WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000300020017-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 22, 2016
• Document Release Date: March 1, 2011
• Sequence Number: 17
• Publication Date: April 18, 1975
• Content Type: SUMMARY

Declassified in Part - Sanitized Copy Approved for Release 2011/11/08: CIA-RDP86T00608R000300020017-0
Secret
Weekly Summary
Secret
No. 0016/75
April 18, 1975
Copy
N4 - 1378
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 eclassified in Part - Sanitized Copy Approved for Release 2011/11/08 :CIA-RDP86T00608R000300020017-0
CONTENTS (April 18, 1975)
1 Indochina
3 Lebanon: Now Vlo&ence
The WEEKLY SUMMARY; Issued every Frlday rrorning by the'
Office of Current Intelligence, reports and'analyzIes significant
developmentwaf the week through' noon on Thursday, It fre-
quently Includes materiel coordinated with or, prepared by,the
Office.,of Economic Research', the Office of.. Strategic
Research, the Office' of Geographic and, Cartographic
Research, and the ' Directorate, of Science and Technology-
Topics requiring more`, comprehensive treatment and
MIDDLE EAST
AFRICA
4 Egypt: Diverting Attention
5 Syria-Iraq: Troubled Waters
6 Israel: New Aircraft
7 Chad: Tombalbayo Killed In Coup
8 India-Sikkim: Another Stop
Producor?Consumer Talks Collapse
Portugal: Now
Nationalization Measures
15 USSR: Congress rlans;
Slowly on Geneva
EAST ASIA
PACIFIC
17 China May Be Cutting
Military Manpower
WESTERN
HEMISPHERE
18 Peru: Volasco Reappears
19 Argentina: Modest Victory
19 Brazil: Majority Party Problems
20 Chile: Man with a Mission
21 Cuba: A Draft Constitution
22 Honduras: Repercussions
from Neighbors
23 Ecuador: The Oil Rhetoric
24 Law of the Sea:
Midpoint Appraisal
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INDOCHINA
Vietnam: Closing on Saigon
The government's position east of Saigon
appears to be deteriorating, and there are in-
creasing signs that the communists are preparing
to intensify their attacks close to the capital
itself.
Along the central coast, a North Vietna-
mese force spearheaded by tanks broke through
government defenses this week and captured the
provincial capital of Phan Rang and its nearby
airfield. The South Vietnamese had moved re-
inforcements to the area, but they were no
match for the three communist divisions con-
centrated around the town. Only a few govern-
ment troops escaped, others are unaccounted
for. The government's remaining enclave along
the'coast, Phan Thiet, is under pressure and will
fall soon.
South Vietnamese troops at Xuan Loc have
fought well for the past week, but they too
appear to be outmanned and outgunned. The
communists are known to have massed three full
divisions--together with armor, artillery, and air
defense units-at Xuan Loc, and captured docu-
ments indicate that elements of a fourth division
may have mc'ied into the area. The govern-
ment's one infantry division, reinforced by air-
borne and armor units, at Xuan Loc is in danger
of being isolaied and destroyed.
Northeast of Saigon, the communists have
attacked the big air base at Bien Hoa, from
which the South Vietnamese mount tactical ?Jr
operations. Sappers have penetrated the base
and, more recently, North Vietnamese gunners
have used their heavy artillery to shell the base.
An artillery attack closed Bien Hoa for approxi-
mately six hours on April 15.
In the delta, the fighting has temporarily
eased. The government has used its firepower to
good advantage thug far to cour ter communist
attacks on Can Tho, the most important city in
the delta, and to keep vital Roul3 1 oprn to
Saigon. Despite these setbacks, however, three
communist divisions have moved into position
Page 1 WEEKLY SUMMARY
for new attacks along Route A in the northern
delta. The two South Vietnamese divisions
assigned to keep the highway open will be hard
pressed to meet this threat.
Fighting also is likely to intensify along the
western approaches to Saigon and close to the
capital itself over the next few days. Communist
planning calls for a major drive along Route 1
west of Saigon, and the North Vietnamese 9th
Division has been spotted moving into Hau
Pg hie Province.
The attacks along the three major ap-
proaches to Saigon will keep many of the gov-
ernment's forces tied down, leaving the capital
dangerously vulnerable to heavy attacks from
the north, a weakne:.s that the communists will
soon be in position to exploit. At least six
communist divisions, including four reserve
units from North Vietnam, are moving toward
Military Region 3. The headquarters of a North
Vietnamese army corps is fast approaching this
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region from the northeast, and at least one of its
four divisions is now in the area north of Saigon.
This looming communist threat is pro-
ducing a mood of deep pessimism in Saigon. A
recent sampling of opinion in the capital seems
to reflect a general consensus that adequate US
assistance will not be available and that the
communists are too strong to hold off. Talk of
US evacuation plans for Americans and South
Vietnamese is adding to the sense of impending
disaster.
Some middle-level government officials are
adopting the attitude that the Americans are the
"only card" they have left and that evacuation
of Americans should not be permitted unless
guarantees for their own safety are made. More
directly, several government officials have
warned of reprisals and disorder if the US tries
to evacuate its personnel without taking along
friendly South Vietnamese.
Cambodia: The Agony Ends
The string ran out for the republican gov-
ernment this week as Khmer communist forces
entered Phnom Penh and accepted the capital's
surrender. At week's end, only fragmentary re-
ports were reaching the outside, but it appeared
that the take-over was effected in a fairly
orderly fashion. Following. a government order
to its troops to lay down their arms, insurgent
spokesmen met with senior government military
officers, and then the insurgents went on Phnom
Penh's radio to ask for calm. The communist
leadership is apparently waiting outside the city
while second-echelon insurgent officers oversee
the occupation. As yet, there are few clues as to
Prince Sihanouk's plans, but his eventual return
to Phnom Penh as a figurehead leader seems
assured.
