WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000300020049-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: December 22, 2016
• Document Release Date: February 22, 2011
• Sequence Number: 49
• Publication Date: November 14, 1975
• Content Type: SUMMARY

 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86TOO608ROO0300020049-5
Secret
Weekly Summary
Secret
No. ^046/75
November 14, 1975
Copy N4 1399
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flu: WED"l Y SUMMARY, is:,uc d every Friday morning by the
Office of Current lntelligencr-, reports and analyzes signifi-
cant devolorinwn , of 1h40 w,:,ok ihruuyh noon on Thursday. It
frequently includes nl:Jic'rial cootdinnicd with or prepared
by the Office of FFcorlon?iic Research, the Office of Strategic
f~ as an:F, the C'ffico of Geographic and Cartographic
Res? arch, and the Directorate of 'icicnce and Technology.
Topics requiring more comprohrrnsive treatment and there-
fore published seponotr:l?y cr; Spacial Reports are listed in
the r;>fltents.
CONTENTS (November 14, 1975)
MIDDLE EAST
AFRICA
WESTERN
HEMISPHERE
1 Spanish Sahara: March Canceled; Soviets
3 India: Gandhi Exonerated
4 Angola: Two Regimes; Soviets
6 Bangladesh: Another Coup
7 Israel: Economic Problems Exaggerated
8 USSR: Anniversary Waltz
10 Economic Summit
12 MBFR: Problems for the West
13 EC: Farm Policy Worries
13 Finland: New Government Likely
15 Argentina: Impeachment Motion
16 Ecuador: A Shaky Presidency
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SPANISH SAHARA
MARCH CANCELED
On November 9, Morocco's King Hassan call-
ed off his "green march" into Spanish Sahara after
receiving new proposals on the disposition of the
territory from a high-level emissary sent by
Madrid. The King's action relieved Spanish con-
cern that the march would lead to hostilities
between the two countries. If Rabat and Madrid
have struck a deal that will transfer the territory to
Morocco, they will still have to contend with
Algeria, which opposes any direct annexation and
insists that a self-determination referendum be
held under UN auspices.
In a speech from Agadir that was studded
with conciliatory remarks about Spain, Hassan
stated that the mass march, which began on
November 6, had "accomplished its mission."
Hassan strongly implied that Morocco's claim to
the territory would be successfully resolved
through negotiations. His optimism was clearly
based on talks he held with a senior Spanish of-
ficial on November 8. Although Hassan did not
reveal any specifics of an understanding or a
framework for future negotiations, he had too
much personal prestige at stake to have backed
down empty-handed.
When Hassan called the marchers back, the
main body of Moroccans had advanced only a
few miles into a sector of the territory south of
Tarfaya. A second column had crossed the border
some 50 miles to the east. Spanish troops had pull-
ed back from both areas.
The Moroccan marchers, who had been fired
up for their venture by nationalistic and religious
propaganda, reluctantly began to withdraw on
November 10. In general, the Moroccan public
has adopted a wait-and-see attitude toward the
King's speech. He will be under mounting
pressure, however, to demonstrate with more
than implications that progress is being made
toward a settlement favorable to Morocco.
On November 11, a Moroccan delegation led
by Prime Minister Osman went to Madrid to nail
down a firm agreement based on the apparent
understanding reached between Hassan and the
King Hassan
Spanish emissary. The inclusion of the director of
Morocco's national phosphate company suggests
part of the talks will deal with arrangements to
assure Spain a share in the profits from the rich
phosphate deposits in northern Spanish Sahara.
Mauritania, with which Morocco is willing to par-
tition the territory, is also participating in the
talks.
Both Rabat and Madric' are being
tight-lipped about the new talks. Press reports
from Madrid, however, suggest Spanish officials
are less optimistic about hammering out a final
agreement than are the Moroccans. Although
Spain is eager to get out of the territory and will-
ing to see it go to Morocco and Mauritania,
Madrid still wants the UN to play a role-possibly
by establishing a temporary trusteeship. Moroc-
co, however, wants to negotiate a settlement first
and then seek the UN's blessing.
Algeria, which condemned the Moroccan
march as an aggressive act, has continued to lam-
bast Hassan through its media. The Algerians have
also been playing up and probably exaggerating
clashes that have occurred this week in
northeastern Spanish Sahara between Moroccan
irregulars, reinforced by some army units, and
guerrilla forces of the Algerian-backed Polisario
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Front. The Front, which has signif6cant support
among indigenous Saharans, demands in-
dependence for the territory. Spanish troops have
pulled back to a defense perimeter that leaves the
northeastern region bordering Morocco, Algeria,
and Mauritania outside Spanish lines.
Algiers opposes a Spanish deal to divide the
territory between Morocco and Mauritania and
can be expected to remind Madrid of the
Algerian position. During a round of talks in
Madrid in late October, stern warnings against
such a deal conveyed by an Algerian delegation
helped persuade Spain's wavering government to
stand by previous Spanish promises to seek a UN
role involving a referer:durn `or the disputed
territory.
Meanwhile, President Boumediene is trying
to persuade Mauritanian President Ould Daddah
to accept Algeria's view. On November 10 the two
leaders met at Bechar; two days later Ould Dad-
dah flew to Morocco for further talks with King
Hassan.
SOVIETS TILT TOWARD ALGIERS
Moscow's shift to a pro-Algeria-, position on
the Spanish Sahara dispute ha& brocght a
deterioration in Soviet-Moroccan relationv,,
In the UN Security Council, the Soviets sided
with the Algerian view that the Spanisiti Sahara
question !;houid be resolved by the cc'any's in-
habitants. !'ravda also weighed in on behalf of
Algiers, pointing out that the G:neral Assembly
had twice approved sett-determinatir,n for the
territory's inhabitants and voicing Moscow's op-
position to any effort to deny hear this right.
