WEEKLY SUMMARY

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CIA-RDP79-00927A005200050001-1
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Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 State Dept. review completed BARMY Review Completed, Copy No. ~5 3 ,,C-E~NT INTELLIGENC 1 I Y ' b F' FIC OF`' `I.~RF EN T I IV L;L I NC ID IA review completed. Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 Nof Vow SECRET (Information as of noon EST, 10 March 1966) Page VIETNAM Intense fighting and high enemy losses in three allied operations highlighted the military situation this week in South Vietnam. Although Communist-initiated activity was down somewhat, there are indications of continued infiltration and Viet Cong plans for large-scale actions. Premier Ky, with the full support of the military Directorate, removed I Corps commander Thi, potentially one of Ky's strongest rivals for power. There is evidence this week both of increased numbers of fighter aircraft in North Vietnam and of greater aggressiveness on the part of DRV fighter pilots. Hanoi has admitted that manpower allocation problems are affecting food production. PROLONGED ABSENCE OF MAO TSE-TUNG The Chinese Communist Party leader's unprecedented five- month absence from public view has been accompanied by idolatrous propaganda possibly intended to prepare the people for a transfer of loyalties to a successor regime. SECRET Page i WEEKLY SUMMARY 11 Mar 66 Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET EAST GERMANS AGREE TO NEW BERLIN PASS AGREEMENT The East German regime's sudden pose of reasonableness is probably timed to coincide with its petition for UN membership. RIFTS IN ALBANIA'S TOP LEADERSHIP Serious factional disputes have appeared in the usually close-knit leadership. Party leader Hoxha.,at least for the time being, seems to have survived the challenge, apparently posed by the defense minister, by adopting some of the criticism as his own and making some con- cessions. Asia-Africa INDONESIAN STUDENT AGITATION CONTINUES The army is protecting President Sukarno's palace, but is acquiescing in the demonstrations against Foreign Minister Subandrio and other leftist cabinet ministers. COMMUNISTS COhTDUE PRESSURE IN NORTHERN LAOS They are probing in the Plain des Jarres area, are offering strong resistance to government probes south of Samneua, and are making gains against guerrillas north of Luang Prabang. GHANA TRANSFORMATION CONTINUES The new anti-Communist rulers are dismantling key features of Nkrumah's power structure. Relations with radical African regimes will be complicated by their emotional opposition to the coup. SECRET Page ii WEEKLY SUMMARY 11 Mar 66 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 SECRET IVORY COAST STABILITY MAY BE DISTURBED 14 President Houphouet-Boigny, possibly disturbed by the coups in neighboring countries, has been moving to contain domestic discontent, but his action may result: in further demands for change. MODERATE AFRICANS DOMINATE OAU MEETING 15 Despite walkouts stemming from the Ghanaian and Rhodesian issues, the moderates seem to have kept the organization together with compromise resolutions. UK TRYING TO STOP OIL SHIPMENT TO RHODESIA VIA MOZAMBIQUE 17 Britain is pressing the Portuguese Government to pre- vent delivery of oil to Rhodesia from a tanker said to be about to arrive at the Mozambique port of Beira. Europe FRANCE MOVES TO DISENGAGE FROM NATO De Gaulle has been notifying the NATO countries that he intends to renegotiate the agreements under which for- eign military forces may remain in France, and to end France's remaining participation in the alliance organ- ization, although not in the alliance itself. NATO INTEREST IN SOVIET PROPOSAL TO TRADE MILITARY OBSERVERS 20 London and Bonn see Moscow's proposal to exchange ob- servers at military maneuvers with NATO or the US as a means of improving relations with the Soviets in an area which need not receive great publicity. FINLAND'S NATIONAL ELECTIONS 21 Voter dissatisfaction with economic policies of Presi- dent Kekkonen's long-dominant Center (Agrarian) Party may help the Social Democrats end an eight-year polit- ical isolation. SECRET Page iii WEEKLY SUMMARY 11 Mar 66 Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET MALTA TO ELECT NEW PARLIAMENT The principal issues are economic problems and the NATO presence. No party is likely to get an absolute major- ity, and incumbent Prime Minister Borg Olivier probably has the best chance of forming a coalition. AUSTRIAN ELECTION UPSETS COALITION BALANCE Although his People's Party now has an absolute major- ity, Chancellor Klaus intends to re-establish its coa- lition with the Socialists. The election results, in any event, affect domestic far more than foreign policy. Western Hemisphere DOMINICAN REPUBLIC Tensions between President Garcia Godoy and the military have lessened and preparations for the 1 June election , have begun. Juan Bosch continues to exaggerate the ter- rorist threat to create an excuse to boycott the elec- tion if he decides his party cannot win. ELECTION BRINGS TENSION IN GUATEMALA 24 A confrontation may be imminent between Chief of Govern- ment Peralta and restive conservatives fearful of a new government headed by moderate leftist Mendez, apparent presidential victor in last week's election. The con- servatives insist that Peralta -annul the elections. COLOMBIAN ELECTIONS MAY THREATEN NATIONAL FRONT SYSTEM 25 Factional quarrels are increasing within the two major parties which, in a unique arrangement that has lasted eight years, have shared all elective offices. However, no serious election violence is anticipated. ECUADOREAN POLITICIANS RESISTING JUNTA'S REFORM PLANS 26 They insist on a constituent assembly--which they would control--to handle the transition to civilian rule. The junta's only alternative to granting this demand may be to impose a military dictatorship. ,5E `I ET Page iv WEEKLY SUMMARY 11 Mar 66 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET Intense fighting and high enemy losses in three allied op- erations highlighted the military situation this week in South Vietnam. Although Communist-in- itiated activity declined some- what, there are indications of continued infiltration as well as Viet Cong planning for future large-scale action. Intelligence obtained during a South Vietnamese operation) led to a larger alli on ed area, led to allied follow-up op- erations which are continuing in the general vicinity. A Viet Cong battalion-size attack against elements of a South Vietnamese regiment in Bien Hoa Province and a multibattal- ion attack against the A Shau Special Forces camp near the Lao- tian border in Thua Thien Prov- ince were the most significant enemy actions reported during the week. Two enemy soldiers who surrendered before the as- sault on the Special Forces gar- rison in Thua Thien provided some warning of the impending at- tack. The soldiers claimed to be members of a North Vietnamese regiment which infiltrated last month and was located about six miles northeast of the special camp. opera ion the next day several miles northwest of the provincial capital, where the main force of a