A number of military personnel and some
leading government officials fled to Thailand
aboard military aircraft. The small-scale exodus
is likely to continue for several days as military
aircraft fly out of the few provincial enclaves
that have not yet run up the white flag.
The flush of victory will ouickly pale for
the communists as they try to cope with the
problems they have inherited. Nearly four mil.
lion people will now become the responsibility
of the new regime, and stocks of basic com-
modities are low. To ease the situation, the
communists apparently intend to evacuate largo
numbers of city-dwellers and refugees to the
countryside, but conditions there will not be
much better. Even before they can start think-
ing about postwar reconstruction, the new
regime will have to seek rapid and liberal outside
assistance to help sustain the population
through the coming months.
Once in full control of the country, the
communists will begin impoF;ng their brand of
Marxism on Cambodia as a whole. Essentially,
this means the countrywide implementation of
programs long under way in communist-con-
trolled territory, including the socialization of
the economy and a replacement of the tradi.
tional administrative system by a centralized
government under the leadership of the Khmer
Communist Party; such measures have not gone
down well with the land-proud and indepen-
dent-minded Cambodian peasantry and over the
years have caused almost two million peasants
to abandon their farms. Smoldering resentment
among those that have remained behind has on
occasion resulted in small-scale uprisings which
the communists have put down ruthlessly. The
Cambodian communists can probably be ex-
pected, however, to push their efforts to regi-
ment and collectivize Khmer society relent.
lessly, using force where necessary.
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Lebanon: New Violence
Radical fedayeen and militia of the right-
wing Phalanges Party engaged in armed clashes
for several days this week in Beirut. The Leba-
nese army and the major, less radical fedayeen
groups stayed mostly on the sidelines. A cease-
fire went into effect on April 16, but the
dispute left the security situation unsettled and
Prime Minister Sulh's government fundamen-
tally divided.
The fighting-the worst in Lebanon since
the major clash between the fedayeen and the
army in early 1973-grew out of a dispute be-
tween a radical Palestinian and a policeman at a
roadblock in a Phalangist-controlled area of
Beirut. Before the cease-fire was declared, more
than 150 persons were killed and many more
were wounded. Sporadic firing continued after
the accord was announced, but it apparently
was the work of isolated groups on both sides.
As announced by Sulh, the cease-fire agree-
ment obliges the two groups to withdraw all
their forces f,,om public places. The accord is to
be enforced, by the Lebanese internal security
services, which are to begin patrols of the dis-
puted areas accompanied by representatives of
the Phalangists and the fedayeen. A separate
understanding had been worked out earlier to
facilitate an exchange of hostages between the
two sides.
The Phalangists accepted the cease-fire
only after suffering heavy property damage and
many casualties. President Franjiyah and other
Christian leaders apparently persuaded party
leader Pierre Jumayyil that prolonged fighting
would bring in major fedayeen units, which
could quickly' overwhelm the Phalangists. The
Phalangists are a strongly natirnalist, Christian
political party that advocates strict control of
Palestinian refugees and fedayeen in Lebanon.
They are always ready to use their 5,000-man
militia to defend their interests and what is, in
effect, Christian control of Lebanon's govern-
ment.
Leaders of-the three most radical fedayeen
groups that carried on most of the fighting met
with their more moderate colleagues in Beirut
on April 16 and agreed to go along with the
cease-fire. They presumably were persuaded to
take this step by their own heavy losses and by
doubts that the larger fedayeen organizations,
Fatah and Saiqa, would enter the fighting in
forca.
Leaders of the Palestine Liberation Organi-
zation and the major fedayeen groups worked
behind the scenes to contain the fighting and to
help arrange the cease-fire. This strategy was
probably based on a conviction that a major
encounter with the Lebanese during the current
uncertainty over Middle East peace talks would
only play into the hands of Arabs who reject the
efforts to negotiate a settlement and reduce
further the likelihood that the PLO would be
invited to attend the Geneva conference when it
resumes. Actions taken by Zuhayr Muhsin,
of the Syrian-controlled Saiqa organization, to
keep his followers out of the dispute suggest
that the Syrian government may also have
counseled restraint.
Prime Minister Sulh proved unable to con-
trol either the security situation or his own
cabinet; the cease-fire was negotiated primarily
by Lebanese political and religious leaders out-
side the government and by an official of the
Arab League. Two cabinet members sympa-
thetic to the Palestinians resigned during the
week, and three pro-Plalangist ministers have
threatened to follow suit. These resignations, if
not withdrawn, could distort the religious and
political balance of the cabinet to the point that
Sulh would be forced to step down as well. He is
already in a weak position as a result of his
handing of the disturbances that occurred last
morfth in the southern port city of Sidon. One
:Member of the cabinet resigned at that time.
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President Sadat reshuffled the cabinet and
appointed a new prime minister this week. His
move appears to have been motivated largely by
a. desire to divert popular attention from the
slow progress of peace negotiations and to reas-
sure the Egyptian people that there will be no
let-up.in the government's program of economic
development.,
Sadat's choice for prime minister was Inte-
rior Minister Mamduh Salim, a loyal supporter
of the President who apparently does not harbor
any personal political ambitions. Salim replaces
Abd al-Aziz Hijazi, who has been the chief tar-
get of popular. criticism over continuing eco-
nomic ills. Hijazi, a competent economist, was
overburdened with specific economic duties on
top of his prime ministerial responsibilities.
