WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001000080003-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 32
• Document Creation Date: December 27, 2016
• Document Release Date: May 10, 2010
• Sequence Number: 3
• Publication Date: January 17, 1975
• Content Type: REPORT

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Top Secret
Weekly Review
Top Secret
25X1
January 17, 1975
Copy N2 ' 650
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CONTENTS (January 17, 1975)
The WEEKLY REVIEW, issued every Friday morning by the
Olfice of Current Intelligence, reports and analyzes significant
developments 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, and the Directorate of Scienca and Technology. EAST ASIA
Topics requiring more comprehensive treatmert and therefore PACIFIC
published separately as Special Reports arc listed in the
contents.
MIDDL _ EAST
AFRICA
WESTERN
HEMISPHERE
1 Soviet Union: Far East Relations
10 China: Congress; Helicopters; Grain
7 Laos: Troubles in Thakhek
8 Cambodia: Focus on the Mekong
4 South Vietnam: Military; Economic
14 Greece-Turkey: Aegean Dispute Revived
15 Cyprus: Political Talks Begin
16 Denmark: El-iction Outcome
17 Spain: Military and Labor Problems
18 UK: EC Debate Heats Up
12 USSR: Trade Bill; Transport
19 Angola: Agreement Announced 25X1
20 Iran - Arab States: Getting Closer
21 Egypt-USSR: Uneven Course
22 Libya: Concern Over US Intentions
23 Israel-Lebanon: The Fightin Grows
25 Ethiopia: Imperiled Truce
26 Latin America: Relations With US
26 Cuba: Detente, Havana Style
27 Chile: Easing Up
28 Argentina: Lull in Terrorism
29 Guatemala: Avenging an Execution
1Comments and queries on the contents of this
publication are Welcome
They may be directed to
the editor of the Week
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Sino-Soviet relations continue to be stale-
mated on all substantive issues, although the
polemics of last year on the border issue have
died down.
Direct contacts between the two countries
remain at a bare minimum. Soviet Deputy For-
eign Minister llichev, who is Moscow's chief nego-
tiator at the border talks held intermittently in
Peking since 1969, came home in August. He has
since been involved in a number of other duties,
and there is no indication that he will soon take
up the negotiations again. Soviet Ambassador
Tolstikov recently returned to Peking, but
appears to be transacting little if any business.
The annual conference of the Sino-Seviet Border
River Navigation Joint Commission, which will
meet in Peking early this year
will probabl
be
,
y
marked by mutual recriminations, if past meet-
SOVIET
UNION:
FAR
EAST
RELATIONS
ings are any guide.
Sino-Soviet trade has leveled off, running at
about a quarter billion dollars per annum for the
past three years. According to the Soviet embassy
in Peking, China has shown no desire to increase
trade beyond this figure. There have been no
recent changes in the size or the status of the
military forces facing each other across the Sino-
Soviet border.
The fate of the three Soviet helicopter crew
members apprehended inside China last March
remains uncertain. The last known Soviet diplo-
matic approach to Peking on this issue took place
in mid-October; Peking evidently failed to
respond to the demarche. Moscow has also at-
tempted unsuccessfully to arrange contact with
the crew members through the Red Cross. Peking
still has given no firm indication of how it intends
to deal with the prisoners, but diplomatic specula-
tion continues to center on an eventual trial.
A major area of contention that is likely to
corne to the fore over the next year is the role of
the Sovie; and Chinese parties in the international
Communist movement. Soviet statements
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Jan 17, 75
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 concerning the conference of European Commu-
nist parties, due to be held later this year, suggest
that Moscow looks to this conference and to the
hoped-for subsequent world conference as forums
at which certain Chinese policies, if not China
directly, can be attacked. Moscow recognizes that
it will not be able to obtain a formal condemna-
tion of China or its policies at either conf:~rence,
but it hopes to get endorsements of Soviet foreign
policy initiatives such as SALT and CSCE and
thereby isolate Peking from the mainstream of
the Communist movement.
Peking is warning other Communist states of
the dangers to their independence should Moscow
be successful in isolating China. Mindful of Soviet
efforts to convene a conference, the Chinese some
time ago began to make an effort to improve their
relations with Romania and Yugoslavia and to
encourage them to maintain their independent
policies.
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By all appearances, both sides foresee little
chance for a significant change in relations. Pros-
pects for improvement at this time are particu-
larly dim because Mao is determined to perpet-
uate anti-Soviet policies in China, and hostility
toward the USSR has become an important
element in China's leadership struggle. Border
clashes could again occur, but it is more likely
that Moscow and Peking will seek to keep their
relations somewhat below the boiling point as
they maneuver for political advantage.
Foreign Minister Miyazawa's visit to Moscow
from January 15-17 probably accomplished little.
It seemed designed primarily to keep alive the
dialogue on a World War II peace treaty. Tokyo
feels constrained only to demonstrate that it is at
least making an effort to achieve progress in
relations with the USSR at the same time that
Grotnvko welcomes Mi}azawa
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relations with China are moving ahead. The
Soviets, for their part, probably see some value in
pursuing direct contacts with the new political
leadership in Tokyo.
The Matter of a Peace Treaty
Tokyo's claim to the small islands north of
Hokkaido, seized by the Soviets at the end of
World W )r 11, has persistently blocked progress on
this and other bilateral political issue, The
Soviets had been taking a wait-and-see attitude
toward the new Miki government on the territo-
rial issue, but what they have seen so far probably
gives them no reason to expect any sort of break-
through. Early this week, Prime Minister Miki
ordered Miyazawa to "stand pat" on Japan's
claim to the "northern territories." The Prime
Minister's chief assistant, moreover, personally
assured audiences in eastern Hokkaido of Miki's
determination to seek the return of the islands.
Press reports also indicate that Miki has asked for
a record appropriation for propaganda activities
aimed at bringing pressure on Moscow on the
issue.
The Soviets, in an effort to counter Japanese
arguments for a territorial settlement as a prereq-
uisite to any peace treaty, have tried to draw a
contrast with rumored Japanese plans for early
conclusion of a peace-and-friendship treaty with
Peking. Moscow has chided Tokyo for its
apparent willingness to overlook such territorial
problems as the conflicting Sino-Japanese claims
to the Senkaku Islands-an area of potential oil
wealth near the Ryukyus-in its treaty discussions
with Peking.
From the Japanese point of view, there are
several distinctions between the two issues. First,
Tokyo actually controls the Senkakus and feels
that it has a good legal case in any subsequent
territorial negotiation with China. Second, and
more important, the Senkaku problem is a com-
ponent of the larger issue of the division of the
Asian continental shelf for purposes of oil ex-
ploration.
Some anti-Peking elements in Japan's ruling
party also see advantage in trying to link the two
proposed peace treatie:. They are trying to delay
a China treaty by claiming that if territorial issues
are overlooked in those discussions, Japan could
no longer insist on prior resolution of the territo-
rial issue with Moscow. To counter such tactics-
at home and in Moscow-the Miki government
will soon begin emphasizing the "friendship"
aspect of the proposed China treaty, playing
down the idea that it represents any attempt to
resolve specific issues.
