Government, delivered a
major address at the victory celebrations, sug-
gestini2 that the PRG will remain in business for
the time being as the fu,rnal entity with which
foreign governments are to establish diplomatic
relations. Communist spokesmen at the celebra-
tions invited immediate recognition of the PRG
by foreign capitzis?including the US, providing
Washington its "obligations under the
Paris 4greement." Such a formulation probably
means that the communists would demand
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certain tough conditions, such as the provision
of US economic assistance.
Communist statements continue to affirm
reunification as a fundamental objective and
make it clear that the question is one of "when"
rather than "if." Prior to reunification, however,
Hanoi appears to be thinking in terms of an
interim period during which the communists
will secure firm administrative and political con-
trol in the South. Such an approach seemed to
be outlined by the party's theoretician, Truong
Chi nh , when he listed "advancing toward
reunification" last in a lengthy series of steps
that had to be taken by the South in order to
"strengthen solidarity" and achieve "national
reconciliation."
In a similar vein, North Vietnamese party
chief Le Duan has called on the South to de-
velop "a sound and progressive national
culture." Implying that reunification would be
accomplished gradually, Iae told cadre in the
North that they should "step up socialist con-
struction" while people in thh South should
"unite and build a splendid der 3cratic national
regime."
A decision to adopt a gradual approach to
reunification might be dictated in large part by
the huge task of setting up a communist
administration in the South. While little
evidence is available to gauge how these efforts
are progressing in he countryside, press reports
from Saigon point up the problems that the new
administration is confronting. Crime is appar-
ently increasing, caused by the large number of
unemployed and of armed former government
military and civilian cadre living in the city.
Since the city was liberated, the governing mili-
tary commission has been forced to concentrate
principally on registering former government
cadre and organizing various youth, women, and
labor groups to provide essential services for a
city of nearly three million. The commission
chairman, Tran Van Tra, has publicly conceded
that it will be some time before Saigon is
"properly administered."
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THAILAND: MAYAGUEZ IMPLICATIONS
The Khukrit Pramot government has
weathered fairly well its first serious political
test, which was provoked by the Mayaguez
affair. The unexpected arrival of US Marines at
Utapao Air Base last week touched off strong
anti-US protests, which leftist politicians
unsuccessfully attempted to turn against ?the
Khukrit coalition. Khukrit's strong criticism of
the manner in which the US handled the
incident served to deflect public anger away
from his government. Although it did strain
US-Thai relations, Bangkok's decision to
acknowledge a US diplomatic note as an official
apology defused tension in Thailand, where
anti-US demonstration; had threatened to turn
violent.
The week's events demonstrated clearly
that the Khukrit government was not prepared
to let the Mayaguez incident stand in the way of
continued good relations with the US. While the
episode will certainly strengthen the argument
of those in the Foreign Ministry and the cabinet
who favor a faster withdrawal of US forces from
Thailand, Khukrit left no doubt during his May
16 press conference that his government would
not be stampeded into taking precipitate &Won
against US interests in Thailand. He did say,
however, that existing US-Thai agreements
would be reviewed and that the Thai gov-
ernment would have to give consideration to
strengthening its control over US activities at
Thai air bases.
The Mayaguez incident could scarcely have
come at a worse time for the Khukrit gov-
ernment, which strongly desires to get off on
the right foot with the new communist regime
in Cambodia. Prior to the arrival of the US
Marines, the Thai were already embroiled in
several minor disputes with the Cambodians,
including the seizure of a Thai fishing
vessel?which was subsequently released along
with the Mayaguez?and the demarcation of one
stretch of their common border.
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LAOS: COMMUNISTS CONSOLIDATE CONTROL
The Pathet Lao are moving rapidly to es-
tablish control over non-communist areas of the
country, oespite their apparent willingness to
maintain?at least for the time being?the
trippings of a center-left coalition government
in Vientiane. They are also orchestrating large-
scale demonstrations against the US preseilee in
Laos.
Pathet Lao combat troops have now oc-
cupied virtually every important former rightist
stronghold in central and southern Laos. No
resistance from non-communist forces has been
reported. In the unlikely event that some form
of organized resistance eventually develops that
the Pathet Lao are incapable of handling, Hanoi
probably will not hesitate to throw some com-
bat units into the fray.
At least 1,000 Pathet Lao soldiers, ac-
companied by tanks and artillery, have re-
portedly moved into the city of Pakse. Farther
orth along the Mekong, an estimated three to
fur Pathet Lao battalions have occupied Savan-
nakhet. Activist students and other communist-
inspired demonstrators, who have been raldble-
rousing in the city for over a week, managed to
marshal a large crowd to cheer the Pathet Lao's
"triumphant" entry. Communist coalition offi-
cials in Vientiane dispatched reporters and
camera crews to dutifully record the event. The
12 Americans?including three senior US AID
officials?who had been placed under "volun-
tary" house arrest by the Savannakhet demon-
strators on May 14 were finally released on May
22 after a coalition cabinet-level delegation gave
in to the protestors demands that Savannakhet
and other non-communist areas in central Laos
be "neutralized."
Elsewhere in the Savannakhet area, Pathet
Lao battalions have reportedly moved into the
towns of Seno, Keng Kok, and Dong Hene. Lao
communist forces are also said to have occupied
the city of Thakhek, some 60 miles north of
Savannakhet.
