WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A011400130001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 21, 2016
• Document Release Date: January 31, 2008
• Sequence Number: 1
• Publication Date: September 17, 1976
• Content Type: SUMMARY

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Secret
Weekly Summary
Secret
CI WS 76-038
No. 0038 / 76
September 17,
1976
Copy N4
1440
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SECRET
The WEEKLY SUMMARY, issued every
Office of Current lntelligenre, reports
cant developments of the Week through r
frequently includes material coordinated
by the office of Economic Research, the
Research; the Office of Geographic
Ling by
inn on Thursday,
with or prepar
if Strafes
Cartogrztial
Research, and the Directorate of Science
CONTENTS
1 Far East
China; Japan
2 Middle East
Lebanon
2 Africa
South Africa;
Angola-Portugal
Portugal;
3 Europe
USSR, Poland;
Romania-Yugoslavia;
European Community;
7 Western Hemisphere
Mexico; Canada; Chile
8 The USSR Looks at China After Maio
10 Spain: Government Program Announced
12 Swedish Election: Taxes and Big Government
14 ASEAN and Hanoi: Rethinking Relations
15 Saudi Arabia: Influx of Foreign Workers
Comments and queries on the contents of this
publication are welcome. They may be
directed to the editor of the Weekly
Summary,
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SECRET
CHINA
All active members of the Chinese
Politburo participated in the official
mourning ceremonies for Mao Tse-tung.
The Chinese media listed them in order of
rank, disclosing no changes in the pecking
order.
All but one of the country's 29 provin-
cial leaders appeared in Peking during the
ceremonies. The group includes several
province chiefs who have been attacked as
supporters of the ousted Teng Hsiao-ping.
Missing from the ceremonies, however,
were three national government officials
who have been linked with Teng. Mao's
leftist wife, Chiang Ching, has not been
publicly cast in the role of widow, as were
the wives of other deceased party leaders,
but her wreath received special mention
by the official news agency.
All military region commanders
appeared in Peking, contributing to the
general show of unity much in evidence
during the week.
Peking has received messages of con-
dolence from all the provinces and from
all II military regions. The Peking
Military Region, the most important in
this succession period, sent a long
message pledging firm loyalty to the party
Central Committee.
Sino-Soviet Relations
The Chinese have so far shown no signs
of interest in better relations with the
USSR. The Soviets were given last place
when foreigners in Peking were allowed to
pass by Mao's bier. The Chinese obituary
on Mao took several swipes at the
Soviets, and the Chinese media have con-
tinued to criticize Soviet foreign and
domestic policies.
By Soviet standards, Moscow's treat-
ment of Mao's death has been correct,
and even somewhat conciliatory. An
assessment of how the USSR may be
looking at a post-Mao China appears on
page 8.
JAPAN N151
Prime Minister Miki and his opponents
in the ruling Liberal Democratic Party
worked out another temporary com-
promise this week, once again avoiding a
showdown in the battle over party
leadership. The new agreement involves:
? A new slate of cabinet and party
officers untainted by the Lockheed af-
fair.
? Convening the Diet to pass a
number of pending fiscal bills.
? Miki's public pledge not to dis-
solve the Diet and call a general elec-
tion as long as legislative business was
progressing smoothly.
? Miki's assent to call a special par-
ty convention in October at which his
tenure in office will be decided.
Each side gave a little. Miki's op-
ponents dropped their demand for his
resignation prior to the opening of the
Diet. In return, Miki limited his own
maneuvering room by pledging not to dis-
solve the Diet precipitately and agreeing
to a special party convention next month.
Miki's opponents will almost certainly
press for rapid action on the pending bills.
With the national election only three
months away, they want to hold the party
convention-and replace Miki-sooner
rather than later next month.
Miki's rivals also gained an important
lever in the replacement of party secretary
general Nakasone-Miki's only major
ally-with Tsuneo Uchida, a follower of
Finance Minister Ohira. The anti-Miki
camp will use their control of this key par-
ty job further to restrict Miki's options.
Otherwise, the changes in the cabinet
and party continue to reflect the balance
of forces that weigh against the Prime
Minister.
Deputy Prime Minister Fukuda and
Finance Minister Ohira, Miki's major
rivals, are still firmly in place and the
cabinet changes are unlikely to bring any
significant shifts in foreign or domestic
policies.
Most important cabinet ministers have 25X1
been retained with the exception of Kiichi
Miyazawa, who has been replaced by
Zentaro Kosaka as foreign minister.
Miyazawa had recently irritated the
Chinese and presumably Miki as well with
his public criticism and candid comments
on the lack of progress in Sino-Japanese
relations. Miki may well have desired to
replace him with a man like Kosaka-a
former foreign minister and foreign af-
fairs expert-who is an ardent supporter
of better ties with Peking.
Panes 1 1A/Gr:VI V Ci IP ARA A rw Car, 17 7r,
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SECRET
LEBANON
3-4
The Syrians apparently intend to give
Lebanese president-elect Sarkis a chance
after he assumes office next week to work
out a political settlement before they
decide whether to launch a new military
offensive. In talks with visiting Lebanese
Christian and Muslim leaders over the
past few weeks, President Asad and other
Syrian officials reportedly have stressed
the importance they attach to an orderly
transfer of power in Lebanon on
September 23.
Asad has urged Christian leaders in
particular to cooperate fully with the new
government to ensure that Sarkis has suf-
ficient stature and authority to conduct
serious negotiations. Asad reportedly won
the agreement last week of Camille
Shamun, the most extreme of the major
Christian leaders, to act with restraint in
order to give Sarkis an opportunity to
pursue negotiations. Shamun is said to
have agreed to put no time limit onthese
peace efforts. Asad, in an apparent
attempt to reassure Shamun, agreed to
continue joint preparations for a coor-
dinated military offensive against the
Palestinians and Lebanese leftists.
Arab mediators advanced a new
proposal this week for a tripartite meeting
among Palestine Liberation Organization
chief Yasir Arafat, Sarkis, and Syrian
Prime Minister Khulayfawi to try to im-
plement the accord concluded by the
Syrians and Palestinians in late July.
Earlier efforts to carry out the
agreement-which calls for a general
cease-fire, Palestinian adherence to
earlier restrictive agreements, and round-
table negotiations under
Sarkis-foundered on Syrian suspicions
that the Palestinians were trying to take
advantage of the accord to rearm and for-
tify their positions.
The PLO-probably at the urging of
Arafat and other less radical
fedayeen-and the Lebanese leftists
accepted the mediators' proposal. The
Christians, however, immediately raised
objections that could delay or even kill the
proposed meeting.
The Syrians apparently also met with
Arafat's troublesome lieutenant, Salah
Khalaf, last weekend, presumably in an
attempt to reach some sort of accom-
modation. The meeting apparently did
not go well. The Beirut press has
speculated that the Syrians refused to
accede to Khalaf's demand that they
withdraw from Lebanon.
Egypt is trying to get into the
negotiating picture. It has invited Palesti-
nian and Lebanese leaders-including
Sarkis, Prime Minister Karami,
Phalangist chief Jumayyil, and leftist
Kamal Jumblatt-to come to Cairo for
consultations. The Egyptians have had lit-
tle success in blunting Syria's aims in
Lebanon by supporting the leftists and
Palestinians and apparently are now try-
ing to undercut Syria by diplomatic
means in anticipation of the Arab League
summit meeting on Lebanon. The League
has set October 18 as the starting date for
SOUTH AFRICA 12dj'
Most blacks in Soweto townsip out-
side Johannesburg observed another
three-day work stoppage this week, the se-
cond such demonstration organized by
militant student leaders within a month.
