WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000300020035-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 23
• Document Creation Date: December 22, 2016
• Document Release Date: March 1, 2011
• Sequence Number: 35
• Publication Date: August 8, 1975
• Content Type: SUMMARY

 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020035-0
I Secret
Weekly Summary
Secret
No. 0032/75
August 8, 1975
Copy N4 1387
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Off Ice of Current Intelligence, reports and analyzes significant
developments of the week through .'noon on Thursday. Itare-
quently Includes material coordinateta with or prepared by the
Office of Economic Research,' the Office' of ,Strategic
Research, the Office of Geographic and Cavtographlc
Research, and the Directorate of Science and Technology.
Toplca requiring more comprehensive treatment and
therefore published separatey as Special Reports are Iist3d
in the contents.
CONTENTS (August 8, 1975)
MIDDLE EAST
AFRICA
1
India: Retroactive Legality
2
Rhodesia - South Africa: Relations
3
Angola: Fighting Spreads
4
Nigeria: All Quiet
5
Comoro Islands: New Government
5
Islamic Development Bank
6
Portugal: Violence Increases
7
Turkey: Waiting It Out
8
CSCE: Proof of the Pudding
9
Soviet Space Probes
10
Eastern Europe: President's Trip
10
l1SSR-Egypt: Debt Difficulties
11
Cyprus: Greek Flexibility
12
West German - Polish Accord
12
Austria: A New Challenger
13
USSR: Workers of the World
EAST ASIA
PACIFIC
14
North Vietnamese Armed Forces
15
V?atnam: Le Duan; Food Shortages
16
North Korean Pimored Force
WESTERN
HEMISPHERE
18
Argentina: The "Mini-Cabinet"
18
Brazil: Time for Retrenchment
19
SELA Inches Forward
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Prime Minister Gandhi continues to con-
solidate her political position, demonstrating a
firm resolvs to remain in office and to remove
any possible threats to her exercise of power.
At Gandhi's direction, her party's large
majorities in both houses of Parliament this
week enacted retroactive amendments to the
election law under which she was found guilty
last June of illegal campaign practices in 1971.
The amendments render largely meaningless the
Supreme Court's consideration next week of her
appeal. They stipulate that the violations of
which Gandhi was convicted are no longer of-
fenses and that the figurehead president, rather
than the courts, will determine the penalty for
anyone convicted of illegal campaigr practices.
Two more bills are in the process of pas-
sage. One will exempt these amendments from
review by the courts and the other will designate
the upper house of parliament, rather than the
courts, as the proper authority to consider
future charges of campaign violations.
A constitutional amendment signed into
law last week prevents the courts from acting on
the legality of the state of emergency Gandhi
declared in June. The measure had been ap-
proved by Parliament and was quickly ratified
by state legislatures also controlled by Gandhi's
Congress Party.
Meanwhile, there is increasing evidence
that Gandhi may be contemplating fundamental
changes in India's system of government. A
special session of Parliament has been scheduled
to begin on August 18, and the president of the
Congress Party is working on a tightly held
"crisis matter," presumably additional amend-
ments to the constitution. Gandhi may well
have in mind substituting for the present par-
liamentary form of government a strong presi-
dential system with herself as the first chief
executive. Eventually she may also move to
declare India a one-party state.
Popular reaction to Gandhi's recent moves
remains restrained. The opposition was caught
off guard by the crackdown in June, and most
opposition leaders are either in jai! or have gone
underground. Press censors strictly control news
of political developments, and security remains
tight throughout the country. There is evidence,
nonetheless, that opposition elements may be
planning nonviolent demonstrations in the
northeastern state of Bihar and possibly else-
where on August 9, the anniversary of a major
anti-British protest led by Mahatma Gandhi.
Other demonstrations could occur on August
15, India's independence day.
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The South African government's public
acknowledgement on August 1 that it is with-
drawing all its police forces in Rhodesia seems
intended to underscore Prime Minister Vorster's
impatience with Rhodesian Prime Minister Ian
Smith's refusal to begin settlement negotiat!ins
with the black Rhodesian nationalists. Vorster
may also hope that removing this symbol of
South African support for the Smith regime will
further his ultimate goal of peaceful coexistence
with the black states of Africa.
Some 1,600 South African police had
participated. in Rhodesian counterinsurgency
operations until last December, when a truce
with the black insurgents was arranged by the
South African Prime Minister and four black
African presidents. Last February, Pretoria
began a quiet withdrawal of the police, and less
than 300 now remain in Rhodesia.
Without the South African police, the
Rhodesian security forces will be hard pressed
should the black nationalists carry out their
threat to resume guerrilla warfare if Smith has
not agreed by October to a settlement confer-
ence. Rhodesian whites are outnumbered 20 to
Page
1, and the shortage of white manpower limits
further expansion of the security forces.
Smith says that a settlement conference
between himself and black Rhodesians must
take place in Rhodesia. The black nationalists,
on the other hand, insist that the conference be
held outside Rhodesia because several of their
exiled leaders might be arrested if they returned
for a conference.
Several considerations may have kept
Vorster from openly completing the police with-
drawal until now. He probably hoped that
uncertainty as to whether the withdrawal would
be completed might stretch out Pretoria's
leverage over both Smith and the black nation-
alists. Also, Vorster was reluctant to provoke
the right-wingers in his own National Party, who
still feel strongly that South Africa should not
abandon the white Rhodesians. Vorster ap-
parently has now come to believe that leaving
even a small police contingent in Rhodesia has
encouraged Smith to evade meaningful negotia-
tions with the black nationalists.
Vorster is aware that the presidents of
Zambia, Mozambique, Tanzania, and Botswana
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The South Africans have announced that
Smith is to meet with Vorster in Pretoria today.