Communist-inspired demonstrations
against the IJS erupted in Vientiane again this
week. An estimated 200-300 demonstrators?
including students, Lao employees of AID, and
some Pathet Lao plainclothes agitators?entered
the main AID and defense attache compound
and sealed it off. The demonstrators also broke
into the nearly:: commissary aiid American cc:ill-
munity center; considerable looting and some
property damage was reported. Units of the
capital's joint police force?consisting mostly of
Pathet Lao?w.:re outside the compound but
made no effort to restore order.
Demonstrators also seizrd the AID ware-
house just outside the capital, and a small num-
ber of Pathet Lao troops?members of Vien-
tiane's joint military security force?stationed
themselves at the entrance to a nearby housing
compound where some 143 American families
reside. At last report, Americans were being
perrnittod to enter but not to leave the com-
pound, and all vehicles were being searched.
China
North Vietnam
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Thailand
Predominantly.communlit-controlled
area, February 1973 ceasefire
F
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Pathet Lao troops entering Savannakilet
In addition to carrying signs denouncing
AID and CIA, the Vientiane demonstrators have
issued several communiques demanding:
? abrogation of all "unequal US-Lao
agreements, particularly the 1951 aid agree-
ment";
? dissolution of the AID organization;
? immediate removal of all AID and CIA
personnel from the country;
? transfer of all AID facilities and equip-
ment to the coalition government.
Pathet Lao coalition officials tv.ie taken
essentially the same line in private conversations
with senior US embassy and AID officials. They
obviously look upon the demonstrations as a
means of bringing additional "popular" pressure
on the US to capitulate to communist demands.
Pathet Lac Deputy Prime Minister Phoumi
Vongvichit told the US charge and the acting
AID director this week that the coalition gov-
ernment wanted US assistance to Laos to con-
tinue, and he seemed to envisage a long-term
requirement for such aid. Phoumi added, how-
ever, that USA ID as a separate organization must
be abolished and that all future assistance must
be given directly to the coalition government
which, in turn, would administer the program. If
the US agroes to these terms, a small number of
American aid "specialists" will be permitted to
remain in Laos as "advisers" to the various coali-
tion ministries responsible for dispensing the
aid.
The Domestic Political Scene
Prime Minister iouvanna convened an
emergency meeting of the coalition cabinet
earlier this week to select replacements for re-
cently ousted rightist ministers and secretaries
of state. In a surprise announcement, Souvanna
named neutralist Interior Minister Pheng Phony-
savan to replace Sisouk na Champassak as minis-
ter of defense. This presumably means that "act-
ing" Pathet Lao Defense Minister Khammouane
Boupha will return to his old number-two posi-
tion at the ministry.
Uncontroversial non-communists were also
named to replace Pheng at interior and to fill
remaining vacancies at finance, foreiqi-. affairs,
and public works. Souvanna has, in addition,
selected his nephew and personal physician as a
tentative replacement for rightist Health Minis-
ter Khamphay Abhay, in the likely event that
Khamphay decides not to return to Laos from
his present mission to Geneva.
Communist Deputy Prime Minister Phoumi
Vongvichit., who Souvanna claims approved all
of his selections, apparently made no effort to
have Pathet Lao officials fill the vacant posts
?all of which were allocated to the non-com-
munists under the terms of the 1973 peace
accords. This would appear to be another indica-
tion that the Pathet Lao are prepared, for the
moment at least, to maintain the coalition
facade.'
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Souvanna also announced at the cabinet
meeting that he had reached agreement with his
Pathet Lao deputy Phoumi to expand the
membership of the coalition's Joint National
Political Council from 42 to 72 delegates and to
convert that body into a legislative replacement
for the recently dissolved, rightist-dominated
National Assembly. The additional delegates, ac-
cording to the Prime Minister, will be evenly
divided between the non-communists, the
Pathet Lao, and the so-called "qualified neu-
tralists."
Transformation of the political council,
which is chaired and dominated by communist
leader Souphanouvong, into a legislative assem-
bly has been a major goal of the Pathet Lao ever
since they joined the coalition. With Sou-
phanouvong riding herd over all of its delegates,
the council will almost certainly become a rub-
ber stamp Pathet Lao law-making body.(
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CAMBODIA: PEKING HAS EARLY ROLE
Their presence overshadowed first by the
widely publicized deportation of foreigners
from Phnom Penh and then by the Mayaguez
incident, the Chinese have been quietly getting
in on the ground floor with the new Cambodian
regime. Chinese representatives have been in the
Cambodian capital since late April, and Chinese
merchant ships have begun calling at the port of
Kompong Som.
Propaganda statements from Phnom Penh
have stressed the need for self-sufficiency, but
the new leadership will need rapid short-ter,'
assistance merely to overcome supply shortages
and will be completely dependent on outside
technical advice in getting Cambodia's small in-
dustries on their feet. The early arrival of Chi-
nese technicians and ships indicates that Peking
will play a substantial role in both areas and for
the near term, in fact, may have a monopoly in
providing assistance to the Cambodians.
Phnom Penh radio has praised China for its
"sincere support and mutual respect," noting
that Cambodian solidarity with China is "strong,
developing, and flourishir.g." In contrast, the
Vietnamese have oeen lumped with the
Laotians and Koreans as "other" close comrades
in arms. The Soviet Union has not been men-
tioned at all.
