WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A008300010001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 32
• Document Creation Date: December 21, 2016
• Document Release Date: May 1, 2008
• Sequence Number: 1
• Publication Date: October 16, 1970
• Content Type: SUMMARY

Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
OSD review completed
Secret
48
16 October 1970
No. 0392/70
State Dept. review
completed
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 25X1 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
~r,urcr 1
(Information as of noon EDT, 15 October 1970)
Page
MIDDLE EAST - AFRICA
Egypt: Post-Nasir Maneuvering . . . . . . . . . . . . . . . . . 1
Middle East: Moscow Retaliates to Charges of Cease-fire Violations . . . 2
Jordan: Another Agreement with the Fedayeen . . . . . . . . ... . 3
Rhodesia: Sanctions Not Working . . . . . . . . . . . . . . . . 5
Sierra Leone: Prime Minister Opts for Force . . . . . . . . . . . . 7
Central African Republic: The President Lives Dangerously . . . . . . 7
Indian Aircraft Industry Plods Along . . . . . . . . . . . . . . . 8
FAR EAST
Vietnam: Yeas and Nays for Peace Plan . . . . . . . . . . . . . 10
Cambodia: Harassing Probes Greet New Republic . . . . . . . . . 12
Laos: What Price Peace? . . . . . . . . . . . . . . . . . . . 13
Communist China: Joining the World . . . . . . . . . . . . . . 14
Communist China: Provincial Permutations . . . . . . . . . . . 15
OSD review completed
SECRET
Page i WEEKLY SUMMARY 16 Oct 70
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
*AW ~r l~lCr 1 Iftv
NATO Probes Uncertain Future . . . . . . . . . . . . . . . . 17
Italy: Social Reforms Inch Ahead . . . . . . . . . . . . . . . 17
Europe Calm About Oil. Situation . . . . . . . . . . . . . . . . 18
Yugoslavia - Communist China: Economic Relations Expand . . . . 19
Soviet Economy: A Moscow Economist's Glum View . . . . . . . 19
USSR-Iran: New Economic Pact . . . . . . . . . . . . . . . . 20
WESTERN HEMISPHERE
Chilean Leftists Having Problems . . . . . . . . . . . . . . . . 21
Bolivia: Torres' First Moves . . . . . . . . . . . . . . . . . . 22
Brazil: Church-State Problems . . . . . . . . . . . . . . . . . 23
Cuba: "Motivating" the People . . . . . . . . . . . . . . . . . 24
NOTES: Africa; Turkey; Nigeria; Romania; Cuba - Warsaw Pact
SECRET
Page ii WEEKLY SUMMARY 16 Oct 70
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
~)rA Js r- t %sof
MIDDLE EAST - AFRICA
Egypt: Post Nasir Maneuvering
The election of Anwar Sadat to the presi-
dency in the national plebiscite on 15 October
marks the end of what is probably only the first
round in a protracted struggle for power within
the Egyptian hierarchy.
Behind-the-scenes jockeying continues
apace, with no single individual strong enough to
take complete control. The three identifiable
leaders who now share the reins of power have
apparently agreed--if only tacitly-to continue
their collegial leadership for the moment. Sadat
has the presidency, but he and the other two
members of the triumvirate-Minister of Interior
Sharawi Jumah and former prime minister All
Sabri-are still attempting to decide how to allot
the three sensitive posts of prime minister, minis-
ter of interior, and secretary general of the Arab
Socialist Union, the only legal political party.
An inherently unstable hierarchical structure
thus seems to be taking form. No member of the
ruling triumvirate has Nasir's hold on the Egyp-
tian people nor is especially popular among such
influential groups as students, intellectuals, the
middle class, or the army. Perhaps reflecting a
growing preoccupation with internal security,
there have already been reports of the arrest of
students and the dispatch of troops to quell pos-
sible disturbances. There are some indications
that the Egyptian leadership is especially con-
cerned about the attitude of the armed services,
but for the moment the military is staying on the
sidelines.
The triumvirate is also attempting to squelch
any possible challenge by three other former asso-
ciates of Nasir: Minister of Guidance Haykal;
Kamal ad-Din Husayn, a member of Nasir's origi-
nal revolutionary group; and ex-premier Zakariya
Muhyeddin, who is reputed to be popular among
military officers, students, and the managerial
class. Press reports from apparently authoritative
diplomatic sources state that all three have been
placed under house arrest. Unsure of its own
popular standing, the regime is particularly con-
cerned that Muhyeddin's supporters might pose a
threat to its rule, particularly if Cairo suffers a
setback in any aspect of the confrontation with
Israel.
The Egyptian leadership's weakness at home
severely restricts its ability to make any meaning-
ful concessions in negotiations for a comprehen-
sive peace settlement. Nevertheless, the Egyptians
have seized the diplomatic initiative in an attempt
to put Washington and Tel Aviv on the defensive.
Foreign Minister Riad, who arrived in New York
this week, apparently intends to remain for an
extended stay at the UN. He is expected to place
before the General Assembly a resolution calling
for-at a minimum-an extension of the cease-fire
beyond 5 November, but on the condition that
there is an early resumption of the Jarring talks.
The Egyptians apparently believe that such an
offer saddles Israel with the onus for letting the
cease-fire expire and for continuing the stalemate
of the Jarring mission.
For its part, Israel is standing pat on its
position that it will extend the cease-fire along
the canal but would resume talks under Ambassa-
dor Jarring only if the "Egyptians and Soviets
take action for the return of the situation in the
military standstill zone to what it was before."
The Israelis were, of course, heartened last week
SECRET
Page 1 WEEKLY SUMMARY
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
vow 1 *0
when the US took a similar position in withdraw-
ing from the deputy-level four-power meetings
(the ambassadorial meetings are to continue).
Egyptian Foreign Minister Riad's remark on
10 October that Egypt could not extend the
cease-fire unless Israel returned to the peace talks
has created some uncertainty in Tel Aviv. The
Israeli press generally treated Riad's remarks as
propaganda preliminary to the UN meetings and
wagered that the deciding vote would be cast by
the Soviet Union-which the Israelis believe wants
an extension. Officials in the Foreign Ministry,
however, think Egypt will not formally renew the
arrangement, but will instead permit a de facto
cease-fire to continue. They believe that Cairo
sees this as a way to relieve itself from any legal
obligation regarding the standstill zone, although
they do not expect the Egyptains to renew the
war now. The officials hedge this prediction, how-
ever, with a reminder that hostilities could break
out if Egypt were carried away by its own rheto-
ric, or got too involved in an internal power
struggle.
Mid d I e East: Moscow Retaliates to Charges of Cease-fire Violations
Moscow has recently mounted a vituperative
propaganda campaign intended to counter US
charges of Soviet complicity in Middle East
cease-fire violations and to shift blame to the US
and Israel for the failure so far of the Jarring
mission.
The campaign was spearheaded by a rare
official Foreign Ministry statement, publicized on
8 October, which reflects Moscow's sensitivity to
charges that it bears a heavy share of the responsi-
bility for violations of the cease-fire/standstill
along the Su z Canal. The statement makes an
outright re' ction of charges by "officials in the
US" of Soviet violations and emphasizes that the
cease-fire was arranged solely by the US without
any participation by the USSR in drafting its
terms. The statement also rejects as a "deliberate
fraud" assertions that Soviet-manned SAM mis-
siles have appeared in the Canal zone. This is the
Page 2
first time Moscow has discussed in any detail the
charges against it.
Seeking to place responsibility for continued
tension in the Middle East on the US and Israel,
the statement accused the US of taking actions
leading to an "exacerbation" of the situation,
including "the demonstration of strength by the
Sixth Fleet, whose ostentatious nature is empha-
sized by the fact that the US President took
part." It also denounced additional US arms and
economic aid to Israel. Finally, making a public
issue of the matter for the first time, the state-
ment attacked US reconnaissance flights in the
cease-fire zone as a "gross violation" of Egyptian
sovereignty.