This time, there was no backlash from
nonparticipating blacks, and police, by
making mass arrests, generally were able
to avoid serious violence.
About three quarters of the black work
force in Johannesburg, including workers
from the other major black township of
Alexandra, were reported absent by the
city's business firms. Roughly the same
number of blacks stayed away last month,
but this week's boycott appeared bet-
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ter organized. There are widespread ru-
mors the blacks are contemplating fur-
ther action.
In Cape Town, demonstrations by the
colored (mulatto) population declined this
week, but-a work boycott began there on
September 15 and the situation remains
volatile. Since the recent outburst by the
coloreds-the first since rioting against
apartheid began last June-gun and am-
munition sales to whites have been heavy,
and some vigilante groups have been
formed to protect white homes and
schools. Whites and coloreds live in close
proximity in the Cape Town area. There
have been a number of incidents in which
white civilians shot and killed coloreds
and blacks, the first such instances since
the troubles started in June.
Minor disturbances occurred elsewhere
in the country, including Durban and Port
Elizabeth. The continuation of scattered
outbreaks and the impending visit of
Secretary Kissinger led high security of-
ficials to meet during the week to discuss
ways of controlling the disturbances.
Last week, Prime Minister Vorster held
a closed-door session with high party of-
ficials at a special caucus in Pretoria. In
public remarks this week, he strongly
reiterated the position that blacks are to
exercise their political rights solely
through their tribal homelands, and that
coloreds and Asians can discuss their
grievances through the newly established
cabinet council, a strictly advisory group
that is to meet for the first time on
September 24. Vorster gave no hint of be-
ing prepared to make meaningful con- 25X1
cessions to the nonwhites, despite press
speculation recently that concessions were
being considered.
PRETORIA
sowetoti
ohan bbarg
-South soIh~._...
XEi/Jtxobe h:
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SECRET
ANGOLA-PORTUGAL
The foreign ministers of Portugal and
Angola are to meet soon to work out
details for re-establishing diplomatic ties,
which were broken in April when Angola
charged Portugal with supporting op-
ponents of the Popular Movement.
The announcement followed an ex-
change of views in Luanda-held at
Angolan President Neto's re-
quest-between officials of Portugal's
governing Socialist Party and Angola
leaders. The visiting delegation found the
Angolans eager to restore formal
relations; one member told the US em-
bassy in Lisbon that ambassadors coul
be in place by the end of September. Por-
tugal plans to send a team of economic
specialists to Luanda soon.
The Angolans apparently are anxious
to speed the return of Portuguese
technicians. They also clearly hope that
Portugal will help them establish broader
links with Europe and other contacts that
would facilitate Angola's admission to the
UN.
Angola's economy needs Western
technology and markets if it is to revive
quickly. The country's lucrative commer-
cial agriculture and diamond mining, for
example, need access to the West before
they can return to normal operations.
Members of the Portuguese delegation
came away with the impression that
Neto's political strength and his self-con-
fidence are growing. In the months im-
mediately following the Popular
Movement's victory in the civil war last
February, Neto and the Movement's
other political leaders-mostly mulat-
tos-were kept from establishing a policy
of nonalignment by black radicals in the
party's military hierarchy. The radicals
appear to have forced the break with
Lisbon in April.
During recent months Neto has been
considerably more visible and vocal than
he was earlier in the year. He has given
many speeches and interviews in which he
has stressed multiracialism and nonalign-
ment and denounced party disunity.
Neto's efforts to broaden his country's
international contacts are not likely to go
unchallenged by radicals in the Popular
Movement, who have close ties with the
Cubans and Soviets who are providing the
regime vital military and other assistance.
Neto, a strong nationalist, probably
would like to reduce the Cuban presence
substantially, but he is in no position to do
so while present military and economic
conditions prevail in Angola, and he lacks
other sources of assistance. A substantial
Cuban presence-probably on the order
of at least 10,000 troops and ad-
visers-appears likely for some time.
We now estimate Soviet grain produc-
tion this year at 200-million metric tons,
up 5-million tons from our estimate in
early August. Because of a near-record
lateness in ripening and harvesting, the
final crop remains uncertain.
A crop of 200-million tons would ex-
ceed last year's by some 60-million tons
and would be second only to the record
crop of 222.5-million tons in 1973.
Cool, wet weather in much of European
Russia throughout the summer has
delayed harvesting. By September 1, only
52 percent of the area sown to grain had
been harvested, compared to a five-year
average of 62 percent. Weather conditions
during the balance of the harvest will play
a larger than usual role in determining the
size and quality of the crop.
Time is growing short for completing
the harvest on the remaining 65-million
hectares of grain crops. There is con-
siderable. risk even before October 1 of
severe frost or snow that could reduce
yields in areas with relatively short grow-
ing seasons. Light frosts have already oc-
curred in West Siberia. Continuing rains
during the harvest and an early onset of
winter could lead to losses if the pace of
the harvest does not quicken.
Grain quality may be a problem in any
event. A large share of the cereal grains
harvested in European USSR is expected
to be unsuitable for flour milling because
of wetness. This problem is intensified in
"wet" years by the shortage of high-
capacity mechanical dryers to dry the
grain before storage.
If favorable prospects hold, Soviet
grain purchases abroad should not exceed
14-million tons, a little more than half the
amount bought in 1975. A Soviet grain
trade official implied last month that the
USSR's grain purchases would total
about 13.5-million tons. Purchases of this
size would cost roughly $3.5 billion, com-
pared with the nearly $4.5 billion spent for
grain last year.
So far this year, the Soviets have
bought 10.5-million tons of grain-5-
million tons of wheat and 5.5-million tons
of feed-grain-and 2-million tons of
soybeans. Of this amount, about 9-million
tons will come from the US and the
remainder from Canada, Australia,
Brazil, and New Zealand. The USSR is
still obligated to take 1.6-million tons
more of US grain to meet the 6-million-
ton minimum called for in the first year of
the US-USSR grain agreement.
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SECRET
POLAND -2 6 , 1
I,/
Political caution has again won out
over economic considerations in Poland.
The party leadership, still unsteady after
the June riots, has apparently decided not
to risk any price increases on basic food
stuffs for at least another year.
The regime has backed away from
Prime Minister Jaroszewicz's proposal in
July that prices for meat would go up this
year by about 35 percent. Thus, for the se-
cond time this summer, a proposal by
Jaroszewicz for price increases has been
scrapped-a serious embarrassment for
any East European leader.
Although his standing with the public
and possibly within the party is weaker
than before June, party leader Gierek is
still calling the shots. On September 3, he
gave Polish workers the good news that
301
the regime would implement price
changes on food only after very long
study. He announced the creation of five
commissions, one of which is to deal with
meat prices, that have at least a year to
carry out their investigations. A Central
Committee plenum approved this plan on
September 9.
By creating these commissions, the
leadership is clearly trying to gain time to
bring serious, tension-causing economic
problems under control. Meat is still in
extremely short supply, and there are only
limited possibilities for alleviating the
shortages over the short run. During the
first six months of this year, the govern-
ment cut back meat exports by about 35
percent; its need for hard currency
suggests it is not likely to reduce them any
further.
