WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A007500030001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 36
• Document Creation Date: December 21, 2016
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• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
OSD REVIEW COMPLETE. Dupe of OSD-274-28
Secret
46
State Dept. review
completed
12 December 1969
No. 0400/69
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SECRL"l'
(Information as of noon EST, 11 December 1969)
VIETNAM
Communist forces in the south continue to confine
themselves to sporadic flurries of localized ac-
tions, although indications of a pre-Christmas
offensive persist. In North Vietnam, however, a
new security crackdown of as yet unknown proportions
is going on. Publicity is limited and the causes
are obscure, but it may be related to measures
against those not responsive to regime policies,
even to strife within the leadership, or simply a
move to correct long-standing law and order prob-
lems.
COMMUNIST CHINA'S TRADE PICTURE IMPROVES
Trade this year may reach $4 billion, with the free
world continuing to account for about 80 percent.
COMMUNIST OFFENSIVE ACTIVITY IN LAOS
Communist military activity has increased signif-
icantly in the north.
OSD REVIEW COMPLETE. Dupe - OSD- 274-28 & OSD-283-5
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SF:CRL"I`
SOVIETS PURSUING NEW GERMAN POLICY
The Soviet leaders have decided to pursue their own
version of "bridqe-building" with the new West Ger-
man Government of Willy Brandt.
HELSINKI AND MOSCOW DEBATE FINNISH NEUTRALITY
Finland's interpretation of neutrality presented
in a recent book has been attacked by Soviet com-
mentators, whose criticisms have subsequently been
rebuffed by President Kekkonen.
HARD BARGAINING AHEAD IN EUROPEAN COMMUNITIES
The European Communities face a period of hard
bargaining in a spirit of cautious optimism fol-
lowing The Hague summit
HUNGARIAN STALINIST BOSS RAKOSI SEEKS END OF EXILE
Matyas Rakosi, Hungarian Communist Party boss during
the period of the Stalinist terror, has reportedly
obtained Soviet support for his request to spend
his remaining years in Hungary, but Janos Kadar is
resisting Rakosi's return.
SOVIET ECONOMIC DEBATE
References to Stalin and the Czechoslovak economist
Ota Sik signal that a new serious level has been
reached in the debate on Soviet economics.
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CZECHOSLOVAKIA TIGHTENS ECONOMIC DISCIPLINE
Managers will be given greater authority to cope
with recalcitrant workers in order to combat dis-
orders and other forms of economic "sabotage."
Middle East - Africa
MIDDLE EAST PASSES QUIET WEEK
As the Four Power talks resumed in New York,
Israel and the Arabs implemented an exchange of
prisoners that released the two skyjacked Isra-
elis held in Syria for the past four months.
Meanwhile, the border war between Saudi Arabia
and Southern Yemen tapered off.
KENYA COMPLETES PARLIAMENTARY VOTE
Although incumbents retained only 41 percent of
the seats in Kenya's first parliamentary elections
since independence, the ruling Kikuyu establishment
remains firmly entrenched and few policy changes
are likely.
DAHOMEY ARMY TOPPLES ZINSOU REGIME
For the fifth time in six years, the army has taken
power in this poverty-stricken former French colony.
The army's plans for the future remain unclear, but
the coup seems certain to compound the country's
numerous political and economic woes.
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Western Hemisphere
FATE OF MINING CONTRACT STILL DOUBTFUL IN PERU
Velasco still appears disposed to sign the con-
tract if SPCC accepts his seemingly inflexible
terms, but whatever the outcome, other US mining
companies are likely to experience difficulties
in obtaining favorable terms.
MINISTERS PUSH CENTRAL AMERICAN SETTLEMENT
The Central American foreign ministers last week
took steps to revitalize the Central American Com-
mon Market and promote a settlement of the El
Salvador - Honduras dispute. Neither task, how-
ever, can be accomplished quickly.
PESSIMISM CLOUDS UPCOMING DOMINICAN ELECTIONS
Continued uncertainty about the presidential elec-
tion is leading to increased pessimism over the
future of the Balaguer government.