In view of the probable political deadlock in
Moscow, both sides no doubt spent most of the
time discussing ways to keep economic relations
on an even keel. From Tokyo's viewpoint, how-
ever, the cancellation of the 1972 Soviet-US trade
agreement and the consequent lack of further US
Export-Import Bank credits is a severe setback for
the proposed Yakutsk natural gas project, in
which Japanese participation has been contingent
on such credits.
Although bilateral economic relations have
grown steadily, the Soviets may well have over-
estimated the degree to which the Japanese need
or want Siberian resources.
For its part, Tokyo may have overestimated
the extent to which the Soviets, to encourage
Japan to balance its relations with Moscow and
Peking, would make concessions on the economic
details of Siberian development.
In any case, looking at the hard economics
of Soviet proposals, the Japanese have decided in
some cases that the terms were unattractive and
the rewards inadequate. Moreover, Tokyo has
been reluctant to offend China-and, to some
extent, the US-by meeting certain Soviet condi-
tions. Finally, the Japanese have clearly been
apprehensive over the possibility of becoming
excessively dependent on Soviet energy resources.
Thus, although economic relations should
continue to expand gradually, no ingred cnts
seem to be present to produce any major break-
throughs. The Miyazawa visit may have provided
confirmation of this somewhat pessimistic view of
the course of Japanese-Soviet relations.
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SOUTH VIETNAM
President Thieu is attempting to rally both
domestic and international support for his govern-
ment in the wake of increased Communist mili-
tary pressure. Late last week, Thieu went on radio
and television appealing for national unity and
greater popular support following the loss of
Phuoc Long Province. The President's most im-
mediate concern, however, appears to be obtain-
ing increased US aid. At a recent meeting with his
senior advisers, Thieu directed that a high-level
South Vietnamese delegation be sent to Washing-
ton to lobby for more assistance.
Communist regiments involved in the action re-
portedly suffered a large number of casualties,
primarily from air and artillery strikes. In coastal
Binh Dinh Province, government operations have
been increasingly successful in cutting Communist
supply routes and neutralizing the activities of the
North Vietnamese 3rd Division.
The South Vietnamese air force also in-
flicted heavy losses on a convoy of some 400
trucks in the triborder area of Military Region 2
early this week. The government believes the
Other remarks by Thieu at this meeting leave
little doubt that Saigon will continue to pursue a
conservative military policy of reserving its main
forces to defend key towns and other important
areas. Thieu acknowledged that the government
has no plans to recapture Phuoc Long Province
since such an effort would be too costly. Thieu's
military adviser, General Quang, mentioned at the
meeting that the provincial capitals or An Loc
and Kontum were equally "indefensible" and
could easily fall to the Communists.
During the past week, Communist military
action increased in the delta provinces, and
heavier fighting will develop if the Communists
move against urban centers in the area. The
shelling of the provincial capital of Moc Hoa near
the Cambodian border last week with field artil-
lery pieces-their first use in the delta-could
presage a ground assault against she town. The
shellings may be designed, however, only to tie
down government forces while the Communists
consolidate and expand their infiltration corridors
deeper into the delta. There has also been a step-
up in fighting in Tay Ninh Province northwest of
Saigon, and sharp skirmishes have erupted in
several of the northernmost provinces.
Despite the well-publicized reverses of recent
weeks, there have also been notable government
successes. Early this week, government forces
broke a month-long siege of a district capital in
Binh Tuy Province east of Saigon. The two
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Jan 17, 75
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convoy was bringing units of the North Vietna-
mese 968th Division from Laos into South Viet-
nam. The headquarters of this division was pre-
viously pinpointed in western Pleiku Province,
and two of its regiments are probably en route to
the highland battlefields. The 968th has been in
southern Laos for about two years and is not
rated as one of Hanoi's better units. Its move-
ment, nevertheless, appears in line with known
Communist plans for a round of sharp attacks in
the highlands later in the dry season.
LIVING ',JITH UNCERTAINTY
serious economic problems-declining US
aic', depressed business conditions, unemploy-
ment, and decreasing real incomes in urban
areas-continue to plague South Vietnam, but
these do not pose a specific danger to the Thieu
administration over the coming year. Recent
changes in South Vietnam's economic leadership,
including the appointment of an economic czar,
are unlikely to lead to much inprovement. Nota-
ble gains have been made in agriculture, and re-
cent Communist military actions do not seem to
have had a significant effect in the countryside.
Still, the country's economic future remains
essentially dependent on foreign aid.
South Vietnam's total production today is
essentially what it was in 1972, but in the mean-
time, its population has grown 5-6 percent.
Soaring world prices have spurred both inflation
and recession by pushing up import costs and
reducing import volume. As a result, many private
firms are working we!I below capacity, and some
have gone out of business. Industrial production
is some 30 percent below 1971 peaks, with the
hardest hit industries including textiles, soft
drinks, glass bottles, plastics, flour, detergents,
and paper products.
Other economic difficulties include tight
credit controls, which have prevented business-
men from obtaining loans to finance production
and capital improvements and to hold unsold
inventories. In addition, some 15-20 percent of
the urban labor force of 3-4 million appears to be
unemployed; many more are underemployed.
Moreover, inflation has been unusually high for
the last two years. Cost-of-living increases came to
65 percent in 1973 and 40 percent in 1974; real
incomes of most of the urban working class
dropped, dnd demand for all but the basic neces-
sities fell.
The large standing army also continues to
strain the economy, with almost half o, the re-
cently enacted 1975 budget going for the mili-
tary. Saigon optimistically estimates a budget
deficit of about $115 million, but it is likely to be
considerably higher unless the economy improves
markedly and the tax base is broadened.
Classic Remedies
In the past, the remedy for these problems
has been a strong dose of foreign-largely US-aid.
Foreign economic aid this year, will amount to
about $700 million, and South Vietnam's exports
may add another $100 million, but this is
$200-400 million less than needed to revive indus-
trial production and guarantee adequate supplies
to farmers for a good crop year. Nevertheless, the
foreign aid should be enough to arrest further
economic decline-at least temporarily-if the
weather is as favorable for farmers as in 1974.
The obvious alternative to such heavy re-
liance on foreign support is to earn substantially
more foreign exchange, but the outlook for this is
not good. Exports grew from $12 million in 1971
to $60 million in 1973, but only to $75-80 mil-
lion in 1974. Saigon's monthly earnings abroad
began to decline last May, largely because of the
high cost of industrial raw materials, especially
fuels, insecurity in the timber-producing areas,
and a drop in foreign demand for fish and wood
products.
Bright Spots
Agriculture, the mainstay of the economy;
has had two good years in succession. The current
rice crop should reach a record 7 million tons,
and it does not appear that the recent increase in
fighting will seriously affect the harvest. The need
for US rice should be minimal this year. In fact, if
weather permits and sufficient fertilizer can be
imported, the South Vietnamese might he able to
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export some rice in the next few years. Sugar
production, too, has increased su`)stantially in
recent years-though not to pre-war levels-and is
replacing over $50 million in sugar imports.
Exports of sugar re still several years off.
Prices appear to have leveled off in the last
several months. More than half of the 1974 price
increases occurred in the first three months of the
year, as high petroleum prices worked their way
through the market place. Since August, the price
inde': has risen at an annual rate of only 9 per-
cent, despite expected seasonal increases that
should have occurred toward the end of 1974.