Gierek announced at the plenum that
Romania and Yugoslavia Coordinate Strategy
During their talks in Yugoslavia last
week, presidents Ceausescu and Tito
evidently concentrated on coordinating
strategy within the communist movement
and on scotching speculation that there
are differences between them.
Tito, i
went a out to show
a ugos aura and Romania have no
disagreements. He greeted Ceausescu at
the airport and saw him off, despite
Yugoslav protocol rules that exempt him
from such duties. The two reportedly held
lengthy discussions that emphasized their
"identity and closeness of views" on all
questions of mutual interest.
One highlight was Tito's signing of a
"joint declaration" that closely follows
Ceausescu's ten principles of national in-
dependence and noninterference in inter-
nal affairs. The Yugoslavs had resisted
earlier Romanian requests that they sign
such a document.
In the declaration, the two presidents
expressed their determination to
cooperate closely in pursuing their in-
dependent courses. They also:
? Praised the recent European com-
munist conference, but voiced anxiety
about the attempts of some countries
to "legalize" the right to interfere in
the internal affairs of others.
? Welcomed the Helsinki accords,
but noted the lack of concrete steps to
implement them and stressed the need
for positive achievements at the
follow-on meeting in Belgrade next
year.
? Reaffirmed their intention to
develop multilateral as well as bilateral
cooperation in the Balkans.
? Emphasized nonaligned issues,
praising the Colombo summit for
renouncing "all forms of foreign
domination and exploitation."
The two leaders also reiterated stan-
dard pledges of "all-around assistance" to
national liberation movements and called
for "democratization" of the UN, dis-
solution of military blocs, and the
creation of a new international eco-
nomic and political order.
some meat would be imported but ad-
mitted that demand still would not be
satisfied. One official earlier estimated
that 100,000 tons of meat will be imported
by the end of the year.
EUROPEAN COMMUNITY
The EC monetary committee agreed
September 10 to back Italy's proposal for
a change in International Monetary Fund
gold sales policy, but refused to ask for a
postponement of the auction held on
September 15.
IMF directors from EC countries will
ask the Fund executive committee to con-
sider possibilities for "being more flexible
in techniques of selling gold." Changes
might involve delaying the scheduling of
future auctions, increasing the time
between auctions, or reducing the
amount of gold offered in each
auction.
Italy, which still has relatively large
gold reserves, is asking the IMF to hold
gold auctions less frequently because of
the depressing effects they have on world
gold prices. The Italians have just com-
pleted a renegotiation of their gold-
backed loan from West Germany and,
because of past declines in the price of
gold, took the option of reducing the
amount of their loan rather than in-
creasing their gold collateral.
France, with the second largest gold
reserve in the EC, and the UK were Italy's
strongest supporters at the committee
meeting. West Germany, which has the
largest gold holdings in Europe, has ex-
pressed little concern about the fall in gold
prices.
The gold issue will be discussed at the
IMF meeting in Manila early next month.
If the EC receives support from some in-
dustrial and developing countries, it will
increase the pressure on the US to agree
to a more flexible scheduling of future
IMF gold sales.
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PORTUGAL 4Z- ~~
Prime Minister Soares, in a
long-awaited economic speech on
September 9, painted a gloomy picture of
Portugal's economic situation and talked
of the tough measures that will be needed
to resolve the country's problems. The
speech, however, was short on the im-
mediate measures that many had hoped
would be announced.
The government does appear ready to
take the first steps toward regaining some
control of the economy. In most cases,
however, the Socialist minority govern-
ment must still translate promises into
legislation and prove to the public it has
the power and the determination to en-
force the laws.
Soares cited the restoration of labor
discipline and worker productivity as top
priorities for economic recovery. Specific
bills are nearly completed and will be sub-
mitted to the legislature when it reopens
in October.
The Prime Minister expressed con-
fidence that Portugal's dwindling foreign
currency reserves will be strengthened as a
result of increased assistance from the
West. Soares may be hoping that foreign
support will enable him to get the
economy moving and permit him to avoid
harsher austerity measures.
The speech was probably welcomed by
most Portuguese, who appear willing to
accept some sacrifice as the price for end-
ing the political and economic chaos of
the past two years. The two parties to the
right of the Socialists would have
preferred an even stronger stand, but gave
Soares high marks for a "positive and
courageous" presentation.
Soares blamed the Communists for the
indiscipline in Portugal's labor unions, for
the sorry state of the nationalized
businesses, and for the excesses of
agrarian reform. The Communists
reacted with predictable sharpness, but
stopped short of declaring outright op-
position to the government. They can be
expected to use their influence in labor to
incite protests against specific measures,
but they probably lack enough support to
mount the "massive resistance" that party
leader Cunhal has promised.
Soares is depending on President
Eanes' authority over the armed forces to
turn back any Communist challenges and
may have toughened his speech to main-
tain good relations with the President.
Eanes, whose own political future may de-
pend on the success of the Soares govern-
ment, is apparently growing impatient
with the government's slowness in enac-
ting reforms and with Soares' inability to
keep peace between Marxist and social
democratic factions in his cabinet and in
the Socialist Party.
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GREECE-TURKEY
The International Court of Justice on
September 11 rejected the Greek appeal
for a temporary ban on Turkish oil ex-
ploration in disputed Aegean waters. It
also rejected a Turkish request to drop the
case altogether, leaving open the possibili-
ty of a later ruling on the substance of the
case.
The Greek government has tried to put
the best face on the situation by stressing
that the decision was expected in light of
the earlier UN Security Council resolu-
tion that urged bilateral talks before
either side resorted to the Court. Athens
also took comfort from the Court's
refusal to drop the case completely.
Except for radical leftist Andreas
Papandreou, the Greek domestic opposi-
tion has not tried to exploit the setback,
and the government seems not to have
suffered any immediate political damage.
Prime Minister Caramanlis doubtless is
concerned, however, that such reverses
could gradually erode support, especially
within the military, for his circumspect
policy toward the Turks.
The Turks, who have refused to
recognize the Court's jurisdiction in the
dispute, expressed satisfaction with the
rejection of the Greek petition but did not
comment on the Court's refusal to drop
the case. Foreign Minister Caglayangil on
September 11 said he hoped Greece will
now negotiate with Turkey in a "realistic"
and "constructive" way. Prior to depart-
ing for New York to attend the UN
General Assembly meetings, Caglayangil
said he would "probably" meet with
Greek Foreign Minister Bitsios there later
this month as had been agreed in August.
He cautioned, however, that the Court's
decision had created a new situation and
that new contacts are required before such
a meeting could take place.
The Greeks appear to have been
sobered by the Court's decision and
probably are resigned to proceeding with
talks. The Turks are in a stronger position
now to put pressure on the Greeks to con-
sider proposals such as joint exploration
of disputed waters. Opposition pressures
or the prospect of political gain could
tempt the weak Demirel government to 25X1
set unacceptable preconditions for the
talks or to pursue a hard line once they
are under way.
EC: Differences with Turkey
EC and Turkish officials, meeting in government dec
government dec
Ankara last week, were unable to settle
differences resulting from Turkey's desire
to improve the terms of its association
agreement with the Community. For its
part, the EC hopes technical-level
meetings early next month will be produc-
tive and that a formal association meeting
can take place in mid-October as sched-
uled. Real progress may not be possible,
however, until after the West Ger-
man national election because of Bonn's
firm line of the question of migrant
workers.
