WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A007300070001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 35
• Document Creation Date: December 21, 2016
• Document Release Date: June 4, 2008
• Sequence Number: 1
• Publication Date: October 3, 1969
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
44
3 October 1969
No. 0390/69
State Dept. review completed
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(Information as of noon EDT,, 2 October 1969)
Far East
VIETNAM
The first important policy statement delivered in
Hanoi since the death of Ho Chi Minh placed major
emphasis on building socialism, a theme that the
speaker, politburo member Truong Chinh, has been
advocating for more than a year. In Saigon, mean-
while, there is increased nervousness over US inten-
tions.
SOVIET-INDONESIAN ECONOMIC RELATIONS TO BE RESUMED
Moscow has agreed to resume some economic aid to
Indonesia despite failure to reach final agreement
on the important issue of repayment of Indonesia's
large debt to the USSR.
MUFFLED DRUMS IN PEKING
The ceremonies commemorating the 20th anniversary of
Communist rule in China could not conceal the fact
that there was precious little to celebrate.
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Europe
MORE PURGES ANTICIPATED IN CZECHOSLOVAKIA
The recent Czechoslovak party plenum set the stage
for a major purge of the party, state, and mass organ-
izations. The party is still divided and Husak prob-
ably will face further challenges from the extremists.
YUGOSLAV REGIME WORRIED OVER BREAKDOWN IN AUTHORITY
President Tito has condemned the lack of discipline
among party members at all levels and has threatened
a selective purge.
EC TRADE AGREEMENTS CAUSE CONCERN IN GATT
International trade circles are becoming increasingly
concerned about the growing number of preferential
trade agreements negotiated by the European Community.
AGRICULTURAL PROSPECTS MIXED IN EASTERN EUROPE
Romania and Hungary may set new grain production re-
cords, but harvests in Poland, East Germany, and
Czechoslovakia are expected to be the smallest in
three years.
TRIBAL OATHS UNSETTLE KENYA
A massive resurgence of tribal oath-taking ceremonies
among the dominant Kikuyu tribe has heightened tribal
tensions.
INDIA'S PRIME MINISTER VISITS TROUBLED NORTHEAST
Mrs. Gandhi's visit last week set off violent demon-
strations, pointing up the strategic region's local
problems and its difficulties with the central gov-
ernment.
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SOMALI PRIME MINISTER EGAL AT TURNING POINT
Since the beginning of Egal's second term in June,
his government has been relatively inactive and he
appears to have lost his momentum.
Western Hemisphere
NEW BOLIVIAN GOVERNMENT EMPHASIZES NATIONALISM
The Ovando government, installed following the coup
on 26 September, is seeking to align itself ideolog-
ically with Peru, and is combining exaggerated nation-
alism and anti-US sentiment at least in part in the
hope of striking a popular chord with the Bolivian
public.
POLITICAL PROBLEMS AWAIT NEW BRAZILIAN GOVERNMENT
The successor to President Costa e Silva will have to
deal with widespread political discontent.
CHILEAN MILITARY THINKS IT IS GETTING SHORTCHANGED
Discontent in the Chilean armed forces over low pay
is again increasing, and opposition political forces
are capitalizing on the issue.
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VENEZUELA REACTS TO INCREASED INSURGENCY
The most serious outbreaks of guerrilla activity in
several months may force the government to revise its
pacification program.
GOVERNMENT OF NETHERLANDS ANTILLES STILL IN FLUX
New elections may have to be called unless a govern-
ment can be formed soon.
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After five months out of public view, both Mao Tse-tung and his heir,
Lin Piao, appeared in Peking to mark the 20th anniversary of Communist
rule in China. The leadership did not produce any new or distinctive policy
guidelines on this important occasion, and the sobriety and restraint of the
ceremonies reflected clearly that there was little to celebrate.
One highlight of the almost perfunctory proceedings was the emergence
of a considerable thaw in Sino-Vietnamese relations. In marked contrast with
last year's National Day, when Vietnam was ignored, Chinese propaganda
went to considerable lengths to emphasize solidarity between Peking and
Hanoi. Peking may be seeking opportunities to influence Hanoi during the
early post-Ho era. The unusually high level of both the North Vietnamese
and North Korean delegations to Peking suggests that the Chinese are making
renewed efforts to counter Soviet attempts to isolate them.
The first important policy statement from Hanoi since the death of Ho
Chi Minh emphasized the necessity of building socialism so that the struggle
in the South could be pursued more effectively. In saying this, politburo
member Truong Chinh restated a theme that he has advocated for more than
a year. No other clues to the composition of the leadership in Hanoi came to
light during the past week, but Chinh's remarks strongly suggest that he
remains one of the dominant voices.
The Thieu government, apparently concerned over increased nervous-
ness in Saigon regarding US intentions and over the possible impact of
renewed antiwar agitation in the US, has been, trying to reassure the public
about the US commitment and the resolve of the South Vietnamese armed
forces.
Japanese student "guerrillas" have opened their campaign against the
police in earnest. Hit-and-run attacks with Molotov cocktails have been
directed at police facilities in Tokyo, Osaka, and Kyoto during the past
week. Major antigovernment demonstrations anticipated on 10 and 21 Octo-
ber are expected to be preludes to violent demonstrations against Prime
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North Vietnamese
Leadership Developments
VIETNAM
sive floods along the Red River
this summer. According to some
reports, most of the victims have
been children. There are no re-
liable indications, however, of
how far the epidemic has spread
or of how many people have been
afflicted. The mortality rate
is believed to be in the range
of 5 to 20 percent of those af-
flicted.
Politburo member Truong Chinh
last week delivered the post-Ho
regime's first important policy
statement. Speaking in his ca-
pacity as chairman of the National
Assembly's standing committee,
Chinh restated policies that he
has been advocating strongly for
more than a year. Once again he
seemed to argue that more of North
Vietnam's energies should be de-
voted to "building socialism" and
repairing the physical damage and
decline in morale caused by the
war. The war itself took a sec-
ondary place in Chinh's speech,
although he maintained that the
best way to support the war ef-
fort is to make certain that North
Vietnam is strong. No other clues
to the distribution of power in
the current leadership emerged
during the week, but Chinh's re-
marks strongly suggest that he
remains one of the dominant voices
in Hanoi.