Rice prices rose 24 percent in 1974, compared
with 82 percent the previous year.
Some progress has been made in reducing
unemployment through government-sponsored
programs in Saigon and Danang. These employ
some 16,000 in each of the cities, and recruit-
arid maintenance and repair of drainage ditches.
Increasing emphasis, however, is being given to
longer term projects such as construction of dikes
and irrigation networks, land reclamation, and
restoration of railways.
Foreign exchange reserves are about $200
million, up from $150 million at the start of
1974. Much of the increase, however, came from
one-time payments from oil companies and from
repatriation of foreign funds by cash-short
businessmen. The reserves are equivalent to about
three months' imports at the current rate, and
provide some elbow room. Additional oil explora-
tion earnings and the production of more goods
to substitute for imports should make it easier for
the government to cope with the drop in aid and
the slowdown in exports.
Economic Prospects
ment is continuing. The programs are concen- President Thieu is obviously concerned that
trating right now on labor-intensive projects such the economy might be a convenient rallying point
as garbage removal, building and street clean-up, for political dissidents. He knows that the
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man-in-the-street can identify much more easily
with high prices, unemployment, commodity
shortages, and graft than with ideologies or even
the conduct of the war outside his environs.
The most pressing need is for visible progress
rather than any broad new programs. The ex-
tensive reforms of 1971 and 1972 provide a
suitable framework for change. The exchange rate
is flexible, interest rates and credit policies are
easily regulated, and stiff tariffs and taxes already
provide ample leverage over imports. Curbing
unemployment may require are expansion of
credit and more work programs, but the remain-
ing basic problems-such as inadequate taxation
of farmers and a nerd for a vast expansion of
exports-cannot be seriously altered in the npxt
few vears.
Civil unrest, apparently fanned by the Pathet
Lao or their sympathizers, continues to flare up
in some non-Communist controlled urban areas.
The Royal Lao Army recently placed the pro-
vincial capital of Thakhek in central Laos under
martial law following an outbreak of civil disorder
there.
The disturbances in Thakhek began on
January 6 when a small group of local workers
and student activists staged a demonstration over
economic and political grievances. The protest
appears to have been masterminded by a local
leftist who has been a leading instigator of labor
unrest in Thakhek over the past several months.
Fearing a repetition of the events last month
in the northwestern provincial capital of Ban
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Jan 17, 75
Houei Sai, which developed into a major embar-
rassment to the non-Communist establishment,
Royal Lao Army forces moved with unchar-
acteristic swiftness in dealing with the Thakhek
protesters. Troop reinforcements were dispatched
to seal off the town, and the protesters were
isolated in the government compounds they had
seized.
Unlike the uprising at Ban Houei Sai, no
dissident non-Communist forces or Pathet Lao
troops have been involved. In the wake of a
shooting incident along the approaches to
Thakhek, however, public sympathy and support
for the protesters has spread to other urban areas
in the non-Communist zone as well as to the
neutralized city of Vientiane. The Thakhek in-
cident occurred when Royal Lao Army troops,
apparently acting in self-defense, fired into a
group of several hundred villagers attempting to
march on the city in a show of support for the
protesters. At ' ' L one villager was killed and ten
others wounde.
The non-Communists insist that they are
firmly in control at Thakhek, but prolonged oc-
cupation of the city by the Royal Lao Army-
especially if aggravated by any further shooting
incidents-could backfire politically. Moreover,
there is a chance that local Pathet Lao troops in
the Thakhek area might support the protesters-as
they did at Ban Houei Sai-thus raising the pos-
sibility of a military confrontation.
in Luang Prabang to deal with the latest urhan
Senior non-Communist political and military
leaders are attempting to minimize the potential
seriousness of the situation at Thakhek in an
effort to prevent the Pathet Lao from capitalizing
on it. Prime Minister Souvanna Phouma has
ordered non-Communist military authorities to
exercise restraint and to make every effort to
avoid further bloodshed. He has also decided to
convene a special meeting of the coalition cabinet
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CAMBODIA: FOCUS ON THE MEKONG
Heavy fighting along the Mekong River near
the navy base at Neak Luong and continued
Khmer Communist control of the riverbanks far-
ther south forced the government at midweek to
postpone a scheduled resupply convoy. Phnom
Penh has a five-week supply of rice and enough
fuel and ammunition to sustain military opera-
tions through the end of the month. Military
stocks are being supplemented by increased air
deliveries. Despite the tightening supply situation,
sporadic rocket attacks, and continued skirmishes
along Phnom Penh's outer defenses, the capital
remains calm.
The situation at Neak Luong is tense, how-
ever. Communist ground units have kept heavy
pressure on government positions on the west
bank of the river opposite the navy base and on
the nearby riverside town of Banam. The fighting
in these areas has caused over 20,000 civilians to
flee to Neak Luong, which has itself been shelled.
Convoys from Phnom Penh were still getting
PrekV!. ~:.
Pnou.
PHNOM PENH' J
(Pochnton
armory
Prnl, lhe-01
/
Luting
Takeo
"-_SOUTH'urETt AM
through to Neak Luong but are encountering
heavy fire en route. At week's end, a government
force trying to push down Route 1 toward the
base was bogged down in the face of stiff resis-
tance.
A Princely Scandal
newspapers that carried the story.
Prince Sihanouk's recent interview by Swed-
ish newsmen +n Peking, in which he alleged that
several lead;rig members of the Lon Nol govern-
ment had in the past indicated a wil!ingness to
join him, has caused a stir in Phnom Penh. The
Prince actually devoted more of the interview to
his thoughts on resolving the conflict, and he may
have been trying to signal some new flexibility
when he said he could accept some Phnom Penh
leaders in an "enlarged government." Local press
accounts of the interview, however, focused on
the alleged offers of defection. Government lead-
ers took the interview as an attempt to sow dis-
sension in the capital and closed down three
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Sagging US and Japanese demand for
Taiwan's exports has led to a sharp economic
downturn. Real growth last year fell below 4
percent, the lowest in over 20 years.
Many small- andmedium-sized companies,
facing mounting inventories and cash shortages,
are struggling to avoid plant closings or bank-
ruptcy. Many firms have cut production, laid off
workers, and are paying partial salaries; some tem-
porary o,ant shutdowns have occurred. Hardest
hit have been the export-oriented industries such
as textiles, electrciiics, plywood, and petro-
chemicals. Unempl')yment in these sectors now
probably exceeds 12 percent. Iron and steel pro-
duction has also slumped, with many workers on
partial pay and nearly calf of all plants reportedly
shut down. Unemployment and production cuts
are likely to increase i the months ahead.
Taipei is attempting to stimulate economic
activity in order to hold d, .wn unemployment.
The government is providing loans to financially
pressed companies and is buying excess s?ocks to
ease the cash squeeze. Few import resirictions
have been imposed, but firms are being encour-
aged to "buy local." Major government projects
may be accelerated to provide more jobs. Export-
ers have been given lower interest rates on loans
as well as more favorable duty and fee treatment,
but any upturn in exports will depend on re-
newed demand in the US and Japan, which to-
gether account for more than half of Taiwan's
overseas sales. Meanwhile, a reduced growth in
imports will probably hold down the trade deficit
to less than the $1.3 billion of last year.