suspected North Vietnamese regiment was trapped. Fighting continued and re- sulted in nearly 600 enemy dead as against allied losses of 113 killed (83 US) and 324 wounded (205 US). Farther south in Phu Yen Province, elements of the US 101st Airborne Division conduct- ing Operation HARRISON engaged a Viet Cong force in a day-long battle on 4 March, raising enemy losses there to nearly 200 killed since 26 February. US forces sweeping an area in Binh Duong Province about 30 miles northeast of Saigon also made contact with the emeny on 4 and 5 March and, with close air sup- port, killed nearly 200 Viet Cong. This engagement, along with other evidence of the recent grouping of large enemy forces in the Another Viet Cong returnee in Bien Hoa Province, claiming to be a company commander of a Viet Cong main force battalion, listed several towns in Bien Hoa and Long Khanh provinces as tar- gets for future Viet Cong at- tacks. US military officials in Saigon have noted that there are four Viet Cong regiments which could launch large-scale assaults in this area. A substantial movement of North Vietnamese troops--possibly as many as 8,000-9,000--has been SECRET 25X1 25X1 LOA I Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET reported by a guerrilla unit lo- cated in the northern section of the Laotian infiltration corri- dor. Large numbers of Communist trucks--perhaps as many as 400-- moved south during the period 16-23 February. The trucks moved nightly in two or three convoys of 20-25 trucks each. This re- port marks the first time in over a year that sizable numbers of Communist troops have been ob- served moving south in trucks through the Laotian infiltration corridor. There is no evidence as to the destination of these troops, and a second team located far- ther south on the same route did not confirm a movement of this size. Normally, infiltrating troops destined for South Viet- nam enter Laos just north of the Demilitarized Zone and move into the southern panhandle on foot trails. I Corps Commander Dismissed Premier Ky, who has recently been concerned with the independ- ence of his military corps com- manders, yesterday received the unanimous support of the ruling military Directorate when he called for the removal of the strongest of them, I Corps com- mander General Thi. Thi ac- cepted the Directorate's deci- sion and reportedly agreed to submit a letter of resignation for medical reasons. However, he is said to have agreed only reluctantly to leave for the United States sometime next week, and a certain amount of uneasi- ness will probably characterize the Saigon political atmosphere until he actually departs. The ousting of General Thi, long considered Premier Ky's strongest potential rival, will probably serve to strengthen Ky's position in relation to the other corps commanders, at least two of whom have also exhibited con- siderable independence. In par- ticular, there are indications that IV Corps commander General Quang will be next to go. Improved DRV Air Defense Additional MIG-21 Fishbed fighters have been delivered to North Vietnam. Drone photography of Phuc Yen Airfield revealed 14 Fishbeds and one pos- sible Fishbed. The number of assembled MI -2ls seen is an increase of four or five since the last photography of Phuc Yen The drone photography also revealed that construction activity Page 2 WEEKLY SUMMARY 25X1 25X1 25X1 25X1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 V17 1 n "m Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 %we 1%W UANG .. At PHU BON IV CORPS SOUTH VIETNAM .B'E'CK J T Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET at several of North Vietnam's major airfields is continuing. A large number of revetments have been constructed or are in the process of being constructed at Phuc Yen and Kep airfields while a major runway extension has ap- parently been completed at Hanoi/ Gia Lam. Concurrent with the increas- ing number of aircraft appearing in North Vietnam is a noticeable increase in the aggressiveness of Vietnamese fighter pilots. On 4 March, DRV fighters unsuc- cessfully a temp e to intercept a flight of F4C Phantoms. Food Production Problems in DRV Problems of food production continue to plague the North Vietnamese regime. In the past month, official spokesmen have expressed concern about the pro- duction of both rice and pork. Although pork constitutes a small part of the North Vietnamese :diet, it is the largest meat component besides poultry. Spokesmen for the Ministry of Agriculture have admitted in the past few months that a sig- nificant amount of acreage de- voted to the spring rice crop had not been planted. A vice minister said in December that manpower shortages contributed to production problems and esti- mated that the remaining agri- cultural workers would have to increase their workdays 25-50 percent in order to make up for the loss of manpower to the war effort. The amount of land which the spokesman said had not been properly planted could nor- mally yield about eight percent of North Vietnam's total annual rice production. Although such a decline in production would contribute to food problems, any rice shortage could be overcome by substituting other foods or increasing imports. The admission of manpower shortages in agricultural pro- duction, however, is the first official suggestion that the mo- bilization requirements of the war have seriously cut into the country's large unskilled agri- cultural labor force. In re- sponse to the air strikes, North Vietnam has mobilized large seg- ments of the population for mil- itary service or related construc- tion work. Although the manpower reserves are substantial, the regime is apparently experiencing serious allocation problems. Con- tinuation of these problems could interfere with production of the mare important fall rice crop. 25X1 25X1 SECRET Page 4 WEEKLY SUMMARY Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET Mao Tse-tung, 72-year-old chairman of the Chinese Communist Party, may be nearing the end of the road. He now has been out of public view for five months, exceeding his longest recorded previous absence in the winter of 1956-57 when he is believed to have suffered a stroke. After his last public ap- pearance in Peking on 10 October, Mao continued to receive an oc- casional foreign visitor at an undisclosed location--probably his villain the East China resort city of Hangchow--but his activ- ities have gone unreported since a meeting with a Cambodian del- egation on 26 November. His current absence has been accompanied by an unprece- dented and still growing out- pouring of emotional and idola- trous propaganda, suggesting concern in top party ranks. Hyperbole on the value of study- ing Mao's works is the order of the day. Mao's thoughts are ac- claimed as the "Red sun in our hearts," the "very heart and soul of all work," and the "apex of contemporary Marxist-Leninist thought." Each of Mao's words is said to be worth 10,000 words of other men. The epochs of Marx and Engels and of Lenin and Stalin are proclaimed to have been succeeded by the "epoch of Mao Tse-tung" during which "capitalism and imperialism... will be sent to their tombs." Adding to the aura of