WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A007100010001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 36
• Document Creation Date: December 21, 2016
• Document Release Date: March 20, 2009
• Sequence Number: 1
• Publication Date: May 9, 1969
• Content Type: SUMMARY

Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
Secret
r 25X1
r
E-'
G'~ir.. \LP
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
State Dept. review completed.
Secret
50.
9 May 1969
No. 0369/69
Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
 25X1
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
Q
Iq~
 Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
SECRET
C O N T E N T S
(Information as of noon EDT, 8 May 1969)
Far East
THE WEEK IN PERSPECTIVE
Page
1
VIETNAM 2
Communist negotiators in Paris have offered a new
ten-point program of conditions for talks with the
South Vietnamese Government, an effort aimed in part
at regaining the propaganda advantage from Saigon.
In South Vietnam, meanwhile, military activity re-
mained light, and President Thieu moved ahead with
his progovernment confederation.
THIRD TERM ISSUE DOMINATES SOUTH KOREAN POLITICS 6
Hard-line supporters of President Pak are stepping
up their efforts to lift the constitutional ban on
his running for a third term in 1971.
CAMBODIA'S SIHANOUK CASTIGATES NORTH VIETNAM AND US 7
Prince Sihanouk apparently is entering another period
of frenetic diplomatic activity, but this time North
.c7, .-. 4-,.. ,
a7 WC-L1 d,3 Lne U
COMMUNIST CHINA EXPECTING MEDIOCRE HARVEST 8
Crop prospects this year probably are adding to Pe-
king's reluctance to tamper with current agricultural
policies. The tone of releases from the recent ninth
party congress indicates that proposals to radicalize
farm policy have been shelved.
SECRET
Page i WEEKLY , SUMMARY 9 May 6 9
25X1
Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
Europe
THE WEEK IN PERSPECTIVE
9
USSR'S INDUSTRIAL GROWTH LAGGED IN FIRST QUARTER 10
Severe winter weather was largely responsible for
the poor performance of Soviet industry during the
first quarter of the year.
CZECHOSLOVAK LEADER HUSAK TRIES TO CONSOLIDATE HIS GRIP 11
Party leader Husak last week alleged that his leader-
ship had passed its initial tests and was now ready
to review the country's myriad problems.
EAST GERMANY GAINS RECOGNITION FROM NON-COMMUNIST STATES 13
East Germany's prolonged efforts to obtain diplomatic
recognition from non-Communist states finally met with
success on 30 April and 8 May, when Iraq and Cambodia,
respectively, announced full recognition of Pankow.
POMPIDOU LEADING FRENCH PRESIDENTIAL RACE 14
As the 13 May deadline for filing for the presidency
approaches, French centrists are still searching for
a man to carry their banner against the declared can-
didates of the left and right.
FRANCE MOVES TO CONTINUE EUROPEAN AIRBUS PROJECT 16
Despite the UK's recent withdrawal, France and West
Germany have decided to go ahead with the projected
A-300 airbus--a 250-passenger, short-to-medium range
aircraft primarily for European airlines.
Middle East - Africa
THE WEEK IN PERSPECTIVE
17
MIDDLE EAST SITUATION REMAINS ACTIVE 18
Lebanon and Jordan continue to wrestle with problems
brought on by Arab commando activities within their
borders as shooting occurs daily along the Arab-
Israeli cease-fire lines.
25X6
SECRET
Page i i WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-OO927AOO71OOO1OOO1-4
SECRET
SOVIET AID BENEFITING THE EGYPTIAN ECONOMY 19
Soviet efforts to assist Egypt's economic development
are paying off and, with the Aswan High Dam virtually
completed, Moscow is now turning its attention to the
Helwan iron and steel complex.
GHANA'S POLITICIANS RETURN TO THE HUSTINGS 20
Ghana's long-suppressed civilian politicians are fever-
ishly organizing political parties in preparation for
elections in September and the subsequent formation
of a civilian government.
Western Hemisphere
THE WEEK IN PERSPECTIVE
21
PERU REMAINS ADAMANT ON IPC ISSUE 22
No visible progress has been made toward agreement
on compensation for the expropriated properties of
the International Petroleum Company.
CHILEAN CHRISTIAN DEMOCRATS TRY TO PAPER OVER SPLIT 23
Supporters of President Frei won a narrow victory
at a meeting of the Christian Democratic Party last
week.
BOLIVIAN POLITICAL TENSIONS SUBSIDE 24
With the swearing-in of a new cabinet on 5 May, an
uneasy truce has at least temporarily eased the
political crisis caused by the death of President
Rene Barrientos on 27 April.
ECUADOR'S PRESIDENT THRIVING ON TROUBLES 25
Problems with petroleum, bananas, finances, and pol-
iticians continue to complicate President Velasco
Ibarra's efforts to govern Ecuador, but he seems to
thrive on the challenge.
SECRET
Page iii WEEKLY SUMMARY 9 May 6 9
25X1
Approved For Release 2009/03/20: CIA-RDP79-OO927AOO71OOO1OOO1-4
 Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
SECRET
PANAMA - COSTA RICA BORDER CONFLICT EASES 27
A series of border incursions that had threatened to
become a problem for the Organization of American
States has subsided for the moment as both countries
seek a solution through bilateral talks.
DUVALIER INTENSIFIES ANTI-COMMUNIST CAMPAIGN IN HAITI 28
President Duvalier's drastic actions may reflect his
anxiety over current difficulties as well as a. hope
of inducing external assistance.
SECRET
Page iv WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
FAR EAST
Communist negotiators in Paris have offered a new ten-point program
of conditions for talks with the Saigon government. The Communists have
made these proposals, in part, to regain the propaganda initiative from
Saigon. These statements come on the heels of policy deliberations in Hanoi
attended by both the chief North Vietnamese negotiator in Paris and one of
the important members of the Front delegation.
Communist forces in South Vietnam continue in the main to refit and
resupply; there are now, however, indications that their "May Action Phase"
will be limited in scope. Enemy planning at this stage appears to be directed
at further attempts to cause a high level of allied casualties and heavy
damage with as low a cost to the Communists as possible. Enemy action may
intensify along these lines in June. Meanwhile, President Thieu appears to be
having some success in forming his progovernment confederation, now to be
called the National Social Democratic Front. A national convention of the
new group is planned for late May.
Hard-line supporters of South Korea's President Pak are stepping up
their efforts to lift the constitutional ban on his running for a third term in
1971. The unprecedented censure of a government minister last month
appears to have given pro-amendment forces their opportunity to win Pak's
support for more vigorous action at this time.
Cambodia's Prince Sihanouk apparently is entering another period of
frenetic diplomatic activity but this time North Vietnam is a target as well as
the US. Sihanouk is once again obsessed with the problem of protecting
Cambodia's frontiers. In addition to rejecting the recent US border declara-
tion, Sihanouk last week also made his most bitter and far-reaching verbal
attack on the North Vietnamese. He even mentioned for the first time the
possibility of severing diplomatic relations with Hanoi.
25X1
SECRET
Page 1 WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
VIETNAM
Two important Communist ne-
gotiators returned to Paris with
the Communist response to South
Vietnam President Thieu's offer
to talk directly with the Libera-
tion Front. At the Paris meet-
ing on 8 May Tran Buu Kiem of-
fered a new ten-point program set-
ting out Communist conditions
for talks with the Saigon govern-
ment.
