WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A008600010001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 42
• Document Creation Date: December 21, 2016
• Document Release Date: November 17, 2008
• Sequence Number: 1
• Publication Date: February 19, 1971
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
State Dept. review
completed
DIA review(s)
completed.
Secret
19 February 1971
No. 0358/71
Copy N2 45
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CONTENTS
(Information as of noon EST, 18 February 1971)
Page
FAR EAST
Indochina: The Many Fronts of War . . . . . . . . . . . . . . . 2
Long Tieng, the Key to Success in North Laos . . . . . . . . . . 2
The Cambodians Carry On . . . . . . . . . . . . . . . . . . . 3
Peking Promises Continued Support . . . . . . . . . . . . . . . 4
Politicking in South Vietnam . . . . . . . . . . . . . . . . . 5
USSR: Plan Directives Are Announced . . . . . . . . . . . . . . 6
Poland Tries to Appease Its Consumers with Price Cuts . . . . . . . . 7
Romanian Party Woos the Workers . . . . . . . . . . . . . . . . 8
European Communities: Economic and Monetary Union . . . . . . 10
Geneva Arms Control Talks Resume . . . . . . . . . . . . . . . 11
Soviets Hint Disenchantment with Brandt Government . . . . . . . 12
MIDDLE EAST-AFRICA
Middle East: Negotiations . . . . . . . . . . . . . . . . . . . 13
Palestinians to Hold National Meeting . . . . . . . . . . . . . . 13
.Jordan: Clashes Erupt Anew . . . . . . . . . . . . . . . . . . 14
Hostilities Hurt Egypt's Economy More Than Israel's . 15
Pakistan's Military Assistance to Arabs Leveling Off . . . . . . . . 17
India-Pakistan: Relations Sour . . . . . . . . . . . . . . . . . 18
INDIA: The World's Largest Democracy toGn to the Polls In March
Recent Developments in Chile . . . . . . . . . . . . . . . . . 20
Guyana's Prime Minister to Nationalize Bauxite Industry . . . . . . 21
NOTES: USSR; Yugoslavia-Egypt; Italy; Finland; Guatemala; Uruguay;
Panama; Argentina
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Kufipang Speu. --
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5iEUKE'l'
FAR EAST
Indochina : The Many Fronts of War
South Vietnamese forces pushing into south
Laos to cut the Ho Chi Minh Trail are encounter-
ing increasing enemy resistance. Moreover, there
are many signs that the Communists are preparing
for much heavier fighting in the coming weeks.
Ground fighting in the Laos operation so far
has been relatively light, probably reflecting cau-
tion on the part of both the North and South
Vietnamese. The Communists have rarely been
willing in recent years to pay the high price of
head-on opposition to allied units supported by
massive air and artillery firepower; so far their
reaction to this operation has been no exception.
They have harassed advancing South Vietnamese
units and thrown up barrages of antiaircraft fire
against allied aircraft, but enemy infantry units
generally have fallen back deeper into Laos, or
simply avoided combat. This has enabled the
South Vietnamese to cut one important link in
the Ho Chi Minh Trail complex, and they are
approaching the main north-south artery that
passes near Tchepone.
Hanoi probably has little hope of avoiding
substantial disruption of its seasonal effort to
move supplies, but it no doubt wants to prevent
the South Vietnamese from achieving the kind of
success that would strengthen Saigon's confidence
in its ability to contain the Communists as US
forces withdraw. Indeed, Hanoi may think there
is a chance of inflicting the kind of setback on
South Vietnamese forces that has evaded the
Communists in South Vietnam for so long. There-
fore, Hanoi is not likely to let the operation run
on for much longer without a major fight.
At the same time, Communist commanders
in South Vietnam are reacting predictably to the
ARVN drive into Laos by calling for stepped-up
attacks. This could lead to a few showy actions,
possibly with sapper activities in some of the
larger cities, but there is no persuasive evidence of
enemy plans for a major counteroffensive.
Long Tieng, the Key to Success in North Laos
The Communists have put heavy military
pressure on government forces around the Long
Tieng complex, and more attacks seem to be in
prospect. General Vang Pao appears to have the
situation at Long Tieng under control for now,
following a costly early-morning attack by the
enemy on 14 February. An estimated two North
Vietnamese companies overran an artillery site on
the southwest edge of the Long Tieng valley.
From that position, the Communists shelled US
installations and the base residential area, destroy-
ing the main supply warehouse, the diesel fuel
depot, and some housing. The electrical power
station, the air operations building, and Vang
Pao's home-which took a direct hit-were
damaged, but can be repaired. The airstrip and
the main gasoline and ammunition depots escaped
damage.
The extent of government casualties is un-
certain, but at least 11 irregulars were killed and a
number of civilians injured. Some of the injuries
occurred when a supporting US air strike dropped
bombs short of its target, hitting an irregular
position. Communist losses are also uncertain, but
government patrols report that at least 21 of the
enemy have been killed.
Some 1,400 reinforcements have been posi-
tioned around Long Tieng, particularly along the
high ground from which the enemy mortar attack
came. On 16 February irregulars established some
new outposts northeast of Long Tieng and re-
occupied the mobile group headquarters position
about ten miles northeast of the town that had
been lost on 7 February. So far, the morale of the
irregulars does not seem to have suffered appreci-
ably as a result of the Communist attacks.
Most of the civilian population of the Long
Tieng valley has been evacuated, with the people
moving to smaller villages south and west of Long
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nmunist-held loc
a ~ if. to
emergency has had little visible effect, but it is
expected to facilitate conscription and add a note
of austerity to the Lao scene.
The Cambodians Carry On
Government leaders in Phnom Penh, the
armed forces, and the Cambodian people seem to
have accepted stoically Lon Nol's illness and his
temporary treatment abroad. The transfer of his
responsibilities to Acting Prime Minister Sirik
Matak was accomplished in a calm and orderly
manner, indicating a general willingness to respect
Lon Nol's appeal for stability and unity during his
recuperation. In this same context, Matak and
other key officials apparently can be expected to
honor Lon Nol's request that no cabinet changes
be made for the time being.
The Cambodian leader's absence fortunately
has coincided with a lull in significant enemy
military actions throughout much of the country,
as the Communists have been limiting their activi-
ties to minor harassing attacks against scattered
government positions and against main lines of
communication. At the same time, the South
Vietnamese Army (ARVN) dry-season offensive
in eastern Cambodia obviously has helped to ease
military pressure on the government, to disrupt
the movement of Communist troops and supplies
through the country, and to improve the morale
and confidence of Cambodian Army officers and
men alike.
ARVN armor and ranger troops in the Chup
rubber plantation area in Kompong Cham Prov-
ince have continued to meet determined enemy
opposition to their clearing operations north and
east of the plantation.
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Tieng. There were no signs of panic among the
departing civilians, however.
To the north of Long Tieng, the irregulars'
position at Ban Na, which contains several key
artillery emplacements, has received continuing
heavy enemy fire. The site is surrounded by well-
entrenched enemy troops.
On the political front, the cabinet on 12
February endorsed the Security Council's recom-
mendation that Prime Minister Souvanna declare
a state of emergency and authorize the army to
take measures, including a curfew, to tighten
security on a nationwide basis.
? Government-held..ln. atiOn
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The sharpest action to date in the ARVN
campaign reportedly occurred at the beginning of
the week near Snuol, in southern Kratie Province.
An ARVN infantry unit claimed to have repelled
successfully a heavy enemy mortar and ground
assault there and, with the aid of air strikes and
artillery support, to have killed 203 Communists
at the cost of ten of their own killed and 50
wounded. Little contact with the enemy was re-
ported from other ARVN operational areas.
A Major Economic Concern
Recent reports from Phnom Penh have
pointed up the government's continuing problem
of having an abundance of rice to sell but no way
of getting it to market. In rice-rich Battambang
Province, for example, warehouses are reportedly
brimming with last year's stocks, while a large
new crop is being gathered.
Since the fighting started, the difficulties in
moving surplus rice to the ports at Phnom Penh
and Kompong Som have grown progressively
worse. Transport costs from Battambang to
Phnom Penh have skyrocketed because of Com-
munist interdiction of the rail line, truck short-
ages, and growing insecurity along Route 5. When
rice does reach the capptal, the export problem
still remains. Insecurity along the Mekong has
caused sharp reductions in calls by large foreign
ships. Moreover, despite an agreement with Bang-
kok late last year, no rice for export has moved
overland to Thailand.
The government does not wish to forfeit
badly needed foreign exchange this year and
wants especially to avoid defaulting on its export
commitments abroad. Unless the security of
transportation can be substantially improved,
however, the impact on Cambodia's 1971 exports
will be even more disastrous than last year.
Peking Promises Continued Support
Peking has escalated its rhetoric regarding
allied cross-border operations in Laos, but there is
no suggestion of change in its effort to avoid
direct military involvement in the war while the
current ground rules remain in effect. -_____~ 25X1
however, that any move into northern Laos might
be considered a direct threat to China, and this or
a "further deterioration of the situation" could
enhance the possibility that Chinese troops might
be brought into the conflict.
Peking has throughout the conflict shown a
continuing concern for the protection of its own
border,
the 17th parallel in Laos as a demarcation line.
