WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009500010001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 46
• Document Creation Date: December 21, 2016
• Document Release Date: September 17, 2008
• Sequence Number: 1
• Publication Date: March 24, 1972
• Content Type: SUMMARY

Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
DIRECTORATE OF
INTELLIGENCE
Secret
WEEKLY SUMMARY
NAVY review completed.
State Dept. review completed
DHS review(s) completed.
Secret
24 March 1972
No. 0362/72
Copy
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
CONTENTS (24 March 1972)
1
The View From the Kremlin:
Brezhnev Surveys Foreign Policy
3
South Asia
5
Indochina
10
China: Paralysis on Personnel
14
Soviet Regional Develop
ment Uneven
15
The Great Submarine R
escue
16
Italy: Shifting Tactics
17
French Leader Calls Ref
erendum
18
Sweden: All Is Not Wel
l
19
MIDDLE EAST
AFRICA
Ceausescu's African Jou
rney
20
Israel-Jordan
25X1
23
ran: Dissatisfaction and Dissent
23
Cyprus: Archbishop on a Tightrope
24
Tunisia: The Succession Issue
WESTERN
HEMISPHERE
25X1
25X6
25X1
REPORTS `25X11
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
Party chief Brezhnev's careful formulations
of Soviet foreign policy this week suggest that
there are some within the leadership who still
need to be convinced of the efficacy of Brezh-
nev's detente policies. Speaking to a trade union
congress on 20 March, Brezhnev was unusually
frank in acknowledging difficulties encountered
by Soviet policies. He admitted that Soviet policy
toward West Germany was a touchy question in
the USSR and expressed some disquiet about the
results of President Nixon's trip to Peking.
Brezhnev provided Moscow's first authorita-
tive comment on the President's visit. He said that
Page 1
"subsequent deeds" of the US and China would
bring out the real significance of the talks; he
implied that the dialogue in Peking went beyond
bilateral Sino-American interests. He also listed
unrequited Soviet efforts to achieve a recon-
ciliation with the Chinese, including the first
public mention of a Soviet scheme for a non-
aggression pact. On the same day as the speech,
TASS announced that Deputy Foreign Minister
Ilichev had returned to Peking to resume border
talks with the Chinese after a three-month hiatus.
The Soviets probably are anxious to get a fresh
reading of Chinese intentions following the Nixon
visit.
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
Partly because of last month's summit in
Peking, Brezhnev's remarks were designed to
project a self-assured, yet cooperative, image. He
appeared to be trying to counter any suspicion
that the Soviets are on the defensive before their
own summit meeting with the US and to convince
Washington that the prospects for improved rela-
tions are brighter than for some time.
Brezhnev offered an explicit endorsement of
SALT just one week before negotiations resume
in Helsinki. Brezhnev also implied that the USSR
hopes for substantial accomplishments at the
summit. He omitted the usual pledges to match
US military spending with "increases in our own
military might."
West Germany and the EC
While defending Soviet policy toward Bonn,
Brezhnev urged West Germany to make the
"responsible choice" in favor of cooperation
rather than confrontation. He altered the previ-
ously negative Soviet policy on the European
Communities (recognizing the reality of the Com-
mon Market) in a move designed in part to
strengthen Chancellor Brandt's position on his
Ostpolitik treaties.
ilateral trade relations with EC
members will end in January 1973, and this is a
problem that Moscow must face up to regardless
of the fate of the German treaties. The recent
favorable Chinese approach to the EC may have
provided additional incentive to move quickly.
The general secretary's remarks on Asia
stressed the importance the USSR attaches to
strengthening its position in India and to im-
proving its relations with Japan. Brezhnev also
referred to his 1969 proposal for an "Asian col-
lective security system." The Soviets have no
illusions that such an arrangement will take shape
soon, but Moscow has resurrected the concept at
this time as a device to exploit Asian concerns in
the wake of the Sino-American summit and to
counter increased Chinese prestige. Moscow's
friendship treaty with India and warmer relations
with Japan grew out of the same concerns.
In this connection, the Soviets are still trying 25X1
to find ways to exploit Hanoi's discomfort over
the improvement in Sino-American relations. Last
October, President Podgorny went to Hanoi
possibility against the dangers of being excluded
from any Indochina negotiations or of damaging
relations with the US by trying to obstruct a
Soviet attempts to woo the North Vietnamese are
complicated by Moscow's concern that the US-
China talks may have improved prospects for an
Indochina settlement. Moscow must weigh this
Page 2
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
South Asia
NEGOTIATION PROSPECTS
The withdrawal of virtrlly all Indian troops
from Bangladesh last week removed a major
obstacle to peace negotiation -,on the subcon-
tinent, but other impediments r ain. A major
barrier to early negotiations overte important
prisoner of war issue involves Indias insistency
that Bangladesh also participate, MuJTh's refugal
to join in talks with the Pakistanis un'ess
Islamabad first extends formal recognitioc tab his
government and, finally, Bhutto's relucta !ce to
grant such recognition.
The tough line toward Pakistan la`eing taken
in both Dacca and New Delhi may, Pepresent ar">
effort to exploit the likelihood that Bhutto can-
not procrastinate indefinitely becatise of domestic
demands for the return of the 94,000 Pakistani
military and civilian captives. -India's willingness
to respect Dacca's position on the recognition
issue and to acquiesce in the Bengalis' determina-
tion to hold some war crimes trials indicates that
New Delhi continues to give priority to cementing
relations with Banglad($h rather than catering to
Pakistani sensibilities' in preparation for Indo-
Pakistani negotiations. In a further effort to build
a fire under Bhutto, Mrs. Gandhi has been at
pains to appear in no hurry to set a date for talks.
On returning from Dacca, she raised the possi-
bility of holding lower level discussions "some-
time or other" as a preliminary to an eventual
Gandhi-Bhutto summit.
Bhutto was busy, too. Indo-Pakistani nego-
tiations doubtless figured prominently in discus-
sions between Bhutto and Soviet leaders in Mos-
cow on 16-18 March. Bhutto's primary objective
was to remedy Pakistan's strained relations with
the USSR. Movement was limited. The joint com-
Page 3
SECRET
munic ,yfe following the visit offered little of sub-
stangg, nor is there any indication the Soviets will
attnpt to re-enact the mediatory role they per-
f med at Tashkent in 1966.
Immediately on his return from Moscow,
Bhutto addressed a mass public meeting in
Lahore. It was a long-heralded speech, and specu-
lation was rife that it would include a dramatic
announcement on Indo-Pakistani or domestic
affairs. This proved unfounded, but the speech
again demonstrated Bhutto's expertise in rallying
the masses. In contrast to seemingly conciliatory
statements on Kashmir prior to the Moscow trip,
Bhutto was unbending on Kashmir. He reminded
the audience of a quarter million Punjabis that
India has deprived the Kashmiris of their right to
'.self-determination and that the dispute remains
unresolved. Moreover, he pledged that Pakistan
would not suffer humiliation in order to reach a
sett?gment with India on prisoner repatriation and
other issues.
Rhetoric and pressure tactics aside, move-
ment tov rcird comprehensive negotiations in
South Asia ears to hinge on Pakistan's recog-
nition of Bangladesh. Bhutto probably would
not incur serioir, domestic opposition to this
move because most Pakistanis seem resigned to
the loss of the former east wing. Additionally, the
US Embassy in Islamalud recently concluded that
many educated Pakistan% lean toward normaliz-
ing relations with India, seven at the cost of
accepting the 1949 Kashm,,cease-fire line as a
permanent boundary. Bhutto is now absorbed in
the task of assessing how deep this tolerance on
Kashmir and India may run, taking into special
account the sentiments of the military establish-
ment whose raison d'etre for the last quarter
century has been confrontation with India.
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
present standoff. Maintaining large numbers of
troops in the field for extended periods of time
costs money, cauwe increa ed wear on equip-
ment, brings mainten'a-"problems, and poses a
drain on POL stocjsn and--gther supplies. Aside
from these logist* s factors, there, is the problem
of troop mo e, which cannot be maintained at a
high lev indefinitely under field conditions if
ther no action.
Some three months after the 14-day war,
Indian and Pakistani forces are still deployed
against each other along their common border.
Neither side` has made any attempt at wholesale
withdrawal`: of combat personnel and some
250,000 Indian troops still stand against about
180,000 Pakistanis. Most of the units now de-
ployed along the common border are likely to
remain in place; at least until an agreement in-
cluding border definition and exchange of pris-
oners has been reached.
New Delhi still holds more than 75,000
Pakistani troops captured in the fighting. Even
with the eventual return of these prisoners and
the resupply of Islamabad's armed forces, princi-
pally by China and France, India's military su-
premacy over Pakistan it, assured for the foresee-
able future. Elimination Of the Pakistani threat
along India's eastern border permits New Delhi to
concentrate its attention ki the west-the only
area where the Pakistani Army could threaten
India. Nonetheless, some 20Q,000 Indian troops
remain available in the east to defend the border
with China.
The Indians are capable of much greater
reinforcement along the common border than are
the Pakistanis. India could assemble in the area a
ground force up, to three times larger than any
force Pakistan could muster. Although there were
some losses in aircraft during the war, the Indians
probably continue to hold at least a two to one
advantage in fighter aircraft over the Pakistanis.
Renewed hostilities do not appear imminent.
Both sides have lobbed shots at one another from
time to time during the past few months, actions
similar to those that followed the 196 war. The
forces of the two countries are on less than full
alert status-India, for example, recently has re-
turned some munitions to storage areas.
On purely military grounds, there are a
number of considerations that place limits on the
Page 4
BANGLADESH
In Bangladesh, meantime, a few parts of the
country are experiencing serious food shortages.
