OFFICIAL ROUTING SLIP

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01720R000900050023-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 13
• Document Creation Date: December 15, 2016
• Document Release Date: May 26, 2004
• Sequence Number: 23
• Publication Date: August 12, 1974
• Content Type: FORM

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I. AREAS OF INSTABILITY AND PROBLEM AREAS
The Sino-Soviet Border: Tension is higher than normal
because of a series of local incidents, including the down-
ing some months ago of a Soviet helicopter over Chinese
territory. Neither side seems to expect a majar blow-up
and both are playing the border in relatively low key.
China: The anti-Confucius campaign, a major power ?~
struggle over what policies and leade-rs are to succeed Mao
Tse-tung, is stalemated. Madame Mao and the "leftists" have
failed in repeated efforts to turn the campaign aside. Pre-
mier Chou En-lai and the moderates have imposed a tight clamp
on potentially disruptive activities, but have not mustered
enough strength to push the campaign to a conclusion. The
Premier is convalescing from a heart ailment but a.????ears '.very. ,
much in charge of day-to-day affairs.
Vietnam: We expect the Communists to be testing South
Vietnamese forces in same heavy local engagements through the
remainder of this year. We do not expect an all-out Communist
offensive. Nevertheless, Hanoi can resume major warfare in
the South with little warning and may be prompted to do so if.
it perceives a significant weakening in Saigon's military and
economic position. The level of next year's economic and mili-
tary aid packages for South Vietnam could be a major problem
area for the administration as well as a source of worry for
Saigon.
Cambodia: The new administration's major problem could
be in obtaining Congressional approval for a continuation of
the substantial aid necessary to keep the Lon Nol government
afloat. The military stalemate will hoJ_d up far the rest of _
the year. There is not sign that Phnom Penh will be able to'
reassert its authority in the countryside, which is now largely
controlled by the Khmer Communists. If, as now seems passible,
Phnom Penh loses its UN seat to Sihanouk's exile government
this fall, a compromise will be placed even further out of
reach.
Laos: There is a potential for instability, but the coa-
lition government remains intact even without the strong hand
of ailing Prime Minister Souvanna. Communist influence in the
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coalition is increasing, however, and this could eventually
cause an upheaval from the conservative side.
Australia: Prime Minister Whitlam's continuing troubles
with the Labor Party's left wing are complicating his efforts
to solve serious economic problems. Preoccupation with the
domestic scene, however, has kept the leftists from focusing
on the matter of US defense installations.
Philippines: The past two years of martial law have
brought political stability to the Lhilippines with the note-
worthy exception of the Muslim areas iri the south where anti-
government insurgents have increased military activity in .:
recent months. Fighting is a drain on military and economic
resources needed elsewhere in the nation. Since Marcos has
accused Malaysia of supporting the rebels, the insurgency
also adversely affected regional cooperation.
Korean Border: There has been an increase in tension
between North and South since last October, expressed most
seriously in a more aggressive North Korean defense of its
sea, and air frontiers. Additional shooting incidents in
disputed waters or in airspace near the North-South border
can be expected without warning. But it is unlikely that
either side will initiate any major aggressive military
action in the foreseeable future.
South Korea: President Pak has stepped up efforts to
suppress internal political criticism. Pak risks alienating
his political and military supporters if he continues his
present approach, This could lead to the toppling of his
regime and a period of domestic turmoil.
Western Europe--Berlin: The Soviets have recently dem-
onstrated that they are willing to interfere with traffic to
West Berlin. in order to make .a political point. This could
happen again, although the particular controversy--the West
German Federal Environmental Office--that provoked the latest
incidents seems to have subsided.
Yugoslavia: Despite Tito's attempts to pre-arrange the
orderly transfer of power by revitalizing the Party and embody-
ing Titoist socialism in the new constitution, the succession
problem is far from settled. The prospects for a smooth transi-
tion are good, but the country's future will depend on how well
his successors work together, whether the federation can survive
the strains of regional animosities, and on the maintenance of
fundamentally good relations with the Soviet Union.