Increased government spending on public
projects is not likely to add much to inflation
because of the slack in the economy. Inflation is
already showing signs of easing-consumer prices
rose less than 10 percent during the second half
of 1974, compared with 25 percent in the fir,t
half, and wholesale prices began declining in the
fourth quarter.
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PEOPLE'S CONGRESS-AT LAST?
The convening of the National People's
Congress appears imminent, if it is not already
under way.
No National People's
ongress as been held for the past decade
and
,
conflict among leaders forced repeated abandon-
ment of previous efforts to hold the meeting. The
congress is expected to hear and approve reports
on the economy, foreign policy, a new state
constitution, and other issues.
A National Peop!e's Congress deals strictly
?rith government-as opposed to party-affairs.
Mao, who holds no government post, need not
attend, although he h;.s done so in the past. Mao
remains in Hunan Province and has been absent
from Peking for about six months. Premier Chou
En-lai is in the hospital, but would probably
attend, if not preside over, as much of the con-
gress as his health permits.
The reports to the congress, when released,
should spell out China's programs and policies,
particularly in the domestic area, in greater detail
than at any time since the onset of the Cultural
Revolution. A number of important appoint-
ments may be anrounced, including a new de-
fense minister, a post vacant for over three years.
Several aspects of this, the fourth congress,
differ markedly from earlier ones. In the past,
congresses were wide-oven affairs, greeted with
much fanfare and attended by foreign visitors.
This one apparently is to be held in secrecy. The
joint Now Year's Day editorial in Peking's press
made no mention of it, oo banners bedeck Peking
to welcome the delegates, and no foreigners ap-
parently have been invited to attend.
All this suggests that convening the congress
should not be taken as a sign that Peking's divided
leadership has now composed its differences, al-
though some progress in this direction has prob-
ably been made. The pattern of secrecy surround-
ing this National People's Congress closely paral-
lels that of the Tenth Party Congress of
mid-1973. That congress papered over leadership
differences, which quickly resurfaced in the divi-
sive anti-Confucius campaigns. 25X1
SUPER FRELONS FROM FRANCE
The Chinese navy is about to receive Super
Frelon helicopters from the French. Twelve of
these multi-purpose, heavy-duty helicopters will
be shipped to China later this year. The Chinese
already have one Super Frelon-delivered last
April-which they probably have used to gain f-
miliarity with its performance and technology. 25X1
The French have utilized the Super Frelons
in both military and civilian roles. Peking evi-
dently has ordered some sophisticated naviga-
tional computers fDr the helicopters, suggesting
that some will be used in an anti-submarine role.
Thus far, Chinese naval helicopters have been
used solely as transports.
Peking lacks enough large helicopters for its
military needs and has depended on the USSR for
both helicopters and helicopter technology. Mos-
cow has provided the Chinese with MI-4 heli-
copters-which they now produce-as well as the
larger MI-6 and MI-8 aircraft. Peking's purchase of
the Super Frelons is probably designed to lessen
its dependence on the USSR. The Chinese also
have expressed interest in purchasing large heli-
copters from the US.
Paga 10 WEEKLY REVIEW
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GRAIN IMPORTS RESUMED
China's grain harvest for 1974 was little if
any higher than the almost 250 million tens har-
vested the year before, and foreign grain suppliers
now are being urger,' to speed up shipments.
Peking had asked its major suppliers to postpone
delivery of almost 2 million tons of grain from
the fourth quarter of 1974 to the second half of
1975. Because of the favorable prospects for the
fall harvest at that time, Peking apparently be-
lieved these shipments could be delayed in order
to ease its tight foreign-exchange position.
China has asked Canada to accelerate the
delivery of 457,000 tons of wheat during the first
quarter of 1975. Peking has opened letters of
credit to cover an additional 290,000 tons of
grain from Argentina and refused the request of a
US trader to postpone the delivery of 100,000
tons of wheat from the first to the third quarter
of 1975.
The winter wheat crop last year was hurt by
drought during -ihe growing season and by wind
and rainfall at the time of harvest. As a result,
output failed to measure up to past years, despite
the record acreage planted. Early rice was set
back by frost, but recovered in time to yield a
good crop. The more important fall harvest,
about two thirds of China's annual grain output,
was unusually late. Early growing conditions were
generally favorable, but then drought, heavy rain,
and insects over extensive areas of south and
central China and prolonged rainfall in north
China damaged crops before the could be fear
vested-
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25X1
SOVIETS REJECT TRADE AGREEMENT
The Soviets' u,ihappiness with provisions of
the US trade bill has been known for some time,
but the final decision to renounce the 1972 agree-
ment may have been made only in the past few
weeks. The limits placed on Export-Import Bank
guarantees of credit available to the USSR, as well
as emigration r.yuirements, were a factor in the
Soviet decision.
It was not until December 18, when Con-
gress was about to vote on the trade reform
legislation, that Moscow made public the letter
Foreign Minister Gromyko had sent to Secretary
Kissinger on October 26 denying any obligation
to alter emigration policy. Two days before the
publication of the Gromyko letter, the issue may
have been considered at the Central Committee's
plenary session. The Central Committee may have
approved a tougher line, but it is more likely that
the Soviets did not decide to take the final step
until some time last week. Until very recently, for
example, some knowledgeable Soviet officials
have been telling their US counterparts that all
would be well in US-Soviet economic relations.
Thus far, the Soviets seem to be playing
down the broader implications for detente of
their rejection of the US-Soviet agreement. Pre-
mier Kosygin, in the course of a banquet speech
on January 14 honoring Australian Prime Minister
Whitlam, made repeated references to the neces-
sity of continuing detente and specifically reiter-
ated the Soviet goal of making detente "irrevers-
ible." The communique issued at the end of Whit-
lam's visit on Thursday also went out of its way
to stress the importance of Soviet-American rela-
tions, "above all the agreements on prevention of
nuclear war and strategic arms limitation."
In a Tass summary broadcast 12 hours after
the Soviet announcement, Moscow informed its
domestic audience of Secretary Kissinger's reac-
tion. The Tass summary, carried in the central
press on January 15 and 16, said the Secretary
noted the Soviet government's message that it
does not intend to accept a trade status that is
discriminatory and subject to political conditions,
and accordingly would not bring into force the
1972 trade agreement. The report concluded with
the Secretary's assurance that the administration
would continue to pursue all avenues, including
legislation, to promote mutually beneficial trade
relations.
The decision not to accept the conditions of
the US trade and Export-Import Bank bills and
the events that led up to it were a sharp setback
to a major element of Brezhnev's detente policy
and may ultimately affect his basic political posi-
tion. He has also suffered a recent setback in his
consumer program and an embarrassing postpone-
ment of his visit to Egypt.
Party boss Brezhnev has been out of public
sight since December 24, except when he at-
tended his mother's funeral on January 8. Presi-
dent Podgorny and Premier Kosygin were the
principal Soviet leaders to meet with Whitlam,
who was in the USSR for four days this week.