Government foodgrain stocks are low, partic-
ularly in the the traditionally deficit districts.
Bangladesh leader Mujib and other officials have
complained t&-k1N--repre ntat es that Bangla-
desh expected immediate and large-scale relief
assistance, but little has so far arrived. Substantial
foreign commitments have been made, but deliv-
ery has been slow, largely because Bangladesh's
two main ports, Chittagong and Chalna, are
clogged with sunken vessels. Last week, Mujib
accepted a Soviet offer of salvage assistance, ap-
parently because of UN slowness in providing
promised assistance for the purpose. Continuing
transportation difficulties inland are also in-
hibiting food distribution.
Some Indian Army elements have returned
to Bangladesh to help quell unrest in the
country's remote southeastern hill region. The
troublemakers there include persons who collabo-
rated with Pakistan last year and rebellious tribes-
men from the nearby Indian territory of
Mizoram. The problem is a legitimate concern of
both countries since the dissidents operate on
both sides of the border. Indian troops have not
otherwise resumed involvement in the internal
Bangladesh security situation. Bangladesh is likely
to have continuing problems in the hill area; the
inhabitants are predominantly non-Bengali tribes-
men who fear domination b the country's
Bengali majority.
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
Indochina
The latest Communist offensive against Long
T,~eng is nearing the end of its second week, and
the outcome of the battle is still in doubt. After
routing irregulars from all their positions near
Sam hong on 18 March, the North Vietnamese
cz)^cc ntrated on Skyline Ridge overlooking Long
tang Despite heavy shellings and asr strikes,
oops of the North Vietnamese 312th Division
s ;~ui d o n itions on the central and western
portions of the ridge while units of tie 316th
Division shelled and probed irregulars on the east-
ern ridge. Enemy tanks supported the attacks in
the 'am Thong area, and there are signs that these
tanks are moving toward Long Tieng.
Heavy fighting
Skyline Ridge
Long Tieng Afha Dong
8ouan+ Long p,
Government-held location
f Communist-held location
Long Tieng from Skyline Ridge
The battle for Long Tieng may be decided
by whether the irregulars' morale or the North
Vietnamese supplies give out first. Vang Pao's
irregulars on Skyline Ridge have fought with
tenacity, and the arrival ofLfresh troops on 22
March should bolster the defenders' morale. The
Communists must also be feeling the effects of
the heavy fighting and air strikes, but apparently
their morale is still good.
Vang Pao's operation against the enemy's
rear areas has had little effect so far on the
Communist effort at Long Tieng. -Advance
m.ents of two task forces are very near Commu-
nist supply lines northeast of the Plaine des
Ja .res. For the moment the Communists appar-
ently intend to counter Vang Pao's diversionary
effort with Pathet Lao and North Vietnamese
troops already in this area. There is no sign of
troops being diverted from the attack on Long
Tieng.
Since their dry-season offensive began in
mid-December, the Communists have expended a
SECRET
Page 5
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
vast amount of materiel and troops in a sustained
effort to capture the Long Tieng complex. Their
apparent lack of reaction to Vang Pao's latest
diversionary operation suggests that the Commu-
nists realize they may not get another crack at the
stronghold this dry season if the present attempt
fails.
A TUMULTUOUS WEEK IN CAMBODIA
President Lon No] has begun his third year
of rule by patching together a new government.
After a number of prominent civilians refused to
head up a cabinet pre-selected by Lon Nol, the
ailing President turned to former exile leader Son
Ngoc Thanh. The 63-year-old Thanh, who has
been waiting patiently for many months on the
political sidelines for just such a call, quickly
accepted Lon Nol's offer to serve as "first min-
ister" and minister of foreign affairs.
Thanh's acceptance of those posts without
any major conditions indicates that he recognizes
that Lon No-who now has added the rank of
prime minister to his lengthening list of titles-in-
tends to remain the dominant figure in the gov-
ernment To underscore this point, Lon Nol let it
be known that Thanh will coordinate but not
direct the work of the other cabinet ministers.
Tha,ih's willingness to serve may stem in
part from a belief that he can exercise a moder-
ating influence on Lon Nol's authoritarian tend-
encies. At the same time, Thanh's announcement
that Lon Nol alone picked the cabinet suggests
that the new "first minister" is trying to preserve
a measure of political independence. For the
moment, Thanh is a definite asset to the regime.
He has the respect of many well-known civilian
politicians and few enemies. In addition, his anti-
Sihanouk credentials, his strong attachment to a
republican form of government, and his reputa-
Page 6
tion for honesty should appeal to dissident stu-
dents and their Buddhist supporters who are con-
ducting anti-government protests.
Thanh represents the major new civilian face
in the Lon Nol cabinet, which otherwise reflects
the growing political role of the military establish-
ment. In addition to retaining the Interior Minis-
try, the military picked up the important port-
folios of defense, commerce, and education. The
balance of the cabinet consists primarily of civil-
ian technicians carried over from the previous
one. The chances are that the new cabinet will be
no more effective and may be less popular than
its predecessor.
Meanwhile, the students, whose agitation
was instrumental in excluding Sirik Matak from
the cabinet, still pose a problem to Lon Nol.
Although there apparently is some disagreement
within student ranks over how far to proceed
with demands for a return to constitutional rule,
the protesting goes on. Thus far, Lon Nol has not
taken a tough line against the students. At mid-
week, he took note of one of their key goals and
announced that a new constitution would be pro-
mulgated "in two weeks."
In the midst of this political tail-chasing, the
Communists brought the war dramatically to
Phnom Penh on 21 March. They broke a three-
month lull by staging their heaviest shelling attack
so far on the capital. Approximately 100 rocket
rounds fell on Pochentong Airport and on
crowded refugee quarters near the heart of the
city, starting fires that caused numerous civilian
casualties. The shelling was accompanied by a
small-scale sapper attack against the government's
main radio station a few miles east of the airport.
Thirty-eight Cambodians were killed in this raid,
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
and the station suffered substantial damage. Two
days later, enemy frogmen succeeded in sinking
an oil tanker and damaging a freighter at anchor
on the Mekong River near the docks of Phnom
Penh.
South Vietnamese Operations
The South Vietnamese began a new stage of
their current cross-border operation this week.
While most of the 6,500-man task force continues
to seek out Communist base complexes and sup-
ply dumps west of Tay Ninh Province, a small
feint northward toward the Communist troop
concentration near Krek is under way.
The first two-week phase uncovered large
quantities of supplies and weapons and disrupted
enemy rear-service units in one of the Com-
munists' main staging areas for attacks into South
Vietnam. Buoyed by the successes of the cam-
paign thus far and with relatively few casualties,
South Vietnamese planners believe that now is
the time to clear out these border bases. General
Minh, the commander of the MR-3 forces, will
probably continue the drive as long as the Com-
munists do not offer any significant opposition.
Of the 700 Communists reported killed by
the South Vietnamese during the first stage of the
operation, most were killed by air and artillery
strikes and probably were logistics and rear guard
personnel. So far, the Communists have not
moved any part of their three-division force south
to counter the operation west of Tay Ninh
Province.
After several weeks of heavy shelling just
below the eastern end of the DMZ, Communist
forces in Thua Thien Province mounted ground
and artillery attacks last weekend, and sharp
fighting continued this week. The new battle-
ground is in the mountains west of Hue. Elements
of the North Vietnamese 324B Division and the
6th Regiment fired mortars and rockets into
South Vietnamese field positions. More than
1,150 rounds were used in one bombardment. A
ground assault included a force of two bat-
talions-the largest such attack within South Viet-
nam for many months. Communist losses have
been high, with more than 400 reported killed in
these actions.
Although action in the northern provinces
involves only a few of the enemy units in the area
and remains localized, Communist military activ-
ity has picked up elsewhere. During the weeks
preceding 11 March, the total number of daily
SECRET
Page 7 WEEKLY SUMMARY 24 Mar 72
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
allied-initiated incidents were at least twice those
initiated by the Communists, but the statistics
began to shift the following week and, between
12 March and 20 March, Communist-initiated
actions exceeded those of the allies.
NORTH VIETNAM: AIR DEFENSE BUILD-UP
Two new airfields are under construction in
southern North Vietnam.
a new field Wort
of the Mu Gia Pass in an early stage of con-
struction; its runway measures about 3,800 feet.
Earlier this year, the North, Vietnamese had begun
work on another airfield cast of Mu Gia; one third
of the 5,600-foot run0vay has already been sur-
fared. If work continues at the present pace, this
field could be ready for limited operational use in
a month or so.
The rapid pace of construction at these air-
fiu ds suggests that Hanoi may intend to mount a
higher level of air operations during the next few
months By this summer, Hanoi could have six
-infields far southern North Vietnam capable of
hand!;n-1 jr?t aircraft.
Page 8
Party Re-building in North Vietnam
The party leadership in North Vietnam ap-
parently has again declared open season on
bureaucratic stagnation and corruption. Party
functionaries have been engaging in some un-
usually frank self-criticism in the open press,
much of it focused on the inter-related problems
of recruitment and membership qualifications. A
recent editorial in the party journal, Hoc Tap,
admitted that up to 20 percent of the new mem-
bers in some areas are below normal recruitment
standards. One reason for this, according to the
article, was the overzealouness of some party of-
ficials during the so-called "Ho Chi Minh recruit-
ment drive" of the last two years. The drive
reportedly has brought in party candidates with
panache and enthusiasm at the expense of those
with superior ideological qualifications. The
journal hints darkly that cronyism and patronage
by high-ranking party officials have helped open
the door for unqualified recruits.
The "Ho Chi Minh drive" was aimed specifi-
cally at extending party membership (and con-
trol) to as many young people as possible."
