WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000300020054-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 25
• Document Creation Date: December 22, 2016
• Document Release Date: February 22, 2011
• Sequence Number: 54
• Publication Date: December 19, 1975
• Content Type: SUMMARY

eclassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020054-9
Secret
25X1
Weekly Summary
Secret
No. 0051/75
December 19, 1975
Copy N! 1399
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 Declassified in Part - Sanitized Copy Approved for Release 2011/11/15: CIA-RDP86T00608R000300020054-9
The WEEKLY SUMMARY, issued every Friday morning by the
Office of Current Intelligence, reports and analyzes signifi-
cant developrnents of the week through noon on Thursday. It
frequently includes material 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.
CONTENTS (Decembe-r /9,075)
MIDDLE EAST
AFRICA
WESTERN
HEMISPHERE
1 Angola: On and On
4 Lebanon: Fighting Down
5 Spanish Sahara: Spaniards Departing
7 Italy: Politic.,) Maneuvering
8 Portugal: Military Role; Economy
10 Spain: The King's Men
i2 France: New IRf3MSilos
12 Iceland: The UN Approach
13 Law of the Sea: The 200-Mile Zone
14 Europe: Civil Aircraft Market
15 Yugoslavia-USSR: Minic Visit
i6 USSR-Egypt: Relations Deteriorate
17 USSR: New Five-Year Plan
17 Poland: Hedging on the Economy
19 Chile-Bolivia: Inching Forward
19 Peru: Purging the Left
19 Argentina: Impeachment Voted Down
EAST ASIA 25X1
PACIFIC
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ANGOLA: ON AND ON
None of the contending parties in the civil
war scored any major military gains during the
past week, although the forces opposing the
Soviet-backed Popular Movement for the Libera-
tion of Angola made some progress in the
west-central sector. Leaders of the two sides are
intensifying their efforts to win political support
among African states prior to the planned special
summit meeting of the Organization of African
Unity. The conference apparently will not con-
vene before next month.
The Military Situation
Late last week, a strike force including
elements of the National Union for the Total
Independence of Angola and the allied National
Front for the Liberation of Angola pushed the
Popular Movement out of the town of Cela. A
National Union communique issued on
December 15 had the force moving north toward
Quibala, apparently along one of the main routes
leading from the south to Luanda, seat of the
Popular Movement's government. The muscle of
this and other combined National Union -
National Front task groups is provided by un-
known numbers of South African soldiers, white
mercenaries, and black Angolans who fought for
the Portuguese against the Popular Movement
during the insurgency.
In the east, the' National Union consolidated
its hold on Luso, recaptured last week. Union
leaders and their advisers plan to send one of
their combined strike groups against Teixeira de
Sousa, which like Luso has changed hands twice
in the past month, and another toward Henrique
base in eastern Angola.
North of Luanda, the military situation has
remained essentially static since Popular Move-
ment forces, backed by Cuban-manned artillery,
advanced two weeks ago to within about 50 miles
of Ambriz, the headquarters of the Zairian-sup-
ported National Front. Destruction of bridges
over several rivers and the start of the rainy season
have checked the Movement's drive, at least tem-
porarily.
African Split Widens
African foreign ministers will not meet in Ad-
dis Ababa this weekend, as had been announced
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ANGOLA
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.! w ~~ :a 1 `'+i ~. n~ LA:_"w~ -."".'d f:~!~fiJ l.-J
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by OAU offici; , to set a date and agenda for a
later OAU summit. Governments supporting the
Popular Movement's Agostinho Neto insisted the
two me. tings be held back-to-back, but OAU
members have not yet agreed on timing. The
Popular Movement's friends are eager for an early
summit, believing that, under present cir-
cumstances, they can exploit the meeting to the
Movement's advantage. At present the diplomatic
trend in Afri:a continues to run in favor of the
Movement; with Sudan's formal recognition of
Neto's regime this week, the score among African
states now is 14 for the Luanda government to
none for the nominal joint regime proclaimed by
his rivals last month.
Countries that want to keep the OAU official-
ly neutral in the Angolan conflict, on the other
hand, are trying to buy time. These countries and
the National Union's Savinibi apparently hope to
counter the political damage to the Movement's
Angolan adversaries from the highly publicized
aid they are getting from South Africa by develop-
ing a backlash against Soviet and Cuban assistance
t) Neto. Support will be sought fora blanket con-
demnation of all outside involvement in Angola
and for a cease-tire and government of national
unity there.
With the OAU meetings in abeyance, Savimbi
flew to Uganda this week for talks with OAU
chairman Idi Amin. The National Union leader is
due in Dakar on December 19 to confer with con-
servative Sengilese President Senghor and
reportedly intends on the same trio to visit
Cameroon and Ivory Coast. In his talks with the
West African leaders, all of whom oppose the
Popular Movement's drive for OAU recognition
as the sole legitimate Angolan nationalist group,
Savimbi presumably will he focusing on concer-
ting tactics for building African support against
the Soviets and Cubans. His principal African
backers-President Mobutu of Zaire and Presi-
dent Kaunda of Zambia-are actually working
tov and the same goal.
Savimbi and his allies face an uphill struggle
in their effort to neutralize the highly emotional
South African issue, which mainly motivated
Nigeria's and Tanzania's recognition of the Neto
regime and is clearly causing other African
governments to waver in their adherence to
neutrality. The Popular Movement, of course, will
continue to exploit the issue for all it is worth. This
week the Movement stoked the fire by exhibiting,
at a press conference in Luanda, four South
African soldiers captured in the recent fighting at
Cela. Neto's lieutenant then took the four with
him on a visit to Nigeria that began in Lagos on
December 16; they are certain to attract wide
publicity there and wherever else he may ';,it.
Savimbi, while in Kampala, made an attempt
to disown Pretoria's assistance by claiming that
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any South African forces +o Angola are there on Sino-Soviet Rivalry
their own and by callir,j on African states to help
drive them out. His aw,;ui'.ent is not likely to be Peking is still making an effort to capitalize on
persuasive in many Afrir -n capitals. Moscow's heavy-handed support for the Popular
Movement. Publicly, the Chinese are maintaining
a position of strict neutrality, and there is no
Soviet Press Admits SL Fjport evidence that any significant new amounts of
Chinese military assistance are reaching the
The Soviet central press has, for the first time, National Front or National Union.
indirectly admitted that both Moscow and
Havana are provid' tij, military support to the 25X1
Popular Movement kj Angola.
