WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A011100080001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 21, 2016
• Document Release Date: December 4, 2007
• Sequence Number: 1
• Publication Date: May 7, 1975
• Content Type: SUMMARY

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Secret
Weekly Summary
Secret
No. 0027/75
July 5, 1975
DOS review completed
Copy N2
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CONTENTS (July 4, 1975)
1 I
ndia: Under Control; Soviet Support
3 P
anama: Uncertainty on Canal Issue
4 P
ortugal: Council Reorganized
5 I
taly: Post-Election Maneuvers
6
CEMA Ministerial
7
EC: Moving Ahead
9
t.0
MIDDLE EAST
AFRICA
The Balkans: Chinese Wooing
CSCE: Trying for a Summit
1.3
Lebanon: A Government at Last
25X1
15
Spanish Sahara: Tension Mounts
15
EAST ASIA
Cape Verde Islands:
Becoming Independent
PACIFIC
17
Laos: The Last Straw?
18
Australia: Government Crisis
18
Korea-China: Talking Peace
20
WESTERN
South Vietnam: Courting Recognition
HEMISPHERE
21
OAS: Tangled Again
22
Argentina: Labor's Demands Undermined
23
Honduras: Peasant Unrest
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INDIA ).,Z
Acting under the wide authority conferred
on the government by the proclamation on June
26 of a state of emergency, Prime Minister
Gandhi continued this week to move against her
political opponents. She also tried to rally
popular support for her cause by promising
improved economic conditions. The inability of
the now leaderless opposition to challenge the
repressive acts of the government indicates that
Mrs. Gandhi has, for now, successfully carried
off her controversial move.
Sporadic clashes between police and
demonstrators erupted in several states where
opposition parties have their broadest support,
but for the most part public reaction apparently
has been subdued. More trouble may be
brewing, however, in two states, Gujarat and
Tamil Nadu, that are not ruled by Mrs. Gandhi's
Congress Party.
On July 1, Mrs. Gandhi unveiled a new
economic program featuring something for
everyone, but especially relief for the poor and
strong measures against the wealthy. Her
promises included more action against inflation,
including credit controls and curbs on govern-
ment spending; vigorous implementation of land
reform laws; crackdowns on hoarders and
smugglers; and controls on prices for student
housing and food.
Prime Minister Gandhi meets with her Congress Party colleagues
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The proposals are typically long on polit-
ical considerations and short on the wherewithal
to accelerate the slow-growing economy. Agri-
cultural production is the key to India's growth,
but the Prime Minister offered no new programs
aimed at increasing food supplies. If she vigor-
ously pursues land reform and succeeds in cur-
tailing grain hoarding, she may even reduce agri-
cultural production.
Despite the outward appearance of nor-
malcy, Indian political life has undergone a basic
transformation. Invoking special emergency
powers, Mrs. Gandhi's government has:
? Suspended civil liberties, including the
right of habeas corpus, and widened its
authority to arrest and detain political foes
and racketeers.
? Jailed more than a thousand politicians
and "troublemakers."
? Imposed strict censorship rules on both
the Indian press and foreign correspondents.
? Outlawed public gatherings of five or
more persons in the capital area and advised
the states to do so also.
With most opposition leaders in jail or
underground, the threat of a nationwide civil
disobedience campaign to force Mrs. Gandhi to
resign has receded. A new outbreak of demon-
strations, in which students would likely play a
key role, could erupt should jailed opposition
leader J. P. Narayan die; the elderly Narayan is
in poor health.
So far, Mrs. Gandhi appears to be retaining
the support of key Congress Party leaders. A
new cabinet-level committee set up to oversee
the administration of the emergency regulations
includes the two ministers commonly con-
sidered potential contenders for Mrs. Gandhi's
post-Agriculture Minister Ram and Foreign
Minister Chavan. Reports continue to circulate
that Mrs. Gandhi has both men under surveil-
lance. Apparently, many Congress Party mem-
bers privately deplore the recent authoritarian
moves. They are intimidated, however, by the
arrest last week of party colleagues who openly
criticized the Prime Minister for refusing to
resign following her conviction last month of
campaign violations in 1971.
Military leaders also appear willing to go
along with recent events. They reportedly were
not forewarned of the emergency decree, and
most likely do not want to get involved in
enforcing emergency regulations. The police and
paramilitary forces should be able to contain
any civil unrest.
For the present, the army, as well as
private business leaders, seems willing to tolerate
suppression of civil liberties, in hopes that a
more disciplined and efficient society will
emerge. Conversely, many politicians, jour-
nalists, editors, and students are described as
despondent. They doubt Mrs. Gandhi's claim
that the stringent new controls are temporary,
and they fear that as long as she remains in
office, freedom of expression will never be fully
restored. But for most of the population, living
at a subsistence level or below, Mrs. Gandhi's
renewed pledge to alleviate poverty is the prime
concern.
If the internal situation remains calm, Mrs.
Gandhi may reconvene parliament by early
August in order to secure required approval for
the emergency decree. The two-month deadline
for approval could be stretched, however, if she
dissolves parliament. The Supreme Court con-
venes on July 14 to deliberate on her appeal,
and a final decision is expected by late summer.
To the surprise of no one, the USSR has
come out firmly on the side of Prime Minister
Gandhi. Pravda has published the full text of
Mrs. Gandhi's emergency decree, commenting
that the decree was needed to defend India
against "reactionaries."
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The Soviets probably expect that Mrs.
Gandhi can carry off her political gamble, and
they almost certainly regard her as more
friendly than any likely successor. The Soviets
hope present problems will force her to become
more dependent both on pro-Soviet figures
within the Congress Party and on Moscow-
oriented Indian communists.
Judging from Soviet propaganda and
private statements, Moscow is determined to
head off what it foresees as a major effort by
China to expand its influence in Asia in the post-
Indochina war period. Moscow regards India as
an important counterweight to China and thus
sees the situation in India as an opportunity to
score against Peking by strengthening Soviet
influence in New Delhi.
...AND PEKING CRITICIZES
Peking has sharply criticized Prime Minister
Gandhi's latest actions, leveling its harshest
personal attack against her in some time. The
Chinese paid special attention to Soviet support
for her moves, charging that she is attempting to
act as Moscow's "subregent" so that the USSR
can maintain its control of India and its influ-
ence in South Asia.
The Chinese handled with discretion the
Prime Minister's conviction on June 12, perhaps
fearing that a heavy propaganda hand would
help her cause. Peking may now believe that her
tactics and open Soviet support will speed her
departure from office, and that propaganda on
these developments is very much in China's
interest.