The Soviet media have subsequently taken
their cue from the Foreign Ministry statement.
One of the toughest commentaries, issued by
SECRET
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
vi vim ? i =
TASS on 9 October, accused the US press of
waging a "slanderous anti-Soviet campaign claim-
ing that the Soviet Union has allegedly broken
certain obligations connected with the cease-fire."
The commentary went beyond the Foreign Minis-
try statement by claiming that the USSR "is not a
party to any agreement" and that "the USSR is
not able to break obligations which it has not
assumed."
The TASS commentary also took a swing at
Tel Aviv, detailing alleged Israeli violations of the
cease-fire, including the construction of a
"mighty belt" of fortifications along the Suez
Canal. Moreover, TASS and the other Soviet news
media have charged that the "press campaign"
against the USSR is a US attempt to "divest itself
and its wards" of responsibility for the stalling of
the Jarring mission.
The unyielding and sometimes belligerent
statements from Moscow in recent days are no
doubt an outgrowth of a considered decision to
undertake a political offensive aimed at squelch-
ing US charges of Soviet responsibility for "al-
leged" cease-fire violations. At the same time, the
Soviets are trying to attribute the failure of diplo-
matic efforts in the Middle East to US actions,
which they claim have encouraged Israel to stay
away from the talks. The tough Soviet line is
probably also intended to serve as an earnest of
continued support for Nasir's successors. 25X1
Jordan: Another Agreement With the Fedayeen
Government-fedayeen negotiations have pro-
duced an agreement that does not represent a
clear victory for either side. Many of the govern-
ment's chief aims have been realized but were
somewhat weakened by vaguely worded excep-
tions whose full extent still remains to be seen.
One article, for example, seems to bring the feda-
yeen under the rule of law-long an aim of the
government-but promptly waters down the point
by mentioning unspecified exceptions. The feda-
yeen are barred from carrying weapons in town,
but again, provision is made for "certain excep-
tional cases." Commandos are apparently answer-
able to the civil courts for ordinary crimes, al-
though the fedayeen command seems to be re-
sponsible for general discipline.
Nevertheless, the government has made some
clear gains. The provision specifying the location
of fedayeen bases has not been made public, but
the government has been promised that they will
Page 3
not be near cities and villages-a major point of
contention. Moreover, the Palestine Liberation
Organization's central committee has been made
fully responsible for enforcing its obligations on
all fedayeen groups.
The fedayeen, however, were given conces-
sions that the government earlier seemed deter-
mined not to grant. The Amman headquarters of
the central committee, for example, will be pro-
tected by fedayeen guards and is apparently free
to conduct a wide range of activities, including
military. The government has also agreed that no
one is to be detained or suspended because of the
recent incidents. In addition, the commandos
have been promised that the government will not
establish or operate organizations "contrary to
the interests of the Palestine revolution," but
there is no indication that the fedayeen have any
clear-cut veto power over government depart-
ments or personnel.
SECRET
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
I
low
The crucial issue of implementation has been
left to a joint committee composed of one mem-
ber from the government, one from the fedayeen,
and of either Tunisian Premier Bahi Ladgham or
his representative. Because the written agreement
is so ambiguous, the stand taken by the joint
committee will probably be decisive in determin-
ing which side eventually comes out on top. A
continuing pan-Arab presence in Jordan is also
guaranteed by the creation of a military subcom-
mittee, made up of the observers from various
Arab countries already in Jordan, which is pre-
sumably intended to prevent a new outbreak of
fighting.
Meanwhile, the cease-fire continues to hold
without serious incident, although there have
been occasional minor clashes. A number of viola-
tions of the agreement by both sides have been
investigated by the Arab supervisory committee,
AFRICA: President Kenneth Kaunda of Zambia
is currently leading a prestigious delegation of
black African officials on a week-long tour of
Western Europe and the US to lobby for black
African positions on issues dealing with white
southern Africa. The delegation is visiting Bonn,
Paris, and London in the name of the Organiza-
tion of African Unity to protest past and pro-
posed arms sales to South Africa. In addition, the
recent Nonaligned Conference held in Zambia
broadened the mission's "mandate" by commis-
sioning it to press for the elimination of all West-
ern economic and military ties with South Africa,
Portugal, and Rhodesia. Kaunda also will report
to the UN General Assembly next Monday on the
accomplishments of the Nonaligned Conference.
His speech is expected to be an earnest presenta-
Page 4
which has successfully prevented them from esca-
lating. The fedayeen are dragging their heels in
moving out of Irbid and Ramtha; press corre-
spondents returning from northern towns state
that fedayeen influence is predominant in some
areas, almost to the complete exclusion of the
government.
to deal firmly with the commandos.
government will live up to its oft-stated intention
Amman is peaceful and under effective gov-
ernment control. Yasir Arafat apparently made a
triumphant return to the Wahdat refugee camp on
10 October, however. His entry was marked by a
general firing of weapons that appeared "out of
nowhere," after which Arafat and an armed feda-
yeen escort toured the camp. Large numbers of
fedayeen have unquestionably gone underground 25X1
in Amman, and it remains to be seen whether the
tion of the standard Third World platitudes
adopted by the gathering.
Kaunda realizes that his mission will ac-
complish little in the way of persuading Western
governments and business interests actually to cut
their ties with white southern Africa. He hopes,
however, to generate enough favorable public
sympathy to induce the UK to reverse its an-
nounced intention to sell maritime defense equip-
ment to South Africa, but it is doubtful that he
will succeed. The mission's other specific goal-
convincing Western interests to withdraw from a
large hydroelectric project in Portuguese Mozam-
bique-also will almost certainly fail. f I 25X1
SECRET
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
SECRET
Rhodesia: Sanctions Not Working
Rhodesia's economic performance this year,
despite some agricultural setbacks due to drought,
has been the best since sanctions were imposed
five years ago and, in some sectors, the most
notable in the history of the former British col-
ony. UK and UN sanctions have not caused severe
economic difficulties and they did not bring the
Ian Smith government to terms. Indeed, the over-
all impact of the sanctions probably has lessened
each year, despite measures taken to strengthen
them.
Rhodesia's economic gains have been wide-
ranging. In June the index of manufacturing pro-
duction was some 61 percent higher than in 1966,
reflecting primarily an increase in local produc-
tion of goods to replace former imports. Both
industrial and residential building also have in-
creased substantially. During the first half of
1970, the value of new industrial building was
about 65 percent above the same period last year.
The mining industry increased its output in 1969
by $28 million to reach a record level of $122
million, and thus far in 1970 production is up
more than 20 percent over last year's output.
Most of the mineral production, moreover, has
been sold abroad despite sanctions.
Demand for imports stemming from last
year's extraordinary economic growth placed
heavy pressure on Rhodesia's already low for-
eign-exchange reserves. The government last week
introduced selective curbs on foreign exchange to
favor import needs of Rhodesia's vital industries.
Because foreign-exchange earnings from agricul-
tural exports this year probably will be reduced,
the pinch is expected to continue.
Nonetheless, Rhodesia's economic outlook is
brighter than it has been since 1966. The coun-
try's economy is more diversified than before
sanctions and therefore is better equipped to
weather economic crises than in the past. If Brit-
ish sanctions are relaxed, as some conservatives in
Prime Minister Heath's party indicate might be
the case in another year, Rhodesia's economy
TURKEY: Although Prime Minister Demirel has
been under considerable fire since last spring, he
should be able to maintain his leadership of the
ruling Justice Party (JP) at its national convention
next week. He may face a serious challenge when
parliament reconvenes on 1 November, however.
The government's slim majority of eight votes is
by no means firm and could easily fall apart. The
26 dissident members who were ousted from the
JP last summer are still determined to dump
Page 5
Demirel somehow, and are trying to form a new
party that might draw away other deputies-pos-
sibly even the speaker of the lower house. Parlia-
ment will almost immediately be faced with sev-
eral controversial items, including the proposed
opium control bill and the question of corruption
charges still hanging over the Demirel family.
