WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004900140001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 30
• Document Creation Date: December 21, 2016
• Document Release Date: February 26, 2008
• Sequence Number: 1
• Publication Date: August 6, 1965
• Content Type: SUMMARY

6 August 1965
OCI No. 0301/65
Copy No.
d ()
WEEKLY SUMMARY I
CENTRAL INTELLIGENCE AGENCY
State Dept. review completed IMMEDIATELY AFTER U3E
OFFICE OF CURRENT INTELLIGENCE
RETURN TO RECORDS CENTh-L,
JOB ..~- X
SECRET
3~groding and declassification
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SECRET
(Information as of noon EDT, 6 August 1965)
VIETNAM
Announcement of the planned US troop build-up in Vietnam
drew defiant propaganda responses from Hanoi and Peiping,
but Soviet media have treated it routinely as an admis-
sion of the failure of US policy. DRV propaganda also is
stressing the need for more bloc aid, and the air strikes
have begun to depress popular morale at least in the
southern DRV. Viet Cong main force units continue to
avoid contact with Vietnamese Government and US troops,
but have maintained small-scale actions chiefly against
communications lines and targets around Saigon. Despite
the rumors in Saigon that the generals on the Military
Directory may try to oust Premier Ky, there'is no evidence
of an impending crisis.
SOVIET LEADERS VOICE OPINIONS ON CURRENT POLICY ISSUES 6
Analysis of recent speeches and articles by top members
of the Soviet regime suggests that they have reached
some decisions on the knotty problem of resource alloca-
tions, but that differences over economic reform which
could split the leadership are beginning to emerge.
EASTERN EUROPEAN REACTION TO US "BRIDGE BUILDING" POLICY
In the year since President Johnson enunciated the US
desire for better relations with Eastern Europe, the
attitudes of Czechoslovakia, Hungary, Poland, and Hun-
gary have softened--a trend which in general has not
been affected by the Vietnam situation. Albania and
Bulgaria have been hostile to the "bridge building"
policy from the beginning, and East Germany--to which
the policy does not apply--has also criticized it. (Pub-
lished separately as Special Report OCI No. 0301/65B)
POLISH CENTRAL COMMITTEE PLENUM
Poland's party leadership apparently quashed a clash
over economic policy prior to the 26-28 July central
committee plenum, and no basic change in policy or
planning resulted from the meeting.
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RUMANIA'S RELATIONS WITH EAST AND WEST GERMANY
The Bucharest regime, apparently undeterred by East Ger-
man admonitions to the contrary, is moving toward closer
relations with Bonn, possibly formal recognition.
COMMUNIST CHINA'S GOLD PURCHASES
Peiping has purchased about $100 million in gold since
January, apparently to hedge against devaluation of
sterling and to build up its scanty gold reserves.
CEYLONESE GOVERNMENT TO UNDERGO FIRST TEST
Debate on its budget message during the next several
weeks will give the Senanayake government its first
parliamentary test, which it is expected to survive.
PAKISTANI-US RELATIONS DETERIORATING
The postponement of a World Bank meeting on aid to Paki-
stan has accelerated the downward trend of US-Pakistani
relations. The Pakistanis are charging the US with ex-
erting political pressure and are searching for alterna-
tive sources of aid, so far without much success.
EGYPTIAN-SAUDI SPARRING OVER YEMEN INTENSIFIES
Nasir might carry out his threat to attack Saudi Arabia.
Europe
GREEK POLITICAL CRISIS ENTERS NEW PHASE
The search for a compromise premier has become more
urgent with the defeat of the Novas government. The
King still appears adamant in opposing the return of
Papandreou, who retains enough support to block any
other candidate. Unless the threatened head-on clash
is averted, leftist extremists appear certain to bene-
fit from the continued instability.
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NATO ESTABLISHES "SELECT COMMITTEE" ON NUCLEAR PLANNING 15
The committee will tackle the problems of extending Al-
lied participation in NATO nuclear planning and improv-
ing communications vital to decisions to use nuclear
forces. There is still some uncertainty, however, about
which defense ministers will make up the committee.
PROSPECTS FOR THE NEW BELGIAN GOVERNMENT
The continuing linguistic dispute will probably impede
enactment of the new government's domestic program, but
retention of Paul Henri Spaak as foreign minister should
permit effective action on foreign policy questions.
DOMINICAN PEACE TALKS CONTINUE AS COMMUNISTS REGROUP
While negotiations for a settlement of the Dominican
Republic's three-month-old crisis center on the thorn-
iest issues, diverse factions in the Communist camp are
preparing for their future roles in the country.
POLITICAL UNREST IN HONDURAS
Strong-arm methods used to put down a Communist-called
general strike sparked a protest rally which led the
government to declare a modified state of siege on 30
July.