3-6
Panama: Uncertainty on Canal Issue
The Panamanian government is presenting
an appearance of calm in the face of a vote by
the US House of Representatives to deny funds
for the canal treaty talks, but officials of the
Torrijos administration are seriously concerned
about the future of the negotiations.
In a statement to the press on June 26,
General Torrijos said that he was confident the
US would uphold its commitment to negotiate,
despite the House vote. Although other
Panamanian officials publicly have been critical
of the House action, they privately have told US
officials that they remain committed to the
negotiations. The press, most of it government
controlled, has also taken a fairly restrained
position, warning the public not to be
"trapped" into resorting to violence by groups
that want to sabotage the negotiations.
The National Guard effectively halted a
demonstration at the US embassy by some 500
ultranationalist students on June 30. The
demonstrators condemned both the US and the
Torrijos government for "conspiring" to
negotiate a treaty that would fall far short of
transferring to Panama total control of the
canal.
Torrijos' handling of the negotiations is
coming under increasing fire, and he may soon
conclude that he must make some public
declaration about this issue. He is continuing to
seek foreign support as a hedge against a
breakdown in the talks. On July 4, he will
travel to Mexico for a meeting with President
Echeverria, and he also may soon confer again
with the presidents of Colombia and Venezuela. 25X1
The Panamanians are almost certain to seek
additional pledges of support at the OAS
meeting later this month in Costa Rica.
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PORTUGAL: COUNCIL REORGANIZES -,14'
The ruling Revolutionary Council ended its
second week of deliberations on the future of
Portugal by announcing that it was reorganizing
in order to improve efficiency in the decision-
making process. The change does not appear to
be directly related to the continuing power
struggle between moderate and radical factions.
That struggle, however, will undoubtedly domi-
nate the meeting of the armed forces general
assembly next week.
The reorganization will involve the creation
of an 11-man central committee with subordi-
nate political, military, and executive commit-
tees. The central committee will be charged with
handling day-to-day council business, but major
policy decisions will continue to be made by the
full body. Military leaders appear to have recog-
nized that "consensus rule" by an unwieldy
body of 29 persons is not effective, particularly
when the situation often requires swift and deci-
sive action by the executive body.
The central committee will be limited to a
few of the more senior officials, including Presi-
dent Costa Gomes, Prime Minister Goncalves,
internal security head Otelo de Carvalho, and
council executive officer Rosa Coutinho. The
chiefs of staff of the three armed services will
also participate, as will four members from the
political committee.
The Revolutionary Council also acted on
other business awaiting its approval, including:
? Passage of a decree-law creating a mili-
tary judicial police service under council
supervision.
? Establishment of operating procedures
for the military tribunal which will judge
those implicated in the abortive coup last
March.
? Approval of the expulsion of any
soldier who promotes discord within the
armed forces, attacks senior officers or the
program of the Armed Forces Movement, or
disrupts public order or military discipline.
The latter law will enable military leaders to
deal with certain units which openly support
extreme left-wing groups, but at the same time
could be used to provide a legal basis for purging
officers considered too conservative.
When the 240-member armed forces gen-
eral assembly meets on July 8, it will probably
consider how to implement the decision made at
its last meeting in late May to establish direct
links between the Movement and the people.
Recent reports indicate that the military, en-
couraged by the number of "popular organiza-
tions" that have sprung up around the country,
may try to organize the various bodies into a
system of popular committees. The assembly is
also expected to take up such problems as the
dispute between owners and workers over the
Socialist newspaper Republica and the Catholic
radio station.
Moderate forces will try to maintain their
momentum after what a presidential aide de-
scribed as a "first round" victory won in the
Revolutionary Council's policy statement re-
leased two weeks ago. Foreign Minister Antunes
has been credited in some accounts as having led
the moderates in the council discussions. He
may be attempting to build support for the
assembly session by contrasting his success in
eliciting economic aid commitments from the
West with Prime Minister Goncalves' inability to
improve the economic situation. Antunes re-
turned from London on June 29 and announced
Britain's full support for EC aid to Portugal. He
also presided over the signing of a loan agree-
ment with the US on June 30 for low-income
housing.
The moderates can expect to meet strong
opposition from more radical factions, such as
the leftist nationalists headed by Admiral Rosa
Coutinho and security forces head Otelo de
Carvalho, as well as Prime Minister Goncalves'
pro-Communist backers. Civilian supporters of
these radical groups have been quick to capital-
ize on the prison escape by 88 former agents of
the previous regime's secret police to criticize
the weakness of the military government and to
blame the lack of authority on the moderates.
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 Prime Minister Moro with Christian Democratic leader Fanfani
ITALY: POST-ELECTION MANEUVERS
Italy's governing parties are still sorting out
their options in the aftermath of the Communist
Party's unprecedented gains in the regional and
local elections last month. A serious internal
feud seems to be shaping up in the dominant
Christian Democratic Party, while the Com-
munists appear content to remain on the side-
lines and let the.other parties jockey for posi-
tion.
Christian Democratic leader Fanfani's
initial reaction to the election was to try to get
the Socialists immediately involved in negotia-
tions for a new center-left government. He
wanted to draw the Socialists into talks for a
new national coalition before they had time to
put together more regional and local govern-
ments with the Communists.
The Socialists-the only governing party
that advanced substantially in the elections-
made it clear late last week, however, that they
intended to keep all options open at the local
level. Party chief De Martino said he will not
talk about a new national government until the
Christian Democrats bring their politics more
into line with the shift to the left revealed by
the election results.
The Socialist refusal to accept Fanfani's
proposal intensified debate among Christian
Democrats over how to stop the erosion of their
party's position. In a holding action, Fanfani
proposed that the party wait until fall to
The
reassess its strategy at the national congress.
Christian Democratic left-wing factions, how-
ever, want to remove Fanfani and begin an
immediate across-the-board review of the party's
policies. Fanfani's position was weakened this
week at a meeting of the Christian Democratic
directorate, when the party's key centrist fac-
tions rebuffed his proposal for a delay. Instead
they scheduled a meeting of the Christian
Democrats' national council for July 19, at
which time serious debate on party policy will
begin and Fanfani's fate may be determined.
The Moro government will probably re-
main in place for the time being. Most political
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leaders fear that toppling Moro now would
amount to a "crisis in the dark." His govern-
ment-a Christian Democratic - Republican
cabinet that the Socialists and Social Democrats
support in Parliament--is still seen by nearly
everyone as the best arrangement until the
Socialists and the Christian Democrats iron out
internal differences and firm up bargaining posi-
tions at their party congresses this autumn.
