CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026200200001-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 15, 2016
• Document Release Date: March 30, 2004
• Sequence Number: 1
• Publication Date: March 15, 1974
• Content Type: REPORT

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Top Secret
Central Intelligence Bulletin
Top Secret
c U-8
March 15, 1974
DIA and DOS review(s) completed.
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March ,
Central Intelligence Bulletin
CONTENTS
PORTUGAL: Armed forces Chief of Staff Gomes and his
deputy, General Spinola,dismissed. (Page 1)
IRAN: Tehran opts for lower peak production in order
to stretch out oil reserves. (Page 2)
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SOUTH AMERICA: Chilean President seeks to counter
alleged aggressive designs of Peru. (Page 16)
UGANDA-CZECHOSLOVAKIA: Prague follows Moscow's lead
and reinstates military deliveries to Uganda. (Page 18)
JAPAN: Overseas borrowing by Japanese firms will ex-
pand rapidly over next several months. (Page 19)
FOR THE RECORD: (Page 21)
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PORTUGAL: The Portuguese Government yesterday
dismisse armed forces Chief of Staff Costa Gomes
and General Spinola, his deputy. The action is a
victory for right-wing forces who oppose Spinola's
advocacy of greater autonomy for Portugal's overseas
territories.
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The dismissals are certain to send further shock
waves through the Portuguese hierarchy, which includes
many Spinola supporters. Probably in anticipation
of this, the government announced that it would par-
tially reimpose the state of alert that confined
troops to barracks for four days this week.
The discharges may also cause rumblings in the
overseas territories. Most civilian and military
leaders will be relieved that Spinola's ideas about
self-determination have been rejected.
Early indications are that Costa Gomes will be
replaced by General Joaquim Luz Cunha, a rightist
who has commanded Portuguese forces in Angola since
1972.
No replacement or Spino a
as been announce o far.
Over the last week the government quietly posted
Spinola sympathizers in the military as far away from
Lisbon as possible. This dispersal of Spinola sup-
porters is probably continuing. The US Consulate in
the Azores yesterday reported a rumor that 48 more
officers would soon arrive in the islands. Some
junior officers, who presumably supported a change
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earlier in the week.
Mar 15, 1974
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IRAN: Iran apparently is planning to slow the
rate of Increase of its petroleum production in
order to stretch out its oil reserves. Tehran plans
to build several refineries and petrochemical plants
and probably wants to ensure that sufficient domestic
oil will be available for the projects.
The National Iranian Oil Company has instructed
the consortium of Western oil companies to prepare
a new production plan. Iranian Oil Company offi-
cials have asked company representatives to calculate
the new program conservatively, on the basis of known
reserves only, and to plan peak production at a level
that can be sustained for at least eight years.
According to a plan published last June, the
consortium had expected to raise production from the
current rate of 5.7 million barrels per day to a
peak of 7.6 million b/d by the end of 1976 and to
sustain that level until 1985, when it would begin
dropping. Recent company estimates of reserves
have been more pessimistic, however, and Iranian
production is now expected to begin declining more
quickly. Although the new plan probably will not
affect production this year, an oil company official
believes the program could lead to a new consortium
peak production goal as low as 6.5 million b/d.
The timing of the Shah's decision presumably
is related to the rapid price increases in recent
months that will yield the government more revenues
in the next three to five years than can be ab-
sorbed effectively by the economy. The decision
probably also reflects the Shah's belief that oil
prices are not likely to decline substantially
over the next five or ten years.
Such a slowdown in the growth of Iranian pro-
duction would further enhance the key role to be
played by Saudi Arabia over the next several years.
The Saudis are capable of increasing production to
offset the Iranian shortfall, if King Faysal so
desires.
(continued)
Mar 15, 1974
Central Intelligence Bulletin
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 The Shah is currently revamping his economic
development plan, which runs from 1973 to 1978, and
he is apparently concerned that rapidly expanding
oil revenues could have a hyperinflationary impact
on the economy. He may be trying to hold down the
expansion of spending because of the strain on
existing capacity and the consequent upward pressure
on prices.
Mar 15 , 1974 Central Intelligence Bulletin 3
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SOUTH AMERICA: Chilean junta President Pinochet
will seek a stronger Brazilian commitment for assist-
ance in countering the alleged aggressive designs
of Peru when he meets with President Geisel tomorrow.
Pinochet, in Brasilia for Geisel's inauguration, re-
portedly will ask for Brazilian aid in acquiring
weapons from third countries hesitant about selling
to the junta, as well as for more materiel from Bra-
zil itself.
Peru's purchase of Soviet tanks and acceptance
of Soviet training personnel have heightened Chilean
concern over traditional Peruvian revanchism.
