WEEKLY SUMMARY

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CIA-RDP79-00927A006600050001-6
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RIPPUB
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S
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37
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December 21, 2016
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September 29, 2008
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1
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Publication Date: 
August 30, 1968
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SUMMARY
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Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY Secret 44 30 August 1968 No. 0035/68 State Dept. review completed Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET (Information as of noon EDT, 29 August 1968) Europe INVASION OF CZECHOSLOVAKIA LEAVES UNCERTAIN AFTERMATH Czechoslovak courage and coolness in the face of overwhelming Soviet force has left the question of victor and vanquished in doubt even in Czechoslo- vakia where the Soviets seem determined to settle in for a relatively lengthy "presence." Page 1 WESTERN EUROPE REACTS TO SOVIET-CZECHOSLOVAK DEVELOPMENTS 6 Setbacks for Soviet policies in Western Europe are already visible as a consequence of Moscow's inter- vention in Czechoslovakia, and the Soviet action has also confirmed the conviction among Western European Communists that their nationalistic approach is cor- rect. CZECHOSLOVAK CRISIS INFLAMES DIVISIONS IN EASTERN EUROPE 7 The invasion of Czechoslovakia by the USSR and its allies has inflamed the already serious differences between Eastern Europe's orthodox Communist regimes and the independent-minded Yugoslavs and Rumanians. SECRET Page i WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 SECRET VIETNAM The opening round of the Communists' latest military campaign was highlighted this week by widespread mortar and rocket attacks and ground assaults against allied positions throughout much of South Vietnam. The staggered geographical nature of the attacks sug- gests that the Communists intend to sustain their current campaign over a prolonged period as well as to confuse and complicate the allied response. LAO GOVERNMENT FORCES CONTINUE TO MAKE LIMITED GAINS Laotian troops are continuing to make some progress in regaining territory lost to the Communists during the past dry season, although government forces are still on the defensive throughout most of the country. RED GUARDS UNDER HEAVY ATTACK IN CHINA The drive against the Red Guards, which started in July as a limited effort to stop the fighting and violence, has developed into a full-scale campaign to destroy their organizations as a present or poten- tial political force. Middle East - Africa THE WEEK IN PERSPECTIVE 17 INDIA'S PRIME MINISTER GANDHI UNDER INCREASING ATTACK 18 Mrs. Gandhi's handling of the Czechoslovak issue has evoked violent criticism from the non-Communist oppo- sition and increasing disenchantment with her per- formance in office on the part of senior Congress Party leaders. PAKISTAN ATTRACTING COMMUNIST INTEREST A flurry of activity involving the exchange of economic and military delegations is taking place between Pakistan and several Communist countries, sharpening the contest between the USSR and Com- munist China for influence there. SECRET Page ii WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET INTERCOMMUNAL TALKS REOPENING ON CYPRUS The intercommunal talks between Greek and Turkish Cypriot negotiators reopened yesterday, but progress will probably be slow and will require considerable compromise on both sides over the basic issues. Western Hemisphere CUBA LINES UP WITH MOSCOW ON CZECH CRISIS Fidel Castro's grudging endorsement of the Soviet intervention in Czechoslovakia was an embarrassing compromise of his pretensions of independence from Moscow, and will probably tarnish his image abroad and heighten disenchantment with his policies in Cuba. POPE FAILS TO RESOLVE DIVISIONS IN LATIN AMERICAN CHURCH 25 The Pope received a tumultuous public reception dur- ing his visit to Latin America but his pronouncements may widen the schism between progressive and conser- vative clergymen. ARGENTINE PRESIDENT OUSTS ARMY CHIEF President Ongania has strengthened his control over the Argentine military by replacing army Commander in Chief Julio Alsogaray, one of his most vociferous critics, with a close friend and loyal supporter. SECRET Page iii WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET BOLIVIAN SITUATION EASES BUT TENSIONS REMAIN 28 The government has reached agreements with student and labor groups, but many students are intent on renewing their demonstrations. In addition, new plots against the government are being planned and the President is privately questioning the loyalty of the commander of the armed forces. INCOMING ECUADOREAN ADMINISTRATION FACES MANY PROBLEMS 29 When Jose Maria Velasco Ibarra assumes the presidency on 1 September, he will be greeted by essentially the same problems that caused his ouster from three of his four earlier terms. SECRET Page iv WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 SECRET The compromise settlement between the USSR and Czechoslovakia, announced in Moscow on 27 August, was at best a Pyrrhic victory for the Soviet leaders, and contains the seeds of its own destruction. It was gained at the expense of igniting Czechoslovak nationalism and uniting the Czechoslovak nation. In Moscow, the collective leadership has been put under severe strain. The erratic course of Soviet policy on Czechoslovakia has caused serious problems for the East German regime both at home and abroad. While Ulbricht may have been pleased by Moscow's lightning cannot fail to be disappointed by the subsequent halfway measures. The early endorsement of the Czechoslovak reforms by Hungary's party leader Janos Kadar and his sudden about-face has put him in an awkward position. The display of Soviet military force has strengthened Polish party boss Gomulka's hand against Polish nationalist elements. The general mood in both countries appears to be one of dismay and confusion which may escalate when students return to their classes in September. The US Embassy in Sofia reports wide but muted Bulgarian disapproval of the invasion and of Bulgaria's participation. The Rumanians and Yugo- slavs sharply condemned the invasion and are now uttering pious hopes that reason will prevail following the settlement in Moscow. The Bucharest regime developed a bad case of jitters over fears-now apparently sub- siding-that it might be invaded next. In Western Europe, the public and official reaction was one of dismay and alarm. The sense of disillusionment about the possibilities the appeal of NATO and European regional institutions has unquestionably been strength- ened. SECRET Page 1 WEEKLY SUMMARY 28 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 EASTERN EUROPE ,Prague 9udopest* SECRET Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 SECRET INVASION OF CZECHOSLOVAKIA LEAVES UNCERTAIN AFTERMATH Czechoslovak courage and cool- ness in the face of overwhelming