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Romania: Bucharest's continuing_ attempts to stonewall
Soviet initiatives and to carve out even more ressuredfrom
in foreign affairs could bring on increasing p
Moscow over the coming months.
is 5adat has escalated Egypt's propaganda-
Libya-Egyp
and-pinprick exchanges with Libya tOtian armedtforcesnand
Wadhafi, and is withdrawing all Egyp
advisory personnel.
Palestinian Terrorism: Radical fedayeen elementsetwcarry
continue to attack Israelis and Westerners, and may y
out threats to assassinate moderate Arab leaders.
Jordan: Perceived failures in Jordanian foreign policy
and long standing domestic grievances have eroded discipline
in the Jordan Arab Army. Action or agit~tOW1n tOOSSibilitypopu-
lar military and civilian leaders is a g g P
Ira The Kurdish rebellion is tying down the bulk of
the Iraqi army in the north, with no end to the fighting in
sight. The rebellion appears to be fueling public hostility
toward the regime and dissension among the leadership in Bagh-
dad; it also complicates Iraq's already strained relations
with Iran, the Kurds' principal source of support.
Southern Arabian Peninsula: The radical regime in South
Yemen, which supports a guerrilla war in neighboring Oman, is
getting increasing attention from both the Soviet Union and
moderate Arab states. Moscow apparently is upping its econ-
omic and military commitment to South Yemen, while Egypt and
Saudi Arabia are holding out promises of large-scale assist-
ance aimed at ending Aden's dependence on the Soviet bloc and
encouraging more moderate policies.
Born of Africa: The Ethiopian government will be pre-
occupied with domestic instability for some time and will
continue to be concerned that Somalia will take advantage of
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the confusion and attempt to grab a portion of Ethiopian
territory. Addis .Ababa, believing that Soviet arms supplies
have given Somalia the military edge, will continue to press
the US for more military aid.
Spanish Sahara: Morocco has launched a major effort to
force Spain to relinquish its colonial control. King Hassan
is seeking broad Arab support and may try to involve the US.
Inch-Pakistani Relations: Twenty-five years of recurrent
tensions, including three wars, leave the future uncertain.
Leaders of both nations claim they want to change the pattern
and negotiations have been sputtering along since 1972 in an~~
effort to re-establish commercial and diplomatic ties.
Pakistani-Afghan Relations: Tension has grown again since
Daoud took power in July 1973 fallowing a coup d'etat. The
primary issue is Kabul's refusal to recognize the border with
Pakistan and its support of autonomy or independence for the
Pushtun minority inhabiting the border area in Pakistan.
South Asian Economic Problems: India, Bangladesh and
Sri Lanka find it difficult to feed their rapidly growing
populations and all seek major aid. Bangladesh appears to
be in the most serious condition, with socio-economic prob-
lems likely to lead to political instability.
Indian Ocean-Persian Gulf: Although not an area of poli-
tical instability, the Indian Ocean region has been given
increasing attention by the Soviet Union and the US. The
region could become the focus of great power rivalry, much
to the concern of the region's littoral states. Iran has
indicated its interest in expanding its role in the Indian
Ocean. .
Portuguese Territories:. US relations with the Portuguese .
overseas territories have been a state of flux since Lisbon
declared its intentions to grant them independence. The liber-
ation movements in Mozambique and Angola are competing for
dominance in their respective areas and in varying degrees
and indicating a desire to have closer relations with us. They
would like more US aid, now that we have permitted closer US
contacts with them, and probably would like our help to counter-
balance Communist influence already present in many of the groups
after years of receiving Communist military assistance.
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Portugal: The coup last April swept away all traces
of an authoritarian government that had run Portugal for
48 years and installed a provisional government that per-
mits the political freedom enjoyed by most European states
and that is in the proce:,s of negotiating a decolonization
in Africa. The political left continues to agitate for
.increased privileges, however, and the remainder of the
Portuguese establishment is growing increasingly impatient
with what it regards as an abuse of civil liberty. The
solution of this problem will determine whether Portugal
has a smooth transition to democracy or returns to some
new form of authoritarian rule.
Spain: Events in Portugal and the declining health of
General Franco have focused attention on the transfer of
power after the. departure of the man who has ruled Spain
for almost four decades. Pressuresfor the liberalization.
of Franco's system will increase after he is gone, but the
degree of change will depend ultimately on the military,
the most powerful element in Spain.