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REVIEW OF INSURGENCY IN LATIN AMERICA
Communist or pro-Communist guerrillas are most active
in Colombia, Guatemala, Peru, and Venezuela (the four
countries cited by Castro as ripest for revolution) but
do not constitute a serious short-term threat to any of
the governments. Communists do add materially to polit-
ical instability, however, and would attempt to fill the
void if political institutions collapsed as in the Domin-
ican Republic
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1..r SEC:RET %ale
President Johnson's announce-
ment of the planned US troop
build-up in Vietnam drew a strong
and defiant propaganda response
from both Hanoi and Peiping. In
language intended to convey an
impression of unshaken Vietnamese
Communist resolve, Hanoi de-
clared that it would fight for
"20 years" if necessary, regard-
less of the number of US forces
sent to Vietnam. As for a ne-
gotiated settlement, the North
Vietnamese asserted that the only
honorable way out for the US was
to implement the Geneva agree-
ment and accept the DRV's four-
point proposal. UN intervention,
said Hanoi, is also unacceptable.
Stripped of its bombast,
this response indicated that the
North Vietnamese now are con-
vinced that Washington is com-
mitted to carry on the war in
Vietnam and that they anticipate
considerably stronger US mili-
tary initiatives in the future.
A 3 August Hanoi party daily
editorial accused President John-
son of "taking a series of other
war measures which he dared not
yet make public."
In contrast to earlier em-
phasis on its own ability to
handle any US military action,
Hanoi's current propaganda--al-
most plaintive in tone--is play-
ing up the importance of bloc
help. Extensive publicity has
been given the aid agreements
signed in July as a result of
Deputy Premier Le Thanh Nghi's
tour of bloc capitals, and the
need for increased assistance
has been discussed in party daily
editorials. A 2 August DRV
government statement, directed
at the announced US troop build-
up, called on "all Socialist
countries to wage a still more
resolute and timely struggle and
to extend increased support and
assistance in all fields."
Peiping's first authorita-
tive response to the President's
speech came in a People's Daily
editorial of 3 Augurs -whicH-
adopted the same defiant posi-
tion Hanoi has been taking. Mak-
ing a detailed comparison of
the present situation with that
at the time of the Korean war,
the editorial claimed that the
outlook now is much more gloomy
for the US than 15 years ago.
The editorial may also have been
intended to bolster the morale
of any in the Communist camp--
including North Vietnamese--who
were shaken by the US announce-
ment.
There has been no authorita-
tive Soviet comment, but exten-
sive routine propaganda cover-
age of the planned US build-
up tends to play down its signifi-
cance and treats it as an ad-
mission of the failure of Amer-
ican policy. Little was said
about the President's remarks
on negotiations.
The near daily air strikes
of the past months have begun to
depress popular morale in the
southern part of the DRV.
SE CRE T
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6 Aug 65
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THAILAND ii
NORTH VIETNAM
t Surface-to Air Missile (SAM) site
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'''j SECRET %Of
Most marketing
is transacted at night, some fac-
tory and handicraft work has been
suspended, and in many areas able-
bodied men have been drafted for
military service or construction
teams.
Surface-to-Air Missile Sites
Recent low-level photography
has not clarified the status of
the two newest SAM sites--numbers
6 and 7--in the DRV. Photography
revealed dummy missile
and radar equipment at site 6.
It is not known whether this site
was operational on 24 and 26 July
when an F4C and a reconnaissance
drone were shot down by missiles.
Photography of site 7
did not show any SAM aunt
ing equipment but indicated that
such equipment may have been pres-
ent earlier. The Soviets or Viet-
namese could be moving the highly
mobile SA-2 equipment from one
site to another to make it more
difficult for the US to plan a
strike against an operational
site.
Military Action in
The South
Viet Cong main force units
generally continued to avoid
major contact with Vietnamese
Government and US forces during
the past week. The only battalion-
level attack occurred at a re-
gional force training center in
Kien Phong Province on 30 July
and resulted in 60 government
casualties. Small-scale Commun-
ist actions in the form of road
mining, terrorism, ambushes, and
hamlet harassment were more fre-
quent than last week. These were
focused on lines of communication
and on targets in the Saigon area.
Free use of roads in the I, II,
and III Corps zones has virtually
been denied to the government,
with all movements in these areas
now requiring heavy escort.
Government-initiated action
remained at about the same level
as last week, with a slight re-
duction in casualties reported.
The most significant operation
occurred on 28-29 July when govern-
ment troops made contact with a
well-entrenched Viet Cong bat-
talion in Chuong Thien Province.
In this action, 54 enemy troops
were confirmed killed, and an ad-
ditional 150 were estimated to
have been killed and carried
away. Government forces sustained
68 casualties. Another government
operation in the IV Corps zone
SECRET
WEEKLY SUMMARY 3 Aug 65
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low
KIEN?
PHO
)ION PANlANO I
C f L I ' OF
I
SII ,'t M
Kompong Cham
MNI BAI
Soar
5th Division
gLod Phuoc Bin
Ninr 0 (Song Bp
I! CORPS
~Ch Reob~.
