WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009600040001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 41
• Document Creation Date: December 21, 2016
• Document Release Date: July 18, 2008
• Sequence Number: 1
• Publication Date: June 16, 1972
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
DIA and DOS review(s) completed.
Secret
16 June 1972
No. 0374/72
Copy N2 48
DIA and
DOS 10
review(s)
completed.
completed.
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significant d el t m the peek
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and 794, o# the USC amen ed. ` s r IS,-
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MIDDLE EAST
AFRICA
WESTERN
HEMISPHERE
1 Indochina
6 Nationalist China: Trade Success
L
~) Italy: Illusive Coalition
10 France: Dassault Flies High
1.1 International Oil Developments
12 USSR-Yugoslavia: Fair Weather
13 Yugoslavia: To Pay the Piper
14 Arab States - Israel
15 Israel: Resigning Under Fire
16 Greece: Regrouping
1.7 South Africa: Protests Fade
17 Burundi: It Goes On and On
18 The Maghreb: Progress Report
19 Venezuela Buys More Arms
20 Peru-US: Straining the Ties
20 Cuba: Construction at Cienfuegos
22 Panama: Hope for Light
22 Uruguay: Bordaberry Strengtlier-c
23 El Salvador: New Cabinet
Sl+CIAL.
RFPORT (Published separately)
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North Vietnam appears to be embarked on a
major effort to ensure overland resupply from
China. Pilot observations and photography of the
transportation corridor running northeast from
Hanoi to the China border indicate that the Com-
munists are attempting to make substantial use of
road, rail, and pipeline facilities despite heavy US
air attacks.
US pilots have reported sighting heavy ve-
hicular traffic almost nightly since 7 June on the
main roads between Lang Son and Hanoi. The
volume spotted on Route 1A on 9 June-30 to 40
Heavy Road/Rail
h-anh Hoa
SECRET
trucks per mile-was about four times that noted
two nights earlier. On 11 June, trucks were re-
ported "bumper to bumper" near the downed
rail/highway bridge at Na Chon. Air strikes on
this tie-up produced explosions, suggesting that
many of the trucks were carrying petroleum. At
least 1,650 trucks have passed through Dong
Dang between 12 May and 7 June.
Photographs of the Ping-hsiang railyard have
revealed recent, significant increases in the num-
ber of rail cars and locomotives. The 590 pieces
of rolling stock photographed on 6 June were the
largest number ever noted in this yard. Presum-
ably, the build-up is related to the continued
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utilization of the rail line in northeastern North
Vietnam even though parts of it are unserviceable.
On 11 June, for example, US pilots came upon
five trains about ten miles south of Na Chon.
Their attacks resulted in an enormous fireball and
numerous secondary explosions.
Hanoi may be constructing an alternate
means to maintain petroleum deliveries from
China. Recent photography suggests that the pe-
troleum storage facility at Ping-hsiang is being
expanded and that a seven-mile pipeline is being
built to Dong Dang on the border. Pipe segments
have also been photographed between Dong Dang
and Kep, a distance of 50 miles. Construction is
already under way to connect Kep with the North
Vietnamese pipeline system at Hai Duong.
Tough Talk in Hanoi
For the second time in recent months, the
chief of North Vietnam's secret police has criti-
cized certain elements of society for a lack of
discipline and "revolutionary" fervor. Writing in
the May issue of the party theoretical journal, the
official, Tran Quoc Hoan, expresses greater con-
cern over such problems than he did in a similar
commentary published just before the start of the
current offensive. At that time, he complained
rather vaguely about slack discipline and poor
morale; now, he is ready to indict even the "guid-
ing echelons" of the party and state bureaucra-
cies, which, he says, have misapplied state laws
and failed to press the regime's crackdown on
"counter-revolutionary elements"-the regime's
euphemism for the war weary and faint of heart.
To cope with these difficulties, Hoan pro-
poses broadening the regime's security apparatus
to include parts of the militia and local admin-
istrative bodies, which have not heretofore been
mobilized for security work. The intimation that
the existing security apparatus cannot do the job
on its own is an unusual admission for a party
official of Hoan's status and prestige.
The pessimism reflected in Hoan's latest ar-
ticle suggests that the regime's concern over social
conditions in the north has grown as the bombing
and psychological warfare efforts have been ex-
panded. Although the piece was purportedly
written for a May publication date, the journal in
which the article appears is only now being cir-
culated so it doubtless is meant as a commentary
on current conditions. The official press has
recently carried a number of other authoritative
commentaries that likewise underscore the need
for a greater effort-both by the people and the
official state organs-to ensure law and order.
The appearance of two major articles by
Hoan in so brief a period thrusts the shadowy
politburo member into unaccustomed limelight.
Chief of Hanoi's security apparatus, he has the
reputation of being one of the most ruthless of
Hanoi's old guard and is by several accounts a
symbol of the repressive discipline and party
control the leadership has tried to keep hidden
from public view in recent years. Hoan's sudden
emergence as a spokesman for the regime may be
an indication that, under the current stresses,
responsibility for the day-to-day management of
society is shifting into the hands of the regime's
toughest overlords.
Hanoi's news media have commented guard-
edly on the effect of Senator McGovern's presi-
dential campaign on the anti-war movement in
the US. Although an article, published in the
party daily on 10 June, characterized the
McGovern campaign as a measure of US oppo-
sition to the war, it went on to say, "There will
be many new developments from now until the
conventions."
On the election itself, the article pulled up
short of forecasting defeat for the present admin-
istration, saying only that it will be faced with
increasing political difficulties "as long as it pro-
longs the war of aggression in Indochina." The
commentary is one of the most detailed yet pub-
lished by Hanoi on the campaign and marks a
departure from other recent pronouncements on
the topic. Up to now, the regime has emphasized
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that US anti-war sentiment is intensifying and
would be an important factor in the elections. In
this latest analysis, the regime seems to be delib-
erately trying to dampen its own supporters'
expectations in this regard.
THE FIGHTING:
New Front in the Delta
In a relatively quiet week, the Communists
appeared intent on opening a new battlefront in
the northern delta region with a series of heavy
shelling and ground attacks on Kien Tuong, Dinh
I-uong, and Kien Phong provinces. An accom-
panying step-up in Communist ground attacks
also occurred in the lower delta, notably against
district towns in Ba Xuyen and Bac Lieu prov-
inces.
The Viet Cong 5th Division, recently en-
gaged in the campaign around An Loc, is pri-
marily responsible for the sharp increase in
Communist military activity in the northern
delta. Elements of the 5th's three infantry regi-
ments, supported by an artillery regiment, at-
tacked the district capital of Tuyen Binh in Kien
Tuong Province and shelled the provincial capital
of Moc Hoa. Several South Vietnamese Ranger
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Gulf of
Thailand
Tuyen.Binh.
ORTf
VJET
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South
China
See
SOUTH VIETNAM
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bases near the Cambodian border also came under
heavy pressure. South Vietnamese 7th Division
troops were airlifted across the border into Cam-
bodia in an effort to counter the Communists.
[-hey subsequently engaged in heavy fighting.
In Dinh Tuong Province, sporadic enemy
shelling attacks and stiff ground probes were
,nade against government positions in the western
portion of the province, with the bulk of fighting
around the district towns of Cai Lay and Cai Be.
[he Communists have overrun several outposts,
and South Vietnamese relief forces are encounter-
ing stubborn resistance from reportedly well-
entrenched enemy forces.
Fighting was also reported in Kien Phong
Province.. The Communists appear intent on gain-
ing control of the province's extensive canal net-
work and river system to assist the infiltration of
men and supplies into the delta from Cambodia.
A regiment of the South Vietnamese 7th Division
has been moved into Kien Phong to bolster local
defenses.