Soviet UN representative Malik-with an eye on
King Hassan's mass march-urged ra!;traint and
moderation on the concerned paitir:-.
Until a few weeks ago, the ~ :viets looked
benignly on King Hassan's irredentism. They had
tried to make a few points in Rabat by privately
suggesting sympathy for Moroccan annexation.
They had agreed in October 1974 to sell Rabat $30
million in arms, even though they were aware that
King Hassan would use the new equipment to
bolster his territorial claims.
The recent Soviet tilt toward Algiers may have
stemmed from:
? A Soviet decision to revert to their
long-standing position calling for self-deter-
mination.
? A desire to utilize ti-.e crisis to mend
their frayed ties with Algiers.
? Concern that endorsement of King
Hassan's mass march might give ideas to
countries-particularly China-with
territorial claims against the USSR.
? Interest in forestalling a Moroccan
stranglehold over the rich ph^.sphate
deposits in Spanish Sahara, which would
give Rabat nearly 80 percent of the world ex-
port market for the rock.
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King Hassan has reacted strongly to the
Soviets' actions. He canceled the visit of a Soviet
delegation that was to put the final touches on a
new agreement expanding the USSR's involve-
ment in development of Moroccan phosphates.
Hassan also has dispatched an emissary to
Moscow to make his displeasure known.
Soviet diplomats in Rabat have displayed
their discomfort and are trying to make amends.
They are now suggesting that self-determination
for Spanish Sahara does not necessarily equate
with independence. The USSR will probably make
further attempts to repair the damage so it can
continue to buy Moroccan phosphates. The
Soviets have been importing substantial quantities
of this basic fertilizer ingredient ;n order to
supplement their sagging production. Moroccan
phosphates may take on even more importance
to the USSR in view of the crop failures this year.
INDIA: GANDHI EXONERATED
The Indian Supreme Court on November 7
overturned Prime Minister Gandhi's conviction
last June by a lower court for relatively minor
violations of India's election law during her 1971
campaign. Gandhi, now freed from the threat of
being barred from office for six years, may soon
take new political initiatives designed to con-
solidate her position further.
All five members of a Supreme Court panel
that heard Gandhi's case upheld election law
changes that retroactively eliminated the legal
basis for her conviction. The changes were
enacted by parliament in August after efforts by
Gandhi's political opponents to capitalize on the
lower court ruling h= led her to impose a state of
emergency on June 26.
In another decision, the Supreme Court
struck down a constitutional amendment that had
exempted the election of a prime ministc- from
challenge in the courts. This ruling, however,
does not affect Gandhi's case, in view of the
court's approvvwl of the election law changes.
With her court case out of the way, Gandhi
might decide to ease some aspects of the
emergency, though she claims the emergency
was decreed because of a conspiracy against her
government and not because of her troubles in
the courts. This week she released J. P. Narayan,
one of her principal opponents, reportedly
because of his failing health. Narayan is the first
major political leader to be released from jail
since the emergency began.
Gandhi may also make some constitutional
changes to further strengthen her control. In
recent months she has talked about reducing the
powers of the judiciary and enhancing those of
parliament, which her Congress Party domi-
nates. Her interest in taking such action may
have been heightened by a Supreme Court deci-
sion this week not to reconsider a ruling by the
court in 1973 that barred parliament from
amending the "basic structure" of the constitu-
tion. Parliament is expected to convene this
month, and changes aimed at weakening the
judiciary may be on the agenda.
Gandhi could also decide to call a general
election when the present parliament's five-year
term expires next March, although she can legally
postpone the election under the state of
emergency. Gandhi and her party would enter
any election as heavy favorites. Most Indians
appear satisfied with-or at least reconciled
to-her authoritarian rule, largely because it has
coincided with an improvement in the nation's
short-term economic prospects caused by good
rainfall this year. Moreover, the opposition par-
ties, which in India's 28 years of independence
have never done well enough in a national elec-
tion to supplant the Congress as the country's
rules, have been further weakened by the
government's repressive measures under the
emergency. Whether the opposition leaders still
in jail would be released in preparation for an
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~;';r1'~ +SOe1M1
'. OreuivIH
ANGOLA
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SOUTN?WtST AFRICA
.? IIAMIIIAI
After almost 500 years of Portuguese rule, 13
years of national insurgency, and more than six
months of sluggish civil war, Angola drifted into
independence on November 11 with the
leadership of the state still being contested on the
battlefield. The three warring liberation groups
immediately set up two rival governments that are
now vying for international recognition.
The Portuguese left without transferring
sovereignty to any of the liberation groups, simply
announcing that it was being turned over to the
"Angolan people." The Popular Movement for
the Liberation of Angola lost no time in asserting,
from its Luanda stronghold, that it was the sole
legitimate heir of the Portuguese. Movement
leader Agotinho Neto was proclaimed president
of the country. Simultaneously, the National Front
for the Liberation of Angola and the National
Union for the Total Independence of ,oigola
jointly announced the establishment of theii, . wn
government in Nova Lisboa, which they renamed
Huambo.
Both sides have published constitutional
structures for their governments. The National
Front - National Union coalition has not officially
released its leadership slate. There is friction
between the two groups, however, and their
partnership is not as firm as their joint announce-
ment implied.