This statement comes on the
heels of important policy delib-
erations in Hanoi attended by
both Le Duc Tho, chief North Viet-
namese negotiator in Paris, and
Mme. Nguyen Thi Binh, one of the
important members of the Front
delegation.
Most of the new ten points
are an elaboration of earlier
Liberation Front demands, but
the scenario has been altered,
and the Communists have gone on
record as refusing to link North
Vietnamese troop withdrawals with
US withdrawals. They will dis-
cuss such problems only with the
South Vietnamese, according to
the new proposals. The Commu-
nists also hinted that they would
be agreeable to a cease-fire be-
fore a coalition government was
established, and that they in-
tend to make extensive reparations
demands on the US for damage in
both North and South Vietnam.
Military Developments in
South Vietnam
There are indications that
the enemy's "May Action Phase"
will be limited in scope. Enemy
activity may be imminent in the
western highlands, and along
the outer fringes of South Viet-
nam's III Corps. The most sig-
nificant enemy ground action
this week took place in north-
ern Tay Ninh Province, where an
element of the North Vietnamese
lst Division stormed a US field
position at a cost of more than
100 of the enemy killed and 29
captured.
Communist military activity
so far this month reflects the
usual recent pattern of refitting,
regrouping, and reassessing. The
present dispersal and low level
of combat readiness of the bulk
of the enemy's first-line combat
units strongly suggests that
there will be no country-wide
Mav offensive
majority of the enemy's
troops could be prepared
if Communist planners ar
SECRET
Page 2 WEEKLY SUMMARY 9 May 6 9
combat
by June
e aiming
25X1
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
for a large-scale campaign.
Chances are, however, that they
will attempt a relatively low-
cost, high political impact cam-
paign, possibly in late June,
designed to increase pressures
in the US for concessions in or-
der to hasten a settlement.
The Communists
had plans for attacks on the capi-
tal city during the spring offen-
sive but they were unable to
penetrate allied defenses.
the enemy
still hopes to hit Saigon with
main force units at some stage
ummer offensive.
the continuing transport of
rockets toward launching areas
near the capital, suggesting
that at a minimum the enemy may
stage limited shellings of Sai-
gon as they did during the spring
campaign.
The Communists have several
options open to them in planning
their next campaign. These
choices include attacks on pro-
vincial capitals and other popu-
lated areas, multidivisional at-
tacks in the Demilitarized Zone
area and against selected tar-
gets in III Corps, or the con-
tinuation of the strategy followed
this spring with emphasis on bom-
bardments of allied military posi-
tions. Although there could be
any number of modifications or
combination of these options, it
would seem likely that any new
country-wide offensive would com-
bine the relatively inexpensive
tactic of widespread shellings
with selected large-unit attacks
on strategic military targets,
particularly in the provinces
ringing Saigon.
Political Developments
In South Vietnam
President Thieu and several 25X1
political groups have reached
agreement on a name for Thieu's
progovernment confederation and 25X1
on the composition of its presid-
ium.
The new group will be called 25X1
the National Social Democratic
Front, and its first national
convention is now scheduled for
25 May. Included in the initial
grouping will be the Greater Soli-
darity Force, the Nhan Xa, the
Revolutionary Dai Viets, the Hoa
Hao Social Democrats, and the
Lien Minh. A newly merged Viet-
namese Nationalist Party faction
may also join.
There are indications that
presidential aide Nguyen Van Huong
may be eliminated as an inter-
mediary between Thieu and the
component elements of the new or-
ganization. Huong is widely dis-
liked and his role as intermediary
in the predecessor organization,
the Lien Minh, has caused many
difficulties.
Meanwhile, Senator Tran Van
Don, a prominent South Vietnamese
SECRET
Page 3 WEEKLY SUMMARY 9 May 69
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 NORTH VIETNAM
Demarcation Line
QUANG Tit! .SO(;'TI!
Iy.
THUA THIEN J1
. _,_ C:1f1aA
WANG
LAOS
QUtA~NG NAM
ECU ion CN.ANI
r\_I
Q U A N G l TIN
r
Son Tinh District-r
Batangan
Peninsula
LLJANG NGAI
25X1 25 50 Miles
~-~ , - II CORPS
i) 25 5[t Kilometers
94946 5-69 CIA
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
politician who has so far remained
out of the negotiations on Thieu's
confederation, has offered to sup-
port Thieu by revitalizing the
Vietnamese veterans legion, in
association with General Duong
Van "Big" Minh. At the same
time, however, Don has appar-
ently kept his lines open to the
enemy side. Don informed US Em-
bassy officials in Saigon that
the Communists had contacted him
about possible cooperation with
"Big" Minh in a coalition gov-
ernment to replace the present
regime. He claimed that he had
declined the Communist suggestion,
at least for the time being, but
also volunteered that such con-
tacts are frequent and widespread.
These contacts represent
Communist attempts to promote their
"peace cabinet." The fact that
a major figure such as Don has
not ruled out participation in
such a government almost certainly
encourages the Communists to be-
lieve they are on the right track
and can eventually undermine the
Saigon political structure. More-
over, Don is probably right that
many other South Vietnamese poli-
ticians have been contacted by
the Communists. It seems likely
that these politicians also are
being only "moderately negative,"
as Don described himself, thereby
giving further encouragement to
the Communists.
The enemy also remains polit-
ically active in many districts
and villages throughout the coun-
try despite the loss of many low-
level cadre as a result of the
government's pacification program.
Assassinations, kidnapings, tax
collections, recruitment, organi-
zation, and propaganda continue
to demonstrate the enemy's pres-
ence in much of South Vietnam.
In I Corps' Thua Thien Prov-
ince, for example, the Communists'
most recent activity has been di-
rected primarily toward rebuilding
their badly damaged infrastructure.
In the past few months, small
groups of Viet Cong have become
more active in the lowland dis-
tricts, where enemy units have
been concentrating on food col-
7 lection. ::: 25X1
In Quang Ngai Province, mean-
while, incidents of kidnaping have
increased, suggesting the enemy
needs additional laborers to haul
his supplies. The Viet Cong also
continue to resist the expansion
of the government's presence into
long-time enemy redoubts on the
Batangan Peninsula. For example,
177 civilians who were taken from
a government resettlement camp on
the peninsula two weeks ago have
been sent by the Communists to
nearby Son Tinh District to re-
establish themselves. Another
attempt by the enemy to disperse
the inhabitants of a second re-
settlement camp on Batangan, how-
ever, was thwarted by a govern-
ment security force.
25X1
SECRET
Page 5 WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
THIRD TERM ISSUE DOMINATES SOUTH KOREAN POLITICS
Hard-line supporters of Pres-
ident Pak are stepping up their
efforts to lift the constitutional
ban on his running for a third
term in 1971.
Hoping to complete the leg-
islative process by year's end,
proponents of a constitutional
amendment are busy behind the
scenes lining up the necessary
two-thirds majorit in the Na-
tional Assembly.