Soviet force left the question of victor and vanquished in doubt even in Czechoslovakia where the Soviets seemed determined to settle in for a relatively lengthy "presence." There is no doubt that the pace of Czechoslovak liberalization has been slowed and that the Soviet troops will assure greater compli- ance with the Soviet interpretation of the Moscow agreement than the USSR was able to achieve after the earlier Cierna and Bratislava agree- ments. As one Czechoslovak official put it, however, the last ten days have raised Czechoslovak national unity to new heights, stirred mas- sive anti-Soviet sentiments, and thoroughly convinced the people of the need for free media--all grounds for new conflict between Moscow and Prague. Whatever the outcome, for Mos- cow the losses of prestige around the world and the significant state- ments of opposition from hereto- fore "loyal" Communist parties are palpable. Seldom has the propaganda line issuing from Moscow provided a thinner cover for its actions, and many Soviet officials abroad have expressed dismay. Over time, Moscow can probably count on na- tional interest reducing the harsh feelings now being expressed, and some of the Communist parties that broke with Moscow probably will also edge back into the fold. With the West, and especially with the US, the chance of working out mutually advantageous agreements has been set back. Page 3 Presumably, Moscow took all of these things into account when it made the decision to invade, but decided that the need to halt Czech- oslovak liberalization was overrid- ing. As it turned out, however, Moscow took the expected losses with- out real assurance that it had achieved its main goal. The settlement announced in Mos- cow on 27 August was at best a Pyrrnic victory for the Soviet leaders. In contrast to its well-planned and smoothly executed military take-over on 20 and 21 August, the USSR does not seem to have had any well conceived, soundly based political alterna- tives. If the Soviets expected a puppet government to form from con- servatives and hard liners in the regime, they were sadly misled. In- stead, the existing government, though missing some members, con- tinued to act effectively. The party also did not falter and--with its leader, Dubcek, under arrest--con- vened its extraordinary 14th Party Congress--originally set for 9 Sep- tember--on 22 August. The Congress elected an acting first secretary, a new reformist- minded central committee, and a new party presidium, with Dubcek, Premier Cernik, and President Svoboda named as members. Several other Czechs who had been strongly criticized by Moscow were also elected, but none of those members of the former presidium who were considered So- viet collaborators. The unity and moral strength of the Czechoslovaks in their opposi- tion to the occupation, as well as SECRET WEEKLY SUMPLARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET the high discipline of the populace and the Czechoslovak military forces, apparently gave the USSR second thoughts about the severe risks of provoking active resistance if it imposed a narrowly based occupa- tion regime. This behavior on the part of the country also provided the Czech leadership with some of its strength in negotiating with the Soviet leaders. Out of the stalemate that had developed--a total Russian occupa- tion and an unbending population and government--emerged the plan for President Svoboda on 23 Au- gust to lead a delegation to Mos- cow to negotiate a settlement. He was accompanied by two conserva- tive party members and three re- formers, all Dubcek appointees. In a speech before his departure, Svoboda-said he was going to Mos- cow at his own request. He was received by Brezhnev, Kosygin, and Podgorny, and accorded the full honors befitting a chief of state. The talks in Moscow, instead of lasting only a day as originally announced, covered four hectic days ending on the night of 26 August. The original delegation from Prague was joined on 24 August by Dubcek and Premier Cernik, and later by nearly all of the Czechoslovak party presidium. On the last day of the talks, the leaders of Mos- cow's allies--Gomulka, Ulbricht, Kadar, and Zhivkov--gave their stamp of approval to the modus vivendi worked out between the Czechoslovak and Soviet leaders. On 27 August, Moscow released a communique' providing the sub- stance of the agreement with the Czechs. It was signed by 13 So- viet leaders, including 9 out of the 11 members of the politburo, and by 19 Czechoslovak leaders, also including 9 of 11 presidium mem- bers. President Svoboda and Party First Secretary Dubcek subsequently gave grave, emotion-laden speeches appealing to their people to under- stand the circumstances of the agreement and to maintain order, unity, and discipline. The key points in the agree- ment, as set forth in the communi- que, are: the Soviet troops that "temporarily" entered Czechoslo- vakia will not interfere in Czech- oslovak affairs and will be with- drawn "as the situation normalizes all Czechoslovak media would serve the party and the cause of friend- ship among Communist nations, i.e., censorship; both sides agreed to strengthen the solidarity of the socialist community, fulfill bi- lateral and multilateral agreements, and "administer a resolute rebuff" to those who would encroach on the existing borders in Europe; and, the Czechoslovaks agreed to demand the removal of the Czechoslovak question from the UN agenda. The Czechoslovak people have somehow found it within themselves to live with, at least for the moment, the terms of the communi- que--a very bitter pill--and at the same time to retain their sense of pride and of having played an historical role in the restoration of Czechoslovakia's honor. The realization of their still precar- ious position will probably prevent any serious active popular resist- ance. At this point, it is evi- dent to the populace that they would have much to lose and nothing to gain by such action. SECRET Page 4 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET Since 28 August, the govern- ment has seemed intent on restor- ing the country to an even keel. A special commission has been es- tablished to determine the steps necessary to implement the Moscow "agreement." At the same time, the newly elected party central com- mittee met, possibly to discuss the validity of the extraordinary 14 Party Congress. Dubcek had implied in his speech on 27 August that the results of this congress might not be acceptable. There were signs, however, that Dubcek would face stiff resistance within the party if he tried to overturn the congress' actions. The National Assembly resolved unanimously that the Warsaw Pact occupation was illegal and insisted that a "concrete date" be fixed for the troops' withdrawal. It also demanded that information media and government organs be allowed to function freely. The Slovak party, for its part, on 28 August elected a liberal as its new first secre- tary, replacing a conservative. A new presidium was also elected with nine newcomers, giving it a decisively reformist character. Moscow's handling of the po- litical side of the invasion and its aftermath gave many signs of