N1h1a T J YEN
off. ~'r.- ON Lat?r
gXUan Lot
5
'Qjh,- fsien
48338 1 ?OUNDARY REPRESENTATION IS
8-88 CIA NOT NECESEAR/LY AUTHORITATIVE
NON CO
LAO
Vha Trans
'TU
bhuoc YLeIII CORPS
P `~ `Rung Sat
t0 Special Zone I
Giahg /VAIN) I
f3ivisiort-
(y~~Can Son (P0010 Condore)
CON SON
SOUTH VIETNAM
MILITARY BOUNDARIES
As of July 1965
Corps boundary
Special zone boundary
Division boundary
Hop Tac area
11 15 5'0 75 100 Wes
I 1~ir r
0 !5 50 75 100 Kilometer;
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S1i (JR j 'l ' lw~
from 29 to 11 July was directed
against a =0-man ethnic Cam-
bodian bandit group suspected
of receiving Viet Cong support.
Psychological -_.rfare activi-
ties resulted ~n the defection
of 128 members of this gang,36
were killed in military action,
and the remainder fled into Cam-
bodia.
A B-52 bomber strike against
a suspected Viet Cong base in
Phuoc Tuy Province on 28 July
initiated the largest US ground
operation to date, involving
three US Army infantry battal-
ions and supporting artillery
on a five-day search-and-destroy
mission. The operation ended
on 1 August without significant
enemy contact. Viet Cong casual-
ties were two killed, two cap-
tured, and one wounded.
South Vietnamese Politics
A scheduled meeting of the
ruling military Directory this
week has apparently set off
rumors in Saigon that the gen-
erals may attempt to oust Pre-
mier Ky, but there is no evidence
of an impending crisis.
Ky apparently does not ex-
pect any move against him and
still plans to visit Taiwan and
Bangkok in mid-August. The Viet-
namese may be seeking a contribu-
tion of Chinese Nationalist troops.
Ky has also continued his
visits to the South Vietnamese
provinces. On one such trip he
admitted he was making slow prog-
ress in implementing his 26-point
government program. His continued
denunciation of domestic profiteers
and obstructionists suggests some
irritation over the obstacles he
is encountering. Perhaps to em-
phasize the government's tough-
ness, stiff penalties were handed
down by a military court on 4
August to 21 persons arrested un-
der the Quat regime for sponsor-
ing a subversive peace movement.
On the other hand, the Ky gov-
ernment has been unusually con-
ciliatory toward an offer by a
dissident tribal autonomy move-
ment--known as FULRO--to cooper-
ate militarily against the Viet
Cong. Negotiations are continu-
ing on this matter, but long-
standing suspicions on both
sides and some indications of
duplicity by some of the tribes-
men are complicating the issue
and contributing to a tense situa-
tion.
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Page 5 WEEKLY SUMMARY
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SECRET `OI
The Communist World
Analysis of recent speeches
and articles by top members of
the Soviet regime suggests that
they have reached some decisions
on the knotty problem of resource
allocations, but that differences
over economic reform which could
split the leadership are beginning
to emerge.
An unusual number of top
leaders have spoken out on do-
mestic issues in recent weeks--
during July a total of ten
speeches and one published article
by eight members of the party
presidium. The differing views
expressed in their remarks appear
to represent personal opinions
and to reflect an absence of col-
lective decision and of any firm
line in the party's propaganda
machine.
The differences, expressed
or implied, on the question of
reform of economic administration
are of the kind and intensity that
could lead to factionalism, to
an outright power struggle, and
ultimately to,a shake-up in the
leadership.
The regime has thus far, how-
ever, exhibited a capability for
closing ranks and composing dif-
ferences, and it may yet be able
to avoid a head-on clash over the
economic reform issue. Any res-
olution of current disagreements,
however, is likely to result in
a slow pace of reform and a
watering down of proposals.
These proposals have ranged
from structural reorganization,
to shake-ups in personnel, to
radical changes in the nature
of the system itself, but have
generally centered on some form
of less centralized planning
and management, and more con-
sideration for consumer pref-
erences in economic decision
making.
A statement by presidium
member Kirilenko on 24 July
that the development of the
output of consumer goods had
been set in the new five-year
plan "at about the same high
rates" as the means of pro-
duction suggests that some basic
decisions on the highly compli-
cated and perennial resource
allocation problem have been
reached. To judge by the admit-
tedly limited information in his
statement and the implications
in other of the July speeches
concerning the "material well-
being of the people," such de-
cisions seem to favor the pro-
consumer forces. However,
most of the speeches also echo
the thought which Shelepin states
explicitly: "We shall in the
future do everything in our
power to enable our army and
defense industry to achieve those
standards which are dictated by
the international situation."
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Iftow, *me
SECRET
Poland's party leadership
apparently quashed a clash over
economic policy prior to the 26-
28 July central committee plenum,
and no basic change in policy or
planning resulted from the meet-
ing. The regime presented an
economic reform program aimed at
improving planning and manage-
ment in the forthcoming five-
year plan period (1966-70), with-
out decreasing central controls.
The Poles, however, stressed prof-
itability, scientific planning,
greater responsiveness of produc-
ers to consumer desires, and ex-
tension of planning beyond the
traditional one-year and five-
year periods, as have some other
bloc countries.