Although united in their refusal to nego-
tiate with the Christian Democrats now, the
Socialists are divided over their longer range
strategy. Many Socialists-especially on the
party left-maintain that their association with
the Christian Democrats is hurting them at the
polls and that the party has more to gain by
staying in the opposition. Party leader De
Martino will have trouble leading the Socialists
back into the government unless he can extract
enough concessions from the Christian Demo-
crats to give any new coalition a more
pronounced leftist cast.
The Communists are continuing to move
cautiously in consolidating their gains. In par-
ticular, they are playing down the implications
their success may have on the national political
scene-a tactic that probably reflects their
traditional fear of provoking a counter-reaction
in moderate and right-wing circles.
CEMA MINISTERIAL
Discussions at the 29th session of the
Council for Mutual Economic Assistance, held
in Budapest from June 24 to June 26, focused
on the pace of integration, future economic
plans, and the repercussions of higher prices for
energy and raw materials.
projects. He also said that an accord with
Mexico is expected in the "near future" and
that the Colombians have inquired about pos-
The participants endorsed a CEMA "multi-
lateral integration plan" that provides for joint
work on ten projects during 1976-80 at a cost of
$13 billion. Few details were revealed, but many
of the ventures in the plan are already in
progress and no new projects were announced.
Kosygin's contention that multilateral plans do
not conflict with economic development by
individual nations indicates that there was con-
troversy among the participants on this subject.
The East Europeans, who have been hit
hard by Soviet and Western price hikes, were
openly seeking assurances on future Soviet
deliveries of raw materials. In response, Premier
Kosygin claimed Moscow is providing Eastern
Europe with additional raw materials and
implied that increasing Soviet investments in
this field would benefit the region.
A bland communique largely masked any
Soviet-Romanian friction over the nature and
pace of CEMA integration. The presence of dif-
ferences, however, was suggested by the state-
ment in the communique that the session
"worked out"-rather than agreed upon-meas-
ures to "improve" the legal underpinnings of
CEMA authority.
The communique was silent on CEMA's
next move to establish a dialogue with the EC,
but CEMA secretary Fadeyev later implied that
the talks will continue. He stressed the familiar
theme of the organization's openness and fore-
cast that an announcement would be made later
this summer of Iraqi participation in some joint
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EC: MOVING AHEAD
2et -3 2
new EC actions to cost-free areas, a fact which
may be reflected at the heads-of-government
meeting later this month.
The West German budgetary constraints
strengthen Bonn in its arguments against EC
inefficiency and serve to remind Germany's
partners of Bonn's key financial role. Bonn's
present and projected budget deficits are
running up against a constitutionally imposed
ceiling. Chancellor Schmidt, with both the reces-
sion and 1976 elections in mind, believes that
new taxes could write his government's death
warrant. Consequently, he has chosen to face his
deficit problem with rigid fiscal austerity aimed
at all expensive initiatives in the EC as well as at
some hitherto favored domestic programs. Bonn
stood alone last week to block new funds for
joint EC scientific research and led the
The EC councils last week reached a
number of long-pending decisions, evidence
perhaps that political developments in some
member countries are allowing greater govern-
ment flexibility. The bar on EC activity imposed
last winter by fear of adverse impact in the UK
referendum and the Italian regional elections is
now no more. French President Giscard, mean-
while, perhaps feeling under less immediate
Gaullist pressure, is moving toward greater
cooperation in the community. He is seeking to
enlarge the scope of EC activity toward south-
ern Europe, the Mediterranean, and the lesser
developed world.
On the other hand, Bonn's unique con-
stitutional restrictions on deficit spending are
making West Germany veto almost any activity
calling for new expenditures. This tends to limit
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opposition to a proposal for new food aid for
poor countries, despite Britain's accusation of
"insensitivity to the cry of the children."
Bonn evidently considers that aid to
Portugal is an exception. West Germany agreed
with its EC partners last week on a program to
consider providing substantial financial assist-
ance to Portugal quickly in order to boost
democratic forces there. The EC ambassadors
and the commission are to prepare specific
proposals by July 15 on the amount and terms.
New expenditure is less of an issue in other
areas, and the EC foreign ministers were able to
move ahead on Mediterranean policy. Italy
removed its opposition to the admission of cer-
tain agricultural products to the EC, although
the concessions Rome received were somewhat
less than it had wanted. As a result of Italy's
action, the farm provisions of the free-trade
agreement with Israel enters into force with the
rest of the accord on July 1, preferential trade
and cooperation accords with the Maghreb can
be concluded, and negotiating directives for
agreements with Egypt, Jordan, Syria, and
Lebanon can be prepared.
The council agreed in principle on a non-
preferential agreement with Canada, to include
provisions for industrial and environmental
cooperation. The commission hopes the accord
will establish a precedent for EC cooperation
arrangements with China, Iran, and the East
European states. A prime EC motive for the
Canadian pact is the hope for better access to
raw materials.
British Foreign Secretary Callaghan scored
something of an institutional breakthrough
when he won a decision favoring black Africa in
the contentious agricultural area. France, the
only holdout, agreed to accept a majority vote
on the issue. This was the first time in EC
history that a majority vote prevailed on a for-
eign policy issue.
The EC also agreed to:
? consider Greece's application for
membership:
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? favor a CSCE summit at the end of
July, if progress this week warrants it;
? resolve differences-again by majority
vote-on a cooperation agreement with Sri
Lanka;
? implement the EC agreement with
African, Caribbean, and Pacific countries on
July 1 on an interim basis, pending ratifica-
tions from the EC-Nine and the 46 develop-
ing states;
? sketch an agenda for the heads of gov-
ernment meeting in Brussels on July 16-17.
The agenda reflects the continuing Euro-
pean preoccupation with economic conditions.
The topics include raw materials, energy, the
economic situation of the community, and
monetary and financial questions.
The EC has been unable to agree on an
energy policy. Energy ministers last week were
deadlocked on such questions as the develop-
ment of alternative sources of energy and
proposals for community research and explora-
tion in hydrocarbons. In addition, the division
continued between France and its partners
regarding the International Energy Agency-and
the policies the US is recommending in that
context. The French charged that the EC treaty
may be violated by the Eight's participation in
agency programs such as emergency oil-sharing.