They may discuss the latest Zambian effort to
salve a settlement talks.
The civil war between the National Front
for the Liberation of Angola and the Popular
Movement for the Liberation of Angola is
steadily spreading. Portuguese officials in Lisbon
and Luanda realize that the situation has
reached a crucial stage, but they are unable to
stop the fighting.
During the past week clashes between
Angola's two principal liberation groups took
place at a number of locations south of Luanda
and in the exclave of Cabinda. Angola's third
nationalist group, the National Union for the
Total Independence of Angola, has strong tribal
support in the area south of Luanda; this in-
creases the prospect that it will be drawn into
the fighting. So far, the National Union has
remained neutral, although in recent months it
has had to defend itself against small-scale
attacks by the Popular Movement.
The clashes in Cabinda apparently were
sparked by a modest buildup by the National
Front along Zaire's border with Cabinda. The
fighting was light and the National Front did
not penetrate the exclave in force. Cabinda is
dominated by units of the Popular Movement.
A high-level military delegation from
Lisbon visited Angola last weekend. The group
Expectations of a Portuguese policy shift
soon regarding Angola are widespread, par-
ticularly among the territory's estimated
200,000 whites. Lisbon has announced that it
will speed the evacuation of all whites who want
to leave the territory. The announcement has
provoked speculation in the territory that
Lisbon realizes it is helpless to control develop-
ments in Angola and now intends to turn the
territory over to the nationalists and let them
fight it out.
Atlantic Novo--- ..Luio
Ocean dondoAngola
are still trying to keep the black Rhodesians
from scuttling the truce. Last month the four
presidents brouqht the quarreling Rhodesian
leaders together and told them that foreign sup-
port for a new guerrilla offensive was contingent
on their proving, through a joint approach to
Smith, that a negotiated settlement was impos-
sible. Subsequently, a senior Zambian official
and the black Rhodesians began a new effort to
resolve the impasse with Smith over a confer-
ence site.
consulted with Portuguese military officials in
Luanda and with representatives of the Popular
Movement, which has close contacts wi',h a
number of influential officers in the Armed
Forces Movement. The National Front and the
National Union apparently refused to meet with
the delegation, arguing that it was biased in
favor of the Popular Movement.
The suspicions of the Front and the Union
increased with the departure for Lisbon of the
Portuguese high commissioner in Angola, who
had taken a neutral position regarding the fight-
ing. He probably will not return, and the ter-
ritory's military commander has become acting
commissioner.
Aug 8, 75
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The new regime lifted all emergency re-
strictions late last week as Nigerians quietly ac-
cepted the replacement of General Gowon by
Brigadier Muhammed as head of the Federal
Military Government. For the moment the new
rulers are preoccupied with putting their admin-
istration in. order and have not indicated how
they intend to deal with economic problems.
The Nigerian press, student groups, and
trade unions have expressed support for the new
government. At the same time, leading news-
papers and student spokesmen-long-standing
critic,, of military rule-have called on the mili-
tary to set a firm schedule for returning Nigeria
to civilian government. Pledges of loyalty have
also come from several senior officers in the
Gowon regime who apparently are reconciled to
their forced retirement. Gowon presently is in
Togo and may later join his family in London.
ern minority tribesman. Cnlnnel Garba, who
first announced the coup, emerged as com-
missioner of external affairs. Civ;lians hold 12 of
the posts, including such important ones as
petroleum and energy, economic development,
and finance. An I bo supreme court justice wa :
named commissioner of justice and attorney
general. This is the only prominent position in
the new regime awarded to Ibos, who still are
viewed with suspicion five years after their
defeat in the civil war.
The new military governors of Nigeria's 12
states have been downgraded in importance and
no longer sit on the Supreme Military Council.
The council may now be more able to control
the governors, who were quite free-wheeling
under Gowon. The governors now comprise the
National Council of States, a new body intended
to provide a forum for state representation and
to act in an advisory capacity to the central
In the new 25-man cabinet, the defense
post went to Brigadier Bisalla, a respected north-
government.
Obasanjo
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COMORO ISLANDS: NEB":I . OVERNMENT
A group that wants to maintain ck.se ties
with France ousted the government of President
Ahmed Abdallah on Auc;ust 3. Abdallah ap-
peared to be moving tow?;d a complete rupture
with Paris following the islands' unilateral dec-
laration of independence on July 6. The new
government has pledged to seek a compromise
with the inhabitants of the island of Mayotte,
whose wish to remain a part of France had
precipitated the dispute between Abdallah and
Paris.
About 50 members of the United National
Front, a coalition of opposition groups, seized
the local security forces' barracks in the capital
of Moroni while Abdallah was visiting another
island. There was no opposition or bloodshed.
An 11-member committee headed by Said
Mohamed Jaffar, a former president of the local
governing council and former Comorian repre-
sentative in the French Senate, is in charge.
The new leaders favor independence, but
they hope their policy of cooperation with Paris
will persuade the inhabitants of Mayotte to
abandon their demands for incorporation in
France. The new leadership is willing to offer
the island considerable autonomy within a fed-
erated state.
Aboallah, backed by the Comorian cham-
ber of deputies, declared the chain of four
islands independent in an attempt to counter a
move by the French National Assembly that
would have permitted Mayotte to become a
French overseas department. Mayotte political
leaders denounced Abdallah's declaration and
demanded that France maintain its authority on
the island. Paris was willing to accept the
Comoros' independence and hoped Abdallah
would reach a compromise settlement with
Mayotte.
. Abdallah, however, adopted a militant
position; on August 1 he demanded that the
French withdraw from all the islands as soon as
possible:. Pro-French demonstrations began in
Mayotte on the same day. Jaifar and his fol-
ISLAMIC DEVELOPMENT SANK
The Islamic Development Bank, the,.'