Italy: Economic problems of avalanche proportions and
recent reversals at the ballot box have weakened the position
of the dominant Christian Democratic party. There does not
seem to be any working alternatives to the present center-
left coalition although there are indications that it will
allow the Communist Party, which is technically an opposition
party, more of a voice in the decision-making process. The
extreme right may respond to such a prospect with increased
incidents of political violence.
Cyprus: The overthrow of Archbishop Makarios has trig-
gered a series of events which has produced repercussions
that go beyond the conflict between the Greek and Turkish
communities on the island. A formulation that will allow
the Turkish and Greek Cypriot populations to live in peace
probably will continue to be elusive particularly since the
Turkish side--buoyed by its military victories--probably
will insist on greater rights than their 20 percent minority
would seem to justify.
Turke The success Ankara has had to date in the Cyprus
crisis has stimulated a rising tide of nationalistic fervor
in Turkey that could spill over into other Greek-Turkey dis-
putes. Turkey's political leaders are not in a mood to make
concessions but they seem to prefer a negotiated settlement.
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The military, however, may be more aggressive. Ankara's
decision to return to opium poppy production carries the
threat that large quantities of illegal narcotics will
again enter the international traffic from this source.
Greece: The newly installed Karamanlis government
also wants a negotiated settlement so it can begin to work
on the many other problems that beset Greece. If tree
negotiations drag on and Greeks forget that it was the
junta that precipitated this problem, or if the Turks
attempt a new military venture, Karaman~lis' plans to
revitalize Greek political life. will be delayed.
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Northern Ireland: Unless a formula like the power-~
sharing concept can be introduced in Ulster, the resentment
that has produced violence for the past five years will con-
tinue. If the British withdraw their security forces,- thereby
allowing large-scale clashes between Protestant and Catholic
extremists, the Republic could be drawn into the conflict and
a very, bloody north-south civil war could result.
Argentina: There is a strong possibility that Mrs. Peron
will be unable to bear up under the pressures of the Argentine
presidency. If this happens, she may either step down as
president or remain as a figurehead only.
Ghile: The military government is facing severe economic
problems that are bound to arouse public dissatisfaction. There.
is also a well organized anti-junta propaganda campaign pointed
at Chile from abroad that provides another unsettling political
factor.
Peru: The radical leaders in the military government are
becoming more dominant and more willing to institute repressive
measures. If this trend continues, political unrest will
increase, perhaps to dangerous levels.
Peru-Chile: Animosities dating from a war a century ago
have recently sharpened and are generating much suspicion
between Peru and Chile. There is some chance that border ten-
sions and the efforts of both to modernize and expand their
armed forces might accidentally trigger a conflict.
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Cuba: An increasing number of Latin American countries
are considering reopening official ties with Castro. The OAS
sanctions are likely to be violated mare and more frequently.
Venezuela: The new government of President Perez is plan-
ning to accelerate the nationalization of oil and iron ore
operations. A number of major US firms will be affected.
Boliv9.a: President Banzer faces threats both from the
military and political groups. He will- face a continuing
struggle to maintain power. ..
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II? ONGOING NEGOTIATIONS
The Conference on Securit and Coo eration in Europe
(CSCE) is currently in recess.
conference resumes on 2 Septemberhe TheoSovietsewilltsoon
be faced with the problem of making the minimum concessions
necessary to bring it to a successful conclusion. They
attach high priority to CSCE; other areas of detente may
lag until the CSCE issues are resolved.
The Mutual and Balanced Force Reduction (MBFR): The
fourth negotiating round begins on 16 September. Little
progress has been made so far and the outlook seems to be
for prolonged haggling, especially while CSCE has not been
wrapped up.
The Law of the~Sea Conference, currently meeting in
Caracas, concludes this first- session on August 29. There
is now discussion that at least two more sessions will be
necessary to draw up a treaty; the first of these probably
will be in Vienna next spring.