COLOMBIA'S COALITION PICKS A PRESIDENTIAL CANDIDATE
The selection of Misael Pastrana as the National
Front's presidential candidate will cause severe
strains in the two major parties, and his road to
the presidency may be difficult.
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The Communists' winter-spring campaign in South Vietnam so far
seems barely that. There have been sporadic outbreaks of activity, prin-
cipally shelling and small-unit attacks, most of which do not appear to be
coordinated in any way. Some attacks were fairly heavy, but generally of
short duration. There continue to be signs, '.However, that the enemy will
embark on somewhat more extensive offensive activity before Christmas.
North Vietnam is experiencing a security crackdown of unknown
dimensions. Evidence is sparse and conclusions tentative, but it seems to be
more than a routine drive against hooliganism and un-Communist behavior.
At the same time, although not necessarily related, Hanoi is reorganizing a
number of government ministries. The reshuffle appears aimed at accelerat-
ing economic reconstruction and expansion throughout the North.
The deep involvement of North Vietnam in the Laotian conflict con-
tinues to be apparent as its regulars are beginning to step up their attacks in
the Plaine des Jarres area. Government guerrillas led by the colorful Meo
General Vang Pao have withstood most of these assaults, but the Meo troops
are weary after a long, successful rainy season campaign. Chinese road
building in northwestern Laos proceeds apace; in one week 10 miles were
added to a road that is heading southwest toward the Mekong River near the
town of Pak Beng.
Elsewhere in Southeast Asia, the Association of Southeast Asian Na-
tions, formed in 1967 to foster economic, cultural, and technical coopera-
tion, is meeting on 16-18 December in Kuala Lumpur. The members-
Malaysia, Singapore, Indonesia, the Philippines, and Thailand-have been
wrangling over whether to invite Laos and both North and South Vietnam as
observers. South Vietnam and Laos now have been invited, but dissension
over this issue and other states will probably mar harmony during the
meetings.
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-I?:(:I' J'. l'
VI ETNAM
Security Problems in the North
North Vietnam is conducting
a new security crackdown of as
yet unknown proportions. Pub-
licity has been limited; the spe-
cific causes are obscure. Some
indications suggest that Hanoi
is simply acting to correct long-
standing law and order problems,
while others suggest that meas-
ures are being taken against ele-
ments not responsive to regime
policies. The latter could even
involve leadership strife in the
wake of Ho Chi Minh's death, but
there is no solid evidence as yet
for such a conclusion.
During the past year or so,
the North Vietnamese have periodi-
cally expressed concern about
poor discipline and lack of re-
sponsiveness to state policies.
have provided evidence
of widespread practices and be-
havior considered antisocial or
criminal by the regime, ranging
from "hooliganism" in Hanoi
through economic malpractices to
stealing of state property. Some-
times party, government, and mil-
itary officials have been impli-
cated. Concern seemed to be much
greater in the first part of 1969
than in recent months, but the
problems could well be the cause
of a new tightening of security.
Resistance to military con-
scription and labor mobilization
might also be at the root of the
current problem. The demands for
military manpower, in particular,
are probably a source of wide-
spread popular discontent, and
the regime could be trying to de-
crease the chances for draft dodg-
ing and desertion.
Something Deeper?
There are overtones to the
current security crackdown, how-
ever, which suggest that it may
go beyond a routine effort to
curb crime, evasion of state di-
rectives, and abuses of social-
ist orthodoxy. The first sign
of the crackdown appeared in a
cryptic communique of a National
Assembly Standing Committee ses-
sion headed by assembly chairman
Truong Chinh in late November
which was passed over a restricted
press wire on 2 December. It
dealt only with "security" in
Hanoi and noted that unspecified
"criminals" would be punished and
that procedures for "trials" had
been established.
Incomplete summaries of North
Vietnamese press items on 6 De-
cember, which discussed security,
have not mentioned the National
Assembly session, but referred
to a recent conference held by
the ministry of Public Security.
These summaries indicate that
the campaign is country-wide and
not confined to Hanoi. An edi-
torial said the drive was aimed
at "counterrevolutionary" and
"bad-minded" elements.