misjudgement and vacillation in the leadership. Although the col- lective leadership as a whole has the responsibility for the deci- sions taken in the crisis, there have been persistent reports of divisions within this group. The Czech issue will, in any case, put severe strain on Brezhnev's "cen- trist" coalition--Podgorny, Kiri- lenko, Polyansky, and Shelest, 25X1 plus the doctrinaire Suslov and the more moderate Premier Kosygin. military intervention. It is pos-25X1 sible that the younger members of the politburo whose political am- bitions have been frustrated under the Brezhnev leadership may be seeking to capitalize on any dis- satisfaction with the leadership's handling of the Czechoslovak prob- lem. Large numbers of Soviet troops moved out of towns and cities into positions away from the population, but the Soviets continued to strengthen their hold on the coun- try. SECRET Suslov and Kosygin opposed 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 SECRE'F WESTERN EUROPE REACTS TO SOVIET-CZECHOSLOVAK DEVELOPMENTS Setbacks for Soviet policies in Western Europe are already visi- ble as a consequence of Moscow's intervention in Czechoslovakia. The Soviet action has disillusioned the Western Europeans and has rein- forced the appeal of NATO and Euro- pean regional institutions. Recent events have also con- firmed Western European Communists in their nationalistic approach. The effect on the Communist parties and Communist-led labor unions is likely to be the more lasting. Western European governments are discussing, at least for the pres- ent, slowdowns of bilateral programs with the USSR, but are keeping their doors open for steps toward resump- tion of detente. In Western Europe, the Soviet invasion was greeted with expres- sions ranging from consternation in such capitals as London and Brus- sels to the low-key statements of neutrals--Austria, Switzerland, Sweden, and Finland. The Finns, particularly sensitive to their strategically exposed location, are expressing concern over a possible deterioration in their relations with the Russians. The UK, Italy, and West Germany are all stressing the importance of NATO, and it ap- pears that the Alliance's future may be strongly influenced by the fact of the rapid Soviet occupation of Czechoslovakia. NATO's present theory of warn- ing, which presupposes a period of critical consultation and military build-up by prospective attackers, is being re-evaluated. Moreover, the recent trend of force reduc- tions and redeployment within the Alliance is likely to be halted by a collective pledge to freeze cur- rent levels pending a review of European security. Italy and oth- ers may reiterate calls for an- other 20-year extension of the NATO treaty. Italy and West Germany have also stressed the need for greater European political unity. At the same time, however, Italy, West Germany, and Switzerland are using the Czechoslovak situation as an excuse to postpone signature of the Nuclear Nonproliferation Treaty. French President de Gaulle has denounced the invasion as an exer- cise of the "doctrine of power blocs, a consequence of the Yalta accords." Paris' initial reaction to the Mos- cow talks is that the Czechoslovaks came out surprisingly well. The Western European public has expressed outrage over the de- velopments in Czechoslovakia, both in the press and through public demonstrations. Except for the Com- munist parties in Luxembourg and West Berlin, and the illegal Commu- nist parties of Spain, Portugal, and West Germany, orthodox Commu- nists in Western Europe have casti- gated Moscow. The Italian and French parties have been foremost in this Communist rebellion, ac- companied by the labor confedera- tions each dominates. The Commu- nist-controlled World Federation of Trade Unions has not yet taken a public position. 25X1 =_- SECRE'T' Page 6 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 SECRET CZECHOSLOVAK CRISIS INFLAMES DIVISIONS IN EASTERN EUROPE The invasion of Czechoslo- vakia by the USSR and its allies has inflamed the already serious differences between Eastern Eu- rope's orthodox Communist regimes and the independent-minded Yu- goslavs and Rumanians. The cri- sis also has revived latent na- tionalistic emotions in the Bal- kans. Relations among these states will henceforth be vexed and uncertain. Belgrade and Bucharest, by insisting that nothing can jus- tify the armed intervention in Czechoslovakia, have provoked unprecedented rebukes from their more doctrinaire neighbors. For the first time, Rumanian party leader Ceausescu has been at- tacked by name in highly unflat- tering terms by the Hungarian and Soviet press. Although Yugoslav President Tito has not been so arraigned, both the Yugoslav and Rumanian "leaderships" have come under heavy fire from Soviet, Hungarian, and Bulgarian media for their "unseemly behavior" in joining the "imperialist chorus" demanding an end to the occupa- tion of Czechoslovakia. Soviet bloc representation at various Rumanian National Day diplomatic receptions on 23 August was deliberately mini- mal, a symptom of the multiply- ing divisions in Eastern Europe. In contrast to previous years, no press commentary on the Ru- manian anniversary appeared in the Polish press. Bulgaria has further added to the fragmentation of Communist unity, despite the tense atmos- phere of the Czechoslovak crisis, by choosing to escalate its long- standing dispute with Yugoslavia over Macedonia. Ordinarily, Sofia is content to state its historical claims to Macedonia in scholarly journals. The day after the inva- sion of Czechoslovakia, however, :Bulgaria's leading party organ directed a major assault at the Macedonian party leadership. Tito and Ceausescu appear concerned, but undaunted. They presumably agreed during their :meeting on 24 August to avoid pro- voking their adversaries, and probably are preparing for addi- tional ideological, economic, and diplomatic pressures from Moscow and its allies once the Czecho- slovak situation stabilizes. Tito told the US ambassador in Belgrade that Yugoslav-Soviet relations from now on would be de- void of trust and confidence. This fear of treachery and military intervention will henceforth per- meate bilateral relations between 25X1 the states of Eastern Europe. SECRET Page 7 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET SECRET Page 8 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET The Communist offensive in South Vietnam continues to focus on secondary targets mostly in outlying areas, but indications are mounting that a major effort against Saigon may be imminent. Although enemy casualties have been running high, most of them have been sustained by Viet Cong local elements. North Vietnamese and Viet Cong main force units for the most part have still not been committed. Vietnamese Communist propagandists, meanwhile, are beginning to emphasize the long-term nature of the campaign, suggesting that the enemy intends to keep up the fighting for a fairly lengthy period. A recent Liberation Radio broadcast characterized each of the staggered attacks thus far made as an "individual general offensive" that contributed to the "high tide of our general offensive." Local military commanders in China are taking full advantage of their new license to crack down on the Red Guards. These former targets of Red Guard abuse, now free to retaliate for the first time, are using all the instruments at their disposal in what seems to be a rapidly escalating campaign to destroy the Red Guards as a present or potential political force. In Laos, government troops are moving eastward from recently cap- tured Muong Phalane, but they will probably be careful not to push their luck too far as they move closer to the strongly defended infiltration corridor. Elsewhere in the country, military activity is generally at a low level, even by rainy season standards. SECRET Page 9 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 NORTH 1 Y7aTNAM f` ?? eQuang Tri -~~ Hue, CAMBODIA Special Forces CampI r / Lot!lllnh ~ Song Be Tay Ninh ,Dau Tieng r f ! 