In the race for international recognition, the
Popular Movement took an early lead by receiv-
ing almost immediate recognition from the Soviet
Union, Cuba, and four African states-Mezam-
bique, Guinea, Guinea-Bissau, and
Congo-whose leaders have long had ties with
the Popular Movement. A number of East Euro-
pean governments have expressed their
"readiness" to establish diplomatic relations with
the Neto regime. So far, the National Front -
National Union regime has not been recognized
by any country. Zaire, Holden Roberto's long-
tir.e backer, and the rest of Africa are observing
the Organization of African Unity's request to re-
main neutral pending formation in Angola of a
government of national unity.
As long as the OAU position remair; un-
changed, neither Angolan claimant seems likely
to win enough support to gain general inter-
national acceptance. Soviet and Cuban recogni-
tion is important for Neto, however, since the two
countries can now assist the Popular Movement
directly and with greater ease and will not have to
channel their military assistance through in-
termediaries such as Congo.
The three groups did not let independence
ceremonies impede the military campaigns they
have been pressing for some weeks. The Popular
Movement dispatched troops and equipment
southward to meet a combined National Front -
National Union force advancing toward Luanda.
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The force is still some 300 miles from the capital,
however. In the north, the National Front is still
trying without success to break through Popular
Movemcnt defenses at Quifangando. This week
Front troops may even have been pushed back a
short distance.
In Cabinda, fragmentary information
suggests that heavy fighting is taking place
between the Popular Movement and forces of a
Cabindan separatist group that have moved into
the enclave from Zaire. The inability of the
separatist group's troops to achieve a quick vic-
tory in what was supposed to have been a surprise
attack suggests that the Popular Movement may
well continue to hold the upper hand at the pre-
sent time.
Neither the Popular Movement nor its adver-
saries are likely t;' win a decisive military victory
any time soon. The fighting will probably settle
into a seesaw war of attrition with the staying
Power of the opposing forces being determined
by the amount of external military assistance each
can obtain.
SOVIETS MOVE QUICKLY
The USSR, as expected, moved quickly this
week to recognize its Angolan client-the
Popular Movement-as the sole legitimate gover-
ning authority in the former Portuguese territory.
A communique establishing diplomatic relations
at the ambassadorial level between the Soviet
Union and the "People's Republic of Angola" was
issued in Luanda on Wednes -.v.
The move will almost certainly lead to more
direct and overt Soviet military assistance to
Agostinho Neto's forces. The USSR undoubtedly
calculates that it could provide more effective and
timely support for the Popular Movement-par-
ticularly in view of its client's sagging military for-
tunes-by direct flights to Luanda than by con-
tinuing to rely on the more cumbersome
Congolese supply route.
Meanwhile, the Soviet press campaign on
Angola continues unabated, with Moscow
blasting "foreign interventionists" for their sup-
port of the Popular Movement's rivals-the
National Front and the National Union. The most
recent authoritative Soviet commentary appeared
last weekend in a Pravda article signed
"Observer," which indicates Kremlin endorse-
ment.
The "Observer" article reserved its heaviest
brickbats for the "racist" regimes of South Africa
and Rhodesia, apparently as part of an intensive
effort to elicit additional support for the Popular
Movement from other Black African states. This
effort apparently is needed because in other areas
of Africa, heavy-handed Soviet involvement with
the Popular Movement has backfired. In addition
to the break in diplomatic relations with Uganda,
Nigeria has publicly criticized the Kremlin's
"flagrant interference" in the affairs of Angola.
"Observer" also made the usual charges
against the Chinese but, in contrast to earlier
Soviet comr"antary, did not directly mention US
support for the Popular Movement's opponents.
This could mean that Moscow intends to play
uowi-. its earlier line that the US and China are
supporti;ig the same side.
Despite tha Soviets' strong military and
diplomatic support for the Popular Movement,
they are apparently not closing their Angolan op-
tions. The "Observer" article, like other recent
Soviet commentaries, suggested growing ner-
vousness in the Kremlin over the deteriorating
military position of Neto's forces. Moreover, in a
recent conversation with US embassy officials, the
Angolan desk officer of the Soviet Foreign
Ministry refused to rule out the possibility of
relations with the Popular Movement's adver-
saries if they ultimately il in the current
struggle. reva 25X1
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BANGLADESH: ANOTHER COUP
In the second violent change of government
within a week, enlisted men loyal to Major
General Zia ur-Rahman on November 7
overthrew the five-day-old regime of General
Musharraf and made Zia the country's new strong
man. Zia apoears to have a better chance of
stabilizing the situation than did his predecessor,
but discipline has not yet been completely
restored in the army's enlisted ranks, and he
could face a challenge from some other officer
seeking to take advantage of the delicate balance
of power in the military. The continuing instability
in Bangladesh has deepened concern among In-
dian officials wF:zi are keeping a vigilant watch on
the situation.
Musharraf early last week antagonized Zia's
many supporters in the army by displacing Zia as
chief of staff and having him arrested. Widely cir-
culating allegations that Musharraf was pi o-India
and that New Delhi had supported his bid for
power also probably played a part in spurring the
enlisted men to action; anti-Indian sentiment
runs deep among the ranks. There is nc evidence
available to confirm either allegation.
On gaining power, Zia reclaimed the positioh
of chief of staff. He retained President Sayem, the
former chief justice who was appointed president
by Musharraf, and turned over to him he title of
chief martial law administrator. Zia and the other
service chief are to act as deputy martial law ad-
ministrators, but real power apparently will re-
main in Zia's hands.
Since becoming the new Bengalee leader, Zia
has had to cope with a mutiny that broke out on
November 8 among enlisted men in the main
Dacca base. The troops sought to take advantage
of the confused situation following the second
coup to settle old scores with their officers or de-
mand redress of various grievances. Several of-
ficers and dependents were, killed ; nd others
detained.