Earlier this mono Pravda, in reporting on a
press conference h: id by President Nyerere in
Brussels, cited the Tanzanian President's state-
ment that he was "certain" the USSR was
providing the MPLA with the "necessary arms"
for its struggle against the "interventionists" from
South Africa. In an accompanying commentary, As long as other countries maintain their
Pravda stated inter aria that the Soviet Union, current levels of assistance to the National Front
which stands "among the loyal friends" of the and the National Union, China can be expected
Angolan people and was one of the first to to maintain a low profile with its former clients,
w;"lcome the birth of an independent regime, "is endorse the Organization of African Unity's call
providing help and support to Angola during for neutrality toward Angola, and score
these difficult days." propaganda points at Moscow's expense. Peking
is clearly concerned, however, that it may not be
Last weekend, moreover, the Soviet news able to sustain this approach.
agency Tass tcok the unusual step of publicizing
MPLA leader Neto's expression of gratitude for
Moscow's "all-round help" to the Angolan peo- Any significant reduction in support for the
ple. At the same time, Pravda provided the first National Front and National Union by other
hint seen thus far in the Soviet press that Cuba is countries, for example, would present the
furnishing substantial assistance to the MPLA. The Chinese with difficult decisions. Mobutu would
Communist Party daily said that Cuba "always sup- almost certaioly want to divert to Angola large
ported all national liberation movements in amounts of the Chinese assistance to his country
Africa, including the MPLA-the sole legitimate to make up for the loss of other sources, and such
representative of the Angolan people." increased Chinese involvement would soon
become public knowledge.
Moscow's decision to make public, even in
an unofficial way, its role in Angola coincides with The prospect of a reversal of the Organiza-
recent VILA gains in the military and diplomatic tion of African Unity's position on Angola or an
arena and suggests that the Soviets may want to agreement among its members to go their
get their fair share of the credit for these separate ways on the recognition issue would be
successes. The decision also dovetails with recent equally unsettling to thn Chinese. This would
revel,-.lions in the US press of allegedly substantial almost certainly lead to much wider African and
US support for the MPLA's rivals; hence, the Third World recognition for the Popular Move-
Soviets may now feel less compelled to mask the ment and leave Pekin on the wrong side of the
dimensions of their own involvement. fence. 25X1
SECRET
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Phalangists take aim at snipers during recent fighting in downtown Beirut
LEBANON: FIGHTING DOWN
The fighting in Beirut between Christians and
their Muslim and leftist foes abated somewhat
during the week following the proclamation last
Sunday of yet another cease-fire. The new truce
was negotiated by Prime Minister Karami and
Palestinian leader Yasir Arafat, with the Syrians
playing a key role in smocthing the way.
Damascus has also made a new mediatory move
aimed at getting Lebanon's political leaders talk-
ing again.
that were sent in last week.
Lebanese politicians-Christian, Muslim, and
leftist-have over the past two weeks tra ieled to
Damascus for consultations, and Syrian Foreign
Minister Khaddam may soon come to Be rut to
continue the Asad regime's efforts to mediate a
political settlement. At present, the Syrians are
focusing on helping Prime Minister Karami to
form a more representative government.
Expansion of the present narrowly based
Arafat apparently was instrumental in gaining cabinet to include members of all principal
acceptance of the truce from Ibrahim Qulaylat, political groups is one of the few remaining op-
the leader of radical leftist forces that spearhead- tions that might help bring about a basic political
ed the recent battle with Christian Phalangist settlement. A broadened government would
militiamen for dominat;on of the city's inter- strengthen the Muslim Prime Minister's hand in
national hotel district. The latest peace controlling the terms and pace of a reform
arrangements provided for security forces to program, thus reassuring moderate Muslim
replace the army in the embattled district. This groups. At the same time, it would give Christians
was a concession tc the leftists who had gained a better chance to prevent or at least delay serious
control over much of the area and had refused to erosion of their dominant position. Such a balan-
relinquish their vantage points to the army units cing of interests would not satisfy Lebanon's leftist
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groups, however- they oppose the country's pre-
sent system of power-sharin among religious
groups.
Until recently, Kamal Jumblatt-the principal
spokesman for the leftists-had refused to be
represented in a government that included the
Phalanges Party and had insisted that his own
reform program be accepted before the forma-
tion of any new government.
genera lack of confidence that the current
cease-fire, still not fully implemented, will hold
long enough to permit meaningful political
progress. As of December 18, scattered fighting
was continuing in Beirut, in villages southeast of
the capital, and in the Tripoli-Zagharta area of
northern Lebanon. In this uncertain atmosphere
elements from any quarter could again upset the
SPANISH SAHARA: SPANIARDS DEPARTING
Morocco's King Hassan is continuing to send
Moroccan security forces into northern Spanish
Sahara to fil! the void left by Madrid's withdrawal
from the territory well ahead of the late February
deadline set in the agreement it signed with Rabat
and Nouakchott last month. Algeria, frustrated by
the failure of its efforts to obtain a clear-cut dis-
avowal of the tripartite agreement by the UN
General Assembly last week, is strengthening its
general military posture and increasing aid to
Polisario Front guerrillas fighting for the in-
dependence of the territory.
Madrid appears to have virtually completed
its evacuation of Spanish forces and civilians.
Spanish press reports indicate the few remaining
troops will leave in early January; a small
diplomatic mission will be maintained in El Aaiun,
the territorial capital. The new Spanish regime is
anxious to avoid any involvement in hostilities
between Morocco and the Polisario Front or its
sponsor, Algeria.
Moroccan army units recently arrived in El
Aaiun to take up security functions. As many as 4,-
000 to 5,000 Moroccan troops reportedly are in
the capital and a similar number in Semara. Some
600 Moroccan police are also stationed in El Aaiun
and a few outlying towns.
Despite the influx of Moroccan forces and
their aggressive pursuit of the guerrillas, Polisario
r.
0
? oo D
Soan"icsti`1
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resistance has spread. Several terrorist incidents
occurred in El Aaiun last week. Polisario forces
reportedly have considerable support among the
local population in the territory, with many
younger Saharans leaving the towns to join urn
with the Front.
Last week also brought the first reports of
fighting between Mauritanian and Polisario
forces, with incidents occurring at several widely
separated points along the long border between
Mauritania and the Saharan territory. Nouakchott
has mobilized its 1,500-man army and is inducting
new recruits. President Ould Daddah's govern-
ment is especially concerned about protecting a
vital rail line that runs parallel to the territory's
southern border. In an effort to secure the rail
head, Mauritanian troops, aided by a Moroccan
unit that arrived by air last week, are trying to
wrest control of a nearby town on the Saharan
side that was occupied by Polisario forces last
month.
In their engagements with the Moroccans
and Mauritanians, the Polisario guerrillas are now
using mortars, machine guns, and grenade
launchers. Each side has alleged the other is com-
mitting atrocities and both are almost certainly
guilty.
25X1
So long as they have Algerian backing, the
guerrillas can keep up terrorist and sabotage at-
tacks. The automated belt conveyor system that
moves prosphate ore some 60 miles from Bu Craa
to El Aaiun is especially vulnerable to guerrilla
operations.