Whatever is going on is
reminiscent of the last big se-
curity drive in late 1967, when
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a decree against "counterrevolu-
tionaries" was issued and the re-
gime moved against opposition to
its policies on the war. Later
evidence from prisoners captured
in South Vietnam showed that one
result of the 1967 drive was a
purge of middle-level officials,
probably because of their opposi-
tion to the extraordinary mili-
tary preparations which were un-
der way for the Tet offensive
launched in early 1968.
Government Reorganization
Hanoi also announced this
week the first major government
reshuffling since Ho's death.
The reorganization was confined
to the economic ministries and
it may portend an acceleration
of the country's reconstruction.
In effect, it elevates a number
of departments and directorates
to the ministry level. These in-
clude the former Directorates
for Electric Power, for Fuels
and Chemicals, and for Metal-
lurgy, and a Department of En-
gineering which had been under
the now abolished Ministry of
Heavy Industry. A new Ministry
of Food and Foodstuffs was prob-
ably formed by combining separate
directorates for foodstuffs which
had been operating under the Min-
istry of Light Industries and the
Ministry of Domestic Trade. The
new Ministry of Materials may
also have been formed by combin-
ing several directorates con-
cerned with various materials
previously scattered among dif-
ferent ministries.
The current reorganization
follows the pattern of earlier
Hanoi attempts to expand its eco-
nomic apparatus by giving sepa-
rate ministry status to special-
ized industries and trade func-
tions. In each case, these re-
organizations preceded changing
emphases in North Vietnam's in-
dustrial development. The cur-
rent reorganization, with its
greater specialization of activ-
ities, suggests that the regime
is ready to devote more effort
to industrial reconstruction and
expansion.
Offensive in the South
The Communists' winter-spring
campaign continues with sporadic
flurries of localized actions, but
enemy preparations for heavier
fighting in several key sectors
of South Vietnam are nearing com-
pletion. It is becoming increas-
ingly clear that the Communists
are getting set for a pre-Christ-
mas offensive phase that will
probably consist of increased
spellings and limited ground ac-
tior.s. The pattern of enemy of-
fensive actions thus far in De-
cember suggests that an intensi-
fied. campaign will focus on the
area. just below the DMZ, on south-
ern I Corps, and on the southern
provinces bordering Cambodia from
Quang Duc to Chau Doc.
Greater enemy emphasis on
population centers may also be
developing. Although no major
city appears seriously threatened,
an increase in small-unit enemy
attacks and shellings of district
towns and a rise in terrorist and
sabotage activity in larger cit-
ies have been noted. Prisoners
and captured documents reveal
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that the enemy intends to inten-
sify this type of activity.
Reports from a variety of
sources point to increased enemy
hostilities in the period pre-
ceding the Christmas cease-fires.
Many of these predict stepped-up
enemy action on one or more of the
three important Communist holi-
days--19 December, National Re-
sistance Day; 20 December, the
"birthday" of the National Lib-
eration Front in South Vietnam;
and 22 December, the 25th anni-
versary of the formation of the
North Vietnamese Army.
Meanwhile, many South Viet-
manese military officers are cau-
tiously optimistic about their,
army's prospects for successfully
taking over more of the combat,
from US troops, even though ma-
jor tests still lie ahead. Re-
cent US Embassy surveys revealed
that increasing numbers of South
Vietnamese field officers are
eager for a chance to take on a
greater share of the fighting.
The most optimistic commanders
were in areas such as northern,
I Corps and the Mekong Delta,
where the US military presence
already had been reduced.
A number of South Vietnamese
officers, however, contend that
the current optimism results more
from the relatively low level
of enemy activity in recent
months than from improvements in
South Vietnamese performance.
This is particularly evident in
the provinces of III Corps sur-
rounding Saigon where US troops
are still present in force and
where two of the three South
Vietnamese division commanders
are privately pessimistic about
the future.
throughout the army.
de corps or improved morale
South Vietnamese confidence
in coming months will probably
depend largely on the outcome
of engagements with Communist
forces. So far, the combat
experiences of South Vietnamese
units under conditions of re-
duced US participation have not
instilled a sense of real esprit
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COMMUNIST CHINA'S TRADE PICTURE IMPROVES
Peking's foreign trade has
picked up from the low levels dur-
ing the Cultural Revolution. Pre-
liminary estimates suggest the
total this year may reach $4 bil-
lion, up 10 percent from 1968.