Partially as a result, about half of the party's
current 1.1 million members are under 30 years
of age. Many of the recent complaints about the
poor quality of the membership lay the blame at
youth's doorstep. Some editorials in the party
and army newspapers have argued that the defi-
ciencies of the party's youth are a primary cause
of the lethargy among city dwellers and workers
and of the slackness in the ranks of the army.
Several other editorials, however, have di-
rected their harshest criticism at the party itself
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
and its "insensitivity" to the needs of the
people-with no special brief for either age or
experience. National Assembly President Truong
Chinh complained recently of the "bureaucratic
and comrnandistic attitudes" of the party mem-
berr. Soon afterward, a military journal pointed
Out that efforts to improve coordination between
He Party and its agencies in the army had proved
ppointing. A Hoc Tap editorial, published
no ifter last fall's disastrous floods in North
earn, observed that the catastrophe had not
all had since it had at least f,,rce + party
?,;aers to buckle down ?o their b.isic respon-
:0r1 ies.
No one in the party leadership seems sure of
what to do about this sort of problem. Some
critics, especially those who are exercised about
youth and recruitment difficulties, have called for
a disciplinary crackdown and the expulsion of
everyone not up to standard. Others, such as
Hanoi's municipal party head, have urged sub-
ordinates, as well as the party as a whole, to allow
free: debate and discussion and to avoid intimi-
c':ti-iq those who want to speak out. Still others
av:e proposed traditional rernedi=s. Truong
Chifrh, for example, has suggested that added
scs of indoctrination should be sufficient to
i":' titer ;ut the problem cases.
Some of the proposais seem excessive and
?r > vi a,t belated, since much of what ails the
,circaucracy has been present for some ;ime.
None of the party's critics has addressed the more
basic question of the extent to which real reform
is practical under present conditions. Certainly,
the regime cannot be expected to go very far
toward implementing a major crackdown or
purge, since either measure could dangerously
weaken the party's reach among the population as
a whole. For similar reasons, no one at the top is
likely to push very hard for a loosening of the
party structure. With Ho Chi Minh's death, the
party was deprived of the one person who was
strong enough to tolerate significant bureaucratic
innovation and charismatic enough to assure the
people's loyalty and support through it all. Until
an equally forceful personality takes the political
helm in Hanoi, party reform is likely to remain a
hig4r idea! with a low priority.
Page 9
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
China: Paralysis on Personnel
Six months have passed since the regime was
rocked by the dramatic Lin Piao affair, and there
has been no discernible movement in filling va-
cancies in the military command or fleshing out
the 25-member politburo from which ten civilian
and military figures were purged. The delay in
filling posts at the military regional and provincial
levels is even longer-some of these positions have
been vacant for two years. While this has not
prevented Peking from administering the country
quite effectively, the question of personnel selec-
tion at the highest levels, and thus of power
configuration, is a central, and unsolved, problem.
be disagreement as to whether the new appointees
should also be elevated to the politburo rank held
by the purged officers. This factor, however, does
not explain the anomalous position of politburo
member Yeh Chien-ying, who is a close colleague
of Chou and is serving as China's top military
representative without ever having been desig-
nated even acting defense minister. The military
personnel equation in Peking is complicated by
quarreling over the role to be given the army in
the running of the country and, perhaps, by sec-
tarian rivalries within the military hierarchy itself.
At the top, only a dozen politburo members
have been publicly active since last autumn, and
the effective authority of some of these is in
question. Madame Mao, for example, continues to
rank immediately behind Premier Chou En-lai in
the pecking order, but her low profile during
President Nixon's visit and her diminished role in
the current cultural thaw belies her public power
position. Wang Tung-hsing, an important figure in
security and party administrative affairs, and
propagandist Yao Wen-yuan appear only infre-
quently, and there are tenuous indications that
they may be under a political cloud. The long
absence from Peking of Chen Hsi-lien, one of the
ranking regional military leaders on the politburo,
casts doubt on his influence on national decision-
making. Moreover, Chen's conservative colleague,
Hsu Shih-yu, the Nanking Military Region com-
mander, reappeared in early February after an
eight-month public absence but has not been seen
since. Hsu's one appearance suggests there may be
considerable resistance from radical forces, both
civilian and military, to his political resurrection.
The most telling indicator of persistent
maneuvering in Peking is the failure to fill any of
the five vacancies at the apex of the military
command structure created by the purge of De-
fense Minister Lin Piao and other senior military
chiefs. One factor complicating the problem may
There is also a number of key vacancies
below the politburo level. Two of China's 11
major military regions are without commanders;
one of these posts has been vacant since De-
cember 1970. In Peking city, the top party and
administrative slots have remained open since the
political demise of politburo member Hsieh
Fu-chih two years ago; the sensitive post of
Peking garrison commander has been vacant for
nearly as long. In southwest China, the recent
death of Szechwan provincial chieftain Chang
Kuo-hua and the prolonged absence of the
principal leaders in Kweichow Province-both po-
litically turbulent areas-confront Peking with
difficult decisions.
The personnel situation is not much better
in secondary levels of the central party and gov-
ernment hierarchy. Of the ten or so principal
operational departments under the party central
committee, only one post has been filled since the
Cultural Revolution. Six government ministers
were named in 1971, but a number of vacancies
remain and there have been no new appointments
since last November. Indeed, one veteran civilian
official who was mentioned for a brief period last
fall as the new minister of fuel and chemical
industries is again being identified by his previous
title of vice minister.
SECRET
Page 10 WEEKLY SUMMARY
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
The personnel dilemma still confronting
Peking does not necessarily mean that the relative
influence of Chou En-lai and other moderate
elements in the ruling elite has not been strength-
ened in the wake of the Lin Piao affair. Indeed,
the pragmatic domestic and foreign programs
associated with these men have been given added
momentum in recent months. Still, the delays
reflect Chou's apparent inability to move de-
cisively in areas clearly within his purview as
premier-but then neither does any other member
of the hierarchy appear able to exert paramount
influence in personnel selection.
SECRET
Page 11 WEEKLY SUMMARY
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
Iq
Next 1 Page(s) In Document Denied
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
Soviet Regional Development Uneven
Despite the official policy of economic
equality throughout the USSR, regional economic
differences widened during the 1960s and may
continue to do so during the early 1970s. In the
1960s, Central Asia and the Transcaucasian
republics had the lowest levels of development as
the result of extremely rapid population growth,
relatively small investment, and low productivity
of labor and capital.
same time, reduce regional differences signifi-
cantly. The emphasis on speedy development dur-
ing the 1920s and 1930s, in conjunction with a
shortage of capital, encouraged growth at existing
industrial centers-the European part of Tsarist
Russia. This imbalance has persisted, and today
most of those regions with the highest income per
capita still have the best investment oppor-
tunities.
The Soviets have found it difficult to pursue
maximum national economic growth and, at the
REGIONAL ECONOMIC INDICATIONS
(by rank)
Per Capita
National
Income
Per Capita
Industrial
Output
Per Capita
Agricultural
Output
European Region
Latvia
1
4
3
Lithuania
4
15
2
Estonia
2
3
1
Belorussia
9
17
5
Ukraine
5
6
10
Moldavia
8
19
9
RSFSR
3*
-
-
Center
1
19
Northwest
2
22
Urals
5
16
Volga-Vyatka
8
13
Volga Valley
9
11
North Caucasus
11
7
Central Chernozem
24
4
Siberian and
Far East Region
RSFSR
East Siberia
12
14
West Siberia
10
8
Far East
7
24
Central Asia and
Transcaucasus Region
Georgia
12
14
20
Armenia
7
13
21
Azerbaydzhan
6
16
23
Kazakh
10
18
6
Turkmen
11
23
15
Uzbek
13
21
12
Kirgiz
14
20
17
Tadzhik
15
22
18
This course of development has created
three basic economic regions: the European
USSR, which contains over two thirds of the
country's population and three fourths of its
industrial employment; the sparsely populated
and little-industrialized Siberian and Far Eastern
region; and the underdeveloped region of Central
Asia and the Transcaucasus, which has one fifth
of the population but only one tenth of industrial
employment.
Regional differences in Soviet population
growth reflect the world-wide trend of a declining
natural increase as urbanization and incomes rise.
In the Russian republic (RSFSR), for example,
the birth rate is less than half that of the minority
nationalities in Central Asia. Inter-regional migra-
tion aggravated these disparities as workers from
the north flowed to the more favorable climate of
the south. Regional wage differentials failed to
stem the tide.
The investment policies of the 1960s did not
favor consistently those republics with the lowest
per capita national incomes. Although the Kazakh
and Turkmen republics received more investment
per capita than the richer republics, Georgia,
Kirgizia, and Tadzhikistan were given only half
the investment of the Kazakh republic. Moreover,
greater investment in the less-developed regions is
discouraged by the slow growth in their labor and
capital productivity. Increases in industrial
production are becoming relatively more ex-
pensive to achieve in these areas than in the
developed western regions.
SECRET
Page 14 WEEKLY SUMMARY 24 Mar 72
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
Ukroine European
The new five-year plan suggests that the
geographic pattern of development will not duct vlity, m depend pmarily on uas the Soviets leadership isaysait must,
change radically during 1971-75. The plan does the develonmpnf non Pro
not contain a program f
,
___
or
c
but o
of capital and labor. Indeed, if industrial
THE GREAT SUBMARINE RESCUE
The H-class nuclear submarine that was disabled in the North Atlantic four weeks ago
continues to be the object of the largest rescue operation ever mounted by the Soviet Navy.