Either of these could be exploited further to
undermine the prime minister's control of both
the party and the government.
SECRET
25X1
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
lftool~ SECRET
Sierra Leone: Prime Minister Opts for Force
Prime Minister Stevens resorted last week to
illegal force to silence a strong political challenge,
increasing the possibility that his opponents will
turn to large-scale violence. Moreover, his strong-
arm tactics probably will alienate moderate politi-
cians who presently support the government, add-
ing to the factionalism within his already-divided
All People's Congress (APC) Party.
Stevens apparently acted in response to the
insistent demands of hard liners within his party
when on 8 October he outlawed the newly
formed United Democratic Party (UDP). Over 20
UDP leaders have now been arrested, including
the party's three most important spokesmen. The
new opposition group had been part of the dis-
parate ruling coalition until last month, when it
broke with Stevens over his plans to introduce a
new constitution, which they saw as the first step
toward one-man rule. Stevens and his supporters
view the new party as a particularly serious threat
because its leaders command a large following in
the north, traditionally a stronghold of the ruling
party.
Stevens claims to be acting under a state of
emergency that he declared last month when op-
position efforts to organize in the north first
sparked violent clashes with armed APC support-
ers. The declaration is without legal basis, how-
ever, as the constitution reserves that power to
parliament. So far, UDP followers are trying legal
measures to free their leaders, but they say that if
this fails, they will use "other methods," pre-
sumably including violence.
Thus far, the security forces, which mirror
the country's general political fragmentation,
have gone along with the prime minister. The
police and army chiefs, as well as some other
security officers, are clearly unhappy over Stev-
ens' resort to illegal suppression of his opponents,
however. Stevens mistrusts both security heads,
but so far has not moved to replace them.F
At the
same time, the prime minister conjured up a for-
eign scapegoat by linking a US Embassy official-
who was ordered out of the country- with one of
the plotters. Sierra Leone's official press also has
mounted a no-holds-barred attack on the US,pre-
cipitating an anti-American demonstration at the
US Embassy on Thursday.
Although Stevens' crackdown has tem-
porarily silenced his most vocal opponents, it
probably has accelerated the erosion of his over-
all political position. His capitulation to extremist
advisers will alienate APC moderates, requiring an
even greater reliance on force if he is to maintain
his position. Moreover, the new opposition has
split Stevens' following among the northern
Temnes-Sierra Leone's second largest tribe-
while at the same time his traditional southern-
based opposition remains intact. Support for
Stevens' policies will be tested next week, when
parliament is expected to consider his emergency
declaration and other measures he has
Central African Republic: The President Lives Dangerously
President Bokassa has recently appeared to
be going out of his way to irritate France, his
country's patron, while continuing to move closer
to Communist and other anti-Western countries.
Page 7
In 1966, to justify the coup that put him in
power, Bokassa made much of the need to fore-
stall alleged Communist subversion and to restore
bonds with Paris that had eroded under the
SECRET
WEEKLY SUMMARY 16 Oct 70
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
W SJ CKJ l
previous regime. Immediately after his take-over,
the Chinese Communists were expelled and West-
ern influence rebounded. Bokassa soon proved
himself to be one of Paris' more erratic and diffi-
cult African clients, however.
Bokassa signaled the beginning of his more
friendly attitude toward Communist and radical
Arab and African countries with the announce-
ment in mid-1969 that the CAR's diplomacy
would no longer be bound by "ideology." As his
foreign minister he soon installed an avowed left-
ist who has arranged relations with Cairo and with
every Communist state save China and Cuba, and
has even recognized Sihanouk's Cambodian exile
government. In support of this swing to the left,
Bokassa traveled during the past year to Egypt,
Sudan, Congo (Brazzaville), the Soviet Union, and
Rumania, and announced his support for some of
these countries' policies.
Bokassa's prime motivation seems to be his
dissatisfaction with the low level of aid his fi-
nancially pressed country has obtained from the
West. He apparently hoped his new path would
jolt France and other Western countries into in-
creasing their aid, or would possibly encourage
the Communist countries to give supplemental
assistance. Instead, the shift has failed to generate
significant additional aid from any quarter and
has jeopardized relations with France.
Bokassa's latest and most serious tiff with
Paris began in July with the French ambassador's
public censure of the CAR's leftward drift.
Bokassa replied with spirited defenses of his poli-
cies and with blunt attacks on "neocolonialists"
and their institutions, such as the French-inspired
Afro-Malagasy Common Organization. Last
month, Bokassa suddenly expelled most French
agricultural advisers and then stripped the French
ambassador of his deanship of the diplomatic
corps. Paris, which has usually adopted a de-
tached approach toward Bokassa, is now search-
ing for discreet ways to indicate its irritation. One
approved proposal calls for continuing existing
aid projects without making any new commit-
ments until Bokassa reverses his course.
Any lasting aid shutoff would have a
calamitous effect on the CAR's economy. More-
over, Bokassa's refusal to come to terms could
become a factor inspiring domestic elements-
already disgruntled with growing repression and
lack of progress-to coalesce in opposition.
Bangui has been beset for weeks with coup
rumors, but there probably is no immediate
threat of an overthrow as Bokassa apparently is
still backed by the army, which remains the key
to any successful attempt.
Indian Aircraft Industry Plods Along
The first MIG-21FL Fishbed fighter-in-
terceptor to be manufactured primarily in India
has been successfully test flown and, according to
press reports, will be delivered to the Indian Air
Force later this month.
The MIG-21FL is produced at three widely
separated plants of Hindustan Aeronautics Ltd.,
India's state-owned aircraft manufacturing firm,
under a 1962 license arrangement with the Soviet
Union. The program has developed in phases. At
first India merely assembled the aircraft from
imported subassemblies, then began manufactur-
ing some of the components, and finally has un-
dertaken "indigenous" production. In this last
phase, India manufactures most of the engine and
airframe and assembles the complete aircraft.
New Delhi will, however, continue to rely on the
Soviet Union for major accessories such as elec-
tronics.
SECRET
Page 8 WEEKLY SUMMARY
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
During the first two major phases of the
production program. India turned out as many as
120 aircraft
India is also producing two other fighter
aircraft, the Gnat and the HF-24. The Gnat is a
subsonic day fighter produced under license with
the UK. The Indian Air Force ordered about 215
Gnats for delivery by 1969. Again, production
delays have prevented the accomplishment of this
objective and it probably will be mid-1971 before
the production program for the Gnat can be com-
pleted.
The HF-24, a supersonic twin-engine jet
fighter of Indian - West German design, was in-
tended to replace the British Hawker Hunters and
the French Mysteres now in the Indian inventory.
NIGERIA: The military government's announce-
ment on 1 October that it intends to retain power
for six more years has sparked little overt opposi-
tion, but discontent beneath the surface is grow-
ing. The press has generally approved the nine-
point program for a return to civilian rule an-
nounced by General Gowon. Public reaction has
been slow and diffuse, except among politicians
who have a personal interest in a quicker turnover
of power. Northern politicians are reportedly rest-
less and annoyed at the delay. The always tur-
bulent Yorubas of the Western State, although
not entirely happy with the prospects of con-
tinued rule by a particularly corrupt military gov-
ernor, appear to have adopted at least a momen-
tary wait-and-see attitude.
Difficulties in designing a sufficiently powerful
engine for the HF-24 have caused the program to
fall far behind schedule. India has turned to the
Soviet Union for SU-7 fighter-bombers to fill the
role intended for the HF-24s. Of the 139 SU-7s
India ordered, about 100 have been delivered.
India will continue to attempt to improve its
aircraft production capabilities to reduce depend-
ence on foreign suppliers. If past performance is
any guide, however, it is unlikely that India will
attain an independent production capability for
the foreseeable future.
General Gowon conceded that the army
might be able to finish its program sooner, and
pressures to shorten the timetable can be ex-
pected. It is unlikely that 61-year-old Yoruba
Chief Awolowo, the highest ranking civilian in the
government, will be willing to check his ambitions
for such a long period.