Hanoi probably foresaw problems with the
nationaiistic and independent Khmer corn-
iunists once the fighting ended and the Cam-
bodians had less need for Vietnamese military
assistance. It must be taken aback, however, by
the suddenness with which the new regime is
asserting itself. Public Khmer communist pro-
hibitions against military bases in Cambodia and
Phnom Penh's pointed references to the coun-
try's "territorial integrity" are obviously aimed
at serving notice that Vietnamese communist
freedom of movement in eastern Cambodia is a
thing of the past. Although Hanoi's need to
transit Cambodian soil ended with the fall of
Saigon, the Vietnamese must be deeply dis-
turbed by Khmer occupation of disputed islands
in the Gulf of Thailand.
Given their considerable investment in the
insurgency, the Vietnamese undoubtedly find
the situation frustrating. At the moment, how-
ever, Hanoi must adjust to political realities and
rely on its supporters in the Cambodian leader-
ship to maintain a degree of influence.
Peking?concerned over the possible exten-
sion of Vietnamese Mgemony in Indochina and
the growth of Soviet influence in the region?is
surely gratified by developments in Camboeia.
During the war, China hedged its bets by con-
tinuing to support Prince Sihanouk while
strengthening ties with communist leaders in
Cambodia. Given the apparent receptiveness of
the new leaders in Phnom Penh to Chinese
overtures, this approach seems to be paying off
ha ndsomely.2
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CHINA
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DESTROYER ESCORT PROGRAM R ESUMES
I a Shanghai shipyard has begun construction
of China's third Kiangtung guided-missile
destroyer escort, the first destroyer-sized ship to
be started in China in over two years.
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The Kiangtung is Peking's only warship
believed to be equipped with surface-to-air
missiles, although no naval SAM system has yet
been identified. All other Chinese operational
missile warships carry Styx anti-ship cruise
missiles.
China has two other Kiangtung ships. One
is operational; the other is fitting out in the
Shanghai area and has none of its armament on
board. /
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EGYPT: PROMOTING SOLIDARITY
President Sadat's recent week-long swing
through four Arab states ended with the appear-
once of restored Arab solidarity but aid little to
move the Arabs closer to a unified approach to
the Geneva peace conference. By consulting
with some of his fellow Arab leaders in advance
of his meeting with President Ford on June 1,
the Egyptian President may at least have
partially disarmed his Arab critics who have long
felt he acts too inc.zpendently.
Sadat's tour included a stop in Kuwait,
visits to Iraq and Jordan?the first ever by an
Egyptian president?and a brief stopover in
Syria. During press conferences in each country,
Sadat gave unusual vent to his frustration with
the Palestine Liberation Organization. He in-
dicated that he has still not succeeded in work-
ing out a unified Arab strategy?or in getting the
PLO itself to announce a position on whether
and under what representatonal formula it
would agree to attend the Geneva conference..
Asked at a Kuwait press conference how he
would resolve the issue of PLO representation,
Sadat replied peevishly that the question might
better be asked c f the Palestinians, who, he
implied, had not yet decided even whether to go
to Geneva.
He repeated this theme, in somowhat softer
tones, at his other stops, including Damascus,
where he had just completed an hour-long con-
sultation with PLO Chairman Yasir Arafat. This
suggests that Sadat received little satisfaction
from Arafal?and probably little support from
the Syrians for Egypt's views on the Palestinian
issue.
Sadat also implicitly criticized the Pales-
tinians for refusing to recognize Israel and thus
impeding progress toward reconvening the
Geneva conference. At the Kuwait press confer-
ence, he said that Israel is "an existing reality"
whose 1967 borders cannot be touched. He
labeled demands for Israel's destruction as "one-
upmanship in which I am not prepared to get
involved." Th 9 PLO leadership is undoubteJly
not happy. Sedat has never before so explicitly
stated Egypt's recognition of Israel before an
Arab audience.
Presidents Bakr and Sadat reviewing troo s in Baghdad
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LEBANON: PRIME MINISTER RESIGNS
Prime Minister Rashid Sulh resigned late
last week after leaders of the country's two
largest Christian political parties withdrew their
support to protest his handling of the disturb-
ances in Beirut last month. It could take Presi-
dent Franjiyah several weeks to come up with a
new prime minister, since he must be acceptable
not only to the President but to the country's
main political and religious blocs.
Lebanese leftists and the fedayeen made a
last-minute effort to drum up support for Stilh's
government. Although they opposed him on
many issues, they valued the freedom provided
by his weak leadership and were eager to deny
the right-wing Phalanges Party the credit for
bringing down the government.
By custom, the prime minister must be a
Sunni Muslim. In recent years, leaders of that
sizable community have been reluctant to serve
under Franjiyah, who dislikes sharing power
with anyone. Over the past two years, however,
Franjiyah has been ill-served by three weak
prime ministers, and he may now be ready to
make the concessions necessary to recruit a
more assertive and politically powerful candi-
date.
The next prime minister's primary chal-
lenge will be the country's deteriorating security
situation. Militia of the Phalanges Party and the
fedayeen clashed in Beirut again this week,
leaving at least 5 persons dead and 40 injured.
This was the first significant violation of the
April 16 cease-fire that ended four days of fight-
ing between the two groups. Government se-
curity forces, ineffective last month, this time
moved quickly to set up roadblocks to contain
the violence.
There is no evidence that the Lebanese
army or the major fedayeen groups were
involved in the fighting this week, which was
limited primarily to mortar and small-arms fire.
Parliamentarian tries to pull Prime
Minister Sulh back into parliament
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At the present time, however, repeated clashes
between the Phalangists and the radical feda-
yeen could lead to widespread calls for changes
in the country's delicately balanced system of
government. Sulh, who is serving as caretaker
prime minister, has already called for such
changes and has openly sided with the Pales-
tinians a ainst the Phalangists.