Spoiling Operations Near Hue
South Vietnamese Marines north of Hue
mounted several operations across the My Chanh
River during the week, but enemy losses were
Legislative action on President Thieu's
bid for emergency powers is still on center
stage in Saigon. Following defeat of the
original measure by the Senate, the Lower
House last weekend passed a new bill that
would restrict the powers to security, defense,
and the economy. This action came after the
Lower House failed to override the Senate's
rejection of the original measure authorizing
full emergency powers. No date has been set
for Senate consideration of the new measure.
Since sentiment against it remains strong, a
close vote is expected.
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light. Some South Vietnamese Marine elements
are being left north of the river in an effort to
disrupt possible Communist troop concentrations
close to the government defense line.
West of Hue, South Vietnamese Army
troops are expanding the defensive perimeters of
several government strongpoints guarding the
western approach to the city. Little significant
fighting has been reported from this sector for
several days, but several enemy regiments remain
in the area.
NATIONALIST CHINA: TRADE SUCCESS
Taipei's trade offensive, initiated late last
year in response to diplomatic setbacks, is show-
ing early signs of success. Exports in the first
quarter of this year reached about $575 million, a
gain of more than 30 percent over the same
period in 1971. The largest increases were to
Europe and Latin America, where the Nationalists
have concentrated a sales promotion effort to
diversify trade. Sales to the US and Japan, which
account for about 50 percent of Taiwan's ex-
ports, also showed significant gains.
This first-quarter performance yielded about
a $50-million trade surplus and is in large part due
to the quasi-official trade development council.
The council has already sent eleven trade missions
abroad this year; it is currently arranging partici-
pation in at least ten international trade fairs. In
addition, it plans to promote studies of potential
markets to be passed on to exporters. To support
these efforts, Taipei has expanded technical coop-
eration with the less-developed countries and has
established commercial offices in several major
trading centers in Europe.
Government forces this week launched an-
other attempt to retake Khong Sedone, the pro-
vincial capital about 30 miles north of Pakse that
was lost to the North Vietnamese in mid-May.
Four irregular battalions were airlifted on 15 June
to a point about seven miles north of the town
and so far have encountered little resistance. The
government is also trying to relieve the pressure
on Pakse from the east; four irregular battalions
have been committed to clear Communist troops
on the edge of the f3olovens Plateau.
Thus far, loss of diplomatic relations has
proved no barrier to trade. Indeed the National-
ists have fared particularly well in Canada, the
UK, and Denmark, where trade increased by more
than 85 percent over the first quarter of 1971.
Taipei has maintained commercial representatives
in many countries that have shifted diplomatic
relations to Peking. In some of these countries,
Taipei has deliberately avoided the use of national
labels that could hinder trade.
Increases in exports, largely light manufac-
tures such as textiles, plywood, and electronics,
have been critical to Nationalist China's decade of
rapid economic growth. Expanding production in
the export-oriented light manufacturing sector
combined with a booming construction industry
to push the first quarter industrial production
index to a record high. Continued growth in these
key sectors is likely to produce an over-all real
growth in this year's gross national product on a
par with the 11-percent rate reached last
year.
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Premier-designate Giulio Andreotti is jug-
gling a variety of coalition combinations, but it
may be several weeks before he settles on a near-
term government.
Negotiations to form a five-party govern-
ment composed of the former center-left partners
plus the Liberal Party already have collapsed. It
was doomed from the start, given the Socialist
IParty's well-known aversion to the conservative
policies of the Liberal Party. The Christian Demo-
crat Party leadership had anticipated this failure
in its instructions to Andreotti and suggested he
next attempt a three-party minority coalition of
Christian Democrats, Social Democrats, and
Republicans. This grouping would require support
from Socialists or Liberals to win a vote of confi-
dence. Neither will give this support, however,
without assurances that they will be included in
the more permanent coalition to be formed later
this year; the Christian Democrats are not pre-
pared to give such assurances.
Andreotti is also toying with the idea of
forming a four-party center coalition with the
Liberal Party. Such a grouping would have a
pencil-thin majority in parliament. This concept is
a useful device to press the Socialists to bury their
campaign pledge to allow the Communists a
bigger role in parliament. Andreotti will face
heavy opposition from ~,ome of his fellow Chris-
tian Democrats if he vigorously promotes such as
alliance. Many Christian Democrats believe that it
would seriously alienate the Socialist Party,
strengthen its left wing, and push it even closer to
the Communists. Still, Andreotti may have to test
this possibility if only to show that a Christian
Democrat minority government is the only solu-
tion over the short-run.
Most Christian Democrat and Socialist lead-
ers prefer to delay the major decisions necessary
to form a more permanent arrangement until af-
ter guidelines are establi?>hed at party congresses
in the autumn. In the interim, the Socialists'
search for scapegoats for their worst electoral
performance in the post-war period is expected to
produce fierce intraparty fighting. The Christian
Democrats hope the Socialists will eventually con-
clude that they should move to the right and
accept the discipline of a renewed center-left coa-
lition.
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France is scheduled to begin delivery of 16
Mirage aircraft to Brazil in mid-June, the latest in
a long and continuing series of deliveries of one of
the world's most successful military aircraft. Over
the past decade, more than 1,200 Mirage aircraft
of various types have been sold to some 16 coun-
tries by Avions Marcel Dassault, France's largest
private aerospace firm.
The Dassault company currently is pro-
ducing Mirage I Its and 5s, and recently completed
tooling up to produce its latest fighter aircraft,
the Mirage Fl. The F1 is an air-superiority
tighter; 105 have been ordered by the French Air
Force, and Spain and South Africa have bought
the plane. The South African contract provides
for eventual manufacture of the plane under li-
cense. Dassault believes that sales of the F1 over
the next ten years will at least equal the 700-odd
figure reached by the Mirage III.
With a view toward the 1980s, Dassault has
begun test flights of the Mirage G8 swing-wing
fighter aircraft designed for the French Air Force.
The company has had several years of successful
developmental experience with an earlier swing-
wing prototype and believes that the G8 will be
an effective competitor in the European market
to the swing-wing Multi-Role Combat Aircraft
that an Anglo-German-Italian consortium intends
to produce for the 1980s.
Although Dassault has been designing suc-
cessful combat aircraft since World War I, the
company's current string of successes dates from
1948 when it won a French Government contract
with the Ouragan fighter aircraft design. Since
that time, much of Dassault's reputation has been
based on its mastery of extrapolating from one
aircraft design to the next, changing only those
components necessary to achieve the performance
variation required.
This technique is most recently exemplified
by the development of the Mirage Milan S, which
is designed specifically to meet Swiss Air Force
requirements for a tactical support aircraft with
short take-off and landing capabilities as well as
maneuverability in narrow mountain valleys. The
Milan uses a basic Mirage I I I airframe but incorpo-
rates a more powerful engine, two small retract-
able wings mounted on the sides of the nose
section, and new avionics. The first complete
Milan fighter made its initial flight in May 1970
and now, along with the US A-7, is one of the
two finalists for the Swiss contract, which has a
potential value of more than $325 million.
The French Government also helped a great
deal in the sales success of the Mirage aircraft.
The government, for example, has permitted
French arms firms to move into markets that the
US and UK will not supply. France took ad-
vantage of the US reluctance to sell sophisticated
jet aircraft to Latin America, and Mirages so far
have been bought by five South American coun-
tries (see article on Venezuelan arms purchases, p.
19). The French, furthermore, have guaranteed
liberal credit terms for many Mirage customers,
and this, coupled with Dassault's competitive
prices and strong after-sales support, has helped
sustain the high level of Mirage sales.
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INTERNATIONAL OIL DEVELOPMENTS
Iraq's nationalization of the Iraq Petroleum
Company has been marked by low-key ap-
proaches from the affected parties during
meetings this week. The US, UK, Dutch, and
French companies that make up the Iraq Petro-
leum Company, and their governments, are
hopeful that a settlement can be reached without
other oil-producing countries becoming more
directly involved.