Despite British promises of being more
amenable to energy discussions, there is little
reason to anticipate that an important break-
through on energy is in the offing.
In the political field, the leaders at Brussels
are preparing for informal discussions of the
future of the community in the wake of the UK
referendum. Both the commission and the Euro-
pean Parliament have made public suggestions
for the shape and direction of European integra-
tion. the only early innovation endorsed in
both reports was for direct elections to the
European Parliament, which is now filled by
national government appointees. European
observers almost unanimously agree that this is
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not the time for any major new move toward
European union, but there is nevertheless afeel-
ing that the Nine will have to take some visible
steps toward that goal.
The relatively smooth operation of EC
meetings during the past six months is largely a
result of the skill and energy of Irish Foreign
Minister FitzGerald, described as the most bril-
liant council president in recent years. Political
developments in Italy are expected to pre-
occupy the Italians during their six-month term
in the EC presidency and may preclude com-
parable performance. President Leone neverthe-
less will bring considerable interest and long
political experience to his presidency of the
heads-of-government meeting in Brussels. He is
in the middle of a seven-year term of office and
is to some extent above the Italian olitical
wars.
33-349
THE BALKANS: CHINESE WOOING
Peking's efforts to limit Soviet influence in
the Balkans have recently taken on an in-
creasingly military cast.
Chinese military delegations made separate
trips in June to Romania and Yugoslavia. The
third-ranking of the nine Chinese army deputy
chiefs of staff spent ten days in Yugoslavia tour-
ing military installations and holding talks with
senior Yugoslav military officials, including
Defense Minister Ljubicic. A second group fol-
lowed a similar itinerary during a visit to
Romania, including a meeting with Defense
Minister lonita.
Within the past year, China delivered IL-28
jet light bomber aircraft to Romania and
MIG-19 fighters to Albania. The delivery of
MIGs was China's first to Tirana in almost five
years, and the bomber shipment was the second
major arms deal between Bucharest and Peking.
More deals may well be in the works, partic-
ularly in view of the recent Chinese visits.
The visits have spawned rumors that the
Chinese are trying to drive another wedge
between the Balkan mavericks and Moscow.
Civilian exchanges between China and the
Balkans also remain active, particularly with
Romania.
Romanian-Chinese communications agreement
was signed, a Romanian industrial exhibit was
opened in Peking, and its representative was
received by Chou En-lai. Sino-Romanian trade is
slated to increase to $320 million this year-28
percent over the level of the 1974 trade agree-
ment.
Belgrade has responded guardedly to
Peking's overtures. The Chinese party's refusal
to open party ties with the Yugoslav Com-
munists has led many Yugoslavs to believe that
Peking is merely using Belgrade. The Yugoslavs'
wariness may have been the reason for Premier
Bijedic's postpo nt of his trip to China until
later this year.
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CSCE: TRYING FOR A SUMMIT
4z-44
The Western and neutral nations continued
this week to resist Soviet demands that a date in
July be set for a summit-level finale of the
European security conference. These nations
insist that agreement be reached first on mili-
tary-related confidence-building measures and
follow-up procedures for the conference. If
these issues cannot be resolved this week, the
summit may have to be postponed until late
summer or the fall.
The Soviets now concede that a summit on
July 22-recently proposed by General Secre-
tary Brezhnev-is no longer feasible, and accord-
ingly they have launched a drive to commit the
West to hold such a meeting before the end of
July. At a news conference in Rome last week-
end, Soviet Foreign Minister Gromyko suggested
that foot-dragging by the NATO states was
strengthening the position of several smaller
states-particularly Malta, Yugoslavia, and
Romania-that are seeking special concessions.
He warned that any postponement of a summit
beyond July would place "a grave responsibility
on the West."
Finland, prospective host for the summit,
had said that it needs four weeks' advance
notice to complete preparations for a July
summit in Helsinki. The Finns have, in any case,
begun preparations for a four-day summit to
begin on July 28.
Sharp divisions began to appear this week
within the NATO caucus over several outstand-
ing problems, and one new issue was raised by
West Germany. Turkey, West Germany, and, to
a lesser extent, the Netherlands have adopted
much harder negotiating positions. The other
NATO states, led by France and the UK, want a
prompt decision on a date.
A major obstacle to final agreement is the
Turkish demand for a separate clause that would
exempt certain areas of Turkey from inclusion
in the provisions for confidence-building
measures. The clause would state that Ankara
need provide advance notice for military ma-
neuvers only on its northern and western bound-
aries. The Turks are isolated on this issue, but
they refuse to budge, and now the Greeks have
demanded a parallel exemption.
Ankara's demand that the Turkish Cypriot
community be represented in the Cypriot del-
egation to the summit and the Turks' objections
to the presence of President Makarios in Hel-
sinki may pose additional stumbling blocks to a
summit this month. Makarios definitely plans to
attend and strongly opposes the presence of a
Turkish Cypriot representative.
The West Germans indicated for the first
time on Tuesday that they would not agree to a
date until the final text on confidence-building
measures and on overall principles governing
relations among states is agreed upon. Bonn's
motivation for a tougher stand on these issues
stems in part from increasing domestic political
pressure for better terms in the final agreement.
Substantive negotiations in Geneva, mean-
while, have proceeded at a faster pace and have
even required weekend sessions. Tentative agree-
ment was reached on some aspects of confi-
dence-building measures. The West is hoping
that the Soviets' desire for an early summit will
prompt them to make a final concession on the
areas covered by this agreement.
Progress was made early this week on nego-
tiations concerning follow-up meetings to the
conference. Most delegations appear willing to
support a solution along the lines of a recent
Swedish proposal that senior officials meet-
beginning in 1977-to assess how the confer-
ence's decisions have been implemented and to
ensure "continuity of the multilateral process."
This provision would keep alive the possibility
of another conference. The French, however,
continue to strongly oppose any wording imply-
ing continuity of the conference proceedings.
On Monday, final accord was reached on
guidelines for freer movement of ideas and
people between East and West. Moscow also
appears willing to go along with a Western re- 25X1
quest for a disclaimer to the effect that the
results of the conference are politically-
legally, bindin .
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LEBANON: A GOVERNMENT AT LAST 4 2, - S3
The heavy fighting that rocked Beirut for
nine days diminished sharply following the
installation this week of a new cabinet and the
announcement by Prime Minister Rashid Karami
and PLO Chairman Yasir Arafat that they would
use force, if necessary, to implement a cease-
fire. The resolution of Lebanon's worst political
and security crisis since 1958 has left the Prime
Minister-and Sunni Muslims in general-in a
strong political position, highlighted the reduced
effectiveness of President Franjiyah and the
right-wing Phalanges Party, and reflected the
increased ability of radical groups to undermine
public order.