At the same time, Sadat named air force
commander Husni. Mubarak to be vice president,
an essentially powerless post that is no longer in
the line of succession to the presidency. Most
key cabinet posts remain in the same hands.
Both Foreign, Minister Fahmi and War Minister
Gamassy have, in addition, been made- deputy
prime ministers.
Open discontent over economic grievances
has traditionally risen in Egypt at times of diplo-
matic stagnation on the Arab-Israeli issue, and
signs of such discontent have been appearing in
recent months. The year began with a violent
outburst in Cairo by workers protesting com-
modity shortages and rising prices. Last month,
demonstrations by angry workers at a textile
plant in the Nile Delta led to serious violence
that resulted in at least one death, scores of
arrests, and a week-long shutdown of plant
operations.
The appointment of Salim, who as interior
minister headed Egypt's security apparatus, will
signal malcontents that such public disturbances
will not be tolerated. Salim will be no better
able than Hijazi, however, to resolve Egypt's
basic economic problems, such as the inade-
quate system of roads and ports that impedes
the distribution of consumer goods. More-over,
although two key economic ministries have been
President Sadat with newly appointed Prime Minister Mamduh Salim
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consolidated, the rest of the cabinet remains an
unwieldy conglomerate of 33 overlapping minis-
tries. The failure to streamline the cabinet
diminishes whatever prospects there were for
cutting through the bureaucratic maze that
hampered Hijazi and contributed to slowing eco-
nomic development.
SYRIA-IRAQ: TROUBLED WATERS
Relations between Iraq and Syria, long
troubled by deep-seated hostility between their
competing wings of the pan-Arab Baath Party,
are seriously strained again. The latest flare-up
between the two regimes appears in part a
by-product of Iraq's recent rapprochement with
Iran, which made it possible for Baghdad to
wind up its struggle with its Kurdish rebels and
to pursue its differences with Syria more di-
rectly.
Earlier this month there were reports that
Damascus had rounded up some senior members
of the Syrian Baath Party and several hundred
lesser party members on charges of spying for
Iraq. The detentions were apparently intended
to forestall any efforts by the Baath Party of
Iraq and its Syrian sympathizers to undermine
the recent congress of the Syrian Baath Party.
The Syrians are said to have placed the Iraqi
ambassador in Damascus and his staff under
surveillance and to be harassing lower level Iraqi
diplomats.
Publicly, the two sides have kept up a
steady stream of propaganda sniping and pos-
turing in recent weeks. The Syrian Baath Party's
Congress last week condemned the "suspicious
right-wing regime" in Iraq, accusing it of collu-
sion with non-Arab . Iran, of sabotaging Arab
solidarity, and abandoning the Palestinians. The
Iraqis, for their part, have condemned Damascus
for allegedly aiding the Kurds, for supporting
Washington's step-by-step approach to Arab-
Israeli negotiations, and for diverting the waters
of the Euphrates River.
Page
The Syrians have denied responsibility for
the low water level in the part of the Euphrates
that flows through Iraq, claiming Turkey is to
blame. Last week, Damascus rejected Iraq's call
for an urgent meeting of Arab foreign ministers
to discuss Baghdad's Euphrates complaint.
According to the Egyptian press, Syria has
decided not to attend a regularly scheduled
Arab League meeting to be held early next week
for fear the Iraqis will press the Euphrates issue.
Syria could be altering the flow of the
Euphrates to retaliate for Baghdad's propaganda
attacks on Asad and the apparently increased
interference in Syrian affairs. Earlier this month,
the Syrians reportedly moved two armored regi-
ments and some paramilitary units into the envi-
rons of the Euphrates Dam as a precaution
against a possible Iraqi sabotage attempt.
Although the Syrians are clearly prepared
to take strong action against Iraqi intervention
in their domestic affairs, they will try to prevent
the dispute from growing to a point that might
affect Syria's relations with other Arabs. Da-
mascus is also apprehensive that Iraq might not
provide military support to Syria in the event of
another round of hostilities- with Israel; it is
already questionable whether such 'assistance
would be forthcoming.
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Prime Minister Rabin at the unveiling of the "Kfir"
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UNVEILING A NEW AIRCRAFT
The Israelis apparently have begun series
oduction of their "super Mirage" fighter air-
craft.
(last week that he believed about
eight of the aircraft have already been built. He
based his conclusion on sightings he made of
new serial numbers on the Mirage-type aircraft.
One of these aircraft was shown to the public on
April 14, when the project was officially
unveiled in Tel Aviv.
The aircraft, which the Israelis call Kfir
(Lion Cub), has been under development for
about five years. The Israeli air force was
scheduled to begin receiving the aircraft in
September 1974, shortly after the Israelis were
to complete another project that involved the
assembly of 50 Mirage 5s from parts obtained
from France. The September deadline was not
met, however, probably because of the require-
ment placed on the Israeli aircraft -idustry to
recondition aircraft from the Octobcr wir.
The Kfir, based on a modified Mirage 5
airframe, is powered by a single US J-79 en-
gine-the engine used in the F-4 Phantom. The
J-79 offers improved performance and greater
reliability than the Atar engine used in the
French Mirage III and Mirage 5 aircraft. The
Kfir, which can fly at twice the speed of sound,
reportedly will have both an interceptor and
ground-attack role, and is said to have a payload
of some 10,000 pounds-nearly twice that of
the Mirage 5.
Components for the aircraft are being man-
ufactured and assembled in Israel. The J-79
engine is being built under license from the US.