The Soviets have succeeded in moving the ballistic-missile submarine about 1,200 rim. to an
area north of Scotland, but it has not been easy because of storms and high seas. An ocean-going tug
finally succeeded in attaching a line to the submarine early last week and is towing the H-class at
four to five knots. At this rate, another week will pass before the submarine arrives in a Northern
Fleet area port.
The helicopter carrier Leningrad and about ten other ships are in the area of the stricken
submarine. Helicopters from the Leningrad are making numerous flights with provisions and
equipment. The US Coast Guard cutter Gallatin has been at the rescue scene and on 18 March noted
that stretcher-like objects were being taken off the submarine.
Although it has been a
month since the submarine was forced to surface east of Newfound-
land, the cause of the original emergency is still not cle
operations
T
ar.
he loss of power and the towin
suggest, however, that the problem involved the main prnnulsi
- 9
on
SECRET
Page 15 WEEKLY SUMMARY 24 Mar 72
l
~ Siberran
R.S.F.S.R. Far Ea st
J
J East Siberia
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
Italy: Shifting Tactics
The scheduling of parliamentary elections
this spring-almost a year early-is forcing the
parties to make some quick adjustments as they
scurry for votes.
To undercut the appeal of the far right, the
Christian Democrats have substituted a "law and
order" campaign for their usual intricate bal-
ancing of personal and political interests. Mariano
Rumor, the Christian Democratic minister of in-
terior and would-be prime minister, has staged a
series of well-publicized police actions in the
wake of recent violence. To allay fears of price
escalation, the minority Christian Democratic
government has decided to seek further delay in
implementing the value-added tax system re-
quired by Italy's Common Market partners.
Pushed by a faster-paced election schedule
than they had anticipated, the Social Democrat !;-
have have abandoned former president Giuseppe
Saragat's policy of cozying up to the Socialistsf'in
the belief that emphasis on anti-Communisrrvwill
poll more votes. The Socialists, on the other
hand, are wooing leftist votes from the faltering,
Soviet-supported Proletarian Socialists. f'
The--#- mmarrists
already aye lost a week,
aving spen fa o t e last one tied up in their
long-schederied 13th party congress. With an eye
to the electorate, Secretary General Berlinguer
softenegI the party's opposition to NATO. Instead
of tho' usual call for Italy to leave the alliance,
Berlinguer asked that Western Europe develop so
as to "free itself from American hegemony."
f
The activist and far-left Manifesto group has
settled on tabloid hero Pietro Valpreda, an
anarchist, as one of its candidates. Valpreda has
been accused, but not tried, in the deaths of 16
persons in a Milan bombing in 1969.
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
Giorgio Almirante, leader of the/eo-fascists,
is str sing his party's claim to-be the true
"nation l alternative of the right,,He has insisted
on selec ing some candidates fom outside. With
the evide t intent of exploi ' g concern in Italy
over the shrinking West In presence in the
Mediterran4n, for exam the neo-fascists have
chosen Adm}cal Gino Bipfndelli to head their elec-
tion list in Naples. EXrindelli, NATO's former
naval commander in 6e Mediterranean, was ex-
pelled from Malta l (st June for right-wing views.
The neo-fascists ar no longer anti-American.
i 4
Meanwhile/ he pening of the campaign has
stalled the untficatior), of Communist and non-
Communist Ia6or confederations. The unification,
earlier scheduled for coipletion in 1973, would
mark a further step in `4he integration of the
Communists into Italian political life. Organized
labor has shown increasing s#,cill in negotiating on
social and economic reform with the govern-
ment. For the duration of ie campaign, the
confederations seem likely to mkintain a common
front in labor activities, but 'they will delay
further action on the merger until the election
results are in and their portents assessed.F-
ch Leader Calls Referendum
esident Pompidou's announcement of a ref-
erendu on enlargement of the European Com-
munitie , was prompted by domestic considera-
tions, although he may hope it will yield benefits
abroad as'Vell. Expansion of the EC already en-
joys great opular support in France, and the
referenda may further divide opposition
political parties long at odds over the Common
Market.
I n a press>: conference on 16 March,
Pompidou again gave priority to France's internal
problems and its European policies. His surprise
decision to hold a referendum-a device much
used by De Gaulle-will focus political debate this
SECRET
Page 17 WEEKLY SUMMARY
spring \ on a popular foreign issue and distract
attentiin from the government's domestic short-
coming. The latest polls show that well over 60
percent 'of the French favor the construction of a
united Europe. A large majority thus is expected
to vote yes in the referendum in late April or
early May."
The opposition, looking to parliamentary
elections next year and caught flat-footed by the
referendum, has denounced Pompidou's decision
to bypass parliamentary ratification of the acces-
sion. The French Communist Party adamantly
opposes expansion of the Community, while the
Socialists, Radical Socialists, and centrists gener-
ally favor enlargement. Disagreement over the en-
largement issue will complicate efforts of the
non-Communist left to reach.an electoral alliance
with the Communists before next year's parlia-
mentary races. Mindful of,'this and of Moscow's
apparent shift on recognition of the EC, the Com-
munists may find it politic to shift their ground.
In addition to domestic gains, Pompidou
hopes that a strong mandate will strengthen his
hand in deliberation' with the European Com-
munities. He may also hope the referendum will
demonstrate solid support for his broader Euro-
pean policy, which is geared toward France's
leadership of a confederal, ton-supranational
Europe independent of the US.
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
Sweden: All is Not Wel I
Sweden's ruling Social Democrats are in a
serious slump, primarily because of the sluggish
economy and differences over centralization of
government. Although their minority government
does not appear in any immediate danger, its
prospects in the election next year are not as
bright as they were.
A recent opinion poll indicated that the
popularity of Prime Minister Palme's party had
slipped to 42 percent, down nearly ten points
from its high three years ago. The same poll
showed that 50 percent favored the three bour-
geois parties, though these parties normally fight
as much with each other as with the Social Demo-
crats. With 26 percent of opinion in support of
the leading opposition Center Party, its chairman
was prompted to say that if the bourgeois parties
receive a majority in next year's election they will
definitely put together a coalition without the
Social Democrats.
The Communist Party, which took a drub-
bing in 1968 as a result of the Czechoslovak crisis,
has regained some ground and is now, the polls
show, the choice of 5.5 percent of the populace.
Until lately, Palme could count on the 17 Com-
munist representatives in parliament to achieve a
majority in close votes. Earlier this month, the
Communists abstained on an unpopular govern-
ment proposal on further centralizing the gov-
ernment; the bourgeois opposition seized the
opportunity to press for a return of authority to
the provincial governments. Three days later, the
Social Democrats renewed their wooing of the
left, announcing that Sweden intended to propose
continued aid to North Vietnam and "national
liberation" movements in Southeast Asia. Other
gestures to the left may he made as long as the
government feels vulnerable.
Page 18
Adding to Palme's troubles, a protest by a
small group of irate Swedish housewives in Febru-
ary has sparked a nationwide campaign against
high food prices. Some 120 "action groups" have
sprung up throughout Sweden. In addition to
spontaneous demonstrations to dramatize their
cause, the ladies have boycotted such products as
milk, beef, veal, and pork. The "milk strike"
caused sales to drop by an estimated six percent
in the Stockholm area during its first ten days.
Despite price reductions by a few food stores, the
boycott tactics may be extended to other items if
the government does not do something to reduce
prices generally. At least one opposition party
leader has pledged to take up the housewives'
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
cause if the government continues to ignore the
issue.
The over-all economic situation is not criti-
cal. While there was no growth in Sweden's real
Gross National Product last year and industrial
production is stagnant, Sweden has a favorable
foreign trade balance and unemployment is be-
ginning to abate. Palme has played for time all
winter, looking forward to the normal cyclical
economic upturn in the spring, and there is ample
reason to believe it will occur. Nevertheless, food
prices and local control of government are funda-
mental issues in Sweden, ones that find public
opinion and Social Democratic policy at variance.
Palme may discover that, even if he curbs the
recession and checks inflation, additional changes
in basic party policy on such issues as centraliza-
tion of authority will be necessary to keep the
opposition out of power in 1973.F__1
Ceausescu's African Journey
The Romanian leader's current tour of eight
diverse sub-Saharan and Arab countries is a tour
de force designed to emphasize the correctness of
Bucharest's approach to international relations
and to display his confidence that all is well at
home.
Now about halfway through the trip,
Ceausescu is using the African forum to drum
away at the efficacy of Romania's "principled"
approach to foreign relations. By "principled," he
means international relations based on universal
observance of national independence and sover-
eignty, non-aggression, equality of rights, and
non -interference in internal affairs-concepts
Bucharest invokes to minimize Soviet interference
in Romania.
Ceausescu hopes in part to promote soli-
darity with several Third World countries long
courted by such disparate friends of Romania as
Yugoslavia and China. More importantly, he
wants to offset the impact of big-power diplo-
macy and hedge against Soviet pressures by trying
to insert Romania more deeply into the lattice-
work of Third World nations that may share a
common sensitivity to real or imaginary inter-
ference and manipulation by big-power blocs.
The communiques issued after talks between
Ceausescu and the leaders of Algeria, the Central
African Republic, the People's Republic of the
Congo, and Zaire have resoundingly endorsed the
Romanian principles. In particular, the com-
muniques have pointedly stressed the role of
small- and medium-sized nations in advancing the
observance of international law.
The same theme is expected to be stressed
when Ceausescu stops in Tanzania and Zambia,
both of which have close relations with Peking.
His next-to-last stop will be in the Sudan, which
crushed a Communist plot last year and broke
diplomatic relations with Moscow, eliciting only a
muted protest from Bucharest. Ceausescu's final
stop will be Cairo with which Bucharest restored
diplomatic relations last month even though
Romania is the only Warsaw Pact member to have
diplomatic ties with Israel.
