WEEKLY SUMMARY

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CIA-RDP79-00927A005100080001-9
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Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 30 December 1965 review(s) I GRQUP'l.ExclWdedfrom.autojnatic completed_ dowr14rddirEq End dediassi-hcahon Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 ;State Dept. review completed DCT No. 00322/65 Copy No. ARMY review(s) completed. DIA review(s) completed. Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET (Information as of noon EST, 29 December 1965) VIETNAM A brief Christmas lull interrupted the continuing high level of military activity. A further cease-fire was a possibility for the lunar new year. The South Vietnamese Government began to implement a hard-line policy towards FULRO, responsible for the recent montagnard uprising. The Directorate still plans to launch a civilian advisory council next month. Hanoi's propaganda reaction to the cessation of bombing in the North has been an attempt to discredit the move. A top Soviet leader, party secretary Shelepin, is scheduled to visit Hanoi to reassert the USSR's presence. Hungary has granted some economic aid to the DRV. The presence in North Vietnam of high-per- formance MIG-21s was confirmed., Nine new SAM sites were discovered. PEKING BEGINNING BIRTH CONTROL PROGRAM IN RURAL AREAS Communist China is apparently preparing to extend its birth control program from the cities to the rural areas, where the bulk of the population lives, but there is little chance that the effect on population growth will be significant in the near future. EASTERN EUROPEAN DEFECTIONS OF GROWING CONCERN The relatively high rate of escapes, especially of professionally trained men, has caused both Czechoslo- vakia and Hungary to reimpose some restrictions on their only recently liberalized travel regulations. FOOT-AND-MOUTH DISEASE IN THE USSR The spread of foot-and-mouth disease may have been checked, but the outbreak is still widespread and ef- fects of the disease will reduce the output of Soviet livestock products next year. SECRET Page i WEEKLY SUMMARY 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Page Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET MOSCOW'S POSITION IN THE UPCOMING INDIAN-PAKISTANI TALKS 8 Realizing the necessity for caution in sponsoring the 4 January meeting, Soviet leaders hope to increase their influence in Rawalpindi without jeopardizing their pri- mary interests in New Delhi. INDONESIAN ARMY PREPARING TO TRY PLOT LEADERS Many prominent figures including some cabinet ministers will be among the defendants. Sukarno has still not banned the Communist Party, but the army's anti-PKI campaign continues anyway. CAMBODIA SEEKING TO AVOID INVOLVEMENT IN VIETNAM WAR Prince Sihanouk appears to be groping for a way to keep the fighting from extending to Cambodian ter- ritory. YEMENI PEACE CONFERENCE RECESSES 12 Shortly after reaching their first substantive agreement in a month of conferring, the royalists and republicans called a break that may last until February. ZAMBIA MAINTAINS PRESSURE FOR EMERGENCY SUPPLY ARRANGEMENTS 13 President Kaunda is seeking to accelerate shipments of oil and to prepare his country for a complete cut off of trade with Rhodesia. TRENDS IN SEKOU TOURE'S GUINEA This radical West African state is subject to acute internal tensions that could threaten the stability of President Tourers regime. After seven years of inde- pendence, the initial enthusiasm generated by the country's single political party is wearing thin and Tours has felt obliged to make sweeping internal changes to preserve his dominance. Guinea has steadily in- creased its ties with the US following the abrupt halt- ing of large-scale Communist aid in late 1961. However, current domestic political pressures could produce ancther shift in orientation as sudden as that of four years ago. (Published separately as Special Report XI No. 0322/65A) SECIET Page ii WEEKLY SUMMARY Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Nave SECRET Europe DEVELOPMENTS IN TRADE BETWEEN EAST AND WEST GERMANY Despite the recent conclusion of some agreements on interzonal trade, important issues remain unresolved. BELGIAN PROBLEMS IN WALLONIA Worsening economic conditions in the French-speaking area could endanger the present coalition government since the relative prosperity of the country's Flemish section has heightened long-standing animosities between the two linguistic communities. GERMAN CHANCELLOR'S VISIT TO WASHINGTON Bonn officials say they are satisfied with Chancellor Erhard's mid-December visit to Washington despite the public impression that results failed to equal the expectations Bonn had permitted to build up. PROSPECTS IMPROVE FOR ITALIAN SOCIALIST REUNIFICATION Merger prospects for the Socialists and Social Democrats have been gradually improving in recent weeks as leaders of both parties seek a unified party able to compete more effectively with Christian Democrats and Communists. Western Hemisphere DOMINICAN TENSICKS REMAIN HIGH Following last week's firefight in Santiago, the two contending factions are looking to the Provisional President for vindication. Garcia Godoy has been tem- porizing in evident hope that :passions will abate. JAGAN RETAINS PARTY DOMINANCE IN BRITISH GUIANA The People's Progressive Party reconfirmed Cheddi Jagan's leadership by electing all of his choices for party offices but did not seriously attack its basic problem of deciding whether to oppose the Burnham government peacefully or violently. SECRET Page iii WEEKLY SUMMARY 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 SECRET NICARAGUAN ELECTION TEMPO ACCELERATES With little more than a year to go before elections that will probably bring a return of the Somoza "dynasty," hotheads on both sides appear likely to ensure dif- ficult times ahead. ECUADOREAN JUNTA ANNOUNCES ELECTION PLAN The schedule calls for restoration of constitutional government following a political campaign next June, but most local politicians are apparently unenthusiastic over the prospect. CHILE: PROBLEMS FACING THE PDC IN THE YEAR AFTER VICTORY Eduardo Frei's presidential election victory in September 1964 was widely heralded as the triumph of a freely elected reform-minded government that would have a pro- found effect on the economic and social development of Latin America. Today, Frei and his fellow Christian Democrats are facing the strains resulting from attempts to initiate advances along somewnat traditional Western lines while attempting to incorporate unique patterns and unproven concepts of Christian democracy. (Pub- lished separately as Special Report OCI No. 0322/65B) 'ECRET Page iv WEEKLY SUMMARY 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 NNO, SECRET The Viet Cong generally ob- served its own conditional ces- sation of hostilities on Christ- mas eve, although guerrilla ac- tivity resulted in allied casual- ties in two instances. Enemy ac- tivity picked up on Christmas day well before the end of the 30-hour allied cease-fire, how- ever, and allied forces resumed combat operations early on 26 De- cember. Military activity before and after the lull continued at the comparatively high level sustained during recent weeks. Communist attacks in battalion strength oc- curred in Quang Tri, Quang Nam, and Quang Ngai provinces before the holiday, and in An Xuyen and Quang Duc provinces on 26 and 28 December. The most successful government operation of the week was in Chuong Thien Province. US military officials in Saigon report that 1,000 PAVN troops may have crossed the Lao- tian border into Quang Tri Prov- ince on 25 December. In addition to an enemy battalion-size attack on 23 December, two bridges on Route 9 were recently destroyed, and large-scale enemy activity may be imminent. On 28 December, the Front's central committee announced that Viet Cong forces would observe a cease-fire toward South Vietnamese troops during the lunar new year period from 20-23 January. Both government and Viet Cong forces sharply decreased their activi- ties during this period last year. South Vietnam Political ion II Corps commander General Vinh Loc last week issued two communiquds that clearly indi- cate a hardened government at- titude toward FULRO, the dissi- dent tribal organization respon- sible for the recent montagnard uprising in four central high- lands provinces. One communique states that any person caught assisting a FULRO member will be shot; the other allows FULRO