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SPANISH SAHARA: UN VISITORS
The visit to Spanish Sahara and Morocco
this week by an investigating team of the UN
Committee on Decolonization has stirred up the
parties contesting the territory's future. The UN
team, which has already been to Madrid, will no
on to Algeria and Mauritania.
Two of the contestants, Morocco and
Algeria, clashed during a meeting in Cairo late
last month. The day after the meeting, King
Hassan warned that, while Morocco would
prefer to negotiate the issue, it might use force
to prevent "self-determination in the Sahara."
Algeria, which is determined to block Moroccan
annexation of the area, supports a referendum
in the belief Saharans will opt for independenc,
and be susceptible to Algerian influence.
The Moroccan press is giving heavy play to
recent hit-and-run strikes against Spanish forces
in the Sahara, portraying the attacks as the work
of a Moroccan-backed Saharan insurgent group.
The coverage suggests that Rabat is using Mo-
roccan irregular troops posing as Saharans in
small-scale guerrilla operations in the Spanish
Sahara.(
The Moroccans' pressure tactics are prob-
ably intended to demonstrate to the UN team
that there are pro-Moroccan Saharans and also
to induce Madrid to resume negotiations. Rabat
might be willing to include Mauritania in a
future dialogue with Spain inasmuch as it has
accepted Nouakchott?but not Algiers?as an
interested party to the dispute.
Page
Atlantic Ocean
E. Aaluni?
S.) a R-P!'.?!.1
Portugal
Madrid
CEU
r'-
Rabat
Ma I
Nouakchott'
Meanwhile, recent allegations in the
Spanish press about secret conversations in-
volving Spain, Morocco, and Mauritania led For-
eign Minister Cortina to announce that Spain
continues to support a UN-supervised referen-
dum on self-determination for the Sahara. Ac-
cording to a Spanish Foreign Ministry official,
the press storias came from Spanish officiaft
who favor a negotiated settlement with Mo-
rorco. The arguments of these officials have
ben vvcakened by King Hassan's renewed claim
to Spain's enclaves in northern Morocco?Ceuta
and Melilla?territories that Madrid says it will
not give up. Madrid appears to believe that a
referendum would result in a vote for an inde-
pendent state, which the Spaniards could hope
to control.
The Spaniards postponed plans for a refer-
endum after the UN General Assembly last fall
adopted a Moroccan-initiated resolution sending
the dispute to the International Court of Jus-
tice. Spain, Morocco, and Mauritania have sub-
mitted written briefs to the court, which began
hearing the case last week. Algeria has made an
oral presentation of its views as an interested
part,. A court opinion is expected in time for
the next General Assembly session in Septem-
ber.
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GENEVA: NPT CONFERENCE CONTINUES
During almost three weeks of meetings in
Geneva, the delegates at the conference to re-
view the Non-Proliferation Treaty have focused
on the standard complaints about the lack of
progress in disarmament negotiations and the
need for money for nuclear power development.
The lark of confidence in current non-prolift.ra-
tion efforts may explain why less than half of
the treaty's 118 signatories have thus far sent
represeritatives to the session. On May 30, the
conference plans to publish a declaration out-
lining its accomplishii.ents and recommending
future disarmament actions.
The nuclear powers have, as expected,
come under fire by allies and enemies alike for
their failure to achieve the complete nuclear
disarmament called for by the NPT. In the
opinion of many countries, moreover, the dis-
armament pacts already negotiated have not ful-
filled the treaty's aims; they believe it is now
time to impose qualitative and quantitative
curbs on nuclear weapons development. The
argument has also been made that progress in
the seismological field with respect to verifica-
tion procedures has made a comprehensive test
ban treaty technically possible.
Some of the nonaligned states are calling
for a timetable for concluding a test ban, but
such a resolution has little chance of passage by
the necessary two thirds of the participants. The
demand nevertheless serves to bring together
those who reject the claims of the nuclear
powers that the NPT system has worked and
should be preserved in its prosent form.
Financing their nuclear development is
another sore point for many NPT parties, the
developing countries in particular. Because they
have foreclosed their option to develop nuclear
weapons by adhering to the treaty, the de-
veloping countries want compensation in the
form of increased technical assistance or dona-
tions of nuclear equipment, materials, and
technology from the nuclear states. Although
not required by the treaty to limit their nuclear
assistance to NPT members, the nuclear states
have previously stated that they would give
preferential treatmeat to states that have
adhered to the treaty.
The developing states argue thal promises
are not sufficient and that preferential provision
of nuclear supplies should be made definite. The
Nigerians have proposed the creation of a fund
under the International Atomic Energy Agency
to provide technical assistance in the field of
peaceful uses of nuclear energy. The UK, US,
and USSR would be required to finance the
bulk of the fund's operations.
Many developing states are also demanding
that nuclear exporters who are parties to the
treaty should require IAEA safeguards on all the
nuclear facilities of any country receiving nu-
clear supplies. Only NPT parties are now re-
quired to submit to such comprehensive safe-
guards and they argue that this is not only
expensive but also makes it easier for non-treaty
countries to acquire nuclear supplies. Whatever
the conference recommends, non-treaty nuclear
exporters such as France would be unlikely to
abide by new export guidelines.
The conference has also discusscid the
perennial topic of peaceful nuclear explosions.