The production rate was originally set at about
two aircraft per month, but this rate may not be
possible in view of the other demands on the
Israeli aircraft industry. As many as 200 of the
aircraft ultimately may be produced, but only
some 60 to 100 are expected to go to the Israeli
air force. The Israelis may hope to find a market
for the remainder, which Israeli Defense Min-
ister Peres said on Monday will cost about $4
million each. They are likely to encounter
strong competition from the French amon
others, however.
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CHAD: TOMBALBAYE KILLED IN COUP
The acting commander of Chad's armed
forces, Brigadier General Odingar, ousted Pres-
ident Tombalbaye on April 13 in a coup marked
by sharp fighting and the death of Tombalbaye,
Chad's only leader since independence in 1960.
Tombalbaye had appealed for help from France,
the former colonial power and Chad's principal
source of aid, but French forces stationed in
Chad did not intervene.
Two days after the coup, a ruling military
council, composed of Odingar and eight other
officers, was formed. The council president is
General Malloum, the well-respected former
armed forces commander who had been de-
tained by Tombalbaye since 1973 for alleged
coup-plotting. Colonel Djime, the commander
of the gendarmerie and one of three top military
leaders arrested by Tornbalbaye early this
month, has been installed as council vice pres-
ident. The council has established four com-
missions to run the government and has prom-
ised additional appointments soon. The consti-
tution has been suspended, the National Assem-
bly dissolved, and all political activity has been
banned.
Odingar's decision to move was probably
motivated in part by the late president's recent
public criticism of the army's lack of leadership
and Tornbalbaye's announcement last week that
he intended to reorganize the army. Odingar
may also have been influenced by widespread
dissatisfaction with government corruption and
maladministration as well as by the govern-
ment's inability to overcome chronic economic
stagnation that has been aggravated by six years
of serious drought in the area.
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INDIA-SIKKIM: ANOTHER STEP
The small semi-autonomous kingdom of
Sikkim came closer to full incorporation with
India this week, bringing sharp attacks on New
Delhi's "expansionist" policies by both Pakistan
and China.
Sikkim's hereditary ruler, the Chogyal, was
deprived of one of the last vestiges of inde-
pendent power on April 9 when his largely cere-
monial 400-member palace guard was disarmed,
after a brief skirmish, by Indian troops stationed
in Sikkim. The Indians acted in response to a
request from the chief minister of Sikkim, a
long-time opponent of the Chogyal. The follow-
ing day, the Sikkimese legislature voted
unanimously to abolish the monarchy and to
seek full statehood in the Indian union. In a
hastily arranged referendum on April 14, Sikki-
mese voters ratified the legislature's action by
overwhelming margins. The Chogyal now ap-
pears to be under palace arrest in Gangtok.
The Indians have announced their inten-
tion to take the necessary constitutional action
to make Sikkim the 22nd Indian state. Attempts
to rally support for the Chogyal and against
incorporation of Sikkim into India can be
handled easily by Indian police and the approx-
imately 100,000 Indian troops in the state. The'
Chogyal presumably will be forced into exile.
The latest events follow several months of
increasing tension between the Chogyal and the
elected government led by the chief minister.
Each side has accused the other of instigating
attempted assassinations. The chief minister has
repeatedly called on New Delhi to intervene and
remove the Chogyal, who is accused of refusing
to abide by the constitution. The chief minister
and his followers represent the ethnic Nepalese
majority that gained effective power two years
ago. They want to abolish all remnants of the
traditional political system, which had been
dominated by the ethnic minority headed by
the Chogyal.
For the past several years, India has fol-
lowed an ambiguous course; it has been intent
on expanding its role under a 1950 treaty as
protector of Sikkim but at the same time
seemed concerned that removal of the Chogyal
could lead to increased instability in the small
but strategically important state. In 1973, New
Delhi intervened in Sikkim following disorders
in Gangtok and was instrumental in establishing
a new constitutional order that relegated the
Chogyal to a figurehead role. Last September,
the Indian parliament voted to make Sikkim an
associate state.
New Delhi claims to have tried to mediate
between the Chogyal and the chief minister, but
it recently made clear publicly that its sym-
pathies lay with the chief minister and his
supporters. Public statements by the Chogyal,
during his attendance at the coronation of the
Nepalese king in February, emphasizing
Sikkim's "separate identity" and his meetings
then with foreign diplomats apparently angered
officials in New Delhi.
Islamabad, which continues to fear what it
regards as India's hegemonic designs on South
Asia, issued an official statement on April 11
denouncing the events in Sikkim as an "annexa-
tion by force." The statement accused New
Delhi of again demonstrating a predilection to
use force in ordering its relations with its smaller
neighbors.
Articles in the Chinese press have con-
demned New Delhi's "expansionist" actions and
have alleged-as Peking did last September-that
the Soviets are backing the Indians in these
moves. The comments contain no threats, how-
ever, and are generally lower key than the
Chinese reaction last year.
Events in Sikkim will be of great concern
in both Nepal and Bhutan, where distrust of
India's intentions toward its Himalayan neigh-
bors already existed. Both governments, aware
of their nations' economic dependence on
Indian goodwill, will be war of ex ressing their
fears publicly.
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The newly installed government of Prime
Minister Suleyman Demiral won a vote of con-
fidence this week, ending a seven-month polit-
ical impasse. The narrowness of the vote-222
votes for the government and 218 against-
illustrates the fragility of the Nationalist Front
coalition and the difficulties it will have in
getting legislation through parliament.