An Iraqi delegation headed by strong-man
Saddam Tikriti is in Paris for talks with govern-
ment and oil company representatives. The
French say they hope to play an intermediary
role that would preserve their economic and polit-
ncal influence in the Arab world without jeop-
ardizing the interests of their partners. France is
expected to keep its own interests foremost in the
talks, but has promised to keep the other three
governments fully informed on its discussion. Iraq
almost certainly views France as an answer to its
marketing problems.
I he Organization of Petroleum Exporting
Countries and the Organization of Arab Petro-
leum Exporting Countries have adopted resolu-
tions of general support for Iraq's action. F_
J The resolution may be difficult to monitor,
because normal increases in production evidently
will be allowed. The Organization of Petroleum
l xporting Countries also designated its secretary
general, Nadim Pachachi, to mediate between Iraq
and the nationalized company.
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1he Soviets worked hard to recast their un-
friendly image during President Tito's visit to
Yugoslav
officials say that no basic differences were re-
solved and that they have no delusions about the
permanence of the thaw.
The visit did not produce significant new
agreements. The two days of talks between the
;Soviet troika and Tito centered on international
natters, particularly the recent summit and the
Progress in bilateral relations since the trend
toward friendlier exchanges began last September.
The communique suggests that the two sides con-
centrated on topics on which there was already
substantial agreement.
-The Yugoslavs have commented that the
Kremlin was forthcoming in accepting Yugoslav
(:proposals for wording the communique. Belgrade
has expressed particular pleasure with one vague
1:)hrase that the Yugoslavs, at least, read as an
edging away from the Brezhnev doctrine. The US
Embassy in Moscow pointed out that the Soviets
seem to have received Yugoslav agreement to
study the possibility of a new bilateral treaty.
Considering the strong Yugoslav objections to the
friendship treaties that India and Egypt signed
with Moscow last year, any treaty negotiations
can be expected to be long and difficult.
The primary achievement of the visit was an
improvement in atmospherics. Unlike Brezhnev's
visit to Belgrade last September, there were few
indications of sharp behind-the-scenes encounters.
The Yugoslavs and Soviets apparently managed to
submerge their differences in pursuit of mutually
beneficial cooperation. The next round in bilat-
eral contacts, a discussion among experts on de-
tails of Soviet credit arrangements for Yugoslavia,
should benefit from the cordial atmosphere
created by the visit.
During his stay in Moscow, Tito was pre-
sented his first Order of Lenin and a Soviet
marshal's sabre. The sabre is an honor previously
denied foreigners. He was warmly received by
crowds at the Moscow airport on his arrival and
during his two-day sight-seeing tour in Latvia.
This reception and the praise of Soviet leaders
were undoubtedly meant to soften Tito's bitter
memories of Moscow's vituperative treatment in
the early 1950s.
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Milos Melovski, Tito's foreign policy adviser
who accompanied him to Moscow, has said in
private that Belgrade intends to explore any
practical benefits it can get from Moscow as long
as the Soviets continue to view improved bilateral
relations as a corollary to their wider drive for
European detente. Melovski, however, indicated
that Yugoslavia would not change its non-aligned
YUGOSLAVIA: TO PAY THE PIPER
Yugoslavia may be fast approaching a major
credit squeeze in the West. Short- and medium-
term credits extended to Yugoslavia to cover
part of the hard-currency trade deficit during
11.970-71 are beginning to fall due. In many cases,
the national bank has been forced to bail out
enterprises and commercial banks that otherwise
would have to default on debts to Western
creditors. So far this year, the national bank has
in this way repaid over $100 million in credits.
To compound the problem, new credits are
not readily forthcoming. A tractor factory is
raising foreign exchange needed to finance im-
ports of Western equipment by borrowing foreign
exchange from Yugoslav citizens rather than
seeking foreign credits. Except for government
backed financial deals, Yugoslav short-term finan-
cial paper has only a few takers, and then only at
high-10 to 12 percent rates.
Belgrade has been in financial trouble
before. Just last September, Yugoslav banks were
overextended and normal sources of credit were
drying up. Western countries and financial
institutions helped Belgrade by extending new
credits and rescheduling old ones. Foreign cur-
rency earnings from workers' remittances and
from summer tourists are rising; however, this
money may not help all that much unless Bel-
grade exercises greater control on its use than in
the past.
If the Yugoslavs are not able to make timely
payments and reduce the volume of outstanding
obligations, their ability to import from the West
will be seriously impaired. The result will be a
threat to regaining economic stability and an in-
with CEMA countries.
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tensions in the Middle East following the official noted that the l',taaelis recently have been
L._od airport massacre on 30 May were partly sending low-flying jets over central Lebanon and
responsible for the air engagement on 13 June in that Israeli ships have been operating near Tyre,
which the Israelis downed two Egyptian MIG-21s. on the southern coast. Israel, as usual, has given
This was the first incident involving the loss of no indication where or when the blow will fall.
aircraft. since September. Cairo claimed it brought
clown two Mirage aircraft, while admitting that
two of its planes were hit.
US attaches as of 13 June
had seen no indications of an impendin Israeli
Meanwhile, the Arab states, especially action.
Lebanon, are still waiting for the Israelis to re-
taliate for the airport massacre. Early this week,
Lebanon protested to the IJN Security Council
regarding alleged territorial violations by Israeli
planes and warships. A Lebanese Foreign Ministry
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Prime Minister Salam disclaims
Lebanese responsibility for airport attack.
Israeli aviation officials say
that the fedayeen
will soon attempt further acts of terrorism, pos-
sibly involving aircraft hijackings. The purpose
would be to force the release of the surviving
member of the Japanese group responsible for the
Lod incident. He is scheduled to be tried by a
military court. Deputy Prime Minister Allon,
responding to the latest threats, warned that Tel
Aviv is fully capable of extending the war of
terror beyond its own borders. Allon expressed a
hope that the blood thirst of the fedayeen had
been slaked by the Lod incident.
Prime Minister Golda Meir on 13 June
formally accepted-with clear reluctance-the
resignation of her long-time friend and confidant,
Minister of Justice Shapiro. He was the target of a
wave of public disapproval for his role in the
financial scandals connected with oil operations
in the occupied Sinai. Mrs. Meir at first fiercely
resisted the call for the justice minister's resigna-
tion, but apparently bowed to the pleas of Labor
Party leaders, who are fearful that her continued
support of Shapiro would cost them votes in the
parliamentary elections coming up in October
1973. Shapiro had attempted to block an investi-
gation of charges of malpractice in the govern-
ment-owned Netivei-Neft Oil Company, defended
its managing director who was forced to resign in
April, and permitted excessive lawyer fees for
witnesses in the investigation that followed.
Mrs. Meir's Israeli Labor Alignment controls
only 56 of the 120 seats in the Knesset, and
Alignment politicians were worried about the
Shapiro affair. The US Embassy predicted re-
cently that if elections were held now, the right-
wing GAHAL bloc, which does not participate in
the government, might win four more seats, and
the Labor Alignment might lose two to four.
Such a shift would not change the nature of the
Israeli government very much; in any case, the
Alignment has 16 months before the election in
which to move to reduce domestic discon-
tent.
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Tensions between the Greek Government
and Cypriot President Makarios have subsided,
but Prime Minister Papadopoulos confronts a
number of domestic problems. He does not face
any real threat to his position, but may have to
do some serious bargaining with his civilian and
military colleagues if he wishes to maintain even a
semblance of movement toward liberalization.
One of these problems involves what to do
With the two monster ministries the prime min-
ster created last summer by combining various
portfolios into the Ministry of National Economy
,rnd the Ministry of Merchant Marine, Transport,
and Communication. Both have proved unwieldy,
:rnd Papadopoulos is now inclined to return to a
arger number of separate ministries.
apa opou os recently announced the
longest military promotions list since the regime's
inception, and this probably dampened the criti-
cism. Nevertheless, the grumbling will probably
continue until the implications of the reorganiza-
tion of the ministries are studied and understood.