Although the reforms dis-
cussed at the plenum were numer-
ous and touched nearly all aspects
of planning and management, it was
made clear that no real decentral-
ization of planning and no sub-
stantial expansion of the market's
role in allocating resources is
envisaged. In his opening speech
at the plenum, Planning Commis-
sion Chairman Jedrychowsk de-
nounced those who denied that
central planning is essential.
As outlined in plenum discussion,
the reforms are designed for the
most part to improve the ef-
ficiency and precision of cen-
tral planning and to increase
the effectiveness of controls.
In presenting its program
the regime probably intended to
give the impression that the
Poles are undertaking a real lib-
eralization of their economy
and are thus keeping up with
the Czechs and the Soviets,
whose economic reforms have
been widely touted in recent
months. The leaders may also
have intended to close the door
on pressures from Polish liber-
als who have urged a thorough
overhaul'of the economic sys-
tem.
The party leadership prob-
ably forced acceptance of its
program for two reasons. The
Polish regime, unlike the Czech
and East German regimes, has
not been, and seems unlikely
to be, forced by economic dif-
ficulties to accept major eco-
nomic reforms. With the ex-
ception of a slowdown in 1962-
63 stemming mainly from ag-
ricultural failures, over-all
economic growth has been fairly
rapid in Poland and, despite
some consumer dissatisfaction
at the slow increase in wages
and consumption during the
1960s, there have been no ma-
jor disturbances.
Moreover, party first sec-
retary Gomulka has always feared
that, given the weak position
of the party in Poland, any sub-
stantial lessening of central
controls over the economy might
mean a loss of party control.
On these grounds Gomulka halted
the 1956 reform program, which
had put Poland in the forefront
of bloc moves for liberaliza-
tion, and has opposed pressures
for liberalization ever since.
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RUMANIA'S RELATIONS WITH EAST AND WEST GERMANY
Rumania's leaders appar-
ently were not moved by East
German party boss Ulbricht's
recent efforts to persuade them
to abandon plans to expand re-
lations with West Germany.
Despite Ulbricht's rather
strained relations with Bucha-
rest, he was one of the few for-
eign party leaders to attend the
Rumanian party congress in July.
His warnings there that Bonn
is conducting a "two-faced" pol-
icy with "revanchist motives"
seem to have been ignored. East
German and Rumanian news stories
about a subsequent meeting be-
tween the East German and Ruman-
ian foreign ministers omitted
the customary statement that una-
nimity of views was achieved.
Bucharest has not concealed
its interest in improving rela-
tions with Bonn. Rumanian lead-
ers ostentatiously gave the
"red carpet" treatment to West
German exhibitors at Bucharest's
Industrial Fair last May. The
trade missions exchanged in Oc-
tober 1963 assumed consular
functions last April. The West
German Trade Mission in Buchar-
est predicts these consular func-
SECRET
Page 8 WEEKLY SUMMARY
tions will be expanded into for-
mal diplomatic ties "perhaps a
few months" after the West Ger-
man elections on 19 September.
Chancellor Erhard recently
told a press conference that
Bonn's policy will not be oc-
cupied "in the near future"
with Eastern European relations.
Erhard tends to be politically
cautious and, faced with elec-
tions as well as a strong con-
servative element within his
party, probably will not author-
ize any change in the status
of his country's relations with
Rumania for the next several
months.
The West German Foreign
Ministry has been studying the
question of diplomatic relations
with Eastern European countries
and is doubtless more favorable
to the idea than Erhard. The
knotty, and still unresolved,
problem for the West Germans
is how to recognize Rumania
without encouraging nonaligned
countries to emulate the Ru-
manians, who would thus have
diplomatic relations with both
East and West Germany.
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SECRET "me
During the last three weeks
Peiping has purchased about $30
million worth of gold on the Lon-
don market boosting the total
bought since January to around
90 tons valued at approximately
$100 million.
A recent statement by the
chairman of China's Council for
Promotion of International Trade
indicated that the gold bullion
was being procured as a hedge
against a possible devaluation
of sterling "because the pound
had weakened." It is also pos-
sible that conservative Chinese
banking officials, taking ad-
vantage of the uneasiness over
sterling and the situation in
Vietnam, are building up the na-
tion's scanty gold reserves now
estimated at less than $300 mil-
lion.
Although bullion dealers
expect that Peiping will prob-
ably buy more gold, there is no
evidence that China plans to
liquidate all its holdings of
sterling, the currency it uses
for most of its trade. Peiping
holds about $200 million in
Western currency, about three-
quarters of it in sterling. Pei-
ping is believed to maintain
about $100 million in sterling
in Britain to meet current for-
eign trade requirements, and at
least another $50 million in
sterling elsewhere in the indus-
trial West.