Chinese efforts to improve rela-
tions with Western sources were
particularly evident at the re-
cently concluded Canton trade
fair.
The free world continues to
account for about 80 percent of
total Chinese trade. Japan is
expected to strengthen its posi-
tion as Peking's leading trading
partner. Trade with the United
Kingdom is recovering signifi-
cantly from last year's depressed
level, while that with Italy and.
France shows moderate increases.
Sino - West German trade remains
at about the same as in 1968.
Greater Chinese imports of
free world steel, metals, and
other industrial materials reflect
some recovery in the Chinese econ-
omy. Although tensions with the
USSR may have caused some distor-
tion in China's import priorities,
they did not seem to generate any
great shift to strategic goods.
Contracts for grain imports rose
moderately over last year, while
purchases of chemical fertilizer
remain about the same as in 1968.
Peking is demonstrating an
increased interest in Western
machinery and equipment, and also
has queried whole plant manufac-
turers. The recent release of
several detained West German tech-
nicians who had worked on the Lan-
chou petrochemical complex may
have been designed to improve
relations with Western suppliers
of plants and specialists.
Exports to the free world
also are showing improvement.
Increased sales are expected to
provide Peking with net hard
currency earnings greater than
last year's $50 million. Exports
to Hong Kong, China's major source
of foreign exchange, continued
the recovery begun in mid-1968
but will fall short of peak lev-
els attained in 1966.
The autumn edition of the
semiannual"' Canton trade fair
held last month will give impetus
to the recovery in Chinese trade
with the West. The fair was dis-
tinguished by its business-like
atmosphere and the noticeable
lack of propaganda. Peking con-
tinued to seek nonferrous metals,
steel, and chemicals. Sales of
traditional Chinese agricultural
and consumer goods were slightly
improved over sales at last
spring's fair. The Japanese alone
expect import-export contracts
negotiated at the fair to total
$150 million.
Peking's trade with some
Communist countries probably will
improve slightly this year as
well. Agreements with East Euro-
pean countries generally call for
moderate increases over the level
of $275 million registered in 1968.
Despite hostilities with Moscow,
the continued exchange of Chinese
agricultural and consumer goods
for Soviet manufactured goods will
prevent trade from falling much
below last year's record low of
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NORTHERN LAOS: Communist Military Activity Increases
New
Pathet Leo 'uccuab
"
overrpn ro~irl
(jdvernment
outposts Muang I
Noun
Paki
Bengj Naar'
4 - Samnau
NVA units attack A6`
Luang
?"Prabang
Covernment High level
positions (...,of Communist
supply activity
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COMMUNIST OFFENSIVE ACTIVITY IN LAOS
North Vietnamese units of
battalion strength recently have
launched concerted ground attacks
against numerous government posi-
tions near the Plaine des Jarres.
The heaviest fighting has occurred
along the northern edges of the
Plaine, where the enemy is attempt-
ing to clear government troops from
key high points such as Phou Nok
Kok. Government guerrillas under
General Vang Pao, the daring and
forceful leader of Meo troops,
have successfully withstood most
of these assaults but are weary
after a long, successful, rainy
season campaign. It seems doubt-
ful that they can long withstand
sustained heavy pressure.
The new aggressiveness of
the North Vietnamese units near
the Plaine is the first clear sign
that Hanoi has been able to move
supplies to its front line troops
in northern Laos despite the gov-
ernment's ambitious interdiction
campaign.
In northwestern Laos, Pathet
Lao forces have overrun several
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important government outposts
near Pak Beng on the Mekong
River. With the capture of these
posi-:ions, the Pathet Lao have
taken an important step toward
removing the last vestiges of
government control in the Nam
Beng Valley--the scene of the
most recent round of Chinese
road--building activity. Accord-
ing ~_o aerial photography F 25X1
the road now is 25X1
motorable for some 27 miles to
the southwest of Muong Sai.