~Chup
Kompong
Cham
7
CAM RaDIA
M battle
Snuul
o Miles a
550997 2-71 CIA
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OUTH VIETNA
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or.Unr, 1
but this may be a means of conveying Chinese
sensitivity regarding areas near its border, rather
than representing a trip wire that would auto-
matically trigger Chinese intervention if the line
were crossed. Peking in any case -probably does
not expect the allied incursion to push above the
parallel.
The Chinese continue to be prepared to pro-
vide needed material support for the Indochina
war effort. An agreement on 12 February con-
cluded with a North Vietnamese delegation in
Peking provides for economic and military aid
beyond that called for in an annual aid pact
signed last fall. The same day, the Chinese issued
a new government statement pledging to take "all
effective measures" to aid their Indochinese allies
and made the usual reference to rear-base support
for North Vietnam.
The 12 February -statement referred to the
Laos operation in terms of a "menace to China,"
and warned that the Chinese "will not remain
indifferent to it." This statement was followed up
with a People's Daily editorial on 14 February.
Referring to a US explanation that the action in
southern Laos does not pose a threat to China,
the editorial claims that, on the contrary, the
"new war venture... definitely poses a grave threat
to China." The suggestion that the allied opera-
tions threaten China itself is a clear escalation of
Chinese rhetoric regarding the war. This formula-
tion was carefully avoided by Peking during the
Cambodian incursions last spring and has been
absent from Chinese propaganda for several years.
Mammoth rallies in support of these and other
Chinese pronouncements on the situation in Indo-
china, which are similar to those held after the
Cambodian incursions, have been conducted in
several major cities in China.
Peking's most recent statements and other
authoritative comment on Indochina since the
beginning of the month have attempted to drama-
tize its concern for China's southern border as
well as its eagerness to throw its support behind
Hanoi. Peking's pronouncements do not commit
it to any particular course of action, however.
Indeed, its comments have emphasized the point
that the Chinese expect the "people of the three
Indochinese countries" to continue to bear the
brunt of the actual fighting.
Politicking in South Vietnam
It appears that the powerful An Quang Bud-
dhist organization will throw its support behind
Big Minh, chief opposition contender for the
presidency in this year's election. 25X1
t o vast majority o n uang mon sin a cities
and provinces are strongly opposed to another
term for President Thieu and are eager to support
Big Minh. They regard Thieu as a political enemy
of the An Quang and believe that Minh would be
more widely popular.
As a Buddhist and as a southerner, Minh has
built-in appeal that should draw many votes in
South Vietnam, even though he lacks any kind of
political machine. A well-organized Buddhist
effort to get out the vote for Minh could go a
long way toward offsetting the advantages that
Thieu enjoys through his control of the gov-
ernment apparatus.
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EUROPE
USSR: Plan Directives Are Announced
Moscow's manner of publicizing the draft
directives for the five-year plan to be presented at
the 24th party congress, which opens on 30
March, bespeaks the unsettled state of affairs
among the Soviet leadership at present.
The TASS announcement of the draft was
notably ambiguous on when and how the Soviet
Communist Party central committee approved the
directives, raising the possibility that a plenum
was not held. Given the difficulties the collective
leadership encountered in working out the draft
plan, it may have been unwilling to risk a free-
wheeling debate on the eve of the congress. At
the same time, failure to hold a plenum would
mark a departure from the procedure followed in
1958 and 1966, when long-term plans were ap-
proved by the central committee in plenary
sessions.
The last time a draft five-year plan was an-
nounced without the convocation of a plenum
was in January 1956-in the midst of the contro-
versy over the Stalin issue and Khrushchev's grow-
ing struggle against the "antiparty" group. That
draft was in effect rewritten less than a year later
as the political battle in the Kremlin heated up.
Brezhnev's. signature on the central com-
mittee resolution approving the recent directives
reinforces the impression that the endorsement
was voted by proxy-perhaps by a rump session
of the central committee or possibly only by the
full and candidate members of the Politburo. In
the post-Stalin period, such decrees have appeared
only over the imprimatur of the central com-
mittee itself.
Brezhnev's public association with the plan
is the more striking in the absence of any refer-
ence to Kosygin, who as premier should have
presented the draft directives to the central com-
mittee. Brezhnev's action clearly smacks of a
move on his part to represent himself as the
Soviet Union's foremost leader, but it also in-
volves risks for him. He is now publicly associated
with decisions on matters that have been very
divisive in the past, and criticism of the plan or
changes in it will tend to reflect on him per-
sonally.
Indeed, the guidelines depart from Brezh-
nev's own previous formulations in one important
respect: the call for the production of consumer
goods to grow more rapidly than that of producer
goods. Regardless of its real impact-or lack of
it-on the Soviet economy, this is a departure
from Brezhnev's statement in his June 1970 elec-
tion speech that the production of producer
goods would continue to grow faster during the
coming five-year period.
A preliminary analysis of the plan directives
indicates no significant shifts in resource alloca-
tions for 1971-75. The planned rates of growth
for the two major sectors-industry and agricul-
ture-are only moderately above those attained in
the 1966-70 plan period.
To achieve even a modest improvement in
over-all growth, however, the regime must depend
upon a marked improvement in the efficiency
with which labor and capital are used. The pro-
jected rate of growth of the labor force and of
investments in new plant and equipment are to
rise somewhat less rapidly than during the last
half of the 1960s. The investment goals for agri-
culture remain the same as those promulgated by
Brezhnev at the central committee plenum last
July; the jump from 77.6 to 82.2 billion rubles
can be attributed primarily to price adjustments
for new construction.
Within the industrial sector, the power in-
dustry, in particular atomic power, and the
machine-building, chemical, petrochemical and
gas industries are to be developed "at a stepped-
up rate." The 1975 goals for petroleum and
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natural gas are extremely ambitious and are
dependent upon the successful development of
new fields and the construction of pipelines in
Siberia. In this connection, another plan goal is
the further development of the country's eastern
regions.
The directives place unusual emphasis on
bettering the lot of the consumer, but the few
statistics given suggest a somewhat lower rate of
progress in consumer welfare as compared with
1966-70. In particular, average money incomes of
urban workers and peasants and outlays for
pensions, medical, and other communal services
are to increase by an annual rate that is about one
fourth lower than achieved during the past five
years.
The leadership's concern over speeding the-
pace of scientific and technical progress is evident
in the plan directives, although no grand strategy
is revealed to ensure attainment of this goal. The
directives promise action on several fronts, how-
ever, including an improvement in management
and planning, greater use of computers, and the
expansion of "commercial, scientific, and tech-
nical relations with the industrially advanced
capitalist countries." The economic reform was
mentioned only briefly to set 1975 as the new
date for the reform's completion in industry and
service enterprises.
Poland Tries to Appease Its Consumers with Price Cuts
The surprise rollback of food prices to the
levels prevailing before the December riots sug-
gests that Polish workers continue to exert great
pressure on the government.
This decision was a significant retreat by the
Gierek regime, but the government announced it
was the final concession that would be made to
the workers in hopes of ending recurrent labor
disturbances. Premier Jaroszewicz said that the
price changes, to be effective I March, were made
possible in part by a long-term credit of an un-
specified amount granted recently by the USSR.
He implied that price cuts are predicated on in-
creased domestic production as well as on imports
of food, and he emphasized the anticipated
growth in meat production expected in the last
half of 1971. The government said there could be
"absolutely" no more price cuts or wage increases
because there are no additional reserves to spend
on them and that they would be inflationary.
The policy to hold down wages was put to
the test from 11 to 15 February when textile
workers in Lodz struck for a 15-percent pay hike
and improved working conditions. After being
told their demands were unrealistic, they report-
edly returned to their jobs, but press reports on
16 February suggest that there was worker unrest
in other parts of Poland.
The Gierek regime has taken many steps to
improve the lot of consumers. Reduced prices for
some consumer goods authorized in mid-
December will be retained. Recent government
measures to provide pay raises for the lowest paid
workers and some increases in family allowances
and old-age pensions are to be continued.
Prior to the price cuts the parliament further
amended the 1971 plan and budget to benefit
consumers. The plan now provides for an addi-
tional increase in the wage fund of $125 million
(at the noncommercial rate of exchange) to cover
anticipated increases in wages as a result of post-
ponement of the unpopular incentives program.
Taxes were raised to provide budget subsidies
totaling about $40 million for additional social
and health services. Planned 1971 increases in
workers' incomes now total approximately one
billion dollars. The revised plan also provides for
larger investments in consumer goods industries
and in services.
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Recently announced personnel changes indi-
cate that party chief Gierek is determined to
replace officials responsible for mistakes in eco-
nomic policy. The chairman of the state planning
Romanian Party Woos the Workers
President Nicolae Ceausescu capped nearly
two months of intensive contacts among the
people with a party central committee plenum on
10-11 February where he castigated bureaucrats
for failure to communicate with the masses.
Ceausescu clearly has been aiming at preventing
the growth of serious popular dissatisfaction such
as that which set off the December riots in Po-
land, and he has taken advantage of the situation
to propose reforms.
Popular grumbling over food shortages and
higher food prices, particularly in the free mar-
kets, sent Ceausescu out to the provinces where
he praised workers and farmers for their contribu-
tions to the nation's past economic successes. He
promised them improved living standards in the
future. This pledge was reiterated in his plenum
speech when he stated that the new five-year plan
envisages a 20-percent increase in real wages by
1975 over the 1970 level, as well as additional
measures that will provide the earliest and largest
increases for low-income families.