The EC's inability to meet Turkish
demands will complicate negotiations set
for this month on Greek entry into the
Community, since the Nine have tried to
"balance" an agreement with Greece with
a positive gesture toward Turkey. Unless
a solution acceptable to Turkey is found,
the EC would lose whatever leverage it
has in persuading Turkey to be more
forthcoming on a settlement of the
Aegean and Cyprus questions.
When the EC announced last July its
proposals for augmenting the existing
agreement with Turkey, the Ankara
lared that it would not
meet with the Nine until they came up
with a better offer.
Turkey is bargaining for improved
access for its agricultural goods, increased
financial aid, and agreement on a date
when Turkish workers will be allowed free
movement within the Community. EC of-
ficials believe the Turks will eventually
accept the offers regarding financial aid
and entry for agricultural goods, but
recognize that additional concessions on
migrant workers will probably be
necessary.
West Germany's position on migrant
labor has been the major stumbling block.
Although committed to preserving
Turkish ties to Western Europe, the West
Germans contend that both domestic
economic and political considerations rule
out any plan that would permit a substan-
tial increase in the number of non-EC
citizens working in the Federal Republic.
As an alternative, Bonn has promoted the
idea of direct West German investment in
Turkey to ease unemployment there and
reduce pressure for Turkish emigration.
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MEXICO
The Mexican government announced
on September 12 that it will support the
peso at a level 37 percent below its
pre-float dollar level. The new level is just
above 5 cents; before the float the peso
had been pegged at eight cents.
The move is an attempt to eliminate
public uncertainties and to reassure the
people that the government is in control of
the situation. By not referring to its action
as a repegging of the peso, the govern-
ment hopes to keep open its options for
further adjusting the value of the currency
if the current exchange rate becomes un-
supportable. Since the public impression
is that a new parity has been set, however,
future changes in the peso's value may
lead to a further outcry.
Prices of goods and services in Mexico
skyrocketed after the peso devaluation.
Department stores quickly increased
prices for consumer durables by 20 per-
cent. Most other retailers have followed
suit. Basic food costs are reportedly up 20
percent since the float started and meat
prices increased even more.
Government inspectors, who in the past
have not been noted for their zeal, have
started to crack down on businesses sub-
ject to government price controls. They
reportedly have closed 38 department
stores and four supermarkets in Mexico
City, Some 100 other businesses face
prosecution for ignoring government price
controls.
The early establishment of a supported
level for the peso is a surprise because
Mexican officials had been saying that an
extended float was necessary. President
Echeverria probably gave in to pressures
from business and labor, which were hav-
ing a difficult time adjusting to the
floating exchange rates.
Echeverria's apparent yielding to
pressure raises doubts about how far his
government is prepared to go in con-
trolling inflation. His policy will be
clearer when the government announces
new official price levels and the size of the
coming federal workers' wage increase.
The increase to the federal workers will
serve as the basis for scheduled wage
negotiations this fall between private in-
dustry and the major labor unions.
CANADA 5_ 5S
The cabinet shuffle Canadian Prime
Minister Trudeau announced earlier this
week is the first step in a Liberal Party
campaign to refurbish the party's image,
but falls short of the sort of change needed
to end the malaise of the Trudeau govern-
ment. The shuffle follows public opinion
polls that show Liberal Party support at
its lowest point since 1958.
Two key cabinet portfolios-Finance
and Energy, Mines, and Resources-are
unchanged, indicating that Trudeau
remains committed to wage and price
controls and to a Canada-first policy on
energy and raw materials. Allan
MacEachen was shifted from External
Affairs to his old job of government
leader in the House of Commons, un-
doubtedly to make use of his considerable
parliamentary skills.
The new Minister for External Affairs,
Donald Jamieson, headed the Ministry of
Industry, Trade, and Commerce. Describ-
ed as congenial, witty, and an "enlighted
pragmatist," Jamieson can be expected to
hew closely to the government's line on
economic affairs. He has in the past ad-
vocated strong trade ties with the US as
well as expanded commercial links with
other countries. His appointment could
signal some softening of Canada's in-
creasingly nationalist approach toward
25X1
Chile: No Signs of Moderation 5-'7~ c
The military government, which mark-
ed its third anniversary on September 11,
shows no signs of moderating its tough in-
ternal security practices or making any
substantial concessions in the area of
human rights.
In his anniversary speech, President
Pinochet reiterated the regime's hard-line
views and indicated that new decrees
would soon be issued further restricting
the "recessed" political parties. The new
measures are clearly aimed at the opposi-
tion Christian Democrats, but the church
and independent labor leaders, whose
criticism has stung the regime, may also
be in for harsher treatment.
The President made public several
measures to be incorporated into a new
constitution that will institutionalize the
authoritarian practices now being employ-
ed. The guarantees of human rights
promised by Pinochet at the OAS meeting
in Santiago in June received scant atten-
tion, and security forces will probably
continue to ignore them. The Interior
Ministry has announced that 205 political
prisoners are being released, but the state
of siege has been extended for another six
months.
Pinochet's tough stand suggests there is
little room for flexibility in accom-
modating a visit by the working group of
the UN Human Rights Commission; its
scheduled trip to Chile last year was
abruptly canceled by Pinochet. Talks
between the two sides appear to be
stalemated, and the Commission's
forthcoming report to the UN will most
likely again be highly critical of the
military regime.
On economic matters, the Chilean
leader gave no hint in his speech that he is
considering any policy changes, although
an acrimonious debate reportedly is under
way in the government over the social
costs of the harsh austerity program.
Despite some spotty improvements in
economic conditions, the US embassy
sees no overall recovery.
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Soviet leaders will probably try to improve relations with
China now that Mao Tse-lung is dead. They will make no fun-
damental concessions, however, and appear skeptical that
reconciliation is possible.
The USSR Looks at China After Mao
the USSR.
Soviet coverage of internal Chinese
developments since Teng Hsiao-ping's fall
has not been entirely consistent. The bulk
of it suggests that the Soviets see the
leftists as having made some gains, but
not enough to overtake the moderates'
majority support in the party, the gov-
ernment bureaucracy, and the army.
A Conciliatory Approach
For a number of reasons, the Soviets
are likely to make some conciliatory-
sounding gestures to China in the coming
days and weeks. Moscow will want:
? To impress the communist world
that it bears no inherent hostility
toward China and that it is ready, as
always, to repair the unfortunate
damage to Sino-Soviet relations
caused by Mao's implacable hostility.
? To indicate to anybody in China
who is interested that it genuinely
wants to ameliorate relations.
? To avoid giving ammunition to
those in China who will argue for a
continuation of Mao's Soviet policy.
? To determine whether any im-
provement in relations is possible.
General Secretary Brezhnev probably
feels some compulsion to demonstrate he
has done everything possible to improve
Soviet relations with China. One of the
reasons behind Khrushchev's ouster in
1964 was his mishandling of the China
problem, specifically his failure to do all
he could to ameliorate relations with
Peking.
The first signs of the conciliatory ap-
proach have already begun to manifest
themselves. The Soviet Central Com-
mittee has sent a message of condolence
to its Chinese counterpart. The message
itself was correct and perfunctory, but it
It has long been almost an article of
faith among Soviet China-watchers that
the death of Mao Tse-tung would not
result in any early or significant improve-
ment in Sino-Soviet relations.