SECRET
Page 9 WEEKLY SUMMARY
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
taw bhUKEI' 140Y
FAR EAST
Vietnam: Yeas and Nays for Peace Plan
Hanoi's "categorical rejection" of the Nixon
initiative on 14 October contains few if any open-
ings. Hanoi did seem to invite further elaboration
of Washington's position on withdrawals and the
shape of the postwar government in Saigon by
charging that the Nixon address was "vague" on
these two key issues. The statement makes it
plain, however, that the Communists are sticking
for now to the Viet Cong eight points as the
"correct" basis for a settlement in Vietnam.
Hanoi's rejection, along with a similar state-
ment by the president of the Provisional Revo-
lutionary Government also issued on the 14th,
caps a week of decidedly negative reactions by
Vietnamese Communist spokesmen and by Mos-
cow and Peking. The Communists have attacked
the US proposal as "old wine in new bottles," a
frivolous piece of electioneering, and an appeal
for Viet Cong surrender. They have tried to rebut
Washington by calling attention to their own
demands, most of which are embodied in the
eight points.
The Communists' public stance suggests that
any exploration of the various "points" now lying
on the table in Paris will be slow going indeed.
The Communists could hew to their line for a
long time, especially if they are satisfied that their
position on the ground will see them through
Washington's next major troop withdrawal an-
nouncement, scheduled for late next spring.
Mixed Reaction in Saigon
Many South Vietnamese have publicly wel-
comed the Nixon proposals, but there are indica-
Page 10
tions that some of them have misgivings over the
possibility of a cease-fire. High government of-
ficials have expressed approval of the plan and are
pleased by the favorable reception it has been
getting in South Vietnam. Some have noted in
private that it puts the Communists on the de-
fensive in the eyes of the world and also helps to
defuse South Vietnamese peace advocates.
For their part, proponents of an early peace
have received the proposal very well, and a few
reportedly have begun to consider new initiatives
of their own. The An Quang Buddhists and
militant antigovernment students have com-
mented favorably, and an outspoken Saigon daily
described the initiative as "quite a big step for-
ward compared with those announced with fan-
fare in the past." Some opposition leaders have
suggested that President Thieu should have of-
fered similar proposals on his own long ago. A
few hard-line elements, on the other hand, have
voiced considerable displeasure over the pro-
posals.
That there have been few expressions of
concern stems in part from the fact that most
politically conscious South Vietnamese believed
that Hanoi would not accept the offer. Saigon
will undoubtedly be relieved by Hanoi's "cate-
gorical" rejection of the proposals. Remarks by
some senior South Vietnamese military officers
indicate that any improvement in the prospects
for a settlement would substantially increase fears
and uncertainty in Saigon. They believe that a
standstill cease-fire would be very difficult to
supervise and that the Communists would be able
to take advantage of such a situation in the
SECRET
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
SECRET
countryside. They also fear that it might lower
morale and sharply increase desertion in the
armed forces.
The new proposal has taklen some of the
play away from the partial devaluation of the
piaster and other economic reform measures an-
nounced by the government last week. Reaction
in Saigon political circles to these measures has
been mixed, with many observers reserving final
judgment until the long-term effect of the pro-
gram becomes clearer. Partly because the govern-
ment made an extensive effort to explain its
actions, there has been no sharp increase in prices
or any expressions of shock and anger of the kind
that followed the imposition of austerity taxes
and led to the political crisis last October.
Casualty Trends
The enemy's losses may be easier to make up
this year than last. The Communists' casualties
have dropped sharply during the past summer and
their losses for the whole year in South Vietnam
have been reduced by about one third compared
with 1969. they still
are suffering an average of over 2,000 killed a
week, however. On an average, the Communists
sustained some 3,000 combat deaths each week in
South Vietnam last year, 3,500 in 1968, and
about 1,700 a week in 1967.
The war also remains costly for South Viet-
namese Government forces. This year, an average
of 360 have been killed each week, the same rate
as last year. In 1968, the year of the most intense
fighting, their weekly losses were 465. Weekly
casualties on the government side have declined
this summer to about 230 dead, according to
preliminary estimates. US losses have averaged
some 95 killed each week this year, approxi-
mately half the 1969 toll, and in recent months
they have been lower than that. These casualty
trends have resulted in part from continued Com-
munist emphasis on guerrilla-type fighting and the
emergence of a new enemy military front in Cam-
bodia. Also, significant enemy attacks have
normally declined during the summer, when
much of Vietnam is flooded by monsoon rains.
If the Communists follow past patterns,
higher allied casualties can be expected from
increased guerrilla activity and some main-force
action during the coming winter-spring dry sea-
SECRET
Page 11 WEEKLY SUMMARY
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
%oli SECRET
Cambodia: Harassing Probes Greet New Republic
There were no major military engagements
during the week, but the Communists continued
to keep the large government task force on Route
6 on the defensive. Government spokesmen in
Phnom Penh greatly exaggerated the number of
enemy troops involved in ground attacks against
the column,
enemy troops and supplies were being moved into
positions that could support fresh attacks on the
column, now numbering 11,000 men. Thus far,
Phnom Penh has suffered approximately 73 killed
and at least 500 wounded in its stymied operation
to reach Kompong Thom city since the offensive
began in early September. Undaunted by its diffi-
culties with this operation, the government this
week sent 13 battalions on a three-day road-
clearing maneuver south of Phnom Penh.
A few enemy probing attacks along Route 7,
between Skoun and Kompong Cham city, also
were reported, but they did not appear to add up
to any new Communist move to isolate the city
and sever its supply line to the column on Route
6.
In the northwest, the Communists made
more harassing attacks in the Siem Reap area.
Government positions near Siem Reap city con-
tinued to be subjected to light enemy shelling,
and Communist troops also attacked and dam-
aged three bridges on Route 6 between Siem
Reap and the crossroads town of Kralanh, which
was occupied briefly by the enemy in mid-Au-
gust.
A few small enemy actions were reported
near Phnom Penh, but they did not dampen the
enthusiastic celebrations in the capital over the
declaration of a republic. The declaration may
serve in part to improve army morale, in that it
will give Cambodian soldiers a fresh and seem-
ingly more democratic symbol to fight for
SECRET
Page 12
WEEKLY SUMMARY 16 Oct 70
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
SEUKL'f
iiiilw
Laos: What Price Peace?
The reaction in Vientiane to President
Nixon's recent Indochina peace proposals has
been favorable, but it is apparent that many lead-
ing political and military figures there are appre-
hensive about its implications for Laos. With
Communist forces controlling as much if not
more territory than ever before, the prospect of a
cease-fire along present battle lines is not wel-
come. Moreover, a number of officials fear that
the US peace plan could undercut their own ef-
forts to start substantive negotiations with the
Laotian Communists.
Although some hard-line rightists feel that
the President's statement was not tough enough,
much of the uneasiness is traceable to questions
about what it implied for Laos' political position,
particularly with respect to the 1962 Geneva Ac-
cords, which the Lao regard as the cornerstone of
their foreign policy. The statement raised nagging
fears that Laotian interests could be sacrificed in
the US search for a settlement in Indochina.
Souvanna may express this concern to US
officials during his visit to New York from 14 to
24 October to attend the 25th anniversary meet-
ings of the UN. The prime minister also intends to
confer here with Soviet Foreign Minister Gro-
myko. In speaking with US diplomats in Paris this
week, Souvanna said he had asked President
Pompidou during his visit to Moscow to request
that the USSR press Hanoi to respect the 1962
Accords.
There have been rumors that Souvanna him-
self would return to Laos via Moscow, but noth-
ing definite has emerged so far. The prime minis-
ter is scheduled to return to Vientiane by 29
October, the anniversary of the death of the for-
mer king.