Ceausescu devoted the major part of his
speech to the need for rejuvenating the trade
unions, which he said should no longer be merely
an arm of the party but should become a demo-
cratic force in society. The plenum began work
on new laws for the trade unions to make them
the basis for "organized consultations." To give
workers a role in decision-making, Ceausescu pro-
posed that the workers' assemblies be al-
lowed to discuss and to disavow the decisions of
enterprise management. Sacking of the managers,
commission and another deputy premier closely
identified with economic policy were dismissed,
as were the ministers of foreign trade and of the
food industry.
however, would still be the prerogative of higher
authorities.
Ceausescu also proposed reforms for the
party and government. He said that the existing
practice whereby a man holds both party and
government positions is not mandatory, thus hint-
ing at the possibility of further decentralization.
He added that nominations for higher office in
the party and government henceforth must be
debated and must receive support at the worker
level. Finally, Ceausescu declared that the execu-
tive committee and the Council of Ministers
should publish their most important debates and
decisions-a pronouncement reminiscent of Polish
leader Gierek's new method of doing things.
The plenum made the most important high-
level personnel changes in the party and govern-
ment since late 1969. Manea Manescu, a compe-
tent technocrat who is the head of the Economic
Council and already a party secretary, was added
to the party's permanent presidium. Ion Iliescu,
former first secretary of the Communist Youth
Union, replaced Virgil Trofin on the secretariat.
The ambitious Trofin-at one time heir apparent
in the party-retains positions on the permanent
presidium and on the executive committee, but
he was removed from the chairmanship of the
Union of Agriculture Production Cooperatives
and was named instead as head of the trade
unions. His political position is questionable;
clearly he has lost power and prestige, but Ceau-
sescu may be giving him a second chance in a
new, more active trade-union role. ~
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USSR: The oft-postponed republic party con-
gresses preparing for the 24th CPSU Congress are
at last getting under way. The Estonian Congress
opened on 17 February; the Tadzhik session
opened the next day. During the last month, six
of the republic congresses had been moved back
from their late January - early February opening
dates (the Georgian session was postponed twice).
The delays can be primarily attributed to a desire
to have the republic congresses discuss the re
cently published draft directives for the next
five-year plan, but they also reflect the lack of
coordination in Moscow during the preparations
for the 24th CPSU congress. There is no informa-
tion on the proceedings at any of the republic
sessions under way, but recent developments
suggest that there may be significant personnel
changes in at least the Estonian and Tadzhik
leaderships.
YUGOSLAVIA-EGYPT: President Tito is paying
his first call on Egypt's new leaders this week,
trying to shape again the kind of warm personal
ties he had with the late Nasir. In preparation for
his trip, Tito corresponded with the four major
powers dealing with the Middle East crisis, imply-
ing that he would act as intermediary if it was
desired. Tito will no doubt address most of his
efforts to the subject of how to reduce the mili-
tary strength and political influence of the great
powers in the Mediterranean, in conjunction with
the question of a settlement of the Arab-Israeli
war. It is quite likely that in this context he will
try to get a new Egyptian commitment to "nona-
lignment" as an alternative policy to great-power
politics in the basin.
ITALY: Prime Minister Emilio Colombo has ap-
parently secured considerable popular and politi-
cal support for his formula to resolve the long
debate, accompanied by sporadic outbreaks of
violence, over the choice of a capital for Calabria,
Italy's southernmost region. Reggio Calabria, the
largest city, will be the seat of the regional assem-
bly and will get a new steel mill providing 12,000
jobs. Catanzaro will be the regional capital and
the site of its executive body. A new university
will go to the third rival city of Cosenza.
Recent government progress on social re-
forms combines with the ebbing of violence in
southern Italy to provide a respite in political
tensions. Continuing bitter rivalry among center-
left leaders over the presidential election next
December suggests, however, that the respite may
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European Communities: Economic and Monetary Union
Compromises on all sides made possible the
Council's agreement last week to begin movement
toward a full-fledged economic and monetary
union. Achievement of that goal within the next
decade would be almost tantamount to political
unification, but even last week's resolution-
which leaves difficult questions of implementa-
tion still to be decided-has given a psychological
boost to the integration movement.
In the final stage of the projected union
there would be free movement of labor, goods
and services, and capital among the Community
countries, as well as the establishment of a de
facto common currency by means of an "ir-
revocable" fixing of intra-EC exchange rates. Dur-
ing the initial three-year stage, to begin immedi-
ately, existing Community !Institutions will be
used to bring about closer coordination of eco-
nomic policies, further moves toward tax har-
monization, a narrowing of the range of fluctua-
tion permitted in exchange rates among EC cur-
rencies, and the drafting of proposals for a
monetary cooperation fund. Extensive coordina-
tion of the member countries' monetary and
>'~Afiscal policies will be necessary if the contem-
plated narrowing of exchange-rate margins is to
succeed.
As an adjunct to the monetary union resolu-
tior,, the Council has invited the EC central banks
to strengthen their cooperation. In addition, the
Council moved to improve coordination of short-
term economic policies and adopted a medium-
term policy program. A mechanism for medium-
term. balance-of-payments assistance-with some
$2 billion in credits at its disposal-has also been
established.
Although the Council resolution does not
specify new institutions to manage the projected
union, it does imply that'new bodies or changes
in existing ones may eventually be necessary for
effective control as the member states lose some
independence in determining national economic
policies. The EC Commission is tasked with pro-
posing any needed changes prior to the end of the
first stage.
Should agreement not be reached by
1975-that is, within two years after the end of
the first phase-on the institutional and other
provisions necessary to ensure "parallelism" be-
tween economic and monetary measures during a
second stage, the initial monetary cooperation
measures may be terminated. This escape clause
was inserted principally to bridge the gap between
French reluctance to spell out now the details of
later stages and German insistence on binding
arrangements for policy coordination. The two-
year "grace period" will also make it possible for
the UK and the other membership candidates to
participate in working out the ultimate shape of
the union.
The Community is now expected to focus
on translating the intent of the Council resolution
into implementing regulations and procedures.
Moreover, central-bank coordination for the pur-
pose of narrowing exchange-rate fluctuations will
be watched closely for its effect on independent
policy making by Community members. Presuma-
bly also, the difficult monetary questions attend-
ant on Britain's joining the EC will now receive
greater attention. In any case the compromises
made last week in order to achieve the basic
decision in principle would seem to indicate gen-
eral acceptance of the need to move-even if
gradually-to endow the Community with its own
economic and monetary "personality."
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Geneva Arms Control Talks Resume
The disarmament conference at Geneva will
be entering its tenth year on 23 February when
the delegates of the 25 participating nations re-
convene for what should be an active-if not
especially productive-session. The primary topic
is expected to be controls on chemical and bio-
logical weapons (CBW), but the 12 nonaligned
nations represented at the talks may push hard
for work on verification techniques of more gen-
eral application.
Present indications are that the conferees are
not likely to resolve the nearly two-year impasse
between the Soviets' draft convention seeking a
comprehensive ban on CBW activity and the UK
draft prohibiting only BW agents. Most of the
participants appear to favor comprehensive treat-
ment of CBW, but the US, with some help from
the Japanese, has scored some telling points with
a series of papers pointing up the difficulty of
enforcing a CW ban given the present state of
limitations in safeguards techniques. The non-
aligned, moreover, dislike the verification provi-
sion in both the UK and Soviet drafts-i.e.,
appealing to the veto-prone UN Security Council
for investigation of complaints.
The question of a comprehensive test ban
(CTB) on nuclear weapons has received increasing
attention at Geneva as a result of both the stra-
tegic arms limitation talks and the continuing
development of more sophisticated nuclear hard-
ware. The conferees realize that short-term pros-
pects for a CTB are dim because Moscow remains
FINLAND: Approximately 70,000 metalworkers
went out last week in the largest nationwide
strike since 1956. With the workers' overwhelm-
ing rejection of the state mediator's second wage
offer, both the union and management anticipate
a replay of the two-month metal industry strike
of 1950. At stake, in addition to a larger wage
settlement than the national economic stabiliza-
firmly opposed to any form of on-site inter-
national inspection. They will probably con-
centrate their attention on related but less im-
portant measures, such as exploring the possi-
bility of guaranteed seismic data exchanges under
UN auspices. Canada and Japan will again seek
discussion on prospects for a treaty that would
prohibit underground testing above a magnitude
of about 4.5 on the Richter scale, a level beyond
which most advanced states can easily detect any
nuclear detonations.
The nonaligned 12 and Italy at the talks last
year directed renewed attention to the feasibility
of various schemas for general and complete dis-
armament (GCD). This topic provided much of
the original impetus for the arms control con-
ference-the USSR and the US submitted separate
GCD proposals at the initial session in 1962-but
interest has dropped off as agreements have been
negotiated on specific, "partial" measures, such as
the Nonproliferation Treaty. Work on GCD is
likely to cut across normal caucus lines at Geneva,
but substantive progress in the SALT bilaterals
seems a prerequisite to any new movement in that
direction.
Sweden late in 1970 offered the conferees a
study of verification options potentially ap-
plicable to the broad range of disarmament proo-
lems. The paper may generate considerable com-
ment at the 1971 sessions.
tion program would countenance, is political con-
trol of Finland's largest union. The Social Demo-
crats and the Communists presently share power
in the union executive, and the latter hope to
capitalize on the strike both to attract more sup-
port at the next union congress and to increase
their strength in the labor movement, only re-
cently reunified.