In public, the Soviets say that Mao has
institutionalized a legacy of "Maoism"
that has as one of its cardinal points a
hostile attitude toward the Soviet Union.
In private, they have also mentioned
natural differences between the two
nations that supersede personalities, as
well as the real differences and hostilities
that have grown over the years. History,
they seem to be saying, cannot be easily
swept away.
Moscow's skepticism, while both pru-
dent and seemingly realistic, has not com-
pletely driven out a certain sense of
hopeful expectation, particularly among
Soviet leaders.
For them, the rhetoric about the per-
nicious influence of Mao has been
grounded in the conviction that it was in-
deed Mao who was to a great degree
responsible for the current state of
Sino-Soviet relations. They see his death
as providing the USSR its first significant
opportunity to alter the course of those
relations and are not going to let that op-
portunity slip by.
Soviet leaders want first and foremost
to minimize the possibility of hostilities
with a nuclear neighbor, 800 million
strong, that shares a border over 7,200
kilometers (4,500 miles) long.
They also hope to dilute the advantages
that their even more dangerous enemy,
the US, has derived from its connection
with China. They would like to forestall,
if possible, further normalization of
Sino-US relations.
Moscow also wants to contain China's
challenge both to Soviet pre-eminence
within the world communist movement
and to Moscow's pretensions to natural
leadership of national liberation
movements in the third world.
Soviet Preparations
In the months prior to Mao's death,
Soviet propaganda played up Mao's role
in China's anti-Sovietism more than ever
before. The Soviets quickly rehabilitated
Chou En-lai's reputation after he died and
were careful not to say many negative
things about Teng Hsiao-ping when he
was riding high. More recently, they have
commented gingerly on Premier Hua
Kuo-feng. Between the lines, the theme
has been that a new beginning was possi-
ble after Mao.
Soviet propaganda also revived the
theme that there are individuals in China,
particularly among the military, less
hostile than others to the USSR.
This theme is predicated not only on the
assumption that such factions exist in
China, but that the USSR, by openly
acknowledging their existence, is prepared
to be helpful.
The evidence that has accumulated over
the years suggests that Moscow does not
have any special insight into the issues and
personalities at stake in the Chinese
succession struggle. The Soviets seem to
hope that China's moderates will best its
leftists.
Moscow realizes that Chinese foreign
policy probably would be easier to
counter should the leftists come out on
top, but the Soviets also seem to believe
that the leftists do not appreciate the
USSR's military might and would be in-
clined to adopt a belligerent policy toward
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was the first public party-to-party contact
between the Soviets and the Chinese since
1966.
On September 13, two Politburo
members, First Deputy Premier
Mazurov, who presumably is standing in
for the ailing Kosygin, and Foreign
Minister Gromyko, headed the group of
Soviets who went to the Chinese embassy
in Moscow to sign the condolence book
for Mao. Although both men are primari-
ly associated with the government, not the
party, the Soviets referred to the party as
well as to the governmental ties of both.
Only one Politburo member, Mazurov,
signed the condolence book for Premier
Chou En-lai in January. Propaganda
broadcasts to China are beginning to
recall past Soviet aid to China and to
reiterate Moscow's desire to normalize
relations.
On September 14, China rejected the
condolence message, reportedly because it
came from a communist party with which
China no longer maintains relations.
China's rejection of the message will un-
doubtedly give the Soviets pause, but is
unlikely to do more than delay additional
conciliatory gestures toward the Chinese.
The Soviets are already beginning to
tone down their anti-Chinese propaganda
and stress instead their desire for better
relations. The Soviets will also spread the
word privately that the USSR hopes for
an improvement in Sino-Soviet relations.
The muting of the propaganda probably
will continue for some time, even if there
is no immediate response from the
Chinese.
Recalling their own concerns when
Stalin died, the Soviets publicly-perhaps
privately also-may try to reassure the
Chinese that the USSR does not plan any
military adventure during the succession
period. The Soviets may reissue to their
forces along the border a long-standing
order to bend over backwards to avoid in-
cidents. Many of the border forces are
now engaged in the annual effort to bring
in the harvest, but any planned out-
of-the-ordinary postharvest exercise ac-
tivity might be canceled or postponed.
The possibility of mixed signals on the
border is considerable, however, since the
Soviets themselves will be apprehensive
that the Chinese-for some unforeseeable
internal political purpose-may make
trouble there. Hence, the Soviets are like-
ly to heighten their vigilance along the
border, including maintaining the in-
creased level of aerial reconnaissance they
began the day of Mao's death.
After the internal situation in China
clarifies somewhat, we expect that the
Soviets will privately approach the
Chinese about the possibility of a
high-level meeting. The Soviets will set no
preconditions for such a meeting and
probably will be amenable to Chinese
suggestions about the level, the time, and
the place of such a meeting.
The Soviets probably have other
proposals ready to present to the Chinese.
Since 1969 they have made numerous ef-
forts to persuade China to mute the
propaganda war and to increase trade and
scientific and cultural contacts. China's
rejection of previous Soviet proposals is
unlikely to deter the Kremlin from offer-
ing them up again because the Soviets
believe that there are influential Chinese
to whom these proposals are attractive.
If China rejects Soviet overtures for a
rst Deputy Premier Mazurov (1) and Foreign Minister Gromyko
leave Chinese embassy following signing of condolence book
_/~_p
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high-level meeting, Moscow may propose
reviving the long-stalemated border talks.
These talks have been the most significant
point of contact between the two sides
since 1969, and they have not always dealt
solely with the border problem.
Moscow may offer to upgrade its level
of representation at the talks. The current
Soviet negotiator Ilichev, who has been
associated with the most sterile period of
the talks, is not as high ranking as the
negotiator who began the talks. Ilichev
has been absent from Peking since May
1975.
Moscow could use revived border talks
to present to Mao's successors some of
the same proposals prepared for a
high-level meeting; it could also make new
offers to resolve the border problem. Any
such offer probably would be somewhat
more generous than the last Soviet offers
in 1973 and 1974.
The Soviets are not going to make any
fundamental concession to China,
however, and they will stick to their posi-
tion that Peking has to show more flex-
ibility. In any event, the Soviets will not
engage in serious negotiations on the
border problem until they think there is a
Chinese leadership in place that has suf-
ficient authority to make an agreement
stick.
If China fails to respond to any of the
USSR's proposals but takes no additional
hostile measures, the Soviet approach
toward China probably will revert
gradually to what it was before Mao died.
If, however, China adopts a more
belligerent posture toward the USSR, the
Soviets will be quick to show their tough
side.
The Soviets almost certainly have con-
tingency plans to deal with the prospect of
a post-Mao leadership that is hostile to
the USSR. Should China's hostility be
manifested only in the propaganda arena,
the Soviets probably would respond in
kind. Should China start trouble on the 25X1
border, however, Moscow's retaliation
would probably be swifter and more im-
pressive than it was in 1969.
The government has taken another major step toward
political liberalization. A bicameral parliament, to be elected
before next June, is to be empowered to make basic con-
stitutional changes.
Ox ci ~ Spain: Government Program Announced
Spanish Prime Minister Adolfo Suarez
took a major step toward accommodating
opposition demands on September 10
when he announced the general lines of his
government's reform program.
In a televised statement following
cabinet approval of the program, Suarez
said that all major reforms-such as
overhauling the state-run labor organiza-
tion, granting greater autonomy to the
regions, and working out the power
relationship between the executive and
legislative branches-would be left to a
bicameral legislature elected by direct,
universal suffrage before next June. In
effect, the new parliament, which will in-
clude the democratic opposition, will be a
constituent assembly.