Algeria, for its part, has increased its troop
strength and added to its supply depots at Bechar
and Tindouf, although the actual extent of the
buildup is unknown. The Algerians have also
ordered tents, medicine, and surgical equipment
from French firms.
Algeria's efforts are probably intended, for now
at least, to exert psychological pressure on
Morocco and to strengthen Algerian defenses
along the border. Moreover, some of this activity
is probably direct support of the Polisario
rront. The Algae' ',ins are providing arms, training,
and possibly some volunteers to the Front in the
hope that the Moroccans will be bogged down
fighting a long arid costly insurgency. Algiers is
undoubtedly concerned over how Rabat will
react to this support and wants to be ready for any
contingency. 25X1
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ITALY: POLITICAL MANEUVERING
Italy's Christian Democratic and Socialist par-
ties are both troubled by serious internal divisions
as they prepare for congresses early next year.
Debate will revolve around the central issue of
how best to compete with the Communists in
local elections this spring and in the next
parliameoitary race.
In the six months since the Communists near-
ly outpolled the long-dominant Christian
Democrats in nationwide local elections, the
latter have done little to improve their prospects.
The question of how to deal with the Communists
has deeply divided the Christian Democrats, with
the result that they were able to agree on little
more than a date for the party congress at their
last strategy session.
The congress will open on March 4, a date
acceptable to both the Christian Democratic
left-led by interim party chief Zaccagni::i and
Prime Minister Moro-and the opposing center-
right group that is seeking to gain control of the
party. The latter group, which includes a majority
of the party, wanted the congress held as soon as
possible, since Zaccagnini is scheduled to step
down at the meeting. The center-right maintains
that Zaccagnini's support for an open "dialogue"
with the Communist opposition threatens to edge
the Christian Democrats toward broader
collaboration with them. Zaccagnini was in favor
of delaying the congress until spring or later in
order to consolidate the influence the party left
has been gaining since he took over in July.
Fearing a split that could cripple the party in
the next campaign, some Christian Democrats
have begun to work to bridge the gap between
these two groups. Foreign Minister Rumor and
Treasury Minister Colombo, for example, are part
of an emerging centrist faction that is trying to put
together a broadly based majority that includes
all but the extreme left and extreme right in
the party.
The Christian Democrats' lack of progress so
far, however, has helped convince the Church to
take a more active role in domestic politics than it
Zaccagnini
has since the 1950s. Alarmed in particular by the
possibility of the Communists' winning the
municipal elections in Rome tllis spring, the
Church hierarchy-including the Pope-is taking
a harder line on the Communists. The strongest
statement came this week, v.hen the Council of
Italian Bishops declared that it is impossible to be
Marxist and Christian at the same time.
For their part, the Soc`.alists have been preoc-
cupied by an internal quarrel over whether to
continue their crucial parliamentary support for
the Moro government. Socialist leader De Mar-
tino has been under strong pressure from
members of his party who believe that continued
support for the government will hurt the Socialists
in the next election.
Last week, De Martino-while sr;arpening his
criticism of the government-convinced the
Socialist directorate to postpone until the party
congress in February any decision on whether to
end support for Moro. De Martino maintained
that causing a government crisis now would play
into the hands of Christian Democrats and Social
Democrats who are opposing the trend in their
parties toward an accomodation with the
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Socialists. He also agreed that a crisis in present
circumstances could precipitate early parliamen-
tary elections, which most political leaders
oppose and for which the Socialists would be
blamed.
De Martino probably also wants to avoid bad
publicity prior to or during his visit to the US in
January. In addition, divisions among Socialists
over what course to follow if Moro falls could
destroy the veneer of unity that De Martino
hopes to maintain through the party congress.
The Communists are also urging the gover-
ning parties to avoid actions that could lead to the
collapse of Moro's government. Communist
leaders fear that dissolution of the government
now would lead to early parliamentary elections
in which the central issue would be the question
of Communist participation in the government.
The Communists want to avoid a premature con-
frontation and prefer to devote their time to con-
solidating the gains they scored at the local level
in June.
PORTUGAL
Portuguese military leaders are proceeding
with a plan to reduce the armed forces' role in
politics. On December 12 the Revolutionary
Council announced a constitutional law forbid-
ding military participation in partisan political ac-
tivities. Recognizing the changing political situa-
tion, the law describes the armed forces as the
"guarantor" of democracy and socialism rather
than as the "driving force of the revolution," the
phrase often heard under former prime minister
Vasco Goncalves. It also lays the groundwork for
ending months of military domination of the
government by relegating the armed forces to a
less grandiose role.
I.ip constitutional law foreshadows changes
in ,greenient reached between the military
and th., political parties last spring, in which the
civilians agreed that the armed forces would re-
tain their dominant role for the next three to five
years. Since the pro-Communist regime headed
by General Goncalves was overthrown in
September, the political parties have demanded
revisions in the pact, claiming that it no longer ac-
curately represents political realities. Talks began
this week between the parties and a five-man
commission from the Revolutionary Council for
the purpose of making such revisions.
This new attitude of the military reflects the
views of a group of "professional" soldiers-some
of whom are members of the Revolutionary
Council-which seeks to return political power
exclusively to civilians and to let the Portuguese
people decide whether they want a socialist
society.
The strength of the "professional" officers'
group is not known with certainty, but its in-
fluence is believed to be growing. It already
appears to have played a major role not only in
putting down last month's leftist rebellion, but
also in bringing about a marked change in the
political direction of the country. An early test of
the group's strength will be the extent to which
the new pact between the civilian political parties
and the military reflects the "professionials" call
for the military to turn power over to the civilians
and return to the barracks.
The purge of leftists following the insurrec-
tion on November 25 improves prospects for the
emergency economic program outlined last
month but by no means assures its implementa-
tion. Within a week of the uprising, the govern-
ment was able to shift attention to economic af-
fairs long enough to approve a series of minor
measures. Lisbon still faces fundamental
economic difficulties and has a limited political
capability to deal with them.
The emergency economic program is a work-
ing document intended to be the basis for discus-
sion and development of specific measures. It'
calls for a number of unpopular actions, notably a
10 percent cut in consumption to reduce imports
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and free capacity for production of export and in-
vestment goods. Consumption would be curbed
by increased taxes, wage controls, higher prices,
and perhaps rationing.
The balance-of-payments deficit would be
cut by higher tariffs, export subsidies, and other
measures. Employment and output would be r:3is-
ed by boosting public sector investment and en-
couraging private investors. Civil construction
and export industries would be the priority areas
for investment.
To carry out this program, government of-
ficials of varying political stripe must agree on a
detai'ed series of laws and regulations. Ever, un-
der the best of circumstances, the government is
not likely to succeed in reassuring investors
because of its commitment to worker control
over private enterprise.