The six-man "nonpolitical" cabinet
installed on July 1 includes neither Phalangists
nor Socialists. Its makeup represents a victory
for Karami and a defeat for Franjiyah, as he and
other right-wing Christian leaders had held out
for more than a month for participation by the
Phalangists.
Phalangist leader Pierre Jumayyil has not
commented publicly on the new government.
The new
mee s umayyi s eman s that it be made up
primarily of conservative representatives of the
country's several religious groups and that
former president Shamun, the leader of the
National Liberal Party, be given the powerful
Interior Ministry, which has responsibility for
internal security and Lebanese-Palestinian rela-
tions.
Major Lebanese and Palestinian leaders
endorsed a cease-fire immediately after the new
government was installed; Karami and Arafat
Masked gunman seeks cover during recent civil strife in Beirut
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,5-4-55
announced shortly thereafter their determina-
tion to enforce it. The agreement between
Karami and Arafat, negotiated in a meeting with
Syrian Foreign Minister Khaddam, senior
Lebanese army officers, and fedayeen leaders,
provides that the security forces will move into
all areas of the city, arrest snipers and kidnapers,
exercise restraint "even when fired upon," and
clear the streets of barricades and arms. The
cease-fire took hold almost immediately,
although sporadic firing by fedayeen and
Lebanese radicals continued in some areas.
These radical elements-which in addition
to the small fedayeen groups included Lebanese
Communists, members of the Syrian Social Na-
tionalist Party, and several Nasirist groups-
played a more important role in the most recent
fighting than during the hostilities of May and
June. They were not supported by the major
fedayeen groups, which stayed on the sidelines,
but were emboldened by vastly increased
Libyan-and to a lesser extent Iraqi-support.
The security services this week made an
unusually strong effort to flush out snipers
belonging to the radical groups. This attempt
was only partly successful, however, because
government forces tended to stick to the relative
security of their armored vehicles and tried to
dislodge the snipers with heavy weapons. This
resulted in considerable property damage, many
civilian casualties, and some disaffection within
the security service.
The limited success of the security services'
initiative, the government's extreme reluctance
to call in the army, and the alarming spread of
violence to towns outside Beirut all served to
prompt Karami and Franjiyah to paper over
their differences. The compromise government
they created, however, will be short-lived. If it is
not expanded to include representatives of all
political factions within two or three months, as
has been promised by Karami, violence is almost
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Moroccan-inspired violence in Spanish
Sahara and in Spain's enclaves of Ceuta and
Melilla, along with growing friction between
Rabat and Algiers, have increased tensions
among the parties disputing the future of
Spanish Sahara. The rising scale of violence and
the frustrations Madrid has encountered in
trying to arrange quadripartite talks with
Morocco, Mauritania, and Algeria have probably
increased Spain's desire to withdraw from the
Sahara.
During the past month, Morocco has in-
creased its military probes into Spanish Sahara,
provoking several clashes with Spanish forces.
Five Spanish soldiers were killed on June 24
when their vehicle hit an antitank mine in the
vicinity of an earlier Moroccan incursion. The
next day, Moroccan troops who had crossed
into the Spanish dependency fired on two
Spanish planes flying a reconnaissance mission
near the border. The Moroccans withdrew after
a Spanish army unit engaged them with mortar
fire.
Last weekend, two bombs exploded in
Ceuta and one in Melilla, killing at least three
Moroccans and one Spaniard. According to press
accounts, Spanish officials temporarily closed
the border between Ceuta and Morocco and
detained some 100 Moroccans for interrogation.
The Moroccans apparently hope that in-
creasing military pressure will induce Spain to
negotiate a cession of Spanish Sahara to
Morocco. If the level of violence continues to
rise, however, Spain may respond more vigor-
ously and show less concern for Rabat's
interests in the Sahara. Madrid is especially
sensitive about Ceuta and Melilla, which-unlike
the Sahara-it is unwilling to give up.
Algerian opposition to Morocco's claim to
the territory has been the chief stumbling block
to negotiations. Morocco, for its part, is more
opposed than ever to Algeria's inclusion in any
negotiations on Spanish Sahara.
The Algerians would like to see a refer-
endum on self-determination, as they believe the
Saharans, if given a choice, would opt for
independence. Toward that end, Algiers is back-
ing a pro-independence Saharan party, the
Polisario Front, which has emerged as the
dominant indigenous political force in Spanish
Sahara. In addition, Algiers has brought home
air and ground units stationed in Egypt since
October 1973 and may have moved some local
army units closer to the Moroccan border. These
limited movements seem to be an attempt to
exert psychological pressure on Morocco, whose
forces would be no match for Algeria's.
Spain, in another effort to arrange multi-
lateral talks, has invited Morocco, Mauritania,
and Algeria to meet in Madrid on July 9. If this
effort fails, the Spanish government says, it will
seek UN Secretary General Waldheim's help in
arranging a conference under UN auspices.
At the same time, Spain is attempting to
build a political structure in the Sahara to
facilitate a unilateral withdrawal if negotiations
break down. The governor general of the ter-
ritory announced last week that he had invited
various political groups to participate in setting
up a commission to receive the "transmittal of
powers." Despite guarantees of Madrid's
neutrality toward all Saharan groups, the
Polisario Front did not respond to the invita-
tion, presumably because it considers itself the
sole representative of the Saharan people.
Cape Verde Islands
BECOMING INDEPENDENT
63
The Cape Verde Islands archipelago, a
Portuguese colony since the 15th century, be-
comes independent on July 5. The island group
is expected to form an early political union with
the Republic of Guinea-Bissau.
The Cape Verde National Assembly,
elected on June 30, is drafting a constitution
and working out details for the union with
Portugal's former dependency on the West
African mainland. Guinea-Bissau received its
independence last September, following more
than a decade of insurgency led by the African
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Party for the Independence of Portuguese
Guinea and Cape Verde. The party is the dom-
inant political force in both areas. Most of its
leaders are Cape Verdeans, although its military
force consists mainly of natives of Guinea-
Bissau--the only area in which the party
mounted a guerrilla effort.