Epidemic in the North
A serious epidemic--probably
a debilitating strain of dengue
fever--has been in progress in
parts of North Vietnam since
around early September. It may
have been exacerbated by exten-
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South Vietnamese
Po itical Deve opments
There is increased nervous-
ness in Saigon over US intentions,
some of it taking the form of
tougher talk on the issues of war
and peace. There is more mum-
bling about danger from premature
US troop withdrawals and more pub-
lic statements against any further
concessions to break the deadlock
in the Paris talks. Recent cease-
fire proposals emanating from prom-
inent American citizens have been
attacked by South Vietnamese
spokesmen--some from groups that
have themselves advocated a cease-
fire in the past--as "meddling,"
"unacceptable," or as likely to
hand victory to the Communists.
The Thieu government, appar-
ently concerned over this domestic
uneasiness and over the possible
impact of renewed antiwar agitation
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in the US, has been trying to re- scattered actions took place
assure the public about the US near the Demilitarized Zone, in
commitment and the resolve of the provinces north of Saigon,
the South Vietnamese Armed Forces. and in the delta.
In a recent television appearance,
Thieu claimed that, while the pace
of "Vietnamization" to date has
been based on South Vietnam's
ability to replace US soldiers,
more weight would be given in de-
termining future US withdrawals to
two other criteria: the status
of the talks in Paris and the
level of enemy activity in Viet-
nam. In a follow-up interview
last week, Defense Minister Vy
went a step further by declaring
that future US troop reductions
would depend on favorable progress
in Paris and a lessening of enemy
activity on the battlefield.
Thieu, meanwhile, has pub-
licly observed that the replace-
ment of all US troops would not
be possible by the end of 1970
but would require several years
to complete. He also told a
gathering of government trainees
that substantial additional US
forces could be withdrawn if ad-
equate material help were forth-
coming, but that South Vietnam
would not stop short of victory
whatever happened.
Military Developments
The ground war was rela-
tively quiet again this week,
maintaining the general pattern
of the past three months. Light,
The latest battle casualty
reports reveal that both allied
and enemy losses decreased sig-
nificantly in the third quarter
of this year. During July, Au-
gust,, and September an average
of some 150 US personnel were
killed each week, compared with
an average of some 280 per week
in all of 1968 and about 245 per
week in the first six months of
1969. For the past three months
approximately 230 South Vietnamese
military personnel have been
killed per week, down from an
average of nearly 470 combat deaths
per week in 1968 and about 310
per week in the first six months
of this year. Current allied
casualty rates are generally in
line with those of the so-called
"lull" periods in the summer and
late fall of 1968.
Reported enemy battle losses
during the past three months have
also dropped off, averaging about
2,500 deaths per week compared
with an average of some 3,500 enemy
killed per week during all of 1968
and the first half of 1969.
These lower casualty figures
reflect changes in enemy tactics
this year. Except for late Febru-
ary and March, when the Communists
carried out a costly offensive,
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the Communists have concentrated
their efforts on brief surges of
shellings and limited ground at-
tacks. Moreover, the "highpoints"
of enemy activity during the past
three months have been consider-
ably less intense than those in
May and June.
Page 4
The most sig-
ns icant threat is still near the
remote Bu Prang outpost in II
Corps, where the Communists have
assembled a sizable concentration
of regular units. Communist regi-
ments have also been noted repo-
sitioning themselves near the Cam-
bodian border area north of Sai-
gon, possibly foreshadowing early
offensive action there.
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SOVIET-INDONESIAN ECONOMIC RELATIONS To BE RESUMED
Recent talks in Djakarta
have re-established a framework
for Soviet-Indonesian economic
relations. Further discussion
on the important issue of re-
payment of Indonesia's huge debt
to the USSR has been deferred,
however, to a later round of
talks. These probably will be
held following a meeting later
this month of Indonesia's West-
ern creditors, who are consider-
ing a long-term plan for repay-
ment of Indonesia's debt.
Despite failure to reach
final agreement on all issues
that existed before or arose
following the abortive Commu-
nist coup in Indonesia in 1965,
significant steps have been made
toward reviving economic rela-
tions. The USSR agreed to re-
sume aid to some projects held
in abeyance since mid-1966, in-
cluding a steel plant and a
superphosphate fertilizer plant.
The USSR also indicated its will-
ingness to extend new aid for
Indonesian tin and fishing indus-
tries and to continue cash sales
of spare parts for previously
supplied Soviet military equip-
ment.
The month-long talks aired
divergent positions on repayment
of Indonesia's $800-million debt,
largely incurred from Soviet mili-
tary aid. Djakarta firmly under-
scored its inability to repay
this debt in accordance with a
rescheduling arranged in 1966.
Indonesia has failed to make
any of the payments--totaling
about $40 million--that have
fallen due under that agreement,
claiming they were too stringent
for Indonesia's weak economy.
As an alternative, Indonesia
proposes that the USSR consider
extendin much easier repayment
terms.
The Soviets' willingness to
resume some economic assistance
to Djakarta represents a soften-
ing in their attitude and sug-
gests that Moscow now feels it
is more in its interest to culti-
vate the Indonesian Government.
For the last three years the So-
viets have avoided being identi- 25X1
fied with the regime because of
its persecution of Indonesian
Communists.
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IIUFFLED DRUMS IN PEKING
The ceremonies commemorating
the 20th anniversary of Communist
rule could not conceal the fact
that there was precious little to
celebrate. The sobriety and re-
straint of the occasion reflected
the severe domestic and foreign
problems facing the regime. Al-
though Mao Tse-tung and Lin Piao
both appeared, reportedly in good
health after a five-month absence
from public view, they did not
produce any new or distinctive
Page 6
policy guidelines. Lin's brief
and nondescript address at the
National Day rally and a speech
by Chou En-lai at a reception on
30 September gave short shrift to
the Cultural Revolution. Both
leaders merely reiterated the
need to rebuild the party and con-
solidate local governments--many
of which are still bedeviled by
factionalism. The fact that these
same themes were emphasized at
last year's National Day attests
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to Peking's slow progress in re-
pairing the political damage
caused by the Cultural Revolution.