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9 WEEKLY SUMMARY 6 Aug 65
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%001 w
SECRET
Debate on its first budget
message during the next several
weeks will put Ceylon's five-
month-old Senanayake government
to its first serious parliamen-
tary test. A leftist opposition
"coalition" headed by former
prime minister Bandaranaike and
supported by Communist and Trot-
skyist elements is homing in on
economic issues in its efforts
to rebound from last March's
election defeat.
Senanayake is expected to
weather the storm, but is vul-
nerable because he has made lit-
tle headway against the economic
disorder that was largely re-
sponsible for the collapse of
Mrs. Bandaranaike's government.
Prices remain high, and the
foreign exchange situation is
as critical as ever. Economic
planning machinery has been
extensively revamped, but few
concrete programs have emerged.
Moreover, the newly formed
World Bank (IBRD) aid-donor con-
sortium at its first meeting
on 28 July was unable to raise
the $50 million that the bank
considers essential to forestall
further decline during the remain-
der of 1965. 25X1
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WEEKLY SUMMARY 6 Aug 65
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SECRET
PAKISTANI-US RELATIONS DETERIORATING
Relations between Pakistan
and the United States continue
to deteriorate, accelerated by
Pakistan's angry reaction to the
recent two-month postponement--
at Washington's behest--of last
week's scheduled World Bank
(IBRD) consortium-pledging ses-
sion on aid for Pakistan.
The sharp worsening of re-
lations has shaken the confi-
dence of the Pakistanis, and they
are overcompensating, allowing
bluster to substitute for dis-
cussion and national pride to
overshadow reason. Barriers to
a broad range of contacts be-
tween Americans and Pakistanis
are rising, and Pakistani offi-
cials are looking for ways to
maintain their country's eco-
nomic development momentum with-
out US aid, if necessary.
Pakistan rejects Washing-
ton's explanation that congres-
sional uncertainties prevent the
US from pledging aid for the
first year of Pakistan's new
five-year plan at this time.
President Ayub particularly
feels betrayed once again by
American policy and has charged
that the postponement is nothing
more than political pressure
aimed at forcing Pakistan to
alter its present foreign policy
of normalizing relations with
Peiping and Moscow and improving
its image in the Afro-Asian
world. He is especially aroused
by the timing of the postpone-
ment of the aid-pledging ses-
sion, since the IBRD had already
endorsed Pakistan's new plan.
Pakistan has turned to
diplomatic maneuverings with
sympathetic consortium members
in an attempt to apply pressure
on the US to alter its position,
but thus far without conspicuous
success. In addition, Pakistan
has sought and received gestures
of moral support from the Soviet
Union and China; no concrete fi-
nancial assistance has been an-
nounced, however, and little is
likely.
A press campaign--directed
by Ayub--is aimed at rallying
public support behind the govern-
ment's policies, while consist-
ently misrepresenting the US posi-
tion. The campaign has constantly
pursued two themes that US aid
means political enslavement and
that economic development can
continue without US aid.
Within the Pakistani Govern-
ment the position of pro-Western
elements, such as Finance Minis-
ter Shoaib, has apparently been
weakened, while Foreign Minister
Bhutto's stock seems, for the
moment at least, on the rise.
Ayub, however, is not
letting Pakistan's reaction get
entirely out of control. While
anti-American elements will
probably have wide license to
heckle Washington through the
remainder of the summer, it will
be up to Ayub to decide at what
level he believes this vitupera-
tion must stop. He does not
want to go beyond his immediate
political needs and thereby hurt
Pakistan's chances of getting
the assistance its financial
experts still expect from the
September pledging session.
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VOW, Nolle
SECRET
Sparring between the Egyp-
tians and Saudi Arabians over
Yemen has recently intensified,
and renewed Egyptian attacks on
Saudi territory are a possibli-
ity.
In his speech of 22 July
Nasir threatened war against
Saudi Arabia if the current peace
talks prove to be unsuccessful.
He tempered his threat by saying
that Egypt might be able to with-
draw its troops from Yemen in
six weeks or less, should the
talks succeed. This theme was
taken up by other Egyptian Gov-
ernment officials, and Yemen soon
followed suit, with speeches by
President Sallal and Premier Amri.
Yemen also sent an official pro-
test to the UN against Saudi Ara-
bian "aggression" in the form
of aid to the royalist rebels.
An effort is being made to
draw the UN secretary gen-
eral into a mediatory role.
The US has passed Saudi reports
of Egyptian penetrations of Saudi
air space to U Thant. The
secretary general might also
try to bring about a Nasir-
Faysal meeting in order to reduce
the threat to peace in the
area.
If negotiations fail, Nasir
may feel compelled to make good
his threat. His most likely
course would be to bomb Saudi
supply centers. The Egyptians
proved they have the capacity
for this in 1963.
foreign intervention.
There is as yet no evidence
that Nasir intends to undertake
the much more difficult task of
launching land attacks against
Saudi Arabia and risk critical
foreign reactions and possibly
SECRET
WEEKLY SUMMARY 6 Aug 65
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IWAW
SECRET
Europe
GREEK POLITICAL CRISIS ENTERS NEW PHASE
The prospect of an early re-
turn to political stability in
Greece remains dim as the govern-
ment crisis enters its fourth
week. The future of the monarchy
and the country's continued
alignment with the West may hang
in the balance.