As the mutiny unfolded, it became evident
that a far-left political group, the National
Socialist Party, had become a force among the
enlisted men. The party, which never developed
much support arr,e,ng civilians, seems to have
been able to capitalize on the gc?ievances of the
troops.
Major General Zia ur-Rahman
W
3y midweek the revolt appeared to have
abated. Most of the arms held by the rebels had
been returned to the base armory, arid a majority
of the mutineers had rejoined their units. Officers
at the base apparently persuaded the noocon-
missioned officers to join them in efforts to
restore discipline. Their effort is complicated by
contention in the office- corps between those
who fought in the 1971 war of independence and
those who v~ere held in Pakistan until 1973.
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This week's events in Dacca may have in-
creased chances that India will try to influence the
situation in Pangladesh. New Delhi's uneasiness
was probably heightened by the fact that it was
once again caught off guard by a change of
government in Bangladesh and by anti-Indian
demonstrations that accompanied Zia's assump-
tion of power.
ISRAEL: ECONOMIC PROBLEM EXAGGERATED
Public pronouncements in Israel in recent
weeks lamenting Tel Aviv's deteriorating. trade
situation and sounding the need for further belt-
tightening exaggerate the country's short-term
difficulties. The government's austerity program,
implemented in the summer of 1974, has achieved
its goal of lowering consumption in the civilian
sector. The still sizable current-account deficit is
being covered by substantial assistance from the
US and by other capital inflows.
Since the austerity program was im-
plemented in mid-1974, Israel has devalued the
Israel; pound by 40 percent, cut back nonessential
budget outlays, and instituted wage and tax
reforms. As a result of these policies, together
with the worldwide recession, Israel's real gross
national product fell 6 percent during the fir,, half
of 1975 compared with the same period in 1974,
the first such decrease in nine years. Private per
capita consumption fell 5.5 percent, industrial
output 3 percent, and investment 11 percent.
The consumer price index cooled to a 12-per-
cent annual rate during the first nine months of
the year, compared with 30 percent in the same
period in 1974. Despite the economic downturn,
the unemployment rate at midyear was only 3.5
percent, compared with 3 percent at year-end in
1974. Increased emigration and frequent military
callups have limited the number of workers look-
ing for jobs..
lsra,:I's current-account deficit this year,
while manageable, is likely to reach a record $3.7
billion. Exports, hindered by sluggish US and West
European demand, should grow only 5 perccnt. A
good harvest, which permitted expanded food
exports, will keep the increase from falling even
lower.
Israel will import $2 billion in defense goods
in 1975, 18 percent above the level in 1974 and
four times the 1973 prewar rate. At the same time,
the economic slowdown has cut back growth in
civilian imports. Israel officials are forecasting a
4-percent increase in the value of these imports,
or a real drop of 5 percent.
The trade deficit is likely to increase by $800
million in 1976, mainly because of higher military
imports. This estimate assumes that nonmilitary
consumption will continue to be curtailed by Tel
Aviv's restrictive policies. Civilian imports are
likely to rise only 5 percent. Transfers and capital
receipts, including US a3sistance, will also in-
crease so that Israel will not need to draw down its
foreign exchange reserves.
During recent cabinet-level deliberations on
the fiscal budget for 1976, Finance Minister
Rabinowitz took a tough stand on the need for in-
creased austerity measures. This has led to rumors
of more devalk-ations, reductions in government
services, and new taxes. Major new measures will
not be required if the pending US aid bill is fund-
ed at close to requested levels.
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The 58th anniversary parade passes through Red Square
USSR: THE ANNIVERSARY WALTZ
The USSR observed the 58th anniversary of
the Bolshevik Revolution last week in ways that
seemed designed to avoid giving meaningful
political signals. All the Moscow-based Politburo
members turned out for the festivities except F. D.
Kulakov, party secretary for agriculture and wide-
ly regarded as a political comer. Kulakov, who
also missed last year's observance, may have been
ill last week.
The Politburo chose Arvid Pelshe, the oldest
(76) and one of the least influential Politburo
members, to deliver the principal address on the
eve of the holiday. It clearly would be hard for
any observers, inside or outside the USSR, to
build persuasive or tantalizing political
hypotheses around the figure of Pelshe.
An effort was made to suggest that all is well
with General Secretary Brezhnev. On several oc-
casions Pelshe paid homage to Brezhnev, and
these references were greeted with "thunderous
applause." The television cameras repeatedly
focused on Brezhnev during Pelshe's-speech, ap-
parently to show that he is still in charge and to
allay suspicions about his physical and political
well-being. Brezhnev also had well-publicized
meetings with the heads of the Uruguayan and
Argentine Communist parties and this week add-
ed West German President Scheel to his list of
visitors.
As to the substance of Pelshe's speech, the
only noteworthy item on the domestic side was
his gloomy statement on agriculture. He reported
that since the revolution agricultural production
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had not increased as rapidly as industrial produc-
tion and admitted that difficulties still have to be
overcome in the agricultural sector. Pelshe did
not give a harvest figure nor did he mention
Soviet grain purchases abroad. In his speech,
Pelshe also defended the Soviet record on human
rights and criticized "illusory and unreal"
democratic rights in the capitalist world.
The foreign policy portion of Pelshe's address
was a notably restrained recitation of familiar
Soviet themes. Detente received Pelshe's un-
inspired endorsement, together with the ritual
warning that its opponents-notably political
spokesmen for the "military-industrial complex"
-remain active. He made no prediction, as
Foreign Minister Gromyko has recently, that the
25th party congress will reconfirm Moscow's
current foreign policy line.