Although there has been no
significant military activity
in southern Laos in recent weeks,
enemy troop movements and probes
in the past few days suggest that
the Communists intend to maintain
pressure against government out-
posts astride Route 111 near Ban
Taleo. The enemy may hope that
by tying down government units
in this area there will be little
chance of government guerrillas
taking new initiatives against
the :_nfiltration corridor farther
to the east.
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The Soviet and US delegations are discussing the content of a communi-
que to close out the Helsinki phase of SALT, probably next week. Ex-
changes have continued to be serious and nonpolemica1.
Premier Kosygin gave official approval to Soviet support for the Arab
fedayeen in a speech before a visiting Egyptian delegation on 10 December.
At the same time he stressed that Moscow is primarily interested in a
political settlement of the Arab-Israeli crisis.
The meeting of leaders of the USSR and East European states last week
in Moscow set up a generally positive approach to Bonn. The West Germans
and Soviets then held their first two meetings on an exchange of renuncia-
tion of force statements. On 1 1 December, Foreign Minister Scheel said that
Bonn is ready to examine steps toward an improvement of relations with
Czechoslovakia. He said he was responding to press accounts of a statement
earlier in the week by Husak that Prague now was ready to seek a settlement
of problems with Bonn.
A new body of the Warsaw Pact, a "military council," met in Moscow
on 9-10 December, apparently for the first time. Its purpose and participants
are not known, but it was chaired by the pact commander, Marshal Yaku-
bovsky. According to TASS, it approved measures to strengthen the pact's
command structure. Because the Romanians agreed to other decisions on
training, it is not likely that the issue of pact maneuvers on Romanian soil
came up.
In Britain, the foreign policy debate in Commons was calmer than
expected. Most of the speeches on My Lai were sober and objective, though
Labor's left wing attacked Wilson's support of US policies. Opposition to
Britain's arms shipments to Federal Nigeria was greater than in the past, but
less than predicted.
The UN General Assembly this week adopted a Swedish proposal
interpreting the 1925 Geneva Protocol as prohibiting the use of tear gas and
herbicides in war. The US opposed, and mast West European countries
abstained. The assembly now is expected to adopt a Mexican proposal calling
upon the two superpowers to negotiate a moratorium on new strategic
weapons systems. Concern over the ineffectiveness of the UN and resent-
ment of the role of the big powers probably lay behind the assembly's
adoption this week of a Colombian proposal that would put the uestion of
UN Charter review on the agenda of the 1970 Assembly session
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SOVIETS PURSUING NEW GERMAN POLICY
On 8 December Soviet Foreign
Minister Gromyko met in Moscow
with West German ambassador Hel-
mut Allardt to open negotiations
on West German proposals for an
exchange of statements on the re-
nunciation of force. The Soviets,
only the day before, had made
known their willingness to begin
the talks. Gromyko and Allardt
reportedly did little more than
touch on negotiation procedures
in their 90-minute meeting, but
the unexpected decision to send
Gromyko to touch off the talks
was probably meant as a pledge
of Moscow's good intentions, and
was so interpreted by the Germans.
It also supported the impression
that the Soviet leaders have de-
cided to pursue their own version
of "bridge-building with the new
West German Government of Willy
Brandt.
In recent weeks the Soviets
have gone to considerable lengths
to convince the Brandt government
they have put aside their tradi-
tional policy of official and im-
placable hostility toward West
Germany. The Soviet press has
treated the Brandt government
with great circumspection from
its inception, and recently Mos-
cow has sought to provide further
evidence of its good will. No-
tably,a West German trade union
delegation, which was in the So-
viet Union from 24 November to 6
December, was treated with calcu-
lated cordiality. Soviet Polit-
buro member and trade union chief
Aleksandr Shelepin even took the
highly unusual step of making an
appearance at the residence of the
West German ambassador for the re-
ception in honor of the visiting
trade unionists.
The speed with which Moscow
has moved to adjust its policies
to the new political realities
in Bonn is probably based on the
hope that the accession of a
Bonn government publicly com-
mitted to political and economic
reconciliation with Eastern Europe
offers prospects for the attain-
ment of some of the basic goals
of Soviet policy in Europe. Mos-
cow's major objectives are still
the legitimization and solidifi-
cation of Soviet hegemony in East-
ern Europe and maintaining the'di-
vision of Germany. The Soviets
may feel that despite Bonn's con-
trary intentions, the strengthen-
ing of West German ties with the
East will inevitably detract from
the strength of its ties with the
West.