Perhaps the most noteworthy
aspect in the otherwise drab pro-
ceedings was the emergence of a
considerable thaw in Sino-Vietnam-
ese relations. The Chinese pro-
vided elaborate welcoming cere-
monies for the North Vietnamese
delegation headed by Premier Pham
Van Dong and for the National
Liberation Front/Provisional Revo-
lutionary Government delegation.
In marked contrast with last
year's National Day when the topic
of Vietnam was ignored, Chinese
propaganda went to considerable
lengths to emphasize the solidar-
ity between Peking and Hanoi. A
Chinese news agency commentary of
29 September congratulated Hanoi
on its "victories over US aggres-
sion" and used the analogy of
"lips and teeth" in describing
the closeness of Sino-Vietnamese
relations--language identical to
the Chinese line before the ad-
vent of negotiations. In Hanoi,
the North Vietnamese turned out
an impressive display of high-
level leaders to celebrate the
Chinese anniversary and stress the
importance they attach to their
alliance with Peking.
Sino-Vietnamese relations
have been strained since Hanoi
opted for negotiations in mid-
1968. Peking, however, undoubt-
edly has been encouraged by the
lack of progress at Paris and now
may believe that closer relations
with Hanoi will afford it new op-
portunities to influence the post-
Ho leadership.
The unusually high level of
both the North Korean and North
Vietnamese delegations to Peking
suggests that Peking is making
renewed efforts to counter Soviet
attempts to isolate China. The
National Day ceremonies also spot-
lighted Peking's continuing pre-
occupation with the tense Sino-
Soviet frontier. Chinese pro-
nouncements were full of allu-
sions to Soviet efforts at "nu-
clear blackmail" and attempts to
foment "rebellion" in frontier
areas. Despite this hostile and
defensive posture, however, 25X1
Lthe Kosygin-Chou meeting o
11 September resulted in an agree-
ment: to hold border talks. An
authoritative Chinese editorial
of 30 September pointedly referred
to China's desire to settle border
disputes through negotiations.
Although this merely reiterates
Peking's long-standing public po-
sition on the border dispute, its
timing may indicate that talks
are indeed in prospect.
China's latest atmospheric
nuclear test on 29 September has
not been mentioned, even in con-
nection with National Day. Nor-
mally, the Chinese Communists make
a nuclear test the occasion for
major propaganda fanfare, but Pe-
king may have decided that it was
prudent not to flaunt its nuclear
program on the eve of talks with
Moscow.
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SECRE`I'
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Ironically, in Czechoslovakia the ultraconservatives, who are wary of
association with the West, increased their strength as a result of the recent
central committee plenum. In the purge of the party and government,
Dubcek, who last year was considering diplomatic relations with Bonn, lost
two of his high posts. Although Husak apparently is still in control of the
party, he is hard pressed by the ultras.
Some cooling of the Sino-Soviet border dispute appears in the offing as
hints of new negotiations flow from Moscow. There are also signs that the
Soviet leaders are engaged in increased politicking at home. Evading the
usual practice of silence on unresolved questions, first deputy premier
Polyansky has entered the current press discussion of collective farm man-
agement with two sharply worded articles signed by his personal assistant.
His move suggests a growing intensity in the behind-the-scenes debate on
domestic affairs.
The European Community is considering ways to adjust the Common
Agricultural Policy (CAP) to the German decision to let the exchange rate of
the mark "float." The result is likely to be that the CAP, only recently
adjusted to the French devaluation, will be weakened further.
The deadline passed on 1 October for British compliance with the UN
General Assembly's resolution requesting London "to terminate the colonial
situation in Gibraltar." In retaliation for British inaction, Madrid cut off
telephone and telegraph communication between Gibraltar and Spain.
The Swedish Social Democratic Party chose Olof Palme as its new party
chairman by acclamation. It is likely that Palme will follow tradition and
simultaneously serve as prime minister after Tage Erlander ends his 23-year
term in office on 14 October.
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MORE PURGES ANTICIPATED IN CZECHOSLOVAKIA
The long-awaited plenum of
the Czechoslovak party central
committee which took place on 25-
26 September set the stage for a
major purge of party, state, and
mass organizations. Party leader
Husak emerged from the meeting in
apparent control of a still-di-
vided party, but despite his ap-
parent decision to rule in a more
authoritarian manner he may face
even greater challenges from the
archconservatives, whose position
was strengthened by the plenum's
decisions.
In a hard-hitting speech on
25 September Husak indicated that
the plenum's purge of the central
committee and the revamping of the
federal and the Czech governments
was but the beginning of a thor-
oughgoing purge. Husak emphasized
that the most important task will
be the ouster of liberal elements
from the local party organizations.
The party will also concentrate on
regaining control of education,
science, art, and culture, fields
which are still dominated by lib-
erals or moderates. In addition,
the trade union organizations will
be a major target. Some local
party organizations, particularly
those in Prague, have already
ousted liberals, and the party or-
ganizations at several universi-
ties have been disbanded. Husak's
remarks suggest also that those
members of the central committee
who were elected at the now-dis-
credited extraordinary 14th party
congress may eventually lose their
positions on the committee.
against "antisocialists" who break
the law. He apparently remains
opposed to political trials, but
some extremists, including Czech
party boss Strougal, have already
voiced their disappointment that
Dubcek and others did not indulge
in self-criticism, and already
j have exerted pressure on Husak to
arrest at least some of the 1968
leaders. On 1 October the Federal
Assembly lifted the parliamentary
immunity of Vaclav Prchlik and
agreed to a proposal to prosecute
him. Prchlik, who had severely
criticized the Soviet Union last
year, was expelled both from the
central committee and the party
last weekend.