Lisbon now estimates real gross national
product will decline 10 to 15 percent this year.
Output fell sharply with the nationalizations and
worker seizures that followed the abortive coup
in March. Agricultural production has held up,
but large-scale nationalization and seizure of
land, which began in September, will depress
next year's farm output.
The government already controls 60 to 75
percent of the modern economy, but has not yet
begun to operate it in a coordinated manner or to
invest heavily in it. Many of the remaining private
businesses are on the brink of ruin, their chance
of survival sapped by forced wage increases, price
controls, a ban on dismissals, confused and incon-
sistent regulations, and denial of credit by leftist-
dominated committees in the nationalized banks.
Economic activity has been interrupted by fre-
quent political meetings and hampered by
worker insubordination.
Most prerevolutionary mangers and owners
have been forced from their positions, leaving a
shortage of critical talents. Many have fled to
Brazil, while others have been jailed on charges of
"economic sabotage." Remaining private
businessmen and farm proprietors have been
subjected to constant harassment. Legal measures
to impose worker control in enterprises still in
private hands are pending.
Unemployment is believed to be ap-
proaching 400,000 persons, or 13 percent of the
labor force. The total has been swelled in recent
months by the influx of Angolan refugees, the dis-
charge of military personnel, a drop in the
number of Portuguese finding jobs in France, and
the deterioration of the economy. Only about
20,000 people seem to be receiving unemploy-
ment benefits.
Consumer prices, which rose about 25 per-
cent in the 12 months prior to the April 1974 coup,
rose at a 20-percent annual rate in the succeeding
16 months, according to official figures. All wage
negotiations have been suspended for the
remainder of the year, pending enactment of an
incomes policy.
The serious drain of foreign exchange
reserves continues, although this year's current
account deficit could be less than the $800 million
of 1974. Reserves dropped $400 million in the first
eight months of 1975, following a nearly $500-
million decline in 1974.
Despite expected government borrowing
from the IMF and priva,^ banks, Lisbon will have
to initiate sizable gold sales by the second quarter
of 1976. Foreign aid will neither stop the decline
of reserves in the near term nor correct the
problems underlying the payments imbalance.
So far, the EC has offered more than any
other donor-$175 riii1lion in conc'ssionary ioans
to finance specific development projects, refugee
assistance consisting of $2.5 million in surplus
powdered milk and butter oil, and a credit for
medicines. Disbursement of the loans cannot
begin for several months, as Lisbon has not come
up with plans for projects in accord with EC re-
quirements. The US and individual West Euro-
pean countries also have offered assistance, but
little aid has been forthcoming from Communist
countries. 25X1
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SPAIN: THE KING'S MEN
Most of the key political portfolios in the new
Spanish cabinet are held by men who have
publicly supported gradual liberalization of
Spain's political system, closer ties with Europe,
and continued friendly relations with the US.
They are joined by a team of bright technical ex-
perts who now hold all of the important
economic portfolios. The orientation of the
cabinet has thus shifted away from the
authoritarian right, and the few rightists remain-
ing may find it difficult to stand in the way of
gradual change toward a more democratic socie-
ty. The cabinet was sworn in on December 1'
The King's hand is evident in a number of the
appointments
Pry
Minister Carlos Arias appears to be left with only
one personal follower, the hold-over minister of
public works, Valdes Gonzalez.
Fraga, until recently Spain's ambassador to
London, has achieved the strongest position
within the cabinet. Strong-willed and outspoken,
Fraga has an eye on the prime minister's job. He
heads a powerful ministry-charged mainly with
internal security-and is one of three deputy
New Spanish Cabinet
Prime Minister ---- --------- CrrlosAtiasNavarro'c
Dept. Prime Minister lot Defense Affairs.
Minister wi'haul Portfolio.- - - - - - _ _ _ _ _ - LtSen. Santiago Die: do Mendivil
Dept- Prime Minister for the Interior.
Minister of the Interior. - - - - - -- - _ _ _ - Manuel Frog...:4rnec
Dept. Prime Minister for Economic Affairs.
Minister of Finance. - _ - _ _ _ - Juan Miguel Villor Mitt
Agriculture - - - - _ - - _ _ _ Virgilio Onate Gilc
Air Force - - - - - - - - - - - - - - - - _ - _ - - LIGen. Carlos Franco Idbarnegarey
Army - - - - - - - - - - - - - - - - - - - - - - LtGen. Felix Alvan:-Arena,
Cmmrr'ee - - - - _ _ - -- - _ _ _ _ -- - - _ Leopoldo Caivo Sotoloe
Education and Science _ _ _ - _ _ _ Carlos Robles Piquerc
Foreign Affairs Jose Marie de Arailnc
Housing - - - _ _ - _ _ _ _ Francisco Lozano Vicarial
Industry - - - - - - - - - - Carlos Per,: del Briciot
Information and ioutism - - _ -- - _ - _ _ _ Adolfo Martin - Gamatoc
labor ------------ _ - . _ _----_.Jos,Solii It ix'm
National Movement - - - - - - - - - - _ _ _ - - - - Adolfo Subre: Gonzoia,m
Navy - - - - - - - - - - - - - Adm. Gabriel Pita do Volga'
Office of the Prime Minister - - - - - - _ _ _ _ - _ Alfonso Oserio Garciac
Public Works _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Antonio Valdes Gonzales' t
Syndicate Organization _ - _ _ _ _ _ _ _ _ - - - Rodolfa Martin Villain
(rho (eonom/c Oweie/mml end Planning Ministry was ehoiishod.)
Relainrit from lost cabin. 'Favor gradual ekaege:'"National Movement.
Economic (eebnicol experts
prime ministers. A brother-in-law and three close
colleagues occupy the ministries of education and
science, information and tourism, commerce, and
industry, giving Fraga important levers in five ma-
jor areas.
The cabinet is generally considered one of
transition. If Fraga succeeds in making his mark,
he may well take over from Arias. Fraga has
publicly favored legalization of political parties,
excluding the Communists, and free arliamen-
,ar elections.
The second major personality in the cabinet
is the new foreign minister, Jose Maria de Areilza,
the Count of Motrico, a former ambassador to
Washington and Paris and long-time monarchist.
In 1964, Areilza gave up his post in Paris in order
to distance himself from the Franco regime, and
in recent years he has been outspoken in op-
posing the repressive policies of the government.
He has many contacts among the democratic left.
Widely considered an opportunist, he is political-
ly ambitious and, like Fraga, has hopes of becom-
ing prime minister.
In all, five of the new ministers are former
ambassadors who served in countries vital to
Spain's foreign relations-the US, the UK, France,
Morocco, and the Vatican-pointing perhaps to a
determination to improve relations abroad.