Ceausescu's journey, his first to the African
continent, is his longest since coming to power in
1965. His nearly month-long absence from
Romania strongly suggests that he is confident
about the Romanian domestic scene and that he
feels relatively free from foreign pressure.
Ceausescu's plans to visit Japan in late May add to
SECRET
Page 19 WEEKLY SUMMARY
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
Tel Aviv is going ahead with plans to con-
duct municipal elections in the Israeli-occupied
West Bank on 28 March despite a last-minute
hitch that could render the whole process moot.
The former mayor of Nablus and the most
significant figure in the election, Hamdi Kanaan,
withdrew his candidacy on 21 March citing "the
ugly atmosphere in the city and future dangers."
His statement followed widespread anti-election
agitation. Seven members of his slate also reversed
their decisions to run. Israeli Defense Minister
Dayan reacted to the surprise move by
threatening to bring in Israeli troops to govern
Nablus if new officials are not elected as sched-
uled. With the withdrawal of the eight candidates,
there are only ten candidates for ten seats on the
Nablus Municipal Council. Under Jordanian law,
if there are not more candidates than seats, the
candidates automatically fill the posts and no
election is necessary.
Following the 1967 war, the Israeli occupa-
tion authorities allowed most of the incumbent
Jordanian municipal officials to stay on and
administer pre-war Jordanian laws and regulations
in the West Bank towns. Jordan continued to pay
their salaries. When their original terms expired,
these officials were simply confirmed in office by
the Israelis. The Israeli Government announced
on 26 November that it would hold elections in
Nablus and nine other towns in the northern part
of the West Bank. Local Arab politicians at first
opposed the Israeli decision, but by 14 March, the
deadline for filing, 141 candidates had declared
their candidacy, including the mayors of all the
towns except Nablus. Some of these candidates
may now reconsider in the wake of Kanaan's
action.
Much of the Arab confusion and hesitancy
over the elections came from the ambivalent
stance of the Jordanian Government. At first,
Amman opposed the elections, calling Tel Aviv's
decision to hold them a contravention of interna-
tional law and the Geneva Convention. By mid-
January, the Jordanian Government became
apprehensive lest its continued opposition prevent
the traditional leadership from participating in
the elections and allow younger anti-Hashimite
elements to win by default. It quietly dropped its
opposition, at least for a time. 44+ g-.klu~'s
"isplart -for West Bank regional
aUjonorny-may signal yet another change of heart
and a reversion to-Amman's- oriaiinal"nooosition.
SECRET
Page
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
King Husayn's West Bank proposal has
aroused a flurry of criticism and a buzz of activity
in the Arab world. The hue and cry may reflect a
general Arab recognition that Husayn has taken
some of the wind from the sails of the Palestinian
resistance movement.
Iraq reacted immediately, spurning the pro-
posal as "defeatist and capitulationist." The com-
ment that emerged a few days later from the
fedayeen organizations was shrill: the proposal
"liquidated" the Palestinian cause and differed
little from Israel's "oppressive" policy toward
Palestinians. Fatah again called for the overthrow
of Husayn. In this connection, Husayn's plan to
leave Jordan in late March for the US has renewed
speculation that the King may be the target of a
fedayeen assassination attempt.
The Confederation of Arab Republics took
several days to react and then concentrated its
fire on form rather than substance. Husayn was
castigated for attempting to solve a "pan-Arab"
problem by himself. All the major Arab govern-
ments except Saudi Arabia and Sudan have now
publicly rejected the proposal.
There seems to be little concern in Jordan
over the negative Arab reaction. In Jordanian
eyes, a Jordanian- Israeli understanding on this
score is not particularly objectionable so long as
the West Bank and East Jerusalem are returned to
Jordan's control. Many Palestinians resident in
Jordan also view the proposal favorably, seeing it
as promising some hope that they can return
home. Reaction among Palestinians elsewhere is
mixed. According to Israeli press reports, refugees
interviewed in Gaza reject the idea of being gov-
erned by Husayn under any arrangement, and the
Page 21
press has also carried reports of a demonstration
against the plan by school children in Nablus on
the West Bank. In general, however, although few
West Bankers are enthusiastic about the proposal,
few seem inclined at this stage to reject it out of
hand.
Geiro-is-probably not as opposed to the plan25X1
as..its.-.association with the Confederation state-
rrment would indicate. It could not, however, risk
sit once on the issue, much less give approval, in
view of the widespread negative reaction. Among
other Arab states and the Palestinian resistance
leaders, reaction seems to point to a degree of
consternation that Husayn has caught the feda-
yeen off balance and has pre-empted their posi-
tion as the self-professed spokesman for the
Palestinians' true aspirations.
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
Iran: Dissatisfaction and Dissent
Iran is stepping up its anti-dissident activities
amid reports of growing popular dissatisfaction
and increasing subversive activity.
Last week, the government executed nine
persons convicted of treason, bringing the total
for the year to 19. The announcement of the
executions followed student demonstrations two
weeks ago protesting previous trials and execu-
tions. The urban guerrillas have attracted some
public sympathy and even admiration because,
for many, they provide a vicarious expression of
the resentments they dare not express themselves.
Over the past several months, a number of
more or less chronic causes of popular dissatisfac-
tion have taken on a sharper edge. Food prices
have approximately doubled during the past year,
without a proportionate increase in wages,
putting a real squeeze on a large part of the
population. The clergy, always against the govern-
ment, has become acutely so. This results from
Tehran's efforts to establish a Religious Corps,
which the clergy believes, correctly, is an attempt
to bring religious activities under control. Official
corruption has also come in for an increasing
amount of ublic disa royal.
Meanwhile, the security forces have stepped
up efforts to end dissident activities. The move
follows an upsurge in acts of sabotage and re-
peated bank robberies by dissident elements,
mostly Iraqi-backed Iranian expatriates.
Fundamentally, much of the dissatisfaction
arises from the tensions created by rapid indus-
trialization and attempts to modernize social and
governmental institutions. If this sort of dis-
satisfaction can be differentiated from the sub-
versive activities sponsored by Iran's enemies,
primarily Iraq, the security problems should be
manageable. The tendency of the Shah and the
security forces to see nearly every expression of
discontent as foreign-directed subversion is, how-
ever, likely to add fuel to opposition ac-
Cyprus:
Archbishop on a Tightrope
Archbishop Makarios parried the Cypriot
bishops' suggestion that he resign as president in
his formal reply on 19 March. He told the bishops
that his resignation could lead to violence which,
he implied, would be on their heads. He added
that, if they were to insist, he would indeed
resign. The bishops rejected his warning and on
22 March repeated their request. Makarios is now
likely to appeal for public support in an attempt
to show that Cypriots will not permit him to step
down. The police in Limassol, a city in southern
Cyprus where two of the three bishops are stay-
ing, are on full alert in anticipation of mass dem-
onstration, and clashes between pro- and anti-
Makarios elements.
In Makarios' ten years at the helm, the bish-
ops have never before obiected
The Greeks appear con-
fident of their ability to wear down Makarios.
They believe that the time gained by the Arch-
bishop's delays will work to Greece's advantage in
the long run. Athens believes that violence is
virtually certain if Makarios resigns as a result of
the bishops' actions. Greece could use such a
flare-up as an excuse to intervene.
SECRET
Page 23 WEEKLY SUMMARY
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
Tunisia: The Succession Issue
The issue of presidential succession, a prob-
lem that has dominated Tunisian politics for
nearly two years, has reared its head again. The
liberal-reformist wing of the ruling Destourian
Socialist Party favors an elected successor, a solu-
tion endorsed by the party congress. President
Bourguiba, backed by the party's conservative-
loyalist wing, insists on naming his successor, his
present choice being Prime Minister Hedi Nouira.
The constitution provides for the succession of
the prime minister, but a revision of this provision
is under study.
A compromise solution seemed probable
early this month when the party's political bureau
endorsed a proposal, presumably by Bourguiba
himself, to create the post of vice president.
Later, Bourguiba indicated to a joint meeting of
the political bureau and the council of ministers
that he had changed his mind, and the meeting
adjourned without agreeing on a solution. The
President's equivocation has generated serious
conflicts within the predominantly conservative
government and party leadership.
The President's insistence on dominating
every facet of Tunisian politics is contributing to
student and labor discontent. Both student and
labor organizations resent the tight controls
maintained over them. The always restive
students went on strike early last month; their
basic demand is new and completely free elec-
tions to choose student leaders to replace those
elected by a party-controlled minority last
President Bourguiba
August. When the students did not return to class
as ordered, two of the five schools of the Uni-
versity of Tunis-involving some 5,000 out of the
university's 11,500 students-were closed until
fall. A recent wave of wildcat strikes in the south
has been settled, but the head of Tunisia's only
labor organization, a long-time associate of
Bourguiba, has come under attack by the
workers, and he may find it difficult to hold the
line on demands for new wage increases.
SECRET
Page 24 WEEKLY SUMMARY 24 Mar 72
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
Castro to the USSR Again
The report that Fidel Castro will visit Mos-
cow next May-for the first time since 1964-
comes at a time when Cuba is becoming more
active in the international arena and when
Cuban-Soviet relations are probably closer than at
any time since before the 1962 missile crisis.
Castro will doubtless seek assurances that the
Soviets will not sell out Havana's interests during
President Nixon's visit to Moscow this spring. For
their part, the Soviets have been concerned about
Cuba's stagnant and mismanaged economy and
will surely wish to discuss this with their visitor.