The schedule of the pro-
amendment forces calls for secur-
ing unanimous approval at the
government party convention, ten-
tatively set for June, and then
completing legislative action be-
fore the assembly takes up the
national budget in September.
The unprecedented censure
last month of a government min-
ister by the National Assembly
appears to have given the pro-
amendment forces their opportu-
nity to win Pak's support for
more vigorous action at this time.
Angered by the assembly's rebuff--
and aware that the censure motion
had been engineered by anti -
third term assemblymen of his own
party--Pak called for a tighten-
ing of party discipline. Pak
publicly expelled from the party
a handful of the ringleaders in-
volved in the vote, while pro-
amendment forces appear to have
been privately encouraged to force
their doubtful party colleagues
into line.
In the present climate, the
anti - third term group within
the party would seem to have lit-
tle room for maneuver. The re-
calcitrants for the most part are
supporters of Kim Chong-pi.l, Pak's
erstwhile alter ego and close
relative by marriage. Kim, am-
bitious to become president but
lacking the power as well as the
apparent will to challenge Pak
head on, had been tacitly encour-
aging opposition to a constitu-
tional change in the hope that
Pak would step aside in his, favor
in 1971. To avoid complications,
he had been in semi-exile in Ja-
pan since late February.
When the full extent of Pak's
anger over the censure motion be-
came apparent, Kim returned to
Seoul on 28 April in an apparent
effort to rescue as many of his
followers as possible. He has
dutifully called on his "old
colleagues and fellow countrymen"
to give their absolute support
to President Pak. Kim has avoided
giving a clear endorsement of
the constitutional amendment,
however, and appears to be mark- 25X1
ing time as he reconsiders his
tactics.
SECRET
Page 6 WEEKLY SUMMARY 9 May 6 9
25X1
,,,. Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
CAMBODIA'S SIHANOUK CASTIGATES NORTH VIETNAM AND US
Prince Sihanouk apparently
is entering another period of
frenetic diplomatic activity, but
this time North Vietnam is a tar-
get as well as the US.
a show of obduracy presumably
enables Sihanouk to demonstrate
to Cambodian leftists, as well
as the Vietnamese Communists,
that he is still his own man.
Sihanouk's emotional press
conference of 30 April indicates
that in addition to having second
thoughts about how rapidly he
should move toward a rapproche-
ment with the US, Sihanouk is once
again obsessed with the larger
problem of protecting Cambodia's
frontiers. In rejecting the re-
cent US border declaration, for
example, Sihanouk said that Ameri-
can newspaper stories describing
the general nature of the declara-
tion indicated Washington had
"reservations" that undermined
its utility to Cambodia. Gaining
recognition of Cambodia's borders
has been one of Sihanouk's princi-
pal foreign policy objectives in
recent years.
It is still too early to
judge how serious Sihanouk is
about the "rejection." He may
merely be trying to exact some
clarification of the US position
that he can use to advantage
with his neighbors and his do-
mestic critics. At a minimum,
Sihanouk also made his most
bitter and far-reaching verbal
attack on the North Vietnamese
to date at the press conference.
Describing the encroachments of
Viet Cong and "Viet Minh" ele-
ments in northeast Cambodia as
typical tactics of the Asian
Communists, he even mentioned
for the first time the possi-
bility of severing diplomatic
relations with Hanoi. Sihanouk
referred obliquely to certain
assistance which the Cambodian
people and army have provided
the Communists and which pre-
sumably may now be withdrawn.
The importance of these
veiled threats will not be lost
on the North Vietnamese, nor
will Sihanouk's call for a widen-
ing of the Paris peace talks to
include representatives of both
Cambodia and Laos find any favor
in Hanoi. The North Vietnamese
have insisted that the issues of
Laos and Cambodia must not be
taken up at Paris.
25X1
SECRET
Page 7 WEEKLY SUMMARY 9 May 69
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
COMMUNIST CHINA EXPECTING MEDIOCRE HARVEST
Mediocre crop prospects this
year are probably adding to Pe-
king's reluctance to tamper with
current agricultural policies,
which include some material in-
centives and relatively free scope
for private plots. The ninth
party congress last month dealt
only tangentially with the econ-
omy, but the tone of releases from
the congress indicates that pro-
posals to radicalize farm policy
have been shelved.
The early harvesting about
to begin will likely bring in a
grain crop slightly below aver-
age. Although conditions in the
north have been generally good,
cold and rainy weather in the
south has necessitated successive
replantings of rice and has de-
layed the next cr
c emi-
cal fertilizers have not been
reaching the communes on a regu-
larr basis.
Crop losses in the south will
probably not be excessive, but
they nevertheless increase the
risk to Peking of implementing
radical Maoist policies in the
countryside. Without first build-
ing up a substantial food reserve,
China cannot push farm programs
that past experience has shown to
result in significant losses in
production. Since late 1966, the
Cultural Revolution has hampered
farm production by lowering the
quality of local .leadership, re-
ducing industrial support, and
forcing the communes to accept
about 20 million city dwellers as
part of a massive resettlement cam-
paign.
In compensation, however, the
general breakdown in discipline
during the Cultural Revolution has
given peasants unparalleled oppor-
tunities to grow and market their
own produce. Food consumption
data from south China indicate
that during the past two years the
contribution of the private plots
to the average diet--measured in
calories--increased by about 15
percent.
During the recent congress,
People's Daily circumspectly de-
fended the continued existence of
private plots; provincial news-
papers, however, have been far less
equivocal on this point. Reduc-
tion and perhaps abolition of the
plots has been one of the goals of
experimentation in rural areas
throughout China since last autumn.
These experiments may now be taper-
ing off, judging by the decreasing
number of references to them in
letters from China,,,
SECRET
Page 8 WEEKLY SUMMARY 9 May 69
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
EUROPE
In the campaign for the French presidential election on 1 June, Gaullist
Georges Pompidou is leading a field of nine contenders, six of whom have no
chance to win. At this point, a moderate Socialist and a Communist are
Pompidou's strongest competitors, but a centrist may yet enter the race.
The Finns are circulating a memorandum to all European states, the
US, and Canada, sounding them out on a European security conference. The
Finns believe that consultations among governments concerned should be
followed by a preparatory meeting and then by the conference itself. If the
proposal is accepted, the Finns are ready to act as hosts.
Two of the top Soviet leaders are visiting Asia in May. Premier Kosygin
in New Delhi this week for the funeral of Indian President Husain held
substantive talks with Prime Minister Gandhi. China was probably high on
their agenda, as it will be when President Podgorny visits North Korea and
Mongolia later in the month. Podgorny's visit probably is aimed at demon-
strating that Pyongyang has a friend in the Soviet Union despite Moscow's
cautious conduct in the wake of the EC-121 shootdown.
After nearly two decades of effort, the East Germans finally won
diplomatic recognition from a non-Communist nation when Iraq announced
full recognition of Pankow. A week later, Cambodia also granted East
Germany full diplomatic recognition. Syria and Sudan may soon follow suit.
Following an initial period of uneasy calm marked by protests and
some demonstrations, Czechoslovak party leader Husak seems to believe that
his regime has passed its initial tests at home and is now ready to launch a
broad review of the country's many problems. His future plans and immedi- 25X1
ate next steps will probably be outlined at a central committee meeting
reportedly set for next week.