There is no evidence of a crisis atmosphere within
the leadership nor are there visible signs of a
concerted challenge to Brezhnev's position. He
faces the problem, however, of keeping the com-
bination of policy setbacks and poor health from
leading to an erosion of his authority. To prevent
this, he must resume an active work schedule and
give new impetus to domestic and foreign poli-
cies. The presvures to take an active role will
increase as politicking for the party congress next
year picks up.
Page 12 WEEKLY REVIEW
Jan 17, 75
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The IL: 76 is a four-engine jet aircraft similar
in appearance to the US C-141 Starlifter. It is a
high-wing, short-takeoff-and-landing (STOL) air-
craft with a high-flotation landing gear that allows
operations from unimproved fields. The Candid
has a maximum payload of about 88,000 pounds
and a range o, about 2,800 nautical miles. This is
about twice the payload of the AN-12, but only
about half that of the AN-22-the two current
mainstays of Soviet military transport service.
Neither the AN-12 nor early models of the
AN-22 have a pressurized cargo compartment-as
does the IL-76-which severely limits their use as
long-range troop transports at altitudes above
10,000 feet. The AN-22B, however, does have a
pressurized compartment.. The IL-76 is also a
faster plane than the AN-12 and AN-22, both of
which are turboprop aircraft. Moreover, the IL-76
probably has improved handling systems for load-
ing, unloading, and paradropping cargo.
At least ten Candids have been built thus far,
and the current production rate is about one
aircraft per month. In addition to its role as a
military transport, the Candid may also be
modified for use as a tanker to support longer
NEW TRANSPORT OPERATIONAL
The newest Soviet transport aircraft, the
IL-76 Candid, now appears to be operational.
range operations of other aircraft and can be used
as a cargo carrier for the Soviet civilian airline,
Aerof lot. 25X1 25X1 25X1
Jan 17, 75
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GREECE-TURKEY: AEGEAN DISPUTE REVIVED
'Tensions between Greece and Turkey over
mineral rights in the Aegean arose again this week
when the Turkish government responded to a
tough statement by the Greek defense minister
with tough statements of its own. Ankara backed
up its statements with a low-level military alert
and a public announcement that Turkey will soon
initiate oil exploration in the Aegean.
The dispute, which had been relatively quiet
while Turkey and Greece concentrated on the
Cyprus problem, was rekindled when Greek De-
fense Minister Averoff said in a speech on January
9 that Greece would aggressively defend its posi-
tion in the Aegean, which he referred to as a
Greek sea. The following day, the Greeks an-
nounced that they had authorized a foreign con-
tractor to conduct oil exploration in the Aegean.
There was no indication, however, that the
seismic exploration vessel would venture into the
disputed zone.
The Turks' initial reaction came on January
11 when the defense minister warned the Greeks
that Turkey was fully capable of retaliating
against any aggressive acts in the Aegean. To back
up this warning, several air and paramilitary units
were placed on alert. By midweek, there were
TENSIONS OVER A'INERAL RIGI-ITS
RENEIvlaD AS 130777 COUNTRIES AN-
NOUNCE OIL EXPLORA TION PLANS.
indications that the Turks had begun to relax
their stance.
The Irmak government's initial restrained
response drew political fire from former prime
minister Ecevit, who charged that the Greeks
were taking advantage of Turkish timidity. Ap-
parently stung by these charges, Prime Minister
Irmak stated that his government was prepared to
take all necessary measures to protect Turkish
rights in the Aegean. He also announced that
"before long" Turkey, too, would begin oil ex-
ploration in the Aegean.
Irmak's reference was apparently to a
Norwegian seismic exploration ship, the Longva,
which for some weeks took soundings off the
southern coast of Turkey in the Mediterranean.
According to Irmak, the Longva, which is under
contract to the Turkish government, will soon
begin to move north to the Bay of Saros and the
Aegean off the western coast of Turkey. 25X1
No timing was given for the Longva's entr
e Ureek defense minister's statement
may have coincided with the already scheduled
movement of the Longva, prompting the Turks to
take defensive measures. 25X1 25X1
In any event, the Turks may now feel that
their prestige is on the line and their lenal claim in
jeopardy. The reported itinerary of the Longva
will place it near the disputed zone, where it
could be used to reinforce the Turkish claim and
salve nationalistic pride. The Turks have urged the
Greeks to negotiate a demarcation line drawn
along the median between the Greek and Turkish 2,1
mainlands, or to agree to joint prospecting. They
may believe that forcing the issue now will brin
the Greeks to the hargaining table.
Page 14 WEEKLY REVIEW
LBANinr
.r::i~ 171{
Jan 17, 75
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CYPRUS: POLITICAL TALKS BEGIN
President Makarios this week announced the
formation of a new cabinet composed of men
who have proved their loyalty to him in the past.
The Greek Cypriot side will now be ready to
devote its attention to the intercommunal talks,
which this week turned to substantive political
issues for the first time since the intercommunal
fighting last summer.
Most of the new ministers held cabinet port-
folios or high posts in the bureaucracy at the time
of the coup last July. None owe their political
allegiance to former acting president Clerides,
who is now a potential rival to Makarios for the
presidency. Makarios had earlier considered form-
ing a government of national unity, composed of
representatives of all political groups, including
the far left and far right. He abandoned the idea
when he was unable to get the agreement of the
various political groups on appointments, par-
ticularly to the important ministries of foreign
affairs and interior.
Having excluded all but his supporters from
the cabinet, Makarios will probably seek regular
consultations with political party leaders in order
to maintain a semblance of Greek Cypriot unity.
The Intercommunal Talks
reciprocate by responding to the humanitarian
After agreeing to a faster pace for the talks
of two meetings per week, Clerides and Denktash
began preliminary discussions of political issues
on January 14 and will meet again today to
discuss reopening Nicosia airport and the island's
seaports, particu!arly Famagusta. The Greek
Cypriots, who make up 80 percent of the island's
population, are likely to call for proportional
representation of the two communities in the
operation of the airport under UN auspices, and
joint ,.ontrol of Famagusta port.
The Turkish Cypriots, for their part, are
likely to insist on equal represenation in the
operation of the airport. They may offer the use
of Famagusta port to Greek Cypriots, but they
are not likely to consent to Greek Cypriot partici-
pation in its operation. The Turkish Cypriot side
will be under pressure to make concessions, how-
ever, because of the impending cut-off of US
military aid to Turkey on February 5. Once the
airport and seaport issues are settled, the negotia-
tors will begin to talk about the powers of the
central government in the proposed federation.
Clerides and Denktash also agreed at their last
meeting to set up a sub-committee to discuss
remaining humanitarian issues. 25X1
The British, in the meantime, are planning to
begin on January 18 the evacuation to Turkey of
the 8-9,000 Turkish Cypriots living in the sov-
ereign British base area in the south of Cyprus.
The refugees are then expected to be settled in
the Turkish Cypriot sector of Cyprus. Turkish
and Turkish Cypriot leaders had earlier voiced
concern about the plight of Turkish Cypriots on
the base. They will now be under pressure to
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The ruling Moderate Liberals were the big
gainers in the Danish parliamentary election on
January 9, nearly doubling their parliamentary
strength. Nevertheless, Prime Minister Hartling
will probably have to make some compromises in
order to get majority backing for his economic
"crisis plan."