SECRET
Page 13 WEEKLY SUMMARY
Government units succeeded this week in
occupying Muong Soui west of the Plaine des
Jarres. The former neutralist headquarters has lit-
tle military value. The government made little
progress, however, south of the Plaine. General
Vang Pao's failure to push back enemy forces
from within striking distance of the Long Tieng
complex this summer means that he will face the
Communists' anticipated fall campaign at some-
thing of a disadvantage.
In south Laos, three government querrilla
battalions were pulled out of the Toumlane Val-
ley area after successfully completing an op-
eration along Route 23. No major fichting de-
veloped on the Bolovens Plateau.
1,111-1 W -a
Camm~~no un1 62~',ralist
con~rai June iy62
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
%Wv SECRET
Communist China: Joining the World
Tuesday's announcement that the long-
drawn-out negotiations on diplomatic recognition
between Peking and Ottawa had been successfully
concluded is likely to reinforce and perhaps ac-
celerate trends toward Communist China's as-
sumption of its "rightful place in the world."
Two intertwined issues are involved: recognition
of Peking per se and the question of China's seat
in the United Nations.
Sentiment favoring Peking seems to be
slowly rising on both issues. There has been a
gradual movement in this direction for some
years-movement that was only temporarily ar-
rested by the events surrounding China's Cultural
Revolution. In 1964 France recognized Peking,
and in 1965 the UN Assembly vote on the tradi-
tional "Albanian" resolution, which calls for the
seating of Peking and the corollary expulsion of
the Taipei government, produced a tie vote-the
high-water mark, from Peking's point of view, on
the issue. China's subsequent absorption in dom-
estic matters and the self-imposed isolation that
followed, coupled with the chaos and confusion
that accompanied the excesses of the Cultural
Revolution, somewhat undermined the tendency
to consider Peking a full-fledged member of the
international community.
In the past year, however, the appearance of
renewed stability on the mainland, coupled with
Peking's general campaign to improve relations
with a wide variety of states and, more recently,
with specific assurances that it is again "inter-
ested" in taking the Chinese seat at the UN, have
mollified many who doubt that Communist China
actually intends to become a "responsible mem-
ber" of the international community. The leaders
of several states have recently remarked that the
present situation, which tends to "freeze out" a
government that controls upwards of 800 million
people, is anomalous. In other cases, Peking's
more "reasonable" posture has reinforced do-
mestic pressures for a change in attitude toward the
mainland.
In these circumstances, the successful con-
clusion of the Sino-Canadian recognition talks
will certainly add additional incentive to states,
particularly Italy, Belgium, and Ethiopia, that
are currently considering similar moves. Rome has
already indicated that it may feel impelled to
follow rapidly in Ottawa's footsteps, and the
lengthy Italian negotiations on recognition may
soon be concluded. Belgium will probably also
follow, although at a slower pace. For its part,
Addis Ababa is awaiting the outcome of the UN
voting before considering renewing efforts to for-
malize its 1964 agreement in principle to recog-
nize Peking. Despite mutual interest in expanded
contracts, however, it is not likely that the con-
clusion of negotiations with these states would
presage a wholesale granting of recognition by
Peking to all comers. Each nation will almost
certainly have to move at its own pace toward
resolution of specific bilateral differences.
The well-publicized interest of many states
in expanding ties with the mainland has also
eroded support for Taipei as the sole representa-
tive of China in the UN. Canadian recognition,
and that of Italy if it comes next month, may
precipitate reconsideration of several undecided
votes on the representation issue in the General
Assembly in mid-November. Although the exact
vote cannot yet be predicted with accuracy, the
chances that Peking may receive for the first time
a small majority on the "Albanian" resolution
have grown. It remains unlikely, however, that
even the largest probable realignment will result
either in Peking's admission or the expulsion of
Taipei from the world body this year, because
Peking almost certainly lacks the votes to defeat
the "important question" ruling that makes ad-
mission dependent on a two-thirds majority.
Nevertheless, even a tie vote on the "Albanian"
resolution would reinforce other factors causing
various states to improve relations with Peking
and could also inspire more forceful challenges to
Taipei's credentials in other UN organizations
over the next year.
SECRET
Page 14 WEEKLY SUMMARY
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
Communist China: Provincial Permutations
The nationwide rallies held earlier this
month to celebrate China's National Day made it
clear that the top provincial leadership endorsed
by Peking at the ninth party congress in April
1969 remains largely intact but that the end of
the regime's difficult consolidation process is not
yet in sight. Interprovincial shifts of secondary
military and civilian administrators are apparently
still continuing and some political settlements
that have been hanging fire for more than a year
have yet to be worked out. The top leaders in five
long-troubled provinces have been quietly re-
moved, and the situation within the Peking city
government itself is uncertain now that former
municipal boss Hsieh Fu-chih has dropped into
political limbo. The continued dominance of
most provincial governments by military men and
reinstated veteran civilian officials was strikingly
reaffirmed, but their ability to work together
remains open to question in a number of localities
and the regime's efforts to get on with party and
government reconstruction continues to be ham-
pered by persistent local political combat.
One regime spokesman recently admitted
that the inability of some provincial leaders "to
put their houses in order" is a primary reason for
Peking's delay in convening the long-awaited Na-
tional People's Congress. Although the spokesman
failed to identify the provinces, Hunan, Kwei-
chow, Inner Mongolia, Shantung, and Shansi have
all been politically unstable since the ninth con-
gress, and Peking has apparently been temporizing
in appointing new provincial revolutionary com-
In Shansi and Shantung provinces, two mili-
tary officials who have been active in local affairs
in recent months headed up the National Day
rallies, suggesting that Peking may be moving to
confirm them as replacements for two civilian
administrators whose political problems had been
the subject of intense debate at the highest levels
long after the close of the ninth congress. The
confirmation of army men in the top spots in
Shansi and Shantung would bring to 20 the num-
ber of provinces headed by military officials.
Least progress toward a political settlement ap-
pears to have been achieved in Inner Mongolia
and Kweichow, with the affairs of both areas
apparently being handled on an ad hoc basis by
military trouble shooters recently transferred in
from other areas.
tier.
It seems likely that there have been more
transfers of military and civilian officials between
provinces than have been publicly disclosed, and
this process of political checkers is probably con-
tinuing as Peking moves to deal with officials
whose factional quarrels have been undermining
the effectiveness of the various provincial govern-
ments. Shifts have also been made to fill long-
standing vacancies, and this seems to be the case
in the most important interregional transfer re-
vealed by the National Day turnouts-the ap-
pointment of P'i Ting-chun, former deputy head
of the Fukien provincial government and deputy
commander of the Foochow Military Region, to
military and civilian positions within the Lan-
chow Military Region. A subsequent radio-
broadcast suggested that P'i may be the new Lan-
chow Military Region commander-a major com-
mand post on the sensitive Sino-Soviet fron-
SECRET
Page 15 WEEKLY SUMMARY
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
%w ~)EUKJ1 1 NEW
ROMANIA: In conjunction with his attendance
at the UN commemorative session, President
Ceausescu is currently making an unofficial
coast-to-coast tour of the US, meeting with bank-
ers and businessmen and touring industrial plants
and a nuclear power plant. He is interested in
gaining an insight into how US capitalism works
and into American industry's use of scientific and
technological expertise. He also hopes that his
exposure here will facilitate Romania's acquisi-
tion of US credit and technology. When Ceau-
Page 16
EUROPE
sescu addresses the UN General Assembly on 19
October, he will probably make a strong plea for
general acceptance of the principles of national
independence and the participation of small states
in major world decisions. At his meeting with
President Nixon on 26 October, Ceausescu will
undoubtedly stress the importance to Romania of
its good political relations with the US and press
for closer economic ties. He may also urge better
relations between Washington and Peking. 25X1
SECRET
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
,nuts x i %NW
NATO Probes Uncertain Future
The Allied study of NATO defense in the
1970s-called AD-70-apparently will come out
strongly for the maintenance of present Alliance
force levels and strategies. The AD-70 report, now
in draft form, also stresses that the European
allies must carry a greater share of the NATO
burden in the years ahead. It remains unclear,
however, whether the Europeans will succeed in
their current efforts to embody this principle in a
multilateral burden-sharing offer to the US.