SECRET
Page 9 WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
USSR's INDUSTRIAL GROWTH LAGGED IN FIRST QUARTER
According to Moscow, Soviet
industrial production grew by
only six percent during the first
three months of 1969, the lowest
growth rate during the first
quarter in the 1960s. Analysis
of monthly and sectoral data con-
firms the official explanation
that the severe winter weather
was largely to blame for the slow-
down.
Civilian industrial produc-
tion--determined by a recalcula-
tion of the official. Soviet sta-
tistics to conform to Western
definitions and to exclude mili-
tary and space hardware--is esti-
mated to have grown by only four
percent. Total industrial out-
put---including military and space
hardware--is estimated to have
grown at a somewhat higher rate
than civilian production.
During January and February,
production in all major sectors
Soviet Industrial Growth (Civilian)
First Quarter - 1969
(Percentage change from corres-
ponding period of previous year)
1963-65 1966 1967 1968 1969
(annual avg.)
First
Quarter 7.1 8.6 6.5 4.1
Full
Year 6.6' 7.2 7.3 6.1 7.3*
(plan)
*Includes military and space
94944 3-69 CIA
25X1
of civilian industry except ma-
chinery stagnated or declined.
There was a marked improvement
in March but some sectors failed
to recover completely, notably
certain fuels, metals, and con-
struction materials.
An improvement in urban diets
is not likely before the 1969 har-
vests. Production in the food in-
dustry, which declined absolutely
in January and February from the
same period a year ago, showed
moderate improvement in March.
As a result, first quarter pro-
duction of some major foods con-
tinued at about the same levels
as during the first quarter of
1968. An absolute decline of
11 percent in meat output, how-
ever, in conjunction with winter
herd losses in central Asia, dims
considerably the prospect for a
sizable increase in retail sup-
plies of meat in the next few
months.
The leadership has shown con-
siderable concern over the unsatis-
factory economic performance dur-
ing the first months of this year.
A meeting early in March of the
Council of Ministers discussed
the first quarter results and
leveled criticism at various re-
publics and ministries. Also, a
number of recent press articles
have stressed the need for greater
effort to recover from the hard
winter. The production lags in
so many important industrial
branches, however, will probably 25X1
retard general economic growth
for several months,
SECRET
Page 10 WEEKLY SUMMARY 9 May 69
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
CZECHOSLOVAK LEADER HUSAK TRIES TO CONSOLIDATE His GRIP
Party leader Husak last week
alleged that his leadership had
passed its initial tests and was
now ready to review Czechoslovak-
ia's myriad problems. He did not
indicate that significant policy
changes were imminent.
In an introspective assess-
ment of his first two weeks in
office, Husak claimed that his
regime had won support on all
levels of the party and had gained
the confidence of the other So-
viet bloc leaders as well. In
fact, support for him on the
local levels has been spotty.
The East German press, moreover,
was clearly distrustful of Husak,
and a Hungarian diplomat described
him as "unsuitable" in Budapest's
eyes.
initiated legal action against
the "criminal elements" alleged
to be responsible.
Meanwhile, Husak presided
over the installation of Stefan
Sadovsky, up to now Slovak pre-
mier, as his successor in the
post of first secretary of the
Slovak Communist Party. At the
same time, Peter Colotka, first
deputy premier of the federal
government, replaced Sadovsky as
Slovak premier. Neither Sadovsky
nor Colotka--who are liberal-
moderates--are men of Husak's
authoritarian bent, but Slovakia
is well controlled by Husak's
trusted colleagues.
The regime also tightened its
grip on the news media. Probably
Husak also alluded to the
success of elaborate security
precautions in heading off civil
disturbances on May Day. Despite
Husak's seemingly strong grip on
the internal situation, however,
a nationwide roundup of several
thousand potential dissidents
was deemed necessary to preserve
calm on 1 May. Even so, a sig-
nificant demonstration broke out
less than a week later in Plzen,
where a crowd of about 5,000 pro-
tested the refusalof local party
officials to celebrate the 25th
anniversary of the US liberation
of the city. Police authorities
forcefully dispersed the crowd and
SECRET
Yage 11 WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
as a warning to other dissident
editors, the party transferred
responsibility for one of its
regional newspapers from a pro-
gressive editor-in-chief to a
group of 11 nonjournalist party
members. In addition, the gov-
ernment banned the dissident stu-
dents' weekly, Studentske Listy,
in part because, as the voice of
the uncompromising Czech students'
organization, it refused to sup-
port subordination of that body
to the Communist-run National
Front.
Husak's policies thus far
have been designed to cope with
the problems raised by his elec-
tion and to comply with Soviet
insistence that the Czechoslovaks
assert the party's authority and
calm the domestic situation. Now
that he has achieved a measure of
control over the media and the
party's superstructure, he will
probably assert himself at the
working levels of the party and
government, and will gradually
deal with economic and social
problems.
Husak may spell out his im-
mediate plans during a central
committee plenum sometime next
week. He may also set the stage
there for additional personnel
changes, because he is likely
to bring more of his supporters
and other "realistic" individuals
into federal party and government
bodies.
25X1
SECRET
Page 12 WEEKLY SUMMARY 9 May 69
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-OO927AOO71OOO1OOO1-4
SECRET
. EAST GERMANY GAINS RECOGNITION FROM NON-COMMUNIST STATES
East Germany's prolonged ef-
forts to obtain diplomatic recog=
nition from non-Communist states
finally met with success on 30
April and 8 May when Iraq and Cam-
bodia., respectively, announced full
recognition of Pankow.
East German Foreign Minister
Winzer led a party-state delegation
to Baghdad on 6 May, presumably to
formalize an agreement and to dis-
cuss exchanging ambassadors at an
early date. Winzer probably will
also use his visit to reaffirm GDR
support for the cause of the Arab
world.
Pankow's propaganda on Bagh-
dad's decision has thus far been
relatively low-key, but it clearly
indicates that the East Germans will
attempt to persuade other Arab
states to follow suit. The GDR
presumably will also step up ef-
forts to obtain recognition from
India, which recently upgraded its
trade mission in East Berlin, and
other third world countries.
There are indications that
Syria also may soon recognize the
GDR. Moreover, the Middle East
news agency reported on 5 May that
Sudan is also considering recog-
nizing Pankow.
The Iraqi and Cambodian agree-
ments to recognize Pankow probably
Bonn has warned that it will
regard recognition as an "un-
friendly act." It has few ways in
which to retaliate against Baghdad,
however, and apparently will direct
its attentions to deterring other
Arab states--which broke with West
Germany in 1965 when Bonn recog-
nized Israel--from following the
Iraqi example. Bonn has more lever-
age in Cambodia, however, and may
even threaten to break relations in
an effort to get Sihanouk to change
his mind.