Husak devoted the major por-
tion of his speech to describing
the alleged mistakes of Dubcek and
other leaders and to discussing
the events that led up to the in-
vasion. He stopped just short
of justifying the invasion, but
his speech and the central com-
mittee resolution condoning the
invasion doubtless were well re-
ceived in Moscow.
Husak's strong attack against
the regime of former party chief
Novotny and his statement that
"old sectarian tendencies" are
still in evidence indicate that
he is aware that he still must
deal with discontented ultracon-
servatives. The central commit-
tee, the Czech party bureau, the
Czech government, and to a lesser
extent the federal government are
now more conservatively oriented.
Husak also warned that he
will not tolerate open opposition,
and he threatened legal measures
Among the long-time hard
liners returned to positions of
eminence were KarelHoffmann,
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Oldrich Svestka, Drahomir Kolder,
and Antonin Kapek. The individual
who gained most from the plenum,
however, was the party's moderate-
conservative ideologue, Josef
Kempny, who replaced Dubcek on
the presidium and was selected to
be a deputy premier and member of
the Czech party bureau.
The Slovak party central
committee, which began a plenary
session on 2 October, probably
will also make personnel changes
that will redound to the advantage
of the archconservatives. As the
Czechoslovak party prepares in
the coming months for a party con-
gress, Husak probably will find
it even more difficult to with-
stand challenges from the more
conservative wing of the party.
DEPUTY PREMIER: Josef Kempny* DEPUTY PREMIER: Peter Colotka I
DEPUTY PREMIER AND MINISTER OF FOREIGN TRADE: Frentisek Hamouz*2
DEPUTY PREMIER AND MINISTER OF PLANNING: Vaclav Hula*
DEPUTY PREMIER AND MINISTER-CHAIRMAN OF COMMITTEE FOR TECHNOLOGY AND INVESTMENT
DEVELOPMENT: Miloslav Hruskovic* 1
DEPUTY PREMIER: Karol Laco* 1
MINISTER OF FOREIGN AFFAIRS: Jan Marko 1
MINISTER OF NATIONAL DEFENSE: Col. Gen. Martin Dzur
MINISTER OF THE INTERIOR: Jan Pelnar
MINISTER OF FINANCE: Rudolf Rohlicek
MINISTER OF LABOR AND SOCIAL AFFAIRS: Michel Stancel i
MINISTER-CHAIRMAN OF THE COMMITTEE FOR PRICES: Ignac Rendek*1
MINISTER-CHAIRMAN OF THE COMMITTEE FOR INDUSTRY: Josef Krejci
MINISTER-CHAIRMAN OF THE COMMITTEE FOR AGRICULTIJRE AND FOOD: Koloman Boda1
MINISTER-CHAIRMAN OF THE COMMITTEE FOR TRANSPORT: Jaroslav Knizka* 1
MINISTER-CHAIRMAN OF THE COMMITTEE FOR POST AND TELECOMMUNICATIONS: Karel Hoffmann*
MINISTER WITHOUT PORTFOLIO: Bohuslav Kucera
MINISTER WITHOUT PORTFOLIO: Jan Pauly*
!Slovak ? Hamouz had been a deputy premier, *Newly appointed 28 September 1969
but not the Minister for Foreign Trade
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YUGOSLAV REGIME WORRIED OVER BREAKDOWN IN AUTHORITY
The Yugoslav leadership is se-
riously concerned about the wide-
spread disregard by local officials
for central policy directives and
is intent on restoring faith in the
federation's ability to solve Yugo-
slavia's many problems. President
Tito has sharply condemned lack of
discipline among party members at
all levels and has threatened a se-
lective purge.
The most flagrant challenge to
central authority occurred last July
when the Slovenian government bit-
terly and publicly opposed the de-
cision of the Federal Executive
Council (FEC) to exclude Slovenian
road projects from a loan financed
by the International Reconstruction
and Development Bank. Conflicts be-
tween Yugoslavia's republics are
commonplace, especially over eco-
nomic matters. The Slovenes intro-
duced a new tactic, however, by mo-
bilizing an unprecedented wave of
public protest, and the central re-
gime felt the heat of this unusual
political pressure.
Tito interrupted the summer
holidays in August and convened the
party's executive bureau, which re-
affirmed its confidence in the FEC
and called for a better performance
in getting the true facts on contro-
versial matters before the public.
The FEC subsequently rejected Slo-
venia's request for a reversal of
the road decision. The Slovenian
government grudgingly accepted the
FEC edict, but it is still rankled
by the affair and has publicly
blamed FEC bungling for the whole
problem.
While the Slovene incident is
the most celebrated case, national-
ity excesses have created difficul-
ties in other sections of the coun-
try. In a series of toughly woxded
speeches along the Dalmatian coast
in late August, Tito attacked pet
economic projects in Croatia and
Serbia. He severely chastized local
Communists who ignore party direc-
tives, and called for more direct
contact between party and enterprise
officials. Since then many party
organizations have met to discuss
the "struggle against nationalism,"
and on 19 September Belgrade's
party secretary repeated Tito's
warning of a purge of "negative
forces" from party ranks.
The stage is now set for de-
bates on regional priorities at a
party presidium session scheduled
for 14 October and in the Federal
Assembly, which convened on 30 Sep-
tember. Tito is eager to tighten
the party's control over internal
affairs by ensuring discipline from
the center, but he does not want to
retreat from the liberal course on
decentralization that he introduced.
One difficulty of party officials
is that they are committed to a pol-
icy of governmental decentralization
that intrinsically undercuts their
control. Local officials tend to
become regional particularists in
order to maintain their power and
because they fear political insta-
bility if they submit to central ad-
ministration. Tito and other na-
tional leaders understand this, and
will proceed with caution in any
cleansing of the party's ranks.