A general shift to the left and a stronger
than expected showing by the conservative Pro-
gressive Party reduced the overall strength of the
non socialist parties of the political center that
have been Hartling's traditional source of support.
With the exception of the Moderate Liberals and
the tiny Christian Peoples Party, all of the non-
socialist parties lost ground. The center bloc was
reduced to 78 seats in the 179-seat parliament.
The Moderate Liberals, who have governed the
country for the past 13 months with only 22
seats, increased their representation to 42.
The parties of the left and right held their
own. The Social Democrats, Hartling's traditional
opponents and the largest party in parliament,
picked up 7 new seats for a total of 53. The
anti-tax Progressive Party lost only two seats
despite the indictment of party leader Mogens
Glistrup for income tax evasion and Hartling's
success at reducing income taxes during his 13
months in office.
Hartling has officially informed the Queen
that his government will continue, despite a call
for his resignation by Social Democrat leader
Jorgensen on the grounds that the country de-
serves a majority government. Hartling intends to
sper 1 the days before January 23, when parlia-
ment reconvenes, negotiating with all nine parties
in parliament for a coalition combination or. lack-
ing that, unofficial support for his plan.
Hartling called the election last month when
it became clear that his austerity program would
not receive majority backing. The program calls
for a wage and price freeze, suspension of the link
between wages and the cost-of-living index, and
strict control of agricultural prices. The Prime
Minister maintains that his is the only plan that
will bite into the country's annual 15-percent
inflation rate, 5-percent unemployment rate, and
huge trade deficit.
If Hartling continues as the head of a mi-
nority Liberal government, he will have to modify
his economic program in order to appease the
Social Democrats, who oppose Hartling's proposal
for a wage and price freeze. The poor election
performance of the non-socialist parties and the
traditional conflict between socialists and non-
socialists indicate a precarious life for a new
government headed b Hartling.
25X1
Page 16 WEEKLY REVIEW
Social Democratic Chairman Jorgensen
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SPAIN: MILITARY, LABOR CAUSE CONCERN
In his traditional year-end speech, Chief of
State Franco described 1974 as a "troubled year
for all of us." Spec~jlation over possible political
activity in the armed forces, an increase in Basque
terrorism, and the worst labor agitation in over a
decade suggest that 1975 will be equally trouble-
some.
Conjecture that political activity among the
military may be serious arose as a result of the
warnings against the impropriety of such activity
issued by the ministers of the three services at
intended as a restatement of the army's apolitical
role. He claimed it was timed to alert the military
not to form or lead political associations when
these became legal on January 12, and was not
prompted by worries of political unrest among
junior officers.
owever, the army minister's warning was simply
The army minister's warning against support-
ing a "definite political position" may well have
been aimed at high-ranking officers who are active
in the newly formed rightist Unified Veterans
Organization. This is a potentially powerful pres-
sure group opposed to any liberalization of the
present system. In addition, several officers who
are members of liberal "study groups" have re-
portedly been called on the carpet.
A spate of strikes-which are illegal-took
place last month and is continuing. The strikes
began largely over wages but took on political
overtones as protests over police violence and
treatment of political prisoners were added. The
highlight was a one-day general strike held in the
Basque area on December 11 to commemorate
the fourth anniversary of the famous trial in
Burgos of 16 Basque terrorists. The strike was
organized by a coalition of extremist political
organizations-including the terrorist group,
Basque Fatherland and Liberty-and various
moderate clandestine labor organizations. In-
volving some 150,000 workers, this was the first
relatively successful general strike in the Basque
provinces since the Civil War. Large police rein-
forcements from Madrid kept violence at a
minimum.
Adding to tension from labor turmoil in the
Basque area were several terrorist acts believed to
have been perpetrated by Basque Fatherland and
Liberty militants to dramatize their anti-regime
fight. Last month, two policemen were machine-
gunned to death from a passing car and two Civil
Guards were wounded by machine-gun fire. The
police responded by arrestinq a number of sus-
pected terrorists. 25X1 25X1
POLITICAL ACTIVITY IN THE ARMED
FORCES, BASQUE TERRORISTS, AND
ILLEGAL STRIKES SUGGEST A T ROU-
BLESOAIE 1975.
The Basque area strikes have been accom-
panied by work stoppages in various important
cities, including Madrid and Barcelona. The spot-
light is now on the Barcelona area, particularly
the Seat automobile plant. Strikes there, which
have provoked retaliatory company lockouts,
involve a host of labor grievances, including wage
negotiations, management proposals for a reduced
work week, and worker demands for recognition
of illegal worker groups. Company efforts to fire
400 activist workers and other anti-labor
measures are likely to intensify agitation.
Other than some strong police action against
strikers, the government has remained inactive in
face of the labor turmoil. The labor minister
continues to promise to unveil the draft of a
revised labor law, possibly containing a limited
right-to-strike provision, but this has been held up
by opposition from conservatives in the govern-
ment. Continued labor agitation is likely at least
through early February when most contract nego-
tiations should he completed.
25X1 25X1
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UK: EC DEBATE HEATS UP
Forces on both sides of the question of
Britain's continued EC membership have begun to
organize in anticipation of the referendum due
sometime before October. The debate now ap-
pears to be centered on the question of British
sovereignty even though the issues being renego-
tiated with the EC are concerned with less emo-
tional matters, such as British contributions to
the EC budget, the EC's common agricultural
policy, and EC relations with the Commonwealth
countries.
The pre-referendum campaign appears to be
in full swing even though the renegotiations in
Brussels are not expected to be completed for at
least two months. Prime Minister Wilson and For-
eign Secretary Callaghan have recently said that,
if a new accord is reached with the EC, they
intend to recommend continued membership.
This pro-EC stand by the two government leaders
coupled with opinion polls indicating that the
public will follow the government's lead, has
aroused the anti-EC forces.
Industry Minister Benn launched the current
phase of the debate by sending an open letter to
his constituents alleging that EC membership
dimi fishes British sovereignty. Subsequently, but
not in response to Benn, a high-level Foreign
Office official--undoubtedly with Prime Minister
Wilson's blessing-argued that, by pooling their
formal sovereignty in the EC, the members retain
a voice in decisions vital to their interests and
together wield an influence that none of them
individually now has.
Britain's two EC commissioners-one from
each of the two major parties-have annou.jnced
that they plan to campaign on behalf of the
pro-EC forces. Both are nominally EC civil serv-
ants, and they have come under heavy criticism
for engaging in such quasi-political activity.
Domestic politicking by EC commissioners, while
rare, is not unprecedented, and both Britishers
seem to feel strongly that the country cannot
afford to withdraw from the EC.
Last week, several anti-EC groups announced
that they have formed an umbrella organization,
the National Referendum Campaign. Because it
Wilson
includes representatives from all three British
political parties, the group may have difficulty
holding together. Spokesmen for the group have
made it clear that they expect the government to
provide equal radio and television time for pro-
and anti-marketeers. The group also wants to have
limits set on spending during the referendum
campaign.
The cabinet has not yet decided whether
members will be allowed to publicize minority
views during the referendum campaign. Although
Wilson has not addressed himself directly to the
question of cabinet solidarity on the referendum
issue, he did announce several months ago that
cabinet officials must publicly support govern-
ment decisions or return benches.