7~, SAIGON SOUTH VIETNAM SECRET Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 *Da Nang Hoi An, Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET VIETNAM The opening round of the Communists' latest military cam- paign was highlighted this week by widespread mortar and rocket attacks and ground assaults against allied positions through- out much of South Vietnam. In the northern provinces, enemy forces maintained heavy pressure on the main routes of approach to Da Nang, Hoi An, Tam Ky, and Quang Ngai city. Vigor- ous allied spoiling operations, however, inflicted enemy losses in excess of 1,200 killed and may have at least temporarily pre-empted major ground attacks against these capital cities. With the exception of sporadic heavy skirmishes in western Quang Tri Province, allied bases along the Demilitarized Zone as well as the provincial capitals of Quang Tri city and Hue remained relatively free of major enemy activity. An attack by a North Vietnam- ese regular force of regimental size against the allied Special Forces camp and district head- quarters compound at Duc Lap in Quang Duc Province generally over- shadowed all other enemy activity in the II Corps area during the week. The three-day action at Duc Lap appears to have been a diversionary scheme designed to draw sizable allied reinforce- ments to the scene from nearby Ban Me Thuot in order to allow the North Vietnamese 1st Division to mount a major attack on the Darlac provincial capital. Page 11 Duc Lap, however, was rein- forced from allied assets else- where in II Corps and this, cou- pled with intensive B-52 and tac- tical air bombardment, ultimately forced the enemy to disengage after sustaining losses of at least 300 killed. Allied casual- ties included 79 killed and 196 wounded. Although the enemy continued to maintain pressure against the allied bases of Tay Ninh, Dau Tieng, Loc Ninh, and Song Be in the outer provinces of III Corps, Saigon and its environs remained generally untouched. Late in the week, however, enemy action did intensify in Hau Nghia and Long An provinces on Saigon's western and southern flanks, and the capi- tal itself was subjected to a light rocket attack. Viet Cong forces in the delta generally confined their activities this week to small- scale ground probes and wide- spread mortar shellings, al- though one heavy engagement in- volving three main force battal- ions was reported near the dis- trict capital of Cai Lay in Dinh Tuong Province. SECRET WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET The enemy's current offen- sive thus far has been marked by the application of economy- of-force tactics against allied targets of secondary importance in generally outlying areas. With few exceptions--Duc Lap, Da Nang, Tam Ky--the attacks have been largely hit-and-run affairs spear- headed in most cases by enemy lo- cal force and sapper units. These tactics, in addition to holding down casualties to enemy main force units, which for the most part remain uncommitted, appear largely diversionary in character-- designed mainly to weaken the de- fense of major objectives by forc- ing allied deployments to areas under siege. The staggered geographical nature of the attacks, starting in III Corps on 18 August and shifting to the delta and thence to the northern provinces and the highlands area, suggests that the Communists intend to sustain their current campaign over a prolonged period as well as to confuse and complicate the allied response. Communist Commentary on the War Hanoi is putting increased stress in its propaganda on al- leged domestic unrest in the US over the administration's refusal to stop the bombing of North Viet- nam. Their action probably re- flects a growing Vietnamese Com- munist hope that the US will even- tually concede the issue without holding out for reciprocal con- cessions. At the same time, the Communists appear to believe that the fighting in the South will continue along inconclusive lines for some time. Recently captured documents indicate, however, that plans are in train for a series of further offensive thrusts, which they hope will result in higher US casualties and a concomitant rise in "dovish" sentiment in the US. The documents suggest that the enemy, although reaffirming the "general offensive and general uprising" strategy, has concluded that a decisive break in the war cannot be expected to result from the offensives conducted so far this year. The Communists prob- ably expect nonetheless, that ac- tions now in process and others planned for the future will demon- strate that the conflict remains an indecisive stalemate from which the allies can, at best, expect only a compromise settlement. Political Developments Plans for an early shuffle of the cabinet have apparently been shelved for the time being as Prime Minister Huong continues to test how far he can go in -shap- ing the government to his own lik- ing. SECRET Page 12 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET Although the prime minister has thus demon- strated considerable skill in handling his cabinet, there are indications that he was actively pushing the transfer of Khiem and that he was obliged to yield to Thieu's cautious views in this area. Khiem is already a con- troversial figure and giving him a strong hand over the military, as Huong apparently desired, would almost certainly have aroused greater antagonism than Thieu is prepared to face at this time. SECRET Page 13 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 LAOS: Current Situation Government-held location Communist-controlled territory Contested territory Communist-held location SECRET ? Munn S ~ +Pfiou --rsr_c -- Luang' .1ui :V : Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 SECRET LAO GOVERNMENT FORCES CONTINUE TO MAKE LIMITED GAINS Laotian troops are continu- ing to make some progress in re- gaining territory lost to the Communists during the past dry season, although government forces are still on the defensive throughout most of the country. In the south, the Communists have been pushed out of the Muong Phalane area after some of the sharpest fighting in over four months. Close air support was responsible for heavy enemy casualties and government ground forces captured large quantities of weapons, ammunition, and other equipment. The recapture of Muong Phalane, which