Actual demands for such services from the
nuclear states have not been particularly strong,
even though a political issue is still made of the
failure of the nuclear powers to make progress
on providing services. To some extent, US
arguments that peaceful explosions technology
has not yet reached the stage of commercial
application are being heeded. On the issue of
security assurances, most states have not been as
amenable to nuclear power arguments and are
pressing for meaningful defense commitments
by the UK, US, and USSR in case of nuclear
threats. Such proposals are likely to meet with
little support from the nuclear states, who argue
that previous assurances?in the form of a UN
Security Council resolution?are suf-
ficient. 25X1
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25X1
PORTUGAL: MILITARY CHALLENGED
Recent events in Portugal may lead to key
leadership chances in the Armed Forces Move-
ment as well as neutralization of the political
parties. The growing friction between the politi-
cal parties and the military, the possibility of
civil war in Angola, and the rapid deterioration
of the economy are giving rise to uncertainty
about the ability of the present leaders to deal
with the country's problems.
The 240-member armed forces general
assembly met on May 19 to consider a number
of serious foreign and domestic problems, in-
cluding the possibility of renewed fighting in
Angola.(
/ In the reorganization
following the March 11 coup attempt, the
assembly was assigned several key functions, but
it now appears to be used primarily ac a sound-
ing board for policies drawn up by Vie powerful
Revolutionary Council.
Communists at Republica
One of the reports taken up by the as-
sembly called for a more direct relationship
between the Armed Forces Movement and the
people through the organization of worker
councils and neighborhood committees?
presumably at the expense of the political
parties. Although there was no decision calling
for early implementation of the proposal, it is
widely rumored that the military is now con-
templating some decisive action against the
parties, including their dissolution. Following
the assembly meeting, the Movement issued a
statement attacking all the parties, including the
Communists, for their partisan politics and
urging their unequivocal support of Movement
policies.
In a speech on May 19, Communist Party
leader Alvaro Cunhal for the first time openly
criticized the Movement's attitude toward his
party. Voicing his fear that the military was
moving toward the abolition of all parties,
Cunhal insisted that the military should not tar
all parties with the same brush and that those
supporting the revoltfion should receive dif-
ferent treatment. Up to now, the Communists
have enjoyed a special relationship with radical
leaders of the Movement, but this may now be
cooling. Cunhal has stated previously that his
party will go underground again if its present
role is curtailed.
The situation was further complicated this
week when Communist printers seized control
of the Socialist Party newspaper Republica, one
of the few remaining newspapers still willing to
criticize the Movement. Armed paratroopers
prevented Socialist demonstrators from regain-
ing control of the newspaper's premises. On May
20, the government announced the newspaper
would remain closed until the matter is ad-
judicated, which could take three months. The
Socialists apparently are convinced that they are
in a struggle for survival and have taken to the
streets in protest.
Another disaffected group, the outlawed
extreme-leftist Reorganizing Movement of the
Proletariat Party, claimed to have discovered a
rightist plot and?with the assistance of a radical
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armed forces unit?proceeded to arrest some 20
"fascists." While initially accepting the plot
thesis and detaining those arrested, the military
leadership branded the action counter-revolu-
tionary. By midweek, the party's demonstrators
had taken to the streets in opposition to the
Movement.
The leadership of the Movement is prob-
ably under greater strain now than at any time
since the military took power last year. The
moderate parties' victory in the constituent
assembly election and the disastrous slide of the
economy have badly shaken the confidence of
the present ruling group. A failure of the de-
colonization policy in Angola or a prolongation
of the present struggle with the political parties
could lead to changes in key leadership positions
in the very near future.
While the military has no serious rival for
power at the moment, its continued failure to
solve Portugal's urgent problems could lead to
the ouster of President Costa Gomes, or Prime
Minister Goncalves, or both. Admiral Rosa
C out in ho, or possibly Brigadier Otelo de
Carvalho, who controls the military's internal
security force, could assume one of the top
posts. Rosa Coutinho, who is capable and ex-
tremely ambitious, has recently been selected
for a number of key positions in the Movement
and enjoys a reputation for getting things done.
Otelo, while not known as a creative political
thinker, also is a contender because he controls
the only effective security force in the country.
25X1
HUNGARY: NEW PREMIER
The "resignation" last week of Premier
Jeno Fock?officially for health reasons?and his
replacement by former deputy premier Gyorgy
Lazar appear to be part of party leader Kadar's
efforts to project a fresh image for Budapest's
domestic economic policy.
Fock's eight-year tenure as premier was
closely linked with the relatively liberal Hun-
garian program of economic reform. As head of
government, he was responsible not only for
administering the program, but also for ensuring
that decentralization did riot get out of hand. In
March, however, Fock candidly admitted that
the government had failed to control the econ-
omy satisfactorily. Although Fock has had some
past differences with the Soviets, there are no
signs that these frictions played a role in his
dismissal.
The new premier, Gyorgy Lazar, appears
well qualified to upgrade the central govern-
ment's economic role. Although the 51-year-old
Lanr is p?,Iitically inexperienced, he is con-
sidered a competent economist and has had
lengthy experience in investment and labor
planning.
For some time, Kadar has been trimming
back the economic rc.;orm?even the term is no
longer used publicly. Earlier, he had dismissed
other high-level economic decision makers and
had put tighter restrictions on factory managers.
H ungary's difficult economic problems
havc also encouraged more centralized decision-
makirg. The country has been hard hit by West-
ern irOation and recession, as well as by price
increases for Soviet raw materials. Budapest had
a substantial trade deficit with the West las4
year, and the current deficit is running at an
even higher rate. As a result, the Hungarians
have significantly tightened controls on invest-
ment and resource allocations. Budapest has not
yet dismantled its reform structure, however,
and continues to avoid the detailed central plan-
ning practiced in other Communist countries.