25X1
SECRET
Page 13 WEEKLY SUMMARY 9 May 6 9
5X6
Approved For Release 2009/03/20: CIA-RDP79-OO927AOO71OOO1OOO1-4
will have a significant impact on
East-West German relations. The
East Germans presumably believe
that recognition twice in one week
further justifies their hard-line
policies toward Bonn and that there
 Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
SECRET
POMPIDOU LEADING FRENCH PRESIDENTIAL RACE
As the 13 May deadline for
filing for the presidency approaches,
French centrists are still search-
ing for a man to carry their banner
against the declared candidates of
the left and right. In a race in
which the left is heavily repre-
sented, three major contenders--
Gaullist Georges Pompidou, moderate
leftist Gaston Defferre, and Commu-
nist Jacques Duclos--will compete
with six minor candidates. Pompidou
is in a leading position, however,
with Gaullists of all shades now
united around him and with various
centrists leaning in his direction.
By fielding a number of can-
didates, the left has shown a lack
of cohesion that may be repaired
before the second ballot. Although
this disarray gives Pompidou a wide
lead over any single leftist can-
didate on the first ballot, it does
not ensure his election. On the
second ballot--and no candidate is
likely to receive the absolute ma-
jority necessary for a first-ballot
victory--the left is almost certain
to unite behind one candidate who
could run a strong race against
Pompidou.
The Communist Party, which
decided reluctantly to run its own
man when no other acceptable left-
ist candidate emerged, probably
hopes to use its first ballot sup-
port to strike a bargain with the
candidate who will oppose Pompidou
on the second ballot. Communist
voting strength in a nationwide
presidential election has never
been tested, but Duclos probably
will be among the top three or four
contenders.
Interim President Poher has
still refused to declare his can-
didacy, but he told newsmen in mid-
week that he "might be obliged" to
be a candidate. Although some of
the centrists as well as the cen-
ter-left Radical. Socialists are
strongly urging Poher to run, other
centrists are trying to convince
him to stay out of the race so that
they can more gracefully join the
Pompidou bandwagon. One center
leader, indicating that Pompidou
would receive substantial support
from center parliamentary deputies
if Poher did not run, said that
some centrists would support Pompidou
in any event.
Many Socialists, despite their
official endorsement of Defferre,
apparently still are hoping that
Poher will run in the belief that
he is the only man who has a chance
to defeat Pompidou. A last-minute
resolution passed by the socialist
congress on 4 May gave the party
the right subsequently to judge
the "opportuneness" of Defferre's
candidacy. Thus, if Poher does
run, the party can switch its en-
dorsement to him.
A poll released late this week
showed that Poher would receive 35
percent of the vote against 42 per-
cent for Pompidou, with the remainder
being divided between Defferre, Duc-
los, and other candidates. The poll
results may tip the balance in favor
of a Poher candidacy and lead Def-
ferre to withdraw in favor of the
interim resident.
25X1
SECRET
Page 14 WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
 25X
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
Q
Iq~
 Approved For Release 2009/03/20: CIA-RDP79-OO927AOO71OOO1OOO1-4
SECRET
FRANCE MOVES TO CONTINUE EUROPEAN AIRBUS PROJECT
France and West Germany have
decided to go ahead with the A-
300 airbus project despite the
withdrawal last month of the UK.
Although some further modifica-
tions may be decided upon, the
airbus as presently proposed is
to be a 250-passenger, twin-en-
gine, short-to-medium range air-
craft primarily for European air-
lines. It is scheduled to enter
service in the mid-1970s.
The French, by keeping the
program alive, will continue to
tie German interests to their
own and to satisfy the stated
French need for an airbus. France
also views the project as one of
the major programs to strengthen
the European aircraft industry to
compete with that of the US. The
Germans are enthusiastic about
the airbus project as it will af-
ford them an opportunity to break
into the commercial air transport
market.
The cost-sharing formula for
the project had been 37.5 percent
for both France and Britain and
25 percent for Germany. France
and Germany now are trying to in-
terest other European countries--
Italy, Belgium, the Netherlands,
and possibly Sweden--in joining
the project and splitting the
British share. Involvement of
additional countries in the proj-
ect would also probably increase
the airbus' sales potential.
After joining the consortium,
the British concluded that there
was no market for the A-300--at
least, this was the reason the
British gave for their withdrawal.
The French have consistently main-
tained that firm orders would be
difficult to secure so long as
the consortium could, not decide
on specifications for the aircraft.
Despite UK disclaimers, the
British withdrawal. from the air-
bus program was probably also in-
fluenced by the fact: that they
have their own so-called airbus,
the BAC-311. It reportedly would
resemble the A-300 in many re-
spects and the UK apparently does
not believe that there is suf-
ficient market for both aircraft.
The French probably will not be
deterred by the British effort,
however, inasmuch a:, the UK has
had only limited success in the
commercial air transport market.
France also will be promoting
its own short-to-medium range,
twin-engine, 155-passenger Mercure,
scheduled to become operational
in 1972. The Italians have a
20 percent share in the Mercure,
which gives the project something
of a European flavor. This, coupled
with continued German participa-
tion in the A-300, enhances French
hopes for expanding the European
position in the commercial air
transport market presently domin-
ated by the US.
SECRET
Page 16 WEEKLY SUMMARY 9 May 6 9
25X1
Approved For Release 2009/03/20: CIA-RDP79-OO927AOO71OOO1OOO1-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
The Middle East situation continues to simmer, with daily shooting
incidents across the Arab-Israeli cease-fire lines. Lebanon is still without a
cabinet, and clashes between the fedayeen and the army are increasing. The
army has announced a crackdown on fedayeen groups in southern
Lebanon-particularly the Syrian-backed Saiqah. King Husayn of Jordan is
also trying to limit the terrorists' activities in Amman.
In the Nigerian civil war, federal forces have not undertaken any
significant offensive activity since capturing Umuahia last month. The
Biafrans have scored minor gains on the southern front and continue on the
offensive there. 25X1
In Algeria, the long-postponed third congress of the General Union of
Algerian Workers (UGTA) convened early this week after six months of
careful preparation by the National Liberation Front. The congress is the
final act of a government and party effort to subordinate the UGTA
completely to the party, and is one more step toward consolidating Algeria's
internal structure.
The death on 2 May of Indian President Husain dominated the news
from South Asia. Selection of a candidate to succeed Husain, in elections
that probably will be held in August, may put new strains on Congress Party
unity. The funeral provided an opportunity for Mrs. Gandhi to meet with
several high-ranking visitors. Conversations with Pakistani Air Marshal and
Deputy Martial Law Administrator Nur Khan apparently were cordial and
could presage new initiatives toward improved relations between the two
countries. 25X1
I
In Calcutta, meanwhile, revolution-minded Communist extremists
announced formation of a third Indian Communist party-this one dedicated
to revolution in the countryside. Divisions among the extremists will tend to
diffuse the threat, however, although the move may encourage new violence
against the government of West Bengal, which is dominated by less militant
Communist parties.
25X1
SECRET
Page 17 WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
SECRET
MIDDLE EAST SITUATION REMAINS ACTIVE
Lebanon and Jordan continue
to wrestle With the problem of
the Arab commandos, as shooting
occurs daily along the Arab-Is-
raeli cease-fire lines.
Lebanon remains without a
cabinet, and clashes between the
army and fedayeen groups are in-
creasing in tempo and intensity.
On 6 May, the Lebanese Army an-
nounced it would begin a crack-
down on fedayeen groups in south-
ern Lebanon, and it singled out
Saigah, the Syrian Government -
backed terrorist group.