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EC TRADE AGREEMENTS CAUSE CONCERN IN GATT
The increasing number of
preferential trade agreements ne-
gotiated by the European Community
(EC) is becoming a growing source
of concern in international trade
circles. Many of the contracting
parties to the General Agreement
on Tariffs and Trade (GATT) feel
that the arrangements are merely
an exchange of discriminatory pref-
erences and do not meet the terms
of Article 24 of GATT. This arti-
cle requires that such agreements
must lead to the formation of a
genuine free trade area or customs
union covering a substantial por-
tion of the trade involved.
The Council of Ministers of
the Community formally approved
limited association agreements
with Morocco and Tunisia last July.
While the agreements fell short
of the full association with the
Community that Morocco and Tu-
nisia had sought, they granted
significant preferences to the
exports of the two countries.
Morocco and Tunisia, in return,
agreed to grant preferences to a
number of Community products. The
Community has submitted these
agreements to GATT for considera-
tion, where they have already met
with opposition.
Objections are also likely to
be raised when the Community con-
siders general trade agreements
with Spain and Israel. The re-
sumption of negotiations for a
preferential agreement with Spain
is apparently near. In 1962,
Spain applied for negotiations
that would lead to full Community
membership, but its accession has
been strongly opposed by some
community members on political
grounds. The Spanish, therefore,
will probably accept for the time
being a trade arrangement, al-
though they view it as the first
ste.? along the road to membership.
Israel has requested associ-
ation with the EC, and while agree-
ment seems distant, there have
been some signs of movement.
France has said that it would be
prepared to negotiate with Israel
if the principle of negotiating
similar agreements with Arab coun-
tries were accepted. Germany has
said that it has no objections to
negotiations with any Arab coun-
tries requesting them. Recently,
Egypt formally requested nego-
tiations on a preferential trade
arrangement with the Community.
Meanwhile, the Community has al-
ready granted ad hoc preferences
to citrus imports from Israel as
well as from Spain.
Officials in GATT are now pon-
dering ways to deal with the EC
cases while preserving the integ-
rity of GATT. The assistant sec-
retary general has said that some-
thing must be done to reconcile
the political and economic real-
ities of the EC cases with the
provisions of the agreement. GATT
is carrying out a general investi-
gation of nontariff barriers to
trade, including preferences.
Moreover, the Organization for Eco-
nomic Cooperation and Development
and the UN Conference on Trade and
Development have been considering
ways to generalize preferences. 25X1
Agreement on these matters seems
to be a long way off, however.
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AGRICULTURAL PROSPECTS MIXED IN EASTERN EUROPE
Weather in Eastern Europe
has boosted crop yields in south-
ern countries and reduced those
in the north compared to those
of a year ago. In Poland, Czech-
oslovakia, and East Germany con-
sumers will continue to find sev-
eral types of food in short sup-
ply this winter.
Official estimates are not
yet in, but total grain production
in Eastern Europe probably will
approximate the 6 6 7 million met-
ric ton record output of 1968.
Unless unforeseen difficulties
develop, both Romania and Hungary
may set new grain production rec-
ords. Poland, East Germany, and
Czechoslovakia's grain harvests
are expected to be the smallest
in three years, however, and their
harvests of potatoes and forage
crops are expected to be down
sharply. High prices and short-
ages of livestock products, es-
pecially meat, will prevail for
at least the next six to eight
months in most East European coun-
tries.
Eastern Europe's demand for
imported grain is expected to ex-
ceed the 6.1 million tons imported
last year by 10 to 15 percent.
This reflects the increased needs
of the northern countries for
feed grain.
Most of the increased grain
requirements probably will be pur-
The US
a so is expected to continue its
role as a supplier of grain this
year, but the size of its deliv-
eries will be dependent on price
and credit arrangements in the
competitive market created by
large free-world grain surpluses.
The USSR, despite its medio-
cre harvest, will continue to be
the major source of imported grain
for the deficit countries in
Eastern Europe. The southern
East European countries (including
Yugoslavia) may have exportable
surpluses of wheat and corn to-
taling nearly four million tons.
These countries will seek to ex-
port their surpluses to Western
markets in order to obtain hard
currency.
Nevertheless,
some of the East European sur-
plus grain producers may be will-
ing to sell somewhat larger quan-
tities than usual this year to
Poland, Czechoslovakia, and East
Germany because of the depressed
Western grain market and possible
Soviet pressure.
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Israeli aircraft are still flying their almost daily air strikes along the
cease-fire lines with Egypt and Jordan, particularly against Egyptian forces
along the Suez Canal and the Gulf of Suez. The strikes seem to be having
only a limited effect on the Egyptians' intentions to maintain their harass-
ment along the canal. A rise in the number of fedayeen-caused clashes on the
Israeli-Jordanian cease-fire line may soon induce the Israelis to hit again at
the East Ghor Canal, which they had permitted the Jordanians to repair just
prior to Prime Minister Golda Meir's trip to the US. Mrs. Meir, who was to
end her visit on 6 October, pressed the US for economic and military
assistance, but gave no hint of any change in the basic Israeli position of no
withdrawal without direct Arab-Israeli peace talks,
The Burundi regime has stopped arresting alleged coup plotters, and
outward calm has returned to the capital. President Micombero's strong
show of force has probably unnerved his opponents for the present, but
underlying tensions between the two major tribes remain.
South Africa's colored people have voted against apartheid in the first
election for a "colored parliament" that is intended to handle the affairs of
these two million mulattoes. The antisegregation .Labor Party captured 26 of
the 40 elective seats. Although the proposed council will have little power,
the white government is obviously chagrined that pro-apartheid parties did
not fare better.
Afro-Asian states may seek a UN General Assembly resolution calling
for sanctions against South Africa when it fails to withdraw from South-West
Africa by 4 October in accordance with a Security Council resolution.
Pretoria, which is not about to pull out, can count on the UK and other
major trading countries to oppose sanctions and to ignore a resolution even
if it passes.
In East Pakistan this week, troops occupied strategic locations on Dacca
University campus to prevent possible demonstrations and a mass student
meeting scheduled for 29 September.