The regime's deliberately paced move to-
ward liberalization was set back by the recent
arrests of student leaders and the disbanding of at
least two student organizations. Last year, Athens
released most of its political detainees from
prison and from forced exile in villages. Also last
year, the government sanctioned the creation of
Prime Minister Papadopoulos (I): Domestic Difficulties
SECRET
the student groups, now dis-
banded. Backtracking on the stu-
dents may have been stimulated
by complaints from the military
that student organizations were
being taken over by leftists. On
the other hand, the regime was
probably genuinely concerned
over recent student demonstra-
tions. The students have legitimate
complaints, and Athens could be
hearing from them again unless
there is some reform in the way
most universities are run.
Papadopoulos will probably
conciliate some elements within
the military who want no more
liberalization, and he will prob-
ably override others. In the proc-
ess of sorting out Greece's domes-
tic difficulties, however, his liber-
alization program is likely to lose
considerable ground.
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SOUTH AFRICA: PROTESTS FADE
South Africa's student demonstrations,
which were on center stage last week, have pe-
tered out following the government's four-week
ban on all protest gatherings. Although some
protesters tried to keep the university boycott
alive, most students, fearing further police re-
prisals, have returned to classes.
Prime Minister Vorster has indicated that all
foreign students who took part in the demonstra-
tions will be deported and that the government
will enact new laws to deal with campus militants.
Sixty seven students who defied the ban on 9
June were clubbed and arrested by police. These
students now face stiff fines and possibly two
years in jail. Some student leaders seem resigned
to even harsher government measures once the
campuses close next month for summer vacation.
The police attacks on white English-speaking
students have met with general approval, particu-
larly among conservative Afrikaners, many of
whom believe the government has been too tol-
erant of dissent. The crackdown on the students
not only placates the government's Afrikaner sup-
porters but serves notice on liberal critics that the
authorities will do whatever is necessary to keep
Reprisals against the Hutu majority almost
seem to have gained an irreversible momentum.
Despite a two-week government "reconciliation"
campaign in the countryside, President Micom-
bero is unable to curb reprisals by the army and
by some government and party authorities.
What began several weeks ago as a systematic
attempt to purge the Hutu leadership quickly
became indiscriminate slaughter. US officials in
Police quell students in Johannesburg.
Bujumbura estimate that more than 100,000
Hutus have been killed in the past six weeks.
Those in authority in Burundi give every evidence
of being determined to forestall any possibility of
a mass uprising by the Hutus.
Micombero now has become preoccupied
with countering foreign reporting of the violence.
Early this month, he strongly criticized the
Belgian press for playing up the repression and for
not emphasizing the government's claim that it is
responding to an attempt to eradicate the Tutsis.
Within the past week, the Burundi UN mission in
New York has publicly criticized a number of
reports in the US press.
Rival factions within the ruling Tutsi oli-
garchy were able at first to unite against the
Hutus, but cleavages are beginning to reappear.
cumstances, icom ero apparently is having dif-
ficulty finding officials who will participate in a
new cabinet to replace the one he dismissed on 29
April. The continued violence suggests that
leaders of the extremist faction who dominated
the previous cabinet maintain their strong influ-
ence, making the possibility of a moderate, con-
ciliatory government unlikely at this time.
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THE MAHGREB: PROGRESS REPORT
A series of high-level visits and the impend-
ing signature of Moroccan-Algerian agreements
underline a gradual improvement in relations
among the Maghrebian countries. The long-
dreamed-of Maghrebian federation (Morocco,
Algeria, Tunisia, sometimes Libya, and recently
Mauritania) is, however, little nearer reality than
when first broached in 1947.
Maghrebian relations have been troubled
during the last decade by territorial disputes-one
of which led to a brief Moroccan-Algerian border
war in 1963-and deep ideological conflicts. In
the late 1960s, Tunisian President Bourguiba and
Moroccan King Hassan abandoned territorial
claims disputed by Algeria, and relations between
them and Premier Boumediene rapidly warmed.
During the last two years, the three governments
have frequently coordinated their positions and
actions.
By 1970, Boumediene and Hassan had
reached broad understandings with regard to the
disputed territory and exploitation of minerals
thereon, but the conclusion of specific agree-
ments has proved difficult. Snags in drafting a
border agreement allegedly caused a last-minute
postponement in March of a tripartite meeting
among Algeria, Morocco, and Mauritania. These
difficulties apparently were resolved during the
quick trip that Boumediene made to Rabat early
this month. Two bilateral conventions on borders
and broad economic cooperation were signed on
15 June in the presence of African summit con-
ferees. Bourguiba's presence at the African sum-
mit, the first he has attended since 1964, makes
possible a Maghrebian summit.
An exchange of top-level visits between
Algeria and Tunisia, delayed because of Bour-
guiba's prolonged illness, finally took place this
spring. The visits symbolized the warmth of exist-
ing relations, but no new accords were reached.
Boumediene has been reluctant to establish
closer ties with his neighbors, who have pressed
for economic integration of the Maghreb, but he
was primarily iristrumental in arranging a rap-
prochement between Morocco and Mauritania.
More recently, he sought, albeit unsuccessfully, to
get Libyan Prime Minister Qadhafi to agree to an
accommodation with Hassan. Qadhafi last year
seized on the attempt to topple Hassan to fire a
series of propaganda broadsides at the Moroccan
monarchy. Both Boumediene and Bourguiba seek
to counter Egypt's influence in Libya by main-
taining friendly ties with their volatile and erratic
neighbor to the east.
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VENEZUELA BUYS MORE ARMS
Venezuela, bent on modernizing its armed
forces, has spent over $230 million for military
equipment in the past two and a half years. The
decision to undertake the program was motivated
by increased border tensions, internal security
requirements, the prestige believed associated
with modern weapons systems, and a compulsion
to keep up with other major South American
countries. Caracas has had large foreign exchange
reserves to pay for arms because of petroleum tax
and price increases.
Where arms purchased had been geared to
increase the mobility of the ground forces, im-
prove communications, and upgrade the navy's
ability to stop guerrilla infiltration, the resurgence
of the border dispute with Colombia in the late
1960s led to demands by the military for an arms
procurement program. Initially, purchases were
limited to US transport aircraft and French light
tanks, but Colombia's purchase of Mirage aircraft
resulted in a clamor for comparable equipment.
Caracas first attempted to purchase super-
sonic fighter aircraft from the US, but, failing
that, Caracas turned to other sources. France's
aggressive sales campaign and willingness to ex-
tend favorable credit terms led to Venezuela's
purchase of 18 Mirage fighters in 1971. Later that
year, Caracas bought 20 Canadian-manufactured
F-5 jet fighters as well as 12 T-2C jet trainers and
16 light armed reconnaissance aircraft from the
US. The T-2Cs will replace the British Provosts,
which now are used for transitional training into
high-performance jets.
The Venezuelan ground forces have ac-
counted for about $50 million of the new pur-
chases. With the acquisition of 70 AMX-30 tanks
from France, Venezuela became the first Latin
American country, other than Cuba, to be
equipped with a modern medium tank. Artillery,
anti-aircraft guns, and armored cars were obtained
from US and Italian sources. Naval purchases have
been limited to a US submarine of World War II
Venezuelan Military Purchases
1976-1972
I rance
AMX-13 tanks (1970)
15.0
kiiratle airr:r iii (19/1 )
45.0
AI'V1X-30 tanks (1971 )
78.0
! Norway
Motorgunboals (1971)
21.6
L,ommunicaiionsequipment 10.0
and aircraft armament (1971)
Patrol boats (1977) 15.6
CF-5 fighter aircraft (1971)
Sidewinder air to-air missiles
(1972)
Antiaircraft awns (1972)
2 1
T?2C jet trainers (1972)
16.0
ihrnarine and tornedoes (1971)
0.5
OV 10 light armed reconnais-
once aircraft (1971)
18.5
Armored cars (1971)
2.4
1 ansport alrcratt (19/0)
16.6
vintage, six motor gunboats from Norway, and six
fast patrol craft, which are being built in the UK
for delivery beginning in late 1974. The British
also are reconditioning the largest ships in the
Venezuelan Navy-three British destroyers and six
Italian destroyer escorts built in the early
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3r ul. _r, 1
Late last month, Peru took the last legal
steps to formalize its expropriation of the Inter-
national Petroleum Company. Peru has always
considered itself the injured party in this case,
and the favorable impact of emergency US earth-
quake and flood damage aid has not offset resent-
ment over the withholding of most other bilateral
assistance and what Lima sees as anti-Peruvian
obstructionist tactics by the US in multilateral
lending agencies.