Irrgest multilateral aid institution funded by
Middle East oil producers, held its inaugural
meeting. in kiyadh last week.. The bank,
headquartered in Jidda, has an,authorized
capital of $2.4 billion, more than $900.rn11-
lion of, which already has been ;'subscribed.
The bar ,k is scheduled to start opera-
tions i,i C ctober: and will provide interest
free loans for development projects in Is-
lamic countries. The bank may also supply
equity funding for industrial projects. Most
of its work presumably will be undertaken.
in conjunction with other international fi-
nancial agencies.
Pakistan and Egypt first. proposeda
Muslim development bank in 1970, but
Saudi Arabia is now the principal champion
of the institution. There are, 27 member
countries and two applications are pending.:
Major OPEC commitments have been made
by Saudi Arabia ($250 million), Libya
($150 million), the United Arab Emirates
($137 million), and Kuwait ($125 million).
Pledges of $12 million or more have come,.
from Turkey, Sudan, Pakistan, Egypt,?and.
Bangladesh.
The new bank brings to five the num
ber of OPEC-sponsored multilateral institu-
tions that provide 'development assistance.
The combined authorized capital :of these
banks is over $4 billion. There are two other.
OPEC-sponsored agencies not. yet in opera- i
.L:__
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PORTUGAL: VIOLENCE INCREASES
Anti-Communist violence in northern
Portugal reached serious proportions this week,
and the country's ruling triumvirate apparently
has finally decided on a new government.
The executive troika-President Costa
Gomes, Prime Minister Goncalves, and security
forces chief Otelo de Carvalho-has been holding
a series of meetings with high-ranking military
officers in an effort to settle the leadership
issue. The Prime Minister's office has said that
the new government will be announced on
August 8.
The upsurge of anti-Communist violence in
the north has driven security forces, as well as
Communist Party functionaries, out of several
towns. The accidental shooting deaths of two
demonstrators in Famalicao resulted in the sack-
ing and burning of the local Communist head-
quarters, as well as attacks on the property of
known Communists. Similar incidents have been
reported in neighboring towns, and one police
official has stated that the people are mobilizing
in many other places to the north to "finish off
the Communists."
The Catholic Church is also fomenting op-
position to the Armed Forces Movement and
the Communists in close cooperation with the
democratic parties. In Coimbra, a ~,orthern
university town, the bishop has urged increased
militancy by Catholics in opposing efforts to
alienate the people from the clergy. Both the
patriarch of Lisbon and the papal nuncio have
said that the church in Portugal is determined to
struggle against the government's pro-Commu-
nist policies.
Faced with these attacks, Communist Party
leader Alvaro Cunhal ha.. made an unprec-
edented appeal to radical lei List groups-=ome of
which are among his bitterest enemies-to join
with the Communists to prevent them from
being overwhelmed by "counter-revolutionary"
forces.
The Communists also appear to have been
dealt a sharp setback in their efforts to infiltrate
and control key military units. General Carvalho
this week reversed a decision issued by his
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headquarters sanctioning the expulsion of a con-
servative commander and his supporters from a
commando unit near Lisbon. Carvalho ordered
the expeiied officers reinstated and their Com-
munist opponents held for court-martial. This
decision could be instrumental in restoring
discipline to the military and in discouraging
Communist penetration of other units.
The Portuguese leaders' "shock" last week
over the extent of independence sentiment
reported in the Azores has been reinforced by
the news of another independence movement
with anti-Communist overtones on Madeira. The
Madeira branch of the Popular Democratic Party
is reportedly spearheading the independence
drive, and Lisbon was sufficiently concerned last
weekend to reinforce its garrison on the island.
TURKEY: WAITING IT OUT
Turkish Prime Minister Demirel declared
this week that Turkey cannot negotiate a new
defense agreement with the US as long as the
arms embargo remains in effect. If no end ; o the
arms embargo appears to be in sight by fall, the
Turks may resume negotiations but solely to
Former prime minister Bulent Ecevit,
leader of the opposition, has challenged Demirel
to outline the future status of US bases now
that bilateral defense agreements have, in
Turkish eyes, become invalid. Ecevit clearly
intends to make political capital out of the base
issue in the senatorial elections schedule d for
October.
Ecevit's tough line will make it more dif-
ficult for Demirel to show much give on the US
base issue or the Turkish presence on Cyprus.
Even if the embargo is lifted, Demirel is
expected to demand continued Turkish admin-
istrative control over the bases and ask for some
adjustments in Turkey's "special" relations with
the US. 25X1
Prime Minister Demirel (r)
and Turkish Foreign Minister Caglayangil
Aug 8, 75
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CSCE: PROOF OF THE PUDDING
Western leaders at the summit last week
stressed that implementation of the provisions
of the European security conference protocol
will provide the only real test of the spirit of
detente as expressed in Helsinki. In evaluating
the conference,. West Europeans will focus on
military security and the freer flow of people,
ideas, and information between East and West.
The first in a series of follow-up meetings to
monitor the progress in implementing the CSCE
accords will be held in Belgrade in 1977.
The Soviets went out of their way to play
to the more optimistic instincts of the Western
nations. Brezhnev's conference speech was an
adroit expression of Soviet interests woven in a
language sensitive to the nagging Western con-
cern that Moscow had somehow gained the most
from the conference. He called the non-inter-
ference principles the "main conclusion" of the
conference. To the West, non-interference
means no more Czechoslovakias. To Brezhnev, it
means that the West cannot use humanitarian
issues as an excuse to meddle in Soviet internal
affairs. Brezhnev told the conference that the
information media can poison, as well as
promote, international understanding.