the enemy took last February, is the first major government victory in more than a year and should help repair morale which sagged during the dry season setbacks. Government troops now intend to move east- ward along Route 9 from Muong Phalane, but they will probably exercise care not to push their luck too far as they move close to the strongly defended infil- tration corridor. In the north, government forces are attempting to close out a two-month old operation aimed at securing the rice-rich Muong Son valley. The government plans to establish an air navi- gational facility at Muong Son to replace the one lost at Phou Pha Thi last March. Recent gov- ernment air strikes have inflicted a heavy toll of enemy casualties and should enable the government to maintain a foothold in the area at least through the remain- der of the rainy season. Aside from these actions, however, fighting this rainy season has been at a relatively low level. For the most part, government forces are still on a defensive footing and the Com- munists have not demonstrated any inclination to follow up their considerable gains of the dry season. The continuing presence of a substantial number of North Vietnamese troops is a clear sign that they intend to defend most of the territory they now hold. Moreover, they are in a posi- tion to launch new attacks at a time and place of their own choosing. it is likely that the Communists will wait until the next dry season begins in October before initiating any widespread offensive. Prior to this, however, probing attacks against forward government posi- tions, such as Thateng, cannot SECRET 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 S ECR ET RED GUARDS UNDER HEAVY ATTACK IN CHINA The drive against the Red Guards, which started in July as a limited effort to stop the fight- ing and violence, has developed into a full-scale campaign to de- stroy their organizations as a present or potential political force. The assault is being con- ducted vigorously and even savagely in some areas. Peking has made un- usual efforts to link the cam- paign with Mao himself even though it is directed mainly at those radical factions that were in- cited by Mao Tse-tung and his radical advisers to denounce lo- cal military officers suspected of disloyalty a year ago. These former targets of Red Guard abuse, now free to retali- ate for the first time, are do- ing this with all the instruments at their disposal. Provincial propaganda media, denouncing as "counterrevolutionaries" the stu- dent Red Guards who just a short time ago had Mao's favor and pro- tection, demand that no mercy be shown them. the army has in- cited mobs to lynch some individ- uals, others have been summarily executed, and large numbers have been paraded in public and whipped with bicycle chains. A number of Red Guard lead- ers who held high positions in the Kwangtung Revolutionary Committee are reported to have been arrested. The intention seems to be to elimi- nate the radical leadership and terrorize the rank and file. It is not clear how long the campaign will last. A broadcast from Shanghai, reporting on plans to send vigilante groups of "workers" to clean out the city's 26 full- time universities, gives the im- pression that a protracted ordeal is planned. As a result of the campaign, considerable disorder and tension: persist in China, but of a different sort than before. Police brutality has replaced factional fighting and, because attention is focused: on political enemies, ordinary crime is on the increase. Old-line military and party figures continue to consolidate their strength in provincial gov- ernments. The three "revolution- ary committees" formed during August are all run by local military offi- cers and former party secretaries. This leaves only Tibet and Sinkiang without new committees, but an- nouncements are expected soon for these remote border areas. Last year, several leaders in Peking stated that one purpose of forming provincial -committees was to lay the groundwork for a new party congress. Little has been heard of this plan in recent months, however, possibly because the top men in Peking cannot agree on who is to occupy key podi- tions in a reorganized leadership. The present standing committee of six men and Madame Mao includes several Cultural Revolution Group members who, like the Red Guard movement they have been directing, no longer seem to serve a useful purpose. These figures, particu- larly Mao's hatchet man, Kang Sheng, and Chen-Po-ta, head of the group, are probably bitterly disliked by the military and old party offi- cials who now dominate most local governments outside the capital. SECRET Page 16 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET MIDDLE EAST - AFRICA Border exchanges and terrorist incidents between the Arab states and Israel have continued at a high rate. The first Egyptian incursion in months across the Suez Canal has infuriated the Israelis, who are threatening severe retaliatory measures. Israel may hold back from major reprisals until the Israeli airliner, which was hijacked last month and is still in Algiers, is released. Splits between left- and right-wing republicans erupted in fighting in the capital of Yemen last week. The royalists began to shell the city in order to take advantage of the conflict, and the casualty rate was apparently high. Prime Minister Amri successfully restored order, but further disturbances are likely. In Turkey, student groups protesting Soviet intervention in Czechoslo- vakia twice forced the early closing of the Soviet pavilion at the Izmir trade fair. Soviet officials are reported to have threatened to close their display completely if the demonstrations were not stopped. The prevailing volatile mood in Turkey probably will not have dissipated by the time personnel from the US Sixth Fleet visit Izmir from 29' August to 9 September. The growing locust threat in the Middle East and Africa has prompted a new call for collective efforts by East African control officials. Observers from the Sudan and the Arabian peninsula, where fertile breeding grounds are located, will be invited to a meeting in Asmara, Ethiopia, to consider new steps to combat the plague. In the Nigerian civil war, federal troops are pressing on into the densely populated Ibo heartland. The Biafrans are :reported to have evacuated Aba, an important administrative center, thus adding to their already serious refugee problem. Biafran troops are, however, stubbornly resisting the fed- eral advance in all sectors. Meanwhile in Addis Ababa, Ethiopia, negotiations between the two sides on ways to bring relief supplies into war-torn Biafra appear to have reached anUNCODEDspite the strenuous efforts of Emperor Haile Selacciaf 25X1 SECRET Page 17 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET INDIA'S PRIME MINISTER GANDHI UNDER INCREASING ATTACK India's Prime Minister Gandhi has come under increasing attack in recent days both from the op- position political parties and from within her own Congress Party. The issue precipitating the latest attack on her leadership was the Indian Government's handling of the Czechoslovak issue. Mrs. Gandhi's statement on 21 August, in