mys- tery surrounding Mao's whereabouts is the unusual absence of public activity by other leaders during the last three months. The party's number two leader, Liu Shao-chi, showed up only once in 11 weeks from late November to early Feb- ruary. Lo Jui-ching, army chief of staff and the Chinese equiv- alent of chief of secret police, has been out of view as long as Mao. In an apparently unprec- edented wholesale absence, not one of the 150-odd top central party or government figures made public appearances during a nine-day period at the end of January. This gap in leadership ap- pearances was followed in early February by the issuance of di- rectives throughout China order- ing middle and senior level party and military officials to study Mao's works and emulate Maoist folk heroes. These offi- cials were told to spend four days a month and one month a year, in rotation, in full-time seminars studying Mao's writings. This extraordinary atten- tion to Mao Tse-tung seems to exceed what would be useful for indoctrination purposes, and could be an effort to prepare the way psychologically for a transfer of loyalties to a suc- cessor regime. Mao's charisma is one of the regime's few do- mestic political assets, and any successor--especially the color- less Liu Shao-chi--probably would try to exploit Mao's name by representing himself as an ultra- loyal Maoist. SECRET Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET The new wave of propaganda on the cult of Mao has contained several reminders that Liu Shao- chi is still the designated heir to Mao's authority. Not only Mao's works but also Liu's [low To Be a Good Communist reportedly were foun un cr the pillow of Chiao Yu-lu, a deceased minor party official who became the latest addition to the Maoist pantheon of the folk heroes. Similarly, Peking announced on 19 February that it was "equally necessary" for top generals to study three of Mao's works and this work by Liu. A long encom- ium to Mao published on 2 March pointedly included a statement that Liu Shao-chi had for decades held up Mao's thinking as the only effective source of guidance for the revolution. V_jVCd..RET Page 6 WEEKLY SUMMARY Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 *mw VAW SECRET East Germany's sudden will- ingness to conclude a reasonable short-term Berlin pass agreement on 7 March was probably prompted in large part by its desire to adopt a moderate and humanitarian pose while petitioning for UN membership. The East Germans derive other political advantages from limited pass agreements, moreover, and will probably agree to more in the future. East German negotiator Michael Kohl originally took an extremely rigid position when the pass talks began in January. He rejected West Berlin's propos- al for a year-long agreement and offered instead a draft contain- ing several unacceptable provi- sions. The East German position at that time appeared so harsh that Mayor Willy Brandt publicly warned West Berliners not to ex- pect any agreement. The day before East Germany's petition for UN membership was presented in New York, however, Kohl informed his West Berlin Senat counterpart, Horst Kerber, of his government's willingness to conclude a short-term agree- ment almost identical to the one at Christmas and New Year's. Despite their earlier hopes for an agreement of longer duration, the Senat and West German Govern- ment accepted the East German offer. The new agreement provides West Berliners the opportunity to make one visit to relatives in East Berlin over the Easter (7 to 20 April) and Pentecost (23 May to 15 June) holidays. It also extends the arrangement for issuance of emergency hardship passes from 31 March to 30 June. One reason for concluding a short-term agreement appears to be a desire on the East Ger- mans part to keep the Senat negotiating. By doing this, they can claim that their theory on the existence of three German "states" is supported by West Berlin. Pass agreements also imply recognition of the Berlin Wall as a legal boundary.. In addition, the East Germans de- rive a fairly large amount of needed hard currency from their requirement that each visitor exchange five West German marks for five East German marks. SECRET Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET Serious factional differences have come to light within Albania's top leadership. Opposition ele- ments, reportedly led by Defense Minister Balluku, apparently were disturbed by lack of economic prog- ress and Albania's international isolation. At least for the time being, party boss Enver Hoxha has retained his authority through adroit maneuvering and some con- cessions. Hoxha, in an effort to save his neck, is adopting the opposi- tion's criticism as his own. As a result he has been compelled to subscribe in principle to some de- centralization of the economic planning apparatus and the state administrative authority and to limited moves to end Albania's iso- lation. He also appears prepared to make a scapegoat of his long- time colleague and governmental chief, Premier Shehu. Hoxha has also instituted measures to reassert his own and the party's authority over the army. He undoubtedly recalled the abortive coup attempt in 1960 led by senior naval officers and in- cluding several senior army offi- cers. The struggle within the lead- ership is revealed in an unusual open letter to the population--the full text of which is not yet available--from the party central committee. Broadcast on 6 March, the letter admitted party errors, strongly attacked the government bureaucracy, and recommended re- forms. The letter called for a "determined struggle against ap- pearances of warped methods of giv- ing orders" and, unprecedentedly for Albania, indicted the "very cen- tralized form of leadership." It recommended a reorganization of the "system of leadership" in which lower party-state bodies would have greater authority. Following the open letter, the regime issued a decree on 7 March reinstating in all military units and institutions the political com- missar system abolished in 1955. Another decree abolishes as of 1 May the rank system in the armed forces and the secret police. These steps were influenced by changes in 1965 in the Chinese Com- munist armed forces intended to strengthen party control over the military. Previous reports of friction between Defense Minister Beqir Balluku and Interior Minister Kadri Hazbiu suggest that the army spear- headed the Albanian opposition. This friction apparently derived in some part from long-standing in- terservice rivalry. Also involved, however, were serious differences between those with rigid pro-Chi- nese views, probably represented by Hazbiu, and Balluku and his ad- herents, who wanted to reduce Al- bania's dependence on the Chinese and its isolation from the rest of the world, and to resume partic- ipation in the Warsaw Pact. SECRET Page 8 WEEKLY SUMMARY Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET NW INDONESIAN STUDENT AGITATION CONTINUES Indonesia's non-Communist students remain alone in openly opposing Foreign Minister Suban- drio and other leftist cabinet ministers and indirectly criti- cizing President Sukarno. Al- though