The National Movement, still Spain's only
legal political party, has only three representatives
in the new cabinet, and two of them are young
supporters of orderly change. Jose Solis
Ruiz--moved from the ministry of the Movement
to that of labor--is the only staunch conservative,
but he is also considered an opportunist and is
not expected to oppose modest political evolu-
tion.
Regime Christian Democrats have two
representatives in the government, including
Alfonso Osorio, who is well-liked by the King and
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King Juan Carlos presents his new cabinet
replaces Arias' right-hand man, Carro Martinez,
as minister of the prime minister's office.
Although regime Christian Democrats are the
most conservative of the various Christian
Democratic factions in Spain, they favor
evolutionary change and could provide a bridge
to other Christian Democrats in the illegal
democratic opposition.
Prior to the announcement of the cabinet,
there was much speculation that Arias would set
up a defense ministry to coordinate the three
militar services.
The King and Arias apparently
decided to compromise and appointed Lieuten-
ant General Santiago y Diaz de Mendivil, one of
the less conservative members of the armed
forces hierarchy, deputy prime minister for
defense and minister without portfolio. Santiago
will apparently be responsible for defense coor-
dination, but it is unclear how much authority he
will have over the three service ministries.
Following the first meeting of the new
cabinet last weekend, the government issued a
forward-looking statement of principles
emphasizing economic and social welfare and
orderly political reforms. Its broad generalities
and lack of a timetable have disappointed the left,
which will continue to try to organize strikes and
protest demonstrations to bring pressure on the
government. Nevertheless, some leaders of the
democratic opposition have voiced approval of
the sweeping cabinet changes. While emphasiz-
ing that the changes do not go far enough, they
have admitted that the new government is a
positive step given the present situation in Spain.
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ICELAND: THE UN APPROACH
Iceland last week requested an urgent
meeting of the UN Security Council following an
incident on December 11 in which an Icelandic
patrol boat was rammed by a British support ship
inside Iceland's 12-mile limit. The British ship ap-
parently was seeking shelter from a storm when
the incident occurred. Iceland called the incident
a "flagrant violation of Iceland's sovereignty, en-
dangering peace and security."
Reykjavik first instructed its UN delegation to
propose a resolution condemning the ramming
incident as a violation of Icelandic sovereignty,
but later agreed to a more subdued approach.
The UK engaged in some quiet diplomacy and
successfully persuaded most of the Security
Council members, as well as the Nordic countries,
to urge Iceland to limit the Security Council ses-
sion to a presentation of views.
Iceland has for several weeks been con-
sidering an approach to the UN as part of an effort
to gain worldwide sympathy and support. Reyk-
ja?, ik deferred an approach to the UN General
Assembly on a resolution that would have brand-
ed the UK an aggressor, but reserved the right to
act if other initiatives failed. The ramming inci-
dent provoked the request for an emergency
meeting of the Security Council.
This is the first time in the long history of its
fishing dispute with the UK that Iceland has
appealed to the UN. In the 1972-73 cod war,
Reykjavik considered raising the issue at the UN,
but never followed through. Iceland probably felt
it could make a better case )ut of the cur ent dis-
25X1 pute because of British violation of Iceland's 12-
mile limit, which the UK recognizes.
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Iceland's desire not to antagonize the US
probably influenced the decision to tone down its
approach to the UN.
jthe
Icelandic coalition could not go away emp-
ty-handed and face the almost certain barrage of
criticism by the opposition parties at home.
The timing of the ramming incident-it oc-
curred during a meeting of NATO foreign
ministers in Brussels on December 11-12-may
have killed any hopes that Iceland will accept
Britain's latest offer on the size of the annual
fishing catch. In an effort to get the stalled
negotiations going again, Bti'ish Foreign
Secr.,tary Callaghan told Icelandic Foreign
Minister Agustsson during bilateral talk. in
Brussels that the UK was prepared to recognize
that fish stocks were dangerously depleted and
were vital to Iceland. On the tough issues, t c;i-
don would reduce its annual catch to a figure
somewhere between the 110,000 tons the British
have demanded until now and the 65,000 tons
that Iceland wants. He repeated that Britain
would withdraw its warships from Icelandic
waters if Iceland would stop harassing British
trawlers.
So far, there has been no response from
Reykjavik. Iceland has consistently maintained
thai its position on the size of the British -atch is
25X1 non-negotiable and has rejected Londor.'s con-
ditions for removing its frigates. r
LAW OF THE SEA: THE 200-MILE ZONE
Moves in recent months by Mexico and
Iceland, to establish 200-mile zones of control off
their coasts have raised fears th0t other nations
will take similar actions. If many more countries
do so, efforts to reach an international consensus
at the Law of the Sea Conference may be under-
mined.
During the session of the conference in
Geneva last April and May, most nations agreed in
principle that coastal states should have exclusive
control over petroleum and other seabed mineral
resources, as well as the right to manage coastal
fisheries, out to 200 miles. Several major issues re-
main to he resolved, however, before an inter-
national agreement can be reached:
? The legal slat(? of the economic
zones, and residual rights of states that have
heretofore operated in the zones to
freedom of navigation, marine scientific
research, and control over marine pollution
within the e'conLlnlic Zone.
? The right of landlocked states to fish
in the economic zones of neighboring
coastal states.
? The harvesting of coastal fish not
taken by the zonal state.
? 'tie management and conservation
of highly migratory species of fish.
Uncertainty as to whether the Law of the Sea
Conference could resolve these issues was
probably a major factor in the recent declarations
by Mexico and Iceland of 200-mile zones. Other
nations may follow suit, and many will, unless
substantial progress is made in the next -e~sion of
the conference. scheduled for March in New
York.
Unilateral declarations are most likely from
countries that desire to conserve offshore fishing
resources. Even Japan, which has long voiced op-
position to unilateral declarations, is under in-
tense domestic pressure to extend its territorial
waters to '12 miles to curb Soviet fishing activity.
Nations such as Canada, whose waters are
heavily fished by foreign fleets, can be expected
to claim the right to manage all living and mineral
resources out to 200 miles. Additional Latin
American countries, concerned about fishing
resources and offshore minerals, may take similar
unilateral actions. Major fishing nations, especial-
ly the USSR, will seek bilateral agreements to
protect their access to their usual fishing grounds.
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D,c 19, 75
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EUROPE: CIVIL AIRCRAFT MARKET
Over the next decade, Wmt Frlropean civil
airlines will need to replace aho it 1150 short-haul
aircraft, worth .hunt $20 billion in '1975 dollars.
I or the p,ISt two decades, Western I urope's
civil aircraft manufacturers have been unable to
compete with (1S manufacturers in the West F.uro-
leilll 111afkot. Fit(, I tiropeans have .I quire(I ad-
vanced 11S technology, however, and now have
the potential to produce a new cost-effective
short-haul aircraft.
