MIDDLE EAST AFRICA SOUTH ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A001400310001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 15, 2016
• Document Release Date: August 9, 2004
• Sequence Number: 1
• Publication Date: July 30, 1975
• Content Type: NOTES

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Middle East
Africa
South Asia
Secret
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No, 0834/7,5
July 30, 1975
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Ethiopia: Social and Economic Policies of
Military Council . . . . . . . . . . . . . . . 1
Afghanistan: Anti-government Incidents
July 30, 1975
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Ethiopia
Social and Economic Policies of Military Council
Since deposing Haile Selassie last September,
Ethiopia's military rulers have made progress in
dismantling the country's feudal order and eliminating
the power of the old aristocracy and have set out
on the difficult job of creating a new economic
and social order. They have done so despite a
separatist uprising in Eritrea and scattered armed
dissidence in most of the other provinces. They
have also faced bickering within the ruling military
council and opposition to land reform from important
parts of the armed forces.
The council is committed to revolutionary
change and is aiming at a vaguely formulated
"Ethiopian socialism." In its search for an
indigenous socialist system, the council has not
directly emulated any other country, although
Yugoslavia's experience seems to be of particular
interest.
Dominant Concern
The dominant concern of the military rulers
right now is the improvement of the position of
the impoverished rural majority. The economic
program designed to secure this objective calls for
the nationalization of all rural land and much
of the modern parts of the economy. The program
aims at a more equitable distribution of income and
at increased government spending on development
projects.
The social program seeks to introduce greater
equality into Ethiopian society by eliminating the
power of the landed nobility and the urban well-to-do,
(Continued)
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primarily through land reform. Education and health
programs are designed to make their benefits more
readily available to the less affluent, especially
in the countryside.
These programs are still in their initial
stages. The council has played down the most
revolutionary part of its land reform program--the
actual redistribution of land. Since land reform
was announced in March, the council has been
concentrating on the establishment of peasant
associations that are to administer the reform.
The redistribution phase is not due to begin until
later this year, after the current crop is harvested.
Peasants who expect to benefit from land reform
may have second thoughts when they learn that the
council intends to establish collective farming
rather than turn the land over to private owners.
Land reform and the other social and economic
programs may not be sufficient to involve the peasant
in the council's development process. Rural
lethargy, superstition, and alienation from the
central government are major obstacles still
to be overcome.
Local insurrections led by landlords and former
aristocrats opposed to the land program are continuing
throughout the country, bringing destruction and
death. Land reform has also created stress
between the council and most armed forces units.
Many officers and"enlisted men alike oppose the
program, which would deprive them of land grants
promised them by the old regime when they joined
up.
Preliminary reports indicate that land
reform is having different effects on production
in different areas. In some locales, planting and
harvesting are proceeding apace. In others, farmers
have held planting to a minimum because of uncertainty
over the disposition of their crops. Most Ethiopians
concerned with agricultural matters expect the
reform measures to lead to a decline in production.
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Urban Land Reform
The council last week followed up its rural
land reform program by announcing an urban land
reform. Almost all urban property will be nationalized,
under its terms. Individuals and families will be
allowed to own only one house and about one-eighth
acre of land.
Private owners will be forbidden to earn rent
from urban land or houses after August 7. On
that date all agreements between landlords and
tenants will be terminated. City dwellers
associations, headed by government officials, will
be established and given authority to collect
rents.
Urban land nationalization more directly
threatens the economic interests of the politically
potent Ethiopian middle class than any of the
council's previous policies. The proclamation will
further alienate many military officers who own
urban property.
The council had earlier nationalized all
banks,
insurance companies, and 72 industrial
firms.
The
nationalization program has gone smoothly
enough
and
has not yet reduced output significantly.
It has
cost
Ethiopia foreign capital and expertise,
and the
new
supervisors appointed to most of the
nationalized firms lack the necessary managerial
skills.
The business community lacks confidence in
the council's leadership. Private investment has
virtually ended. Uncertainty and fear of further
nationalization are inhibiting the import of
ordered goods; foreign suppliers are insisting on
irrevocable letters of credit.
Private Enterprise
Business confidence and morale will stay
depressed until the council clarifies its intentions
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toward private enterprise and issues its promised
investment code. Foreign exchange reserves are
high and will help cushion the impact of the
economic downturn.
Some urban entrepreneurs have supported the
regime either because they have enjoyed greater
personal opportunities or because they are convinced
the council's policies are right for Ethiopia.
Unskilled workers have supported the regime
because it has provided them jobs and kept prices
for commodities at reasonable levels.
The council has also curbed corruption,
increased tax collections, and imposed new,
progressive taxes.
The council has been flexible in applying some
of its policies. It quietly stopped enforcing
price controls that had created serious shortages
in some foodstuffs. Early this month the council
modified a proclamation regarding government
control of mineral exploration. The revised
policy opens some prospecting to foreign private
capital investment.
Aside from land reform, the council's most
ambitious program to bring change to the countryside
is the "development through cooperation" program.
Since late 1974, about 50,000 students have been
sent to the countryside to teach reading and
writing and to instruct the peasants in digging
wells, building public facilities, and improving
farming methods.
The campaign has been successful in some areas,
particularly in the southern provinces, but has been
a failure in others. Violence directed by and against
the students has been one of the most notable features.
Some students have been harassed by peasants
who resent their intrusion. Other students have
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incited the peasants to seize land from the
landowners. Clashes involving the students,
landlords, and security forces have resulted in
numerous deaths.
The limited accomplishments of the program
have not justified its cost or the disruption to
the students' lives. Student dissatisfaction
with the program is increasing because of the council's
failure to set a date for ending their service in
the countryside.
Better Administration
In order to carry out its new policies and
programs, the council has attempted to improve
governmental administration. It has sought
better-qualified civil servants for local administrative
positions and for key posts in the central ministries.
The civil servants, however, complain of a lack
of authority and clear guidelines, and they are
reluctant to make decisions for fear of offending
the council.
The council itself attempts to operate by
consensus, a difficult and time-consuming undertaking.
Once a course of action has been decided on, the
council is able to implement projects faster than
the old regime, but it frequenly acts without
sufficient consideration of the consequences; medium
and long-term lannin is less evident now than
before.
July 30, 1975
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Afghanistan
Anti-government Incidents
Anti-government violence this past week in several
places in Afghanistan was apparently timed to
coincide with the celebration of the second
anniversary of the coup that put President Mohammad
Daoud Khan in power.
The most serious incident, a skirmish in which
several were killed, apparently began on July 22
in a valley about 100 miles northeast of Kabul.
Army units had to be called in, and order was not
restored until July 25.
Government forces, after interrogating some
prisoners, most of whom were students from Kabul
University, announced that the dissidents were
"reactionaries" and that they belonged to one of
several terrorist groups armed and trained in
Pakistan.
I violence in the
valley was the result of popular dissatisfaction
with the government's at o o control the local
economy blame on agitation
by conservative religious leaders, who have long
opposed Daoud, or on the revival of a local dispute
between the predominantly Tajik population of the
area and the ruling Pushtuns.
The occurence of some half dozen attacks
against government installations in other locations
during the same period of time, however, tends to
support the view that small sabotage units have been
working according to a coordinated plan. Whether
or not these groups have been trained and supported
by Pakistan, the Afghan government is likely to
use the incidents and reported confessions to
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