Elements of the Saiqah had
attacked three different units
of the army over the previous
weekend, killing one soldier.
The army said, therefore, that
:it was forced to take deterrent
measures in order to provide for
the safety of its own units and
to maintain military morale.
President Hilu, in a move prob-
ably aimed at winning domestic
support, publicly stated that
Lebanon would remain "loyal" to
the Arab cause, but within a
framework that recognized Leb-
anon's sovereignty.
In Jordan, King Husayn also
has moved to exercise closer con-
trol over the fedayeen. Follow-
ing shooting incidents in Amman
on 29 April, the King told
fedayeen leaders that armed guer-
rillas would no longer be per-
mitted to wander the streets of
Amman and that their military
bases within the city were to
be closed. He added that, if
necessary, the army would be
brought into Amman in force to
clean out the fedayeen.
Palestine Liberation organi-
zation chairman Yasir Arafat, rep-
resenting several major terrorist
organizations, agreed to these de-
mands, but the Popular Front for
the Liberation of Palestine (PFLP)
has not yet followed suit. Al-
though the PFLP has been more ac-
tively antiregime than the other
terrorist organizations, it does
not by itself constitute a serious
threat to the government. Mean-
while, firing across the Jordan-
Israel border occurs almost daily.
Shooting incidents also con-
tinue to occur regularly along the
Suez Canal, but there do not seem
to have been any further Egyptian
commando raids across that water-
way during the past week. The
Israeli raid into central Egypt
last week apparently was not very
successful in terms of physical
damage.
25X1
SECRET
Page 18 WEEKLY SUMMARY 9 May Ei 9
Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
 l Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
SOVIET AID BENEFITING THE EGYPTIAN ECONOMY
Soviet efforts to aid Egypt's
economic developments are showing
positive results. This month will
mark the virtual completion of the
Aswan High Dam--the USSR's major
aid project in the underdeveloped
areas--which cost Moscow $325 mil-
lion in credits. Ceremonies re-
cently were held inaugurating a
new steel sheet rolling plant at
the Helwan iron and steel complex.
Helwan now is the USSR's principal
project in Egypt, and Moscow has
committed about $160 million in
credits to finance further expansion.
The Aswan Dam project, under
construction since 1960, is esti-
mated to have cost about $750 mil-
lion. Although 2,000 Soviet tech-
nicians were employed at the peak
of construction in 1964, the num-
ber has gradually fallen to 250,
most of whom are working on the
power facilities and networks not
scheduled for completion until mid-
1970. Cairo's repayments on the So-
viet credits began in 1964 and have
reached more than $50 million. In
a speech last January to the National
Assembly, Nasir said the High Dam
is expected to increase national in-
come by $184 million this year. Few,
if any, benefits have accrued thus
far from the land reclamation pro-
gram associated with the High Dam,
however.
intensive industrial projects such
as an aluminum plant and a phosphoric
combine.
The $800 million complex at Hel-
wan is projected to consume about 1
billion kilowatt-hours of High Dam
electricity. If operated at full
capacity when completed in 1976-77,
Helwan will fill Egypt's total iron
and steel requirements as well as
provide a surplus for export.
Egypt's brightest hope at the
moment lies in the development of
its petroleum resources. The great
strides made thus far in Egypt's oil
production have been achieved pri-
marily through the efforts of West-
ern oil companies. Despite the
loss of the Sinai fields, crude
oil production reached an annual
rate of over 10 million tons by
the end of 1968 and may approach
15 million tons this year, which
should permit Cairo to increase
its foreign earnings from oil ex-
ports. Egypt's major producing
field, El Morgan, remains vulnerable
to Israeli harassment, however.
Also, potential Western investors
in Egypt's proposed $145 million oil
pipeline from the Red Sea to the
Mediterranean apparently are having
second thoughts about becoming in-
volved as long as fighting continues
along the Suez Canal.
By the end of 1968, the Aswan
power plant was producing 1,500 mil-
lion kilowatts per hour. When full
power capacity is reached next year,
the potential annual output of elec-
tric energy throughout Egypt will
be more than three times the amount
generated in 1963. Soviet and Egyp-
tian experts are presently investi-
gating the feasibility of power-
The Soviet role in Egypt's
petroleum development has been
limited. Under a recent agreement,
however, Soviet oil-prospecting
operations in the western desert
are to be accelerated. An aerial
survey is under way, seismic work
has started, and drilling is to
begin this month,
25X1
SECRET
Page 19 WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
GHANA'S POLITICIANS RETURN TO THE HUSTINGS
Ghana's long-suppressed ci-
vilian politicians are feverishly
organizing political parties in
preparation for elections in Sep-
tember and the subsequent forma-
tion of a civilian government.
The ruling National Liberation
Council (NLC) lifted its ban on
political activity as of 1 May.
The initial field probably will
contain 20 or more parties, but
these are likely to shake down
to two or three major groups and
a few die-hard independent fac-
tions after active campaigning
gets under way.
The best organized group is
Kofi Busia's Progress Party, the
direct descendant of the chief
opposition group during the
Nkrumah era. Busia's party,
which appeals strongly to tradi-
tional elements, has been organiz-
ing for over a year and has a
clear jump on all the others.
Busia appears to be the favorite
of the NLC chairman, Brigadier
Afrifa, but he is a colorless
politician who has recently been
deserted by several of his long-
time associates.
A second major group is
forming around Komla Gbedemah, a
former finance minister and co-
founder of Nkrumah's Convention
Peoples Party (CPP), who broke
with the ousted dictator in 1961.
Gbedemah has powerful support,
including that of the NLC's vice
chairman, police chief John Harl-
ley., a fellow Ewe tribesman. His
party will have significant sup-
port in labor circles and is
likely to attract many former CPP
moderates. Gbedemah is tainted
by his association with Nkrumah,
however, and he has not yet been
fully cleared by the current re-
gime's investigators.
Although the NLC gives every
indication of allowing the first
free elections in Ghana since
1956, it is determined to head
off quickly any elements suspected
of favoring the restoration of a
Nkrumah-type reg:Lme. All CPP
leaders who held major party or
government positions when Nkrumah
was ousted in February 1966 are
still banned from active politi-
cal life. These people, however,
will probably contribute to the
violence that seems inevitable
once the politicians begin active
campaigning.
Meanwhile, the ouster from
the NLC last month of its chair-
man, General Ankrah, for solicit-
ing personal subsidies from for-
eign businessmen has been followed
this week by the firing of NLC
member Nunoo. Nunoo had publicly
challenged the NLC's list of pol-
iticians who allegedly received
handouts from Ankrah, probably
because the list was dominated
by his fellow Ga tribesmen. His
removal does not seriously alter
the power balance within the NLC,
but it deals another blow to the
public image of the junta and
seems certain to heighten tribal
tensions during the coming polit-
ical campaign.
25X1
SECRET
Page 20 WEEKLY SUMMARY 9 May 69
~""' Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
SECRET
WESTERN HEMISPHERE
May Day passed quietly in Latin America this year. There were the
usual labor demonstrations in most of the larger countries, but violence and
anti-Americanism were held to a minimum.