Diplomatic activity in preparation for the next phase
of Middle East ne otiations will be continued throughout
August (including visits to Washington by senior E
Jordanian, and Syrian representatives).. PresidentsyAsadnand
Sadat still have differences of their own to resolve, and
something has to be done about Jordan's desire for disengage-
ment measures along the Jordan River.
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SALT: The SALT talks, in recess. since April, may
resume in September, although no date has been set. The
June summit failed to narrow significantly the gap separ-
ating the positions of each side, rendering unlikely an
early agreement on the announced goal of a ten-year pact
limiting strategic offensive weapons.
China will expect further progress on Sino-US issues.
Peking will be hoping the Ford administration moves ahead on
settling the Taiwan issue. There probably will be early indi-
cations of Chinese interest in further discussions on US-
Chinese issues.
Sino-Japanese negotiations on a peace treaty and trade
pacts are underway. They may be intensified, but there are
problems, among them the status of Japan's relations with
Taiwan.
Philippine-US Base Agreements: President Marcos has
recently been more flexible in dealing with the US, largely
because he no longer needs to worry about political apposi-
tion. Negotiations over a new base agreement and a successor
to the Laurel-Langley trade arrangement are proceeding slowly
but are being conducted in a friendly atmosphere.
Panama Canal Treaty: Panama's strongman leader, General
Torri~os, is committed to completing a treaty with the US over
the next year or so. He believes that talks are going well
now and seems optimistic. But if there is any sign that Wash-
ington is losing interest in the negotiations or is less forth-
coming, Torrijos may well create an incident in the canal area
or take some other drastic action for purposes of-refocusing
world attention on his demands.
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An Arab summit conference had been scheduled for
September 3 in Rabat. Sadat wants it postponed, prefer-
ably until after the Geneva conference, and has secured
the agreement of key Arab states--including a grudging
Syria--to delay it until mid-October. _Sadat fears that
such a conference would be a forum for attacking his
policies and strategies in seeking a settlement, and
would narrow his room for maneuver.
The Geneva conference is still expected by most
Arab states in late September or early October. There
is some fear that Israel will stall the negotiations,
Kirig Husayn says he will not attend without a Jordan
River disengagement and a clear mandate to negotiate
the return of the West Bank. Israel's continuing com-
mitment to formal negotiations may be shaky.
Korea and the UN: The future of the UN Command and
other matters related to the future of the US military/
political presence in the peninsula are slated for discus-
sion with the communist powers (and, inferentially, with
North Korea) at this fall's UNGA. Failure to win communist
acquiescence to a compromise on such issues might open the
way for a bruising confrontation in the Assembly; a vote
might easily go against the US/South Korean position.
The World Population Conference, the first such confer-
ence ever to be held, meets in Bucharest, Romania, from
August 19 through 30.
The 29th UN General Assembly begins in New York on Sep-
tember 17.
There will be a World Food Conference in Rome organized
under the auspices of the United Nations November 5-16, 1974.
It is expected that all members of the United Nations will
attend.
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The Trade and Development Board of the United Nations
Conference on Trade and Development will meet in Geneva
August 20-September 13.
The substantive phase of the multinational trade nego-
tiations under GATT will get under way this fall if US
trade legislation is passed.
OAS meetings, tentatively set for November or later:
The question of reestablishing relations with Cuba will
receive priority attention. Serious consideration may
also be given to possible restructuring of the OAS itself.
Meeting of Hemisphere Foreign Ministers, Buenos Aires,
early 1975: The Latins will be looking eagerly for signs
that Secretary Kissinger is committed to following up his
pledge at Mexico City to continue a new dialogue. Cuba
will be in the forefront here also.
Meeting of Presidents of Bolivarian States, Peru,
December 1974: This meeting.celebrates the important Bat-
tle of Ayacucho of the 19th century war of independence
from Spain. Some effort may be made to develop a common
front against the US on economic matters. A broader meet-
ing of all Latin American presidents is scheduled to take
place in Caracas after the first of the year; similar mat-
ters will be discussed there.
Surinam: Independence set for late 1975. Large US-
owned bauxite holdings may come under pressure.
Nicaragua: Presidential election, September 1974.
Efforts of strongman Somoza to extend his family's dynasty
causing unrest.
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