members 20 days to surrender or face severe punishment. Military trials have been held in Pleiku for 39 members of a regional force company that participated in the rebellion. Four were sentenced to death, two of whom have already been shot, 30 have received prison sentences, and five have been acquitted. Some 300 FULRO sym- pathizers are now in government ]hands, and additional courts- martial have been scheduled for at least some of them. Defense Minister Co in Saigon is report- edly urging moderation, and cau- tioning against mass executions. Major General Chieu, secre- tary general of the ruling mili- tary Directorate, told US Embassy officials last week that the Di- rectorate still plans to launch a 60-man civilian advisory coun- cil, probably some time next month. He said a majority of the Directorate favored giving the council some concrete re- sponsibilities in addition to its SECRET Page 1 WEEKLY SUMMARY 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET "ng Yuan yang /.r i..r t~i_auCa. ' c NO"QTHpngS ~. ,'t ) 0. ... i ~- ~ J Sam neua~ f, L A O S Cuanb Praoang Kontum , A. Kt Phen Th st wt rs 23 DECEMBER 1965 QUANG NGAI ' 2Rrr PHU BON BINH iTUY, The Indochina -South China Arerr gmw__ iouth Vietnamese military b:ouridar es PHU YEN r l , R III CORPS r Rung Sat Special Zone (VNN) N 7th DiYisioil 25X1 SECRET -St h LMVIslonjLLUC 1 GHUC'C /% Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 _ SE CRE 7' advisory role. However, Chieu was unable to indicate who the council members might be, leav- ing the impression that candi- dates may be hard to find. He also said his own efforts to es- tablish a national front group- ing of politicians who would sup- port the military government had been unsuccessful, and that this project would be at least tem- porarily postponed. Rumors continue that Na- tional Police Director Lieu and I Corps commander General Thi are attempting to undermine Pre- mier Ky and Chief of State Thieu. Although Thi and Lieu--long-time close associates--are politically ambitious and frequently critical of Ky, there has been no firm evidence that they are actively preparing a coup. Hanoi propaganda has al- ready attempted to discredit the current US cessation of the air attacks against North Vietnam by claiming that hostile US air ac- tivity over the DRV is continu- ing. The DRV has protested to the ICC that "many formations of US jet fighters repeatedly over- flew the DRV and carried out re- connaissance and provocative ac- tivities on 25, 26, and 27 De- cember." This is the same line Hanoi took toward the five-day cessation of the bombings last May. Neither Peking nor the Liberation Front has yet commented on the current standdown. Soviet Leader to Visit Hanoi Moscow's decision to send a top leader--party secretary Shelepin--to Hanoi indicates a clear intention to exert a strong influence upon the North Vietnam- ese. His trip is the first high- level Soviet visit since the Kosygin mission last February, and the Soviets probably feel that the current bombing pause provides a good opportunity to encourage Hanoi to seek political alternatives to the war. Announcement of the visit coincides with increased Russian material and political support foil, the DRV and with renewed ex- pressions of Hanoi's gratitude for Moscow's "great assistance." The visit represents a direct challenge to China's influence, however, and Hanoi appears to have made an effort to placate Chinese concern. The party daily on 28 December published a lengthy ar- ticle praising the "broad and tremendous support" Peking has provided. Also cited were num- erous examples of Chinese pledges of support, including statements by Mao Tse-tung and Chou En-lai. An undertone in the article, however, suggested Hanoi feels Chinese aid has been more talk than action. Although Peking has insisted that it will "stand shoulder to shoulder" with its Vietnamese comrades, Hanoi may SECRET Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET P)ec1) inurn Li1aracterlstics and Performance 'Sa};mum SDred c,t st,o ieve as?mr m speed a opiimum As ., ? Con bai ceiling i 550 tt, rrinl C yrornsc zoom or snap-upi ~iirrL ~e.l irre to climb to 40,000 (t+ f"ptimc;m combat rodius Air-3arne rodnr -upabliity k n o t a 40,UOU+t. C~i,1U I tt. ,%8, }o0 it. 4.1 minutes 4 n.m. search and iU n.m. track 2 (far eatr ri,iinu AA-1s > l+calis or ' {ros!?d horrrina AA-2s t.AtolIs? 5-6 n.m. SECRET Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RD7/P7/9--00927A005100080001-9 "E.CRE1 feel Peking should provide addi- tional material assistance and cooperate more fully with Soviet aid efforts. Hungarian Economic Aid Hungary has granted North Vietnam a new long-term, interest- free loan as well as a moratorium on repayment of past loans, ac- cording to a joint communique signed by DRV Deputy Premier Le Thank Nghi and Hungarian Deputy Premier Fock on 28 December. A separate agreement on "economic aid of a different nature" was also listed. The vague revela- tions? on this agreement may indi- cate that while Budapest is will- ing to give Hanoi's war effort minimum support, it does not wish to publicly commit itself to any specific military assistance. The public announcements suggest that the assistance offered is more generous than Le Thanh Nghi was able to arrange when he was in Budapest early last summer. The DRV delegation left for Germany on the 28th, suggesting visits to several East European capitals. Hanoi's initial an- nouncement indicated the trip would include only Moscow, Pe- king, and Pyongyang. High-Performance Aircraft in DRV The presence of new-genera- tion, high-performance fighter aircraft in the DRV was confirmed last week by high-altitude drone photography. Seven MIG-21 Fish- beds were seen at Phuc Yen Air- field. Four other canvas-covered planes may also be MIG-21s. In addition, a total of 63 MIG-15/17 fighters were seen at Phuc Yen and Kep airfields, very close to the accepted air order of battle. New SAM Sites Nine new surface-to-air mis- sile (SAM) sites--numbers 53 through 61--were disclosed by photography One 25X1 of the sites is still under con- struction and missiles and mis- sile-associated equipment were noted at one other site. SECRET Page 5 WEEKLY SUMMARY 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET Evidence is accumulating that Communist China is preparing to extend the birth control pro- gram it has been conducting for several years from the cities to the rural areas, where over 80 percent of the estimated 763 mil- lion population lives. There is little chance that the effect on the population's rate of growth in the near future will be significant. The practical dif- ficulties of training personnel to administer a nationwide pro- gram and of providing enough con- traceptives are severe. Moreover, the regime seems still to be in- hibited by ideological concerns and by anxiety over the possibil- itv of arousing the resistance of the conservative peasantry. China's population problem is growing more acute. Food pro- duction has been outstripped by the growth of the population, which during the past six years has risen by an estimated 80-90 million. Rations are still near the edge of subsistance despite grain imports of 5-6 million tons annually since 1961. Private plots--allowed to revive during the post - Leap Forward food dis- aster years--have become a vital and apparently permanent supple- mentary source of food. In- dividual food intake remains be- low the level of 1957, the year before the Great Leap, and there is little chance that it will be restored to that level, since ac- complishing this would require doubling grain output over the next 20 years. Food reserves, with the possible exception of small stores for military con- tingencies, are believed to be nonexistent. The information available so far indicates that the spread of birth control practices in the countryside will be slow, and in part contingent upon more-or-less chance factors such as the pres- ence of rural hospitals or par- ticularly zealous cadres. No preference has become discerni- ble for any one device or method, although the intra-uterine loop has obvious advantages for China in cost, ease of manufacture, and administration. Sufficient trained tech- nicians are presently lacking to administer even the simplest methods in a nationwide program. However, starting in the second half of 1965, large numbers of urban medical personnel h ve been reassigned to rural work. As a further harbinger of developments to come, the recent nationalconference of