the army refuses to let them demonstrate against the pal- ace, it has been relatively leni- ent about activities directed against Subandrio and the crypto- Communist Minister of Basic Educa- tion, Sumardjo. The students ex- tended their activity on 9 and 10 March to Chinese Communist targets--the consulate general, the trade office, and the news agency. Sukarno's ban on demonstra- tions by students, announced on 26 February, applied only to those from universities.. The burden of present activity is being carried by high school youth, although the more advanced stu- dents are reported to be still participating. Despite the gov- ernment order closing the Uni- versity of Indonesia in Djakarta, students apparently continue to use its buildings as a general headquarters. A student radio which recently has begun broad- casting apparently operates from Bandung, 75 miles from the capi- tal,. Army officers. at various levels are said to be discuss- ing a variety of possible plans against Sukarno and those who support him. The army appears to be pleased with the students' action but at the same time will not support them openly and ap- parently wishes to avoid serious disorder or violence specifically directed against Sukarno. The President is engaged in a series of meetings with civil- ian and military leaders. The sessions are scheduled to con- clude on 12 March and may pro- duce new initiatives against the students and the army. He and Subandrio apparently directed their own followers to take to the streets on 8 March. The US Embassy experienced a small but violent demonstration by about 300 leftist youth. Also, at Sukarno's orders, a number of leftists and pro- Communists who had been dis- missed from the various govern- ment departments after the 1 October coup attempt are being reinstated. The President has transferred trials of civilians involved in the coup attempt from the army to the attorne eral, Communist forces continue to exert pressure against government positions in northern Laos. In the Plaine des Jarres area, several Communist probes have been mounted in the past week against neutralist positions east of Muong Soui. Some enemy shelling of Muong Soui itself has been reported. Com- munist activity in this area is prob- ably in reaction to an unsuccessful SECRET Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Muong Sori',Samneua inh ginh Chang hsi c }{ 61433 SECRET Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET operation which was conducted by Kong Le's neutralist troops last month. In the Samneua area, a Com- munist thrust against Muong Hiem, which has been anticipated since Na Khang fell on 18 February, has thus far failed to materialize. The enemy, having reportedly suffered heavy losses in taking Na Khang, apparently is regroup- ing before pursuing the year-old campaign to clear government en- claves south of Samneua town. Government probes in the vicinity of Na Khang have encountered strong resistance. However Pathet Lao troops have been driven from Muong Son, a posi- tion some 30 miles to the north. Farther west, Communist forces continue to make gains against government guerrillas north of Luang Prabang. Two positions have been lost to Pathet Lao and North Vietnamese troops since late February. Reports from civilian refugees indicate that the Communists, in contrast to past practice, are to hold can- tured positions. SECRET Page 11 WEEKLY SUMMARY 11 Mar 66 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 25X1 25X1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 ikft~ SECRET Ghana's new anti-Communist army and police rulers are rapidly dismantling key features of Nkrumah's power structure and pressing ahead with reconstruc- tion measures amid further signs of popular approval of the re- cent coup. Their intra-African relations will be complicated, however, by the more radical Af- rican regimes' emotional opposi- tion to Nkrumah's ouster. On 7 March the ruling Na- tional Liberation Council (NLC) abolished the Ghana Young Pio- neers, a Communist-supported or- ganization established in 1960 to indoctrinate youth in a variant of Marxism. The coup leaders had earlier closed down the Ideolog- ical Institute at Winneba, near Accra, where successive groups of adult cadres of Nkrumah's now dissolved party had been exposed to foreign Communist instructors. Nkrumah favorites who headed uni- versities have been replaced by respected nonpolitical figures. The new regime is evidently encouraging the early re-emer- gence of a free, Western-style labor movement within the frame- work of the Ghana Trades Union Congress (GTUC). Nkrumah had long ago converted this important mass organization into a docile appendage of his party and also opened it wide to Communist pene- tration. Now, under a newly in- stalled anti-Communist leader, who seems to have rank and file support, a basic reorganization is about to be launched through a series of union elections. The GTUC's extensive ties with the Communist world are apparently being severed. According to the new GTUC chief, this will include withdrawal from the Communist- backed All-African Trade Union Federation, a primary instrument of Nkrumah's African subversion program. The evacuation of the ex- pelled Chinese advisers--evidently some 175 were in Ghana--was sub- stantially completed by 3 March. The Soviet exodus, involving ap- proximately 500 technicians and their families, will probably continue for about another week. Both Communist powers are being restricted to 18-man embassies. The new regime has already resumed diplomatic relations with Britain, which Nkrumah had severed last December over Rhodesia. It appears determined to press ahead with economic reforms keyed to earlier recommendations of the World Bank and International Monetary Fund. Although the NLC continues to fear that Nkrumah may soon try to return to Ghana, the ousted leader now appears to have ac- cepted his present inability to reverse the coup. He is still in Guinea but may move on soon to Cairo. Despite the large number of African states which have recog- nized the new Ghana regime, Nasir now appears inclined to play a leading role in organizing fur- ther African expressions of dis- approval of the coup. Zambia has moved formally to terminate ac- tive relations with Accra, while the NLC has itself initiated a rupture with Guinea. SECRET Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET Ivory Coast, which has been markedly stable since 1963, may be heading into a period of do- mestic agitation. President Houphouet-Boigny, reportedly un- nerved by the recent rash of coups in neighboring West Afri- can countries, has attempted to head off his critics in a manner which may instead encourage them to make further demands, Ivory Coast's prosperity is unmatched in black Africa. This has somewhat obscured the exist- ence of impoverished rural areas, tribal hostilities, and large numbers of frustrated and rest- less young Ivorians who crave positions of power. By mid-1965 there were indications that the rate of economic growth was slow- ing and that the country's cash crops, coffee and cocoa, faced serious marketing problems. These factors, combined with the coups