Peruvian courts recently ruled against two
other US businesses, Marcona Mining and Con-
chan, the latter a Standard Oil of California affil-
iate, in cases involving millions of dollars in back
taxes.
Feeling that their efforts to improve bilateral
relations have been frustrated by US obstinacy on
the International Petroleum Company issue,
Peru's military leaders may believe the time has
come to try to move the US to modify its eco-
nomic sanctions. To this end, they may be experi-
menting with a tougher policy toward Washing-
ton, looking for ways to demonstrate forcefully
that they will not risk their "revolutionary"
credentials for US friendship, that the US should
concern itself with existing, rather than past, in-
vestments in Peru, and that Peru has other friends
to whom it can turn.
operation in a number of areas, including hydro-
electricity, mining, and petroleum, that have been
traditionally dominated by Western interests.
Peru is still a long way from regarding
amicable relations with the US as expendable, but
a period of increased tensions may lie ahead. F 25X1
Construction activity in Cienfuegos con-
tinues to center on economic rather than military
facilities, although improved roads, for example,
could serve either purpose. The only strictly mili-
tary improvement noted in the past two years has
been an eight-acre landfill adjacent to the Cuban
naval base at Cayo Loco. Prior to that time, an
anti-submarine net was installed at the entrance
of the bay and a facility was built on Cayo
Alcatraz to provide rest and recreation for Soviet
naval personnel, but the USSR has made minor
use of the new installation. Since August 1970,
four Soviet submarines and 18 Soviet naval sur-
face ships have visited the port.
Oil strikes in the Amazon lowlands (in which
US and other foreign oil companies are involved)
and promises of large credits from Japan, Western
Europe, and the Communist world have raised
Peruvian hopes that viable alternatives to US and
multilateral development financing are available.
Few concrete projects have thus far developed
from Peruvian-Soviet aid agreements, but contacts
with the USSR are on the upswing. Peruvian
military service chiefs were just in Moscow and
may, have agreed to acquire Soviet military equip-
ment. A high-level Soviet delegation is now in
Lima to discuss economic and technical co-
Photography of last month shows that
nearly all building activity in the area is in con-
nection with development of industrial projects,
roads, and the local airport. Two major roads
circling the bay have been completed recently and
a third is under construction. Other economic
development projects nearing completion include
an $80-million fertilizer plant, a thermal electric
power plant, a large housing and office complex,
and a variety of small commercial and industrial
shops. A previously completed sugar handling
terminal may be in the process of ex-
pansion.
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Construction Activity in Cienfuegos
Water pipeline
under construction
Shoal water
Adminfhousing complex?
Electric power plant
Cayo lace landfill;,
P01 storage a
Probable + \.
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SELKE"1'
The threat of expropriation of the US-
owned power and light company has been eased
by meetings between representatives of the parent
company, Boise-Cascade, and top Panamanian
officials. The company has tentatively agreed to
conditions for ending Panama's temporary take-
over. It will comply with all Panamanian public
utility laws, pay its fuel bill, and place some of its
stock certificates in escrow to guarantee an ade-
cluate investment program. In turn, negotiations
will resume on a new contract, with the govern-
ment to define the rate of expansion required and
the rate of profit to be permitted the company.
Panamanian President Lakas has emphasized
that he understands the serious repercussions ex-
propriation would have and that he wants to
avoid such a move. Boise-Cascade's new approach
may undo some of the damage that has resulted
from the insensitivity of its local management. It
has improved chances for a mutually satisfactory
settlement.
President Bordaberry has reshuffled his cabi-
net to form a coalition government of Colorados
and factions of the opposition Blancos_ This po-
litical breakthrough, along with signal successes in
the internal war against the Tupamaros, improves
the new President's position.
Late last week, Bordaberry named Blancos
as ministers of commerce, labor, and transpor-
tation, a significant victory for the President, who
has been seeking a national accord with the
Blancos since taking office three months ago.
Although the new coalition does not include the
largest Blanco faction, headed by Wilson Ferreira,
the accord does give Bordaberry a slim legislative
majority in return for his promise to move toward
major reforms in agriculture, industry, banking,
and education.
Meanwhile, the government continues to
score unprecedented successes in its aggressive
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drive against the Tupamaros. In the past two
months, the security forces have dramatically
increased their effectiveness in counter-terrorist
operations. Combined police and military units
have captured over 300 terrorists and seized
important Tupamaro arms caches and strong-
holds. Since the state of internal war began on 15
April, army officers have been appointed police
chiefs in all but one of the country's nineteen
departments. In addition, military units, which
are not subject to the same judicial restraints as
the police, have been using harsher interrogation
techniques to obtain information.
For the first time in almost two years, the
terrorists appear to have lost the initiative. The
knowledge that some Tupamaros are now coop-
erating with the government probably has shaken
morale, but the organization still appears to have
some capability for terrorist action since most of
its leaders and sizable numbers of militants re-
main at large.
EL SALVADOR: NEW CABINET
When President-elect Molina takes office
on 1 July, he will bring with him a carefully
selected, competent team of cabinet minis-
ters. Despite considerable pressure from party
stalwarts, Molina appears to have given sec-
ondary consideration to party loyalty.
The reappointment of Enrique Alvarez
as minister of agriculture indicates a con-
tinued and possibly increased concern for
problems of the rural sector. Alvarez is highly
regarded in progressive circles and among the
rural poor for his reformist ideas; as a member
of one of the "fourteen" families, he is con-
sidered by large landowners as a traitor to his
class. Two other appointments are note-
worthy: the ministries of defense and interior
will be headed by Col. Carlos Romero and
Col. Juan Martinez Varela, respectively. Both
The leftist Frente Amplio coalition has not
broken openly with the Tupamaros, despite re-
cent statements by some coalition leaders de-
nouncing violence. The Communists seem no
longer to be maintaining a dialogue with the ter-
rorists and may in fact be seeking to attract
disillusioned Tupamaros to their own organiza-
tion. There are indications that non-Marxist mem-
bers of the Frente Amplio, such as the small
Christian Democratic Party, do not want to be
linked with the Tupamaros any longer and may
pull out of the Frente to seek a safer alliance with
Wilson Ferreira's liberal faction of the Blanco
Party.
The effectiveness of Bordaberry's new coali-
tion will be measured by the fate of his draft
security legislation, which is intended to replace
the state of internal war that expires on 30 June.
The President's security proposal has been the
focus of major controversy between the Blancos
and Colorados, and a compromise solution is be-
ing sought in the congress.
were unsuccessful candidates for the presi-
dential nomination. They are respected offi-
cers, and their appointments should quiet
some of the restlessness within the military.
Vice presidents generally serve in some
cabinet or diplomatic post. President Rivera
(1962-67) sent his troublesome second in
command to Washington as ambassador.
President Sanchez (1967-72) appointed his
vice president minister of finance. Molina has
named his running mate, Dr. Enrique Mayorga
Rivas, as secretary general to the presidency.