Brezhnev studiously refrained from saying
anything about the inviolability of frontiers-a
concept that has been widely interpreted as
legitimizing Moscow's post - World War II ter-
ritorial gains in Europe and that was clearly one
of the Soviets' principal objectives in CSCE. On
the contrary, Brezhnev tried to give the impres-
sion that CSCE was not a denouement, but a
prologue. Brezhnev did not blanch at extolling
the humanitarian benefits that will derive from
the agreement.
The words were easy, but the practice may
be another story. The Soviets will have to show
considerable flexibility and a flair for public
relations if they are to convince others that they
are living up to the agreements. The text was, as
promised, printed in full in the Soviet press
but
,
the Soviets seem to have been caught off guard
when American correspondents applied for
multiple entry visas.
Brezhnev stated that with the conclusion
of the CSCE, progress at the force reductions
talks in Vienna is now a "priority goal" of the
Soviet Union. This sentiment, echoed by all the
larger Western powers except France, may be
put to the test this fall when the talks resume.
The first and, perhaps, most visible test of
the new accord will come when the Warsaw Pact
gives advance notice of its military maneuvers
this fall under the provisions of military-related,
confidence-building measures. This week, NATO
members agreed on a text concerning the
notification of a series of exercises planned for
Brezhnev and Gromyko head the Soviet delegation
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September -Involving US, West German, Cana-
dian, and French forces. The Allied announce-
ment specifies the time, purpose, and area of the
maneuvers, the units participating, and the
number of troops involved. The Western powers
will be watching whether the Warsaw Pact states
reciprocate with the same degree of detail in
their notification.
The Communist performance regarding the
provisions for greater exchanges of people,
ideas, and information will also be watched
.closely. Procedures for putting some of these
provisions into effect still must be worked out
in bilateral accords. Other provisions will be
dealt with in international forums, such as UN
specialized bodies and trade organizations.
I he East European regimes can be
expected to deal very cautiously with questions
relating to the freer movement of ideas and
people. Indeed, the East German and Czecho-
slovak news media have only obliquely referred
to such issues.
The West anticipates significant com-
mercial as well as political benefits to result
from the accords. Western businessmen hope
they will be allowed to set up offices in Moscow
and to expedite transactions by dealing directly
with factory managers instead of going through
ministry officials.
The H':Isinki summit may breathe life into
the largely dormant UN Economic Commission
for Europe. The commission is preparing a
report on follow-up procedures for the CSCE, to
include suggestions -,'or projects involving:
? expansion of trade between East and
West,
? economic planning and forecasting,
? regularized and detailed exchanges of
information in the fields of science, technol-
ogy, and the environment,
? moves toward harmonization and
standardization,
? joint research concerning environ-
mental and energy problems,
? development of common projects in
the energy, communications, and transporta-'
tion fields.
According to Chancellor Schmidt, the 35
participating nations are now morally com-
mitted to "let deeds follow words." The burden
of implementation-particularly in the areas
requiring increased exchanges-will fall primarily
on the East. The "voluntary" commitments
represent, in the words of Prime Minister
Wilson, "a moral commitment to be ignored at
our mutual peril."
SOVIET SPACE. PROBES
According to two Soviet scientists, the
Soviet Union will' launch an, unmanned
space probe to Mars next, month. A probe
to Mercury was also discussed.
At the international space conference
in Bulgaria this June, the two scientists indi-'
cated that the Mars launch .would take place
during 'the launch window' in' September:
Previously, other space officials had 'indi
cated that no missions to Mars were planned
for this'year. The last Soviet launch' to Mars*
was in. August 1973.
No date was mentioned fora Mercury
probe, but optimum periods for a launc'.ti to''
Mercury occur about ever~r four'month's,-
the next one is at the end of Ortober. This'
would be the' Soviets' first '"Vercury
.probe: 25X1
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President Ford's whirlwind trip to Eastern
Europe generated much popular enthusiasm,
which the leaders in Warsaw, Bucharest, and
Belgrade will use to their own advantage. News
media at each stop gave heavy coverage to the
Presidential visits.
Poland's leaders were obviously pleased
that the President chose to visit their country
only ten months after party chief Gierek be-
came the first East European leader to talk with
President Ford. The Poles appeared to be es-
pecially proud that the PrE.iderot chose to stop
in Warsaw before going on to Helsinki for the
CSCE summit meeting. Polish news media have
underscored expanding Polish-US contacts, par-
ticularly in the economic and commercial fields.
Gierek can be expected to emphasize Warsaw's
developing ties with Washington as he tries to
divert attention from his regime's economic
problems.
The timing of President Ford's visit to
Romania-in Bucharest's view-could scarcely
have been better, since it closely followed US
congressional action opening the way for most-
favored-nation status for Romania. President
Ceausescu probably hopes that the bilateral
summit meeting will boost his prestige, which
has suffered because of economic problems and
the recent devastating floods. Ceausescu accord-
ingly rolled out the red carpet, and the US
embassy in Bucharest reported that the Roma-
nians gave more media coverage to President
Ford's visit than to that of any other foreign
dignitary. Romanian journalists dwelled on the
significance of most-favored-nation treatment
and stressed the "profound fact" that the Presi-
dent arrived in Bucharest only a day after the
Helsinki summit.
The Yugoslavs, like the Romanians, viewed
the visit as a welcome sign of Washington's in-
terest in their country's stability and indepen-
dence. Belgrade reported that the dialogue
between the PresidFmt and Tito "went further
than all other" Yugoslav-US summit meetings.