Pinochet reportedly will try to convince Geisel that
Cuba and the USSR plan to use Peru as the new "bridge
for Marxism" in the hemisphere, with the ultimate
goal of isolating Brazil.
Geisel, who probably has a more objective per-
spective on the issue of "Marxist penetration,"
is unlikely to buy all of Pinochet's thesis. Brazil
does, however, want the Chilean junta to succeed and
will continue to provide economic aid
Bolivian President Banzer is also attending the
Geisel inauguration, and Brazilian officials have
helped arrange an informal meeting between the Chil-
ean and Bolivian leaders. This is in line with Bra-
zil's interest in helping the junta patch up Chile's
quarrel with Bolivia. Such a rapprochement would be
important to Chile in the event of a confrontation
with Peru.
Both Pinochet and Banzer have said publicly
that they are willing to discuss issues of common
concern. Bolivian claims to territory conquered
by Chile in the War of the Pacific in the last
century have been a source of friction ever since.
Diplomatic ties have been suspended for over a
decade because of a dispute over Chile's diversion
of a river that flows through both countries.
(continued)
Mar 15, 1974
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The Geisel administration would find an improve-
ment in Bolivian-Chilean relations attractive on
several counts. Brazil basically wants to see both
military regimes strengthened. Even partial recon-
ciliation would earn Brazil prestige as an interna-
tional arbiter, and the fact that the two presidents
are meeting on Brazilian soil will help. Finally, a
possible Chilean concession to Bolivia on access
to the sea might involve internationalization of a
port in northern Chile, a development that Brazil
might view as an opportunity for economic gain and
increased influence in general. Chile is anxious
to attract foreign investment to its northern bor-
der region, and the junta probably believes that a
Brazilian economic stake in the area would help
discourage Peruvian incursions.
Mar 15 , 1974 Central Intelligence Bulletin
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UGANDA-CZECHOSLOVAKIA: Prague is following
Moscow's lead in reinstating military deliveries t
Uganda.
After a hiatus of several years, Soviet
military shipments began again last November when
armored personnel carriers, artillery, tanks, and
fighter aircraft were delivered.
Between 1965 and 1970, Prague and Moscow pro-
vided Uganda with a total of $13 million worth of
military equipment. Following the coup that brought
President Amin to power three years ago, however,
relations became strained, the military aid program
was discontinued, and all Soviet and most Czech mil-
itary technicians were withdrawn. Relations began
to improve in late 1972 when Amin announced his
hope that Soviet military aid would resume.
Resumption of military deliveries by Moscow
and Prague reflects a bid for influence with the
Amin regime, whose relations with London, Washing-
ton, and Tel Aviv are deteriorating. Amin has had
to turn to Communist countries for military aid,
because Western countries are reluctant to provide
it.
Kenya and Tanzania do not trust the mercurial
Ugandan leader. Their uneasiness will increase as
Uganda acquires more arms, although Amin apparently
is not planning any military action.
Mar 15, 1974
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JAPAN: Overseas borrowing by Japanese firms
will expand rapidly over the next several months.
The Ministry of Finance has announced that the gov-
ernment will permit domestic firms to bring in about
$390 million in foreign loans in the second quarter
of this year to help them finance higher fuel costs.
This is in addition to the $260 million in such loans
permitted during the first quarter. Only power com-
panies, steel producers, and shipbuilders have thus
far been allowed to raise foreign loans and bring
the funds into Japan.
The dollar inflows resulting from this borrow-
ing will help reduce Japan's expected balance-of-
payments deficit during the period and ease the
downward pressure on the yen.
Mar 15, 1974
Central Intelligence Bulletin
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FOR THE RECORD
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Romania-Argentina: President Ceausescu signed
several agreements during his recent visit to Argen-
tina, including a $100-million economic credit, Ro-
mania's largest commitment to a South American nation.
The credit will be used in the mining, agricultural,
and petroleum sectors. A $37-million contract for
petroleum equi ment already has been signed under
the credits.
Portuguese Guinea: The self-proclaimed rebel
government of Guinea-Bissau, which is challenging
Lisbon's control of Portuguese Guinea, has been ac-
corded observer status in the United Nations. This
will allow it to send a delegation to the General
Assembly on a nonvoting basis. The rebel government
apparently hopes to obtain full membership in the UN
next fall. Since proclaiming its "independence" last
September, the rebel government has been recognized
by about 70 African, Communist, and third world coun-
tries, and has been admitted to the Organization of
African Ppity and the UN Food and Agricultural Organ-
ization.
Mar 15, 1974
Central Intelligence Bulletin 21
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