Demirel's four-party right-wing coalition
controls only 210 seats in the 450 member
parliament. He was able to win his narrow
victory only because of support from some
independent deputies and the absence of several
opposition members. This adds up to a very
shaky parliamentary base for a coalition that is
riddled with internal inconsistencies. Whether all
the independent deputies will continue to sup-
port the Nationalist Front in parliament is
uncertain.
Feelings were running high during the
voting, which was interrupted by fist fights. The
speaker of the National Assembly later suffered
a mild heart attack. Party crossovers prior to the
vote created considerable bitterness, suggesting
that Demirel will have an unusually hostile
opposition, in addition to the problems involved
in holding the coalition together.
The Nationalist Front coalition partners
are united primarily by their desire to be in the
government and avoid elections. One of the
partners-the Islamic-oriented National Salva-
tion Party-is noted for its uncooperative and
obstructionist tactics; it was instrumental in
breaking up the previous government in which it
participated along with former prime minister
Ecevit's party.
The Salvationists, who challenge Turkey's
choice of Western models for its modernization,
oppose foreign private investment and tourism
and advocate a vague, utopian economic policy.
Their holding of several important economic
portfolios-the price Demirel had to pay to get
his coalition together---does not bode well for
the economy.
Another weakness of the Demirel govern-
ment is its dependence on the small pan-Turkish
National Action Party, a group even more
extreme than the Salvationists. Led by Alpaslan
Turkes, the strong man of the 1960 military
coup, this national socialist party boasts of its
right-wing "commandos," although their num-
bers are probably nowhere near the 100,000
claimed. The "commandos," many of whom
belong to the party's youth wing, specialize in
. Demirel and his government
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Current Party Lineup in Parliament
Seats
Justice Party*
150
National Salvation Party*
48
Republican Reliance Party*
9
National Action Party*
3
Republican People's Party
188
Democratic Party
31
Turkish Unity Party
1
Independents
16
(Unfilled)
4
450
stirring up trouble between left- and right-wing
students. Clashes between extreme rightists and
leftists have in fact been occurring at a fairly
high rate during recent weeks and can be ex-
pected to continue.
Both of the extreme right parties in the
coalition take a hard line on Cyprus and can be
expected to oppose giving up any of the ter-
ritory now held by the Turkish Cypriots. Both
also oppose Turkey's membership in NATO and
the EC. Although Demirel and his new foreign
minister are experienced and moderate figures,
they will have a difficult time keeping their
colleagues in line.
Demirel's success in forming a government
will undoubtedly, postpone a much-needed elec-
tion. Although there is no guarantee that a new
election would end the current indecisive bal-
ance of strength among the parties, at least it
would; offer that prospect, particularly if the
electoral law,. is changed. Only Ecevit-who
would benefit. most-really wants new elections.
The army, which dislikes Demirel and
forced -him to resign in 1971, will probably
maintain a "hands off" policy unless there is a
dramatic rise in civil unrest or Demirel attempts
to take some form of revenge against the mili-
tary. If Demirel survives until summer, he will
be able to use the annual military promotions,
reassignments,, and retirements to try' to build
support within the army and regain its confi-
dence. 25X6
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PRODUCER-CONSUMER TALKS COLLAPSE
Talks between oil-producing and oil-
consuming states collapsed this week after fail-
ure to roach agreement on an agenda for a
proposed International conference to be hold
this summer. Both sides agreed to remain in
contact, but there Is little hope an early com-
promise will be reached over the major issue-
how raw materials would be treated at the
proposed conference.
The developed countries-roprosontod by
the US, the EC, and Japan-argued for an
agenda focusing on energy and energy-related
issues. They were willing to discuss raw material
issues as they rotated to energy, but opposed
any efforts to link the price of oil with the price
of imports from the industrialized countries.
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Page 13 WEEKLY SUMMARY
The oil-producing states-represented by
Algeria, Iran, Saudi Arabia, and Venezuela-and
the developing states-roprosontod by Brazil.
India, and Zaire-demanded that equal Impor?
tance be given to the economic problems of the
Third World. Algeria, self-appointed spokesman
for the seven, insisted that the full conference
give equal emphasis to both raw materials and
development aid as well as energy, and that the
conference address the problems of export-
earn-ings stability and inflation. Participants were
also sharply divided over demands by the devel?
oped states to grant observer status to the Inter-
national Energy Agency. Algeria branded the
oncrgy agency an organization designed for
confrontation.
Apr 18. 75
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SECRET
The French, who originally called for the
conference and had the most prestige to gain
from Its success, made strenuous efforts to find
common ground. Early this week, the pattici?
pants hoped that French President Discard's
visit to Algiers would produce a compromise,
but it did not. The developed countries and the
seven remained united throughout the ten days
of negotiations. The US, the CC, and Japan met
daily to coordinate the position of the de.
veloped countries with the member states of the
International Energy Agency. The tepresenta?
Lives of the developing states and the less radical
oil producing states consistently supported
Algeria's determination to establish the inclu?
beginnin a dtalo re on nit,
Pottu
NE NATIONALIZATION MEASURES
In an effort to get a grip on the faltering
economy and to establish firmly limit man
radical economic program. Portuguese teadets
this week announced further broad national,
itation measures. The Portuguese church hiet'
atchy. meanwhile, has thrown its support
behind moderate patties in the coming etettion
in an effort to slow the cou+ilty'; jptecifrta
move to the lef i.