gynecolo- gists and obstetricians--Commu- nist China's first--announced that large numbers of rural part- time health workers will be trained and that among their newly adopted textbooks will be one en- titled "Modern Methods of Child- birth and Birth Control." SECRET Page 6 WEEKLY SUMMARY 25X1 25X1 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRE' EASTERN EUROPEAN DEFECTIONS OF Czechoslovakia and Hungary have become increasingly concerned with the rising number c.' defec- tions--a consequence of the liber- alization of travel restrictions-- of professionals such as physicians, scientists, and engineers. The problem also has had repercussions in the recipient countries of France, Austria, and--possibly-- West Germany, and transit countries such as Yugoslavia. Critical comments have ap- peared in Czechoslovakia and Hun- gary recently, culminating in Hun- gary in a speech to parliament by Premier Kallai. Kallai admitted that .005 percent of the Hungarians traveling to the West this year had chosen not to return. The figure in the Czech party press was 0092 percent for Czechs choosing the West. The percentages may appear low, but the loss of 3,000 Hungar- ians and at least a similar number of Czechs for a nine-month period must be disturbing, particularly since these figures include a large proportion of professionals and represent only the totals publicly admitted by the regimes without reference to secret escapes across the border. The regime's solutions have been to revert to a limited reim- position of restrictions. The Czechs have revived the "hostage" system whereby at least one member of the family must remain home, while Hungary reportedly has been placing stricter limitations on travel by professional men. Recipient countries have been unhappy about the situation also. Austria and France, for example, are interested in improving rela- tions with the East, but find them- selves faced with accommodating ever greater numbers of refugees from these countries. Austria has upon occasion returned would-be de- fectors, who have then been sen- tenced to at least three years im- prisonment. France, once the eas- iest European country in which to find refuge, reportedly has been refusing to grant asylum or work permits. Recently the Bavarian Government returned a would-be Hun- garian defector, but this may have been an isolated incident rather than a reflection of a change in West German refugee policy. Now that travel to Yugoslavia has been made easier, that country is being used as a jumping-off point for the West. Belgrade has promised -to cooperate with its Eastern Euro- pean neighbors, however, and in many cases has thwarted defection at- tempts. The Yugoslav borders with the West nevertheless remain a much- used roadway for illegal travel to the West. Defections are not a serious problem to the Polish regime, prob- ably because the population feels relatively secure in the knowledge that the right to travel has become more or less established since 1956. Rumania and Bulgaria are not faced with the problem because they do not permit travel to the West except by SECRET WEEKLY SUMMARY 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET 25X1 The spread of foot-and- mouth disease may have been checked, but it is still wide- spread in the USSR. The cur- rent outbreak, which began in late October - early November, will adversely affect the out- put of livestock products next year. Control and prevention measures were still in force as of mid-December. It has been reported that the disease has infected humans, and notices urging the population not to buy noninspected meat and milk Precautions against the disease have been noted as far north as the Baltic republics and as far west as Moldavia. Although the extent of the disease is not known at this time, output of meat and dairy products next year will probably be less than was envisaged when the 1966 plan was drafted. The effects of the disease--along with other factors--make unlikely the fulfillment of the planned increase of 8-10 percent in total agricultural production MOSCOW'S POSITION IN THE UPCOMING INDIAN-PAKISTANI TALKS Moscow is probably approaching tue 4 January meeting at Tashkent between Indian and Pakistan leaders with the expectation that about the best that can be achieved is an easing of the hostility between the two coun- tries and perhaps an agreement to hold further discussions. So- viet leaders could consider it a net gain simply to have brought Ayub Khan and Shastri together under the aegis of their "good offices." They view the forth- coming meeting both as a step forward in their efforts to win a firm diplomatic foothold in Pakistan, and as a move to de- prive the Chinese of an oppor - tunity to exploit discord in South Asia Over the past year, Moscow has worked at improving its re- lations with Pakistan and re- cently has adopted a more non- committal attitude on the ques- tion of Kashmir in order to win greater influence in Rawalpindi. However, the USSR doubtless feels that it can retain the confidence of the Indians on the strength of its past record of support for New Delhi's claims. The Soviets appear so far to have satisfied the Indians that Moscow's recent tactics have been designed to frustrate the Chinese and to exert a moder- ating influence in Rawalpindi. SECT .ET Page 8 WEEKLY SUMMARY 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET *Ne The flow of Soviet military equipment to the Indians is un- diminished, as is Moscow's over- riding interest in maintaining its position in New Delhi. The USSR reportedly has in- formed India that the Soviet leaders hope that India and Pakistan will agree to forego the use of force as a means of settling their problems and to disengage their respective forces This is probably about the max- imum Moscow hopes to obtain from the meeting, and it is question- able whether Soviet officials intend to push either side very hard even for these limited goals, vention during the negotiations Soviet leaders appear to have a realistic view of the 25X1 risks posed by any direct inter- New Delhi believes that the Russians want to reduce tensions on the Asian subcontinent, but presumably not at the expense of India. Consequently, they in- tend to appear cooperative with Moscow and to remain in a posi- tion to put the onus on Rawal- pindi should the Tashkent talks fail to break the stalemate. The Pakistanis, for their part, want some movement toward a solution of the Kashmir problem and hope that Moscow will maintain its recently adopted noncommittal Stance on the issue. None of the parties to the meeting in Tashkent, however, appear overly optimistic about a basic Indian- Pakista.ni accommodation. SECRE'T' Page 9 WEEKLY SUMMARY 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET Asia-Africa INDONESIAN ARMY PREPARING TO TRY PLOT LEADERS With the Indonesian Commu- nist Party (PKI) above ground or- ganization almost totally de- stroyed throughout the country, the army appears to be concen- trating on preparations for the trial of alleged leaders of the 30 September movement. tspe- c ial military court will begin the trials sometime after 24 January, when Ramadan, the Muslim month of fasting ends. battle against the army's grow- ing power. His speeches charge that the army-directed anti-PKI campaign is creating dangerous divisions within Indonesian society and emphasize the "posi- tive contribution" of the PKI to the Indonesian revolution. Heavy editing of these speeches by the army-controlled news medi however, has greatly reduced their impact. Army commander General Suharto has announced that some cabinet ministers will be among the defendants. Apparently even dead Communist leaders will be tried. One of the most promi- nent figures likely to be brought before the court is Marshall Omar Dani, former air force chief and air force minister, who was deeply involved in the coup attempt. Uani, who was earlier sent out of the country by Sukarno on an official mis- sion, reportedly returned to Djakarta on 19 December and now is in jail. President Sukarno is con- tinuing his apparently losing Army leaders have been sharply provoked by Sukarno's failure to ban the PKI by 24 December as he had earlier led them to believe he would. SECRET Page 10 WEEKLY SUMMARY Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 `"00~ SECRET CAMBODIA SEEKING TO AVOID INVOLVEMENT IN VIETNAM WAR Prince Sihanouk evidently is groping for a diplomatic ri- poste to meet what he presumably views as a grave threat to Cam- bodia