The islands, which were uninhabited when
discovered by Portuguese explorers, were ini-
tially valued by Lisbon as a secure base from
which to administer its colonizing activities on
the African continent. The archipelago soon be-
came a major staging area for the Portuguese
slave trade; some slaves from the mainland be-
came permanent residents, and their descend-
ants account for the bulk of the present popula-
tion of 280,000. In later years the Portuguese
relied heavily on Cape Verdeans, because of
their longer contact with Portuguese language
and culture, to help administer Guinea-Bissau,
Angola, and Mozambique. Cape Verde and
Guinea-Bissau were under joint territorial gov-
ernment until 1879.
The islands, situated about 300 miles west
of Senegal, were the poorest of Portugal's over-
seas territories. The islands are of volcanic
origin; water is scarce, and farming is extremely
difficult. The 7 percent of the island that is
arable supports over 80 percent of the popula-
tion on a subsistence level. The islands do have
two valuable economic assets resulting from the
importance they had to Portugal as a way-
station to Africa-an international airport and a
modern harbor. The harbor is a major haven for
Portuguese and foreign fishing fleets. The two
facilities should bring in substantial income.
Although the island group will probably
have a degree of local autonomy in any union
arrangement with Guinea-Bissau, it will basically
be little more than an appendage of the more
populous mainland state. Heretofore, the islands
have been heavily dependent on Portuguese aid;
during the past 18 months, Lisbon provided
some $60 million in financial assistance. Lisbon
has indicated that it will be unable to provide
financial assistance after independence, although
it will probably continue to underwrite some
technical and cultural assistance in the form of
teachers, doctors, and agricultural experts.
To a large extent, the islands will now be
dependent for economic assistance on Guinea-
Bissau, whose own resources are extremely
limited. The African Party is actively seeking
financial assistance for both areas from a wide
variety of international sources, including the
US.
Both the Soviet Union and Cuba were
major supporters of the party during the insur-
gency, but there are no indications that this
support has bought them special favors from the
Bissau government. Moscow is continuing to
supply Bissau's military needs, and Soviet del-
egations have visited Bissau to discuss future
military and technical aid. The prospective
union government will probably allow the
Soviets landing and bunkering rights at the
islands' port and airfield, but party leaders have
declared publicly that they will not allow a
foreign military presence in Guinea-Bissau or the
islands and that they will follow a nonaligned
foreign policy.
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After a brief lull, the communists have
renewed their campaign of harassment and
intimidation against the US mission in
Vientiane.
A mixed group of Pathet Lao troops and
police as well as student and other civilian
demonstrators still occupies the three US in-
stallations they seized before dawn on June 28.
The installations include the USIS headquarters
in downtown Vientiane and the US embassy's
general services compound and nearby US
residential housing area on the capital's out-
skirts. A fourth installation-the USIS ware-
house-was seized on Monday. All Americans
have been evacuated from the various facilities.
According to US officials, the demon-
strators have plastered highly inflammatory wall
posters around all of the installations. Some of
the posters call for the immediate departure of
all "American imperialists" from Laos and
threaten harsh consequences otherwise. No
violence or serious property damage has oc-
curred thus far, although US officials have noted
that for the first time since the Pathet Lao -
inspired demonstrations against Americans
began nearly two months ago, civilian protesters
are brandishing weapons.
There are strong indications that a major
demonstration against the US embassy, orig-
inally scheduled for June 30, is now on tap for
the holiday weekend. Meanwhile, the president
of the leftist Lao Student Federation, the acti-
vist group that has spearheaded most of the
recent anti-American shenanigans, took a very
hard line toward the US at a press conference
earlier this week. He threatened that, if the US
refused to continue assistance to Laos in the
form of war reparations and foreign exchange
support, the coalition government "would agree
with the federation's desire to break diplomatic
relations."
Protests by the US mission to senior
communist coalition authorities over the latest
anti-American harassment have fallen on deaf
ears. Pathet Lao Deputy Prime Minister Phoumi
Vongvichit--who along with titular Lao com-
munist leader Souphanouvong returned to
Vientiane last weekend following a three-week
Central Committee strategy session in Sam
Neua-has been "too tired" to discuss the
matter with the US charge. Phoumi's alleged
fatigue could be politically motivated and de-
signed to further exacerbate the already severely
strained Lao-American relationship. It could
also be the result of a mild heart attack that
Prime Minister Souvanna Phouma claims his
deputy suffered while in Sam Neua.
Steps continue to be taken to trim the
mission staff. Some 19 nonessential embassy
employees were temporarily dispatched to Thai-
land early this week, leaving only 22 official US
personnel in Vientiane. Some 57 private Amer-
ican citizens also remain in the Lao capital.
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u'''I 41) r i~r~~r?l~j ~'~Il ~~"jli ~I ~/r !
It ~G,6.r, rl I~'i.,,, U 1~ Ifj.o,
AUSTRALIA: GOVERNMENT CRISIS
Prime Minister Whitlam's firing of Deputy
Prime Minister Cairns has put the Labor govern-
ment under the most serious strain since it took
office two and one-half years ago. An early
national election-a distinct possibility-would
almost certainly result in a sweeping victory for
the Liberal-Country opposition.
Labor's stunning loss of a traditional Labor
district in a Tasmanian by-election last weekend
is adding to disarray in the party. Many Labor-
ites blame Whitlam for the defeat. Tensions may
reach the breaking point if Whitlam now tries to
push the party caucus to replace Cairns as
deputy party leader when it meets on July 1.4.
Prior to Cairns' dismissal, the opposition
Liberal-Country coalition did not appear to have
any intention of using its parliamentary advan-
tage to push for national elections. Liberal
leader Fraser has said that he was content to let
Labor ride out the remaining two years of its
term unless "unforeseen and reprehensible"
events occurred. He is now under intense pres-
sure by his colleagues to go for early elections
and may decide that he cannot afford to pass up
the opportunity to force the government to the
polls.
Public disaffection with Labor was made
abundantly clear by the defeat in Tasmania. The
margin of that defeat suggests that recent public
opinion polls, if anything, understate the trend
against Labor.
Labor's poor electoral showing plus the
party imbroglio has bolstered the Liberal-Coun-
try coalition's confidence that it could handily
win a national election. The timing depends on
the opposition's decision that it is ready to
accept responsibility for Australia's deep eco-
nomic problems, for which there are
solutions.
GJ-7 6
KOREA-CHINA: TALKING PEACE
The North Koreans and the Chinese, both
publicly and privately, continue to emphasize
that Pyongyang's intentions are peaceful.