In contrast to Gromyko's anniversary address
last year, Pelshe accorded relations with the
Western powers perfunctory treatment. The US
received only one brief, albeit favorable,
paragraph; relations with Western Europe and
Japan were assessed in an additional three
sentences.
Pelshe referred to "realistic trends in the rul-
ing circles" of the leading capitalist states, but said
nothing about the contribution of summitry to
US-Soviet relations nor did he allude to
Brezhnev's next visit to Washington. He endorsed
further progress at SALT but, in a departure from
the usual order, mentioned, both MBFR and
Soviet UN arms control initiatives before SALT.
Pelshe devoted considerable attention to the
world communist and "national liberation"
movements, including some warm words for
visiting North Vietnamese party chief Le Duan.
Pelshe's castigation of China's "Maoists" evoked
from his audience the only real enthusiasm
generated by the speech. He warned Peking
about "encroachments" on the "interests" of the
USSR and, in a new addition, its "friends."
The amount of military equipment displayed
during the Moscow parade was well below that
exhibited last year. Only 151 vehicles participated,
compared to about 300 last year. The military
parade in Leningrad was similarly curtailed, con-
fined to a march-by of troops with no large items
of military equipment. In a break with previous
years, the Moscow parade did not include
strategic missiles, tracked vehicles, or new equip-
ment of any kind. The Soviets did display the SA-8
and SA-9 surface-to-air missiles, indicating their
growing interest in tactical air defense.
Defense Minister Grechko's brief address in
Red Square on November 7 contained the usual
invidious comparisons of communist and
capitalist societies. He expressed satisfaction,
however, with the trend toward a relaxation of
world tension and toward cooperation among
states with different social systems. While
Grechko warned of "aggressive imperialist
forces," he singled out for specific cr;ticism only
"Peking's leaders" and their "provocative
policy." He added that the party and government
are working to strengthen Soviet "economic and
defense capacity." 25X1
Soviet leaders observe the parade
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ECONOMIC SUMMIT
Seeking Political Dividends
At the economic summit in Paris this
weekend European and Japanese leaders-ac-
companied by their foreign and finance
ministers-will all be looking for results they can
use to bolster their national and international
positions. The US will be importuned by the
French to return to international monetary
"stability" and by others to give priority to the
harmonization of economic policies. US support
may also be sought in the dispute over a separate
seat for Britain at next month's conference of
developed and developing states. The developing
states will probably look at the summit results as
indicating the degree of solidarity existing among
the developed countries as the December con-
ference approaches.
The French have been seeking a return to fix-
ed-later amended to "stable"-currency ex-
change rates since President Giscard first called
for the conference. West German, British, Italian,
and Japanese leaders, at first reluctant to par-
ticipate in such a forum, have come to recognize
their stake in successful talks on this or other
issues. The summit will therefore cover a broad
range of issues. In addition to a discussion of
monetary problems, the agenda has expanded to
include economic policy coordination against
recession, trade in raw materials, development
problems, and East-West trade. In addition, the
leaders may discuss the threat of trade protec-
tionism and the status of the Multilateral Trade
Negotiations in Geneva.
Of all leaders at the conference, Giscard has
the greatest political stake in demonstrating some
visible progress. A successful summit would help
restore a sense of dynaroism to French foreign
policy in the wake of the snub delivered to
Gisca1d during his recent visit to Moscow.
Another consideration, which the US embassy in
Paris says is not being discouraged by French of-
ficials, is that the summit represents a success for
the French aim to participate in an exclusive
group that would lead the other industrialized
democracies. Seeing no chance for an early
agreement to return to fixed exchange rates,
Giscard professes this is only a long-term goal;
now he wants a commitment to work towards less
flexible, "viscous," exchange rates.
In addition to its interest in monetary affairs,
Paris will urge acceptance of the French view in
favor of establishing worldwide price agreements
on raw materials. The French will push this argu-
ment in relation to trade with the developing
world and trade in agricultural goods-pa rticular-
ly grains.
West German Chancellor Schmidt's principal
aim at the summit will be to push his views on
greater coordination of economic policies among
industrialized states. Germany faces national elec-
tions next fall, and success in making his views felt
would reinforce Schmidt's international and
domestic standing.
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Schmidt will ask that the I !S review its
economic policies with an eye to helping lead
other countries out of recession. Schmidt may
raise the issue of harmonization of export credit
policies but is not likely to get a favorable hearing
from Giscard on this.
Schmidt will also support moves to develop a
common strategy for the developed countries at
the Conference on International Economic
Cooperation next month. This conference will
bring together ministerial-level representatives
from 27 industrialized, oil-exporting, and poor
developing states to discuss energy, raw materials,
development, and related financial issues.
Flexible exchange rates have generally
favored the UK, and London initially was among
the most reluctant to accept Giscard's invitation
to discuss their abolition. Prime Minister Wilson's
foremost concern will be to secure cooperation
from:. the other participants to help the UK meet
its current economic problems. He will probably
not ask directly, however, that the US and Ger-
many expand their economies at a faster rate. Fac-
ed with increased demands at home to impose
barriers to imports, Wilson may seek understan-
ding from other leaders of pressures that could
push him to move toward protectionism.
The West Germans and French could seize on
these British requests to get London to soften its
stand on separate representation at the
December conference. The British move has
stymied efforts by the industrialized states in the
Organization for Economic Cooperation and
Development to select their eight representatives
for the conference. The original plan called for
single representation of all the EC members, but
Britain has insisted that its interests as an oil
producer and a financial center cannot be ade-
quately represented by the EC. Giscard and
Schmidt may use the opportunity to point out the
inconsistency of British claims to independence
on energy matters with London's pleas for
recognition of its dependence on other economic
issues.