contained in recent public statements concerning possible US military ground operations on Cambodian territory. So far, the Cambodian Government's reac- tion has been confined to ap- peals to the international com- munity and standard denunciations of US policy in Indochina. Several official communi- ques issued over the past week suggest that at least for the present Sihanouk's principal tactic will be to portray Cam- bodia as the innocent victim of the escalating war in South Viet- nam. He has called on the Geneva co-chairmen to take a "clear position" on the US decision to authorize the violation of Cam- bodia's borders. He also has hinted that Cambodia may appeal to the United Nations in an at- tempt to win international sym- pathy. Sihanouk is attempting to put the onus on the US for the tense situation along the bor- der. He has forcefully reiter- ated denials that the Viet Cong use Cambodia for sanctuary or as a source of arms and ammuni- tion. At the same time, he has renewed calls for an expanded International Control Commission (ICC) to inspect and "control" the border area. An ICC inspec- tion team is currently in Siha- noukville at Sihanouk's invitation, trying to determine the number of personnel it would take to "control" the port effectively. disposal." Thus far, Sihanouk has been circumspect concerning the pos- sibility of calling for outside support in the event of a US or South Vietnamese "attack." A government communique issued on 26 December referred to a "pos- sible appeal" to "all nations" for assistance and support. Two days later, however, a resolu- tion submitted by Sihanouk to a meeting of the National Congress omitted any reference to outside aid and asserted only that Cam- bodia reserved the right to de- fend its own territory and to re- taliate to "aggression" with all the "laughable (sic) means at its SECRET Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET The Harad peace conference between Yemeni royalists and re- publicans has been recessed, pos- sibly until late February, and bothsides are prepared for out- breaks of trouble during the in- terim. A month-old conference, born out of the agreement last August between King Faysal and President Nasir, has been called off at least until the end of the holy month of Ramadan, and it is un- clear when the talks will resume. The Ramadan fast has provided a logical excuse to break off the deadlocked attempt to form a caretaker all-Yemen government. Shortly before the recess, the republican side had finally ac- cepted the royalist view that the caretaker government be neither royalist nor republican in form. This first agreement of any sub- stance added a note of optimism that the meeting would, in fact, be reconvened. Both Nasir and Faysal will actively encourage renewal of talks. Despite their individual efforts to obtain the most favor- able terms possible, there is lit- tle doubt of their desire for peace in Yemen. Ever since their August agreement on steps to end the three-year-old civil war, they have done their best to discourage clashes between the naturally fractious tribes and surprisingly few incidents have occurred. The two leaders have been less suc- cessful in damping inflammatory propaganda and rash partisan statements. The Saudis have apparently lived up to their agreement to suspend arms support to the roy- alists, and are now attempting to persuade the Egyptians to be- gin troop withdrawals without waiting for the formation of an interim government. The start of Egyptian troop movements would almost certainly stimulate a new interest on both sides in renew- ing the Harad conference. The republicans appear re- signed to eventual Egyptian with- drawal. They have attempted to set up several defense organiza- tions to protect themselves from the expected postwithdrawal rav- aging by fierce royalist tribes. The royalists, despite alarmist press reports that they were ready to attack, have been bel- ligerent only in isolated cases. Nevertheless, both sides still regard each other with suspicion and are making contingency plans in case the talks fail. Nasir has announced he will strike back against any royalist attack, and the Saudis continue to stockpile weapons along the Yemen border. SEC'RET' Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET *00 ZAMBIA MAINTAINS PRESSURE FOR EMERGENCY SUPPLY ARRANGEMENTS Zambia's President Kaunda. is maintaining high pressure on Britain and others to accelerate the flow of emergency oil ship- ments into his country and to prepare Zambia. to invoke a com- plete economic embargo against Rhodesia.. Numerous operational dif- ficulties, such as a shortage of oil drums, threaten to de- plete Zambia's low petroleum reserves. The joint UK-US con- tingency planning committee in Lusaka, however, remains op- timistic that over 11,000 tons of oil can be sent to Zambia in January and that deliveries will eventually approach the UK goal of 17,000 tons per month. This would be close to Zambia's nor- mal consumption before Rhodesia cut off Zambia's supplies. Gas rationing has begun in both countries. Kaunda is disappointed with the UK-US-Ca.nadia.n effort thus far. Unless the supply opera- tion becomes quickl and visibly effective, Kaunda. might yet institute rash eco- nomic sanctions against Rhodesia. Such action could wreck the Zam- bian economy and increase the possibility of a large-scale flight of essential European workers. On 22 December, Kaunda's threatened move to bar imports of vital Rhodesian coal supplies was averted at the last minute only by Prime Minister Wilson's reminder of the disastrous con- sequences of such a move for the Zambian economy In London, Wilson obtained parliamentary approval for in- stituting oil sanctions, but at the price of reaffirming his gov- ernment's opposition to the use of military force in the Rho- desian crisis. SECRET Page 13 WEEKLY SUMMARY 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 25X6 25X1 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 SECRET DEVELOPMENTS IN TRADE Despite the recent conclu- sion of some agreements between East and West Germany on inter- zonal trade (IZT), important is- sues remain unresolved. Europe BETWEEN EAST AND WEST GERMANY Under the new agreements, West Germany will transfer 50 mil- lion DM from the East's surplus balance in the consumer goods and food account to its deficit strategic goods account. As a counterconcession, East Germany in 1966 will buy coal valued at 40 million DM, almost 50 percent above such purchases thus far in 1965. Discussion of the main un- resolved issues--FRG compensation for elimination of the petroleum products subsidy, and the method of signing basic modifications of the IZT agreement--will resume at the next regular meeting sched- uled for 10 January. Despite the current impasse, trade in the near future is ex- pected to continue at the record- high levels apparently achieved in 1965. BELGIAN PROBLEMS IN WALLONIA The Belgian Government is assigning highest priority to ac- tion to counter the growing eco- nomic deterioration and political alienation in Wallonia, the coun- try's French-speaking area. The Wallonian problem is acute at this time because of the difficulty that the coalition parties are having over next year's budget. Prime Minister Harmel's Social Christian Party (PSC) is seeking cuts in expend- itures for social security and education as the price for hav- ing supported some Socialist pro- posals for increased taxes. The PSC's acceptance of higher taxes was not enough, however, to se- cure the support of a majority of the Walloon Socialist deputies, who broke party discipline to vote against the government's revenue bill. These dissidents may be joined by others of both parties in opposing the govern- ment's attempts to reduce expend- itures. The parties have reluctantly agreed that a number of uneconomic coal mines, representing 12 per- cent of the nation's total pro- ducing capacity, will be closed as an added economy measure. Gov- ernment subsidies to the remain- ing mines will be increased, but SECRET Page 14 WEEKLY SUMMARY Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 SECRET the mine closings will seriously hurt the economies of the affected areas, most of which are in Wal- lonia. To counter the growth of federalist sentiment in Wallonia, the government hopes initially to attract American investment to provide employment there. The minister of economic affairs told US officials in Brussels that un- less several large American firms are brought