The political crisis that developed in Bolivia following the death of
President Barrientos has subsided for the moment. On 5 May, the country's
two chief political figures, President Siles and armed forces commander in
chief Ovando, worked out an agreement on the new cabinet, thereby
avoiding a showdown at this time. In general, the new cabinet seems
competent and perhaps somewhat more conservative than the one it re-
placed.
Mexico, Panama, and the Central American republics were preoccupied
with preparations for the forthcoming visit of Governor Rockefeller. The
first phase of the governor's discussions on US - Latin American relations
will begin in Mexico City on 11 May and end in Panama City on 18 May.
Panama's National Guard jailed a number of prominent Communists and
student leaders on 5 May, partly as a security precaution for the governor's
visit.
In Chile, pressure for some form of action against the US-based copper
companies is increasing. Several weeks ago, a deputy from the left-wing
"rebel" sector of President Frei's Christian Democratic Party called for
nationalization of the Anaconda Copper Company on the grounds that it
had been buying up mineral lands in the northern part of the country.
Although the Frei administration has firmly backed the "Chileanization"
agreements signed in 1967, which allow government participation in owner-
ship and management of the companies, the party last week adopted a more
extreme position that calls for "recovery of natural resources in accord with
the national interest." This matter of action against the copper companies
appears to be one on which much of the party, otherwise badly divided can
agree.
25X1
SECRET
Page 21 WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
PERU REMAINS ADAMANT ON IPC ISSUE
25X1
The Peruvian negotiating team
that came to Washington two weeks
ago for further talks on the ex-
propriation of the International
Petroleum Company (IPC) is pre-
paring to return to Lima within
the next few days, with no sign
that any progress has been made
in resolving the problem.
The Peruvian team was appar-
ently given instructions to avoid
getting into substantive negotia-
tions on the matter of compensa-
tion for the ex ro riated US oil
property.
The military govern-
ment is still hopeful that the US
will not apply economic sanctions
but is beginning to face up to
the probability that the sanctions
will eventually be imposed.
The issue of compensation
for the expropriated property cen-
ters on the government's claim
that the IPC owes the state some
$690 million, far more than the
value of the property. President
Velasco apparently has no inten-
tion of altering his position on
this matter and is now considering
how to react when the economic
sanctions are eventually imposed.
The deadline for a decision on
IPC's administrative appeal of
the debt is 5 August, although
the Peruvians have suggested that
this decision could still be ap-
pealed to the judiciary, which
could forestall indefinitely a
final disposition of the matter.
Present efforts to offset
the economic impact of the sanc-
tions include attempts to attract
foreign investment from elsewhere
in the world. Such efforts are
currently under way with Japan,
which has demonstrated a strong
interest in mining concessions
and might be persuaded to increase
its already substantial invest-
ments in Peru. In addition, the
Peruvian Government has announced
that it is seeking a $329 million
loan from the USSR to finance an
irrigation project in the Andes
Mountains.
25X1
SECRET
Page 2 2 WEEKLY SUMMARY 9 May 6 9
25X1
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
CHILEAN CHRISTIAN DEMOCRATS TRY TO PAPER OVER SPLIT
Supporters of President Frei
won a narrow victory at a meeting
of the Christian Democratic Party
(PDC) last week. The party
elected a strong administration
backer as its president and re-
buffed a leftist move for a "pop-
ular unity" campaign with the Com-
munists and the Socialists in
the presidential election next
year. Despite these gains, how-
ever, serious differences remain
within the party.
The outgoing party presi-
dent's charge that the result of
the election was "obedient to US
thinking" and the incoming presi-
dent's harsh denial of the charge
are symptomatic of these differ-
ences. Another symptom is the
resignation from the party of
Senator Gumucio, who has been
described as the leftist con-
science of the PDC. Gumucio's
move may stimulate some other
resignations by PDC leftists.
It is also expected that a part
of the PDC youth will leave the
party.
The position adopted at last
week's PDC convention avoids the
extremes of the left-wing posi-
tion. It takes into account, how-
ever a controversy recently
raised over land acquisitions in
the north by a US-owned mining
company. A Christian Democratic
deputy who usually supports Pres-
ident Frei has called for nation-
alization of the company so that
the mineral lands do not fall into
foreign hands. The Christian
Democratic meeting called for
"recovery of natural resources
through a policy of Chileaniza-
tion or nationalization in accord
with the national interest." This
issue seems to be one of the few
that draws support from all fac-
tions in the party.
Although the Frei administra-
tion drew up the current "Chileani-
zation" agreements that give the
government some share in the owner-
ship and management of the US-
owned copper companies, the party
does not want to be left behind
other parties of the right and
the left that are urging further
action against the companies. The
issue of copper nationalization
is certain to be an important one
in the presidential campaign.
Total value of the US-owned min-
ing companies is about $800 mil-
lion.
Radomiro Tomic, long consid-
ered Frei's heir apparent, played
a prominent role at the meeting,
but at least for the time being
he is not a likely candidate for
the presidential nomination. He
still refuses to run without sup-
port from the leftist parties,
believing that the Christian Demo-
crats alone cannot win in 1970
and not wishing to run a losing
race. For their part, the Commu-
nists and the Socialists have
steadfastly refused to support
Tomic because of his association
with the government and with the
US, where he served for several
years as Chilean ambassador.
The pro-Frei faction of the
Christian Democrats has a number
of presidential possibilities,
but none so far has drawn much
SECRET
Page 2 3 WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
SECRET
public interest. Two senators-
elect, Juan Hamilton and former
minister of defense Juan de Dios
Carmona, are dark horse possibili-
ties. Frei's favorite at this
point is former interior minister
Bernardo Leighton. Foreign Min-
ister Gabriel Valdes, well known
for playing all angles of a ques-
tion and for his pro-European
outlook, is now pushing for the
nomination. He has made no se-
cret of his contempt for the US.
The party probably will nominate
its candidates some time this
summer.
25X1
BOLIVIAN POLITICAL TENSIONS SUBSIDE
With the swearing-in of a
new cabinet on 5 May, the politi-
cal crisis that followed the
death of president Rene Barrientos
on 27 April has subsided.
those near La Paz, have declared
their allegiance to Siles rather
than Ovando. Peasant support
was a mainstay of Barrientos'
government.
Some compromise appears to
have been worked out between Luis
Adolfo Siles Salinas, who as
vice president constitutionally
succeeded Barrientos, and the
most likely challenger to his au-
thority, armed forces commander
in chief Alfredo Ovando. The
new cabinet reflects such a com-
promise. It is generally com-
petent, and perhaps more conserva-
tive than its predecessor. it
includes two of Ovando's rela-
tives, but none of the young
technicians Barrientos had fa-
vored. The compromise must also
have determined the amount of
influence Ovando will have in
the government between now and
the presidential election in May
1970.
Last week, disaffection among
the peasants had threatened to
cause Siles' ouster within a week
of his accession. This threat
seems to have been overcome, for
the time being at least, and
some peasant groups, especially
SECRET
Page 2 4 WEEKLY SUMMARY 9 May 6 9
With elections only a year
away there is considerable sup-
port for adherence to the con-
stitution, even among some op-
ponents of President Siles. This
sentiment and the failure of
Ovando's supporters to generate
widespread public demands for
Siles' resignation may have con-
vinced Ovando that his best
course of action now is to wait
for the elections, which he is
almost sure to win.