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TRIBAL OATHS UNSETTLE KENYA
For the first time since the
bloody Mau Mau revolt of the 1950s,
Kikuyu leaders are exploiting
traditional tribal oaths in
swearing their fellow tribesmen
to absolute loyalty. The massive
resurgence of oath-taking cere-
monies has heightened tribal ten-
sions in Kenya.
Although the current pledges
do not contain the terrorist over-
tones of those of the Mau Mau,
Kenya's other tribes see the oath-
taking as evidence that the Kikuyu
are determined to maintain their
pre-eminence. These tribes inter-
pret the ceremonies in the con-
text of long-standing intertribal
rivalries and also in the light
of their suspicions that the as-
sassination last July of Tom
Mboya, a Luo, was arranged to en-
sure Kikuyu domination of the
government.
The oath-taking began as a
reaction to the violent anti-
Kikuyu feeling after Mboya's mur-
der. It has since been organized
throughout the Kikuyu areas and
has even extended to neighboring
tribes. Although President Ken-
yatta, as the foremost Kikuyu
leader, could stop the ceremonies,
he has not done so.
As the oathing continues,
there is danger that relatively
minor tribal clashes--such as a
land dispute that flared up last
month between Kalenjin and Kikuyu
tribesmen--will spark more seri-
ous violence. There is also dan-
ger of conflict among the Kikuyu
themselves, many of whom are being
forced to take the oath. One Xi-
kuyu Christian minister was re-
cently beaten to death for re-
fusing.
Some -army officers are be-
ginning to worry that the oath-
taking may undermine the effi-
ciency of the armed forces by
stirring up tribal rivalries
within the ranks. The two top
army officers, neither of whom
is a Kikuyu, are known to be
concerned over the government's
failure to stop the oathing.
In an unprecedented action, they
recently attempted to discourage
further ceremonies in two areas
by moving in troops without prior
government clearance.
With Kenya's first general
elections due early next year,
tribal tensions and the loyalties
of the security forces will be
of particular concern both to
the ruling party and to the per-
sistent but disorganized opposi-
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INDIA'S PRIME MINISTER VISITS TROUBLED NORTHEAST
Prime Minister Gandhi encoun-
tered discordant notes in strategic
northeast India last week as she
continued a nationwide tour aimed
at capitalizing on her recent po-
litical victories. Her problems
stemmed mainly from New Delhi's long
neglect of the region's economy, and
the central government's inability
to solve a series of long-standing
and complex political problems in
the area.
For the most part, the local
people reacted with indifference to
Mrs. Gandhi's efforts to win support
by claiming credit for the central
government's recently inaugurated
"progressive" policies. Instead,
she was pressed for action on a va-
riety of parochial issues. In the
union territory of Manipur, she was
met with violent demonstrations--
six people were killed--demanding
full statehood for the area. Al-
though another union territory, Tri-
pura, received her more cordially,
she was presented with statehood
demands there, too. In both places,
she was urged to sort out leadership
squabbles among local politicians in
her Congress Party; on 24 September,
soon after her departure, the weak
Congress government of Manipur fell
after a no-confidence vote.
In Nagaland, where an insurrec-
tion has been under way for more
than a decade, state government pol-
iticians and the faction of the Naga
underground that now eschews vio-
lence welcomed her sympathetically,
but she was unprepared to meet the
Nagas' demand for negotiations lead-
ing to independence. She resorted
to an old government demand that
militant Nagas, who have accepted
help from China and Pakistan, sever
all foreign ties before further
political concessions would be
granted.
A two-day public tour of Assam
had to be canceled because of secu-
rity problems resulting from a mass
movement demanding the construction
of a government petroleum refinery
in the state. The Indian Government
believes that the refinery would be
uneconomic, but local leaders see
it as both a vital development proj-
ect and a symbol of tl,,_central
NORTHEAST
INDIA
9619710-69
In contrast wih Mrs. Gandhi's
earlier goodwill visits to other
areas of India, the trip to the
politically and economically un-
developed northeast was something
of a public relations nightmare.
She was constantly plagued by the
people's lack of interest in "all-
India" problems and by their tend-
ency to evaluate the central gov-
ernment's worth by its ability to
solve parochial issues. The north-
east problem highlights the strong
centrifugal forces at work in India--
forces that Mrs. Gandhi must deal
with as she attempts to revitalize
the Congress Party in preparation
for the next scheduled general
elections in 1972. 25X1
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SOMALI PRIME RINISTER EGAL AT TURNING POINT
Somalia's Prime Minister
Mohamed Egal, who arrives in the
US next week for a short visit,
was confirmed for a second stint
in office last June. Since then,
however, he appears to have lost
the momentum that produced a num-
ber of significant accomplishments
during his first term.
After taking office in 1967,
Egal made dramatic progress in
areas where his predecessors had
been notably unsuccessful. His
efforts at detente with Kenya es-
tablished a firm foundation for
relations that previously had
been nonexistent He even man-
aged to improve relations with
the deeply suspicious Ethiopians.
Within Somalia, Egal exerted a
firm hand over the dominant but
capricious government political
party, the Somali Youth League,
and also prevented Sor:aalia's
tribal-ridden politics from dis-
rupting his foreign and domestic
policies.
Now, however, despite some
concessions by both sides, Egal
as nearly run out of ways to
continue prouuctive discussions
with the Ethiopians. The two
countries are stalemated over the
question of Ethiopia's right to
tax the livestock of Somali no-
mads during seasonal migrations.
Two serious clashes this summer
in Ethiopia between troops and
the migrating nomads had serious
repercussions in northern Somalia
by undermining Egal's policy of
urging restraint on the nomads
l'agv 2 0
while the governments sought a
solution.
Egal's performance in the
domestic political arena has also
begun to falter. His attempts to
strengthen the central goverment
by enlarging his authority and
forging a one-party state--only
one of the 124 parliamentary dep-
uties is now outside his party--
have instead heightened tradi-
tional Somali distrust of central-
ized authority. His blatant sanc-
tioning of rigged national elfic-
tions last March, and the impe,si-
tion of political controls over
the police, Supreme Court, and
the press have strengthened his
control over the inefficient Pu-
reaucracy but have made politi-
cal enemies. Moreover, the sub-
sistence economy continues stog-
nant despite some $400 million
that Somalia has received in or-
eign aid--and sizable additio al
amounts do not appear in the
offing.