The Novas government, which
never had much chance of success,
failed in its bid for a vote of
confidence on 4 August. The
final vote--167 to 131--followed
four days of turbulent sessions,
disrupted at times by fist fights
and loud heckling inside the
chamber and by noisy demonstra-
tions outside Parliament. The
22 votes of the Communist-domi-
nated EDA party gave former prime
minister Papandreou the margin he
needed to unseat the government.
Papandreou, by maintaining
his firm control of the Center
Union party, has demonstrated
his ability to frustrate any at-
tempt to form a new government
that does not have his tolerance.
King Constantine, on the other
hand, apparently remains adamant
that he will not accept Papan-
dreou as the head of a new gov-
ernment. Unless this head-on
conflict is averted by compro-
mise, which would probably re-
quire the defection of many Pa-
pandreou supporters, Greek po-
litical stability will be seri-
ously undermined to the advan-
tage of extreme leftist elements.
The Palace is determined
to end the political chaos that
has disrupted the normal func-
tions of government for the
past three weeks.
The EDA's strategy in the
current crisis continues to be
one of nonviolent support for
Papandreou. During the past
three weeks, EDA-led demonstra-
tions have been highly organized
and well disciplined. In the
recent student demonstrations,
the EDA organized "vigilance"
squads to assure nonviolence.
If the King resorts to military
dictatorship, however, Commu-
nist strategy might change rap-
idly in an effort to foster a
revolutionary situation.
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NATO ESTABLISHES "SELECT COMMITTEE" ON NUCLEAR PLANNING
The North Atlantic Council through "quiet diplomacy." In-
(NAC) agreed last week to estab-
lish a "Select Committee" (SC)
to tackle the problems of extend-
ing Allied participation in NATO
nuclear planning and improving
communications vital to decisions
to use nuclear forces. There is
still some uncertainty, however,
about which of the NATO defense
ministers will make up the com-
mittee, and it remains unclear
how its deliberations will ulti-
mately tie in with those of the
Paris Working Group which is
studying the plans for a Multi-
lateral Nuclear Force or an Al-
lied Nuclear Force.
When the US suggested the
committee last May, it sought a
small group to be composed of
itself, the UK, France, Italy,
and West Germany, presided over
by Secretary General Brosio as
guardian of the interests of non-
participating members. France,
after some wavering, soon an-
nounced it would not join the
body, but, unexpectedly, did not
oppose its creation. The Nether-
lands, Canada, and Turkey in-
sisted on membership for them-
selves and France opposed par-
ticipation by the secretary gen-
eral--even as an observer--ap-
parently in order to deprive the
committee of any standing as an
official NATO body.
As a compromise the NAC last
week agreed that a senior member
of Brosio's staff should attend
the SC in his stead, thus pre-
serving the official link with
NATO. It authorized the secre-
tary or his assistant to try to
solve the problem of composition
asmuch as the US has accepted
Canadian and Dutch participation,
this boils down to an effort to
dissuade Turkey from its stand.
To reassure the nonparticipants,
the NAC also agreed that any of
them can ask at any time to be
consulted and can make suggestions
or contributions to the commit-
tee, and that the secretary
general will report fully to
nonparticipants on SC activities
at their request.
If the problem of Turkey
can be resolved, the SC will
probably hold its first meeting
in early September and decide on
topics for discussion. Likely
starters are the arrangements
now in effect in the US and
Europe for coordinating use of
strategic nuclear weapons, and
the technical problem of com-
munications between Allied gov-
ernments in emergencies.
France, in approving the
SC's terms of reference, made
clear that it still opposed the
guidelines for use of nuclear
weapons which were approved by
the NATO ministers at their meet-
ing in Athens in 1962 and em-
phasized the need for the SC to
report back to the NAC. Having
failed to relegate the SC to the
nonofficial status of the Paris
Working Group, the French prob-
ably feel they can still rely
on a veto in the NAC to block
proposals of the SC which do
not suit them.
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SECRET
PROSPECTS FOR THE NEW BELGIAN GOVERNMENT
Efforts by Belgium's new
coalition cabinet to enact ef-
fective economic and social pro-
grams are likely to be impeded
by the continuing division of
the population along linguistic
lines. On foreign policy ques-
Page 16
tions, the retention of Paul-
Henri Spaak as foreign minister
and the increase in the powers
of his office are likely to re-
sult in a more forceful asser-
tion of the Belgian position.
SECRET
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SECRET
Prime Minister Pierre Har-
mel believes that Parliament
will not approve his domestic
program until the constitution
is revised to give increased
representation to the more rap-
idly growing Dutch-speaking
sector while providing guaran-
tees for the minority French-
speaking group. Revision, how-
ever, is likely to be attained,
if at all, only after long and
bitter debate. The coalition
of Social Christians and Social-
ists is one vote short of the
required two-thirds majority in
Parliament. Any support it can
gain from individual Liberals
--whose party as a whole op-
poses any change in the present
federal structure--is likely to
be offset by defections of gov-
ernment deputies. Many French-
speaking Socialists, for example,
will hold out for more regional
autonomy than the suggested re-
forms provide.