The nationalization measures follow guide-
line, issued cast wank by the Revolutionary
Council to combat f ortugal's economic ills-
underutilized production capacity, reduced in'
vestment levels, a soaring balance of payments
deficit, and rampant inflation, The government
also announced a national employment program
to deal with growing numbers of unemployed,
as well as price controls on food staples, The
guidelines further call for wage controls and
greater worker "control" of production,
Portugal's deepening economic crisis is
largely a result of the revolutionary regime's
own mismanagement. Its policies have fo,tered
industrial anarchy-with workers seiti:ig fac.
toties=given rise to phenomenal wage increases,
and generally discouraged foreign investment
T Repeated attempts by Western countries to lend
economic assistance have been frustrated by the
new leaders' inability to identify worthwhile
projects. The Movement. failing to admit its
own shottcomings, continues to hide behind rev.
Following up on its natioftalitation of
banks and insurance companies last month. the
governnwrit announced on April 16 that it hat
now extended its control in many :Ley indus-
tries, including transportation. Fovttpen firm,
producing electric power. tour petroleum com-
panies. and one steel company, as well at the
main rail. maritime, and air transport services.
have been nationalited. In addition, the Perna,
chemic:t, pharmaceutical, heavy machinery,
tobacco, concrete. beer. fertilizer, and cellulose
indutlrls. at well as shipystds, are slated for
government intervention. A seizure of tinge land
holdings in the south was also announced.
olulionaty jargon and to blame the inherited
capitalist economic structure tot its t-toblems,
Meanwhile. Portuguese bishops have urged
Catholics to voto against patties participating in
the constituent assembly etedions on April 25
whose principles violate Christian precepts.
Although the Portuguese Communist Party and
he ullta'lefl patties ate not mentioned specifi?
tally, local parish priests are eeii~'cta_d to take
IIR bi j} ;lal$:i?ant !)7 a 1*!~ ?eii tO ;fie 7.;t t~
void tot the moderate patties. The bishops also
said that casting blank ballots was unacteptabLQ.
Aimed Forces Movement personnel reportedly
have been urging undecided vo'ers to lave limit
ballots unmarked. apparently in at, effort to
reduce the margin of the expescted mule
majority.
The church appears to have dJecided to take
a stand now, after months of teticente on poJiti'
-
cat matters, in order to contribute to the modes
ate parties' efforts to make a good election
showing. which they hope will demo brats to
Movement leaden that the is little popular
support for their radical policies:
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Kwi pin
USSR
PLANNING THt CONGUtlt5
Tha SK,viot Patty Central Committee meel.
ing on # t til 16 sigoalet the start of preparations
for he, 25th party tongues; and eliminated one
of the runners in the long-term race to succeed
General Secretary fltethnev, the removal of
ttatfo uniot,s chief /lleksandt Shelepin fto.n the
Politburo floe; little to clarify the succession
tnu?;tirln, howvvet, and additional move; within
the :eadCtship could veell occur befote the con.
Goes; convenes.
trethnev was cloatly in chatye at the
ptanttn, dative: no a retort on flans for the neat
cr*ngwe;;. novr ;at lot f=ebtuaty 24, 1976. tot.
oir#rt f,tini;tct Gtomyko gave a teporf on foreign
affairs, which i; usually given by (3tethney, this
continua; the show of greater collectivity in the
loadetthip evitfent Once fhe Gc_nctal SKtetaty's
iline;; this winter, ftethnev has t en limiting
Ili; act,vitie;. thu; allowing greatet irublic r,.
t,g;ute fret his rolloat?a;;
Sl,elet;in ha; long been regarded warily by
y}fnc of hi; collealhte; at a dingiotort cotf,hina?
tin of ability and ambition. and his depattute
(took the, KtFmlin remove; a potential elerr'nt
twf instability itt the leadership. In 1965, ho
mounted a Setiou but unulccv;;tul challenge to
firetltnev'; Iaadership. When that failed, his
career took a precipitous slide. In 1967 he was
removed from the patty Secretariat and given
the tt,de unions post=traditionally a powerless.
figurehead position. Shelepin's vi!,il to England
and Scotland last month was greeted t,y a
fremendou; Dole-y in the British press against
him personally as a former chief of the Soviet
sectel police (KGO) and clearly butt his pros-
Pects for the future.
The decision setting the date for the con?
fifes; was made earlier and mote smoothly than
vra; the caw lot the 24th party congtess, Then.
it was not decided until mid-July 1970 that the
ctNirres;. o igin~!! tnomi;s`d tot that ysat.
would open in late Match 1971. The ptesR?.+t
Dattetn suggests the leaders' Safi;faction with
the present political situation and their confi?
dance that they can set the country's course
caret the next five y.at;, The plenum tcsolution
callod lot continued vigilance, but reconfirmed
the policy of detente. including the value of
summit meeting;. 25X1
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Now that the Soviets have a chance of
gaining some of the diplomatic spotlight in the
Middle East, Moscow has come down with a
touch of stage fright. While still voicing support
for an early resumption of the Geneva confer-
ence, Soviet officials are also saying that careful
preparations must be made to ensure its success.
The Soviet hesitancy is partly attributable
to concern that the US will employ the confer-
ence as a cover to continue step-by-step nego-
tiations. Furthermore. Ilia Soviets have invested
substantial capital in the idea that (Qneva
provides the only solution to the Arab-Israeli
problem. A failure would not only damage their
prestige but would also increase the prospect of
war.
In an attempt to smooth the way toward
Geneva, the Soviets reportedly have been talking
to Israel. The Israeli prets-basing its stories on
government "backgroundet%"--reported that
rwo Soviet emissaries had recently discussed
Geneva with Prima Minister Rabin and Foreign
Minister Allen. The Soviets were said to have
urged Israel to attend the conference In return
for Soviet guarantees of Israel's pre-1967 bound.
aries, and hold out the prospect of an eventual
resumption of diplomatic ties.