which she expressed "concern" at news of Soviet inter- vention in Czechoslovakia, was de- nounced as too mild the following day in Parliament. A proposed resolution offered by a member of the Congress Party, which char- acterized the Warsaw Pact action as a "clear violation of the UN Charter," was defeated by the Congress majority but had the support of all non-Communist op- position parties and four members of the Congress Party, including Minister of Petroleum, Chemicals, and Social Welfare Asoka Mehta. Mehta, who once was a close economic adviser to Mrs. Gandhi but has become increasingly es- tranged from the prime minister in recent months, subsequently resigned from the cabinet. When word reached New Delhi that India had abstained on the UN Security Council resolution condemning Soviet intervention in Czechoslovakia, violent criti- cism of the government erupted in both houses of Parliament and led to a protest walkout by all non- Communist opposition parties. Mrs. Gandhi's assurance that the government supported every word of the UN resolution except "con- demn"--she preferred "deplore"-- did little to mollify the law- makers. Party President Nijalingappa recently joined the ranks of those opposed to Mrs. Gandhi, according to press re- ports. Deputy Prime Minister Desai and Home Minister Chavan, both considered major contenders for the prime ministership, have become increasingly disenchanted with Mrs. Gandhi's performance. operating in the prime min- ister's favor are the slowly im- proving economy, the natural reluctance of party leaders to engage in a struggle that could further damage Congress Party unity, and the probability that no agreement has yet been reached on a successor. Additionally, Mrs. Gandhi is not lacking in the art of political infighting and has given evidence that she is de- SECRET Page 18 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 25X1 25X1 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET PAKISTAN ATTRACTING COMMUNIST INTEREST A flurry of activity involv- ing the exchange of economic and military delegations is taking place between Pakistan and sev- eral Communist countries, sharpen- ing the contest between the USSR and Communist China for influence there. In July, a Pakistani delega- tion received a Soviet commit- ment to provide military equip- ment. Details of the So- viet agreement are not known, but Moscow, in deference to India, had heretofore provided only vehicles and helicopters under commercial contracts. China, the first Communist country to deliver combat equipment to Pakistan, remains a major source of jet fighters, bombers, tanks, and ground forces equipment. Much of the current economic activity with the USSR is a fol- low up to Premier Kosygin's visit last April. At that time, some impetus was given to the Soviet economic program which, with the exception of a seven-year-old, $30-million oil exploration pact, stems primarily from about $150 million in credits extended dur- ing the past four years. The USSR is expected to announce soon the completion of feasibility studies for a steel mill in West Pakistan and a nuclear power reactor in East Pakistan. In late July, moreover, the Pakistani minister of agriculture visited Moscow to complete arrange- ments for Soviet assistance in developing the fishing industry. As part of this project the USSR offered to conduct a survey of expanded facilities at a port in West Pakistan. The USSR now has announced the imminent arrival of three Soviet trawlers to con- duct oceanographic surveys and to train personnel in deep-sea fishing operations. The USSR also is playing host to a four-man delegation from the West Pakistan Agricultural De- velopment Corporation which is studying the suitability of So- viet agricultural machinery for Trade with the USSR has risen from only $14 mil- lion in 1964 to over $65 million last year. Communist China meanwhile con- tinues seeking to expand its activities in Pakistan. Foreign Minister Husain announced on his return from China in early August that a Pakistani team will soon visit China to study flood con- trol. The press in Pakistan USE:d this occasion to report on SECRET Page 19 WEEKLY SUMMARY 30 Aug 68 25X1 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET progress at the $10-million-heavy machinery complex the Chinese are building just outside Rawalpindi. submitted a bid including long-term credits to construct a petrochem- ical plant. Despite political problems at home, Czechoslovakia announced in mid-August that it soon would deliver power equipment other Communist countries have recently shown renewed in- terest in Pakistan. Rumania, jointly with West Germany, has INTERCOMMUNAL TALKS The second phase of the in- tercommunal talks on Cyprus opened yesterday in an atmosphere of mutual hope for some movement toward a settlement. Both sides realize, however, that the nego- tiators have considerable ground to cover before any reasonable progress will be forthcoming. A gradual dissipation of the momentum resulting from the serious crisis last November will add to the already substantial burden of the negotiators. Con- tributing to this slowdown has been the tendency in the Greek Cypriot community to believe, rightly or wrongly, that time is on their side and a similar im- mobilism among some Turkish Cyp- riot diehards who remain suspi- cious of Greek Cypriot moves to- ward normalization. In addition, the extension last June of the UN peace force for an additional six months has contributed to the complacency among the Greek Cypriots. A shorter term would under a $28-million aid agree- ment concluded in mid-1966. REOPENING ON CYPRUS have applied pressure on the parties to speed up their normal- ization programs. Although some moves have given mild encouragement that progress can be made, differences of view on the basic issues are considerable. Of these, the least difficult would seem to be the change to a unitary elec- toral system. Under the present constitution, dual elections are held with the Greek Cypriot com- munity electing the president and its own legislative represent- atives and the Turkish community voting separately for the vice president and its legislators. The earlier talks gave some prom- ise that compromise on this ques- tion was possible. A more difficult problem will be faced when the future of the vice presidency is considered. This office now must be occupied SECRET Page 20 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET by a Turkish Cypriot, a consti- tutional provision that Greek Cyp- riot President Makarios hopes to abolish. This could bring trouble with the Turkish Cypriots, who are unlikely to agree to a decrease in their executive authority in the national government. Two final issues, executive veto and autonomy, are tied to- gether and represent the crux of the problem--that of guaran- tees for Turkish Cypriot secu- rity. In the past, the privilege of the veto gave the Turks the ability to block action in many areas that they viewed as against their best interests. Likewise, the current Turkish Cypriot con- centration on separate enclaves where they are able to provide for their own security seems likely to continue and to be