The AD-70 study was proposed by Secretary
General Brosio, acting on a suggestion made in
President Nixon's foreign-policy report to Con-
gress, as a thorough review of the military and
strategic problems that NATO will face in the
next ten years. The emerging draft report con-
cludes that NATO's approach to security in the
1970s should continue to be based on the dual
concepts of detente and defense.
The report comments that the next decade
could develop into an era of "successful negotia-
tions," possibly including agreements on Berlin,
strategic arms limitations, other arms control
measures, and one or more conferences on "Euro-
pean security and cooperation." Despite this
optimism, the study observes that the Soviet
Union still seems bent on extending and strength-
ening its political power and, therefore, whether
East-West relations can be improved will depend
on Moscow.
Because of the continuing nature of the
Soviet threat as seen by the Alliance, the report
goes on to reaffirm the Allied commitment to a
deterent defense based on both nuclear and con-
ventional capabilities as well as the strategy of
flexible response and forward defense. The study
maintains that there is no substitute for the
presence of American troops in Europe to
preserve a credible deterrent, but exhorts the
Europeans to allocate to defense purposes a
"stable and possibly larger proportion" of their
national wealth.
The defense ministers of the European
NATO members-excluding France, Iceland, and
Portugal-meeting as the "Eurogroup" on 1
October pledged in principle to contribute more
to the common defense. They hope to make the
US a specific offer before December, encom-
passing both a monetary contribution-the ap-
proach that West Germany had urged-and ways
of improving their own defense efforts. But the
prospects are not bright. The Europeans in gen-
eral are reluctant to increase their national de-
fense efforts given present public and par-
liamentary sentiment, and are in any case uncer-
tain as to whether any plan they could produce
would actually ward off significant US troop re-
Italy: Social Reforms Inch Ahead
Prime Minister Emilio Colombo, one of It-
aly's chief economic experts, is making some
progress toward the enactment of social reforms,
and at the same time is exerting pressure for
equilibrium in the economy. The government's
most pressing task now is to meet a deadline of
26 October in winning approval of the Chamber
of Deputies for a key fiscal and economic
package.
The government and organized labor reached
agreement early this month on the broad outlines
SECRET
Page 17 WEEKLY SUMMARY
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
vow ar,vtcr, t i"w
of health and housing reforms. The labor federa-
tions had also demanded reforms in transporta-
tion, schools, and old-age care during a series of
expensive strikes last spring, but union leaders
seem satisfied for the time being with the present
rate of progress.
The long-pending bill permitting divorce in
Italy also moved this month markedly closer to
the status of law and may receive final parliamen-
tary approval next month. The issue in the past
has disrupted Christian Democratic Socialist co-
operation and threatened government stability,
but tension now seems considerably reduced.
Parliament is also reconsidering the govern-
ment's designation of Catanzaro as the regional
capital of Calabria. These second thoughts are in
direct response to the continuing violent protest
in the city of Reggio Calabria, which seeks the
economic benefits of capital status.
The crowded parliamentary calendar has de-
layed debate on the fiscal and economic decrees
that the Colombo government elaborated during
its first weeks in office last August. The decrees
took effect immediately but must have parliamen-
tary approval by 26 October to remain in force.
The Senate made a variety of minor amendments
but retained the thrust of the original measures-
including the substantial gasoline-tax increase-in
the version it approved on 11 October. The
Chamber of Deputies, which must also face the
recommitted divorce bill, has thus been allotted
only 15 days to approve the package, which is
pivotal to Colombo's program of accomplishing
social reform without seriously increasing govern-
Europe Calm About Oil Situation
As oil producers fell into line and concluded
new tax and price agreements with Libya re-
cently, one major threat to West European oil
supplies abated.
Production cuts in short-haul Libyan oil im-
posed by the government during negotiations
have been largely restored. European consumers,
however, head into winter with a tight supply of
tankers, which stems from the continued closure
of the Suez Canal. This situation was com-
pounded this year by the shutdown in May of
Tapline, which delivers significant quantities of
Saudi Arabian oil, and by the unanticipated
growth in Western Europe's demand for oil.
Nevertheless, West European countries seem
chiefly concerned with the resultant price in-
creases: short-term 'tanker charter rates, for ex-
ample, have doubled since May.
At last week's Organization for Economic
Cooperation and Development meeting on the oil
supply situation, participating delegates expressed
the view that there would be little ground for
concern unless further production cutbacks in the
Mediterranean area occur or the winter proves
abnormally harsh. If present conditions prevail,
Western Europe expects to meet normal winter
oil demands through moderate drawdowns of
existing oil stocks, which at present probably
amount to two to three months' needs.
France faces particular problems. It soon
will resume contentious negotiations with Algeria,
from which it procures 30 percent of its oil. The
fact that it provides a market for 60 percent of
Algerian oil exports may, however, prevent any
stoppage of exports as a negotiating technique.
Oil supply problems will persist until the
current tanker situation is alleviated. Scheduled
completion next year of tankers under construc-
tion is expected to ease the tight supply con-
siderably.
SECRET
Page 18 WEEKLY SUMMARY 16 Oct 70
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
SECRET
Yugoslavia - Communist China: Economic Relations Expand
Since resuming diplomatic relations at the
ambassadorial level earlier this year, economic
and governmental relations between Peking and
Belgrade have expanded considerably.
For the first time in ten years, an official
Chinese delegation attended the fall trade fair in
Zagreb. The group stayed in Yugoslavia two
weeks touring industrial establishments and meet-
ing with top government officials. During the
visit, substantive talks touched on a possible Chi-
nese purchase of freighters and tankers ranging in
size from 15,000 to 70,000 tons. The Yugoslavs
are already building six 12,000-hp. marine engines
worth more than $1 million for the Chinese ship-
ping industry for delivery next year. A Sino-
Yugoslav shipping service was inaugurated earlier
this year, and Belgrade is encouraging its East
European neighbors to use Yugoslav ports for
trade with Communist China.
Spade work for the current upswing in
Yugoslav-Chinese economic relations was done in
March 1969 when an official Yugoslav trade dele-
gation visited Peking and, for the first time in
over a decade, signed a trade-and-payments agree-
ment with the Communist Chinese. Although po-
tentially beneficial to both countries, trade
expansion faces problems. Because trade between
the two, totaling $1.6 million last year, is settled
in convertible currency, both will probably seek
balanced exchanges so as to minimize drains on
their limited hard-currency holdings. China will
be particularly cautious in making new purchases
because its charter of about ten Yugoslav flag
ships already represents an existing drain on its
hard-currency holdings. Nevertheless, there is
likely to be a measured increase in trade ap-
proaching and perhaps exceeding the postwar
high in 1957 of about $11 million for total trade.
In addition to economic advantages, the up-
turn in economic relations provides political divi-
dends for both Peking and Belgrade, although
ideologically the two remain miles apart and
party relations between them are nonexistent.
Both, however, have a common cause in resisting
Soviet hegemony. Yugoslavia's new ambassador
to China, General Orescanin, was well received in
Peking last May and within a matter of weeks met
with top Chinese officials, including Premier
Chou En-lai. Belgrade responded in kind, and
Tseng Tao, the new Chinese envoy to Yugoslavia,
was received by President Tito and Premier Ribi-
cic a few weeks after his mid-August arrival in
Yugoslavia.
Relations probably will continue to improve.
The Yugoslavs recently established a special sec-
tion in the Federal Economic Chamber to moni-
tor trade with China. Moreover, Ambassador
Tseng Tao's recent meeting with the Yugoslav
federal cultural relations chief, Dr. Dusan Veji-
novic, could indicate that a cultural agreement is
in the offing.