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)viets Hint Disenchantment with Brandt Government
Last week Soviet diplomats stationed in
widely separated Western capitals inspired a
round of bizarre press stories suggesting that Mos-
cow had become disenchanted with the Brandt
government and was now thinking about coopera-
tion with the conservative opposition Christian
Democrats (CDU/CSIJ). Although the stories
were later disavowed, it seems likely that they
were part of a Soviet diplomatic maneuver aimed
at putting pressure on the Brandt government.
Moscow would like Bonn to break the linkage it
has established between a Berlin agreement and
ratification of the Soviet - West German treaty,
and to enter substantive negotiations with Pan-
kow on Berlin matters without a covering four-
power "umbrella" agreement.
Soviet diplomats have in private tried to
maneuver Bonn into this position since last fall,
but until now they had avoided any action that
might mar the appearance of Soviet - West Ger-
man harmony. On 2 February, however, the
deputy chief of the Soviet Embassy in Washing-
ton told a Hearst correspondent that Moscow's
"honeymoon" with the Brandt government was
over because the Chancellor had reneged on his
alleged "commitments" to Moscow. He added
that Moscow was no longer greatly interested in
gaining West German ratification of the treaty,
because Bonn in any event could not repudiate
the treaty's provisions. The Soviet official also
implied' that Moscow might resume propaganda
attacks on Bonn, and that it was even toying with
the idea of cooperation with the CDU/CSU. Two
days later a Soviet diiplomat in Stockholm held
forth in a similar vein with a German correspond-
ent, alleging that the liberal Brandt government
was even more dangerous to Soviet interests than
the previous Christian Democratic governments
had been. The reports were promptly picked up
by the West German press and almost as
promptly-on 7 February-denied by the Soviet
Embassy in Bonn. The circle was then closed on 9
February when the two sources of the original
stories refuted their earlier statements.
Disavowal of the press reports suggests that
the Soviets believed their purposes had been
served once the stories had been given full play.
The reports may, in fact, have struck a sensitive
nerve among those Bonn officials, including
Brandt's chief negotiator Bahr, who regard time
as a precious commodity in Ostpolitik. Brandt,
nevertheless, continues to maintain publicly that
he feels under no time pressure, that his govern-
ment's negotiating stance on Berlin remains firm,
and that overall there has been no deterioration
in Soviet - West German relations. As proof, a
friendly, though dated, New Year's letter from
Kosygin to Brandt was surfaced.
Meanwhile, Pravda came out with an edi-
torial on 13 February which seemed as much an
endorsement of Brandt's Ostpolitik as an ad-
monition that his policies might founder unless he
presses more vigorously.
Moscow probably hopes that this recent
maneuvering will persuade the West Germans that
Soviet patience is more limited than Bonn may
realize. By suggesting that Brandt's political
charm may soon fade in their eyes, the Soviets
probably hope to persuade the West German
Government to begin working out the terms of a
Berlin agreefent on its own, or failing that, to
press the Allies to reduce their demands for an
accord. Moscow must calculate that the four-
power Berlin talks have reached the crucial draft-
ing stage, and that Bonn's views will have a
measurable influence on the outcome of this
exercise as well as on determining the course of
the parallel talks between West and East German
representatives. Instead, however, Moscow has
only enhanced West German suspicions that there
are divisions among the Soviet leadership over
German policy. It may perhaps have also irritated
Brandt by publicly embarrassing him, and its
maneuvers may encourage a greater caution in
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MIDDLE EAST - AFRICA
Middle East: Negotiations
The Israeli Government has re-
acted negatively to a personal effort
by Ambassador Jarring to overcome
the current stalemate in the nego-
tiations.
Press reports from Jerusalem in-
dicate that, at its cabinet meeting on
14 February, the government had de-
cided to reject Jarring's initiative; at
the urging of Foreign Minister Eban,
however, it was decided to avoid out-
right public rejection and merely to
ignore the proposal. Although there
are conflicting accounts of the details
of Jarring's proposal, it reportedly
calls on Israel to agree to withdraw
from all of Sinai, except for Gaza, and
on Cairo to recognize Israel's terri-
"The Answer Is `No' - Now, Let's Hear The Suggestioi#
was ready to discuss "arrangements for peace," if
Israel would make a similar commitment.
torial integrity and to agree to a permanent peace.
The Israelis have publicly accused Jarring of ex-
ceeding his authority and reportedly have said
that he is authorized to act only as a go-between
and is not empowered to present his own pro-
posals. According to press reports, all members of
the cabinet are in agreement that Israel must
demand an answer as to whether Egypt is willing
to make peace with Israel.
The Egyptian press reports that Cairo has
responded to Jarring's initiative after asking for
and receiving explanations regarding his proposal.
The details of the Egyptian response have not
been published
Ac-
cording tot e semiof icial a,'-Ahram, Egypt said it
The Israelis are clearly embarrassed by the
apparently forthcoming responses Jarring has
been receiving from Cairo. A positive response by
the Egyptians to Israel's demand for a clear-cut
statement on a peace agreement would deepen
this embarrassment. If and when the Israelis are
forced to consider seriously the question of with-
drawal, even if only from Sinai, a major domestic
political crisis can be expected. The National Reli-
gious Party, which almost split over the question
of returning to the Jarring talks, might desert the
government over the withdrawal issue. This would
leave the Israel Labor Party and its allies with 64
of 120 seats in the Knesset, a margin regarded by
political observers as too narrow to be work-
Palestinians to Hold National Meeting
Deep policy differences between various fac-
tions in the Palestine liberation movement could
surface and produce still further discord during
the eighth session of the Palestine National
Council scheduled to begin in Cairo on 27 Feb-
ruary.
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PLO CENTRAL COMMITTEE MEMBERS
Left to Right (seated): Kamil Nasir; Yasir Arafat; Nayif Hawatmal; Yasir Amru; George Habbash
fedayeen have suffered in Jordan to Fatah's at-
tempts to create a unified guerrilla movement.
Within Fatah itself Yasir Arafat has been accused
of exacerbating the situation in Jordan by ill-
timed and ill-advised appeals for Arab support
against the regime of King Husayn, and by mak-
ing other inflammatory public statements despite
requests that he remain silent. Arafat, however,
has so far been successful in avoiding meetings at
which he and other leaders might be called to
account by second-echelon officials of Fatah.
Fatah, the dominant group among the feda- bear the brunt of attacks upon current fedayeen
yeen organizations, could soon find itself the tar- policy thus may decide to boycott the conclave in
get of attacks by the others, with extremist Cairo. If enough of them stay away, the council
groups led by the Popular Front for the Libera- meeting could be canceled for lack of a quo-
Arafat and other leaders who are likely to
tion of Palestine attributing recent setbacks the rum.
Jordan: Clashes Erupt Anew
Yet another round of fighting sputtered their personnel and heavy weapons from three of
along throughout the week in Amman as the the seven hills of Amman. To this end the govern-
Jordanian Government successfully continued to ment appears to have been successful. 25X1
press its campaign to force the fedayeen to with-
draw from bases in the capital.
The government's immediate goal in its
latest drive against the fedayeen was to remove
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By 17 February there was a partial return to
normality in Amman as shops reopened and the
government began to release Palestinians who had
been arrested at the outbreak of fighting. Civilians
in some so-far uncleared areas were reported,
however, to have fled their homes in expectation
of new operations. The fedayeen militia was said
to be out in strength and fully armed in still other
districts of the city. Further fighting could erupt
any time the government decides to move to clear
other areas of fedayeen control.
Hostilities Hurt Egypt's Economy More Than Israel's
The Six-day War of 1967 and the subsequent
military confrontation have retarded economic
growth in Egypt but probably have stimulated it
in Israel.
Israel's gross national product (GNP) has
grown about 12 percent a year since the war.
At the time of the war, Egypt's centrally
controlled economy was already stagnating for
lack of foreign exchange and shrewd direction.
Initially, war losses depressed the Egyptian GNP
further, and it was only after a couple of years
that output began to grow by three to four per-
cent a year. Recovery has been retarded by war-
related losses of foreign exchange earnings that
have been offset only partially by foreign mone-
tary aid. Moreover, the conflict has distracted the
attention of Egypt's leaders from economic de-
velopment, reduced the availability of Western
aid, and diverted Soviet aid to military purposes.
Little development of defense industries has oc-
curred.
Foreign assistance has greatly relieved the
defense burden of both adversaries. Crisis-induced
aid has covered about half the increase in defense
costs in Israel and perhaps as much as two thirds
in Egypt. Aid to Israel has consisted of cash gifts
and purchases of bonds on concessionary terms
by sympathizers living in other countries as well
as special credits from the US Government. Aid
to Egypt has been composed of cash transfers
from the governments of Libya, Kuwait, and
Saudi Arabia plus military supplies from the
USSR, for which payment has not been made.
The outlook is for a continuation of brisk
economic growth in Israel and modest expansion
in Egypt. Barring large-scale warfare, however, the
growth of defense expenditures will slow
markedly in both countries.
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Pakistan's Military Assistance to Arabs Leveling Off
Pakistan's assistance program to Arab coun-
tries-which consists primarily of supplying train-
ing personnel-appears to be leveling off. The US
defense attache in Amman recently reported that
the Pakistani antiaircraft battalion would be out
of Jordan by early March and that the Pakistani
air force advisory grour, which had numbered at
least 100 officers and enlisted men, would be
reduced in strength to a half dozen. At the same
time, Pakistan is increasing the number of mili-
tary personnel-now nearly 1,500-to other Arab
countries.