This is an influential position. He will coor-
dinate all cabinet activities and will have first-
hand knowledge of all government pro-
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DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Guatemala: Nation in Transition
Secret
N? 46
16 June 1972
No. 0374/72A
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g ors t 1
GUATEMALA
Nation in
Transition
Guatemala, a land of five million people in an area about the size of Ohio, has
always been somewhat of an enigma. To the tourist, it is a spectacular land dotted
with Mayan ruins and colorful Indian villages. To the armchair traveler, it is a
menacing and violent country where ambassadors are assassinated, and extremists on
the left and right vie in killing each other. The economist sees a basically healthy and
expanding economy, but the sociologist observes a society that operates almost
exclusively for the aggrandizement of a small upper class, leaving the multitudes to
live in poverty and ignorance. The political analyst perceives the result of this deep
social cleavage in a turbulent political system characterized by a growing estrange-
ment between the intellectual and business elites. Indeed, a pessimist would suggest
that the country is poised on the edge of an abyss.
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Special Report -2
The reality is not so bleak; the country is in
no danger of falling apart. President Carlos Arana,
nearly half way through his term of office, is
firmly in power and enjoys solid military support.
Although the leftist insurgency has not been de-
stroyed, it has suffered serious losses as a result of
a vigorous government counterinsurgency pro-
gram and has no chance of overthrowing the
government anytime soon.
Arana has shown himself to be a master of
Guatemalan political arts. He has been tough on
his political foes, capitalizing on existing rivalries
to divide and demoralize the political opposition.
He has been careful to keep political tension
below the critical point. He has discouraged many
of the excesses of the extreme right and remains
sensitive to international and domestic pressures
to reduce the violence.
Having spent much of his time thus far learn-
ing the ropes and dealing with the security prob-
lem, Arana may be able to use his remaining two
years to improve schools and medical services and
to assist the rural poor to achieve a better life.
This is not to suggest that vested interests will be
displaced or that a new social order is just around
the corner, but calls for reform and change are
less likely to be equated with Communism. Some
very necessary, though probably fairly narrow,
reforms may be achieved, and, more important, a
foundation may be laid on which future adminis-
trations can build.
Of perhaps even greater significance for
Guatemala's future will be Arana's preparation
for the 1974 elections. Already, there are a num-
ber of serious candidates. Arana must first decide
whether to strengthen Guatemala's shaky demo-
cratic tradition by holding the elections, or
whether his own ambitions will require that he
have more time in office. If the elections are held,
Arana will have to decide whether to run a
candidate, perhaps a military man, who will con-
tinue a moderate reform program, or whether to
back the candidacy of Mario Sandoval, the power-
ful and ultra-conservative president of congress
and one of the most dangerous men on the Guate-
malan political scene. That decision alone could
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determine the course the country takes for the
next decade.
When, in July 1970, President Mendez
turned his sash of office over to Colonel Arana, it
was only the third time in nearly 150 years that a
Guatemalan president had completed his term of
office, and the first time that a freely elected
president of one party turned power over to the
opposition. It should have been a day of great joy
for political moderates who had long hoped for
some augury of political maturity and respect for
democratic institutions, but it was not. Arana was
the champion of the far right, with gory creden-
tials as an architect of the counter-terror ap-
proach to subversion. He had run a somber law
and order campaign and had garnered only 42
percent of the popular vote. He was a minority
president, who, many felt, possessed neither the
brainpower nor the temperament for the job.
While the moderates were apprehensive,
there was rejoicing on the tar right and, strangely
enough, on the extreme left as well. The right was
itching for a no-holds-barred counter-terror cam-
paign that might once and for all destroy the
Communist and leftist apparatus. The left wel-
comed the advent of what it saw as a more
narrowly based regime that, through its own in-
eptness and repression, would arouse sufficient
discontent to give the insurgents a degree of pop-
ular support that had thus far eluded them.
As president, Arana was a disappointment to
ooth extremes. The guerrillas, in particular, saw
little profit in letting the government play at
reform and stepped up terrorist activity to pro-
voke repressive action.
Arana was not dealing with a mere rash on
the body politic but with a full-blown disease. He
was facing neither a group of radical students who
thought it fashionable to become weekend guer-
rillas nor transient disturbances that could be
brought to an end by a few arrests and a few
concessions. Instead, Arana was up against a
determined, disciplined, experienced, and ade-
quately funded terrorist movement that had
existed for over a decade and had taxed the
energies and resources of three previous adminis-
trations.
[-he pro-Soviet Communist Party with its
action arm and the Cuban-oriented Rebel Armed
Forces are the two mayor subversive groups. The
Communists, with a hard core of 500-700 and
probably twice that many sympathizers, accept
guerrilla warfare and terrorism as important tools
in the struggle for power. They agree, too, that
there is tactical utility in kidnaping for ransom
and occasionally assassinating government offi-
cials, and the party's action arm (probably less
than 50) engages in these activities. The party,
Special Report - 3 - 16 June 1972
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however, rejects the view that this alone is suf-
ficient to overthrow the government. On the con-
trary, it places primary attention on organization
of worker-peasant-student fronts as a broadly
based political framework for guerrilla activity.
Having tasted political power under Arevalo
(1945-51) and Arbenz (1951-54), the Communist
leaders also emphasize the need to infiltrate and
work through the legal political parties.
The Rebel Armed Forces, on the other hand,
has largely ignored, indeed scorned, this type of
political activity. It espouses a more simplistic
approach that has had considerable appeal for its
younger and less-sophisticated membership (ap-
proximately 200 hard-core types and several hun-
dred collaborators). This group has held as an
article of faith that full-scale guerrilla warfare is
the best and quickest road to power. As a first
step, it has stressed the use of terror to cripple the
government, hinder its security forces, and gain
publicity. The general public, it believes, will be
forced to become involved as government coun-
ter-terror comes more and more to affect the lives
of the people.
The guerrillas provided a most serious threat
to stability from 1963 to 1966 and again in the
early days of the Mendez regime. From late 1966
through mid-1967, the military launched a fero-
cious anti-guerrilla offensive that not only set the
insurgents on their ear, but precipitated a blood-
bath to which many innocent people fell victim.
Insurgency remained at a relatively low level from
1968 to mid-1970 as the insurgents devoted
themselves to reorganization, resupply, and re-
cruitment. Nevertheless, it was during this period
that some of the most spectacular terrorist opera-
tions occurred. The murder of US Ambassador
Mein during a kidnap attempt in August 1968 and
the murder of West German Ambassador Von
Spreti in April 1970 drew world attention to
Guatemala. Terrorist activity flared at the height
of the 1970 presidential campaign as the insur-
gents attempted to embarrass the government and
force cancellation of the elections. The Arana
victory and the Von Spreti incident led to an
undeclared truce that lasted a few months. By
Special Report
Arana on Law and Order
I wish to make clear... that my becoming chief
executive would signify in one word: order. Order in
all aspects of life. Order at the cost of any sacrifice
and above any obstacle.
-accepting nomination, Feb 69
Arana and Caceres Henhoff (vice president) of-
fered peace, order, and tranquility to a desperate
people who lived in fear and who were longing for...
security. They will keep their promise.
-after declaring state of siege, Nov 70
I have tried to save the country by respecting all
its institutions and laws.... But perhaps our enemies
have underestimated us, have confused serenity with
tolerance, and tolerance with weakness. They are
totally mistaken.
-address to the nation, May 72
mid-September 1970, however, bombings, kid-
napings, and murders had increased dramatically.
By early November, Arana was coming under very
heavy criticism for the drift and lack of direction
in his handling of the internal security situation.
On 13 November, he finally took up the gauntlet.
He put the country under a state of siege and
unleashed the security forces.
The security forces floundered at first, ap-
pearing ridiculous as they picked up mini-skirted
girls and long-haired youths on downtown streets,
pulling down the hems of the former and shaving
the heads of the latter. Nevertheless, it was not
long before the security forces settled into their
job. The terrorists began to suffer important de-
feats, losing key leaders, safe-house facilities, sup-
ply centers, and arms caches. The security ser-
vices, however, were not overly preoccupied with
the niceties of law, and their scatter-gun tactics
resulted in some unjustified killings. Moreover,
with the resurgence of rightist terrorist groups,
violence climbed far above the levels that had
precipitated the state of siege.