in Dahomey and Upper Volta, which had extremely close ties with the Ivory Coast Government, apparently prompted Houphouet-Boigny to face up to several issues which threat- ened to undermine his regime. A major cabinet shake-up on 21 January epitomized the new approach. Portfolios were shifted and total membership was enlarged to bring in several younger men not closely identified with past policies. To reduce the risk of subversion, no one with a base of local support was dismissed. Several days later, a new minor post was created to permit a large and occasionally dissident tribe to be represented. By far the most important ministerial change was the dis- missal of Raphael Sailer, the French national who, as minister of finance since 1960, had be- come the symbol of the govern- ment's encouragement of French domination of the economy. Al- though Houphouct-Boigny always paid lip service to the princi- ple of opening economic oppor- tunities to Ivorians, Saller's policies in effect negated these promises. The President has also con- ceded to public opinion by finally burying his proposal to establish dual nationality for citizens of the states adhering to the Entente which Ivory Coast concluded with several of its neighbors in 1959. Many Ivorians had feared that this would permit natives of Da- homey, who are particularly hated, and of Upper Volta, Niger, and Togo to compete on equal terms for choice government jobs and other positions. Houphouet-Boigny apparently was taken aback when he belatedly learned of the intensity of Ivorian feeling on some of these issues. Ile is responding in various ways. He has decreed clemency measures for political prisoners, reportedly is planning to revive an armed party militia, and is in the process of opening new channels for controlled political expres- sion. These steps, instead of protecting his regime against dissidence, may actually encourage his critics to press for even more concessions. BEGET Page 14 WEEKLY SUMMARY Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 V"'l~ SECRET Now The delegations from moder- ate states managed to keep the Organization for African Unity (OAU) together at the Sixth Ses- sion of the OAU Ministers' Coun- cil in Addis Ababa last week, despite the divisiveness of Gha- naian and Rhodesian issues. The session was almost scuttled by the refusal of the delegations from the Brazzaville Congo, Guinea, Mali, Tanzania, and Egypt to sit with the repre- sentatives of the new Ghanaian regime. Algeria and Somalia withdrew in protest over the ac- ceptance of a moderate resolu- tion on Rhodesia. However, all eight departing delegations em- phasized that they were leaving only this meeting and not with- drawing from the OAU. In its resolutions the council called on Britain to ap- ply "effective measures, includ- ing the use of force" to oust the Smith regime in Rhodesia. The question of relaxing the De- cember resolution under which nine African states broke rela- tions with Britain was raised by Tunisia, but not approved in the plenary session. African nations were called upon to work for UN Security Council examination of the situation in Rhodesia under Chapter VII of the UN Charter, and a five-nation Committee of Solidarity With Zambia was set up to seek economic and technical relief for the nation which would bear the brunt of any complete break with Rhodesia. The council avoided action on the rival Rhodesian national- ist organizations by recommend- ing that aid be given only to Af- ricans who become actively en- gaged in fighting inside Rhodesia. The OAU's radical secretary general,Diallo Telli of Guinea, was shorn of some of his power. The council reduced the secretar- iat's budget from a requested $2.3 million--which was only half of last year's expenditure--to $1.7 million. Many of the dele- gates resented Telli's freewheel- ing use of his office for personal gain, and his attempts to exclude the delegates from Accra. The council is not scheduled to meet again until just before the annual African summit confer- ence in November. Before then, how- ever, the dissident factions are likely to get together to plan their next move. There are indi- cations that these nations and certain other nonaligned states month. A map of Africa is printed on the back of this page. SECRET WEEKLY SUMMARY 11 Mar 66 Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET SPANISH SAHARA GUINEA LIBERIA ER VOLTA OAHVNEY NIGERIA TC?Sfl COAST AFRICA 61418 CFNTNI, AFRICAN M,WLK DEMOCRATIC IBEPUBUC - _-OF THE Vile CONGO REPUBLIC Of SOUTH AFRICA SECRET UNITED ARAB --R PUBLIC - -SOMALI REPUBLIC Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 SECRET British and Rhodesian atten- tion is focused on rumors of the imminent arrival in Portuguese Mozambique of a tanker with oil for Rhodesia. Salisbury is mak- ing arrangements at the port of Beira to bypass British-owned facilities, and has ordered the pipeline company to be ready to pump oil from Beira to the Umtali refinery in Rhodesia. London, on the other hand, is pressing the Portuguese Gov- ernment and the private companies involved in the complex Beira- Umtali link to prevent delivery of the oil to Rhodesia. It also hopes to mount an air and sea surveillance intended to intimi- date suspect tankers and deter their docking at Beira. A taAker full of oil would tremendously boost the will of white Rhodesians to hold out. It also would increase conflicting pres- sures on Britain's Prime Minis- ter Wilson--domestic pressure to negotiate with the Rhodesian re- gime, and demands from Africans that he take more militant action against it. A break in the oil embargo also would increase pressures on Zambia's President Kaunda to impose a boycott of Rhodesian goods or sanction use of Afri- can troops or guerrillas against Rhodesia. Any move in this di- rection would exacerbate internal racial friction and might result in the flight from Zambia of skilled white workers essential to the country's economy. Labor tension with racial overtones, which had been in- creased last week by a confron- tation between white miners and the government over mineworkers' demands for large increases in wages and allowances, has at least temporarily eased. The government and the few local union groups involved backed away from their earlier antago- nistic attitudes. The miners apparently have won little sym- 25X1 pathy from the white population at lar e. 25X1 De Gaulle has been notifying the NATO countries that he in- tends to renegotiate the agree- ments under which foreign mili- tary forces may remain in France, and to end France's remaining participation in the alliance organization, although not in the alliance itself. In their initial reaction the other NATO members have taken the position that an integrated NATO even SECRET Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 France's Importance to NATO and US Military Posture 2 Ar;riy diviyons arW_1 independent brrode 16 Airforce squadrons 8 Tactical strike/attack 3 Reconnaissance 5 Air defense French Forces Assigned to NATO (All stationed In France or West Germany) 5 Submarines earmarked for SACLANT Etain Verdunt J ~Mety- _ Chambley Phalsbourg, Toulhancy Chaumont US Installations