Suarez' program incorporates several
other concepts called for by the opposi-
tion as guarantees of democratic progress:
? Abolition of the seats for 40
members of the current parliament ap-
pointed for life by General Franco.
? Some form of proportional
representation.
? Regional representation in the up-
per house.
? Lower house initiative for con-
stitutional reforms.
The reaction of the opposition and the
Spanish press to Suarez' proposals has
been broadly positive, though the left in
its public statements has been picking at
the flaws it sees in the program. "As the
opposition, we have to criticize it," one
Socialist leader explained to the US em-
bassy. The opposition has specifically
complained that it was given no formal
voice in drawing up the program and that
the government is still committed to
working through the "moribund" in-
stitutions of the Franco era.
Other opposition concerns about the
liberalization process have concentrated
on the election law that the government
will soon draw up. The left fears the law
may allow Francoist local government of-
ficials to manipulate the election.
Preparing Spain for the legislative elec-
tion while keeping the rest of the reform
program on track will be the principal
role of the Suarez government. So far,
Suarez has published a draft law that
would amend the constitution and es-
tablish a bicameral legislature. The law is
to be submitted to parliament and subse-
quently in some form to a referendum.
Suarez is then to issue the election law by
decree.
The major obstacle will be getting the
reform program approved by two thirds
of the current, rightist-dominated parlia-
ment. This means, in effect, asking the
political right to vote itself out of power
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q_ oomiles
0 10OKilnrtieters
Basque
Provinces
Catalonia
SPAIN
*Mad rid
after nearly 40 years, but the government
seems optimistic.
Support of the Military
In order to strengthen his hand against
the right, Suarez-strongly backed by
King Juan Carlos-has sought prior ap-
proval from the military hierarchy. On
September 8, the Prime Minister called a
meeting of all senior Spanish military of-
ficers and presented them with the details
of his program. The generals reportedly
assured him he could rely on their sup-
port.
Relations with opposition Improve
Relations between government and op-
position seem to have improved
dramatically since Suarez began meeting
with leftist leaders, but legalization of the
Communist Party remains a major point
of contention. The government-pointing
to military inflexibility-maintains that
its hands are tied.
There have been recent signs, however,
that the Communist-dominated Workers'
Commissions may soon be legalized by
decree law along with other opposition
labor unions. The government could
rationalize such a move on the grounds
that the Workers' Commissions are
neither political nor overtly Communist.
By allowing the Communists to work
openly in labor, the government would
hope to blunt opposition demands for
legalizing the party and at the same time
gain valuable good will from labor as
collective bargaining contracts affecting
some two million workers come up for
renewal this fall.
The Challenge of Regionalism
The government also faces a potentially
serious challenge this fall from regional
separatists who will probably be disap-
pointed by Suarez' decision to shelve
regional questions for the time being.
In the troubled Basque provinces, there
have been widespread strikes and
demonstrations following the killing of a
young Basque worker by the Spanish
Civil Guard on September 8. Almost
200,000 workers in the region have walk-
ed out in protest, and there have been
numerous clashes between demonstrators
and police. Tensions remain high in the
region, and another incident could touch
off major disorders.
In Catalonia, the separatist issue does
not often manifest itself so dramatically,
but in many respects it poses a more
serious problem. Whereas the Basque
culture appears to be dying out and the
push for independence there-as distinct
from general discontent-is led by a
relatively small group of extremists, the
Catalan culture is thriving. Some 80 per-
cent of the people in Catalonia speak the
native language as opposed to about 20
percent in the Basque area, and Catalan
nationalists enjoy widespread popular
support.
The issue of Catalan nationalism is a
matter of particular concern to the
Spanish military, whose backing is
critically important to the Madrid govern-
ment during the present transition period.
Senior military leaders, preoccupied with
maintaining Spain's territorial unity,
reportedly consider Catalan separatism
one of the greatest problems facing Spain
today. 25X1
Prime Minister Suarez (r) with King Juan Carlos
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Swedish voters will decide on September 19 and 20
whether the country's brand of democratic socialism has gone
far enough. The election campaign has been contested almost
solely on domestic issues.
Swedish Election: Taxes and Big Government
Swedish voters, who go to the polls on
September 19 and 20, will be asked to
decide whether it is time to check the
spread of centralized government, which
the opposition believes threatens to
permeate nearly all levels of society under
the ruling Social Democrats.
Parliament now is divided equally
between socialists and Communists on the
one hand, and nonsocialists on the other.
Each bloc controls 175 seats. Prime
Minister Olof Palme heads a minority
Social Democratic government with 156
seats in the 350-member parliament. He
relies on the support of the 19 Communist
deputies to block challenges by the three
nonsocialist opposition parties.
The Social Democrats, in government
almost continuously for 44 years, have
suffered declining popularity in recent
years. Along with their Communist allies,
the Social Democrats have trailed the
combined opposition parties in polls all
year. If this dissatisfaction is translated
into votes, the Social Democrats will
either be forced into opposition or have to
share power in some way with the non-
socialist parties.
In less than a century, Sweden has
grown from one of Europe's poorest coun-
tries to one of the world's richest. Its stan-
dard of living and per capita income are
among the highest in the world. Swedish
levels of health and medical care are un-
surpassed, and poverty and illiteracy are
practically nonexistent. The few minority
groups-primarily the Lapps and foreign
workers-are accorded treatment equal
to the Swedish majority.
These achievements have made Sweden
a model for many nations, and nearly all
Swedes recognize the benefits that have
accrued from successive Social
Democratic governments. Much of the
Social Democratic legislation has
originated in Sweden's central labor
federation, which is the party's single
Prime Minister l'aline in 1975, campaigning for aid to the
Spanish opposition. I'll is .year, he has no foreign issue
to divert public attention foin Sweden s problems.
most powerful source of support. Many
Swedes believe, however, that conditions
are good enough and that additional
sacrifices-increased taxation and
government involvement in private af-
fairs-would offset the current benefits.
The pervasiveness of the government's
role in national life-and the attendant
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cost in both material terms and in the en-
croachments on personal freedom-has
begun to dampen enthusiasm for granting
a mandate that might lead to extending
the system even further.
High taxes, which make the system
work, are a major campaign issue. A
Swedish worker with an annual income of
$10,000 pays nearly one third in income
taxes; a businessman earning $36,000 an-
nually retains only about $13,000; an ex-
ecutive in the $350,000 bracket receives
less than 20 percent of his salary after
taxes.
The Social Democrats are proposing a
3-percent tax hike, the Liberals and the
Centrists favor a 1.5 percent rise, while
only the Conservatives oppose any in-
crease. The fact that none of the parties is
trying to reduce the tax load, which would
mean a drop in social benefits, reflects
majority support for the existing social
welfare system.
No longer able to divert public atten-
tion from Sweden's own problems by es-
pousing causes that are not vital to the
nation's interests- Vietnam or
democracy in Spain, for example-the
government has had to concentrate on
defending its domestic policies. This led to
a substantial loss of votes in 1973 and
plagues the government's present cam-
paign. This year, the only foreign policy
issue to emerge is aid to Argentina, which
has had little impact in the campaign.