Milika Sundic, Radio Zagreb's authoritative
commentator, suggested that Belgrade was par-
ticularly pleased with Washington's desire to
improve relations in all fields, presumably in-
cluding military relations. Sundic probably
summed up Belgrade's hopes in noting that
despite some continuing differences, Yugoslavia
and the US will cooperate "as previously and
perhaps more broadly" in solving problems to-
gether. 25X1
USSR-EGYPT: DEBT DIFFICULTIES
Egyptian Finance Minister Ismail returned
home empty-handed on August 2 after extended
negotiations with Moscow regarding Cairo's debt
on military purchases from the USSR. The fail-
ure of she negotiations to make significant
progress could lead Egyptian President Sadat to
take further action against Moscow's remaining
interests in Egypt. The Soviets are apparently
trying to head this off by promising to hold
more talks at an unspecified date in Cairo and
holding out the prospect of additional develop-
ment aid.
The Egyptians wanted an extension of the
ten-year moratorium, which expired in 1974, on
its military debt to Moscow. The Soviets re-
fused, insisting on payment of the $200 million
now overdue. This would require Egypt to di-
vert large quantities of exports-mainly hard-
currency earners-to the USSR and would
impose additional strains on Cairo's balance of
payments.
The Soviet position indicates Moscow is
going to continue to play tough with Egypt,
even at risk to its remaining privileges in Egypt.
Thy, E vpti ns have already clearly linked their
resirictions on Soviet naval access to Egyptian
ports to Moscow's inflexibility on the debt and
on the provision of military equipment. 25X1
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- Kyronlo
NICOSA-:-- ~__
e -Cypt
sctod..
(U.K. U6SB/~/1
CYPRUSn.GREEK FLEXIBI 17Y
Prospects for a negotiated Cyprus settle-
ment may have improved following a productive
round of intercommunal talks in Vienna last
week. The Greek side may now be willing to
accept the Turkish demand for a biregional fed-
eration with a weak central government, albeit
in return for significant territorial concessions.
In the most significant development to
date in the talks, Greek and Turkish Cypriot
negotiators agreed to the transfer of the 9,000
Turkish Cypriots in the south to the north and
an improvement in the living conditions of an
equal number of Greek Cypriots in the Turkish
Cypriot zone. Some 800 Greek Cypriots ex-
pelled recently from the north will be allowed
to return.
Greek Cypriot willingness to permit the
departure of the Turkish Cypriots-a long-stand-
ing demand of the Turkish Cypriot leadership-
represents a significant departure from President
Makarios' past strategy, which used the presence
of the Turkish Cypriots in the south as evidence
of the feasibility of his multiregional federation
scheme. Makarios now appears to have aban-
10 ;0
Stow?, mOne
558307 8-15
Boned this idea. A plausible press report from
Ankara states that Greek Cypriot negotiator
Clerides agreed in Vienna to accept a biregional
federation with a weak central government in
return for territorial concessions. Greek Cyp-
riots have demanded the return of the rich
Morphou and Famagusta areas and have vari-
ous!y indicated a willingness to accept Turkish
Cypriot control over as much as 25 percent of
the island's land area. The Turks presently
occupy 38 percent of the isl nd.
Much depends on whether the Turks meet
the territorial demands of the Greek Cypriots.
in an apparent response to Clerides' consent to
the transfer of the Turkish Cypriots from the
south, Turkish Cypriot negc.iator Denktash dis-
cussed all outstanding issues in Vienna last
week. He promised to pre.;ent concrete pro-
posals-presumably including the territorial
question-when he meets with Clerides in New
York on September 8-9. The two leaders plan
also to conclude their discussions on the powers
of the central government, which took u much
of their time last week.
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WEST GERMAN - POLISH ACCORD
West German Chancellor Schmidt grid Chance'lor Schmidt held out against increasing
Polish Communist Party Chief Gierek agreed in the sire of the low-interest loan that his pred-
Helsinki last week on economic aid measures ecessor Brandt initially offered the Poles.
and repatriation of ethnic Germans-two issues
that have hampered relations since the bilateral West Gelman officials have so far resisted
reconciliation treaty was signed in 1.970. demanrk from the Soviets and other Fast Euro-
peans for government-subsidized .redits. The
The agreement, initialed in Germany yes- only similar loan was to Yugoslavia under the
turday and to be signed formally when Foreign guise of development aid.
Minister Genscher visits Warsaw in October, pro-
"rides for: Schmidt still must obtain Bundestag ap-
proval of the payment to the pension fund.
? A low-interest loan of $400 million by Opposition Christian Democratic leaders are
West Germany and a lump sum payment of charging the Poles with extortion, claiming that
about $500 million to a Polish pension fund, the Brandt government had already made a
ostensibly as compensation for war losses; political payment for the emigration of ethnic
Germans by recognizing the Oder-Neisse line in
? Polish permission for the repatriation the treaty of 1970.
of some 125,000 ethnic Germans over the
next four years. Warsaw did allow over 50,000 to repatriate
in the years immediately after the treaty but
Much of the $900 million could return to sharply curtailed emigration in 1973, when the
West Germany in the form of payment for ex- Brandt government refused to meet its demands
ports. Poland has cut back on purchases of West for credits and indemnification. The opposi-
German goods due to low hard currency earn- tion's arguments, however, are unlikely to influ-
ings and the coolness in political relations. ence the final parliamentary vote, because the
Bonn's decision to boost its payment to the two coalition parties solidly support Schmidt's
pension fund was the key to the breakthrough. request. 25X1
AUSTRIA: A NEW CHALLENGER
The death last month of Karl Schleinzer, Taus, nevertheless, will have difficulty out-
the leader of the opposition People's Party, and pointing the witty, urbane, and politically astute
his replacement by a political unknown diminish ',hancellor Kreisky. The outspokenness of
the party's prospects as it prepares for national Kreisky has often involved him in unnecessary
elections on October 5. controversy, yet his stewardship coincides with
a period of domestic political stability and pro-
At a special party congress last week, the longed economic prosperity.
executive committee unanimously agreed on
41-year-old Josef Taus as the new party leader Barring some dramatic evrnt, such as a
and chancellor-candidate. Taus, the director of serious downturn in the economy or Kreisky's
the Austrian savings bank system and a member -udden physical deterioration, there seems to be
of the party's labor league, met the require- little chance that the Socialists will fail to win a
ments for a new, younger leader to challenge plurality next October.