in France* (31,000 Military personnel) 4 Major army depot headquarters 23 Army depot facilities 65,000 French troops "Including Berlin) Military communications system SHAPE { Petroleum distribution system Active air bases Stand-by air bases Air force communications depot Army aerial support Navy support center *By 31 March 1966, at US initiative, 3 installations will be closed and certain depots reorganized. FEDERAL REPUBLIC OF GERMANY NATO subcommands `ks US commands Headquarters, French forces in Germany US air installations ? Other installations 5aumur-*_Chinon ? Ingrandes?? tenay. ;Potiers ,Chtze SECRET Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Vfte, SECRET %to without France is preferable to the series of loose bilateral agreements Paris favors. By insisting that all for- eign troops and bases in France be brought under French control, Paris has directly challenged the extensive US military struc- ture in France. Eight basic agreements now govern the US pres- ence there. Five of these are bilateral, covering lines of com- munication, air bases, pipelines, and headquarters for the commander of US forces in Europe. The US also is party to three multilat- eral agreements: The North At- lantic Treaty (NAT), a status- of-forces agreement, and an agree- ment concerning the juridical as- pects of NATO, its staff, and representatives from member states. To terminate the bilateral agreements before 1969 without ending its participation in the NAT, France may seek legal. jus- tification in the doctrine of international law (rebus sic stantibus) which provides that a change in the conditions pre- vailing at the time an agreement was signed voids the agreement. De Gaulle has consistently held that changed conditions neces- sitate a change in France's role in the formation and implementa- tion of Western political and military policies. Even if France does not unilaterally withdraw from the NAT or the bilateral agreements, it could legally end the status-of-forces agreement after one year's notice and thereby raise practical difficul- ties for the continued presence of US forces. France also intends to with- draw its forces and personnel from NATO's integrated command structure. This will be the final step in a process which began in 1959 when the French Mediterranean fleet was placed under national command. Since that time, Paris has excluded most of French territory from NATO's integrated air defense, has refused to restore to NATO control three divisions removed from Europe for use in Algeria, has withdrawn the bulk of France's Atlantic fleet from NATO, has withdrawn French representation on the NATO naval Channel Com- mand and three subordinate naval commands, and since 1965 has made clear that French forces will not participate in any NATO exercises which do not conform to French strategic views. France may intend, however, to maintain its representation on the North Atlantic Council and, though this is less likely, in the Standing Group. France probably intends that the 65,000 French troops now in Germany under NATO remain there under. French control through a bilateral agreement with Bonn. The US Embassy in Bonn believes as a "theoretical possibility." there is a legal basis for such an arrangement, deriving originally from occupation rights and then from the 1954 Convention on Re- lations. Chancellor Erhard has acknowledged such an arrangement SECRET Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET NATO INTEREST IN SOVIET PROPOSAL TO TRADE MILITARY OBSERVERS The Soviet proposal late last year for NATO - Warsaw Pact or US-Soviet exchanges of ob- servers at military maneuvers has generated some interest in NATO. UK and West German plans for bilateral exchanges with the USSR have been outlined in recent NATO and US discussions of the proposal. The British and West Germans are interested in pro- moting such exchanges as a means of improving relations with the Soviets in an area which need not receive great publicity. The question of exchanging military maneuver observers was raised with the US Army attache in Moscow last October by Soviet First Deputy Minister of Defense and Warsaw Pact chief Grechko and has been subsequently refer- red to by other Soviet Ministry of Defense officers. Grechko suggested that qualified US and NATO military personnel attend large bloc military exercises. He said that the purpose of these exercises was to let the West know that the Warsaw Pact forces were combat ready and well equipped, and suggested that the ex- change would serve to prevent Western underestimation of Eas- tern strength and consequent mis- calculation. Grechko stated that exchanges would be accept- able either between NATO and the Warsaw Pact or between the US and the USSR. In the latter case, he said that it was important for both sides to have a sober appre- ciation of the "capabilities of the possible enemy." Subsequent NATO Council discussions have ruled out a Warsaw Pact - NATO exchange because of the problem posed by East German membership in the pact. The UK revealed in NATO Council meetings in mid-February that it has issued invitations to "Warsaw Pact countries" to send observers to a military exer- cise in the UK in April. Those governments which accept will guarantee reciprocity. The Brit- ish emphasized that such ex- changes offered the political ad- vantage of "chipping away at the Soviet closed society" and that the Soviet initiative in this area should not be rebuffed. West Germany has as yet made no approach to the Soviets. The West German response in NATO was probably sparked by earlier discussion of the possibility of a bilateral US-Soviet exchange of observers on German soil as one of several alternatives. The West Germans have opposed this alternative since it would appear that the US and the USSR were cooperating without regard to Bonn's interests and ignoring the hostile Soviet attitude to- ward West Germany. Nevertheless, the West Germans believe that it might eventually be possible to work out an exchange of their observers with the Soviets in pursuit of the "normalization" of their relations with the USSR. SECRET P-age 20 WEEKLY SUMMARY Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Nwop/ SECRET `'0 FINLAND'S NATIONAL ELECTIONS National elections on 20 and 21 March may result in a fundamental shift in power relationships on the Finnish political scene. Most deeply affected will probably be the relative strengths of the two prin- cipal contending non-Communist par- ties--the long-dominant Center (Agra- rian) Party of President Kekkonen and the Social Democrats, who for almost eight years have endured po- litical isolation imposed by Kek- konen with Soviet support. This period in opposition is redounding to the advantage of the Social Democrats, as the party is now riding a groundswell of dis- satisfaction with the pro-farmer eco- nomic policies of the succession of Center-dominated cabinets which have governed Finland in recent years. The campaign is centering on domes- tic issues, particularly the unpopu- larity of continued heavy subsidiza- tion of marginal agriculture, the need to industrialize more rapidly, and the government's seeming inabil- ity