Debate within the leadership over how to
meet these economic challenges may have
played a part in Fock's departure. In a recent
article, Lazar was critical of the management of
the economy, saying that Hungary had failed to
udapt quickly enough to changing conditions in 25X1
the West. The Hungarian media have suggested
there is also some contention over whether
stricter import controls are necessary.1
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WESTERN ALLIANCE WEEK
Ministerial meetings of the International
Energy Agency and of the Organization for Eco-
nomic Cooperation and Development next week
in Paris cap a year of efforts to increase the
importance of these institutions to Atlantic
unity. The session will also mark the beginning
of concrete efforts to address the demands of
the Third World. British Foreign Secretary Cal-
laghan's view that the ministerials are part of a
"Western Alliance Week" culminating with the
NATO summit in Brussels on May 29-30 reflects
the satisfaction of most European leaders with
the increasingly important role f the two
organizations.
In the last year, the OECD's 24 members:
? overcame serious differences to form
the International Energy Agency;
? agreed to a $25 billion fund for states
with oil-related balance of payments prob-
lems;
? initiated their most far-reaching review
to date on a coordinated policy on raw
materials and relations with poor states.
The energy agency ministerial will be the
first since the agency was established last
November to implement a US-inspired plan for
oil sharing in the event of another embargo. The
agency has also begun research on development
of alternative energy sources and is reviewing a
US proposal to establish minimum prices for oil
to help guarantee investment in alternative
energy sources. In he face of threats by oil
producers to boost oil prices even higher,
MA and OECD officials at board meeting
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however, most members may not feel under
pressure to move quickly on this proposal.
The members are nevertheless pleased with
their solidarity at the abortive preparatory meet-
ing of oil producers and consumers in Paris last
month. Although the consumers continue to be
interested in resuming talks with the oil pro-
ducers, most have shifted their priority to the
larger issues of trade in all raw materials and
relations with the Third World. These topics will
dominate the OECD ministers meetings.
The oii crisis has sharpened the recognition
of the OECD states?particularly the Europeans
and Japanese?of their dependency on raw
materials. The industrialized states have been
looking for ways to assure themselves of long-
range supplies and of steady prices. They are
confronted by the rising expectations of de-
veloping states that export raw materials and
look to the OPEC cartel as a model for their
own behavior.
Some of the OECD states, in particular the
EC Nine, have shown an increased willingness to
give in to the developing states on rhetorical
issues, such as the insistence on canonizing the
"Declaration for a New International Economic
Order" and the "Charter of Economic Rights
and Duties of States." This shif+ left the US
isolated in its opposition to the final declaration
of the UN Industrial Development Organiza-
tion's conference in Lima last March. The OECD
states nevertheless are not prepared to captitu-
late to all the demands of the developing states.
At the Paris energy talks, for example, where
concrete rather than rhetorical concessions were
sought by the developing states, the other in-
dustrialized countries did not break ranks with
the US.
Policy reviews on these issues in many of
the OECD countries will not be completed
SCHEDULED MEETINGS
May 26 EC foreign ministers in Dublin
May 27 I EA ministers in Paris
May 28-29 OECD ministers in Paris
May 29-30 NATO summit in Brussels
May 29-30 Regular US-EC bilateral con-
sultations in Brussels
before the ministerial meeting. Nevertheless,
most Europeans and the Japanese believe that
the final shape of an OECD policy must reflect a
willingness to negotiate some basic issues with
the developing states. The ministers' meeting in
Pars will probably have to thrash out the guide-
lines for a common policy as well as instructions
for a special high-level group that will develop
formal specific proposals on raw materials dur-
ing the summer.
The OECD ministers will also look toward
strengthening the internal cohesion developed
during the last year. They will reaffirm their
pledge not to resort to new import restrictions
or export subsidies "for balance of payments
purposes." The pledge, designed to curb beggar-
thy-neighbor policies in the face of world re-
cession, has not been kept by Australia and
Finland. The UK and France have also acted
against the spirit of the agreement, but it has
otherwise been rather successful. The UK in
particular is anxious that this year's pledge refer
specifically to the special responsibilities of
states, such as West Germany and the US, that
are still runnin. sa ments sur luses.
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25X1
F-104 REPLACEMENT STILL MUDDLED
The four-nation European consortium
seeking an F-104 replacement aircraft has still
not reached a consensus on whether to purchase
the F-16 or the Mirage F-1. Belgian efforts to
promote the French Fl/E, headed by Defense
Minister Vanden Boeynants, continue to keep
the other countries from announcing the F-16 as
the consortium's choice. The Danish, Dutch,
and Norwegian defense ministers have pointed
out to Brussels that the Belgians will have to
bear the respr,nsibility if the consortium breaks
up.
Around mid-May, the French again in-
tensified their efforts to push the Fl/E by
dropping the price to match that of the F-16.
Paris also hinted that it might react favorably to
Belgian efforts to promote a joint European
aircraft industry, and that France was interested
in exploring future cooperation in defense
projects with the EC Nine. The French continue
to underscore their pos:Jon that the consortium
countries could best launch a "Buy Europe"
program by choosing the Fl/E now. 25X1
Short-term French strategy reportedly was
based on delaying a consortium decision until
after May 15, the date the US price offer was
scheduled to run out. Although the deadline has
been extended through the end of May, the
French are likely to continue this strategy.)