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The state of siege restricted political activ-
ities and suspended certain constitutional guar-
antees, but there was no curfew and the life of
the average Guatemalan was little affected. Then,
too, political violence had become so much a part
of life that its increase did not immediately pene-
trate the popular apathy. But, as the months went
by, public support of the government crackdown
began to evaporate. Restiveness began to grow
among students, professors, church officials, the
bar association, and the political opposition. Even
some of Arana's own supporters began to suggest
the need for a change; the cure had become more
painful than the disease.
Arana was not insensitive to this changing
domestic mood and was even more concerned by
criticism in the foreign press. He began to dis-
courage the extra-legal activities of the right and,
if he did not succeed in eliminating them, at least
kept them in check. By November 1971, Arana
concluded that he had squeezed all possible polit-
Special Report
ical mileage out of his get-tough campaign. He
declared his pacification program a success and
lifted the year-old state of siege.
In a political sense the pacification program
was, indeed, a success. Arana had seriously weak-
ened the subversive movement without causing
irreparable cracks in the body politic. The tactical
losses suffered by the guerrillas had far exceeded
any strategic gains, and they were in need of a
period of recuperation. Government pressures,
moreover, appeared to have forced the insurgents
to shift some of their attention from Guatemala
City to the rural areas, particularly the Peten,
Guatemala's sparsely populated northernmost
province. Since tension over violence in Guate-
mala appears directly proportional to incidents in
the capital, this alone has solved some problems
for the government.
On the other hand, the guerrillas retain their
organizational integrity and the capacity to en-
gage in selected acts of terror. The result could
best be described as a standoff in the govern-
ment's favor. The government has not destroyed
the terrorists; the terrorists have not even come
close to overthrowing the government.
What Arana had succeeded in doing, there-
fore, was to remove much of the accumulated
pressures from the right and the left and to buy
time to pursue, if he chooses, more fundamental
and far-reaching social and economic policies. Al-
though the state of siege has ended, there is no
sign that security forces will become less vigilant
or less aggressive. The government will continue
to try to keep the guerrillas off-balance and on
the run. The Castroite Rebel Armed Forces, of
course, is not likely to admit the bankruptcy of
its guerrilla warfare strategy nor forswear vio-
lence. It may take greater care that its activities
do not become identified in the public mind as
ordinary criminality. It may consider a more
sophisticated political approach designed to
broaden its base of support and may once again
opt for closer ties with the Communist Party. The
Communists, for their part, are likely to be more
convinced than ever of the importance of a politi-
cal program and take great pains to avoid provok-
ing the government at this time.
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Guatemala's political problems do not begin
and end with the insurgency movement. There are
the social conditions that spawned it, the political
conditions that perpetuate it, and the slim pos-
sibilities for meaningful change. The facts are
grim. A majority of Guatemalans are illiterate,
subsistence farmers mired in poverty. Their diet is
inadequate, their education, health, and welfare
services are among the poorest in Latin America.
At the core of the problem are the Indians who
make up half the total population and whose
traditions lead them to resist social integration
and modernization. Pervasive rural poverty also
reflects the failure to develop peasant agriculture.
Growth in agricultural production has been con-
centrated in a few export crops that are raised on
a few large, modern farms. The small holder lacks
credits, education, extension services, and incen-
tives.
Guatemala, moreover, provides a striking
contrast in ideology and political style with neigh-
boring Mexico. Mexico proclaims itself the land
Arana on Development
We want to be very clear. This government has
one fundamental objective: to better the social con-
ditions of the working population.
-inauguration speech, Jul 70
We are not carrying out the pacification of the
country only with arms in hand,- but we are taking
education to the countryside, bread to the farms,
health to Guatemalans, prosperity through work with
better salaries.
I offered to work in order to do as much as
possible to :alleviate the most pressing needs of the
poor people. I have visited almost every municipality,
listening to complaints, investigating needs, and have
understood the people's hopes and desires because I
am part of that people.
-address to the nation, May 72
Special Report
of the revolution, and Mexican governments, pro-
gressive or not, maintain that they are fulfilling
and safeguarding the 1910 revolution. Guatemala,
on the other hand, is very much the land of the
counter-revolution, and Guatemalan governments,
even when they are not totally reactionary, find it
necessary to declaim "It won't happen again
here." If prevailing political attitudes are becom-
ing dated in Mexico, they are shopworn, indeed,
in Guatemala.
Guatemala, of course, had its own
revolution, which began in 1944. As the upheaval
progressed, it took on all the earmarks of a classic
revolution bent on overturning the traditional
power bases and radically remolding society. First
under Juan Jose Arevalo and even more under his
successor, Jacobo Arbenz, the leadership of the
revolution fell under Communist influence. In
1954, when the government was about to give
recently acquired Czech arms to peasants and
workers, a military coup by Colonel Castillo
Armas cast out Arbenz. Castillo Armas' overturn-
ing of land reform efforts and restoration of the
old elite to its usual place left a bitter herit-
age-violence in politics.
The political scene today has been greatly
affected by the extremes the nation has experi-
enced since 1944. On the one side are the
revolucionarios who glorify the 1944 revolution
and the beginnings of the modernization of soci-
ety under Arevalo. On the other side are the
liberacionistas who view the overthrow of Presi-
dent Arbenz as the salvation of the country from
Communism. Reformers have been indiscrim-
inately considered Communist by the conserv-
atives, whose inflexibility in turn makes the lib-
erals more willing to collaborate with the extreme
left.
From 1966 to 1970, Mendez, a liberal,
democratically elected president, made a major
effort to arrest the polarization of Guatemalan
politics by establishing a dialogue between his
government and the power elite. He was caught,
however, in a cruel dilemma. On the one hand, he
wanted to bring about change and reform to
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prevent an explosive buildup of discontent. On
the other, his political survival depended on those
who were opposed to even the most modest re-
forms, and he had to convince the landed gentry,
businessmen, and the army that he was not work-
ing against their interests.
Mendez had been permitted to take office
on the understanding that the military would
have a free hand in dealing with the insurgents,
and his liberal image was marred by the indiscrim-
inate use of force that resulted. When, midway
through his term, he finally brought the military
to heel, he had come to accept the impossibility
of his achieving far-reaching reform. Although he
half-heartedly advocated social and economic
measures, his obsession became the survival of his
government. He began to believe that he would
make a major contribution to Guatemalan polit-
cal stability if he could only complete his term in
office and preside over the election of a constitu-
tional successor. That his successor was the repre-
>entative of the far right was the final irony.
From the beginning of his administration,
Arana surprised his opponents by being more
than a front man for the oligarchy. His stance on
the insurgency was clear, but even in this he
showed an awareness that previous governments
had been handicapped by ineptness in public rela-
tions and an inability to win public: confidence.
More important was Arana's concern with eco-
nomic development and social reform. He seemed
to realize that economic and social under-
development provided fertile ground for ex-
tremism and violence. Unlike Mendez, Arana was
in a position to talk sense about Guatemalan
development needs, to take positions at variance
with conventional political orthodoxy, and to get
away with it. His reputation and career made it
virtually impossible for the business community
or the large landowners to tar him with the Com-
munist label. Moreover, Arana enjoyed wide-
spread support among the armed forces. He did
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not have to worry about a coup nor dissipate his
energy trying to maintain his political balance.
Even before his inauguration, Arana pledged
greater technical assistance and bank credits to
farmers, more job opportunities and better educa-
tional and health facilities for the masses, admin-
istrative reform and improvement of the civil
service. When he came into office, he quickly set
the tone of his administration by moving to fulfill
those pledges. In addition, Arana began imple-
menting the comprehensive five-year development
plan prepared by the Mendez government.