The government's economic
program, which calls for de-
velopment of industry, public
works, and cultural institutions
on a regional basis, would be
highly beneficial to the eco-
nomically depressed French-speak-
ing areas. If passage is de-
layed too long, Belgium may
face another election within a
year.
Spaak, who now is charged
with coordinating the activi-
ties of all ministries concerned
with foreign affairs, will be
able to take stronger positions
on questions that developed dur-
ing the ten-week government
"crisis." He may, for example,
shift somewhat from the gen-
erally pro-French outlook he
has assumed in the Common Mar-
ket crisis to a position closer
to that of the other four mem-
bers, while still leaving him-
self some leeway to act as
mediator.
He probably will also
arrange to fulfill some of the
requests from the Leopoldville
government and Belgian admin-
istrators and businessmen in
the Congo for additional tech-
nical assistance. Such ac-
tion, however, will depend on
whether the Tshomb6-Kasavubu
government stays in power and
whether the United States is
willing to provide financial
and material assistance. Bel-
gium's role in the Congo will
probably be clarified this fall
in another round of US-Belgian
talks.
While negotiations for a set-
tlement of the Dominican Repub-
lic's three-month-old crisis
center on the thorniest issues,
diverse factions in the Commu-
nist camp are preparing for
their future roles in the country.
Hector Garcia Godoy, the
prospective provisional presi-
dent, has been taking a major
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SECRET
role in negoiiations between the
OAS and the two contending fac-
tions. He has informed both the
Government of National Reconstruc-
tion and the rebel "constitu-
tionalist" regime that he will
not take office until they reach
general agreement on major issues.
He is trying to arrange meetings
between military officers from
both factions who could initiate
discussions on the leadership of
the armed forces and the future
of military officers on the
rebel side.
strongly 25X1
favor a negotiated settlement.
They are confident that they will
ultimately be able to obtain power
peacefully after some future elec-
tion won by Juan Bosch's Domini-
can Revolutionary Party (PRD).
After a settlement is reached
the PSPD hopes to strengthen the
de facto alliance with the PRD
that has developed during the in-
surrection. Present PRD leaders,
however, have expressed their
wariness of formalizing such a
tie.
Garcia Godoy has tentatively
chosen the core of his cabinet
from men who are, in most cases,
highly regarded by one or both
of the camps. The sensitive post
of secretary of state for the
armed forces would probably go to
Manuel Ramon Ruiz Tejeda, a
civilian who has served in nu-
merous government positions since
the 1920s. Garcia Godoy would
prefer to function as his own
foreign minister during the early
days of the provisional govern-
ment.
The question of a vice pres-
ident has not been settled since
Eduardo Read Barreras declined
the position. If the OAS can ob-
tain the concurrence of the rebel
government, it will probably
abolish the post, as it had
originally proposed.
The three Communist parties
continue to be divided in their
approach to the question of ne-
gotiations and their policies dur-
ing and after the provisional
government. Leaders of the orth-
odox Communist Dominican Popular
Socialist Party (PSPD)
SECRET
Page 19 WEEKLY SUMMARY
The PSPD believes that guer-
rilla warfare and terrorism would
be especially inappropriate now
because the masses are tired af-
ter more than three months of
unrest and would not support re-
newed calls for armed action.
These sentiments run counter to
the ideology and plans of the
more radical members of the pro-
Castro 14th of June Political
Group (APCJ) and the extremist-
oriented Dominican Popular Move-
ment (MPD). The numerically
small MPD, which appeals to im-
poverished urban classes and the
larger APCJ, which has an attrac-
tion for nationalistically minded
Dominicans, previously joined
forces to mount the ill-fated
armed insurrection of late 1963.
They still believe that this is
the correct path for a success-
ful revolt in the Dominican Re-
public.
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SECRET
POLITICAL UNREST IN HONDURAS
The Honduran Government ap-
pears to have surmounted its most
serious challenge since taking
office on 6 June. The general
strike called by the Communist
central labor federation
(FECESITLIH) on 27 July col-
lapsed after a few hours. It
was supported by Communist ele-
ments and apparently by the op-
position Liberal Party, but hoped-
for support from the powerful
north coast labor federations
did not materialize. The rapid
and strong measures taken by the
government prevented any serious
disorders, and business had re-
turned to normal in Tegucigalpa
the next day.
The government's strong-arm
methods, however, caused reper-
cussions later. On 29 July some
500 students--with known Commu-
nist agitators among them--held
a rally to protest the action
of strikebreakers who entered
two schools and beat up some stu-
dents. When participants in the
rally began to move toward the
National Assembly building, se-
curity guards fired into the
crowd, killing one student and
wounding two others.
On 30 July a modified state
of siege was declared and the
government ordered some 40 known
Communist agitators arrested.