The Soviet show of evenhandedness
apparently was designed to convince Tel Aviv
that Moscow did not Intend to turn Geneva into
a propaganda show. The Soviets also probably
wanted to suggest that they--as well as Wash.
i gton-could bargain with both sidos.l -
The USSR's interest in promoting n facade
of Arab unity was apparent during a visit to
Moscow this week by Iraqi strong man Saddam
Husayn. Premier Kosygin laid heavy stress on
the importance of cooperation between Syria,
Egypt, and Iraq. Although Moscow would like
to enlist Iraq in the Middle East negotiations--it
only to further complicate Egypt's ability to
pursue independent initiatives-the Soviets once
again appear to have failed to moderate
Baghdad's rigid opposition to talking with Israel.
The Soviets will try again to reach a
common position with Cairo on the conference
when Foreign Minister Fahmi i in Moscow on
April 19.20. The Soviets were hardly pleased by
President Sadat's pronouncement that Geneva is
not the only negotiating avenue open to Cairo.
or by Egypt's suggestic,n that the Geneva con.
ference be expanded to include Britain, France.
India, and Yugoslavia. The latter arrangement
will be viewed as an effort to reduce Soviet
influence at Geneva. The problem of Palestinian
representation at the conference is sure to come
up in the discussions with Fahmi, Comments by
Soviet officials indicate that Moscow is search.
ing for a way to get around this issue and is
willing to defer it until the talks are actually
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CHINA: CUTTING MILITARY MANPOWER?
Poking reportedly plans a significant roduc?
tion in military manpower this year, primarily
because of a need to iuduco soandinn on the
armed forces.
a decision to omo zo one million men n
1975 was announced at a recant conference
presided over by Politburo member Chu To, a
veteran military leader. It Is not yet possible,
however, to make a precise estimate of the size
of any resulting not reduction.
China Is believed to demobilize routinely
between 500,000 and one million men every
year and to take in an equal number. The
Chinese armed services ostensibly have fxod
terms of service, but some troops are hold
beyond the regular tours reference
to reduced spending suggests that, in contrast
with previous years, soni3 of the troops demo.
bilizod in 1975 will not be replaced. If this is
Id be corroborating ovidenco
in the near future.
China's army, navy, and air force are now
estimated to have well over 4 million men. The
bulk of a reduction would have to be taken by
the army, which has over 1.5 million men in
main force units, local forces, acid support
troops. Military leaders probably would try to
minimize the effect of demobilization by
reducing manning levels rather than eliminating
units and by taking as few men as possible from
the more important main forces,
on demobilization.
the service personnel will be "sent down to the
countryside" to aid in agricultural production.
that Chinese forces were
overstrength and that large numbers were to he
discharged and sent to aid in agricultural pro.
duction. Along with the reduction. there report.
2d1y would be a rotation of units that had been
in the same locations for too long.
Perception of Threats
It a Iarge.stale reduction were to occur, it
would be further evidence that the Chinese
believe the threat of imminent hostilities with
the USSR of the US has declined. Although
Poking almost certainly will continuo to main-
tain largo numbers of troops in Its four northern
military regions, it would have foyer troops
immediately available for ro!nforcoment.
Poking did not call up additional recruits
following the Sino?Soviet border Incidents of
1969, but it did extend the torn of service of all
the troops than under arms. Because this served
to swell the ranks of the army, the reported
demobilization this year may be designed in part
to offset that Increase. In recent years, demo-
bilization of man whose terms of service were
completed and Induction of replacements
appear to have taken place in normal fashion.
During the past sovoial years, Peking has
been making strong efforts to reduce the mili-
tary's role in politics. Those of forts-which have
included the transfer of military region com-
manders, withdrawal of personnel on nonmili.
tary assignment, and reversion of units of the
paramilitary Production Construction Corps to
civilian control-are all indicative of Poking's
desire fn focus its military establishment on
purely military matters.
Peking may have determined that it now
has more troops than can be economically and
effectively used. There have been recent indica-
tions of debates over questions of budgetary
allocations, particularly with respect to the
armed forces.
A significant reduction of forces probably
could not be accomplished without incident.
For instance. administrative and logistic diffi.
culties could arise in trying to transport person-
net to areas throughout China if demobilization
came quickly. Moreover. many soldiers probably
saw the army as a steppingstone to employment
in major population centers and would resent
being sent back to the countryside. A number of
recent incidents have involved demobilized serv-
icemen demonstrating against the i adership's
failure to give them the benefits they expected.
A flurry of domestic propaganda broadcasts ex-
tolling demobilized soldiers who are going to the
countryside seems designed to counter such dis-
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PERU: VELASCO REAPPEARS
In X obvious effort to reassert hirmelf in
the public eye, President Velasco presided over a
Iteavi:y publicized cabinet meeting on April 11.
The session was held at a beach resort south of
Lima. where the President has been recuperating
from a stroke he suffered on (-chruary 28. Press
reports noted that the President was in "excel-
lent" health for his first working cabinet session
since his illness. Lima newspapers reported act
April 15 that the President will temain at the
resort for another week, Velasco's lengthy con?
vatescence casts doubt on his ability to regain
effective control of the military government he
his led since 1968.
Uuting the President ; absence ftow the
capital. Paste Minister Morale; Permudci has
reportedly acted as chief executive, meeting
with other ministers, signing decrre;, ;,!1 (1. In one
Instance, holding a marathon pre:,: (mile,edtr,
ternini;cent of Ihose held by Vela%t,o,
It is difficult to gauge how much power
Morales Iterrm-det has arcumulalyd during
Velasco's tonvale;tcnte. l-or one thing, the
prime minister has riot pre;idrtl rivet any cabinet
meetings. probably on Velasco's orders. At the
same time, however. Morales firrmur3et appears
to be Placing his own imprimatur on guv.
ernmcnt policies. (.wting his news conference on
April 1, for example, a number of new initi.i?
hive; were announced that hinted at a more
moderate approach to civilian Political and
economic, freedoms than those characteristic r)l
Velasco.