Soviet Economy: A Moscow Economist's Glum View
In a public lecture in Moscow on 25 Septem-
ber a State Planning Committee economist gave
an unusually frank exposition of the profound
problems facing the Soviet economy. He made
few promises about the future to his listeners,
whose hostile questions reflected keen popular
dissatisfaction and anxiety over the country's
economic performance.
SECRET
Page 19 WEEKLY SUMMARY 16 Oct 70
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
iftol SECRET IWO
The lecturer was especially explicit in dis-
cussing the "social" problems besetting the coun-
try. The housing shortage remains acute, he
admitted, and has even grown worse in some areas
since the current five-year plan began in 1966. He
pointed to "serious lags" in public services and
acknowledged that there are "low income" fam-
ilies in the Soviet Union. At the same time he
hinted at inflationary pressures by complaining
that monetary income had grown faster than en-
visaged by the plan. He cited production losses as
evidence that the country had not been prepared
for the transfer to the five-day work week, a
program announced by party chief Brezhnev at
the 23rd party congress in 1966.
Enormous resources must be applied to solve
these problems, the speaker said, but he also
suggested that there are several obstacles to carry-
ing this out. Agricultural difficulties are "problem
number one," and the need to develop natural
resources in the east and to expand the trans-
portation network will raise costs in these sectors.
With rare candor he told his audience that the
USSR must bear a heavier defense burden than
the US because it must match US defense spend-
ing despite a smaller economy.
The lecturer recited standard formulas for
economic progress. These included faster tech-
nological development, better production or-
ganization and discipline, and more efficient use
of capital investment and output. He refused,
however, to comment on what measures will be
taken under the new five-year plan (1971-75) and
promised only that its much delayed directives
would be published in two or three months.
The economist said he found many of the
queries by the audience too "unpleasant" to
answer. One questioned his suitability as a
lecturer inasmuch as his organization was the one
most responsible for the economic slowdown.
Another asked why the economic reform had
failed to justify itself. While denying that this was
the case, the speaker said that a joint committee
had submitted a report to the party central
committee outlining the reform's defects and
suggesting corrections. He also answered many
questions reflecting anxiety over price increases
with assurances that the prices of "mass"
consumer goods would not be raised. 25X1
USSR-Iran: New Economic Pact
With the signing of a 15-year trade and eco-
nomic cooperation protocol last week, the Soviets
underscored their intent to assist Iran's economic
development in a manner promising the greatest
potential benefit to the USSR. In particular, Mos-
cow focused on the expansion of the Iranian
natural gas industry and in principle agreed to
double its imports of this fuel. An Iranian official
has commented, however, that projects under the
protocol will be undertaken only if Tehran con-
siders them economically feasible.
Under the agreement, Soviet technicians will
study two Iranian proposals to cover the cost of a
second gas pipeline to the USSR. Under one pro-
posal, the USSR would install the pipeline and
amortize its cost by importing agreed amounts of
Iranian gas. Under a second plan, Iran would bear
the cost of the pipeline with the stipulation that
the USSR would buy the gas at the prevailing
West European market price.
The first Soviet-Iranian pipeline went into
operation last week. This system, extending from
southern Iran to the USSR, is capable of deliv-
ering six billion cubic meters of gas annually.
With the scheduled addition of more compressor
stations, annual deliveries are expected to increase
SECRET
Page 20 WEEKLY SUMMARY 16 Oct 70
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
rr/ ar,ut? 1
to 10 billion cubic meters in 1974. Iran is com-
mitted under existing pacts to deliver about 140
billion cubic meters of gas valued at about $1
billion over the next 15 years.
The two countries also agreed to explore
jointly for gas in the northeast frontier region.
Soviet technicians are expected to go to Iran
shortly to study construction of plants to pro-
duce petrochemicals of interest to the USSR.
Soviet interest in Iranian oil was limited to pro-
posed exploration in the Caspian Sea and central
province areas.
In the nonfuel area, the Soviets are planning
to expand the 1.2-million - ton capacity of the
Isfahan steel mill that they are now constructing
to four million tons per year, if this proves eco-
nomically sound. The Soviets will submit a report
on the plant's expansion to Iranian officials
within three months, and Tehran will make the
final decision.
Measures to expand trade between the two
countries over the next 15 years were also dis-
cussed. The USSR agreed to increase its purchases
of some industrial products and to collaborate
with Tehran on the import of agricultural goods
during this period.
Moscow has also extended two credits to
Iran. The first-valued at $10 million-will be
used to establish eight vocational training centers,
and the second-amounting to $44 million-will
be used to develop Iranian industries. It is unclear
whether the two credits are indeed new, long-
term extensions of aid. Iran has drawn less than
$100 million under two lines of credit totaling
more than $483 million extended by the USSR
during 1966-68.
WESTERN HEMISPHERE
Chilean Leftists Having Problems
Salvador Allende is rapidly consolidating his
power, but there is increasing evidence of dis-
sension among his backers. Some extremist lead-
ers within his own Socialist Party distrust Al-
lende, and they reportedly are vetoing cabinet
choices and political decisions. They are sus-
picious of the influence of the orthodox Commu-
nist and "bourgeois" Radical parties, the two
largest members of Allende's six-party Popular
Unity (UP) coalition. Rivalry with the Commu-
nists is deep, although the two Marxist parties
have been political collaborators for years. In
particular, many Socialists fear that the demon-
strated organizational abilities of the Communist
Party will be used to dominate Allende's govern-
ment. They are frantically trying to improve the
slipshod Socialist organization.
The Communists are using their many assets
to ensure a strong but unobtrusive role and to
organize agitation in Chile and other Latin Ameri-
can countries against any attempt to deny Al-
lende the presidency. They opposed, however, the
actions last week by the extremist Movement of
the Revolutionary Left (MIR) that provoked mili-
tary and police reaction. The Communist daily
attacked MIR slum leader Victor Toro as a "paid
ally of the conspiratorial right," and the UP di-
rectorate publicly condemned the action and dis-
avowed any connection with the MIR. Allende
did not comment, probably because of pressure
from his radical Socialist colleagues who support
the MIR. Even though the revolutionaries reluc-
tantly agreed to lie low during the electoral
period in order not to damage Allende's chances,
the Communists were planning ways to destroy
the MIR. MIR leaders call their UP critics "Stalin-
ists" and compromisers and vow to maintain the
MIR's "political-military structure until capital-
ism has been eliminated in Chile."
SECRET
Page 21 WEEKLY SUMMARY
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
iJLVitt' I
INVO,
Another problem for Allende is the con-
tinuing strike at two large copper mines in which
the Chilean Government has a majority interest.
He has warned the well-paid copper workers that
their refusal of a proffered wage increase is costly
to the country and prejudicial to his future ad-
ministration. The strike is costing Chile about
$1.2 million in lost production and about $0.5
million daily in government revenues.
The economic situation continues to deterio-
rate and the inflation rate is rising. Industrial
firms report widespread declines in orders, sales,
and production. Many firms paid neither their
suppliers nor taxes in September but did pay their
wages. Although few firms have laid off workers
because of Chile's strict labor legislation, bank-
Bolivia: Torres'First Moves
President Torres' first week in power pro-
duced cabinet appointments and policy state-
ments that appear to be responsive to military
pressure, falling far short of demands of his radi-
cal supporters in labor and student groups.
Torres' appointment of a moderate leftist
cabinet and his failure to espouse radical policies
publicly appear to reflect military pressure and
his realization that vocal support from urban-
based groups could not overcome determined
military opposition to his government. The first
overt indication of military fears was the state-
ment on 7 October by the commander of a major
La Paz unit, concurred in by other La Paz army
elements, that his unit was armed and ready to
"defend institutional unity, threatened today by
irresponsible extremism." Although this state-
ruptcies could cause industrial unemployment to
increase dramatically by the end of October.
ment was later "clarified" and stripped of its
anti-Torres threat, the President presumably
realized that the major units in La Paz were
willing to act to ensure the type of government
they wanted. The same point may have been
made in a meeting on 10 October between Torres
and leading military commanders, including some
who had o osed his on inal assumption of
power.