The Soviets presumably real-
ize that there is not likely to
be any great change in Bonn's
orientation in the short run, but
they may count on other immediate
benefits. Chief among these is
access to West German technology
and financial credits. The con-
clusion late last month of a huge
deal involving the sale of Soviet
natural gas for West German pipe
{is likely
to whet Moscow's appetite.
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Although the Soviets on bal-
ance probably feel that so far
they have profited most by the
improvement in relations, they
may soon be called on to make con-
cessions of their own.
Nevertheless, during last
week's summit meeting of Warsaw
Pact leaders, Moscow gave its al-
lies the green light to proceed
with bilateral approaches to Bonn.
According to various East European
diplomats, the summit meeting was
convened to mollify the East Ger-
mans, who sought to convince their
allies that they should delay be-
ginning bilateral negotiations
with Bonn. The communique issued
after the meeting, however, shows
that the East Germans were re-
buffed.
The communique does contain a sop
for :Pankow in its call on all
states to recognize East Germany,
but it is apparent that this is
not meant to be a precondition to
Bonn's negotiations with East
European states.
East German leader Ulbricht
stated upon his return to East
Berlin on 5 December that he was
"satisfied" with the results of
the meeting, but he doubtless was
attempting to make the best of a
political setback. Ulbricht's
subsequent comments on the com-
munique' suggest that, as usual,
Pankow will stress only those
passages critical of the Federal
Republic.
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HELSINKI AND Moscow DEBATE FINNISH NEUTRALITY
The Finnish interpretation of
neutrality was recently attacked
by Soviet commentators, but these
criticisms have been rebuffed by
President Kekkonen.
The controversy began early
last month when the Soviet press
agency Novosti released a curi-
ously delayed review of the book,
Finnish Neutrality, written by
Fnland's ambassador to the UN,
Max Jakobson, and published late
in 1968. The Finnish Government
had commissioned Jakobson to write
an authoritative study of Finnish
foreign policy since World War II.
Basic to Jakobson's study was
the development of Finland's rela-
tions with the Soviet Union. He
pointed out that after the War,
President Paasikivi made his goal
the establishment of Soviet confi-
dence in Finland and the recogni-
tion by Finland of the validity
of Soviet defensive strategic in-
terests in the north of Europe.
The Finnish-Soviet Mutual Aid Pact
of 1948 became the keystone of
this policy. This pact calls for
Finland to defend its territory
in the event of an attack on the
Soviet Union across Finland by
Germany or its allies, and it pro-
vides for consultations if such a
threat is agreed to exist.
status, Jakobson noted that the
newly elected President Kekkonen
undertook an "opening to the
West" to achieve similar recogni-
tion of Finland's neutrality by
the other great powers. At the
same time Kekkonen's good working
relationship with Soviet Premier
Khrushchev eventually produced a
refinement of Finland's obliga-
tions under the 1948 pact. Jakob-
son repeated Kekkonen's 1961 as-
sertion that the initiative for
consultations under the treaty
would be left to Finland.
It was this interpretation
which was attacked by Novosti as
"one-sided" and "not correspond-
ing to the letter or spirit" of
the 1948 treaty. The Finnish
press seized on this criticism
to express its concern over the
lack of official Soviet referenqes
to Finnish neutrality in the past
three years and the recent Soviet
discussions of the 1948 treaty in
terms of a military alliance. In
veiled language the press noted
an alarming return to views "rem-
iniscent of the period prior to
1955" and called for an end to
the misunderstanding.
On the pretext of reviewing
a recent work on Soviet-Finnish
relations, Finland As Foe and
Friend by Soviet historian V. V.
Po kkhilebkin, President Kekkonen
addressed himself to this subject
at a meeting of the nation's lead-
ing foreign policy association
late last month. While conceding
After the 20th congress of that either party to the 1948
the Soviet Communist Party in 1956 treaty had the right to suggest
acknowledged Finland's neutral consultations, provided the other
SE' CRI','I'
I'age 12 WEEK1A SUMMMiA1 Y
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