Italy, not invited to the summit at first, will
have in many ways fulfilled its major goal simply
by attending. Rome will also be looking for help,
however, in reflating its economy, but the
relatively minor role Prime Minister Moro and his
advisers are likely to play in other areas will, in
some ways, only serve to re-emphasize Italy's
junior-partner status.
Italian participation will also highlight the
frustration of the smaller EC members and other
Europeans who are not participating in the sum-
mit. These states, who are resigned to, but not
pleased with, their exclusion would prefer utiliz-
ing already established international forums
where they are represented. The small EC states in
particular will question whether the summit ap-
proach can do anything but hander EC efforts to
coordinate economic and financial policies.
Canada is particularly displeased with Paris' ada-
mant refusal to consider participation by Ottawa
in the face of statements of support from the US
and other participants. Paris will apparently try to
make amends by pushing Canada as one of two
co-chairman of the Conference on International
Economic Cooperation.
The summit is a particularly important
political event for japan: it is the first time Tokyo
has participated in such a meeting since before
the war. Tokyo still feels unsure of its position,
however, and may wonder whether it has in fact
been in on all of the advance work between other
participants.
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MBFR: PROBLEMS FOR THE WEST
The force reduction talks in Vienna have avoid commitments to the East to discuss matters
marked time since the seventh round began in that would give the Soviets a voice in West Euro-
mid-September, awaiting the introduction of the pean defense discussions and limit allied military
West's nuclear proposal. Differences among the flexibility.
Western allies make it uncertain, however,
whether the proposal will be tabled before the As a result of these anxieties, there have been
round ends in December. several discussions in the EC in recent months on
the Vienna negotiations, largely at the insistence
The West's nuclear proposal would add to of the Germans. Bonn has argued that these dis-
the basic allied negotiating offer a willingness to cussions are designed merely to define distinctly
withdraw some US nuclear warheads and delivery European interests in a force reduction agree-
systems from Europe. It also would offer to in- ment. They have thus sought to involve the
clude discussion-but not reduction-of air force French, who do not participate in the Vienna
manpower levels in the negotiations. The talks, both in order to neutralize the effect of
proposal is designed to obtain Soviet withdrawal French opposition to the force reduction talks on
of a tank army and agreement to a common man- the German domestic scene and to draw Paris into
power ceiling in order to arrive at the overall discussions of European security.
numerical equality of forces that NATO is seek-
ing. The Soviets have been insisting that the While enthusiasm for the discussions in the
reductions include Western nuclear and air EC appears to have waned in recent weeks under
forces, which they contend make up for the the twin burden of intra-European differences
Soviet advantage in ground manpower and and strong opposition from NATO, the discussion
equipment. participants continue to resist invitations from
NATO to report in detail on their deliberatiosis,
Substantial progress has been made in allied and the talks are likely to continue in a variety of
negotiations on how and when to table the alternative forums.
nuclear proposal. The few issues that nc'v remain,
however, are especially difficult. Expecting that Bonn and London have suggested another
the negotiations will move forward once the trilateral meeting of the US, German, and British
proposal has been introduced, and believing it representatives to work out allied differences
the biggest bargaining chip the West is likely to over the nuclear proposal. The US has resisted this
play, some European allies-notably the British bid on the grounds that such a meeting would
and the Germans-seek to ensure that the make it impossible to table the nuclear proposal
proposal is not presented until the allies decide before the end of the present sound. Because it is
among themselves how to respond to Soviet assumed that the allies basically favor an agree-
demands for European force reductions. ment, there is some reason to think that the
remainices can be worked out in
The Europeans are especially concerned that b
ilateral gsesifons. Presentation of the nuclear
the allies not signal any willingness to reduce or proposal during the present session is
limit European-as opposed to US-arms and nevertheless in do..ot.
equipment. The Germans, whose large army is of
special concern to the Soviets, are arguing for a Aware that the West hopes to table tF.e
collective allied reduction commitment to avert long-awaited proposal during the present round,
the possibility that Germany will be singled out to the Soviets reacted initially by disparaging the
take all or most of the European reductions. Apart military significance of the Proposed nuclear
from the immediate desire of the Germans to withdrawals and demanding that the offer also
avoid individually any diminution in their own respond to their desire for reducti:ris in West
security, the more general European interest is to European forces that the West hay reserved for a
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later phase. This denigration of the Western
proposal Is mainly tactical in nature, intended to
show that the Soviets do not regard it as a pan-
acea. The Soviets will probably be receptive to the
proposal if and when it is tabled. Ever since the
start of the negotiations the Soviets have insisted
that nuclear elements be included in the reduc-
tions, and they can scarcely reject a proposal in
which NATO finally moves toward acceptance of
their position. While the Soviets will thus
probably agree to incorporate the nuclear
proposal as an element in the negotiations, this
does not mean that they will accept all of its
specifics or that a meaningful agreement will
quickly follow.
The Soviets still appear to be interested in
making progress in the negotiations and have
offered a modification of their approach to the
question of defining whether intermediate types
of forces fit into air or ground categories. It
appears that the Soviets are toying with ways to
juggle force figures in such a way that the
appearance of a common ceiling will be created.