a SECRET Page 21 WEEKLY SUMMARY part of the Turkish bargaining package. The degree of local and national autonomy that Ma- karios will be willing to grant the Turkish Cypriots will be the key to any real settlement. In any event, progress on these basic issues is likely to be slow and tedious. Essential for any resolution of the con- stitutional problems would seem to be continued forward movement on normalization procedures such as the freedom of travel, economic integration, and a decreased military readiness. These might help alleviate Turkish Cypriot fears and distrust that have built up over the last four years. Without this, a serious crisis could again recur and destroy 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET the visit of Pope Paul VI to Colombia highlighted events in Latin America this week. The Pope received a tumultuous reception during his three-day visit in Bogota, but his pronouncements on the rote of the Catholic Church in social change will probably widen the schism between the increasing number of progressive clerics and the unyielding, ultraconservative church leaders. Public and government reaction to the Soviet invasion of Czechoslo- vakia continues to be highly critical. All the major orthodox Communist parties except Mexico have endorsed the Soviet move, but in some of these parties the issue has produced considerable confusion, indecision, and even factionalism. Extreme leftist and pro-Chinese parties have condemned the action. The Mexican Communist Party, which heretofore has always fol- lowed Moscow's lead, reportedly asked the Soviet Union to withdraw its troops and begin negotiations based on the principles of equality, respect, and noninterference in the internal affairs of states and parties. Panama's President-elect Arnulfo Arias is confident that his coalition will have at least a majority in the National Assembly. Arias has instructed the Electoral Tribunal to annul the victories of certain progovernment deputies and replace them with his own followers prior to the completion of the vote count. After a lull in antigovernment agitation in Uruguay, the Communists are again planning student and labor demonstrations and work stoppages. A 48-hour general strike on g consid- ered. SECRET Page 23 WEEKLY SUMMARY 30 Aug 68 25X1- Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET CUBA LINES UP WITH MOSCOW ON CZECH CRISIS Fidel Castro's grudging en- dorsement of the Soviet inter- vention in Czechoslovakia, in a speech on 23 August, was an em- barrassing compromise of his pretensions of independence from Moscow. It will probably tarnish his image abroad and heighten disenchantment with his policies in Cuba. Prior to this, Cuba had adhered officially to a neutral position on Czech-Soviet rela- tions while tolerating some ex- pressions of anti-Soviet senti- IOn the 22nd, Cuban authorities permitted more than 200 Czechs--including Prague's ambassador in Havana--to hold an anti-Soviet rally and to dis- tribute a declaration demanding the withdrawal of Soviet troops. For two days following the invasion, however, no official statement was issued. Then on the 23rd, Castro was forced by circumstance to act against his own instincts and convictions. In an uncharacteristically disordered speech, he simultan- eously attempted to condone the intervention and to maintain the same level of criticism he has directed against Moscow since 1966. He said that the invasion was a "flagrant violation" of Czech sovereignty with "absolutely no legality," but that it was justi- fied. He criticized the Warsaw Pact countries for supporting "rightist" leaders in Latin Amer- ica, and asked them if they would also send troops to protect Cuba, Vietnam, or North Korea. In addition, a major portion of Castro's speech was devoted to criticism of the US. He ex- plicitly rebutted rumors that Cuba would consent to a rapproche- ment with the US. Castro's awkward position was partly a result of his am- bivalent feelings toward "lib- eral-nationalist" Communist regimes. Although he deplored the "archrevisionist" reforms in Czechoslovakia, he probably also admired the willingness of the Czechs to confront Moscow. In the final analysis, however, he apparently realized that he SECRET Page 24 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET could not be silent. He may have been concerned that there had been a shift toward a hard line within the Soviet leader- ship. In any case, because of his continued dependence on So- viet economic and military aid, he was compelled to support Mos- cow. In only one instance in the past--when the Soviets in 1962 withdrew their strategic weapons from Cuba--has Castro's ultimate role as a pliant Soviet client been so blatantly demonstrated. Because of the self-conscious excuses he put forth in his speech, he probably feels humil- iated, and may seek some means of restoring his cherished image of independence. POPE FAILS TO RESOLVE DIVISIONS IN LATIN AMERICAN CHURCH Pope Paul VI received a tumultuous public reception dur- ing his three-day visit to Co- lombia last week, but his pro- nouncements on the role of the Catholic Church in social change will probably widen the schism between the increasing number of progressive clerics in Latin America and the unyielding ultra- conservatives. Many of the bish- ops, who are in Bogota to attend the Second Conference of Latin American Bishops, were hoping for a papal pronouncement for an active role for the church in pushing for immediate changes in the social structure--for an immediate social revolution-- with a few even endorsing the idea that violence might be nec- essary in some instances. Obviously, the Pope had never intended to support the position of the militant, noisy minority of "left trend" priests and laymen who see revolution as the only means to solve Latin America's problems. The large group of progressive priests, on the other hand, genuinely hoped that the Pope would attempt to direct the church to a left-of- ceenter approach to Latin Amer- ica's social problems. SECRET 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 SECRET revolution as a means to achieve social improvements. Speaking to workers and peas- ants on 19 August, the Pope denounced the violence advocated by radical priests. He assured the poor of his concern for their miserable conditions and, as part of a five-point program for so- cial reform, stated that the gov- ernments and upper class Latin Americans should strive for more social awareness and sharing of the wealth. The five points, which are in effect a partial restatement of his encyclical "On the Devel- opment of Peoples" of March 1968, are: to proclaim the Christian dignity of the poor; to continue to denounce economic inequality; to support fraternal assistance from developed countries to under- developed countries; to have the church serve as an example of generosity and service; and, finally, to reject violence and In his address to the bish- ops' conference, however, the Pope appeared to reverse his position as he defended conserv- ative theology including his recent birth control encyclical. Moreover, his emphasis on non- violence and a gradual approach would seem to contradict