In the meantime, Ovando will
continue to exert pressure on
Siles.
At
best, there is an uneasy truce in
Bolivian politics.
25X1
25X1
Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
SECRET
ECUADOR'S PRESIDENT THRIVING ON TROUBLES
Problems with petroleum,
bananas, finances, and politi-
cians continue to complicate
President Velasco Ibarra's ef-
forts to govern Ecuador, but he
seems to thrive on the challenge.
President Velasco is con-
vinced that exploitation of rich
new oil finds made by Texaco-Gulf
offers the quickest means of fi-
nancing his social welfare poli-
cies. Despite this belief, how-
ever, his government refuses to
compromise on several issues, es-
pecially the ownership of the
costly pipeline needed to carry
the oil to a Pacific port, which
has led to an impasse. In addi-
tion, the third successive minis-
ter of industries to handle these
petroleum negotiations announced
this week that a mid-March agree-
ment in principle was no more than
an unsatisfactory "proposal" from
Texaco-Gulf. He added that a
draft agreement assuring the gov-
ernment of higher royalties, own-
ership of the pipeline, and a
more extensive road network to
the oilfields had been presented
to the consortium.
The defense minister was
forced to resign on 29 April af-
ter 50 young engineering officers
retired in protest over his ap-
parent efforts to award his family
firm the contract for building
roads in the area of the oil dis-
coveries. These charges, coming
from some of Ecuador's best mid-
dle-grade officers, surfaced grow-
ing opposition within the mili-
tary against the minister.
Meanwhile, January and Feb-
ruary shipments of bananas,
Ecuador's major export, were
down nearly 30 percent from last
year. In addition, cacao sales
were off about 40 percent be-
cause of the USSR's failure to
repeat last year's large pur-
chase. Extended strikes as well
as the effects of well-inten-
tioned but self-defeating new
government banana policies led
some large shippers to threaten
suspension or phaseout of their
Ecuadorean operations. This
situation has eased, but the
basic problems remain unsolved.
With a nearly empty treasury and
the receipt of an underfinanced
budget from Congress, the loss
of banana receipts is particu-
larly serious.
Despite demands for a spe-
cial session to alleviate the
banana problems, Congress ad-
journed on schedule last Satur-
day. Its accomplishments were
almost nil, and irresponsible
harangues, fistfights, and shoot-
ings did not enchance its image.
There were no impeachment pro-
ceedings against cabinet members,
as had been feared, but charges
of smuggling, improper influence,
and connivance with foreign na-
tionals did force the resigna-
tions of several ministers on
whom Velasco had relied heavily.
He is beginning to have diffi-
culty finding appropriate re-
placements for the frequent cab-
inet losses but apparently has
lost no faith in his ability to
help Ecuador in spite of itself.
25X1
SECRET
Page 25 WEEKLY SUMMARY 9 May 69
Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
SECRET
n2
C
9
Urena
R-I C
~~ .
.., -
A4rttiirante
Palmar~""?!l . C'
G
9
Sur
La Uni n V h
W ``
halito
Cerro .
Canals
'
~} Punts"
Gordns
El HatoO
del Volca Bald
BO4uete
A
r
"_ Gorfit
rea of
ent
'
o.
Correddr
border incidents N
P
M A
~
Concepc:ion_~ RGuafaca
"David )
-
Puerto
Armuelles
'a-;PI(
M Ex ICO
JAMAICA
..
HONDUNA
OUATEA?'A lA
~1'Y
Et:SAtVAD N' ICARAOaA
PANAAtA
4-
IS
Area of map ~
r cot
COBA
.
_se
-L
i
C Miles
25
a;;
94943
25X1
SECRET
_, _,,~ Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
 i
Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
SECRET
PANAMA - COSTA RICA BORDER CONFLICT EASES
A series of border incur-
sions that had threatened to be-
come a problem for the organiza-
tion of American States has sub-
sided for the moment as Panama
and Costa Rica seek a solution
through bilateral talks.
Costa Rican charges that
Panamanian security forces crossed
the border on several occasions in
pursuit of antijunta insurgents
and clashed with the Costa Rican
guard have given way to concili-
atory efforts in Washington and
Central AmericaF
upon guard commandant General
Torrijos to take a less belliger-
ent attitude.
Torrijos, who believes that
Costa Rica has been unable or un-
willing to control insurgent ac-
tivity along the border, was re-
ported earlier to be considering
strong countermeasures, such as
closing the border. The military
regime has denied that the guard
encroached on Costa Rican terri-
tory and has even suggested that
insurgents dressed in guard uni-
forms were responsible for the
clashes.
25X1
No further clashes have been
reported in the border area since
30 April. The Panamanian foreign
minister has assured Costa Rica
that the guard was undertaking
"careful measures" to avoid vio-
lation of the border. The un-
usually cordial response from
Panama seems to indicate that
civilian advisers have prevailed
Meanwhile, Torrijos had a
number of prominent Communist
Party and student leaders arrested
in order to forestall possible
student disorders in Panama City.
The country's largest secondary
school and the national university
are scheduled to reopen this month.
Both institutions were centers of
antigovernment agitation after the
coup, and the roundup of poten-
tial troublemakers may be designed
to prevent demonstrations during
Governor Rockefeller's visit on
18 May.
25X1
SECRET
Page 2 7 WEEKLY SUMMARY 9 May 6 9
Approved For Release 2009/03/20: CIA-RDP79-00927A007100010001-4
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
SECRET
DUVALIER INTENSIFIES ANTI-COMMUNIST CAMPAIGN IN HAITI
25X1
President Duvalier has en-
larged the scope of his campaign
to crush the small Communist
movement in Haiti. This is
partly an attempt to induce a
resumption of external aid, but
may also reflect a general sense
of anxiety on his part.
Last week, the Haitian leg-
islature passed an extremely re-
pressive anti-Communist law that
provides the death penalty for
all manifestations of possible
subversive activity. Also, the
military has been expanding its
operations against Communist
groups throughout the country.
Despite some increase in Commu-
nist terrorism during the past
year, Duvalier may be overreact-
ing, perhaps purposefully, to
the recent merger of the two
largest Communist groups in Haiti.
While his security net has obvi-
ously caught some innocent peo-
ple, several prominent Communists
have also been arrested
Duvalier is also concerned
over his difficulty in obtaining
revenue for his government, and
is appealing to the US and to
international lending agencies
to increase their financial as-
sistance. Salaried employees
often are denied their pay for
months at a time because of the
lack of funds, a problem that
has become more acute during the
past year. Last week, Duvalier
decided to press tax claims in
excess of a million dollars
against three US firms in Haiti.
These claims are based on laws
that had not been applied pre-
viously and constitute an obvi-
ous extortionary move by the
government.
Duvalier's efforts to obtain
aid have been largely unsuccess-
ful. Should conditions fail to
improve, he may resort to other
drastic action to dramatize
Haiti's problems.
25X1
SECRET
Page 2 8 WEEKLY SUMMARY 9 May 6 9
-W will Ins ~ Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
 25X1
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
Q
Iq~
 Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4
Secret
Secret
Approved For Release 2009/03/20: CIA-RDP79-00927AO07100010001-4