Opposition's Problems
The three opposition parties lack issues
on which to attack the government, and
they disagree among themselves. Basic
differences over domestic policies between
the Center and the Liberal parties on the
one hand and the Conservatives on the
other have prevented cooperation in the
past and raise serious doubts about the
ability of the nonsocialist parties to agree
on a coalition even if they win a majority.
Thorbjorn Falldin, leader of the large
Center Party-the man likely to head any
nonsocialist government-has tried to
make opposition to the government's
nuclear policy a unifying issue. When en-
vironmentalists opposed further
hydroelectric expansion in the mid-1960s,
the Social Democratic government em-
barked on a nuclear energy program that
now has five plants on line and several
more under construction.
Initially both Gosta Bohman, leader of
the Conservatives, and Per Ahlmark of
the Liberals sidestepped Falldin's demand
that the plants be closed and the plan
abandoned. Recent press commentary,
however, reflects considerable public con-
cern over nuclear waste disposal and other
safety aspects of the government's nuclear
program. What appears to have been a
nonstarter as an important issue could
make the difference in a close race.
Socialist Campaign
While the nonsocialist parties seem un-
certain and indecisive, the Social
Democratic campaign appears to be in
high gear. A possible stumbling block for
the party is the so-called Meidner Plan,
which would give unions control of in-
dustry in 20 to 25 years by forcing com-
panies to make a certain percentage of
their profits available to workers for the
purchase of stock. Under the Meidner
Plan, control of Swedish industry would
pass to the unions within the next two or
three decades.
Thus far, the opposition has not
aggressively attacked the Meidner Plan
and other key Social Democratic
proposals that would nationalize the con-
struction industry and eliminate private
ownership of land. The Conservatives
may still do so, but the Liberals and the
Centrists, who have supported govern-
ment moves to give workers a voice in in-
dustrial management, have indicated that
they will not dig in their heels over.these
proposals.
The prospects for the Communists'
continuing to play a supporting role to the
Social Democrats are clouded by the deep
ideological split in the party and its ad-
vocacy of a revolutionary platform that
has alienated many of its fringe sup-
porters. Midyear polls showed the Com-
munists with less than the four percent of
the national tally necessary to win signifi-
cant representation in parliament, but a
poll in late August indicated that the par-
ty might squeak by. The Communists are
Thorbjorn Falldin
almost certain, however, to win 12 percent
in one northern district, a long-time
stronghold, and such strength locally
would give the party at least one seat in
the new Riksdag even if it fails to get
four percent nationally.
Alternative Governments
The latest polls show the Social
Democrats and the Communists winning
a combined 47 percent of the votes and
the opposition parties 51 percent. The op-
position parties had an identical edge just
before the 1973 election, but lost by a
fraction of a percentage point to the
usually fast-finishing Social Democrats.
If the opposition wins a majority and
manages to put together a coalition, the
basic differences among the parties
probably would persist, resulting in an in-
herently unstable government. En-
couraged by this prospect, the Social
Democrats might decide to take the in-
itiative and attempt to form a government
that would include one or both of the cen-
trist parties, or go it alone as a minority
government.
US relations with Sweden are not likely
to change significantly if the opposition
wins, although a nonsocialist government
probably would take more pains to avoid
unnecessary frictions with the US.
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Indonesia, Malaysia, and Singapore received some stiff
jolts at the recent nonaligned conference in Colombo. They
were unprepared for the vehemence of Vietnam's attacks on
ASEAN or for the political militance that dominated the
proceedings.
q1
ASEAN and Hanoi: Rethinking Relations
Three of the five members of the
Association of Southeast Asian Nations
are reassessing relations with Vietnam
following Hanoi's stinging attacks on the
organization and its members at the re-
cent conference of the nonaligned at
Colombo.
Indonesia, Malaysia, and Singapore
are full-fledged members of the nonalign-
ed movement. The other two members of
ASEAN-the Philippines and
Thailand-are not members of the non-
aligned movement, but the Philippines
attended the conference as a guest and
wants to join.
The Vietnamese view ASEAN as a
potential rival and source of political and
economic influence capable of thwarting
their ambitions for a stronger position in
Southeast Asia.
In their postwar drive to improve
relations in Southeast Asia, the Viet-
namese have from time to time-usually
in private conversations with individual
ASEAN members-soft-pedaled their
objections to the organization. In public,
they still seem inclined to reiterate, and
sometimes flaunt, their revolutionary
credentials.
As the Vietnamese seek a leadership
role in the nonaligned movement, they are
likely to continue attacking ASEAN.
Suspicions Reawakened
Indonesia, Malaysia, and Singapore
were all dismayed by Vietnam's strong
support of the Lao resolution that charged
ASEAN with being a front for US im-
perialism. For Indonesia and Singapore,
Vietnam's behavior reawakened their
suspicions about Hanoi's real intentions
in the region, and it wiped out much of the
good will generated by the visit of Viet-
nam's Vice Foreign Minister Phan Hien
to Southeast Asia in July. Both countries
now believe Hien's conciliatory posture
then was an effort to mask Hanoi's basic
objective of subverting and dominating
the area.
For Malaysia, Hanoi's attack was an
especially sharp slap. Malaysia had been
working hard to encourage a more
cooperative attitude on the part of
ASEAN members toward Vietnam.
Prime Minister Hussein is clearly
irritated by Vietnam's attack
Malaysia put its own resolution io avor
of a zone of "peace, freedom, and
neutrality" in Southeast Asia on the
docket at Colombo. The concept has been
a cornerstone of Malaysian foreign policy
for several years. Other ASEAN
governments are skeptical about the idea,
but have generally gone along with
Malaysia's insistence that it be formally
incorporated into the ASEAN regional
view. I n February, at the first meeting of
the ASEAN heads of state, the concept
was adopted by all five members and
made a central part of the conference's
final communique.
Malaysia went to the nonaligned con-
ference convinced that its resolution
would be adopted and was not prepared
for the attack from Laos. Vietnam
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provided strong support for the Lao
resolution, and most ASEAN observers
believe Laos was acting as the front man
for what essentially was a Vietnamese
position. The Malaysian proposal never
came to a vote.
The Colombo performance could well
undercut Vietnamese objectives in
Southeast Asia. Most ASEAN states
believe Vietnam needs them more than
they need Vietnam. With Hanoi revealing
its "true colors"-the words of Lee Kuan
Yew of Singapore-the ASEAN states
will be less enthusiastic about providing
Vietnam with economic assistance.
Singapore reportedly plans to turn a
cold shoulder, and Malaysia, whose
economic help to Vietnam is minimal,
also intends to review its position. In-
donesia almost certainly will reconsider
its future aid program to Vietnam. Even
token economic aid from its noncom-
munist neighbors is important to Viet-
nam.
Disillusionment at Colombo
Regional considerations aside, the Lao
resolution, together with the general dis-
array of the Colombo conference, has left
Indonesia, Singapore, and Malaysia
seriously questioning their future role in
the nonaligned movement. The three
generally do not share many of the values
of the newer, more militant members of
the movement and see no need to posture
about anti-imperialism or subscribe to the
anti-US diatribes of the more recently
decolonized states.
The three countries were disappointed
that the more serious economic questions
facing the nonaligned were given short
shrift and that the conferees produced few
meaningful guidelines to deal with sub-
stantive problems.
The Philippines, watching from the
sidelines, has so far been less critical of
the conference than its ASEAN
colleagues. President Marcos is anxious
to become a full member of the nonalign-
ed movement by the next summit in
Havana in 1979. As the only Southeast
Asian country still allowing a large US
military presence and as a member of
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SEATO, Manila has yet to establish its
third-world credentials to the satisfaction
of the ruling councils of the nonaligned.