In speeches and commentary marking the
25th anniversary of the Korean war last week,
the North Koreans pressed this theme, stating
flatly that talk about Northern invasion plans
was "ridiculous" and that Pyongyang has no
intention of using force of arms to reunify the
country. The North Koreans have been making
much the same pitch in conversations with for-
eign diplomats. Foreign Minister Ho Tam re-
cently acknowledged to Australia's Foreign Min-
ister Willesee in Pyongyang that reunification
was not an early prospect and that a new Ko-
rean war was not likely.
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Willesee was given the same message in
Peking. Chinese Foreign Minister Chiao Kuan-
hua played down Kim II-song's visit to Peking in
April, claiming that it had been planned months
in advance and only "fortuitously" coincided
with the collapse of Indochina. Chiao expressed
confidence that North Korea would not attack
the South.
Chinese officials in Europe, at the UN, and
in other capitals have emphasized that, although
reunification of Korea is a matter for the Ko-
rean people to decide, Peking urged a moderate
course during Kim's visit. Moreover, Chinese
propaganda has continued to stress "peaceful"
reunification-a line Peking has highlighted since
the Kim visit.
North Korean propaganda continues to
play some militant themes, but with less promi-
nence since Kim's foreign trip last month. The
statement first introduced by Kim II-song in
Peking-that the North would not stand idly by
in the event of an uprising in South Korea-still
appears, as do warnings that the North will meet
any aggression from the US and Seoul with
vigorous revolutionary war. But Pyongyang
almost certainly recognizes that Kim's threaten-
ing tone at the outset of his visit to Peking was
counterproductive, as it encouraged a closing of
ranks in South Korea-quieting President Pak's
political opposition-and prompted strong ex-
pressions of support for Seoul by high US
officials.
The current stress on peaceful intentions is
probably also aimed at increasing diplomatic
support for North Korea at the conference of
nonaligned countries in Lima and at the UN this
fall.
Kim meets Mao during recent visit
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Since seizing Saigon in April, the commu-
nists have been busy courting international
recognition. The UK, the latest country to an-
nounce diplomatic ties with the Provisional Rev-
olutionary Government, was the 30th to do so.
A number of others have expressed an intention
to recognize the new administration; still others,
such as West Germany, maintain that no inter-
ruption in formal relations occurred.
Not even the communists' staunchest allies
during the war have yet been allowed to estab-
lish any sort of diplomatic representation in
Saigon. Rumors are now circulating in Saigon
and Hanoi, however, that the communists may
soon allow some diplomats to take up residence
in the South, possibly as early as August. A
French correspondent quoted an unidentified
high-ranking source in Saigon on June 22 as
saying, "A certain number of foreign countries
will be able to have diplomatic relations in the
South." The source added that "later on"-
presumably after reunification--these missions
"will become consulates."
rumors that several countries have a discus-
sions with communist officials on the practical
problems of setting up diplomatic missions in
Saigon. The communists have indicated that the
missions should be small and be headed by a
charge d'affaires.
The timing of a decision to permit foreign
diplomats in Saigon may be linked to the com-
munists' evaluation of the progress being made
toward maintaining order and providing food,
jobs, and homes for the large number of un-
employed including former soldiers and civil ser-
vants and persons displaced during the war.
Allowing foreign diplomats could also be a
harbinger of a transition to a civilian administra-
tion from the military committees (headed by
Northern generals) that now run Saigon and
other large urban areas.
It the communists have adopted a more
liberal attitude toward establishing relations
with other countries, this has not yet been dis-
played in negotiations with Japan.
both North Vietnamese and Viet Cong-have
toughened their conditions for economic assist-
ance and diplomatic representation. Hanoi re-
portedly is now insisting that Japan complete
aid negotiations before embassies in the two
countries are opened. The Viet Cong for their
part have indicated that countries that sup-
ported the Thieu government must provide eco-
nomic assistance as a condition for diplomatic
representation in Saigon.
Hanoi's need for economic assistance and the
unlikely prospect that China and the Soviet
Union will maintain previously high levels of aid
are the principal factors behind Hanoi's tough-
ened position. Whether or not this interpreta-
tion is accurate, Hanoi's leadership has probably
concluded that the Japanese want a toehold in
Vietnam badly enough to stand being squeezed
a little harder. Before the war ended, the North
Vietnamese had bargained the amount of Japa-
nese aid upward from $17 to $41 million.
We continue to pick up signs that both
North and South Vietnam plan to seek admit-
tance to the UN this fall. The communists prob-
ably see certain practical advantages in separate
representation. For one, the South Vietnamese
might be able to succeed to positions held by
the Thieu government in various UN specialized
agencies and other international organizations.
Allowing a limited diplomatic presence in
Saigon and seeking separate representation at
the UN would point up the gradual course the
communists apparently intend to follow in re-
unifying the two Vietnams. The unidentified
source of the French correspondent stated that
the process would be completed by the end of
1976 at the latest. The source also said that
Hanoi would be the unified country's political
capital and Saigon its "economic capital," a
distinction that has also been made in the com-
munist media.
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Conflicting principles once again threaten
to leave the OAS awash in rhetoric and unable
to come to grips with practical issues. Two items
currently before the body illustrate the divisions
that plague inter-American affairs: one pits the
rest of the hemisphere against the US; the other
evokes an ideological conflict among the Latins
themselves.
The question under discussion at OAS
headquarters in Washington, "illicit corporate
payments," opened as an accusatory exercise
reminiscent of the OAS blast against the Trade
Reform Act some months ago. Six govern-
ments-Peru, Ecuador, Venezuela, Honduras,
Bolivia, and Costa Rica-all stung by revelations
of bribery in business dealings, sponsored a
resolution in effect condemning transnational
companies as corrupting influences and insisting
on the need for a code of conduct for such
firms.
Despite the fact that the payoffs were
revealed through US investigations, the transna-
tional companies remain for the Latins a major
symbol of US exploitation and intervention.
The distinction between US official and US
private activity remains blurred. Latin govern-
ments are prone to exaggerate the political and
economic power of large companies and to feel
unable to protect their national interests in
dealing with them. These governments want
what amounts to corrective intervention by the
US-a US monitoring system that would "con-
trol" US investors abroad. The devising of a
code of conduct has been under study for some
time in the UN and other international bodies,
but an inter-American effort to this end
languished as Latin-US affairs turned again to-
ward an adversary relationship.