Two high-level Soviet economic delegations paid
working visits to Havana last year, and Cuban
President Dorticos spent a week in Moscow in late
December, probably deliberating on economic
Castro's attitude toward violent revolution
in Latin America may also be debated. The So-
viets and Cubans have at times displayed sharply
divergent views on the subject of violent revo-
lution, and Moscow on one occasion branded the
Cuban position as "the worst form of dog-
25X1 After his visit to Moscow, Castro may seek
to gain added support for his government by
visiting several other nations. During his visit to
Chile last year, he announced that he had
SECRET
Page 26 WEEKLY SUMMARY 24 Mar 72
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
accepted invitations to visit Bulgaria, Hungary,
and Algeria. Recent reports indicate that he may
Chile This Week
President Allende's suspension of congres-
sional sessions until 28 March marked a week of
jockeying for political advantage. Allende wants
more time for secret talks with opposition Chris-
tian Democrats over the executive-legislative
impasse created by congressional insistence on
approving nationalizations. Extremists in the gov-
ernment coalition rejected a compromise that
Allende had already approved. During a Christian
Democratic conclave, party president Fuentealba
reiterated the party's commitment to legal op-
position and rejected "rightist pressures" aimed at
ousting the government. He did rail against the
administration for violating democratic rights.
Exaggerated opposition press treatment of
mounting rural violence has been attacked by
the government as seditious, but Allende is com-
plying with a Supreme Court demand that the
executive move immediately to end illegal land
seizures by peasants under the leadership of leftist
extremists. Tensions were raised in Santiago when
officials banned an opposition women's march set
for 24 March while promoting a pro-government
rally.
The Socialist and Communist parties each
held plenums last week. Speakers at both ex-
pressed determination to overcome economic
opposition and government ineptitude. They also
asked supporters not to let differences weaken
the coalition. Allende, addressing his fellow So-
cialists, warned that Chile may become the victim
of an economic blockade and called for ideo-
logical unity among all leftist forces, including the
extremist miristas. At the Communist meeting,
Orlando Millas said the opposition was attempting
to overthrow the government and urged its adher-
ents to press forward with the revolution in order
to avert the establishment of a "terroristic tyr-
anny."
All political parties have agreed to support
legislation authorizing electoral pacts for the
March 1973 congressional elections. This avoids
the problems that would be involved in creating
single parties representing the government and its
opponents. Differences among opposition parties
could make these pacts less advantageous to them
than to Allende.
While the focus was on domestic politics, a
range of foreign policy questions received atten-
tion. During a visit to Santiago by Argentine
Foreign Minister de Pablo Pardo, agreement was
reached to substitute the International Court of
Justice for the British crown as arbitrator in the
border dispute. Looking further afield, the Al-
lende government is outdoing itself in prepara-
tions for the third meeting of the UN Committee
on Trade and Development in Santiago in April.
Tanzanian President Nyerere was invited to be the
keynote speaker.
Page 27
SECRET
WEEKLY SUMMARY 24 Mar 72
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 25X1 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
Secret
Secret
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Spain: A Future Without Franco
Secret
24 March 1972
No. 0362/72A
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SPAIN: A Future Without Franco
Special Report
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 .a ^.1, L..:+IG """I . {tr* s?_`e. VW,', W ',K -4` .y 3."."R.
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
Crowd at Franco's 35th Anniversary
As the end of 79-year-old Chief of State
Francisco Franco's rule approaches, he is seeking
to ensure that his system of government will
continue after him. Although Franco over the
years has allowed some mellowing of the harsher
aspects of his authoritarian rule, he has not and
will not tolerate basic changes in the government
he designed for Spain. There are dissident ele-
ments in Spanish society, but after 35 years in
power Franco retains the support or acquiescence
of the majority of Spaniards. Franco has taken
limited-but relatively significant-steps to pre-
pare for the succession.
In 1967, Franco promulgated a new con-
stitution to construct a framework for transition
from his more than 35 years of personal rule. By
separating the posts of chief of state and chief of
government, the new constitution calls for a divi-
sion of the powers that Franco now holds. Al-
though it contains other provisions that could
lead to a gradual liberalization of the regime, the
Caudillo has not put them into effect.
In 1969, Franco exercised his prerogative
under the new constitution and named Prince
Juan Carlos of Borbon to be king when Franco
dies or is incapacitated. Juan Carlos, a grandson
of the last king, Alfonso XIII, was required to
swear to uphold the constitution and the prin-
Special Report
ciples of Franco's National Movement, the sole
legal political organization in Spain. In effect,
Juan Carlos pledged to carry on the present
regime under a monarchial framework.
Franco could still reverse this decision but
he is unlikely to do so, in part because it has the
support of military leaders who regard the mon-
archy as a stabilizing influence and who do not
wish to see a post-Franco power struggle. There-
fore, Juan Carlos is likely to be sworn in as king
within three days after Franco dies or is declared
incapacitated. Although some government leaders
feel that the transition would be smoother if
Franco resigned now as chief of state, the
Caudillo ruled out that possibility in his 35th
anniversary speech last fall.
The populace greeted Juan Carlos' designa-
tion as future king with indifference. Franco had
kept the young prince in the background. There
has been little enthusiasm for the re-institution of
a monarchy from people who cannot recall a
chief of state other than Franco.
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
On 1 October last year, with approximately
one million Spaniards assembled in Madrid to
celebrate the 35th anniversary of Franco's rule,
the Caudillo referred to the fact that after his
own demise Juan Carlos would carry on as king.
The statement drew thunderous applause.
Most Spaniards presume that Juan Carlos, no
matter what his talents, will be a figurehead king Any tendencies toward liberal rule that Juan
with the prime minister exercising the real power. Carlos may hold are likely to be checked by the
4 BASQUE PROVINCES
Bilbao
Madrid
llA
- `Algiers
Special Report
M{GIBRALTAR (UK)
MOROCCO 4
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
marriage on 8 March of Franco's eldest grand-
daughter to Prince Alfonso of Borbon, who is also
a grandson of the late king Alfonso XIII. The
presence in the wings of a well-connected, more
conservative prince will make Juan Carlos cau-
tious.
In addition to designating Juan Carlos as
next chief of state, Franco in 1969 shook up his
cabinet. Given his age and tendency to hang on to
familiar faces, Franco's cabinet choices were an
important move to prepare Spain for the future.
This cabinet probably will carry the country into
the post-Franco era. In choosing the new cabinet,
Franco departed from his habit of balancing
power among key groups. Instead, he assigned the
greatest number of posts to economic specialists
associated with the semi-secret Catholic lay organ-
ization, Opus Dei. These technocrats give eco-
nomic modernization and a loosening of state
economic controls priority over political liberali-
zation. They are European-minded and wish to
increase Spain's ties with Europe. They are, there-
fore, willing to support cautious political liberali-
zation in order to improve Spain's stature abroad.
Opus Dei members insist that they are not
subject to central political guidance from their
leadership and that the society is devoted ex-
clusively to spiritual goals. But critics still charge
that Opus Dei is intent on controlling the nation's
econcmic, political, and educational life. The
society has attracted a wealth of managerial talent
and Franco, recognizing Spain's need for such
Franco at Granddaughter's Wedding to a Prince
Special Report
24 March 1972
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
skills, has kept the Opus Dei - dominated cabinet
in spite of pressures to drop it. Such pressures
intensified in the wake of the Matesa financial
scandal, in which large sums of export credits
granted by the government allegedly were
misused by officials of the company. Several
Opus Dei officials were implicated, and this dam-
aged the society's reputation for probity. Ulti-
mately, three former Opus Dei ministers were
indicted, but the present foreign minister and the
minister of education were cleared.
To counteract the loss of prestige from the
Matesa case, the technocrat faction in the cabinet
decided to expand its influence by working for
the appointment or election of Opus Dei mem-
bers to the Cortes (legislature) chosen last fall.
Although Opus Dei improved its position in the
Cortes, it failed to gain dominance in the Council
of the Realm, the body that will help choose a
prime minister when Franco relinquishes that
post. Opus Dei's chances of controlling the selec-
tion of a new chief of government have thereby
lessened; indeed, it will probably have to nego-
tiate with other factions to stay in power after
Franco goes.
Rumors persist that Franco will soon give up
his position as prime minister. Because Franco
already leaves much of the day-to-day business of
running the government to Deputy Prime Minister
Admiral Carrero Blanco and to the cabinet, the
Caudillo really has little reason to give up the post
of prime minister. Many government officials
would prefer that Franco designate a prime min-
ister now while he can control the choice. If
Franco were to do so, he probably would chose
Carrero, a rather colorless 64-year-old bureaucrat
whose chief asset is his long association with
Franco. Because the admiral wants the economic
expertise of the Opus Dei technocrats, he would
probably keep them in the cabinet. But in spite of
the influence of his Opus Dei colleagues, Carrero's
reputation as a close associate of Franco and as a
hard-line, unimaginative reactionary might not
Special Report
facilitate acceptance of Spain into NATO or the
European Communities.
If the choice of prime minister is left until a
new chief of state takes over, Carrero's chances
would be considerably reduced. He is not popular
among the military leaders, who feel he is not a
proper admiral at all, having been promoted to
that rank despite a lack of suitable sea service.
These leaders may insist on one of their own for
the post. The chief of the high general staff,
General Manuel Diez Alegria, or one of the chiefs
of the nine military regions are possibilities. Diez
Alegria is notable among Spanish military men for
his European outlook and for his espousal of
gradual change in the direction of a freer society
once Franco is gone. He also works well with the
Opus Dei technocrats. He might not be acceptable
to some of the hard-line regional military com-
manders.
If the military chooses to remain in the
background, a member of the present cabinet
could get the post. One leading possibility is Min-
ister of Economic Development Laureano Lopez
Rodo, a leader in Opus Dei. Lopez Rodo would
continue to emphasize economic goals. Another
strong contender is Minister of Foreign Affairs
Gregorio Lopez Bravo, a dynamic personality and
favorite of the press. With him as prime minister,
Spain's chances of closer association with Europe
would be improved. Franco is said to be very
pleased with his performance as foreign minister.