Pakistan began its military assistance efforts
in earnest in late 1966 when it sent a small team
of army personnel to Jordan. An air force advi-
sory team was later assigned to an air base in
northeast Jordan where it has been training Jor-
danian Air Force F-104 pilots and aircraft main-
tenance personnel. Islamabad's military aid to
Jordan reached its peak in December 1969 when
it sent an antiaircraft battalion, which may have
included as many as 600 men, to provide protec-
tion at a time when Israel was bombing Jordan.
The reductions about to take place may reflect
the completion of the air force training program
and Pakistan's belief that such assistance is no
longer needed. In any case, Pakistan would like to
avoid becoming involved should there be a repe-
tition of last September's fighting.
Saudi Arabia also has a sizable contingent of
Pakistani military advisers. Some 500 Pakistani air
force personnel are stationed in Saudi Arabia at
seven air bases. Their principal duties involve
supervision of maintenance work and the training
of mechanics and pilots, but they also fly the
Lightning fighters supplied by the UK. Some 100
more Pakistanis supply logistical and ad-
ministrative aid to the Saudi army and navy.
Pakistani air force instructors are providing
tactical training to Iraqi MIG-21 pilots and may
be flying Iraq's SU-7s. Because the Pakistanis do
not have either aircraft in their inventory while
the Indians do, a major motive may be a desire to
familiarize themselves with the types of aircraft
they may someday face in combat.
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Advisory assistance on a small scale is being
provided to the Trucial States and perhaps to
Libya and Syria. The bulk of this assistance, as
for other Arab nations, is given to the air forces
of these countries primarily in the form of basic
flight training.
Pakistan's military schools also train a num-
ber of Arab foreign nationals. Students from all
these countries are enrolled in the Pakistani Air
Force Flying School, the Army Command and
Staff School, and in navy schools.
Pakistan's military aid program provides the
Arab nations with good training at low cost. For
its part, Pakistan demonstrates its solidarity with
fellow Muslim states, gains valuable military expe-
rience, and obtains needed foreign ex-
change. 25X1
India-Pakistan: Relations Sour
Domestic politics in both India and Pakistan
continue to frustrate efforts to defuse the dispute
arising out of the recent hijacking and destruction
of an Indian airliner in West Pakistan. In the
meantime, disagreement over constitutional issues
has moved the two parts of Pakistan closer to
formal separation.
On 30 January? two self-styled Kashmiri
"freedom-fighters" hijacked to Lahore, West
Pakistan, an Indian plane on a domestic flight and
demanded the release of Kashmiri separatists re-
cently arrested in India. Despite what Pakistani
authorities claim was a serious effort by them to
save the plane, the hijackers destroyed it on 2
February after having released the passengers and
crew earlier.
Indian politicians, campaigning for parlia-
mentary elections in early March, have seized on
the issue. Prime Minister Gandhi has publicly ac-
cused the Pakistani Government of collusion in
the hijacking, and a Hindu nationalist party has
organized attacks on Pakistani diplomatic instal-
lations. Meanwhile, the Indian Government, in an
increasingly harsh series of notes, has demanded
both compensation for the plane and extradition
of the hijackers. Pakistani overflights of India-
some 60 a week-have been banned until Is-
lamabad complies.
Pakistan has refused to pay compensation,
and the hijackers-who were granted political
asylum in order to save the passengers and crew
of the aircraft, according to the Pakistanis-have
become heroes in West Pakistan. West Pakistani
politicians-maneuvering for position in the forth-
coming National Assembly-have praised the hi-
jackers and attacked India's continued occupation
of the disputed state of Jammu and Kashmir. At
this time, compensation would be politically diffi-
cult and extradition almost impossible for Is-
lamabad.
Reports of troop movements in both coun-
tries have further heightened tensions, but it still
appears that neither country wants a military
confrontation.
East Pakistanis reacted quite differently
from West Pakistanis, fearing that the furor over
the hijacking would be used to prevent or delay
the assumption of power by an East Pakistani -
dominated civilian government. President Yahya
Khan may have allayed their suspicions somewhat
by announcing that the National Assembly will
meet on 3 March to begin drafting a new constitu-
tion.
Z. A. Bhutto, leader of the party that won
over half the West Pakistani seats in the assembly,
has said, however, that his party would not attend
assembly sessions. He charged that the East Paki-
stanis-who will have an absolute majority-plan
to force through their own constitution without
regard for West Pakistani views.
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0r,Vnr, I
The main point of disagreement is-an East
Pakistani plan for provincial autonomy that
would leave the central government responsible
only for defense and foreign affairs. East Paki-
stani leader Mujibur Rahman has reiterated his
unwillingness to compromise on this program.
rejected.
President Yahya, who must validate the new
constitution, could eventually face a choice be-
tween unacceptable alternatives. On the one
hand, he would have an East Pakistani constitu-
tion that neither he nor most West Pakistanis
wanted. On the other he would face the threat of
East Pakistani secession if the constitution were
WESTERN HEMISPHERE
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Recent Developments in Chile
The Allende government appears to want
increased commercial relations with Communist
countries but has not yet made significant prog-
ress. Negotiations for the trade agreement signed
with Cuba on 12 February in Santiago reportedly
did not go smoothly.
In a tough speech last week, Interior Minis-
ter Toha reaffirmed the government's determina-
tioi to expropriate all farms over the minimum
siz;: established under the 1967 agrarian reform
law, and he did not rule out the possibility that
legislation might be enacted to permit even more
extensive expropriations. In this speech Toha im-
plicitly criticized the extremist Movement of the
Revolutionary Left (MIR), which the overnment
has recently allowed almost free rein. 25X1
The agreement for trade amounting to $20 mil-
lion annually from 1971 through 1973 is smaller
than Chileans had predicted earlier.
Commercial discussions with the USSR have
been uneven. Following the recent visit of a rank-
ing Soviet trade official, Chilean Minister of Mines
Cantuarias remarked that the Soviets were "as
bad as the worst capitalists."
Allende's handling of the opposition con-
tinues to pay off. In return for the government's
backing off from insinuations that members of
the former Christian Democratic (PDC) adminis-
tration were involved in the plot that led to the
death of the army commander in chief, the PDC
apparently will soft pedal its opposition on cer-
tain sensitive issues. An additional factor is the
government buyout of the PDC-controlled Zigzag
publishing house, Chile's largest, which is to be
transformed into a state agency while allowing
Zigzag to continue to produce some of its own
publications.
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S.C,UKL I
Guyana's Prime Minister to Nationalize Bauxite Industry
Prime Minister Burnham seems about to na-
tionalize the Canadian-owned Demerara Bauxite
Company (DEMBA), a subsidiary of the
Aluminum Company of Canada (ALCAN).F_~
Burnham should have little
trouble securing the two-thirds majority necessary
to approve the measure.
The Guyanese are not yet well prepared to
run DEMBA's holdings. The government has just
begun to look for new markets, equipment
sources, and shipping contracts for a government-
owned bauxite industry. Burnham and a number
of government officials followed up their attend-
ance at the Commonwealth Prime Ministers' Con-
ference in Singapore by visiting Belgrade on 1-4
February. The group discussed possible Yugoslav
technical. assistance to Guyana, and although no
agreement was reached, a Yugoslav technical
group will visit Guyana, probably in April.
The group also visited India, but qualified
Indian technicians for assistance to Guyana are
unlikely to be available. The three large private
companies, two of which are partly controlled by
ALCAN and Kaiser Aluminum, probably would
not cooperate with Guyana. The fourth, a small
Indian-owned firm, probably would have few
technicians to spare.
The Guyanese will face additional problems
in a go-it-alone program; the difficult task of
finding buyers will be only one of them. Al-
though mining in Guyana was once fairly eco-
nomical, its costs are now high compared with
those of Guyana's major competitors. The ore
must now be dug from deposits averaging about
110 feet in depth, whereas other major producers
can mine near the surface. Moreover, Guyanese
bauxite is more expensive to ship because of the
long distance between the mines and seaport load-
ing facilities, which requires reloading. Although
Burnham may be beginning to realize that he will
encounter many problems in trying to run the
industry, he appears bent on making the ef-
GUATEMALA: Political violence over the past
two weeks has included at least nine assassina-
tions, several attacks against low-level security
officials, and the serious wounding of wealthy
25X1 industrialist and government supporter Jorge
Kong.
Although Communist leaders had recently
put a halt to terrorist activity following several
successful government operations against the in-
surgents, pressure from the rank and file for
vengeance apparently has resulted in its approval
for a resumption of activity,
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URUGUAY: The Tupamaros' public declaration
that the Brazilian consul will be released when
emergency security measures end was a clever
gimmick that has contributed to a setback for the
government. A terrorist communique indicated
that the family of Consul Gomide has paid the
demanded ransom-the Tupamaros asked for $1
million but probably received only about one
fourth of that amount--and tied his release to the
scheduled expiration of emergency measures on
Saturday. The government has strenuously
avoided any appearance of meeting terrorist de-
PANAMA-US: Relations have hit one of the peri-
odic low notes following the arrest on 6 February
by US narcotics agents of a minor Panamanian
official whom the Torrijos government charged
had been lured into the Canal Zone for this pur-
pose. The government protested sharply and has
publicly committed itself to obtaining the man's
return. The incident may come to a head this
weekend in the face of a US decision to ignore
the Panamanian demand and fly the prisoner out
of the Zone to face trial in Texas. Torrijos realizes
the emotional and nationalistic potential of the
case and the eagerness of the students to take to
the streets in anti-US demonstrations. He may
find it hard, therefore, to resist the temptation to
mands, however, and on 16 February requested a
45-day extension of the security decree.