into the area within the next six months to offset the effect of the mine closings, there is a serious danger the Socialist Party will break into Walloon and Flemish wings. In such an event the Socialists could no longer Liege L I E G E participate in the coalition, which would mean the downfall of the present government. In contrast to historically dominant Wallonia, the Dutch- speaking Flanders portion of Bel- gium has shown increasing pros- perity in recent years, partly as a result of receiving since 1959 some 80 percent of all for- eign investment in Belgium. This reversal of economic roles has heightened long-standing animosi- ties between the two linguistic communities. For example, some 50 persons were injured at Fouron on 19 December in the latest of a series of clashes between the two groups. E _.L A N D E R S Linguistic frontier Province boundary Remaining bilingual area ,. E G I L SECRET Page 15 WEEKLY SUMMARY -' GERMAN . VLUXEMBOURG 'j Arlon I Luxembourg) Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 SECRET GERMAN CHANCELLOR'S Bonn officials are express- ing satisfaction with Chancel- lorhard's mid-recember visit to Washington despite the pub- lic impression that results failed to equal the expectations Bonn had permitted to build up. On the key question of nuclear sharing in NATO, the Germans have acknowledged that no de- cisions were taken, but they are looking to further discussions among the interested governments and in the recently established NATO Special Committee on nu- clear questions. Bonr press spokesman Karl Guenther von Hase told newsmen on 22 r:ecember that Bonn's ob- jective during the Washington talks was to set forth "prin- ciples" concerning an "appro- priate share" in nuclear defense and not to seek agreement on a specific project at this time. As outlined by lefense Min- ister von Hassel, Bonn now an- ticipates two general fields of action on nuclear sharing: consultation on strategy and plan- ning as foreseen for the NATO Special Committee, and "quiet discussions" among alliance mem- bers aimed at establishment of a common weapons system. Bonn presumably hopes to gain even- tual acceptance of a NATO sub- marine fleet along the lines of the British proposal for an At- lantic Nuclear Force. Erhard's expression of satisfaction with the talks was mirrored in the optimistic state- ment issued by his Christian VISIT TO WASHINGTON Democratic Party's press service that a way out of the impasse on nuclear sharing has been found. The independent, influ- ential newspaper Die Welt saw the ,understanding on principles" as a good beginning, the poten- tial of which should not be un- derestimated. The press service ,of the opposition Socialists, 'however, took the view that the 'appropriate share in nuclear !defense" envisioned in the com- munique was the "least binding" of possible declarations and concluded that all projects for physical participation in weap- ons systems must now be written off. On other questions, Von Hase expressed Bonn's satisfac- tion with the "understanding shown by US officials of the West German view that the effects of a nonproliferation agreement on the alliance should be studied carefully before concluding any such agreement. Political par- ties and the press also welcomed the American invitation to par- ticipate in US space projects as a highly significant oppor- tunity for German science and in- dustry. The US ambassador to NATO feels the American initia- tive on space cooperation comes at a most propitious time, since European countries increasingly are concerned about the techno- logical gap between themselves and the US. He feels Germany is one of the countries ideally suited to cooperate effective! such space endeavors. SECRET Page 16 WEEKLY SUMMARY Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 25X6 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 rT_ "I SECRET 11 1 PROSPECTS IMPROVE FOR ITALIAN SOCIALIST REUNIFICATION Prospects for reunification of Italy's Socialist (PSI) and Social Democratic (PSDI) parties have been gradually improving in recent weeks and are expected to receive another boost from the 8-11 January PSDI national con- gress. The issue is crucial for future political developments be- cause leaders of both parties feel that a reunified party-- representing some 18 percent of the total vote--would be able to increase its leverage on the dominant coalition partner, the Christian Democrats, and to com- pete effectively with the Commu- nists for the allegiance of Italy's large leftist electorate. PSDI Secretary Mario Tanassi --who until recently had serious reservations about reunification --has declared that the merger is now "inevitable." He believes a majority of over 95 percent at his party's congress will approve prompt acceptance of the PSI's proposal for immediate launching of "common action at all levels" between the two parties. PSI- PSDI caucuses in both houses of the Italian Parliament have al- ready developed plans for joint action and close cooperation. An important early test of PSI- PSDI harmony may be provided by the expected post - PSDI congress meeting of Italy's governing coalition partners to consider the status of the government's legislative program. Tanassi also expects his party will place no conditions on the merger despite the ob- stacles that the PSDI has cited in the past. These included the issue of PSI ties with the Italian Communists at the local administrative level and in the labor field, the relationship of the PSI to the Socialist Inter- national, and the PSI's adher- ence to what some Socialist Demo- crats describe as an obsolete concept of "neutralism and in- ternationalism" in foreign pol- icy. Leaders of both parties, however, now appear willing to seek compromises, and the PSI has already taken positive steps to meet PSDI reservations. Beyond these obstacles, the question of the timing of So- cialist reunification remains the most difficult to resolve. Both Italian President Faragat and Deputy Prime Minister Nenni are committed to the merger as soon as practicable and report- edly hope to accomplish the process by next fall--well in advance of the 1968 national elections. The PSI, however, is also concerned that the merger not occur before "other democratic socialist forces" can be included so as to give the party a broader base. Therefore, the Socialists --with an eye to their eroding electorate--are likely to move cautiously toward reunification, and the actual merger, if all goes well, may not be realized `ECTRET Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET Western Hemisphere Although Christmas passed peacefully enough, underlying tensions continue in expectation of action Garcia Godoy may take after last week's firefight be- tween the rebels and regular military in Santiago. The Pro- visional President appears con- vinced that both sides share re- sponsibility for the conflict and may feel compelled to take some punitive measures. The two contending factions, however, have developed their own versions of the event and neither is likely to be satisfied with less than complete vindication. If recal- citrants on either side object to the presidential decision, the provisional regime will prob- ably again have to fall back on the Inter-American Peace Force (IAPF) . Under pressure from younger officers, Defense Minister Rivera has been taking a harder line, charging that presidential ad- viser Buenaventura Sanchez has attempted to split the President from the regular military. Ri- vera.has also issued in the name of the Defense Ministry a mani- festo blaming the rebels for the Santiago fighting. The US De- fense attaches report that com- pany-level officers and NCOs are agitated over the provisional government's continued toleration of Caamano's "army." Before the holidays, they reported that "most military are spoiling for a fight" and this view still holds. Isolated acts of terrorism by extremists on both the right and left have further aggravated the situation. Homes and busi- nesses--including two radio sta- tions--owned by rebel supporters have been shot up or bombed, prob- ably by the right. On the left, terrorism is being spearheaded by the pro-Pekin Dominican Pop- ular Movement In this delicate situation, the Provisional President has abandoned his earlier view that the public "demands" quick retri- bution for the Santiago fighting and has been temporizing in evi- dent hope that passions will cool. He postponed a public report on the Santiago incident slated for