Spokesmen for the various defense minis-
tries now indicate that Belgium, the Nether-
lands, and Denmark have agreed to announce
which of the competing aircraft each has chosen
before the end of the month. Norway has al-
25X1
ready announced it has chosen the F-16, pro-
v:cled its three partners opt for the same aircraft.
Spokesmen for the other three indicated a simi-
lar provision?that all four countries make the
same choice. If the four cannot reach a common
decision by the end of the month, it is possible
that the consortium could break up. 25X1
Brussels apparently will use the time to
make another effort to "pin the French down."
The other three countries apparently have
not reacted as positively to the new French
proposals.)
/ there are some con-
sortium members who are increasingly worried
that Belgium will drop out of the consortium
and select the F1/E.1
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US-POLAND FISHING TALKS
Poland and the US began negotiations on a
new bilatera: fishing agreement this week. The
talks have focused on the protection of fishing
resources near the US east coast and expansion
of port call privileges for the Polish fishing fleet
at east coast ports, but Warsaw will also seek a
similar agreement for the US west coast.
The existing agreement, signed in 1973,
calls for voluntary protection of US Atlantic
fish stocks and provides for limited Polish access
to east coast ports. A similar accord, with ex-
panded port call rights, is likely to be signed,
but an agreement on west coast fishing will face
strong resistance from US fishermen.
Until 1968, Polish fishing activity outside
the Baltic was concentrated in the North and
Norwegian seas. Since then, Poland has greatly
expanded its fishing operations off Newfound-
land and Long Island, and its heaviest catches
are now from the northwestern Atlantic. In
1972, units of the fleet began fishing off the
west coast of Africa, and others moved during
1973 to the Pacific for the first time?off the
west coast of South America and the US.
The Polish fishing fleet caught an estimated
630,000 tons in 1974, exceeding the five-year
plan's goal of 590,000 tons by 1975. This
largely resulted from new technology, more
ships, and centralization of the fishing industry's
management. As of mid-1974, the Polish fishing
fleet was the fifth largest in the world, with 265
ships totaling 271,000 tons. Poland's share of
total world tonnage was only 2.5 percent, how-
evr), slightly less than that of the US; two thirds
of ,lorld fishing tonnage is concentrated in the
Soviet and Japanese fleets.
Most ships in Poland's fleet are modern?
two thirds of its ocean-going units are less than
ten years old. Large factory traw!ers equipped
to process fish on board make up more than half
of total tonnage. Their predominance in the
fleet raises the average size of Polish fishing
vessels to 1,020 tons, second only to the Soviet
fleet.
Poland belongs to only 3 of the 20 inter-
national regulatory commissions having jurisdic-
tion over fishing in specific geographic regions
or species of fish; all 3 are concerned with
Atlantic fishing. Warsaw also participates in the
UN Food and Agricultural Organization, but is
not a party to any conservation agreements. The
Poles do have bilateral fisheries agreements?
largely for joint deep sea fishing ventures and
research?with eight countries, six of which are
developing nations. Warsaw has promised assist-
ance in building port and processing facilities in
several developing countries but is seeking
financial contributions from other countries or
international organizations. Under any circum-
stances, Poland's financial commitment to these
projects will be modest.
Polish fishing goals call for an increase in
the annual catch to 1 million tons dur: ig
1976-1980. To meet this goal, Warsaw will con-
tinue to expand its fleet and seek new fish
species. The fleet will extend its fishing activities
to the eastern Pacific as well as to the South
African shelf, the western Indian Ocean, and
Antarctica. Other goals include extensive inter-
national cooperation with countries near rich
fishing grounds, participation in joint fishing
companies, and increased fish exports.)
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ARGENTINA: POWER PLAY IN THE ARMY
A showdown between the newly appointed
Argentine army commander, General Laplane,
and President Maria Estela Peron's government
has been narrowly averted. Interference in army
affairs by presidential adviser Lopez Rep,
however, has angered many officers and will
probably lead them to step up talk about the
desirability of a coup.
The forced resignation of Argentina's army
commander, Lieutenant General Anaya, and his
replacement by Major General Alberto Numa
Laplane was Lopez Rega's opening move in a
drive to extend his influence over the army. This
incident was followed up recently by an order
from Defense Minister Savino for the retirement
of two brigadier generals who are anathema to
Lopez Rega. General Laplane refused to carry
out the order and offered to resign. Granted an
audience with the President, he apparently won
some concessions permitting him to name his
own men to key army positions.
LOPEZ REGA'S PERSONAL CHOICE HAS
STRONGER LOYALTIES FOR THE
ARMY AND WON PRESIDENTIAL AP-
PROVAL TO APPOINT HIS OWN MEN.
Laplane, who reportedly was chosen by
Lopez Rega for his pro-Peronist sentiments, may
have increased his prestige within the army by
demonstrating that his first loyalty was to the
army rather than to the Peronists. Laplane's
strong stand was doubtless a reflection of wide-
spread military sentiment. Army officers were
already incensed over the manner in which
Lopez Rega had engineered the abrupt dismissal
of Anaya.
The armed forces remain the only obstacle
blocking Lopez Rega's quest for absolute power.
Any further attempt by him to expand his
political influence will produce another open
challenge from the army, whose new com-
mander has shown that he does not want to be
tagged as a tool of Lopez Rega. He will be under
strong pressure from his officers to resist the
social welfare minister's attempts to put a tight
leash on the army. Even without a new move by
Lopez Rega, military leaders, who still prefer to
retain President Peron, are likely to renew their
efforts to remove her principal ad-
viser. 25X1
? ? ?