or unwillingness to face the wide range of economic problems. The Center and the Communists have sought to divert public atten- tion from these issues by reviving the old canard that the Social Demo- cratic leadership does not fully support Finland's official policy of friendly relations with Moscow, but these charges do not appear to have been given much credence by the pub- lic. Many observers predict that the Social Democrats will gain a minimum of seven and perhaps up to 16 additional seats in the 200-mem- ber parliament. These gains are ex- pected to be made principally at the expense of the Center and its coali- Social Democratic Party \ 38 Finnish People's Democratic League (Communists) 47 Conservatives 32 tion partners--the three so-called "bourgeois" parties--but there is a good chance that the Communists too will slip somewhat, reflecting the dissension that has plagued their party for the past year or so. No responsible political party leader has ventured to suggest what the political complexion of Finland's postelection govern- ment will be. A logical result of extensive Social Democratic gains would be a resumption of cabinet co- operation between the Center and the Social Democrats which was the basis for almost every Finnish gov- ernment in the postwar years up to 1958. However, this would require considerable compromise by the two parties on an economic program. It is uncertain whether Mos- cow would choose to try to pre- vent the Social Democrats from gaining cabinet representation. Aside from the usual press attacks against the Socialist leadership, the Soviets have thus far taken a relatively restrained attitude to- SECRET Page 21 WEEKLY SUMMARY 25X1 G~D XI Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET MALTA TO ELECT NEW PARLIAMENT The campaign for Malta's 26 March election centers on Prime Minister Borg Olivier's handling of economic ills since independence and the related question of whether Malta is getting adequate return for allowing NATO forces on its soil. Borg Olivier set the elec- tion for March to get it over with before the Maltese learn from the April budget that Britain is end- ing its budgetary support. London is impatient with Borg Olivier's failure to use aid already granted, and his unwillingness to help solve Malta's economic problems by, for instance, increasing or even en- forcing the income tax. In addition to attacking this record, opposition leader Dom Min- toff is accusing Borg Olivier of failing to get an economic or de- fense agreement from NATO commen- surate with Maltese sovereignty. Mintoff used to denounce the pres- ence of Western forces in the is- lands but, with the prospect of re- gaining power, recognizes their economic value and apparently has no desire to kick NATO out. He nevertheless wants to increase Malta's ties with Communist and Af- ro-Asian countries, to increase his bargaining power with NATO, and to make Malta appear neutral. Mintoff, who is playing down his politically costly quarrel with the Roman Catholic hierarchy in Malta, is expected to take some of Borg Olivier's 25 seats in the 50- seat Parliament, but probably will not win an absolute majority. Borg Olivier would probably have a bet- ter chance than he of forminga shaky coalition government. AUSTRIAN ELECTION UPSETS COALITION BALANCE Austria's elections on 6 March upset the equilibrium which has prevailed between its two major parties since the end of the Al- lied occupation in 1955. The cen- trist People's Party's gain of two seats from the Socialists and two seats from the right-wing Liberal Party gives it an absolute majority. Political leaders are "shocked" by this upset of the tradition of equilibrium between the two par- ties, according to the American Embassy in Vienna. The voters have previously tended to swing votes to the weaker party to main- tain the balance regarded as an es- sential shield against a renewal of the civil disorders of the 1930s. Reaction against Communist support for the Socialists and internal party dissension appear to have been the major causes of Socialist losses. These losses mostly bene- fited ex-Socialist Olah, who never- theless won no seats for his new party. Chancellor Klaus has promised to re-establish his People's Party's SECRET Page 22 WEEKLY SUMMARY Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 V"O SECRET coalition with the Socialists. Klaus may require them to forfeit some cabinet and subcabinet posts as well as to allow much greater parliamentary initiative and deci- sion--conditions which may prove too stiff for acceptance. In any event, the election results will --at least in the short term--af- feet domestic far more than foreign policy. A lessening of tensions be- tween the Dominican military and Provisional President Garcia Godoy has been largely responsible for a calmer political atmosphere in the past ten days. The Provisional President publicly has praised what he calls the "changed mental- ity" of the new service chiefs and even has endorsed the military's contention that unknown plotters are seeking to implicate the armed forces in whatever sporadic vio- lence occurs. In return, Minister of Defense Perez y Perez has threat- ened to discipline or discharge any member of the armed forces who disregards the strictures against partisan political activity. Garcia Godoy has appealed for "moderation" during the political campaign and has~continued to re- place some of Juan Bosch's adher- ents in municipal and provincial government posts--generally with backers of Joaquin Balaguer or in- dependents--in order to establish some measure of parity among the parties. Registration of voters eligible to cast ballots in the 1 June election has begun throughout the country. Several incidents have marred the calm. Troops of the Inter-Amer- ican Peace Force have been involved in several scraps with gangs of juvenile toughs, and one of Bosch's bodyguards was killed by a police- man during what appears to have been a personal quarrel on 6 March. After learning of the shooting, a group of Bosch's bodyguards as- saulted several police in downtown Santo Domingo. Such incidents un- derscore the lack of effective po- lice measures, the prevalence of weapons among the populace, and the bitter enmities left by the revolution. Bosch seized on the recent shootings to reiterate his charge that the country is not ready for elections--a claim seconded by militant Social Christians. Bosch alleges that "hundreds" of members of his Dominican Revolutionary Party (PRD) have been murdered and that the Dominican military are otherwise intimidating his follow- ers. While there has been some right-wing terrorism directed against Bosch's followers, the PRD leader has exaggerated the danger, apparently in order to build a position from which he can 25x1 boycott the elections if he de- cides the PRD cannot win. SECRET Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET A confrontation could be in the offing between Guatemalan Chief of Government Peralta and restive conservatives who are fearful of a new government headed by Julio Cesar Mendez Montenegro. As of late morning on 10 March, Peralta was to meet with his top military commanders, following