On Wednesday, the permanent legislative
committee, reflecting the sentiment of a Congress
jealous of its own prerogatives, turned down the
President's appeal. The government's campaign
against the Tupamaros had suffered a mild re-
versal earlier in the week as well; the Supreme
Court ruled that the administration's plan to try
terrorists in military rather than in civilian courts
use the occasion to test the efficacy of anti-US
demonstrations as a bargaining tool.
A number of Panamanian officials, including
President Lakas, are urging restraint, and there are
a number of economic considerations that may
temper Torrijos' reaction. The government is cur-
rently attempting to secure US loans to alleviate a
serious budgetary difficulty. Large-scale demon-
strations would jeopardize the loans and risk the
loss of tourist revenue from the pre-lenten Carni-
val festivities now under way. The Panamanians
have terminated the Peace Corps program and
may take further steps-perhaps expelling a mem-
ber of the US Embassy-in order to save face over
ARGENTINA: President Levingston appears to
be gaining support within the armed forces as a
result of growing discontent with the military
hierarchy among middle-grade officers. There is
no evidence that army commander General
Lanusse is preparing to remove his long-time
friend Levingston from office, but rumors to that
effect in the past month appear to have created a
growing "choosing up sides" mentality within the
army. Discontent within the armed forces has
existed for some time, but the President's nation-
alist line plus his recent efforts to demonstrate
that he is not simply the puppet of the military
junta may now have provided a leader around
whom the dissatisfied can rally. There is no evi-
dence, however, that Lanusse has lost control.
On the domestic political front, two pro-
vincial governors were removed this week and
there are widespread rumors that several other
governors as well as a few cabinet ministers will
be dismissed. The one new governor named so far
is a man of Peronist leanings, indicating that
Levingston intends to name replacements who
not only support his nationalist line but who are
more closely attuned to the political currents in
SECRET
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Secret
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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
India: The World's Largest Democracy
To Go To The Polls In March
Secret
N? 38
19 February 1971
No. 0358/71A
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l-AJ1N r 11JJ11N 1 Li.L Nftoi
Prime Minister Indira Gandhi has called parliamentary elections a year before the
constitution requires them, calculating that the chances of boosting her party's seats in the
lower house are better now than they will be in 1972.
Mrs. Gandhi is publicly attributing her government's mediocre performance to her
party's loss of its parliamentary majority following the split in the Congress Party in late
1969. She is presuming that the elec-
torate will be more sympathetic to
this argument now than it might be
next year should an insufficient rain-
fall result in poor crops, and unem-
ployment and inflation continue to
mount. Furthermore, she fears that
another year of political instability at
both state and national levels would
serve to assist opposing parties in their
struggle to forge a viable opposition.
To challenge her at the polls, a four-
party opposition alliance was formed
last month, but it lacks a common
program and is held together only by
antipathy toward the prime minister.
Despite her party's customary stress on "radical socialism" as the best means of
accelerating much-needed economic and social development, Mrs. Gandhi is basically a
centrist, and the party's election manifesto is restrained. Mrs. Gandhi has established a solid
footing as the leader of India's largest party and has no rivals on a national scale. If she
substantially improves her parliamentary position and thereby reduces her dependence on
support from numerous minority parties, the prospects for a stronger central government
are enhanced. If she suffers a reverse or makes only slight gains, indecisiveness and
instability will continue to prevail. In either case, Mrs. Gandhi's future policies are not likely
to deviate far from past emphasis on an independent foreign policy and relatively mild
socialism at home.
Background ship and age 21 by 1 January 1970. (The 10-12
million becoming 21 after this date will be disen-
Indian voters will go to the polls between 1 franchised because of the lack of time to update
and 10 March to elect India's fifth lower house of electoral rolls.) Approximately 60 percent of the
parliament (Lok Sabha) in 23 years of inde- electorate are expected to cast valid votes-58
pendence. About half the nation's 560 million percent exercised their franchise in 1967, and the
people meet the suffrage requirements-citizen- percentage voting has been rising since the first
general election in 1952.
Special Report
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V V1N r 11JrJINl 1 11-IL
Distribution of Elective Seats
by
State and Union Territory
JAMMU
KASHMIR I a="
Special Report
STATES
Andhra Pradesh
41
Assam
14
Bihar
53
Gujarat
24
H yana Pradesh
4 9
Jammu and Kashmir
6
Kerala
19
Madhya Pradesh
37
Mysore
27
Nagaland
1
Orissa
20
4151,6-k
13
am7`Nadu
39
NEPAL SIKKI
~Ithmnn~iu* I
CONFIDENTIAL
Kabul*
f /
UNION TERRITORIES
Delhi
7
Goa, Damao and Diu
2
Manipur
2
Tripura
2
Andaman and Nicobar Islands
1
Chandigarh
1
Dadra and Nagar-Aveli
1
Laccadive, Minicoy and Amindivi
Islands
1
Pondicherry
1
WEST
BENGAL
CEYLON
BOUNDARY REPRESENTATION IS
NOT NECESSARILY AUTHORITATIVE
A-;SAM
NAGALAND
1
I SLA N
NO9
BURMA
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The new Lok Sabha will consist of 518 elec-
tive seats apportioned among India's 18 states*
and nine union territories on the basis of popula-
tion. Because state boundaries are fixed largely
along linguistic lines, there is considerable dispar-
ity in the size of the states. Thus, the two most
populous states, Bihar and Uttar Pradesh, to-
gether claim more than 25 percent of the Lok
Sabha seats.
Voting will be staggered over the ten-day
period, and in the larger states or where there
may be difficulty in maintaining order, the ballot-
ing will extend over several days. There will be
more polling booths than ever before, and the
government claims no voter will have to walk
more than 1.2 miles to cast his vote. Ballot count-
ing will begin only after all polling is completed,
and final results are expected on 13 March. The
new parliament will convene in late March in time
to ratify the budget for fiscal year 1972, which
begins on 1 April 1971.
Lok Sabha candidates run from single-
member constituencies, and they need not be
residents of the state in which they run. Constitu-
encies are too big for effective representation-the
average consists of about one million people.
Furthermore, India's multiparty system produces
aberrations in the electoral results; more than
three candidates run in most constituencies, and a
plurality of 35 to 40 percent or less can produce a
winner.
One hundred fourteen (or 22 percent) of the
elective seats in the Lok. Sabha are reserved for
the so-called Scheduled Castes and Scheduled
Tribes-the Untouchables who rank at the bottom
of the socioeconomic order and the tribes who
live outside the mainstream of Hindu society.
Although this provision ensures these underpriv-
ileged groups a parliamentary representation
proportionate to their percentage of the over-all
population, in 23 years it has failed to do much
to alleviate the disadvantage of being born into
these groups. In addition, a special constitutional
provision empowers the president to appoint two
members from the Anglo-Indian community and
one from the isolated North East Frontier
Agency.
India's four previous parliamentary elections
have been relatively peaceful and well organized.
Under the scrutiny of a permanent, autonomous
Election Commission, the election machinery ap-
pears to operate honestly, and charges of malfea-
sance against election officials are rare. Nonethe-
less, some ballots are tampered with, and there
are estimates that, in the past, up to 10 percent of
the votes have been bought. Other election irregu-
larities-stuffed boxes, intimidation, bogus voters,
voting "early and often"-can be expected in
some constituencies, particularly in those tight
contests where money is available. Despite this, it
is generally believed that India's national elections
are a valid index of popular sentiment.
Early Election- Why?
For the first time India's parliament has
been dissolved one year in advance of its regular
five-year term. Prime Minister Gandhi apparently
has decided that her chances of winning a parlia-
mentary majority of at least 262 seats are
stronger now than they will be in 1972. When the
Lok Sabha was dissolved in December, Mrs.
Gandhi's party held 228 seats.
Indian politics experienced a major shake-up
during the last year and a half. From indepen-
dence in 1947 to November 1969, the centrist
Congress Party had dominated Indian politics,
sheltering a wide range of political factions under
a single roof. Following the death of Prime Minis-
ter Nehru in 1964 and the succession of his
daughter to the prime ministership in 1966,
*The former union territory of Himachal Pradesh was elevated to full statehood on 25 January 1971.
Special Report - 3 -
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Ruling Congress Party . . . . . .. . . 228
Frequent supporters of Dravida Munnetra Kazhagam (DM K) . 24
Prime Minister Gandhi Communist Party of India (CPI) . . . . 24
Opposition's Core
of Support
Organization Congress Party . . . . . . 65
Swatantra Party . . . . . . . . . . . . 35
Jana Sangh Party . . . . . . . .. . . 33
Communist Party of India/Marxist (CPM) 19
Samyukta Socialist Party (SSP) . . . 17
Praja Socialist Party (PSP) . . . . . . . 15
United Independent Group . . . . . . 25
Unattached Independents . . . . . . . 24
Indian Revolutionary Party (BKD) . . 10
Vacancies . . . . . . . . . . . . . . . 3
Nonpartisan speaker . . . . . . . . . . 1
Total membership 523
(New Lok Sabha will consist of 518 elective and 3 appointed-521-seats)
however, the party met increasing difficulty in
withstanding the challenge from smaller opposi-
tion parties with specific regional, religious, or
communal appeals.