Revival of the issue via their polemical
resolution was another sign of the Latins' con-
viction that the US and other developed nations
can be influenced by a constant barrage of
criticism from the Third World. Some govern-
ments, however, are beginning to respond to
arguments that the flow of unenforceable
declarations from the less developed countries is
preventing serious efforts to bridge international
74-76
divisions. Peru has been less willing than the
other sponsors of the resolution to move to a
more reasonable position, so that rhetoric will
probably outweigh practicality in the final
declaration. Nevertheless, the interest by the
majority in accommodating the US point of
view to some extent seems indicative that
dialogue is still alive in the OAS.
San Jose, Costa Rica, will host another
OAS meeting which will begin on July 16 and
run for perhaps two weeks. The issue here will
be specifically to amend the inter-American
security alliance, the Rio Treaty, but the gut
question is that of the Cuba sanctions. One of
the amendments likely to pass will make it
possible for a majority, instead of two thirds, to
rescind sanctions. Some governments would like
to follow through by converting the assembly
into an "Organ of Consultation"-foreign minis-
ters or their designates acting under the treaty-
that would terminate sanctions against Havana.
Chile and other anti-Castro governments, how-
ever, will probably block such a move. Santiago,
for example, will not send its foreign minister,
and it plans to empower its delegation to deal
only with the formal Rio Treaty agenda. The
vaunted OAS principle of ideological pluralism
remains an abstraction that many governments
refuse to accept in the case of Castro's Cuba.
The Latins on both sides of the Cuba prob-
lem have faulted US "neutrality" on the issue.
Those preferring to normalize relations with
Havana are angry at the US for failing to go
along with the majority at Quito last autumn, a
stand which they believe denied them the
chance to dispose of this contentious issue.
Neither side is likely to be wholly satisfied
at the outcome of the San Jose conference. The
Latins favoring normalization will probably call
for yet another meeting and vote on a resolution
that will, at a minimum, leave governments with
"freedom of action" on the Cuba matter-a
freedom many OAS members have already
exercised independently by establishing rela-
tions with Cuba.
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I)r
Textile workers demonstrate outside the
headquarters of the General Labor Confederation
Argentina
Labor's announced pledge to respect the
authority of President Peron constitutes a
momentary but significant victory for the gov-
ernment in its continuing conflict with workers.
For the moment at least, the leaders of the
Peronist labor confederation are unwilling to
risk calling the workers into the streets again for
the final showdown, as they had threatened.
The President's unexpectedly strong stand
has caught the labor leaders off guard. They had
apparently assumed that the government would
yield easily, but the administration's persuasive
economic rationale for overturning massive pay
hikes negotiated last week has considerably
lessened their ability to act. The longer the
union chiefs hesitate, the more untenable their
position is likely to become.
At the direction of chief presidential
adviser Lopez Rega, the government sought first
to undermine the authority of the labor leaders
and now seeks to divide the whole labor move-
ment. The administration came out against the
wage hikes only after many, but not all, of the
important unions had negotiated new wage con-
tracts. The government thus set union against
union and demonstrated once again to the
workers their leaders' inability to deliver.
Against this setting, the Peron administra-
tion has come forth with a proposal to increase
wages by 80 percent, in installments. This will
probably appeal to those workers whose new
contracts were still being negotiated, but will
not assuage those who had obtained increases of
100 percent or more. The President has also
announced a doubling of certain benefits that
apply primarily to workers at the lowest end of
the wage scale.
Both the President and Economy Minister
Rodrigo, a protege of Lopez Rega, have made
tough, well-thought-out speeches cataloguing
the nation's many economic ills, pointing out
that austerity is in order and that the present
administration-the constitutional heir to the
magical Peron legacy-is uniquely qualified to
deliver it. The stress on legitimacy is designed to
discourage military intervention; indeed, most
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officers are known to favor the maintenance of
constitutional rule if at all possible.
In a related move, Lopez Rega has taken
another step toward building greater control
over the nation's security apparatus. Last week,
the government created a new post within the
Interior Ministry-that of under secretary for
domestic security-and filled it with a former
federal police official. The new official will
coordinate all government antisubversive efforts.
The appointment came before the current crisis
and could have been designed to give the govern-
ment an alternative means of dealing with
potential labor violence, given the military's
unwillingness to intervene against workers and
on the side of Lopez Rega.
If the government wins its contest with
labor, the main victor will be Lopez Rega; his
mastery of the political situation will then be
virtually complete. A fragmented, unrestrained
labor movement, however, could prove more
dangerous in the long run than the somewhat
recalcitrant but still relatively disciplined force
that now exists.
Peasant unrest is giving the government of
President Melgar, in office only since April, its
first hard test.
Army troops last week broke up a hunger
march in the interior of the country by peasants
of the National Union of Campesinos, killing at
least five persons in the clash. Many more deaths
may have gone unreported. The march was
intended to force the government to comply
with peasant demands for a more rapid distribu-
tion of land and the release of imprisoned
campesinos.
Police raided the peasants' union head-
quarters in Tegucigalpa and arrested its leaders.
Three US Peace Corps volunteers and several
Catholic priests of US nationality were detained
by police. The Peace Corps volunteers were later
released.
By week's end, army troops had stopped
the marchers and sent them back home, but the
peasants have vowed to resume their protests,
which may include further attempts to take over
privately owned lands.
Melgar apparently received authority to
crack down from the 26-man Superior Defense
Council, the policy-making body dominated by
lieutenant colonels who ousted president Lopez
in April. Their action was an attempt to show
that the new government is not weak or vacil-
lating, as its critics have said.
Despite the quick and harsh response,
peasant unrest still poses a problem for Melgar.
Committed like his predecessor to the cause of
agrarian reform, he has to steer between the
demands of the peasants and the landowners.
Melgar is regarded as a conservative with ties to
landowner and business circles, which have
opposed land reform.
Although the council appears to have given
the President the authority to get tough this
time, it is not at all clear that he will be allowed
to dismiss the peasants' demands out of hand.
Pressures from organized peasantry for a speed-
up in agrarian reform are likely to continue, and
the lieutenant colonels, probably fearing that
more repression would bring the military into25X1
disrepute, are likely to tell Melgar that some
movement toward more rapid land reform is
necessary for the good of the country.
President Lopez has extended to the
entire country the state of siege he imposed
in three widely separated areas in mid-June.
Continuing student demonstrations, protests
against economic hardships, and the recent
outbreak of guerrilla activity have obliged
Lopez to move to maintain order. By im-
posing martial law and all but abandoning
his policy of broadening civil liberties,
Lopez is almost certain to face the most
serious political challenge of his ten-month
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Secret
Secret
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