Within the now year, the I uropean ttlanufac-
torers will have engine and airframe technology
comparable to that of US manufacturers and can
therefore sleet the performance req(liremmnts
established for the new short-haul aircraft. They
also have the necessary production capacity to
built) most of the 1150 aircraft that are needed.
They will have to marshal their resources and
cooperate to the fullest, however, if they are to
get their short-haul aircraft off the ground ahead
of their US competitors, who last year exported
$2.7 billion worth of civil transport aircraft.
The Soviet aircraft industry is expected to be
no more than an onlooker. The Soviets have
neither a current production model nor plans for
a new model that would come close to the re-
quirements established by the West Europeans.
Aircraft Requirements
About a year ago, at the urging of their
governments, a group of West European aircraft
manufacturers and national airline companies ex-
amined requirements for the 1980 to 2000 period.
They decided they would need two sizes of
replacement aircraft:
? A smaller aircraft with 90 to 120 seats
and a range of up to 1,000 miles. Such a
plane is expected to evolve from
modifications in US and West European air-
craft now under production.
? A larger shirt-haul aircraft with 170
to 200 seats and a range of about 2,500 miles.
I he Ieadilrl; ( ontenders in this class are Air-
bus Industrie A 100 1310, 115 Boeing 7X7, and
Us Ihnrglas I)('X200.
the 11S-(Nesigne(1 aircraft differ from the Air-
hus principally in minimum take-oaf (lis-
tanc e-7,000 to 9,(X)0 feet versus 5,000 feet. This
performance characteristic alone would give the
I urope,uls an advantage over their 1IS competi-
tion he( ause many I elropean ?lirfields have
runways of only 5,000 to 6,000 feet,
I he 5(iledule(I 1310 variant of the A.300 may
have the hest combination of performance and
econonlic features for ,he future West European
market. this family of aircraft has the sue and
design flexibility, coupled with advanced
technology-new wing aerodynamics arld new
structural materials, including composites-to
meet performance and economic requirements.
Since some of the research and development
expenses have already been absorbed and since
the A.300 I31() variant could be ready perhaps as
early as 1979-one to two years earlier than any
all-new, design-the 1310 is currently the strongest
Europvarl candidate. The 1310 variant could be
powered initially by current engines and later by
advanced high-performance engines.
High-Performance Engine
The early availability of an advanced
high-performance engine is important to West
F.urop:'an manufacturers. If they were to wait for
the development in Western Europe of such an
engine or for US manufacturers to develop the
engine for US airlines, the US would he able to
keep its market advantage. Thus, the develop-
ment of such an engine and the advanced air-
frame technnt ,y will be important in the selec-
tion of a replacern .. d;craft.
Fortunately for the West Europeans, a new
en;ine, the CFM 56 high-bypass engine with a
nominal 20,000-pound thrust-the so-called 10-
ton engine-should be available in early 1979. It is
being jointly developed by General Electric and
French-government-owned Snecma.
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Ihis engine meets the requirements c,1 low
fuel consunipt!on, as well as lower noise and
emissions; it is expected to be ready for series
production ;n 19711. A new, competitive US
engirie, the JTIOI), will probably not he ready for
s( rids production until at least 1980. Whatever the
West European decision, France almost certainly
will insist that the aircraft ultimately selected he
powered by the 10-ton engine.
Manufa( turers wishing to compete for the
West European replacement contracts will have to
commit themselves to,i new aircraft program now
or in the very near fu!urc. Several models of air-
craft in existing fleets have been out of produc-
tion for a~ long as it decade and have reached
retirement age. About half the cur, ent l /eSI Euro-
pean short-haul fleet-assuming a 16-year aircraft
life-will be out of service by mid-1983.
YUGOSLAVIA-USSR: MINIC VISIT
Yugoslav Foreign Minister Minic's early
Decemter visit to Moscow produced several
bland statements that suggest a deliberate
attempt to play down the failure to resolve
basic Soviet-Yugoslav differences.
Before the trip, considerable Western
press attention had focused on Belgrade's dis-
agreements with the Soviets over the proposed
European Communist Conference and on
Yugoslav suspicions that Moscow is behind
pro-Soviet subversive activity in Yugoslo .1a.
Neither side, however, has wanted a serious
deterioration in relations, and the Minic mis-
sion prcvided a useful opportunity to quiet
speculation about an impending break.
The communique on the visit said the talks
occurred in an atmosphere of "friendliness,
mutual understanding and frankness." There
were no direct references to differences, but
neither were there any hints that the Yugoslavs
accept Soviet denials of involvement with
Stalinist subversives in Yugoslavia.
I uropean replacenu'nt need',, in fact, are
some Iwo to three years ahead of the needs of US
airlines, I he availability of .i quiet, economical
engine with r 10-ton thrust provides West
Europeans with an o iportunity to supply Western
I trope's needs for short-haul aircraft.
III(, f uropean manufacturers need this
market to maintain eniployntent and to keep
production lines going. They are suffering from
the failure of some past civil aircraft programs and
from US success in winning the competition for
replacement fighter aircraft with the F-16.
A r,ieeting in the near future of the I'C Court-
cil is expected to address European civil aviation
plans and policies. The results of this meeting will
affect Western Europe's ability to capture a major
portion of its own market and to remain corn-
petitive in the into-national arena.
The communique ev;dently was drafted
after considerable wrangling, and Yugoslav
observers are privately discounting its
significance. Instead, they are stressing Mi.iic's
toast to Gromyko which, they say, amounted to
a lecture on the principles of non-interference
in Yugoslav internal affairs.
Given the contentious political substance
of the talks, economic relations emerged
center stage in media coverage. A new
five-year trade plan calling for $14 billion in
two-way trade was signed by the foreign trade
ministers at the outset of Minic's trip. The
growth in bilateral trade will thus continue
through 1980, but at a somewhat slower rate.
By September of this year, the USSR had
supplanted West Germany as Yugoslavia's
leading trading partner, and bilateral trade in
1975 will probably reach nearly $2 billion. Two
years ago, trade amounted to only $815 million,
but higher prices for Soviet oil and raw ma-
terials have since then rapidly inflated the dol-
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USSP-EG'(PT: RELATIONS DETERI )RATE
The mcent irllpac se In Soviet-Egyptian debt
negotiations is a further indication of the
deterioration in their relationship. Egypt's finan-
cial options have increased as a result o onerous
Arab aid, which has reduced the effectiveness of
Moscow's withholding of arms deliveries and its
hard line on debt rescheduling.