'Socialist control of the government. Taus is the
image of the self-made man of working class The best chance for the People's Party to
background. His banking experience may enable return to power would be to form a coalition
him to speak more authoritatively on Austria's with the small opposition Liberal Party. The
economic issues than his predecessor. problem with this solution is the ultraright-wing
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reputation of the Liberals. Krolsky may already
be trying to head off such a move. Earlier this
your, he gratuitously gave Liberal Party chair-
USSR: WORKERS OF THE WORLD
man Friedrich Peter considerable pubiicit b
including him in a delegation to Bonn.
Moscow is using more foreign laborers to
complete high-priority natural resource and
tourism projects. It has established a now for-
eign trade organization to arrange agreements
and coordinate work with foreign construction
firms.
Most of the foreign laborers so far have
come from Bulgaria, which began sending con-
struction workers to the Soviet Union in 1968
to Uuild camps and other facilities for the tim-
ber project in the Komi ASSR. Next came lum-
bermen, and now over 10,000 Bulgarians are at
the project. Others have worked on a gas pipe-
line and various construction projects. As many
as 45,000 Bulgarians are reportedly employed in
the Soviet Union.
Finns have worked on projects near the
Soviet-Finnish border. Finnish laborers helped
build the Hotel Viru in Tallinn between 1969
and 1972. They are now on jobs such as the
modernization of a pulp and paper complex
near Leningrad, a logging project, and prepara-
tory work on an ore concentration facility near
the Soviet-Finnish border.
The gas pipeline from Orenburg to Eastern
Europe will employ the most foreign labor. Five
East European countries agreed last year to send
workers to build segments of the pipeline for
this CEMA project in partial payment for gas
that these nations will receive beginning about
1979. Workers from Eastern Europe began en-
tering the USSR in March -,yid April; construc-
tion activity will be at its height in 1976.
Next year, 2,000 East European construc-
tion workers will join 26,000 Soviets working
on another CEMA project-the Ust Ilim pulp
complex under construction since 1973.
Western labor will he needed for the So-
viets' hotel construction program. Last Septem-
ber a Moscow official put the city's total labor
shortage at 120,000, noting that the construc-
tion sector, long blamed for shoddy workman-
ship and failure to complete projects on sched-
ule, was particularly short. Soviet officials have
said they will need at least 40 new hotels in time
for the 1980 Olympics. A $180-million agree-
ment concluded in December calls for a French
group to employ 800 workers to build three
hotels in Moscow and one in Leningrad.
Another agreement with a Swedish con-
struction firm and Intercontinental Hotels of
the US for four hotels was signed in May 1974,
all hough final approval of the deal has been
stymied by Soviet refusal to allow Intercon-
tinental a role in managing the hotels. The So-
viets are discussing more hotel construction ar-
rangements with firms from France, Finland,
West Germany, Switzerland, Italy, Austria, the
UK, and the US. Yugoslav construction firms
are negotiating to build a $500-million Olympic
village in Moscow. Yugoslav firms are also build-
ing hotels in Sochi arid Yalta.
Moscow is not doing any favors for the
countries that send workers to the USSR. The
CEMA countries have complained that their
commitments to Orenburg will exacerbate their
own labor shortages and interfere with fulfill-
ment of their production plans in some sectors.
As a result, the number of East European la-
borers expected to work on the project has been
reduced to about half the originally planned
25,000. Hungary, Czechoslovakia, and East Ger-
many have halved their labor commitments
since June, and Bulgaria has bowed oit alto-
gether. Only Poland is likely to provide the
4,000-4,500 workers announced last year.
Foreign labor will also be expensive; work-
ers reportedly will continue to receive full pay
from their home jobs, as well as a second salary
from the pipeline job. The workers are also
promised living standards comparable to what
they are accustomed to at home, a policy which
could create morale problems for the workers
on the project.
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NORTH VIETNAMESE ARMED FORCES
Three Months After Victory
During a few dramatic weeks characterized
by the rapid demise of the South Vietnamese
government and the capture of massive amounts
of US-made equipment and munitions, Hanoi
emerged with the second strongest military
establishment in East Asia. This sudden military
dominance has not been lost on neighboring
Thailand, Malaysia, Indonesia, and the Philip-
pines. There is apprehension in these countries
that Hanoi, now fat with success and the spoils
of war, might be tempted to increase assistance
to the insurgencies with which these countries
have to contend.
Just what the communist leadership is
thinking in respect to the use of its military
capability is unknown. One thing Hanoi will do
is keep a strong force in the South as long as it is
needed.
Foremost among Hanoi's concerns is main-
taining internal security, while the communists
grapple with economic, administrative, and
political problems.
Occupation Army
The mission of most North Vietnamese
army units in the South is that of an occupation
army. Their duties now consist of providing
security, mopping up holdout remnants of
former South Vietnamese units, and assisting in
restoring and maintaining general law -ind order.
They also have administrative, engineering, and
agricultural tasks.