This approach will probably be unacceptable to
the West because the underlying disparity would
not be affected, but the Soviet move could
foreshadow greater willingness to meet Western
FINLAND: NEON GOVERNMENT LIKELY
The prospects for the formation of a new
majority coalition government, needed to deal
effectively with Finland's difficult economic
problems, were enhanced last week by the vic-
tory of the Social Democrats in a hard fought
election for control of the Metalworkers'
Union, Finland's largest and most influential
union. Following inconclusive parliamentary
elections in September, most party leaders
were unwilling to talk seriously about the
makeup of the next government until after the
Metalworkers' election. A Communist victory
would have further complicated efforts now
under way to form a government and raised
doubts about the ability of the next govern-
ment to come up with strong economic
measures.
concerns once the nuclear proposal has been for-
mally presented. 25X1
EC: FARM POLICY WORRIES
The EC has begun a thorough review of the
common agricultural policy that will receive
high-level attention when the nine heads of state
and government meet in December. Last year,
Bonn made the review a condition for West Ger-
man consent to an increase in farm support
prices. Despite the polemics during the past year
over EC farm policy, attention is now focused on
several modest reforms. The Nine presumably
have realized that the common agricultural policy
already represents so many carefully worked out
compromises that radical changes are politically
impossible.
i 'uring its initial months, the review was
hampered by the campaigning before the June
referendum on continuing British membership in
the EC that made an oversimplified reform of
The Social Democrats captured 259 of the
506 seats to the Metalworkers' convention on
December 14. The Communists won 240 seats,
while the Center Party took 7 seats. Earlier
predictions of a close tally that would have
enabled the Center Party to cast the deciding
votes did not pan out.
The Social Democrats now have the upper
hand in charting the course of the union for
the next four years. Although the margin of vic-
tory was slim, the Social Democrats' morale will
get a boost from their election showing. Their
discouraging performance in the parliamentary
elections and a scandal involving the smuggling
of funds from West Germany and Sweden to
aid in the Metalworkers' election had seriously
dampened party enthusiasm.
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agricultural policy an issue. Since then, the British
have had little to say, but the West Germans, the
French, and the Italians have contributed
acrimoniously to the debate.
Chancellor Schmidt, a former finance
minister and the first postwar chancellor to have
few inhibitions about seeking political influence
commensurate with West Germany's economic
strength, has long made political hay out of his
criticism of waste and inefficiency in the Brussels
bureaucracy. With an eye to stringent budget
pressures in Bonn and close national elections
next year, Schmidt has been especially critical of
any moves to raise community expenditures for
agriculture.
In France, rivalry between President Giscard
d'Estaing and Prime Minister Chirac has added to
the difficulty over EC farm pokey. Chirac made his
national reputation during 1972-1974 as an
agriculture minister who advanced the interests
of the French farmers through theatrical tactics in
Brussels. At Chirac's insistence, Paris contravened
EC regulations this fall with a tax on Italian wine
shipments.
Italian Agriculture Minister Marcora has
been particularly aggressive in promoting Rome's
point of view. He has emphasized that the Com-
munity allocates a larger share of its resources to
support the prices of agricultural commodities
produced in northern rather than southern
regions, and he asks corrective action. Marcora,
who owns a livestock and dairy farm in Italy's Red
Belt, operates from a strong position in Rome as a
leader on the rise in the newly influential left
wing of the Christian Democratic Party.
Reform Review
Implementation of several reforms suggested
by the EC Commission would greatly extend the
scope of the Community's common farm policy,
but such steps are likely to face stiff apposition in
the member countries. The changes are aimed at
overcoming some of the long-standing problems
associated with the common agricultural policy,
especially with regard tc surplus production, but
implementing the changes would require ad-
ditional expenditures-a step certain to be
criticized in a time of economic difficulty.
The member states are nevertheless getting
down to considering politically feasible reforms.
Some members hope to clear up misunderstand-
ings about the program and prove that the com-
mon tarm policy is not the drain on EC resources
that its critics allege.
Future debate will take place at several levels,
with Commission and national officials working
closely with representatives of farm organizations.
The EC heads of government, however, will
probably have to establish guidelines for farm
policy reform when they meet in Rome at the
beginning of December.
Within the next few months
the EC is likel
,
y
to endorse Commission suggestions for more
stockpiling of farm products, long-term contracts
for overseas sales of food, and the adjustment of
grain price ratios to encourage use of surplus
low-grade wheat as a feed grain. The EC is less
likely to accept Commission proposals looking
toward greater producer responsibility in
avoiding surpluses, increased farm size, more use
of direct payments to farmers as a substitute for
price supports, and extension of the common
agricultural policy to more products.
Nearly three fourths of the EC's budget is
spent on agriculture, with dairy support the
largest single item. National critics find Brussels an
easy target for the planning that leads to surpluses
of milk, butter, beef, and wine.
The member governments nevertheless
recognize that the large proportion of the Com-
munity's budgetary outlays devoted to agriculture
is necessary because Brussels has assumed
budgetary responsibility from national
governments. Moreover, more EC farmers are in-
volved in tha troublesome dairy sector than in any
other. Even at the height of bitter debate during
the past year, none of the EC members has
spoken rout in favor of dismantling the Com-
munity's agricultural program and returnin to
national Tarn olic
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ARGENTINA: IMPEACHMENT MOTION
An impeachment motion against President
Maria Estela Peron, introduced late last week, is
gaining support in congress. The motion charges
gross incompetence as well as large-scale misuse
of public funds.
At least three opposition political groupings
have already lined up behind the motion, and the
largest opposition group, the Radical Civic Union,
seems to be moving in that direction. Parties
allied with the Peronists in the governing coali-
tion are said to favor impeachment also, at least
unofficially.