Debt talks reached a stilleniat(' over Cairo's
refusal to accept Soviet conditions fo, reschedul-
ing Egypt's $2- to 4-billion aid debt. Moscow
refused Sadat's demand for it ten-year
moratorium On all payments and for spreading
repayments over a 30- 40-year period. Despite the
failure to reschedule the debt, it 1976 trade
protocol signed at the recent meeting allows
Egypt to export roughly $140 million more than it
receives, Presumably, some of the excess could be
used for debt repayments.
Until recently Moscow had deferred most of
Egypt's military repayments, although service on
economic debt was maintained. The latter has
been paid as scheduled over 5-12 years at 2.5 to
3.0 percent interest. Payments have amounted to
$60 million to $85 million a year since completion
Net Flow of Soviet Economic
Aid to Egypt
01 1 I i i l
1969 1970 1971 !972 1973 1974 1975
of the Aswan Dam in 1970, about equal to annual
aid receipts from the U.ISR. In 1975, Egypt paid
back more than it received in new aid.
Moscow', cguick replacement of most of
Cairo's military equipment losses in the 1967 and
1973 wars underlined the extent of the Soviet
comillitnivnt to the Middle East. Since the 1973
Arab-Israeli conflict, however, no new
Soviet-Egyptiall military agreements have been
signed. Deliveries under old ,k cords continued,
but even these have been reduced to it trickle
since early summer. Deliveries totaled $80 million
in 1974. Three squadrons of fighters, including 2C
MIG-23s, and other equipment worth about $155
million were delivered in the first half of 1975,
bringing total Soviet arms shipments to Egypt in
the last two decades to at least $3.5 billion,
Recent Arab iini,ncing has decreased Egypt's
dependence on the USSR and allowed it to con-
tract with the UK and France for let fi 'h; ors,
helicopters, and air-to-air missiles.
/Egypt
also seeking Arab and Western financing to ex-
pand its military aircraft industry. Nevertheless,
the Soviet arms embargo has had a serious impact
on Egyptian military readiness, and substantial
amounts of Western arms are a long way off.
Strains in Soviet-Egyptian political and
military relations have not directly affected ongo-
ing Soviet development assistance to Egypt. Dur-
ing 1975, more than 1,500 Soviet economic
technicians were in Egypt, many working on the
expansion of its only integrated steel mill and on a
Soviet-built aluminum plant. They also were
employed on ship repair work and shipbuilding at
the Alexandria shipyard, and in providing
assistance to Egypt's fishing industry and
large-scale irrigation and rural electrification
programs. Here too, however, Arab financin^ has
reduced the relative importance of Soviet aid.
Although no new Soviet development aid has
been extended since 1971, some $400 million of
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credits remain to he drawn on old agreements
that total $1.4 hilli< n. Moscow has bean cautious
in undertaking new assistance, however. A $20-
million grant for clearing mines from the Gulf of
Suez was the only eniergenc -related assistance
provided in the aftermath of the October 1973
war.
Moscow, still anxious to maintain ,1 role in
Egypt, has recently been seeking to revitalize its
economic aid program. It agreed earlier this year
to go ahead with a cement plant at Asyut and to
increase the capacity of the aluminum plant, both
to be financed under existing credits. The USSR
has also offered to underwrite the development
of the Abu Tartur phosphate deposits and related
facilities, for which at least $600 million of new
Soviet credits would be required. Egypt is ap-
parently shopping elsewhere for funding the Nbu
Tartur, however.
25X1
USSR: NEW FIVE-YEAR PLAN
On December 13, the Soviets outlined a
five-year rlan for 1976-80 that apparently commits
the country to lower, more realistic goals than did
the previous five-year plan. The highest targets
are in the agricultural sector; investment there is
to be further increased and the annual grain
harvest is set close to the record level.
Thrift, efficiency, and quality production are
stressed, and there is little encouragement for the
consumer to expect anything more than a gradual
increase in the standard of living. This was
foreshadowed in the 1976 plan announced earlier
this month.
The new plan calls for the following increases
over the five-year period:
? Agriculture: 14-17 percent versus
37.4'i pc,-cent originally planned for 1971-75.
he goal for grain is set at between 215 and
220 million metric tons a ye, r; only once has
the harvest been higher than 215 million
tons. Me already heavy investment program
in agriculture will be further emphasized,
rising from 1.11 billion rubles in 1971-75 to
172 billion rubles in 1976-80
? Industry: .35-39 percent versus 47
)orcent originally planned for 1971-75;
I)eavy industr y is to grow by 38-42 percent
and light industry by 30-32 percent. The
1976- 80 plan thus continues the midterm
reversal of the current plan, which at first
promised to accelerate the production of
consumer goods faster than that of producer
goods.
? National income (roughly com-
parable to the Western concept of gross
national product): 24-28 percent, compared
with 39 percent originally set for 1971-75.
? Wages: 16-18 percent for salaried
workers and 24-27 percent for collective
farmers. The difference is in line with the
current policy of reducing the disparity
between the two groups.
? Foreign trade: 30-35 percent in
volume, roughly comparable to the increase
planned for 1971-75.
The outline of the new five-year plan, while
acknowledging the negative impact on the
economy caused by weather-connected harvest
failures, criticizes production shortfalls and other
shortcomings in the non-agricultural sectors as
POLAND: HEDGING ON THE ECONOMY
With a cautious eye on the volatile working
class, the Polish party congress ended last Friday
with promises of further economic progress.
Both party leader Gierek and Prime Minister
)aroszewicz acknowledged that serious economic
problems beset the country-including in-
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67 sa
F u
flationary pressures, consumer goods shortages, s speech at the party congress
g , is regarded by many Poles as a comer. Tadeusz
and mushrooming repayments on a soaring hard Wrzaszczyk, who was appointed head of the plan-
currency debt. Instead of shifting growth ning commission and a deputy premier earlier
priorities to alleviate th,'se problems however
h
the leadership outlined a program that would
continue the current economic momentum.
Thus, investment, consumption, and production
targets for 1976-80 are the same as those set for
the last five-year period. Gierek and Jaroszewicz
claimed repeatedly that the projected goals can
be achieved through better management and
worker performance and through increased
productivity based on imported Western
machinery and equipment.
Both leaders hedged on the sensitive issue of
price increases for basic foodstuffs. Gierek, for ex-
aniple, justified the need for removing the price
free.-e, but added quickly that a final decision will
be made only "after further study and con-
sultations with the people." Every Pole knows that
this means the price of food will go up, but the
bureaucratic maneuvering could last until after
Easter. The leadership most certainly recognizes
th
at any sudden large price increases could lead
to violent worker reaction as they did in 1970.
The few changes in the top leadership an-
nounced at the congress were obviously designed
to strengthen Gierek's control. His pre-congress
team was re-elected virtually in toto.
Two newcomers were elected candidate
members of the Politburo. Jerzy Lukaszewicz,
party secretary for press and propaganda matters,
t
is fall, is a strong supporter of Gierek's efforts to
use Western credits and technology to modernize
the economy.