his earlier emphasis on the "imme- diate need" for social reform. The result of the Pope's visit, therefore, appears to be a significant victory for the church conservatives and a loss for progressives. Although the progressives, according to press statements they have made, will probably accept the Pope's pre- cepts, they now believe that the Pope's use of the terms "order and gradual change' are giving conservative churchmen a ready-made excuse for blocking change and maintaining the status quo. They believe further that the Pope is unwittingly aggra- vating the estrangement of "left- trend" radical priests and may drive more progressives into the radical camp. This, in turn, could weaken the church's in- 25X1= SECRET 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET ARGENTINE PRESIDENT OUSTS ARMY CHIEF President Ongania has strengthened his control over the Argentine military by re- moving army Commander in Chief Julio Alsogaray, one of his most vociferous critics, and replacing him with a close friend and loyal supporter, General Alejandro Lanusse. At the same time, On- gania named new commanders for the navy and air force, but both those incumbents are ready for retirement. plan some return to constitutional or elected government. Ongania's choice of Lanusse should end military pressure for political reform. Lanusse has sclid that he will permit Ongania to oversee the army, rather than try to make the army the watch- 25X1 dog over the President. The relationship between Ongania and Alsogaray has been a stormy one. Alsogaray demanded a greater role for the army in policy making, and several times accused Ongania of wanting to establish a fascist or personal- ist dictatorship. Alsogaray drew his backing from the "lib- eral" faction in the government, which included his brother Alvaro, the ambassador to the US until early this month, when he, too, was removed by Ongania. The Alsogarays supported the "lib- eral" economic reforms of Economy Minister Krieger Vasena but ob- jected to Ongania's refusal to Alsogaray is reported to be bitter over his abrupt dismissal and his inability to line up support among his fellow officers to prevent it. Lacking.such support, however, he will prob- ably fade into the league of retired generals who make oc- cELSional ineffective statements opposing Ongania. Strong backing from the military should enable Ongania to continue economic reforms 25X1 SECRET Page 27 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 SECRET BOLIVIAN SITUATION EASES BUT TENSIONS REMAIN Public disorders have abated in accordance with agreements the Barrientos government has reached with student and labor groups. Bolivia remains tense, however, because of reports of continued plotting and the pos- sibility of renewed disorders. The government secured agreements from student and labor groups to cease their disruptive activities by granting most of their demands and releasing ar- rested leaders of both groups. The labor groups have accepted President Barrientos' explanation for the state of siege and other actions they had opposed, but local student federations are bitterly divided over the agree- ment their leaders reached with the government on 23 August. The national federation has rec- ommended accepting the agree- ment, interpreting it, however, as only a "temporary truce." The recent student and labor disorders were apparently not di- SECRET Page 28 WEEKLY SUMMARY rectly associated with a plot by the three major opposition po- litical parties to overthrow Barrientos, but the plotters hope to capitalize on what they view as a steadily deteriorating situ- ation. General Marcos Vasquez, who has evaded arrest since fail- ing in a coup attempt on 21 August, has reportedly allied himself with leaders of the op- position, many of whom are in exile and is seeking support for an- other attempt to oust Barrientos. He has been deprived of support from within the armed forces by the government's swift arrest of officers suspected of having been in contact with him. The government appears to retain the support of the mili- tary and to be capable of turn- ing back any new challenge. Pres- ident Barrientos, however, has indicated that he has doubts about the motives and continued loyalty of armed forces commander Gen- 30 Aug 68 25X1 25X1 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 SECRET INCOMING ECUADOREAN ADMINISTRATION FACES MANY PROBLEMS When Jose Maria Velasco Ibarra assumes the presidency on 1 September, he will be greeted by essentially the same problems that kept him from serv- ing out three of his four earlier terms. Velasco's talent for obtain- ing political power has been matched by his inability to ex- ercise it wisely. Although over the years he has commanded the respect and the support of many able men, he has tended to ig- nore their advice in favor of unscrupulous, self-interested counselors. A similar situation appears to be shaping up for his new administration. Many moder- ate and capable men are support- ing him, but so are opportunists such as ex-president Carlos Julio Arosemena and Castroite Manuel Araujo. In shaping his economic policy, Velasco will be hampered by a budget situation that is deteriorating rapidly. Prov- inces whose funds have been cut this year are threatening strikes and civil disorder. Velasco is faced with the problems of re- ducing current expenditures, meeting the needs of the prov- inces, and planning for future budgets. The election of center-left vice presidential candidate Jorge Zavala, who ran on a ticket op- posed to Velasco, could also cause problems. Zavala has claimed publicly that his job entails undefined but unlimited powers, which he will exercise as he sees fit. Although it is doubtful that Zavala will have official powers beyond those mentioned in the new constitu- tion, there are a number of ways he could harass Velasco. He could make public statements criticizing the President and his policies and expose cases of alleged Velasquista graft or corruption. Finally, he could emulate Velasco's last vice president, who succeeded in over- throwing Velasco and having him- self installed as president. During three of his four previous administrations, Ve- lasco's inability to maintain good relations with the armed forces played a major role in his fall from power. Although many mili- tary men have no desire to inter- vene in politics after the diffi- culties their governing junta encountered from 1963 to 1966, their willingness to tolerate the activities of leftist or irresponsible officials who threaten the nation's welfare is not unlimited. The military may already be concerned by a statement attributed to Velasco's probable defense minister that some senior officers will be retired involuntarily. This statement conflicts with assur- ances by other Velasquista leaders that Velasco is not plan- ing an extensive purge of senior SECRET Page 29 WEEKLY SUMMARY 30 Aug 68 Approved For Release 2008/09/29: CIA-RDP79-00927A006600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Next 1 Page(s) In Document Denied Iq Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6 Secret Secret Approved For Release 2008/09/29: CIA-RDP79-00927AO06600050001-6