Recent schisms within the Peronist party ma3
provoke defections that could ensure passage of
the motion. Late last week, the party formally ex-
pelled Buenos Aires Governor Victoria Calabro, a
prominent unionist and spokesman for those
Peronists who oppose the President. The L'S em-
bassy reports that his ouster could well provide
the 20 or so Peronist votes needed for passage of
the measure.
Peron's recent actions have led some to
speculate that she is deliberately seeking to
provoke a military coup and thus achieve a kind
of martyrdom. She remains isolated in her
hospital room, taking counsel only from a small
clique of followers of ousted Lopez Rega. During
the period of her hospitalization, Peron has ig-
nored requests from cabinet members that she
meet with them to discuss government business.
ruvaw,cII rerun iouowmg ner recent resumption of the presidency
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ECUADOR: A SHAKY PRESIDENCY
President Rodriguez continues to hold on to
the presidency, but only because the military is
disunited and unable to agree on a successor.
Despite his best efforts, Rodriguez has not been
able to gain the support of the military, and his
regime still is plagued by discontent, economic
problems, charges of corruption, and plotting.
The President's intention in the is ng term to
restore civilian control of the government has suf-
fered a setback. Last month's cabinet changes,
which removed two civilians from their posts, in-
creased the military's dominance. Rodriguez' re-
President Rodriguez
cent signing of a bill making journalists "liable for
crimes against the state," plus the arrest of former
Ecuadorean president Arosemena and conser-
vative leader Trujillo, may be evidence of a
decrease in civilian influence. 25X1
The President's inability to deal with
economic problems has added to public discon-
tent. Popular economic measures, such as the re-
cent reduction in import tariffs, have been
overshadowed by persistent problems in labor,
industry, and agriculture. The labor unions
appear to be Rodri uez' most immediate
problem.
The
Presi ent's reaction may we e a actor a fecting
his longevity as the nation's leader. 25X1
President Rodriguez is also faced with mak-
ing a decision on oil policy, which will affect all
areas of the economy. He will have to decide how
to adjust the price of Ecuador's oil in light of the
recent OPEC increase. If the selling price is forced
up, Ecuador's oil will no longer be competitive
and significant oil revenues will be lost. Even if the
oil remains competitive because of market fluc-
tuati:)ns, a price hike without tax relief for the oil
companies will reduce the already lagging incen-
tive to exploit existing sources of oil, upgrade
facilities, and undertake further exploration.
Despite all the problems the President faces,
there is still no coordinated movement to replace
him. Opposition to his regime, however, is in-
creasing, and his future is put in doubt by eroding
military support and increasing political and
economic pressures. 25X1
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IA
GUATEMALA-BELIZE
S- --king a Compromise
Guatemalan leaders are looking for ways to
defuse the volatile Belize issue, but time and
political considerations stubbornly held by the
three parties involved in the dispute may be
working against a peaceful settlement.
The reinforcements sent into Belize last week
by the British in response to a buildup of forces
on October 31 on the Guatemalan side of the
border have convinced the Guatemalans that
London is determined to defend against an inva-
sion. British forces in Belize, now about 1,100
troops plus six Harrier attack aircraft-which are
vastly superior to any airpower Guatemala
has-have the capability of defending all but
remote jungle areas of Belize. Faced with the
strong probability that a military action with even
a limited objective would fail, the Guatemalans
are seeking to find a solution through
negotiations with the British.
Guatemala has accepted as a foregone con-
clusion that the Brit sh-sponsored resolution on
Belize will be adopted by a large margin in the
UN. Guatemalan leaders then will have to carry
through on their threats to respond with military
action, or risk losing face.
Not yet willing to foreclose all options short
of war, a Foreign Ministry official this week held
the door open to the possibility of renewed
negotiations with the British. He said That there
can be many ways to resolve the issue peacefully,
such as the international Court of justice, arbitra-
tion, or a friendly mediator. The implication is
that Guatemala very much wants the US to take
on this role-and, of course, to favor Guatemalan
interests. In another attempt to reach a solution
through diplomacy, Guatemala this week laid the
groundwork for intervention by the OAS. The
OAS played a major role in calming the last
flare-up of the Belize dispute in 1972.
The reaction to the British reinforcements has
thus far been restrained, although the
Guatemalans are concerned that incidents with
British forces patrolling the border could occur
and lead to a clash of serious proportions. Mexico
has proposed a compromise resolution that calls
for the parties involved to refrain from any action
that would delay negotiations or jeopardize har-
mony in the region. Guatemala seems willing to
accept the Mexican proposal, but feels that it has
come too late in the game and has no real
pu,sibility of acceptance in the UN.
What the Guatemalans are really looking for
jr some gesture from the British indicating that
meaningful negotiations are a distinct possibility.
President Laugerud will need something to offset
the domestic reaction, both from the public and
from the hawks in the military, that seems certain
to follow passage of the British resolution.
A public announcement before the UN acts
on the resolution, coupled with a private ap-
proach by the British to give Guatemala some
clear indication of what London has in mind to
settle the dispute, would probably be enough to
prevent, or at least forestall, an outbreak of
hostilities. If the British do not offer a face-saving
device, the risk of a military conflict will increase.
Still, there is no guarantee that London would
be able to persuade Belize to agree to
Guatemala's very exacting demands. Guatemala
has in the past insisted on a sizable chunk of Beli-
zean territory, in addition to satisfying economic
and security concerns, before it would relinquish
its claim. The Belizeans are hardly likely to agree
to any significant territorial concessions.
Guatemala would have to scale down its demands
considerably in order to make headway on a
settlement. At this point, there are few signs that
either side would be willing to back down.
25X1
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