Egal is apparently not in
serious trouble yet despite gkum-
bling among politicians and o0ca-
sional rumors of difficulties,be-
tween him and President Scermirche.
Nevertheless, although Egal's
party presents a monolithic a -
pearance, his control could b,
weakened by the 60 percent tupnover
of deputies that took place in
the national elections. There
are a number of important party
factions and individuals ready
to maneuver against him when the
unpredictable Somali parliament
opens in late October.
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The new Bolivian government, led by General Alfredo Ovando, has
already set the tone for the immediate future by emphasizing nationalism.
Continued attacks on "US imperialism" can be expected. The military
regimes of Brazil, Argentina, and Peru were the first to recognize the new
government.
In Brazil, top military commanders, seeking a replacement for President
Costa e Silva, appear to have selected General Emilio Medici, a close personal
friend of the President. An announcement of this choice and of the term of
office seems imminent.
The cancellation of a proposed 36-hour general strike in Argentina has
temporarily headed off a serious clash between President Ongania and the
Peronist-dominated General Labor Confederation.
In other developments, the Netherlands Antilles may be forced to call
for new elections unless a government can be formed in the near future.
Venezuelan guerrillas have staged their most serious attacks in recent
months; and the Panamanian Government is beginning to focus more atten-
tion on the canal issue. Although a formal request to resume talks with the
US has not yet been made, some indication of the government's intentions
may come to light in pronouncements during the first anniversary of the
military coup on 11 October.
Nationalistic noises will also be made by Peruvian President Velasco on
the 3 October anniversary of last year's military coup and on the 9 October
anniversary of the take-over of the International Petroleum Company. The
Latin American foreign ministers, in New York for the opening of the UN
General Assembly session, held two meetings earlier this week in an effort to
resolve problems between El Salvador and Honduras but made no prog-
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NEW BOLIVIAN GOVERNMENT EMPHASIZES NATIONALISM
The Ovando government, in-
stalled following the coup on 26
September, is seeking to align
itself ideologically with Peru,
and is combining exaggerated na-
tionalism and anti-US sentiment
at least in part in the hope of
striking a popular chord with the
Bolivian public.
General Alfredo Ovando Can-
dia seized power and was "named"
president of the "revolutionary
government" by the commanders of
the three armed services. He then
named a cabinet of ten civilians
and five military officers. The
civilian component is made up
almost entirely of strong crit-
ics of the US and is expected to
lead the government in a leftist
and nationalistic direction.
The early target of the
anti-US attacks from those in
and close to the government is
the US-owned Bolivian Gulf Oil
Company, and to a lesser extent,
other US business enterprises.
Ovando's equivocating statements
on the Gulf issue have given en-
couragement to those who want the
company nationalized.
~ Top
Gulf officials in Bolivia appear
optimistic that they can reach a
satisfactory agreement with Ovando,
but the US Embassy fears that he
may have difficulty in selling
to the public a settlement that
falls short of nationalization.
Anti-US attacks in the last
few days have concentrated more
on areas where there is less
likelihood of a confrontation
with the US that could damage
Bolivia's weak economy. On 29
September a major La Paz news-
paper, apparently with the ap-
proval of the government, charged
that the US, through its aid and
financing policies, was responsible
for the recent crash of a Boliv-
ian airliner which claimed 74
lives.
The exaggerated nationalism
and the anti-US sentiment being
expressed in La Paz at the pres-
ent time is reminiscent of what
occurred in Peru following the
military takeover there a year
ago, Indeed, General Ovando has
expressed on several occasions
his desire to form an "ideological
confederation" with the military
government of Peru. The Peruvians,
however, have taken a very cau-
tious attitude toward the new
Bolivian Government.
~~ Peru recognized the new
Bolivian Government early, but
the foreign minister has made it
clear that there are several dif-
ferences in the Peruvian and Bo-
livian situations and is quoted
as saying that the "Peruvian revo-
lution is not for exort." 25X1
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POLITICAL PROBLEMS AWAIT NEW BRAZILIAN GOVERNMENT
The administration that re-
places President Costa e Silva will
face major political problems.
Top military officers continue
to work toward selecting Costa e
Silva's successor, and General Emi-
lio Medici has been given the nod.
The minister of labor and social
security, Jarbas Passarinho a 49-
year-old retired army colonel, re-
portedly will be his running mate.
A formal announcement of the
schedule for the President's resig-
nation and the transfer of power
to his successor is likely to be
made very soon. The governing tri-
umvirate that assumed power on 31
August will probably call Congress
back into session for the first
time since being suspended last
December. The triumvirate itself
has purged at least nine more fed-
eral deputies and one senator. The
remaining members probably will not
speak out against any of the new ad-
ministration's measures because
they know that if Congress steps
out of line the military will not
hesitate to close it again.
Political discontent is due to
a number of reasons. These include
the purge of public officials, the
executive's assumption of greater
authoritarian powers at the cost of
the legislative and judicial
branches, the unlikely prospects
that the President and state gov-
ernors will be popularly elected,
and the government's limited suc-
cess in halting serious urban ter-
rorism despite the adoption of ever
more drastic punishment.
Discontent appears to be par-
ticularly acute in the wealthy state
of Sao Paulo and in the underdevel-
oped northeast. Leading Sao Paulo
politicians, including Governor
Sodre, are concerned about the de-
terioration of relations between
the government and the public. The
consulate general reports that lo-
cal politicians and journalists are
growing "desperate" about the sit-
uation, and are convinced that sub-
version and terrorism will increase
as long as the country has a mili-
tary government that is unable to
generate effective public support.
The prestigious newspaper 0 Estado
de Sao Paulo has joined the chorus
of Uisco:)ntent by severely criticiz-
ing the government for "destroying
political institutions." It also
warned that the military could lead
the country into chaos by assuming
the role of an electoral body.