last week, and now says he will make one on the night of 29 De- cember. Garcia Godoy has told Ambassador Bennett he intends to Jo something drastic "before that t." SECRET Page 19 WEEKLY SUMMARY 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET Garcia Godoy will probably attempt to moderate the impact of whatever course of action he chooses by consulting beforehand with all interested parties, in- cluding the OAS ad hoc committee. Under present circumstances violence could break out without warning and an unplanned incident could escalate into a major con- frontation, a development that al- most inevitably would involve the IAPF. The Communists would almost certainly attempt to exploit such a situation through their ability --demonstrated during the past two weeks--to manipulate street mobs 25X1 and rioters. This, combined with a widespread availability of arms, poses a continuing danger to secu- rity. Although the British Guianan People's Progressive Party (PPP) and its December special congress concentrated on electing new of- ficers and did not decide whether to follow a policy of peaceful or violent opposition to the Burn- ham government, Cheddi Jagan's undisputed leadership of the party was reconfirmed, The PPP's last regular con- gress, held in April 1965, broke down because party leaders could not decide whether to elect a moderate or an extremist as party chairman--the number two position in the PPP. In order to prevent an open rift, Jagan postponed elections and assumed sole interim responsibility for PPP administra- tion. All of Jagan's choices for party officers were elected at the December congress. Cedric Nunes, an activist currently detained for suspected complicity in the June bombing of the US Consulate office, was elected chairman. Since Nunes is in prison, he is unlikely to play a major part in policy formation at present. Jagan's support for Nunes' candidacy may have been one of many strategic moves de- signed to satisfy all factions in the party and thereby paper over the moderate-extremist split. It is likely that PPP lead- ership will continue to be divided and that the party will drift in- effectually until Jagan stops vacillating and clearly opts for a policy of moderation or extrem- ism. He is currently on a trip abroad that is scheduled to in- clude stops in Prague, Havana, and Moscow, and he will probably return home in February. No im- portant policy decisions are likely to be made in his absence. SECRET Page 20 WEEKLY SUMMARY Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 SECRET With the February 1967 election little more than a year away, Nic- araguan political activity is gain- ing some momentum. General Anas- tasio Somoza, commander of Nic- aragua's National Guard, has left no doubt about his intention to run as the candidate of the ruling National Liberal Party (PLN). How- ever, the opposition conservative parties are still primarily en- gaged in internal feuding and have been unable as yet to organize an effective campaign against the Somocistas. During the past month, Gen- eral Somoza has engaged in a veritable whirlwind of activities to enhance his reputation prior to the PLN convention. These noisy events have been widely pub- licized by the Somoza press, with editorials and poems lauding the general in effusive terms as a "condor soaring over the Andes" and with other hyperboles. Dur- ing 'the festivities for the gen- eral's 40th birthday, Chamber of Feputies President Orlando Mon- tenegro actually proclaimed Somoza a candidate for the presidency. The general acknowledged the trib- ute, but remarked that he could not accept a nomination while he re- mained in the army. Discord in the opposition camp is highlighted by the dilemma facing Traditionalist Conservative Party (PCT) leader Fernando Aguero, who finds it difficult to maintain even a facade of party unity. While denouncing the PLN and the "Somoza dictatorship," Pugero has in turn been denounced by members of his own party. Jose Cuadra Cardenal, prominent PCT official, recently resigned his post as technical secretary of the party and an- nounced his intention to fight against "bad leadership." US Em- bassy observers believe former president Luis Somoza could be be- hind Cuadra's resignation., Since Aguero's dictatorial tactics have alienated many conservatives, there is a possibility that Cuadra might serve as a rallying point for dissenters However, at present Cuadra has chosen to remain within the PCT. In addition, the PCT has had several other setbacks. For ex- ample, interparty negotiations on electoral reform came to a sudden halt when the present Schick gov- ernment refused to accept any of the substantive changes requested by the PCT. The party must now un- dertake an expensive and cumber- some petition process if it is to be legally reinstated. The embassy has noted that with the failure of political con- ciliation efforts, hotheads on both sides may force a return to tradi- tional intransigence. Moreover, ill-feeling against the Somozas re- mains alive, and the probability of a return to the Somoza "dynasty" could revive old hatreds and create additional domestic turmoil. In any case, the outlook for the coming year appears to be an in- creasing deterioration of the re- laxed atmosphere fostered by Presi- dent Schick. SECRET T Page 21 WEEKLY SUMMARY Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET The military junta has an- anounced its plan to restore con- stitutional government in 1966 through presidential elections to be held on 5 June. A two-month campaign in which the political parties are promised -full free- dom within the limits of public order would precede the contest. The president-elect would take office on 1 September. Constitutional changes to be made before the campaign will probably include a ban on re- election of aspiring former pres- idents such as four-time presi- dent Josd Maria Velasco Ibarra and e..-President Camilo Ponce Enriquez. The office of vice president probably will be sup- pressed and the legislative branch reformed. The junta's plan reflects determined opposition by the armed forces high command to both an interim civilian president and a constituent assembly--steps desired by most politicians who fear that otherwise the military will impose a president. The armed forces are aware, however, that in the past such arrangements have tended to exacerbate insta- bility. The politicians have dis- played negligible energy since the failure of attempts to over- throw the junta last July, and are unprepared for a presidential race. They probably will con- tinue to urge a constituent as- sembly that they could control, but may also attempt to concert ephemeral "fronts" or coalitions in hopes of developing a winning combination. Lack of provision by the junta for election of a congress--historically the least stable or effective branch--thwarts the ambition of many politicians and may further inhibit their cam- paign enthusiasm. Minister of Government Garcia Velasco, who favored a constituent assembly, has left the government, and for the moment, other parti- sans of this approach are muted. Ex-junta member Freile has found no response to his plaints against the government from hiding, and he now lacks the organized fol- lowing to give his presidential ambitions more than a remote chance. Little has been heard from exiled Velasco Ibarra, al- though some of his partisans an- nounced that he would be a can- didate regardless of the govern- ment's attitude. The other nomi- nees, Raul Clemente Huerta and Carlos Guevara Moreno, remain silent. There are persistent rumors that some opponents of the tran- sition plan have found military support and may attempt to es- tablish a new junta or a single executive. Embassy sources indi- cate that ex-President Ponce is behind efforts to concert a civil- military coup in order to prevent his being barred from the June contest. Pressures for such an attempt will likely become most serious near the 29 January anni- versary of the widely hated Rio Protocol which defined Ecuador`s boundaries with Peru. SECRET Page 22 WEEKLY SUMMARY 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 25X1 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 sftp~ SECRET SECRET Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 QeI : No.. 0322/65A SECRET GROUP 1r Expfuded from dutorhatic downgrading ond,det9assifitatior Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 %JV1 '*001 SECRET Seven years after independence, the radical West African