Morale: Iternuule/' stature among '
officers, which already was high, has probab'
grown during the President's absence. Morale
Bermudez' low-key, businesslike approach is
'likely to, appeal to many officers, who will also
respect his umvillingncss to make a precipitate,
or ohvintr, ploy for Iii)wet. Unless ~~ lasi.n can
reassert his authority soon, s~:;~rndinalt , will
become accustomed to '.Lt'kicig out 10olair s
(tclrrnrdet on irnp(r!:,nt matters, a trend that
may alrcart' b;,: wider way. 25X1
Over the longer lerin. Velascr)', disc-.; amt
lengthy t:nnvalesccrtce, coupled with sign; of
dr;;ahisfaction with hiss radical poi 'tics. vill
prr.bahly cause a gradual dinmtulr'?.' of hl'.
powci s.
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Apr 18, 75
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ARGENTINA: MODEST VICTORY
The government of President Maria Estola
do Peron won a modest victory when it captured
the governorship of Mislonos Province in an elec-
tion on April 13. It was the first test at the polls
since Juan Peron's election in September 1973.
The most encouraging sign for Mrs. Peron's
supporters was the severe defeat suffered by a
splinter left-wing Poronist party backed by the
Montonoro guerrillas. Extreme leftist Poronists
will, however, point to the drubbing at the polls
as Justification for (hair campaign of violence.
The strong showing of the centrist opposi-
tion Radical Party-which finished a close
second-probably owed much to a sub!.tantial
protest vote against the government's policies
and a backlash against massive vote-buying by
Social Welfare Minister Lopez Rego, who bla-
tantly her dod out millions of pesos in "subsi-
dies" prior to the balloting. Radical gains will
enhance the position of party loader Balbin,
who has boon under fire from within his party
for not taking a harder line against the govern-
ment.
BRAZIL: MAJORITY PARTY PROBLEMS
President Goisol, displeased by divisions
and a lack of dynamism within the government
party, is socking to revitalize it by pursuing what
the US embassy calls a "two-track strategy."
On the one hand, he wants to give the
party a greater edge on the opposition by keep-
ing its leaders better informed of the admin-
istration's plans and policies. The President has
also sought to land prestige-and to underscore
his desire for improvement-by delivering a
personal address at a recent party meeting.
On the other hand, however, Goisol has
asked his advisers to devise some political alter-
natives. One suggested Idea is to create a pro-
government third party designed to bring to-
gether the energies of the most dynamic
members of both the government and opposi-
tion parties. Another possibility would abolish
the present parties and create three or four
entirely now ones. The deliberate leaking of
such contingency planning to the press may well
have been intended to impress the government
party with the urgent need to reform itself.
The outcome of the Misionos vote may
well serve temporarily to restrain conservative
critics of Lopez Rego within the Peronist labor
movement and the military. Some of them will
grudgingly admit that the strategy of the Presi-
dent's chief adviser worked to contain the chal-
lenge from the dissident Peronist left even if it
did so at the expense of losing votes to the
Radicals.
7horo is at least a fair chance that the
government success will strengthen the hand of
moderates such as Interior Minister Rocamora,
who have encouraged the President to adopt a
more conciliatory approach in dealing with
other political parties. Rocamora, a staunch ad-
vocate of close cooperation with opposition
party leaders, has urged Mrs. Peron to hold
elections in provinces that have been put under
lirect central government control. There is no
assurance, however, that voices of moderation
will be hooded by Mrs. Peron as long as Lope!
Rego retains his dominant influence.
Geisel is concerned not only because of the
opposition's electoral gains last fall, but also
because of the effect a repetition of government
losses could have on conservative opponents of
his liberalization program. Mor.:wer, the em-
bassy believes that some within the military
simply would not tolerate an eventual opposi-
tion majority in congress, which, under the cur-
rent rules. no,ninally "elects" the next
president.
Goisol is not likely to opt for any drastic
change in the present two-party system-a crea-
tion of the military governments-because the
result would be disconcertingly similar to what
the officers replaced a decade ago. Even if he
were so disposed, moreover, there is little indica-
tion that the opposition would cooperate
readily. For the time being. thorofooa. Geisel is
likely to bond every effort to rebuild the govern-
ment party's position within the current frame.
work. The President's next overt move will
probably be to replace the party leadership.
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lurgc Cana.
Increasingly aware of the seriousness of
Chile's econoitlic situation, the military govern.
ment this week added more civilian expertise to
the Cabinet and gave civilian finance Minister
Jorge Cauas a broad new mandate. He will try to
cope with the nation's mounting balance-
of-payments problem and nlana;e the battle
against inflation, Price% already have risen 60
percent this year.
The government's civilian economists ap-
patently have convinced President Pinochet that
the long-term economic and political con-r.
quences of failing to control inflation acre po?
tentially mole dangerous than the unpopularity
of the austerity measures needed to deal with
the problem effectively. Casuals believes that the
government's economic program remain:, basi?
catty sound and that improper implementation
is to blame for the disappointing results so far.
Hi: determination to reduce deficit spending
sharply in order to dampen import demand and
ease Inflationary pressures means Increased
unemployni'ml and more austerity, especially
for the poor.
Cauas will have to modify his rnart