Marcos thinks he cannot afford at this
point to be as critical of the conference's
results or of Vietnam's performance as his
three colleagues have been.
Despite their reservations, none of the
three is likely to pull out of the nonaligned
movement or even sharply criticize the
conference in public, but they may try to
disassociate themselves from the more
militant nonaligned positions.
Over the longer term, the three will re-
main interested in better bilateral
relations with Vietnam, provided Hanoi
restrains its support for neighboring in-
surgencies and tones down its an-
ti-ASEAN rhetoric.
For now, however, these countries are
unlikely to take significant initiatives
toward Vietnam. They are more likely to
exert greater efforts to strengthen
ASEAN and to try to make it a more
effective competitor to Vietnam.
More than half of the labor force in Saudi Arabia is now
foreign, and the proportion of foreigners continues to rise.
Many Saudis wonder whether the implicit threat to their
traditional values is too high a price to pay for rapid economic
development.
Saudi Arabia: Influx of Foreign Workers
Saudi Arabia's commitment to its am-
bitious five-year development plan has
generated tremendous demands for skill-
ed and semi-skilled labor that cannot be
met domestically. The need to import
workers is beginning to cause serious
labor and social problems.
North Yemen has been the customary
source of unskilled labor in Saudi Arabia;
in the past year or so, Yemeni workers
have been joined by large numbers of In-
dians, Pakistanis, South Koreans, and
Filipinos. There is also a large West Euro-
pean and US presence in the kingdom.
About half the Saudi labor force is now
foreign; if the trend continues, we es-
timate that by 1980 two thirds will be
foreign.
Many Saudis fear the influx of so many
foreign workers will undermine the unique
Saudi lifestyle and values and wonder if
this is not too high a price to pay for rapid
economic development.
An estimated 500,000 North Yemeni
laborers-who need only an identity card
to enter Saudi Arabia-are scattered
throughout the kingdom. Most are
manual workers in the construction in-
dustry. According to one estimate, there
are more Yemenis in Jidda than in any
city in North Yemen.
These workers send home about $25
million a month, an important contribu-
tion to North Yemen's economy. The
Saudis have long viewed Yemeni residents
with a mixture of indifference and con-
tempt.
In the past year, the North Yemeni
predominance in the labor force has been
diluted by the growing presence of Asian
workers, most of whom come from the
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subcontinent. The Saudis are concerned
because the productivity of the Indians
and Pakistanis is low, while inflation
keeps boosting their salaries and
maintenance costs. Some of these workers
have proved to be demanding employees,
in contrast to the docile laborers to which
their Saudi employers have been ac-
customed. Another concern of the Saudis
is their suspicion that workers from the
subcontinent will not go home when their
work is done.
The Saudis have ambivalent feelings
about the 10,000 to 12,000 South Koreans
in Saudi Arabia's Eastern Province. The
Koreans, who are engaged primarily in
construction work, are respected for their
hard work, productivity, and
craftsmanship but are eyed by the Saudis
with a good deal of suspicion and even
some fear for their discipline and quasi-
military appearance and manners.
Saudi apprehensions have been fed by
the Koreans' tendency to dress alike in
uniforms and to go about publicly in
groups of 10 or 20; some Saudis even see
the Koreans as a potentialsecurity threat.
The government's reaction has been
sharply to curtail entrance visas to other
Koreans.
There are small, but growing, con-
tingents of workers from other Asian
countries. About 200 Thai have arrived
and have shown themselves to be
hard-working and unobtrusive. Filipinos
make up a small-about 200 at
present-but growing segment of the
foreign work force. About 5,000 In-
donesians are expected, but few are in the
country now.
Problems
The country's economic boom has
driven up wages and prices precipitously;
both are estimated to be increasing at 40
percent a year. Since 1973, the shortage of
labor and the extensive construction pro-
jects have boosted daily wages for an un-
skilled Yemeni construction worker from
$3 to $25. Wages for domestic help have
doubled.
Foreign workers employed on govern-
ment construction projects in recent
weeks have engaged in several major
strikes-virtually unheard of in Saudi
Arabia. A work stoppage by Pakistani
laborers in late August was put down by
police and army units. Early this month,
400 skilled Turkish workers struck a
military construction project in Taif. The
government, which refused to entertain
the workers' demands for higher pay and
better working conditions, ordered their
deportation when they refused to return to
the job. Strikes are illegal in Saudi
Arabia, although grievance procedures do
exist.
Yemenis-unlike other foreign
workers-are not bound by the Saudi
regulations that limit the shifting of spon-
sored expatriate workers from one
employer to another. Yemenis can enter
the kingdom without sponsorship and
without visas. This situation, coupled with
the fact that few workers of any nationali-
ty obey the law requiring them to have a
binding work contract, has caused virtual
chaos in the labor market as workers feel
free to quit their jobs at will.
Some Yemenis have switched
employers four or five times in as many
months.
An apparent increase in crime has been
an unwelcome spin-off from the presence
of foreign workers. Traditionally, crime
has been rare in Saudi Arabia because of
harsh penalties.
We have reports that crimes committed
by foreigners-usually against other
foreigners, including Americans-are in-
creasing. The oil consortium, Aramco,
has started a safety program warning its
employees of possible dangers in their
neighborhoods.
The Saudis long have been sensitive to
the possible security threat posed by
foreign workers to the oil fields. Since
1967, Aramco has been forbidden to use
Syrian, Iraqi, Palestinian, or Yemeni
laborers at Ras Tanura or sensitive oil
sites in the Eastern Province. No such
security concern has yet been expressed
about American or European workers.
The Westerners, however, present a
different problem. They must be offered
high salaries and housing and
maintenance benefits to entice them to
work in the kingdom. Young, Western-
trained Saudis who are now returning
home and going into the government are
discovering that these Westerners-most
of whom seem no better qualified than
they-are being paid far more for doing
the same work.
Compounding the problem is the fact
that many uneducated Saudis working in
the private sector are accumulating
wealth and influence at a rate unat-
tainable by a government employee. The
Saudi government, concerned about slow-
ing inflation, is reluctant to raise govern-
ment salaries.
A result of these pressures has been that
increasing numbers of the most capable
young Saudi officials are abandoning
government service for the private sector.
Outlook
Saudi Arabia's plans for domestic
development will require a continuing in-
flux of foreign workers-an estimated
500,000 more by 1980. The associated
problems will continue-inflation, crime,
possible security threats-and, perhaps
more long-lasting and difficult to control,
the cultural challenge to the values and
traditions of Saudi society. Saudi concern
about crime and security threats has
focused mainly on Asians, but not sur-
prisingly the American and European
residents are. seen as presenting the
critical challenge to Saudi culture.
The Saudis face some tough decisions
about their plans for development and the
related issue of foreign labor. They could
choose to ignore the problem and hope its
effects do not become too disruptive, or
they could change the mix of the foreign
work force-perhaps substituting
Americans or Europeans for Asians.
Such a shift would cost the Saudis more
in wages immediately and more in
cultural impact in the long term. The
Saudis have been pleased with the quality
of American work.
Finally, they could curtail their
development plans and reduce foreign
labor. This, of course, would have far-
reaching political, economic, and social
implications for the kingdom. F_
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