Government agents confiscated
that day's edition of the Liberal
Party newspaper El Pueblo and
closed the plant- o owing the
shutdown, the Liberal Party's
central executive council met
and decided that the party's
paramilitary forces throughout
the country should be alerted
to go into action against the
government in case of further
repressive measures. Should any
such activity begin, the Lib-
erals are likely to get some
assistance from the Communists
and other dissident elements.
The Honduran Government will
probably be able to deal ade-
quately with the situation, but
the repressive measures it is
likely to use against potential
troublemakers will generate con-
tinuing political unrest .E
SECRET
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`r SECRET '`'o
Fidel Castro, in his 26 July
speech, cited Colombia, Guatemala,
Peru, and Venezuela as the Latin
American countries where revolutions
are most likely. It is true that
Communist or pro-Communist guerril-
las are most active in these four
countries, but sporadic outbreaks
of insurgency have occurred in sev-
eral others from time to time. In
no country, however, do Communist
guerrilla operations presently con-
stitute a serious short-term threat
to the government, although they do
add materially to the uneasy atmos-
phere in countries of chronic polit
ical instability. Insurgent Commu-
nist elements in such countries
would attempt to fill the void if
political institutions collapsed,
as happened in the Dominican Re-
public.
The Cubans have provided the
most support to guerrillas in Latin
America, largely in the form of fi-
nancial assistance and training.
Havana gave considerable assistance
to the Peruvian guerrillas during
1962 and 1963. During 1964, the
Cubans appear to have concentrated
support for the revolutionaries in
Venezuela, Guatemala, and Colombia,
apparently in that order. Other
Communist countries--notably Com-
munist China in the case of the Peru-
vians--have also given training and
financial assistance to selected
Latin American guerrilla groups.
Rural violence in Colombia has
long had two faces--banditry and
Communism. Until 1962, the bandits
were by far the more troublesome,
but army campaigns against them have
Page 21
reduced their power while Communists
have been recruiting more and more
"guerrillas." There is no centrally
controlled guerrilla organization
yet which is responsible to the Com-
munist Party or its more violence-
minded offshoot called the Commu-
nist Party-Marxist/Leninist (PCC-ML).
The Army of National Liberation
(ELN), surfaced in January, has sev-
eral leaders trained abroad--most
of them in Cuba--and seems to have
access to overseas funds and coun-
sel. Still small--fewer than 500
members all told--and virtually in-
active since January, the ELN seems
to have the potential to become a
major insurgent force if the many
competing groups, which are mostly
ineffective except for sporadic sab-
otage, can be induced to accept ELN
leadership.
Thus far, the security forces
have had little difficulty contain-
ing insurgency, but they have not
substantially reduced the numbers
or the power of the Communist-di-
rected groups.
Guatemala
The situation in Guatemala re-
mains tense. However, the recent
lifting of the state of siege im-
posed in February and the elections
on 1 August for 14 Constituent As-
sembly seats may tend to normalize
the situation.
A faction recently split from
the 13 November guerrilla movement
led by Marco Antonio Yon Sosa has
become the terrorist arm of the
Communist Party. This split might
make the terrorist groups less ef-
fective.
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SECRET
During recent weeks, the
Guatemalan security service has
raided terrorist strongholds in
the capital. Although not over-
whelmingly successful, the gov-
ernment forces did kill two im-
portant members of Yon Sosa's
group and captured several others.
A recent helicopter sweep of the
guerrilla-infested regions re-
sulted in the destruction of 14
guerrilla campsites.
Peru
The Movement of the Revo-
lutionary Left (MIR) in Peru
has a well-organized guerrilla
force of about 1,000 members/
MIR had already initiated
highly publicized action in cen-
tral Peru, but, following its
own philosophy, withdrew into
hiding after the Peruvian Army's
counterguerrilla-trained Rangers
moved into the central region
late in June.
Rugged terrain plus sub-
stantial support of the MIR by
local peasants--who resent the
decades of contumely and repres-
sion by the national government--
have frustrated police efforts to
flush out the guerrillas. There
is little hope that the army will
be any more successful.
The Armed Forces of National
Liberation (FALN) has been oper-
ating in rural areas of Venezuela
and in its cities since 1962.
By now, it is unlikely that the
old-line Communist leaders could
call off the younger hotheads
even if they cared to. FALN
guerrillas and terrorists have
managed to keep many battalions
of the Venezuelan Army busy in
the field since December 1963,
and neither enlarged nor lost
the territory under their con-
trol.
Urban violence, usually
under FALN direction, is still
a major problem although much
less so than in 1963. Sabotage
against US-owned businesses--
primarily the petroleum indus-
try--is frequent and costly.
Neither the FALN nor the
Communist Party constitutes a
present threat to the govern-
ment, but the continued exist-
ence of nearly 2,000 terrorists
and guerrillas is a constant
embarrassment to it. Also,
the FALN could well be the nu-
cleus of a future insurgent
movement, if an unexpected po-
litical development were to
lead presently benign opposi-
tion parties into such action.
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SI LF
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