25X1 25X1
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ANGOLA: AGREEMENT ANNOUNCED
Portuguese officials and leaders of the three
rival Angolan liberation groups signed an accord
on January 15 giving the territory a transitional
government and providing for full independence
on November 11. The transitional government is
scheduled to be installed on January 31.
The accord climaxed five days of hard bar-
gaining among the parties at a resort hotel in
southern Portugal. During the transitional phase,
the territory will be governed by a Portuguese
high commissioner and a presidential council
composed of the deputies to the leaders of the
three insurgent groups. A cabinet of 12 ministers
will also be established, with porttoi?os divided
equally among the Portuguese and the three
groups.
The leaders themselves-Holden Roberto of
the National Front for the Liberation of Angola,
Agostinho Neto of the Popular Movement for the
Liberation of Angola, and Jonas Savimbi of the
National Union for the Total Independence of
Angola-will not participate directly in the transi-
tional government. Presumably, they will concen-
trate on building up the political structures of
their organizations.
The accord calls for a defense commission
composed of the high commissioner, the presiden-
tial council, and a joint general staff. Forces of
the three insurgent groups are to be integrated
into an Angolan national army, and Portugal is to
begin a phased withdrawal cf its troops before
April.
The transitional government is charged with
organizing elections for a constituent assembly
sometime before independence. A central com-
mission will be established to draft an electoral
law. Only the three liberation groups can submit
candidates for the constituent assembly. The ac-
cord provides for a presidential election, but is
vague on when it is to be held.
Under the accord, the three liberation
groups guarantee to respect the rights and prop-
erty of Angola's 500,000 whites, but no provision
is made for the participation of the whites in
political activities. In the past, the three groups
have argued that Angola's whites must cease
thinking of themselves as a separate power bloc
and join one of the liberation organizations.
Angola is the last of Portugal's African terri-
tories to work out an agreement for independence
since Portugal embarked on its decolonization
campaign following the coup last April. The proc-
ess was delayed largely by the rivalries among the
insurgent leaders. Those rivalries have certainly
not been put to rest by the present accord, and
they could upset the delicately balanced machin-
ery for sharing power.
Angola's whites, who were not invited to
participate in negotiating the accord, will see their
political options as very limited and might begin
looking for ways to disrupt the transition. At
present, however, the whites appear to be poorly
organized and do not see likely to pose a serious
threat. 25X1
Ango!ar: Delegates
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Jan 17, 75
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IRAN - ARAB STATES: GETTING CLOSER
Visits to Jordan and Egypt last week by
Iran's Shah Mohamrned Reza Pahlavi served clear
notice of his desire to increase the influence of his
non-Arab country in the Middle East. The Iranian
ruler sought to demonstrate his support for the
moderate leadership of King Husayn and Presi
dent Sadat, to further the split bet-veerr Egypt
anJ the USSR, and to isolate the radical Arab
regime in Iaq.
The Shah and Sadat in Cairo motorcade
In his talks with Husayn and Sadat, the Shah
evidently lobbied for greater ?nuperotloll with
niodOrate Arab leaders. He probably also sulicited
support for the larger rule Tehran has assumed in
the Persian Gulf area and asked for Wideislaordiny
of his position in the dispute between Iran and
Iraq. The Shah views Sadat as a strong leader who
shares Iran's desire to restrict the influence of
radical Arab regimes and the Soviet Union in the
Middle East.
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The communiques ending the visits broke no
new political ground. On Arab-Israeli questions,
the Shah predictably came down clearly on the
side of his hosts. The -mmuniques called for
implementation of UN +esolutions to achieve
rapid Israeli withdrawal from occupied territories,
rejected any unilateral change in the status of
Jerusalem, and pledged support for the "legiti-
mate rights of the people of Palestine."
Both Husayn and Sadat provided a warm
welcome, praising the Iranian monarch's leader-
ship and promising to promote greater Arab-
Iranian cooperation. This f;?iendly treatment is
sure to be resented by the radical regimes in
Baghdad and Aden, which have urged their fellow
Arabs to condemn Iran's military sur srt for the
rebellious Iraqi Kurds and for the C mani Sultan's
efforts to suppress leftist dissidents. President
Sadat also lent his support to Iran's contention
that world inflation cannot be blamed on higher
oil prices. The Cairo communique stressed that a
solution to international economic problems
should be based on cooperation "without re-
course to threats of violence."
During the Shah's visit to Amman, some
previously negotiated arrangements for Iranian
aid to Jordan were publicized. Under the agree-
ment, Iran is providing 22 F-5 jet fighters as well
as limited assistance for housing and medical facil-
ities. In Cairo, statements on economic ties reiter-
ated details of agreements signed last year for
credits totaling about $850 million.
After leaving Cairo, the Shah told a Vienna
newspaper that Tehran would not participate in
any new oil embargo instituted by Arab pro-
ducers. The Shah's comment may have been
intended to reassure Tel Aviv, which depends on
imports of Iranian oil, that his newly strength-
ened ties with the Arabs were not made at the
expense of Israel. Although the Israeli govern-
ment has not commented on the Shah's trip,
there is some anxiety among officials and jour-
nalists over Tehran's aid to Egypt and Jordan. On
the other hand, some Tel Aviv newspapers took
the nine that the Shah's relations with Cairo
would be a force for moderation and a counter-
EGYPT-USSR: UNEVEN COURSE
President Sadat last week complained pub-
licly again about Moscow's arms policy toward
Egypt, but he did not pursue the subject in two
subsequent opportunities. The Egyptian leader's
criticism seemed intended in part to justify to
other Arabs his support of the US bilateral
approach toward Middle East peace negotiations
rather than the multilateral approach favored by
the Soviets.
In an interview with a Beirut newspaper on
January 8, Sadat acknowledged that, during For-
eign Minister Fahmi's visit to Moscow last month,
Soviet leaders had agreed to provide "a part" of
Egypt's arms demands. But, he charged, this will
not meet Cairo's needs either for replacement of
war losses or for newly developed equipment. The
new criticism of the Soviets ended a long period
of restraint by Sadat on the subject.
Addressing his remarks to "every Arab,"
Saclat noted that Syria has received full com-
pensation for war losses from Moscow and that
Israel has received both replacements and new
equipment from the US, whereas Egypt has
obtained only "a few arms." His message seemed
to be that Egypt is justified in taking what it can
get from US diplomatic efforts because Syria gets
what it wants from the Soviets.
Sadat did not repeat the criticism, however,
in an interview with a second Beirut newspaper
later in the week or in a Cairo newspaper inter-
view this week. He reiterated his standard posi-
tion that Moscow has always supported only
peaceful means of resolving the Arab-Israeli con-
flict--itself an implicit criticism intended to show
other Arabs that their "best" ally opposed the
war in 1973--but his tone was basically friendly.
He called party chief Brezhnev a "real friend" of
Egypt and of the Arab cause, and he expressed
gratitude for the help Moscow has given. Sadat
undoubtedly knows that public criticism will only
endanger the arms supplies, however limited, that
the Soviets have promised, and he may have
thought better of his earlier open airing of
Egyptian-Soviet differences.