The party secretariat and the central com-
mittee were enlarged, but the changes will not
affect power relations at the top.
More then 70 foreign delegations attended
the congress. Soviet party leader Brezhnev's
speech was short on substance, but-as is his
wont in recent months-bearish on relations with
the West. CSCE was clearly on his mind. He
demanded that no one aspect of the Helsinki
agreements be emphasized over another, and he
criticized the West for its failure to disseminate
the text sifficiently. In addition, he repeated his
earlier references to "ideological penetration."
The unexceptional speeches of the other East
European party leaders were generally refrains of
Brezhnev's themes.
Now that the congress ,tas promised a con-
tinued rise in the standard of living, and with
special supplies of f i;,,; available for Christmas,
tensions in Polani will remain low for the next
few weeks. Wars....w cannot continue its special
supply efforts indefinitely, however, and signs )f
discontent will soon resurface as Poles go back to
their normal business of rumor-mongering in an-
ticipation of rice increases and renewed food
shortages. 25X1
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SECRET
PERU: PURGING THE LEFT
During Army Day speeches on December 9,
both the President and Prime Minister Vargas
wai ned "counterrv olutioriaries" against attemp-
ting to "destabilize" the government. l'\lorales
Bermudez went on to declare that, if necessary,
force would be used to protect the military-led
revolution.
The government is in fact facing serious
economic problems, and balance-of-payments
difficulties may be more troublesome than it had
anticipated. The problems have been com-
pounded by labor strife, which continues despite
government efforts to respond to worker
grievances.
A crackdown against leftists would give rise
to charges that the President has sold out to the
right wing and reneged on earlier promises of
more open political debate. Morales Bermudez'
support within the military, however, almost cer-
tainly will not suffer and may even be enhanced
b such a move.
CHILE-BOLIVIA: INCHING FORWARD
The Chilean government is apparently still
not agreed on just how far to go toward satisfying
Bolivia's aspiration for a sovereign outlet to the
sea.
A Foreign Ministry spokesman in Santiago
meanwhile has issued a formal opinion that early
resolution of the problem is unlikely, a move
calculated to lower the heat that Banzer has
applied to the issue. Pinochet nevertheless
recognizes that pressures are building on Banzer
for some sign of progress in the talks before
February-the first anniversary of the decision to
resume diplomatic relations and begin bilateral
discussions on the century-old problem.
Lima would have serious reservations about
any agreement involving the erstwhile Peruvian
provinces won by Chile in the War of the Pacific
(1879-1883). A 1929 protocol requires Peruvian
consent to any alteration of boundaries. For the
time being, the Peruvians are willing to let Chile
and Bolivia grapple with the issue by themselves,
but the Morales Bermudez government will insist
on a voice in the settlement if it affects areas sub-
ject to Irredentist claims. 25X1
ARGENTINA: IMPEACHMENT VOTED DOWN
The Argentine congress has not yet been able
to translate its grave objections to President
Peron's administration into concrete action.
This week a congressional committee finally
rejected an impeachment motion offered well
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over a month ago by a group of opposition
deputies. The motion, which charged poor
presidential performance on a variety of fronts,
wds defeated on grounds that it contained no
concrete charges, only political criticism.
The committee's action is not surprising. In
the first place, the strongest support for impeach-
ment has come from a handful of congressmen
representing a tiny splinter party. Thus far the
larger opposition groups have not followed
through on their threats to push for impeach-
ment. Moreover, members of the governing
coalition have the largest representation on the
chamber's impeachment committee.
Although spared the immediate threat of im-
peachment, the government lost ground in the
chamber as a whole, when, for the first time, it
ceased to command an absolute majority. The set-
back came last week when 27 members of the
coalition officially left it. The 27 then formed their
SECRET
own group, joining other congressmen trying to
fend off administration efforts to hinder congress'
investigation of high-level corruption.
The split merely formalized the steady ero-
sion of the President's authority. She is the titular
head of the Peronist party, which forms the core
of the coalition. The attack on her leadership
began many months ago and is highlighted by the
passage of a succession law she strongly opposed
and by the ouster of a close associate from the
presidency of the chamber of deputies.
The President's loss of authority does not,
however, mean a corresponding increase in the
power of the forces ranged against her. Indeed,
the latter seem more and more disorganized
despite the generally agreed need to "do
something." Thus, congressional action on the
impeachment and investigation questions faces
protracted wrangling and ma of produce con-
crete results. 25X1
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SECRET
CHINA: A VOICE FROM THE LEFT
Party leftists have been remarkably silent all
year as many of their pet policies, adopted during
the Cultural Revolution, have been overturned by
a moderate coalition headed by vice premier
Teng Hsiao-ping. Early this month, however, they
launched a propaganda counterattack in their last
remaining area of influence-education-and
have attempted to expand this into a general
defense of the Cultural Revolution and the
policies of that period.
Chairman Mao has reportedly endorsed
several changes in educational policy that would
raise the level of academic training in Chinas u-
niversities. These changes were elaborated on in a
speech made by the minister of education this
fall. On December 4, however, the day the educa-
tion minister returned from a trip abroad, the par-
ty newspaper carried an article on the front page
that attacked each of the educational changes
point by point.
The leftist outcry over education has
probably thrown enough of a scare into educators
to prevent them from making any changes in
educational policy. Attempts to expand this attack
into a defense of the Cultural Revolution in order
to regain some lost ground are likely to meet with
less success.
Several articles lauding the Cultural Revolu-
tion appeared recently, calling for a defense of
the "new things," policies that emerged from the
Cultural Revolution. This broader attack is a
response not only to the changes in Cultural
Revolution policies-and to Mao's apparent
abandonment of the left-but also undoubtedly
to the growing power and prestige of the
rehabilitated Teng Hsiao-ping. Teng is a particular
irritant to the party's left wing because, as one of
the most prominent victims of the Cultural
Revolution, he personifies all of the evils that the
leftists wanted to eradicate during that period.
One article, in fact, specifically warns officials
who were purged during the Cultural Revolution
but have now been reinstated to mind their p's
and q's.
Teng Hsiao-ping
Teng's power, greater now thar. before the
Cultural Revolution, is likely to confine leftists' at-
tacks to propaganda broadsides while limiting
their actual influence over policy. Nevertheless,
these recent articles demonstrate that leftists re-
tain access to the media and are capable of stir-
ring up propaganda debates despite a steady
decline in their political influence. In the past
year, the left has not been able to mount a
sustained attack on current policies. If kept up
over time, such leftist activity could force the
hard-nosed Teng to take firm action against his
antagonists or, in the tradition of Premier Chou
En-lai, to tread more cautiously in overturnin the
policies of the Cultural Revolut gyn.
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