A high communist off:;,i;,~ recently con-
firmed that security remains the major problem
in the South. Although the resistance appears to
have little hope, harassment attacks are wide
ranging enough to require extensive counterin-
surgency efforts from ,he communists. The
South Vietnamese diehards have to a degree
reversed the tables on the communists, who now
s'.`ion relatively large numbers of troops along
highways, near bridges, and at remote outposts
to fond off small attacking forces armed with
light weapons.
North Vietnamese forces have had to take
up positions along the ill-defined border with
Cambodia. Numerous small clashes have erupted
as Khmer communists and Vietnamese commu-
nists dispute territory. The Vietnamese moved
quickly to assert claims to several offshore is-
lands in the Gulf of Thailand earlier this sum-
mer, and they are not likely to cede any prop-
erty to their weaker communist neighbor.
Communist forces in the South also have
been heavily engaged in clearing the countryside
of the dangerous relics of war. Both Hanoi and
Saigon have announced that engine,:r units have
cleared large numbers of unexploded bombs,
shells, and mines, and removed derelict military
vehicles from farmlands. They state that large
parts of t'ie country have been restored to agri-
cultural production and that new farming areas
will open.
Communist military personnel are spending
considerable time identifying, cataloging, and
storing the large quantities of US equipment and
munitions captured last spring. The North Viet-
namese have already made use of some of the
equipment, including US aircraft, in the delta
and against the Khmer communists on some
offshore islands. The eventual disposition of
much of the captured equipment proLably has
not yet been decided. So far there has been no
evidence that Hanoi is offering surplus arms to
insurgents in other countries, although that pos-
sibility worries neighboring capitals.
The shortage of qualified civilian adminis-
trators has forced the communists to use mili-
tary personnel in a variety of government jobs,
mostly at the lower levels. Some military cadre
have been filling in as civil servants and helping
with the "re-education" of former government
civilians and military personnel. As more and
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more civilian technicians and administrative are "re-educated," the military is expected to
cadre arrive from the North and additional restrict its involvement more and more to purely
former South Vietnamese government personnel defense matters. 25X1
Phnom Penh and Hanoi announced this
week that North Vietnamese party chief Le
Duan, responding to a Cambodian invitation,
had just concluded talks with Khmer leaders in
the Cambodian capital. Neither announcement
gave any details of the discussions, the partici-
pants involved, or the dates, but the meeting
probably took place sometime between July 7
and 22. During that time, no member of the
North Vietnamese Politburo was seen in public,
and there was speculation that Politburo mem-
bers were in South Vietnam attending a party
plenum. It is possible that Le Duan and others
made a side trip to Cambodia.
The North Vietnamese visit to Cambodia is
the first publicly announced visit by a high-level
foreign delegation since the communists as-
sumed control in mid-April, and it may have
been an effort by Phnom Penh to introduce
some balance into the Peking-Hanoi competition
for influence. Peking has yet to dispatch a dele-
gation of equivalent rank, although Chinese
representatives have been in Phnom Penh since
shortly after the collapse of the Lon Nol govern-
ment, and China has been by far the largest
source of aid to the new regime.
Probably aware that the North Vietnamese
visit would touch Chinese sensitivities, Radio
Phnom Penh on the same day broadcast a mes-
sage to China's defense minister commemorating
the anniversary of the Chinese army. The mes-
sage warmly thanked the Chinese for their sup-
port during the five-year war and noted that this
support has continued in the "new phase of the
Cambodian revolution."
Communist officials are preparing the
people in South Vietnam for possible food
shortages later this year and next. Recent propa-
ganda broadcasts have stressed that "famine,"
caused by the old capitalist-oriented agricultural
system, "will continue to wreak a disastrous
impact for a long time to come as it cannot be
overcome immediately."
Rice stocks are probably large enough to
last until the autumn harvest. There are local-
ized shortages, but these reflect distribution
problems rather than a lack of rice.
Rice output this autumn, however, will be
lower than last year's record crop of 7 million
tons. The profit-oriented production and mar-
keting system of the past has been upset, and
farmers face reduced supplies of fertilizers, fuel,
machinery, and spare parts-all of which must
be imported and most of which were previously
financed by foreign aid. Communist officials
hope to compensate partially for production
shortfalls by expanding farm acreage in formerly
insecure areas and increasing rural labor. Urban
residents are being encouraged to move out of
the cities by offers of free land, transport, seeds,
and tools. Since April, several hundred thousand
people have reportedly been resettled.
The communists have thus far avoided a
rush to collectivize the agricultural sector. They
probably recognize that such a move would dis-
rupt production even more. Instead, communal
farming has been introduced only in previously
settled communist areas, refugee resettlements,
and on newly opened farmlands provided to
urban emigrants. 25X1
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The additional tanks give North Korea d
strong mobile armored force capable of offen
sive as well as defensive operations. The ew
division, which was formed by mid-1974, is
Iccated near Koksan within a day's march of the
Demilitarized Zone. Either division could easily
move down the Kaesong or Chorwon invasion
corridors into South Korea.
To oppose these forces, the South Koreans
have some 800 US-built medium tanks and sub-
stantial numbers of crew-served anti-tank weap-
ons, but no anti-tank guided missiles. There are
also 100 M-60 medium tanks assi ned to US
forces in South Korea.
Pyongyang has substantially increased its
armored force over the past few years. Since
1971, it has put between 900 and 1,100 addi-
tional medium tanks in active service, permitting
the formation of a second armored division, the
upgrading of other units, and the partial replace-
ment of older and less effective armored
vehicles.
The North Koreans now have between
1,500 and 1,700 medium tanks and 60 to 100
assault guns. The additional tanks include both
Soviet T54/55s and the Chinese-produced coun-
terpart, the Type 59. Because China now is
North Korea's principal supplier of ships and
aircraft, most of the new tanks may be the
Chinese Type 59.