Lopez Bravo has clashed with Juan Carlos and
might not have the prince's backing.
Other possible choices include former
cabinet members. Among these is Federico Silva
Munoz, former minister of public works and a
member of the National Association of Catholic
Propagandists, a rival of Opus Dei. He resigned in
1970 to separate himself from the Opus Dei -
dominated cabinet and to build more support for
himself as an alternative who is loyal to Franco.
He favors gradual political evolution in the post-
Franco era. His abilities as minister and his tele-
vision appearances have won him wide public
-5-
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
support. He would be more able than Carrero
Blanco-and less able than Lopez Bravo-to pro-
mote Spain's acceptance into West European
organizations.
The Military: For Preserving Order
Franco's authoritarian system has rested
chiefly on support by the army; the conservative
business, banking, and land-owning interests; the
Roman Catholic Church; and, to a lesser degree,
the National Movement. Franco has played these
groups off against each other and, by timely shifts
of power,-has prevented any one of them from
becoming too powerful. They all see a prospect,
once the Generalissimo's hand is removed, that
they will have greater scope for political expres-
sion. They are making their plans to enhance their
own positions accordingly.
The army is by far the strongest of the
power groups. Army officers have consistently
been given posts in the cabinet, and many have
been appointed to the boards of business firms
and banks. The army is united in loyalty to
Franco and in a commitment to preserve order,
but it has internal differences about how much
reform is desirable in a post-Franco era. Some
officers have joined with police and old guard
fascist elements of the National Movement-the
Falangists-to oppose any liberalization at all.
Other officers support the Opus Dei technocrats
in their efforts to modernize the economy and
relax the more rigid controls on political freedom.
For the most part, the military has prefered to
stand aside from politics and to intervene only
when there is a threat to public order or to
military prestige. All in all, military leaders are
likely to back those who can best preserve order
after Franco departs.
As senior generals whose service dates back
to the Civil War fade from the scene, younger
officers drawn from the more European-minded
middle class may slowly swing the army toward a
less authoritarian political system. As in most
armies, younger officers complain because promo-
Special Report
tions are slow and pay has not kept pace with
civilian pay. Discipline is good, however, and
discontent among junior officers is unlikely to get
out of hand.
The Burgos trial of 16 Basque terrorists in
December 1970 brought the military into sharp
conflict with a modest government effort toward
liberalization. The hard liners-including many in
the military and the security police as well as the
Falangists-wanted a military trial culminating in
death verdicts to discourage terrorism. The
moderate cabinet ministers and those government
officials who wish to associate Spain with Western
Europe, wanted leniency. The church, opposition
groups, students, and labor also protested against
the trials. The military grew angry over the gov-
ernment's failure to control criticism. Franco
eventually decided to allow the military trials and
a death sentence. This satisfied the military but,
in line with his habit of balancing the interests of
all concerned, Franco allowed an open trial and
later commuted the death sentences. The con-
tretemps led observers to speculate on the
implications for the future: if a similar conflict
were to arise without Franco to arbitrate, could
differences be resolved without a military take-
over?
The military joined with Falangists and vet-
erans' groups in organizing successful large rallies
in support of the trial and Franco. Reportedly
surprised by the success of these rallies and con-
cerned about the military disapproval of the gov-
ernment's handling of the situation, the cabinet
has taken steps to placate law and order senti-
ment in the military.
The suspension of habeas corpus decreed
during the trial was continued for six months,
during which the police arrested over 2,000 per-
sons; most of them were released after a short
detention, but some 228 persons were still being
held when the suspension was lifted. A stiff
public order law was passed in July 1971, aimed
as much at controlling professional and middle-
class political activity as at worker and student
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8 -
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
groups. Orders, warnings, and threats have been
issued to the press to curtail criticism of the
government. The campaign against the press was
highlighted by the closure and forced sale of the
newspaper Madrid. Plans to relax the ban on
political parties by allowing tightly controlled
political associations to be formed within the
National Movement were put aside.
Labor: Most Likely to Cause Trouble
Workers, students and, to a lesser degree, the
church do not share the military's satisfaction
with the regime. Under Franco's corporative
system, the only legal labor body, the Syndicate
Organization, is under government control.
Workers do not feel that the syndicates represent
their interests effectively. To counter this, syn-
dicate officials drafted a new and more liberal law
reducing government controls. But the cabinet so
watered down the law that the version finally
passed by the Cortes last year had little effect.
Labor discontent has led to a proliferation
of groups that aim to improve the lot of the
workers. Some, sponsored by Catholic organi-
zations, are tolerated within narrow limits by the
regime. Others, sponsored by illegal political or-
ganizations opposed to Franco, are suppressed by
the police. One of the most active of the latter
groups is a grass-roots, loosely confederated one
known as the Workers' Commissions. Communists
and Catholics collaborate in these commissions
with far rightists, Socialists, and the apolitical. In
spite of their illegal status, the Workers' Com-
missions have had some success in organizing
demonstrations and in getting plant managers to
negotiate with them as the legitimate spokesmen
of the workers. In some plants, the Workers'
Commissions have penetrated the government
syndicates by getting their own candidates elected
as shop stewards. The Workers' Commissions
hope to build an organization so strong that the
government will have to treat with it.
Employees learn of Madrid's closing. pages occur periodically in spite of the harsh
Special Report
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
measures employed to prevent them. Of the sev-
eral serious strikes over the past year, some have
involved demands for wage increases to meet the
rise in the cost of living. Others have been pro-
tests against labor legislation and rules governing
dismissal of workers. The technocrat cabinet and
the syndicate leadership have been more willing
than iheir predecessors to allow labor and man-
agement to settle disputes among themselves. The
government has called in the police to break up
protests, and a willingness to use force is still the
regime's prime method for keeping a lid on labor.
Since last Christmas, there have been rela-
tively few labor disturbances. Workers have been
waiting to see how they fare in the collective
bargaining contracts now being negotiated in a
number of major industries. An exception has
been the Basque area, where a labor dispute led
the Basque Fatherland and Liberty terrorists to
kidnap a Basque businessman. He was released
after management met most of the kidnapers'
demands, including reinstatement of 183 fired
workers and a wage increase. The police then
arrested some 30 alleged members of the terrorist
group, who are now awaiting trial in connection
with the kidnaping. Another serious incident was
the bloody clash on 10 March in El Ferrol del
Caudillo on the northwest coast between the
police and some 3,000 shipyard workers who
were protesting the dismissal of six fellow
workers. Labor is the element most likely to
cause trouble in the post-Franco period. Well
aware of this, the government is likely, at least in
the immediate aftermath of Franco's death, to
use force to prevent serious agitation. Thereafter,
much will depend on how well the government
adjusts to labor's demands for a free labor organ-
ization and better wages.
The Students: Always Troublesome
Only a minority of students are politically
active, and they do not pose a serious threat to
the present regime or to a post-Franco govern-
ment. They are an irritant to a regime that will
not tolerate demonstrations and is slow to adjust
Special Report
to demands for change. Activist students have
sought reform of the official student organization
and have demanded organizations of their own.
Conflicts were inevitable. Police have suppressed
periodic demonstrations, and universities have
been closed to allow tempers time to cool. Usu-
ally, the threat to cancel examinations with a
subsequent loss of credit for the year has been
sufficient to stop the students.
Nonetheless, there were violent confron-
tations between students and police in 1967-68,
when protests against the regime were added to
demands for university reforms. In January 1969,
after prolonged student-worker demonstrations,
the authorities reacted strongly. They closed in-
definitely the universities of Madrid and
Barcelona. A 90-day state of emergency was pro-
claimed, and certain civil rights were suspended.
The authorities also arrested over 1,000 persons
and shipped some 35 individuals to remote Span-
ish provinces for the duration of the state of
emergency. By early March 1969, the situation
was sufficiently quiet to persuade the government
to reopen the universities and lift the state of
emergency. The authorities took the precaution
of placing police and plain-clothes' agents in the
universities to maintain order.
In January of this year, the police again took
strong action against students demonstrating at
Madrid University. Although the clashes were
precipitated by the suspension of 4,000 medical
students protesting a change in their curriculum,
the unrest had more fundamental causes. Stu-
dents resent the presence of uniformed and plain-
clothes' police on the campus. Many deans are
ineffective and hostile to the students. In addi-
tion, a polarization of students has been brought
on by the disruptive tactics of a small but militant
group of extreme leftists-including a number of
Communists-who have clashed with an even
smaller group of extreme rightists. Underlying
these factors is campus opposition to authority in
general and to the Spanish establishment in par-
ticular.
-8-
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
Demonstrating Madrid students flee police.
Some students appear to be turning up their
political and organizational activities.
A student general strike was called for the first six
days of March, and this led to disturbances
throughout the country. The university situation
is likely to remain unsettled, but authorities will
keep matters under control through police action
and, when necessary, by closing colleges. Im-
provements in educational facilities are planned,
and these should help reduce tensions.
Church-state relations have deteriorated in
recent years. Both the Vatican and a majority of
the Spanish clergy want to disassociate the church
from Franco's regime, but neither is prepared as
yet to face the loss of state subsidies. The church
is hard put to reconcile the concept of social
justice with the labor policies of the government.
The state wishes to retain its influence over the
church. The Vatican has asked the Spanish Gov-
ernment to renounce its voice in ecclesiastical
appointments, but Madrid is unwilling. Church-
state relations were strained last September when
the Assembly of Spanish Bishops and Priests
called for broader recognition of human rights in
Spain and the independence of church and state.