state of Guinea is subject to acute internal tensions that could threaten the stabil- ity of President Sekou Tourd's regime. The polit- ical enthusiasm initially generated by the coun- try's single party, the Democratic Party of Guinea (PDG), is being stifled by local, tribal, and in- dividual. interests. Despite Tourd's attempts to blame many of Guinea's difficulties on foreign med- dling, he has already felt obliged to make sweep- ing internal shifts. For a country of its small size and relative lack of development, Guinea exercises a dispropor- tionate amount of influence among the more radi- cal African states. This, together with its poten- tial economic importance as possessor of over 40 percent of known world reserves of bauxite, has tended to make it a focus of international inter- est. An influx of Communist aid and advisers shortly after independence made it appear that Guinea was being drawn irreversibly into the Com- munist sphere. However, this trend was abruptly halted following exposure of an allegedly Soviet- inspired plot in late 1961. Since 1962, Guinea has steadily increased its ties with the US, which is now the principal donor of economic and technical aid. Close relations have never been resumed with France despite the example of other French-speaking African states and the desires of many influential Guineans. Domestic political pressures could pro- duce another shift in orientation as sudden as that of four years ago. When Guinea abruptly voted its independence in September 1.958, its chief asset was its highly organized political party, the PDG, which had a revolution- ary, egalitarian, and somewhat puritanical outlook. During the final years of French rule, Tourd and his associates used the party to fuse Guinea's normally antagonis- Page 1 tic tribes and social classes into a unified anticolonial force, and the momentum of this effort carried over into the early pe- riod of independence. After seven difficult years, however, the PDG's ability to engage all the people in a selfless nation- building effort is showing signs of fraying. On the positive side, Tourh's regime, by creating a widespread SECRET SPECIAL REPORT 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET SECRET Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 %041 Vftvf SECRET sense of civic responsibility, has accomplished far more than have most other newly independ- ent African states. His regime is well ahead of others in the field of social development, es- pecially in terms of education, status of women, and the eradi- cation of tribalism. Neverthe- less, these things represent good beginnings rather than final ac- complishments, and they are sub- ject to undermining by internal rivalries, foreign manipulation, and economic difficulties. In fact, economic conditions in Guinea have been deteriorating ever since independence. Although Communist countries soon stepped in to replace the suddenly ter- minated French support, many of their initial aid projects proved to be ill-conceived and unproduc- tive. During the past few years, foreign aid to Guinea has come from more diversified sources and has been somewhat better suited to the country's needs. It has contributed a modest variety of processing plants and a lim- ited improvement in such fields as communications and transporta- tion. Simultaneously, however, vital agricultural production has declined in both the subsist- ence and small plantation sectors, and there have been intermittent food shortages. The country's economic prob- lems are rooted in the govern- ment's capricious domestic poli- cies, which are more often promul- gated to satisfy nationalist sen- timent or to follow a socialist pattern than to deal with the sit- uation at hand. In 1960, for ex- ample, Guinea adopted its own cur- rency as a manifestation of polit- ical independence, but the cur- rency is now virtually worthless and nonconvert ible . Moreover, shortages of foreign exchange have cut deeply into supplies of con- sumer goods and have prompted var- ious clandestine trading arrange- ments. There has been a mounting incidence of farmers' withholding their produce, of illicit deals in foreign currency, and of b]tackmarketing and smuggling. In 1964 an estimated 60 percent of Guinea's exportable products were smuggled out for hard cur- rency and even most goods legally imported were smuggled out be- fore they could reach local con- sumers. It was general knowl- edge that police and party of- ficials participated extensively in these activities. For several years the gov- ernment attempted directly to conduct most retail trade in Guinea. In November 1964, after a year of experimenting with a more liberal commercial system and attempting persuasion through PDG channels, it resorted to force to induce observance of stringent new economic regula- tions. Smugglers were arrested and many independent merchants and peddlers were put out of business as retail trade in staple goods reverted to direct government operation. A special party commission was set up to investigate possible economic wrong-doing on the part of of- ficials. Other economy measures in- troduced in 1964 added to the gen- erral discontent. Of these, the most unpopular appears to have SECRET Page 3 SPECIAL REPORT 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET been a rigid restriction on the number of students permitted to go on to secondary schools in Guinea or to continue their ed- ucation abroad. One dramatic result of all these measures has been a massive emigration from Guinea to neigh- boring countries, especially to relatively prosperous Ivory Coast and Senegal. Conakry officially closed the borders in November 1964 and used security forces to enforce the closure; some of the restrictions were lifted during 1965, but controls remain tight and certain categories of indi- viduals such as soldiers, stu- dents, and unmarried girls are still not permitted to leave. In all, about ten percent of the Guinean population is estimated to have departed, mostly during the past two years. SEKOU TOURS Politically, Tourd has never been an absolute master in Guinea, and as contradictory pressures build up, his policy decisions tend to become more erratic. PDG doctrine, for which Tourd is ul- timately responsible, emphasizes broad participation in govern- ment affairs and the use of the consensus method for determining policies. Tourd probably cannot arbitrarily impose his will even within the PDG's 15-member polit- buro,and he has not been able to generate real forward movement at several of the recent specially called sessions of the party's national council. Although Tourd has a unique ability to artic- ulate the needs, emotions, and as- pirations of the Guinean people, there are also a number of other top figures who are politically important in their own right and can probably delay or reshape policies they oppose. There is good evidence that Tourd has long been dissatisfied with some of his colleagues. How- ever, his efforts to purge the politburo--dating back to 1962-- have been notably unsuccessful. As president, he has a freer hand to reshuffle the government than the party, but even there certain individuals apparently are virtually untouchable. Local complaints recur about party and government officials practicing tribal discrimination or using their positions for personal gain. Over a year ago, Tourd accused unspecified officials of improper conduct in their dealings with foreign SE E A-4 x IZET SPECIAL REPORT 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 *90~ 11"o SECRET embassies. More recently, exten- sive transfers have been carried out in the security forces, in- cluding the dismissal of the com- mander of the large military camp near Conakry and the replacement of the defense minister. The general atmosphere of suspicion and recrimination appears to have intensified as conditions within the country have worsened. Tribal antagonism to the re- gime has occurred primarily among the Fulani, who make up over a third of the population, and among the Malinke, the second largest group. The Fulani enjoyed a privileged position under French rule and have never been fully reconciled to the present system. The Malinke, on the other hand, are the dominant tribe in the PDG and the government, but many of them are also members of the traditional merchant class that has been badly hurt by the con- trols on commerce. Other political tensions ap- pear to arise from various domes- tic factions siding with different