Pursuant to this plan, the Arana government
has taken steps to increase domestic tax revenues
and its investment budget. Stress has been on
social services and agricultural development.
Administrative reform legislation has been passed,
and the government has embarked on an
ambitious rural electrification and rural public
health program. The government also is pro-
moting agricultural research and reforming the
rural credit system.
Arana has not been content with a purely
mechanistic approach to development problems.
He has made a major effort to visit the depart-
ments and municipalities to show his concern for
the welfare of individual citizens. From this, he
has, of course, reaped direct political benefits:
good publicity, high exposure, and a gain in
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SIUKL I
personal popularity. But there has been more
than tinsel. Arana has used the tours to begin a
dialogue with rural leaders, learning first-hand
about the needs of the small communities. He has
appeared genuinely shocked at some of the con-
ditions he has encountered, such as rural wages of
:35 cents per day.
Despite all that has been done, it is far too
soon to pronounce the problem solved. Arana has
not abandoned the powerful vested interests,
which form a tightly knit and highly conservative
oligarchy. He will undoubtedly achieve sufficient
progress to prevent any significant increase in the
irisurgents' popular appeal and, with the state of
siege ended, he may pursue an even more vigorous
reform program, but it is unlikely that he will
undertake the kinds of reforms that will seriously
threaten vested interests. The Arana government
may prove just as reluctant as previous adminis-
trations to make the politically difficult decisions
that would accelerate the rate of social change.
Even if such a course were attempted, implemen-
tation would be constrained by the shortages of
rranagerial skills and money, and by opposition
from the political right.
Arana may go down as a transitional figure
in Guatemalan political history. He is a product
of the army and not the oligarchy. While the
Guatemalan Armed Forces lack the reformist zeal
of the Peruvian military, they show a growing
sympathy for the plight of the impoverished. The
oligarchy tries to keep alive the dichotomy be-
tween liberacionistas and revolucionarios and to
woo the soldiers away from any thought of
tinkering with the country's basic socio-economic
structure. Nevertheless, Arana talks of himself as
one of the "people," and his reformist impulses
appear to strike a responsive chord among many
of the junior officers. So long as this is the case,
the social, political, and cultural integration of
the lower income groups into the mainstream of
national life will probably keep pace with "effec-
tive demand," the rising expectations of the
people. If the armed forces will not serve as the
engine of progress, they will at least not be cast in
the role of a caboose with its brakes on.
Even if Arana's commitment to economic
and social development is sincere, he may not be
similarly committed to building a democratic
tradition, strengthening the country's political
institutions, or creating a viable party system.
Indeed, problems associated with Guatemala's
political development are more likely to cause
difficulty in the coming months than any debate
over social policy.
First, the opposition parties are operating
under severe constraints, and the situation is not
likely to improve. Although Arana likes to think
that he is above politics, certainly above party
politics, he has never been entirely sold on the
concept of a loyal opposition and, in fact, may
consider the two words mutually exclusive.
Second, executive-leqislative relations may
worsen. At present, congress is a rubber-stamp
organization. The rightist coalition holds 37 of
the 55 seats. Continued cooperation, however,
hangs by a thread, and that thread is the relation-
ship between Arana and the president of congress,
Mario Sandoval. Arana is not timid in the exercise
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of power and has the strength and determination
to bind the system to his will. Should the two
men fall out, Arana might decide to operate with-
out the congress.
Third, the 1974 elections are already casting
a very large and very dark cloud over the political
horizon. Arana is not clear who should be his
successor. It is, of course, in his interest to play
his cards close. There are indications that he will
not support Sandoval-the man who seems most
determined to run. He may as a matter of fact put
forward his own candidacy.
Apart from the illegal Communist Party,
there are five basic political parties. On the right,
the National Liberation Movement, run by San-
doval, and the Democratic Institutional Party
form the government coalition. The latter is very
much the junior partner and rather unhappy at
and the Democratic Revolutionary United Front,
an unregistered grouping around Manuel Colour
Argueta, the popular young mayor of Guatemala
City.
It is a tribute to Guatemalan courage and
stamina that there are any political parties at all.
Local officials and party leaders live harsh and
frequently brief lives. Those on the right are in
danger of assassination by the insurgents; those
on the left are in similar danger from the right..
Political opponents have often found it cheaper
and more convenient to rub out or scare off the
opposition than to stuff the ballot box.
The parties of the left have had a par-
ticularly hard time since Arana came into office.
Their activities were restricted by the state of
siege, their organizational efforts hamstrung by
the government-controlled electoral registry and
their members subjected to personal intimidation-
Last December, the governing National Liberation
Movement, with a minority of delegates to a
nationwide conference of mayors, used its muscle
to elect a majority of officers. In the March
municipal elections, the party not only kept up a
Guatemalan practice whereby the government
wins a majority, but bettered any previous record.
With local control in its hands, the party now can
manipulate the electoral machinery for the 1974
presidential and congressional elections-provided
the military keeps its hands off.
Difficulties for the Revolutionary Party be-
gan soon after it lost control of the presidency.
For almost two years, from July 1970 until Feb-
ruary 1972, the government-controlled electoral
registry kept the party from electing a new leader.
In February, Carlos Sagastume won the post over
his more leftist opponents with the behind-the-
scenes help of Mario Sandoval. The result was to
divide the party and make more difficult the
formation of an alliance with the Christian Demo-
crats.
the cavalier treatment it is accorded by Sandoval. With the Revolutionary Party in disorder,
It remains in the coalition for want of anywhere the government is turning its attention toward the
else to go. On the left are the Revolutionary Christian Democrats, who recently made the mis-
Party, headed by Carlos Sagastume; the Christian take of criticizing too loudly Arana's decision to
Democratic Party, led by Rene de Leon Schlotter; pay $18 million for the US-owned utility
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company that provides Guatemala City and
environs with electric power. The party leaders,
while applauding the decision not to renew the
company's fifty-year concession, argued that
since the cost to the Americans had been under
$1 million, Arana had gone too far in his gener-
osity. They hinted that Arana was retaining some
of the money for himself. Arana shortly there-
after made a nationwide radio and television ad-
dress during which he singled out the Christian
Democrats for criticism, and it now appears the
electoral registry is taking a close look at charges
of irregularity leveled by a dissident Christian
Democratic faction against party leader De Leon.
Although Mayor Colom is so far to the left
as to be anathema to the government coalition, it
may not block his efforts to obtain official recog-
nition for his party. This generosity would reflect
the government's interest in further fraction-
alizing the left.
The greatest potential for trouble, however,
may come not from government harassment of
the left but from within the government camp.
Mario Sandoval has been making it clear that he
wants to be the next president, and many in his
party regard the Arana administration as a stage
to total political domination by Sandoval's Na-
tional Liberation Movement. Arana and probably
a majority within the military do not regard a
Sandoval candidacy as being in the best interests
of Guatemala. At various times, Arana has mused
out loud about changing the presidential term
from four to six years, of forming his own party,
and of working out a broadly based political
accommodation to run a single unity candidate in
1974.
The two men have long been associated in
rightist causes and have proved useful to one
another, but have never been close. Although
capable and hard-working Sandoval is an invet-
erate plotter (he has attempted to overthrow the
last three governments) with a taste for violence.
Sandoval is much more the doctrinaire rightist
than Arana and in many ways is a throwback to
I:he past. Few men on the Guatemalan political
Special Report
scene today are less likely to unify a divided
country.
Both men would like to avoid a showdown
as long as possible. Sandoval recognizes the thin-
ness of his military support and knows that he
cannot win against Arana without such backing.
Willing for the present to trade on his prestige as
party and congressional leader, he has drawn back
from a confrontation. Arana, for his part, desires
to keep control of the congress and the National
Liberation Movement and realizes that an attack
on Sandoval would split the party. Nevertheless,
unless Arana changes his mind or Sandoval is
cured of presidential fever, a collision seems
inevitable.
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