In contrast with the declining popular sup-
port for her party, Indira Gandhi, now 53, has
grown in power, self-confidence, and determina-
tion. In late 1969 she precipitated a split in the
Congress Party that severed her faction of center-
left "progressives"-the Ruling Congress Party-
from the center-right old guard-the Organization
Congress. Personal rivalries, however, rather than
ideological differences were a major factor in the
split.
Throughout 1970 Mrs. Gandhi's Ruling Con-
gress Party maintained a working majority only
through heavy reliance on the pro-Soviet Commu-
nist Party of India (CPI), the small South Indian
Dravida Munnetra Kazhagzlm (DMK), and various
independents. She hopes to dispense with the
inhibition this imposes by increasing the number
of Ruling Congress seats to more than the 262
required for an absolute parliamentary majority.
The Ruling Congress' detailed analysis of its
country-wide strength in late 1970 indicated
troublesome organizational weaknesses, par-
ticularly in heavily populated north and central
India. Yet, party officials were encouraged both
by the loss of strength suffered by the rival Or-
ganization Congress (OC)-especially in the two
states under OC control-Mysore and Gujarat--
and by Mrs. Gandhi's apparent mounting popu-
larity. If, however, the 1971 rainfall is insuffi-
cient, unemployment spirals, and inflation con-
tinues, Mrs. Gandhi would face an even more
dissatisfied electorate in 1972. Thus, early elec-
tions are clearly a gamble, but calculated risk has
become a familiar feature of Mrs. Gandhi's poli-
tical style.
The Opposition
Mrs. Gandhi's decision for early elections,
announced on 27 December, climaxed weeks of
speculation and some preparatory efforts by op-
position parties. In early January a four-party
opposition alliance was formed by the Organiza-
tion Congress and three other parties: the Hindu
nationalist Jana Sangh, the radical socialist
Samyukta Socialist Party (SSP), and the conserva-
tive Swatantra.
The alliance represents a mixed bag of con-
flicting ideologies, ranging from the conservative
right to militant socialism. Its main purpose is to
prevent a splintering of the opposition vote, and
its only unifying goal is to deny power to Mrs.
Gandhi. The partners' original intent was to sup-
port a common candidate in most constituencies,
but in many areas their competing aspirations
could not be reconciled.
The Organization Congress is the senior part-
ner of the alliance. Since it split away from the
Congress, it has not fared well, mainly because it
lacks rank and file and has been weighed down by
aging leaders whose principal activity following
the split seemed to be debating the morality of
aligning with parties holding incompatible views.
Expediency won out when it became evident that
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such electoral arrangements were the only means
of winning even minimal representation in the
next parliament.
The Swatantra Party was reluctant to join
the alliance and briefly held out for a common
platform, which it argued would enhance the al-
liance's credibility and obviate disagreements if
the partners were to participate later in a coali-
tion government. Swatantra relented, however,
because of the prospect that, with its power
largely confined to three states, it would be hard
pressed even to retain the 35 seats it won in 1967.
Additionally, its identification with private enter-
prise, laissez-faire, and the vested interests of for-
mer princes and prominent industrialists runs
counter to the leftist, antiestablishment trend
that has recently been evident in elections in
Ceylon and Pakistan, as well as in scattered state
contests in India.
The most dynamic of the four partners is the
Jana Sangh, which won slightly less than 10 per-
cent of the popular vote in 1967 and is the only
party that has regularly increased its vote in re-
cent elections. Its staunchly nationalistic platform
has the greatest appeal to conservative, orthodox
Hindus, and thus the urban middle-class, salaried
workers, tradesmen, and small landowners form
the core of its support:. A dedicated cadre has
helped it to prosper. Although the Jana Sangh
may increase the number of seats it holds, it is
unlikely to expand its base beyond the northern
Hindi-speaking states.
The Samyukta Socialist Party (SSP) is the
more radical of India's -two main socialist parties,
and its leadership is noted for opportunism-as
illustrated by its willingness to join the rightist-or-
iented alliance. The SSF' now heads its first coali-
tion government, in Bihar State, but it is beset by
internal wrangling and its prospects on the na-
tional scene are bleak.
The Marxist Communists (CPM) will com-
pete independently and expect to improve their
positions in Kerala and West Bengal, where they
Special Report -5-
5 -
are already entrenched. The CPM continues to
are
call for abandonment of the constitution, but
ironically its policy still favors working within the
system the party seeks to destroy. This incon-
sistency has provoked sharp attacks from extrem-
ists on the left as well as from the moderate
Communist Party of India (CPI) on the right.
Mrs. Gandhi made it clear that her party will
not form a country-wide electoral alliance with
any party in contesting about 450 of the Lok
Sabha's 518 seats. The pro-Soviet CPI, which has
been her most ardent supporter since the Con-
gress split, had hoped to extract an alliance com-
mitment that would enable it after elections to
press for more leftist-oriented programs. Nonethe-
less, the Ruling Congress and the CPI have formed
electoral agreements in several states, repeating
the cooperative strategy that worked successfully
for them in elections in Kerala last September. In
other states Ruling Congress leaders refused to
defer to the CPI, and the two parties will com-
pete.
Electoral agreements have also been worked
out with Mrs. Gandhi's other chief supporter, the
DMK, a regional party with strength only in south
India, principally in Tamil Nadu. The DMK has
modified its earlier demand for outright separa-
tism for Tamil Nadu. It now requests a maximum
degree of autonomy for the states, but maintains
its opposition to Hindi as the national language.
Its generally reliable support in parliament has
earned special favors, including New Delhi's more
relaxed attitude on the language issue.
Efforts to reach an understanding between
the Ruling Congress and the more moderate of
the socialist parties, the Praja Socialist Party
(PSP), were fruitless. The Bharatiya Kranti Dal
(BKD), another spin-off from the old united Con-
gress Party, has opted against any national coali-
tion, but has empowered most of its state units to
forge local alliances.
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Mrs. Gandhi is campaigning vigorously to
project an image as champion of the common
man. As the campaign has progressed, her style
has moderated somewhat, assuming a tone of
reassuring persuasion in contrast with an earlier
emphasis on "radicalism."' The party's manifesto,
too, is a relatively sober document that avoids
specific promises and unrealistic goals. It restates
well-known proposals for nationalization of gen-
eral insurance, financial assistance to the rural
poor, an expanded public sector, greater govern-
ment participation in the import and export
trade, and a nonaligned foreign policy. The em-
phasis on practical goals and Mrs. Gandhi's recent
assurances that her party does not advocate the
abolition of private property rights are clearly
aimed at winning the essentially centrist elector-
ate.
Mrs. Gandhi's speeches attempt to get maxi-
mum mileage from her government's short and
relatively insignificant list of recent accomplish-
ments, including national iization of the 14 largest
Indian-owned banks and passage of a Monopolies
Special Report
Control Act. She has also obtained some credit
for her attempt to abolish the privileges and an-
nual subsidies granted when the British departed
India in 1947 to some 300 former rulers of
princely states. When a constitutional amendment
bill to terminate the princes' special treatment
failed to pass parliament last September, Mrs.
Gandhi backed a presidential order removing their
privileges. In mid-December this move was in-
validated by the Supreme Court. The privy purses
constitute only a minor expense to the govern-
ment, but the issue has given Mrs. Gandhi wide-
spread publicity as a promoter of an egalitarian
society.
The Gandhi government is particularly vul-
nerable on its record in economic matters. Un-
employment is endemic in India, but in recent
years it has developed into a potentially explosive
political issue. Increasing numbers of educated
unemployed are involved in urban violence and
are potential recruits for the pro-Maoist Naxalite
movement and other extremist groups that have
seriously strained stability in parts of India. In
rural areas, little effort has been made to alleviate
the plight of the growing mass of landless labor-
ers. The government has taken some limited,
short-term measures to moderate inflationary
pressures, but it has also contributed to increases
in demand by liberalizing credit policies of the
nationalized banks and by increasing wages of
government employees when faced by actual or
potential strikes. On balance, the lack of a parlia-
mentary majority does not justify the govern-
ment's failure to effect a number of policy
changes that could have alleviated the generally
stagnant investment climate in the private sector
and stimulated activity in the lagging public sector.
In addition to exploiting economic issues,
the opposition has accused Mrs. Gandhi of exces-
sive partiality toward the USSR, the domestic
Communists, and the Muslims. Mrs. Gandhi re-
taliates with charges that the opposition has no
program of its own. The opposition parties are
vulnerable on this score; in fact their individual
election manifestoes reveal the difficulty they
would have in working together. The opposition
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campaign is essentially negative, stressing a need
to prevent the country from proceeding further in
"an authoritarian and antidemocratic direction"
under Mrs. Gandhi's leadership.
There are a number of places where Mrs.
Gandhi faces special problems. In some cases po-
tential trouble has been defused by direct action
from New Delhi, but where regional parties or
opposition leaders are particularly strong, the
Ruling Congress has been less, successful, and the
electoral outcome is impossible to predict.