a reported ultimatum that he step down in favor of a new junta or be deposed. Mendez, of the left-of-cen- ter Revolutionary Party (PR), was the front runner for the presi- dency in Guatemala's 6 March elec- tions. Although the full tally is not in, it is evident that none of the three candidates won the ma- jority necessary for direct elec- tion. Returns so far indicate, however, that the PR has captured a majority--perhaps 29--of the 55 congressional seats. Because the "second-level" election entails selection of the president by the legislature after it meets on 5 May, the PR's candidate seems likely to be the eventual victor. Since the election, Peralta has continued to maintain that the army will keep its word and deliver power to the elected party. Mendez has made a concerted effort to convince military leaders of his own and his party's anti- Communist bent and to assure them he has no plans to interfere with the command structure of the armed forces. Which appeal--that of the conservatives or that of Peralta and the PR--will prove effective with the military high command remains in doubt. Should Peralta resign, his successor would be chosen by the military command- ers, according to the operative "laws" of the present regime. There is still danger that both sides will harden in their determinations and bring a di- rect clash between the bitterly ant i forces in the coun- try SECRET Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 SECRET Elections for congressmen and departmental and municipal representatives are to take place in Colombia on 20 March. Presi- dential elections will be held on 1 May. Under Colombia's unique Na- tional Front system, which pro- vides for a 16-year coalition of the two principal parties, half of all elective offices are awarded to the Conservative Party and half to the Liberal Party, and the presidency is alternated. There are no issues, therefore, between the two parties, but only among contending factions within them. Ideology and policy are subordinate to group and personal interests. The major factions competing for votes in the coming elections are the Official Liberals and the Ospinista Conservatives, which make up the government coalition, and the National Popular Alliance (ANAPO), the Liberal Revolutionary Movement, and the Lauro-Alzatista Conservatives, which are expected to join after the congressional elections to oppose the government coalition. The Ospinistas and Lauro-Alzatistas are so designated after their founders: Mariano Ospina Perez, Laureano Gomez, and Gilberto Alzate Avendano. The Liberal Party is up for the presidency this time, and the Official Liberals and the Ospinistas have already launched the candidacy of that party's Carlos Lleras Restrepo. One or more candidates representing op- position interests will be selected in the light of the re- sults of the congressional elec- tions and the political maneuver- ing that follows them. The National Front govern- ment must command two thirds of the votes in-the congress to pass most important legislation, and there is some doubt among observ- ers that it will be able to mus- ter even a majority after the elections. This would force the government to rule by decree and perhaps lead to a radical modifi- cation of the National Front sys- tem. ANAPO, the Conservative fac- tion of rabble-rousing former president Gustavo Rojas Pinilla, is expected to make the greatest gain and is considered the most serious threat to continuation of the National Front system. Although the government has ef- fected some basic reforms, their impact has not yet been widely felt by the people, and Rojas has based his campaign on the charge that the National Front government is responsible for the significant increase in the cost of living. Considerable voter apathy will probably be reflected in large-scale abstention from the polls. The prevailing mood among the Colombian voters seems to favor orderly, legal political processes, rather than violent change, and no serious violence during the elections is antici- pated. Electoral fraud is not expected to be a significant fac- SECRET Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 SECRET ECUADOREAN POLITICIANS RESISTING JUNTA'S REFORM PLANS Ecuador's military junta an- nounced its long-awaited consti- tutional reforms on 2 March and, by the weekend, resistance from the politicians had combined with adverse economic developments, labor and student unrest, and a spate of plots to produce tension and widespread uneasiness. The decree banned presiden- tial re-election and consecutive congressional re-election, in- creased the powers of the National Security Council, and reduced the powers of congress. It made insurgents subject to military justice, thus bypassing the courts, whose unwillingness to prosecute subversives has been notorious. Elections were post- poned from 5 June to 3 July in order to complete lagging voter registration. Leading politicians, who ac- cording to the US ambassador have a "blind and almost fanatical devotion" to ousting the military junta, responded by forming a new front, a characteristic Ecua- dorean tactic, aimed at assem- bling most parties and forces, including Communists, for a sin- gle objective. The front reas- serted the politicians' persist- ent demands for a constituent as- sembly--which implicitly they would control--to handle the transition to constitutional rule. Such assemblies are in harmony with Ecuadorean history, but have been chaotically inept, and the junta fears that reform programs would be lost in the shuffle. to cooperate in the elections have now vowed intransigence. Some observers believe that the junta's program will thus become unworkable and leave it only two choices: yielding to a constitu- ent assembly, or imposing a true military dictatorship. Concurrently there have been several adverse economic develop- ments. Foreign exchange reserves continued to fall, and imports to rise. A serious budget defi- cit threatens, and the usually stable currency has fallen. As a remedy the junta decreed an in- crease in import duties which, if vigorously implemented, could bring the budget under control. A storm of protest has come from foreign trade interests which last year fomented major disor- ders to resist tariff reforms. The populace seems to fear that the cost of living, which has been inching upward, will break away. These circumstances--and greater unity--improve the poli- ticians' prospects and present the junta with a severe challenge. On the hopeful side are failure of planned weekend demonstrations, a slight diminution of labor problems, and continuance of the military unity on which stability depends. If the junta vacillates, its plans for transition will fail, and changes in the executive may result; if it acts firmly, it may achieve an orderly return to ci- vilian rule, with a new president taking office on 1 September. Parties which had indicated present or ultimate willingness SECRET Page 26 WEEKLY SUMMARY Approved For Release 2008/05/21: CIA-RDP79-00927A005200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1 i%W SECRET SECRET Approved For Release 2008/05/21: CIA-RDP79-00927AO05200050001-1