Last December-possibly as a gesture of
good will to reduce tension-the government
agreed to a reshuffling of bishops. As a result,
liberal bishops were appointed to head six of the
seven dioceses involved. The most significant
change was the appointment of Cardinal Enrique
y Tarancon as bishop of Madrid-Alcala, Spain's
most important diocese. He is an advocate of an
active social role for the church. The principal
victory for the government was the transfer of the
liberal Bishop Cirarda from Santander, where he
also had responsibility for Bilbao and the Basque
area, to the deep southern province of Cordoba.
Hard liners in the government did not approve of
Cirarda's sympathy with the nationalism and
labor grievances of his fellow Basques.
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
With relatively liberal men in the principal
ecclesiastical posts, the church is in a better posi-
tion to work with political groups that want a
stronger role for labor. As part of the price for
the government's concurrence in these liberal
appointments, the church may have agreed to
concentrate on social action and to soft-pedal
political reform. This did not stop a church sub-
committee from taking the government to task a
short time later for its unjust social and economic
policies. Franco himself, in his traditional year-
end message to the people, warned the church
against interference in temporal affairs. At his
investiture as Archbishop of Madrid-Alcala in
early January, Cardinal Enrique y Tarancon
pledged to speak up for "those without voice to
defend their legitimate aspirations." This was a
clear reply to Franco's warning and indicates that
the church has changed from a pillar of the
regime to a major political irritant.
The Opposition Parties: A Distant Prospect
The traditional opposition parties-Christian
Democrat, Socialist, Communist, and Anarchist-
are illegal, fragmented, and powerless. They are
for the most part survivals of former political
parties and regional organizations. Practically all
of them, except for a few extremist bands, are
resigned to waiting out Franco's passing to obtain
political rights and a role in the government.
Some of these groups would like to see a
provisional government installed after the passing.
This provisional government would call a con-
stitutional convention to decide on the form of
government and to formulate guarantees for
political liberties. Because the chances of this
happening are very poor, the opposition will have
to settle for working to liberalize the present
system; for example, by working with labor and
students to bring more effective pressures for
change and agitating for legal political status.
If political parties should be legalized, none
of the present opposition parties looks strong
enough to win a dominant position. The Social-
Special Report
ists, using the nucleus of a clandestine trade
union-the General Union of Labor-would have
an initial advantage. They would also benefit
from the traditional anti-clericalism of many
Spanish workers and intellectuals as well as from
the financial support of West European Socialists
and trade unionists. At present, they are badly
split between those who accept direction from
elderly Socialist leaders in exile and those who
support a self-proclaimed "interior" Socialist
group led by the intellectual Tierno Galvan.
The Christian Democrats have a potentially
strong party, which would draw support from
religious organizations, businessmen, and intel-
lectuals. But they are also badly split. Various
active Catholic groups exist, but some of them
would prefer a secular Social Democratic Party.
The Communist Party has some influence in the
illegal Workers' Commissions, but its leadership is
under fire from dissident elements. Moreover, the
Communist Party is not likely to be legalized
soon, even if other parties are, and its ability to
work with other groups and to develop a popular
base is limited by widespread hostility to Com-
munism.
In the Basque provinces and in Catalonia,
regional groups demand greater cultural, eco-
nomic, and political autonomy from Madrid. The
small, terrorist organization Basque Fatherland
and Liberty dramatizes its extreme demands with
bombings but is no threat to the government.
Some 300 Catalonians met secretly in Barcelona
last November to draft a program of resistance to
the Franco regime and to plans for Prince Juan
Carlos to succeed Franco. These goals are beyond
the reach of such a group, but it may succeed in
revitalizing opposition forces in Catalonia and
contributing to political agitation in the post-
Franco era.
The Economy: A Bright Spot
The strong performance of the Spanish econ-
omy in the 1960s promoted the stability of the
Franco regime, and continued economic progress
-10-
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
SECRET
Spain:
Growth of Real and Per Capita GNP, 1960-1970 seven-percent annual growth rate in the 1960s,
Real GNP one of the highest in Europe. Before that, Spain's
i
t
ti
h
d b
h
i
i
h
econom
agna
c s
on
een c
ron
a
c s
nce t
e
Civil War and had forced Franco in 1959 to agree
to abandon traditional policies of autarky in favor
of modernization and an open-door policy toward
foreign investment. With an expanding domestic
a, market, relatively low labor costs, comparative
10 __
freedom from labor strikes, and a generous gov-
ernmental attitude toward foreign ownership,
repatriation of profits, and low tax rates, Spain
attracted a good deal of direct investment from
abroad. It zoomed from $36 million in 1960 to
$222 million in 1970. Morover, Spanish traders
and industrialists soon discovered that, given their
low labor costs, they could compete readily in
European markets. By 1971, per capita gross
01 national product was but $31 shy of the $1,000
1960 '61 '62 '63 '64 '65 '66 '67 '68 169 '70
Per Capita GNP
Rapid economic expansion led to vast
imports and a yawning trade deficit that reached
$2 billion in 1971. The tourist boom, foreign
investment, and remittances from Spaniards
working abroad, nevertheless, moved Spain into a
positive over-all balance-of-payments position.
Tourism receipts alone covered about 80 percent
of Spain's trade deficits in the 1960s and 95
percent in 1971. Indeed, Spain was not only able
to cover its trade deficits but to accumulate large
foreign exchange reserves which amounted to
$3.2 billion in 1971.
obviously would improve the staying power of
any successor government. Spain achieved a
mark sometimes used as the benchmark of a
modern Western economy.
The economy will more than likely continue
to progress if the transition period after Franco
goes is relatively smooth. Despite a slowdown in
late 1970 and 1971, Spain should experience
strong economic growth in 1972 and into 1973.
The 1972 budget and 1972-75 Third Devel-
opment Plan are geared toward expansion, calling
for an annual growth rate of seven percent or
more and a $13-billion increase in public invest-
ment over the next four years. Exports, which
now finance almost 60 percent of total imports,
The Organization for Economic Cooperation and Development has
23 members: all West European countries plus Australia, Canada,
Greece, Japan, Turkey and the United States.
Special Report
-11-
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
are expected to continue growing at an acceler-
ated rate.
With a continued sound basic balance-of-
payments position, rapid domestic growth, and
growing export markets in both Western and East-
ern Europe, Spain will continue to attract foreign
investment. There are already signs that Spain
could become a production base for many of
Europe's multi-national companies-a prospect
that increased with Spain's 1970 preferential
trade agreement with the European Communities.
Nevertheless, Spain faces a number of seri-
ous economic problems. Wages as a proportion of
gross national product have been stagnant over
the past decade and have barely kept ahead of
rising prices. Although wages rose 13 percent in
1971, for example, the real increase was only 4.6
percent because prices rose 8.4 percent. The wage
lag is the most serious source of labor unrest in
Spain and could exacerbate social frustrations and
make for an uneasy transition period. There
seems to be a growing awareness in Madrid, how-
ever, of the need for increased "social develop-
ment" and for governmental intervention in the
economy to ensure balanced economic growth in
the 1970s.
Special Report
Another problem is the approaching en-
trance of one of Spain's principal trading part-
ners, the UK, into the European Communities.
This threatens to make obsolete the 1970 prefer-
ential trading agreement with the EC. Once
Britain goes behind the EC tariff fence, French
and Italian products will have a strong com-
petitive edge over Spanish products that now
enjoy a good market in the UK. The EC is ready
to consider revising the present agreement to
cover the new situation through adjustment of
commodity coverage and tariff levels. But Madrid
officials hope for a new agreement that will also
clarify the timing of eventual Spanish association
with the EC. There are strong objections from
some EC members to permitting the Franco
regime to become an associate or full member,
and Madrid's chances of getting such a com-
mitment are no better than in 1970. The govern-
ment does have some time to work for political
liberalization to aid in reaching its goal of associ-
ation and eventual membership in the EC.
As long as Franco remains in power, the
problems facing his regime can be kept under
control. The succession law that he devised prob-
ably will be followed and Juan Carlos will be
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
SECRET
installed as king. The recent appointments of
three more hard-line Falangist generals to top
military posts may complicate efforts of the
present technocrat cabinet to remain in power.
Although the first post-Franco government will
undoubtedly remain authoritarian, pressures to
lift present political controls, at least partially, are
likely to grow. Many within the Spanish estab-
lishment favor economic and social reforms and a
gradual evolution toward a freer political life.
Thus, even within the regime there will be forces
working for change. Improved economic con-
ditions have given more people a stake in society
and more reason to work for orderly change. The
impact of better education and contacts with
freer Europeans have reduced the old animosities
of class, religion, and politics which so divided
Spaniards in the past. These influences, too, will
improve chances for gradual progress toward a
more open society.
Other factors could upset the situation after
Franco. If the government makes changes too
Special Report
slowly, popular aspirations for social, economic,
and political reforms could provoke widespread
protests. Both workers and students are capable
of causing trouble, especially if encouraged by the
various opposition parties and labor unions. A
recession or serious inflation would stimulate
support for protests. If unrest were to become
widespread, the military probably would take
over in the name of stability. But given the
expectations that Franco's passing is sure to
arouse, a military take-over might prove only a
temporary solution, and a period of great
instability could follow.
As of now, the progress that the present
government has made in stimulating the economy
and in promoting modernization and Europeani-
zation has a good chance to continue. If the trend25X1
holds, the possibilities will improve for an evo-
lution from the present government to a more
responsive system.
-13-
SECRET
Approved For Release 2008/09/17: CIA-RDP79-00927A009500010001-8
 Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8
Secret
Secret
Approved For Release 2008/09/17: CIA-RDP79-00927AO09500010001-8