Although Torres appears to have muted im-
mediate military opposition to his leadership, his
actions have produced dismay among his civilian
supporters. Leftist parties and the national stu-
dent confederation already have condemned the
SECRET
Page 22 WEEKLY SUMMARY
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
; , b l__JKL1
naming of "gorilla imperialists" to the new cab-
inet, which includes seven military officers and
four holdovers from Ovando's cabinet. Additional
opposition from the left is almost inevitable in
reaction to Torres' statements to the press. He has
refused to revoke the announced compensation to
the Gulf Oil Company for its nationalized
Bolivian holdings and did not announce plans for
the immediate nationalization of foreign-owned
industrial and commercial installations. Torres
said, however, that he favored commercial and
diplomatic relations with all countries and would
consider the re-establishment of relations with
Cuba. He also affirmed the state's right to control
basic industry, specifically mineral resources, and
called for the "progressive nationalization" of for-
eign capital.
Torres' refusal to bring prominent extremists
into the government or to espouse decidedly left-
ist policies appears to be the surest way to retain
the support of leading military commanders. He
also must maintain the unity of the armed forces
as the strongest element for stability within the
country. One way to achieve this would be by
minimizing moves against officers who originally
opposed his claim to the presidency.
Because of his early and enthusiastic ac-
ceptance of leftist support in his bid for the
presidency, Torres probably will be forced at least
to consider some of the demands made by these
groups. On 13 October, the government acted on
two of the lesser demands by repealing a law
permitting the deportation of five leftist clergy-
men and another that prohibited hunger strikes, a
tactic commonly used by the opposition.
As was the case with Ovando, Torres' tenure
will depend on his ability to handle leftist
demands without alienating his crucial military
backing. Depending on the latitude granted him
by the military and on his own political skill,
Torres' early policy statements leave him room to
accommodate himself to important changes.
Among the options open to him are nationaliza-
tion of the US-owned Matilde tin mine or other
industries, probably with some form of com-
pensation; the extension of wage increases to
miners and other groups; a degree of worker par-
ticipation in some industries; and the estab-
lishment of some form of relations with
Cuba.
Brazil: Church-State Problems
Arrests and alleged police mistreatment of
persons connected with the Roman Catholic
Church are causing tension between the govern-
ment and the religious hierarchy in the world's
largest Catholic country.
The recent allegations are a revival of a long-
standing issue. Moderate church leaders, such as
the primate of Brazil, Cardinal Sales, have at-
tempted to persuade government and security of-
ficials of the moral wrongness of torture, while at
the same time keeping their campaign in low key
to avoid antagonizing the military and police.
They fear that by open criticism they would lose
any chance of acting as a moderating influence.
This policy of restraint was evident at the
11th annual assembly of the Conference of Brazil-
ian Bishops (CNBB) last May. Liberal prelates
wanted a declaration condemning the government
for torturing prisoners, but the government used
pressure to prevent any mention of torture. A
compromise statement was issued condemning
violence in any form. Another result of the CNBB
meeting was a tacit understanding that the church
would refrain from public criticism of the govern-
ment on the torture issue in return for an admin-
istration agreement not to arrest clerics until it
had consulted with the CNBB. There was a nota-
ble decline in the number of allegations of torture
following the conference, probably in part a
SECRET
Page 23 WEEKLY SUMMARY
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
bt(JKt 1 VW
result of the understanding reached as well as of
the decline in the level of terrorism and conse-
quently of arrests of fewer suspects. Late in Au-
gust, however, 15 bishops in the northeast
claimed that security officials had tortured two
priests accused of subversion.
Despite avowals from President
Medici that a is eliminating from the security
services persons who have records of mistreating
prisoners, and official denials that the priests had
been tortured, the CNBB has called upon the
President to investigate the charges thoroughly. It
has set up its own committee to examine the case.
In late September, police arrested four
priests and several youths connected with the
Young Catholic Workers' movement (JOC) and
with a church-sponsored leadership training in-
stitute (IBRADES). Both organizations have a
somewhat leftist orientation. Cardinal Barros
Camara of Rio de Janeiro protested the arrests to
the President and other government officials. Ad-
ditional friction was caused by new arrests of
IBRADES employees on 7 October, bringing to
11 the number of church-associated persons being
held by Rio de Janeiro police, according to the
CNBB. When CNBB secretary general Bishop
Lorscheider went to the IBRADES headquarters
to look into the arrests, he was detained by police
for more than four hours.
An emergency meeting of the directorate of
the CNBB reportedly has been called to examine
the arrests and charges that the government is
engaging in a campaign to discredit controversial
Archbishop Helder Camara. Dom Helder recently
accused the government of carrying on a mud-
slinging campaign to try to ruin his chances of
winning the Nobel Peace Prize. Several high pre-
lates who often have attempted to curb Dom
Helder's outspokenness now have come to his
defense on the grounds that the attack on him is
an attack on the church.
These incidents appear to have brought rela-
tions between the church and state to their lowest
point in recent years. Cardinal Sales has stated
that the policy of trying privately to influence the
government would be maintained only as long as
it showed some promise of producing results. If
such hope fades, the church is prepared to take a
public and more militant stand, even at the risk of
further antagonizing the government.
Cuba: "Motivating" the People
Implementation of the rehabilitative meas-
ures introduced by Fidel Castro following this
year's disappointing sugar harvest is in full swing.
The militarization of all senior high schools,
formally announced on 29 September, is perhaps
the most far-reaching of the measures. Students
will receive military instruction in addition to
their regular academic study. They will be under
"strict military discipline" and will be credited
with having served time toward completing their
military service obligation. All technological in-
stitutes already have been incorporated into this
system. In addition, junior high school students
will be exempted from the draft as long as they
remain in school. The regime plans eventually to
make education up to the university level manda-
tory for both males and females. This program
would in effect establish universal compulsory
military service.
Meetings to combat absenteeism and pro-
mote worker efficiency are being held at all work
centers to explain a complex system of merits and
demerits that will be applied against each
laborer's work record. Later, additional meetings
will be held so that the "working masses" can
SECRET
Page 24 WEEKLY SUMMARY 16 Oct 70
25X1
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
%me. SEUKJ"1'
"consider and discuss" a proposed law on va-
grancy. Still more meetings will take place in
November for union elections. The positive re-
sults to be gained from these repetitious discus-
sion periods are questionable; it is more likely
that the assemblies will only serve to irritate
further a population fed up with what is already
considered excessive regimentation.
Castro's latest ministerial shift elevated a
relative unknown, Nora Frometa Silva, to the
post of minister of light industry. The appoint-
ment is a departure from Castro's practice of
naming trusted military officers or competent
technicians to high-level administrative positions.
Frometa has occupied key leadership posts in the
Cuba Women's Federation since 1965, but her
background shows little evidence that she is
technically qualified for her new position. Her
appointment may indicate that Castro is sensitive
Senior High School Students Prepare 240-mm. Rocket
Launcher for Firing
to the charge that no women occupy top-level
posts in his administration.
CUBA-WARSAW PACT: A high-level Cuban
military delegation headed by Armed Forces Min-
ister Raul Castro arrived in East Germany on 12
October to observe the Warsaw Pact "Comrades
in Arms" exercise. According to a TASS an-
nouncement, Castro met with Soviet Defense
Minister Andrei Grechko during a stopover in
Page 25
Moscow on 11 October. Also attending the meet-
ing were representatives from Mongolia and North
Vietnam. Raul Castro also headed the last Cuban
delegation to observe Warsaw Pact maneuvers in
late 1965. At that time he held lengthy conversa-
tions with top Soviet officials and paid a visit to
Czechoslovakia and Bulgaria.
SECRET
Approved For Release 2008/05/01: CIA-RDP79-00927A008300010001-1
 25X1 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
Secret
Secret
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
 25X1 Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1
Next 32 Page(s) In Document Denied
Approved For Release 2008/05/01: CIA-RDP79-00927AO0830001 0001 -1