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CUBA: REGIONAL PAR'Y CONCLAVE
Havana is preparing for the first conference
of Latin American Communist parties since
1964. Attempts reportedly had been made to
convene such a meeting on several occasions in
recent years, but a series of policy differences
between Havana and Moscow?for example, on
the efficacy of violent revolution?had appar-
ently proved to be an insurmountable obstacle.
Now, however, Cuba's policy is much more in
line with that of the USSR, and the way has
been cleared for the conclave to be held?
probably next month.
The Cubans probably began preparations
for the conference last fail. At that time, a high
party official?Political Bureau member
Armando Hart?returned to Havana from
Moscow and, in a speech honoring a fallen Chil-
ean revolutionary, offered Cuba's support for a
meeting "to draft and implement the points of a
long-range revolutionary strategy" aimed at
eliminating US influence in Latin America and
destroying "fascist" governments such as the
Pinochet regime in Chile. Hart, who has been
close to Castro for more than twenty ye:.?;?.,
described a policy that more closely paradeled
the Soviet's "via pacifica" than the Cuban
lent line, presumably as a signal that Havana, at
least temporarily, was ready to merge its Latin
Ar rerican policy with that of the USSR. There
have since occurred a series of visits to Havana
by Latin American Communist party officials
?Rodney Arismendi cf Uruguay, for example?
apparently for preparatcry talks to iron out
differences that might interfere with the success
of the conference.
Castro's alleged contention that the con-
ference will have nothing to do with the USSR
cannot, of course, be taken at face value.
Moscow will surely have observers on hand, as
will many of the Communist parties outside
Latin America. Moreover, the Cubans have
apparently given in to Soviet demands that
only Communist parties be invited. Havana
would prefer to include a broad spectrum of
revolutionary movements so long as they profess
their dedication to Marxism-Leninism.
POLICY STATEMENTS SIGNAL THAT
CUBA'S LATIN AMERICAN VIEWS
MERGE WITH THOSE OF THE USSR.
The Castro regime probably views the
meeting as a chance to add significantly to its
influence among the Latin American com-
munists. The upper ranks of many of the parties
are suffering from either the ravages of old age
or repression by local security forces, and the
Cubans presumably want to be in a position to
take advantage of the leadership vacuum they
see developing over the next few years. They are
therefore willing to suppress their distaste for
many of the region's top communists and to
replace the antagonism of the 1960s with a
more pragmatic attitude of making the best of a
poor relationship. Moreover, they realize that if
their efforts to create a broad-based "anti-
fascist" organization to bring pressure on
rightist governments are to succeed, they will
have to include the communists.)
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Pinnehet
CHILE: THINKING AHEAD
President Pinochet is considering making
some basic changes in the mili,ary government,
either before or in conjunction with the second
anniversary of the military take-over in Septem-
25X1 ber.
/The President apparently
also is interested in civilian participation in a
revamped pseudo-legislative structure that
presumably would fulfill the functions now
performed by the all-military Advisory Com-
mittee to the Junta.
25X1
25X1
Some of the President's ideas have not
been enthusiastically received in the armed
forces. Negative reaction probably is strongest in
the navy and air force, where there already is
some discontent over Pinochet 's expanding pres-
idential prerogatives.
/Considerable
maneuvering within and among the services is
likely as Pinochers plans take shape over the
next several months/
BOLIVIA: GULF OIL
25X1
25X1
President Banzer is trying to cash in on
growing nationalistic sentiment against Gulf Oil
by pushing a tough campaign against the com-
pany.
On May 20, the government arrested Gulf's
representative in La Paz and "criminal proceed-
ings" were begun against him, the company, and
its US chairman. La Paz also has asked the OAS
permanent council to condemn the company's
"sordid activities" in developing countries.
Earlier, the Bolivian ambassador in Washington
requested State Department cooperation in
eliciting full details on the company's admission
that in the 1960s it had made "political con-
tributions" to supporters of former president
Rene Barrientos.
Banzer's aides are telling US officials that
"serious" politica repercussions will result from
the Gulf Oil disclosures unless the names of
those involved are revealed and legal proceedings
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against them begun. There were initial indica-
tions that students, junior officers, and opposi-
tion leaders might seize upon the controversy as
a means of attacking Banzer on the broader
issue of corruption in government. More re-
cently, however, this threat has been superseded
by an outpouring of public indignation agaiost
the oil company?particularly its implication of
the late General Barrientos, one of the country's
few national heroes.
Banzer, with no durable political base, has
repeatedly had to quash conspiracies and coup
attempts against his regime. He now sees an
opportunity to undercut his opponents and gain
popular support by defending "national
dignity" and attacking one of the favorite
targets in Latin America?the multinational
corporation.
The Bolivian government still owes Gulf
Oil over $50 million as indemnification for oil
installations nationalized in 1969. La Paz, al-
legedly because of growing public pressure, is
threatening to susrond indemnity payments
until the company fully clarifies its allegations.
Since the payments are actually made by Argen-
tine purchasers of Bolivian oil and gar and go
directly into a New York bank trust account,
Banzer' s threats may be empty although effec-
tive for domestic consumption.)
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Declassified in Part - Sanitized Copy Approved for Release 2011/12/29:
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Declassified in Part - Sanitized Copy Approved for Release 2011/12/29:
CIA-RDP86T00608R000300020024-2
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