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SECRET
Although President Perori's return to work
after weeks of illness was the publicized high-
light of the past week, of far more consequence
is the growing prominence of a !mall group of
cabinet ministers who are assuming the day-to-
day direction of the government.
Dubbed the "mini-cabinet," the group is
led by Interior Minister Benitez and includes
Justice Minister Corvalan and Defense Minister
Garrido. For the time being, these three 'omain
politically acceptable to labor and the military
because, unlike other minlsicrc. they have no
links to the ousted Lopez Rega.
Since the emergence of the "mini-cabinet,"
the government appears tc have overcome some
of its paralysis. Recent actions include:
? Tightening of controls on imports, to
ease the balance-of-payments situation, and
naming of a new central bank president.
? Intervention in the National Grain
Board, following revelation of high-level
bribery cases there.
? Easing of press restrictions that had
been clamped on during the ascendancy of
Lopez Rega.
? Granting of massive wage increases to
public employees, followl4ig many weeks of
indecision on that matter.
? Release of a number of political prison-
ers, on condition that they leave the coun-
try.
The release of the prisoners, aimed at
easing tensions, changing the rightist image of
the government under Lopez Rega, and ridding
the country of some key dissidents, began even
before last week's truce offer by the leftist
People's Revolutionary Army in exchange for
certain concessions, including release of all polit-
ical prisoners. That group also wants the govern-
ment to end the state of siege and rescind all
"repressi-ve" measures, including the ban on its
activities. Although the group realizes there is
no cha,ice that these demands will be met, the
publicized offer is probably designed to enhance
its image by displaying a willingness to be con-
ciliatory and to highlight what it sees as govern-
ment repression.
Cabinet ministers who have ties to Lopez
Rega continue to be attacked politically and
have been rendered ineffective. Foreign Minister
Vignes and Labor Minister Conditti reportedly
have offered their resinnations.l
President Geisel has responded to a resur-
gence of criticism from military conservatives by
defining the goals of his administration in a way
that de-emphasizes the importance of political
liberalization. Last week, in a lengthy and rather
detailed speech, Geisel instead stressed his con-
cern with social progress and called attention to
recent economic gains.
Asserting that economic growth will con-
tinue Geisel outlined government efforts to
stimulate development, retard inflation, and
reduce Brazil's balance-of-payments deficit. The
major portion of his speech was concerned with
social programs. At the conclusion he made
some highly significant comments regarding
politics.
Geisel made it clear that he does not intend
to promote a return to democratic rule. On the
contrary he stated his intention to retain special
decree powers and alluded to the necessity for
vigilance against communist infiltration and si,b-
version. He said "a lot has been published and
said about political relaxation... none of which
corresponds to reality." He then referred to
"relaxation" in terms of technical social pro-
grams that provide low-cost housing and free
medical care to the needy.
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Just before the speach General Golbery,
Geisel's political adviser, normally resumed his
official duties after a long illness, but the Presi-
dent's remarks suggest that Golbery, the ad-
vocate of political liberalization, is unlikely to
regain the influence he previously exercised
within the government. !nstead it appears that
Geisel intends to preserve the greater political
freedom granted thus far, and to protect his
own authority by adopting a more conservative
political posture.
SELA INCHES FORWARD
The Latin American Economic System
(SELA) remains a disembodied spirit following
the conference in Panama, where advocates had
hoped to establish this new Latin/Caribbean
association. A second try at creation is sched-
uled for October 15. Venezuela? Mexico, and
Panama, the leading proponents of a broad new
hemispheric organization excluding the US, will
probably lobby intensively for a more fruitful
second session.
Both the promoters and the demurrers feel
that they achieved something at Panama. The
originators of the notion take pride in having
attracted dele-ates from 25 government;- all the
invitees but tl.e Bahamas and Surinam. More-
over, they wrung a unanimous resolution out of
the conference favoring the establishr,i?nt of
SELA despite grave reservations on the part of
many countries.
The opponents of SELA came reluctant
but resigned to the need to maintain public
solidarity, and found solace in having forced a
delay while a working group drafts a more speci-
fic definition of the organization's goals and
structure. The fundamental concern of those
opposed is that SELA's principal goal is pre-
cisely what the would-be founders insist that it
is not: to put pressure or. the US.
Critics of SELA also managed to raise the
many practical problems that Venezuela and
Mexico have tried to ignore. The vague prin-
ciples proposed for SELA take no account of
the many political and economic differences
that divide the countries of the area, and they
fail to clarify the relationship with the various
economic pacts and federations already in exist-
ence. The small countries are voicing their con-
cern over prospects of being dominated by the
much larger economies of such countries as
Brazil and Mexico. Also, the SELA documents
do not address the question of who would bear
the burden of granting special tre,)tment for the
least developed areas.
One potential point of controversy never
developed. The SELA meeting provided a kind
of debut for Cuba in the Latin/Caribbean
brotherhood, following the recent lifting of the
OAS sanctions against Havana. Continuing
Cuba's role as behind-the-scenes sponsor of
SELA, Cuba's delegation worked unobtrusively
and evidently took pains not to give offense.
The Cubans will be elated at the founding of an
all-Latin system, but clearly do not intend to
trL'mpet SELA as an anti-US victory, at least for
the time being.
SELA's promoters will have to take some
note of the concerns that have been raised, but
probably count more on the momentum of the
swing toward solidarity in getting the union
established. Whether SELA ever really promotes
economic development is most likely of re a-
tively little importance to Mexico and Vene-
zuela. They would take satisfaction in producing
a paper organization that leaves out the US and
that serves as another platform from which they
can plead the case for a "new world order"
more beneficial to their own interests.
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