foreign powers. Prominent Fulani, for instance, have been critical of Toure for the exclusion of France from Guinea's economic de- velopment since 1958. Some other leaders would prefer to see the Soviet Union or Communist China in the place of the US, which Toure has now accepted as the leading partner in Guinea's eco- nomic development. In this atmosphere, rumor campaigns of the wildest kind have developed. Some of the stories circulated include re- ports of gross police brutality against people picked up for mi- nor infractions of economic regu- lations, of a supposed US-insti- gated plot to overthrow Toure, and of the alleged mysterious death in the Soviet Union of the regime's most prominent Fulani personality. November "Plot" Expose Sekou Toure's dramatic pub- lic charges last November that domestic enemies and foreign powers were plotting against him brought some of the smoldering dissidence out into the open. It Is unlikely that those accused actually possessed a serious po- tential for overthrowing the government. Nevertheless, the "exposure" of the plot provided the occasion for sweeping person- nel changes. Party activity was ELlso stepped up to demonstrate public solidarity with the re- gime. Announcements that inves- tigations are continuing in order to establish evidence against ad- ditional plotters may be designed to intimidate other malcontents. As elaborated thus far, the plot supposedly was planned by Ivory Coast President Houphouet- Boigny with the support of two French cabinet ministers and the presidents of several other moderate African countries. The principal agent identified in- side Guinea was Mamadou "Little" Toure, a Malinke cousin of the President and the former head of the state textile trading company. His role allegedly was to hire "commandos" who would create dis- turbances as a cover for the as- sassination of Toure. According SECRET Page 5 SPECIAL REPORT Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 SECRET to government accounts, three such assassination attempts have failed, including two on the 2 October national holiday. The money involved was al- legedly brought in from Abidjan by Francois Kamano, head of the Ivory Coast Social Security Of- fice, who has family ties in Conakry and visited there often as Tourd's guest. Both "Little" Tourd and Kamano seem to be free- wheeling operators well known in Ivory Coast as well as Guinea. The latter was arrested briefly in 1963 in connection with a plot against Houphouet-Boigny. on President .Houphouet-Boigny, under whom Tourd began his po- litical career in the 1940s. They broke in the 1950s over ideolog- ical issues, and currently are rival spokesmen, respectively, for radical, anticolonial, and socialist Africa and for moderate, pro-Western, and capitalist Af- rica. Tourd's quarrel with Ivory Coast is of such emotional in- tensity that it may be partially responsible for Guinea's recent militancy regarding the Organi- zation of African Unity and the Rhodesian issue. Guinea was the first of the nine states that broke diplomatic relations with Britain over this question. This and other prevailing conspiracy stories reflect a com- bination of normal Guinean dis- trust of foreigners, tribal an- tagonisms, echoes from two plots exposed some years ago, and gen- eral suspicions aroused by Guinean feelings of frustration and iso- lation. Guineans are also likely to confuse foreign contact with plotting, and criticism with sub- version. Thus far, government and party surveillance has been adequate to detect and neutralize any serious threat. External Repercussions One immediate result of the November plot charges was a break in diplomatic relations with France. The two embassies were promptly closed and economic negotiations, which had seemed to be progressing, were called off. Tourd's charges against French-oriented Ivory Coast were accompanied by a stinging attack In any case, the pro-French and pro-Ivorian group within the Guinean regime is currently in eclipse. There are some indica- tions that in order to bring this about, Tourd may have felt obliged to ally himself with pro- Soviet elements, thereby increas- ing their weight in the Guinean political equation. Although the President presumably be- lieves that he can remain their master, their influence may prove more than he bargained for in an essentially fluid situation. A new rapprochement with Mos- cow was under way even before the recent plot disclosures. In July, President Tourd made his first official visit to the Soviet Union since the 1961 episode in which the Soviet ambassador was sent home for his alleged sub- versive activity. Before leaving Conakry, Tourd implied to US of- ficials that the visit was a ges- ture meant to please PDG elements dissatisfied with the results of SECRET Page 6 SPECIAL REPORT Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 V4W SECRET the priority given to Western aid over the past few years. Moscow may have offered to- ken commitments to Tourd, but no new aid agreements are known to have been signed. However, Guinea has persisted in claim- ing that the USSR "would assure" construction of the long-pro- jected Konkoure dam, hydro- electric plant, and aluminum smelter, as well as a detailed list of other projects. The ag- gressive handling of the subject, both in the news media and at a special meeting of the top party council, may have been aimed at putting additional pressure on Moscow, but was more likely in- tended to satisfy the pro-Soviet faction within the regime. Many Guinean leaders would welcome Soviet entry into the aluminum picture either for its own sake or as a form of pres- sure on the Western companies to step up their activities. Guin- eans tend to view rapid develop- ment of the bauxite industry as their chief hope for overcoming their present economic diffi- culties. Current production is pro- vided mainly by Fria, a consor- tium of Western companies in which the US firm, Olin Mathie- son, is the principal shareholder and a French firm has operational responsibility. Another American firm, Harvey Aluminum, has an exclusive concession for exploi- tation of the massive reserves at Boke and has formed a mixed company with the government of Guinea. Last June, US AID pro- vided the proposed Boke opera- tion with a loan guarantee, but arrangements for financing have not been completed. The Guinean Government, which nationalized a French concession on these reserves four years ago because of nonperformance, presumably is becoming impatient at the delay in beginning work on the proj- ect. Although the Chinese Commu- nists are active in Guinea and their aid programs are generally well received, they do not ap- pear to have any significant group of supporters among PDG or government leaders. Tourd himself appears to have been so upset by the militarist and racial doctrines expounded by Chinese Foreign Minister Chen Yi while visiting Conakry last Sep- tember that he is unlikely to develop closer relations with Peking in the foreseeable future. The current tense situa- tion in Guinea could continue indefinitely. The country's economic problems and political tensions have already been build- ing up over a span of several years and there is little indi- cation that a dramatic denoue- ment is in sight. Moreover, it appears unlikely that Tourd's re- gime could be overthrown by do- mestic dissidents in the near fu- ture. SECRET SPECIAL REPORT 30 Dec 65 Approved For Release 2008/04/15: CIA-RDP79-00927A005100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET Sudden shifts in Guinea's domestic and foreign policy can- not be ruled out, however. Guinea already has moved from a close identification with the Communist bloc in 1961 to a primary reli- ance on US aid in 1965. The per- manence of present and future al- liances will be equally depend- ent on the views of Guinea's leaders as to where their best interests lie. It is an important article of Sekou Tourd's political faith that his regime should reflect the wishes of the people. If competing pressures should be resolved and a new consensus produced within the PDG in fa- vor of different policies, Tourd might be expected to adjust his programs with little or no r ins SE 'RE l Page 8 SPECIAL REPORT Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 SECRET SECRET' Approved For Release 2008/04/15: CIA-RDP79-00927AO05100080001-9 Q.QI No. 0322/65B Copy No. .53 AL EFORT CHILE: PRO$LEMS XAGINGr THE IDC THE. 1 R E ",VICTORY SECRET GROUP I Excfuded froth QufomWic downgrading am larfn