The problem in the northeast
apparently is due primarily to the
efforts of military officers to weed
out public officials, rural labor
leaders, and clergymen whom they
consider corrupt or subversive.
~ The governor
of Perna uco State, Nilo Coelho,
had hoped to form some kind of loose
alliance with other governors in
the northeast to resist the mili-
tary pressure, but they apparently
could not agree on a united posi-
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CHILEAN MILITARY THINKS
Discontent in the Chilean armed
forces over low pay is again increas-
ing, and opposition political forces
are capitalizing on the issue for
their own purposes.
Rumors that unrest in the tradi-
tionally apolitical military had
reached serious levels culminated
last week in television reports that
a coup had been quashed during the
national independence day celebra-
tions. The late arrival of an army
contingent at a ceremonial mass and
the subsequent relief of its com-
manding officer apparently were the
basis for the reports. The imposi-
tion of stricter security measures
in response to reports of extremist
plans to attack army installations
also helped to spread the rumors.
Pay at all levels of the armed
forces is low, and adjustments al-
T is GETTING SHORTCHANGED
ways lag substantially behind the
country's chronic and presently
rapid inflation. An automatic wage
increase in September amounted to
about $3 a month for majors. Many
officers complain that the efficacy
and prestige of the military are
declining also because of obsolete
and inadequate equipment, reduced
recruiting and operational exer-
cises, and alleged general neglect
by the Frei government.
The service chiefs are con-
cerned over the unrest, but they
have not persuaded the government,
which is already hard pressed for
wage raises by other groups, to ad-
just military pay. President Frei's
uncompromising attitude may indi-
cate that he wants to bring the is-
sue to a head. He has promised to
give special attention to military
needs in 1970 pay raises,
ative Nationalist Party legisla-
tors unsuccessfully introduced a
bill to raise military pay 25 per-
cent. Both political extremes un-
doubtedly will continue efforts to
Marxist political groups and
newspapers are excoriating the gov-
ernment for its inattention to:the
needs of the military and are pub-
licizing the activities of retired
military personnel who are trying
to stir up discontent in the ac-
tive forces. In September, conserv-
ensure their credit rating with the
armed forces.
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VENEZUELA REACTS TO INCREASED INSURGENCY
Since 23 September, Communist
guerrillas have ambushed government
troops several times and have at-
tacked numerous military and civil-
ian installations. One officer and
at least four enlisted men have been
killed so far, and several others
have been wounded. Most of the in-
cidents have taken place in eastern
Venezuela, the traditional opera-
tional area of the Castroite Move-
ment of the Revolutionary Left (MIR).
The outbreak of guerrilla
activity is the most serious in
several months, and may force the
Caldera government to revise the
pacification program it insti-
tuted shortly after taking power
last March. The minister of de-
fense announced early this week
that the government will have to
review the program if it can be
proved that guerrillas freed un-
der the program were involved in
the recent incidents. Under the
pacification program, the govern-
ment has held counterinsurgency op-
erations to a minimum and has of-
fered amnesty to guerrillas if they
lay down their arms. Some guerril-
las were also freed under the pro-
gram. The program has been carried
out reluctantly, but many officers
believe that only aggressive opera-
tions will put an end to the guer-
rilla problem.
President Caldera stated last
week that his government will dis-
tinguish between aggressive groups
and those with "similar ideologies
but which have chosen to struggle
within the framework of domestic
institution." The military is
greatly disturbed by the upsurge in
guerrilla activity, which they at-
tribute partly to the pacification
problem. It is unlikely that Presi-
dent Caldera will prevent the mili-
tary from pursuing the guerrillas,
but he will not want to abandon his
program entirely.
The recent attacks may be an
effort by the guerrillas to force
the government to abandon its paci-
fication program because they fear
it is eroding their base of support.
They probably also want to demon-
strate their independence of the
national leaders of the MIR and
the youth group, both of which seem
to be considering accepting the gov-
ernment's offer.
If the guerrillas acted on
their own, the leaders of the MIR
and the youth group will probably
break with them. Although this
would deprive the guerrillas of
needed logistical support and some
of their troops, at least the guer-
rillas would have demonstrated their
determination to continue with the
armed struggle.
SECRET
Page 2 7 WEEKLY SUMMARY
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SECRET
GOVERNMENT OF NETHERLANDS ANTILLES STILL IN FLUX
Interim Minister-President
Sprockel may be forced to call
for new elections unless a gov-
ernment can be formed in the near
future.
The deadline of 29 Septem-
ber for the installation of a
new administration passed with-
out results. The governor asked
former finance minister Petronia
to form a government to overcome
the impasse that resulted when
no party gained a legislative ma-
jority in the elections on 5 Sep-
tember.
Petronia is the leader of
the Aruba Patriotic Party, which
is allied with the Democratic
Party. These parties controlled
the government prior to the elec-
tions, and with 11 of 22 seats,
are still in a strong position to
head a new administration. Although
the scattered opposition parties
might be able to organize a coali-
tion with the help of the Aruba Pa-
triotic Party, if it broke its agree-
ment with the Democrats they prob-
ably would not be able to hold the
coalition together for very long.
The opposition parties prob-
ably would not want new elections
because they realize that the Demo-
cratic Party and the Aruba Patri-
otic Party would increase their ef-
forts to secure one more seat. The
Workers Front reportedly has been
offered two cabinet posts by the
Democrats if they join in' a coali-
tion. The next few weeks should
produce a spate of intensive po-
litical maneuvering.
THE NETHERLANDS ANTILLES
Oemocrsttc Party 7
Aruba Patriotic Party 4
National Peoples' Party 3
Workers Front 3
Aruba Peoples* Pa.ty Grouping 4
United Bonaire Patriotic Party
and the Bonaire Workers Party
SECRL` rl.
This coalition held 13 Mats in the
provnius government
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 Approved For Release 2008/06/04: CIA-RDP79-00927AO07300070001-6
Secret
Secret
Approved For Release 2008/06/04: CIA-RDP79-00927AO07300070001-6