The governments of these two large states
that span the heavily populated Hindi-speaking
belt fell into opposition hands last fall. Although
this development would appear to have made an
early election risky for Mrs. Gandhi, it does allow
her to try to reaffirm her presumed strength
among the conservative, rural populace. Caste,
factional, and community forces, rather than poli-
tical ideology, have largE!ly determined the com-
position of this vital bloc of 138 seats in the past.
The outcome in Uttar Pradesh will be particularly
important to Mrs. Gandhi because it is her home
state, and it has been a major battleground be-
tween the two Congress Party factions. She hopes
to carry the Muslim and Untouchable minorities,
which formed the backbone of the once-united
Congress Party's electorate.
This is one of India's most backward states,
and Mrs. Gandhi's strategy of attacking the right
might backfire here. Her strongest opposition is
from the rightist-oriented alliance of princes-who
still have substantial political influence-and the
Hindu nationalist Jana :Sangh Party. Her state
party organization is badly split, and this is one of
the few states in which the Ruling Congress runs a
clear risk of suffering defeat.
7 -
Special Report -7-
West Bengal
West
The problem of restoring stability to this
key industrial state appears to defy solution.
Demonstration in West Bengal
More than 30 parties will contest simultaneous
national and state elections on 10 March-unless a
further deterioration in public order compels the
government to postpone them. For the first time
since independence, the government has been
forced to call in the Indian Army to try to ensure
relatively peaceful conditions for campaigning
and balloting. The military is not trained to per-
form this civic function, and its ability to stem
the wave of murders and terrorist acts by rival
extremist groups is questionable. Postponement
of elections, however, would be considered a vic-
tory for the terrorist Naxalites, who have vowed
not to allow them, and would evoke a noisy
protest from the CPM, the most powerful con-
tender at the polls.
This large south Indian state, under a Ruing
Congress government, has long been troubled by a
separatist movement in the underdeveloped in-
terior region of Telengana. Mrs. Gandhi offered
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the region a formula that would postpone a deci-
sion on statehood until 1977, but the offer was
rejected. The residents have organized their own
political party and will contest the 14 seats from
the area.
This state also will hold simultaneous state
assembly elections in which the ruling DMK
hopes to regain its slowly ebbing power. One of
Mrs. Gandhi's ablest strategists, C. Subramanian,
has been working to establish a Ruling Congress
foothold in the state. The DMK, which has co-
operated with Mrs. Gandhi in New Delhi, was
reluctant to surrender seats in its own homeland,
but it eventually acquiesced.
Kashmir has only six seats in the Lok Sabha,
but activity in the state is of great concern to
New Delhi. Over the last several years the political
atmosphere in Kashmir has been more peaceful
than at any time since the state acceded to India
in 1947. The local government operates in har-
mony with New Delhi, and until recently political
activity among Kashmir-is opposed to the state's
incorporation into India did not exceed tolerable
limits. The Plebiscite Front, however, had not
abandoned its position that the future status of
Kashmir should be determined by a referendum.
When the front announced that it would run
candidates in the election for the first time, New
Delhi began to worry that the vote would reveal
considerable support for the front. During Mrs.
Gandhi's visit to the state last December, she
warned that the secessionist advocates would be
stopped and insisted that Kashmir's accession to
India was a closed chapter. Shortly thereafter the
front was declared illegal under the 1967 Un-
lawful Activities Act, and its members were pro-
hibited from participating in elections as front
candidates. Additionally, the most prominent
Kashmiri, Sheikh Abdull'ah, has been barred from
Kashmir for three months, and hundreds of front
activists have been arrested. New Delhi is now
confident that most of Kashmir's seats will be
Special Report - 8 -
retained by Mrs. Gandhi, but at the cost of
abruptly halting a three-year experiment in the
gradual liberalization of Kashmiri politics.
In Communist-ruled Kerala, a CPI/Ruling
Congress alliance is confidently awaiting the poll.
Inveterate leftist V. K. Krishna Menon, who won
a parliamentary seat in the last West Bengal by-
election, will seek election from his native Kerala
for the first time. His chances of winning the seat
are fair.
Mrs. Gandhi expects the Ruling Congress to
do well in Maharashtra-home base of a key politi-
cal figure, Finance Minister Y. B. Chavan. In the
Bombay region, however, gains may be made by
the Shiv Sena. Since its founding in 1966, this
nationalistic, anti-Communist organization, which
stands midway between a movement and a party,
has made considerable gains by seeking to pre-
serve the interests of Maharashtrians over south
Indian immigrants, who are said to enjoy a dispro-
portionate share of jobs in the state.
Although Gujarat and Mysore are Organiza-
tion Congress Party strongholds, the Ruling Con-
gress may pick up some seats, in part because of
the personal popularity of Mrs. Gandhi as well as
because of the dissatisfaction of Organization
Congress units over their party's decision to join
forces with the rightists. The Ruling Congress did
well in a recent series of by-elections in Mysore.
A slight gain is also possible in the Punjab.
The governing Sikh Akali Party generally sup-
ported Mrs. Gandhi in New Delhi, but efforts to
formulate a joint strategy in the state were unsuc-
cessful. In neighboring Haryana, the predomi-
nantly Hindu section of the formerly united
Punjab, the Ruling Congress is expected to retain
its majority despite well-organized Jana Sangh
opposition. In the isolated northeastern state of
Assam, the Ruling Congress is also expected to
pick up a few seats, largely because opposition
parties are so ineffective. Although Mrs. Gandhi
inherited Rajasthan's Congress Party bloc
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Two New Election Symbols
for the Now-Split Congress Party
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Old United Congress
Symbol
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following the split, it is questionable whether she
can make gains there against an opposition that
includes a number of princes and prominent busi-
nessmen.
Orissa is one of three states to hold concur-
rent state and national elections. In early January
the four-year-old Swatan-tra-Jana-Congress coali-
tion government fell, and both parties pressed
New Delhi for simultaneous state assembly elec-
tions. The Ruling Congress and the locally ori-
ented Jana Congress have discussed possible col-
laboration-thus far inconclusively-and Mrs.
Gandhi's prospects for increasing her representa-
tion in this state are not bright.
As for the races in India's generally small
union territories, the Jana Sangh is likely to retain
its hold in Delhi-the most important-while Mrs.
Gandhi should hold her own in the others.
Prospects Are for a Unique Election
The separation of national and state elec-
tions (except in three states) challenges the basis
on which the united Congress Party and other
major parties have operated since independence.
Confronted with the rise of numerous non-
Congress state governments following the setback
of the still-united Congress Party in the 1967
elections and a weakened Ruling Congress govern-
ment in New Delhi in 1970, Mrs. Gandhi con-
cluded that the old style of patronage politics
built around dual elections could no longer ensure
success. She is now betting that national issues are
capable of swaying substantial portions of the
electorate. By asking the electorate to vote almost
solely on national issues, she is hoping to bypass
locally dominant, traditional groups who for-
merly played the most important role.
In the past, a candidate's stand on state and
national issues was almost irrelevant, and he was
elected largely because of his proven or potential
ability to provide his constituency with ample
government largesse in terms of agricultural
credit, fertilizer, seeds, irrigation facilities, wells,
Special Report
roads, and schools. With almost 4,000 seats being
contested in the past in the two simultaneous
races, caste, linguistic, factional, and religious
groups engaged in highly complex bargaining ar-
rangements, swapping support for their various
candidates. Until the 1971 results are in, one can
only ponder whether the "new" politics has really
taken hold.
To win a majority Mrs. Gandhi must do well
in the major cities where she has held few seats
and among young people who are voting for the
first time, and she must regain that segment of
the Muslim minority that defected from Congress
in the 1967 national election. The fight will be
particularly stiff in those states where her party's
organization is weak at the grass-roots level. The
princes, who are smarting from her policy on the
privy purse issue, could pose a serious threat in
some 40 constituencies where they still retain
power.
Mrs. Gandhi has considerable advantages,
however. She has better material resources than
the opposition, including air transport for coun-
try-wide campaigning, and she receives wide-
spread media coverage. Although a Supreme
Court ruling denied both Congress Party factions
the use of the traditional symbol of yoked bul-
locks, the Ruling Congress has the edge because
of Mrs. Gandhi's national image as Nehru's daugh-
ter and as prime minister during the last five
years.
There is no means of surveying pre-election
trends among the mass electorate of 225 million
rural, predominantly illiterate, tradition-oriented
Indians who will determine the electoral out-
come. Less obscure are the 50 million urban
voters who are more or less modernized. This
group appears to be increasingly dissatisfied with
the government's performance in all spheres and
is demanding relief from the confusion, petty
maneuvering, and bureaucratic inertia that have
characterized India's first experiment in coalition
government. Despite the radical rhetoric from the
podium and in India's free press, however, it
_10- 19 February 1971
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appears that the vast majority of Indians are
moderate centrists.
Many objective observers expect Mrs.
Gandhi at least to hold her own and possibly to
win a few additional seats though falling short of
an absolute majority. If the increase is large
enough, she can lessen her dependence on as-
sorted leftists, regionalists, and independents, and
a stronger, more effective government-with cen-
ter-left leanings-might emerge. If not, Mrs.
Gandhi will continue to head the largest single
party, but the government will lack the stability
and decisiveness needed to grapple with India's
overwhelming problems.
Special Report - 11 -
CONFIDENTIAL
19 February 1971
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