25X1
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The Libyans now seem convinced that press
stories of alleged US plans to seize their oil fields
are true. Although this view of US intentions has
prompted the regime to take extraordinary secu-
rity precautions, Tripoli aprarently believes its
interests would be further jeopardized by over-
reaction.
Until late last year, the regime had re-
sponded to the press stories as if they were simply
part of Washington's overall diplomatic strategy
for bringing down oil prices. Security forces regu-
larly assigned to protect petroleum installations
were reinforced, but the regime-although appre-
hensive-seemed to believe that such talk was a
contrived and probably hollow threat.
The Libyan assessment apparently changed
as a result of US Sixth Fleet exercises off the
Libyan coast in late November and early January.
An interview with a US Marine captain aired on
French television last week may well have con-
firmed Tripoli's worst fears. When questioned
about his mission in the Mediterranean, the cap-
tain stated there probably were plans at high
echelons" to invade Libyan oil fields. He then
asserted that US forces were fully capable of
carrying out such a mission and would have no
moral qualms about doing so.
These events have had a sobering effect on
President Qadhafi and his collea ues.
Libyan officials have been reluctant to publi-
cize any information or answer questions about
the Sixth Fleet despite widespread local knowl-
edge that Tripoli air port was closed and air de-
fense units placed on alert at the time of the last
US exercise in January. Even in private, Libyan
authorities have made only restrained references
to Sixth Fleet activity.
This uncharacteristic Libyan caution is prob-
ably due in part to Tripoli's recognition that it
25X1
must avoid a provocative incident in view of its
limited military capabilities. In addition to these
immediate concerns, at least some members of
the regime may not want to abandon recent at-
tempts to improve relations with the US, which
they see as an important step in regaining the
cooperation of Arab moderates-especially Egypt.
Foreign Minister al-Huni, who seems to be the
leading advocate of this view, apparently has con-
vinced Qadhafi that Libya must deal with a new
set of circumstar, ces in the Middle East or con-
tinue to pay the heavy price of diplomatic isola-
tion. Mounting .ears of US intentions could
quickly change Tripoli's strategy, but at least for
the present the regime intends to act with cau-
25X1 25X1
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ISRAEL-LEBANON: THE FIGHTING GROWS
Through most of the week, fighting con-
tinued between fedayeen and Israeli forces in
southeast Lebanon near the Israeli-Lebanese-
Syriaan border. The nature of the clashes may be
changwy, however, as the fedayeen apparently
chose to stand and fight in at least one Lebanese
village, Ktar ;huba, which the Israelis atta.:ked in
reprisal for a fedayeen ambush of an Israeli
border p:;trol. In an effort to root out the feda-
yeen, Israeli troops entered Kfar Shuba on at least
three occasions during the week and each time
met resistance.
The Beirut press claims that during the first
four days of this week, fighting in and near three
villages caused extensive damage to homes, roads,
aqueducts, Ind power and telephone lines.
Residents of Kfar Shuba occupied government
offices in the district town of Marjuyun on Jan-
uary 14, demanding that Beirut act to halt the
Israeli attacks and that it call on other Arab states
for help. The Israeli chief of staff, General Gur,
told reporters that Israel would continue its
"persistent" effort to clean out the fedayeen
from positions in southern Lebanon from which
they directly threaten northern Israeli border
towns.
If the fedayeen have indeed embarked on a
policy of forcefully resisting Israeli cross-border
incursions into Lebanon, the fighting could
escalate dangerously and force the Lebanese to
become more directly involved. Beirut claims that
the Israelis have already shelled Lebanese artillery
positions and army patrols during this latest
round of fighting. Damascus may also be tempted
to play a more direct military role under those
circumstances.
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A fragile truce in Eritrea is threatened by
renewed terrorist incidents and hard-line state-
ments both from government spokesmen and
some exiled leaders of the Eritrean insurgency.
The ruling military council and insurgent
leaders in Eritrea Province apparently agreed in
late December to observe a de facto truce while
exploring the possibility of a peaceful settlement
of the insurgency. Provincial notables in Eritrea-
prominent tribal and religious figures-have been
trying to arrange direct negotiations between the
rebels and the council.
According to press reports, government
sources are now saying that the three-cornered
negotiations have broken down because the gov-
ernment refused to issue a statement accepting
Eritrean independence and agreeing to withdraw
Troops from the province. A government broad-
cast complained that the Eritrean separatists
initiated a new wave of violence early this week,
including bombings at the Asmara post office,
twelve kidnapings, and one assassination. It is not
clear whether these incidents were approved by
the insurgent leaders in Eritrea.
ON"', 4rnrr;
yr-~/)
Addis Ababa.
A.
Mosque in Eritrea Province
Meanwhile, rebel exiles continue to insist on
independence as a precondition to an;j nego-
tiations with Addis Ababa. Within Eritrea, how-
ever, negotiations between the notables and
insurgent leaders may still be continuing.
An Ethiopian delegation is currently touring
Arab capitals in an attempt to enlist support in
fostering negotiations with the predominantly
Muslim insurgents, who have received arms and
financial assistance from the Arabs. The delega-
tion completed talks this week in Cairo-where
some of the intransigent rebel leaders are based-
and is scheduled to continue on to Beirut, Bagh-
dad, and Damascus.
With the situation already touch-and-go in
Eritrea, the council appears to be racing a new
threat to its authority in Begemdir Province,
where clashes occurred last week between police
and dissidents. The US embassy in Addis Ababa
has received reports that the unrest is the
beginning of a revolt against the military council, 25X1
possibly organized by the former provincial
governor, who went into hiding last month along
with other provincial officials. The Begemdir dis-
sidents oppose the council's adoption of socialism
Page 25 WEEKLY REVIEW
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^
LATIN AMERICA: RELATIONS WITH US
In an effort to accommodate their some-
times conflicting political needs in regard to the
US, Latin American governments are trying to
select carefully the issues on which regional
solidarity counts more than individual national
interest. Most governments, for example, have
responded favorably to Venezuela's call for a
special OAS meeting to discuss portions of the US
Trade Reform Act, which many Latins have
characterized as discriminatory. At the same time,
the call by Venezuela and Ecuador for a boycott
of the hemisphere's foreign ministers' meeting set
for March in Buenos Aires has been greeted less
sympathetically.
Despite wide support in principle for the
effort to place the US in an OAS "court" to
answer charges of economic aggression, the
notion may remain in the rhetorical stage. Not all
Latin governments are clear on how the new US
trade legislation will affect them, and they are
currently examining US briefings that detail the
positive aspects of the act. The Venezuelans seem
pleased with reports that Congress will be asked
to alter language in the bill that the Latins find
offensive, and Venezuela may come around to
agreeing to discuss the trade issue at the regular
OAS General Assembly in April rather than hold-
ing out for a special session in the immediate
future. President Perez still may condition
Venezuela's attendance at Buenos Aires on action
rather than statements of intention.
The brouhaha over the trade legislation is
symptomatic of growing Latin concern that the
US is unwilling or unable to follow through on
the promises inherent in its offer of a new dia-
logue last year. Their s:%g)tici:m about the state
of Latin American - US relations has added to
their desire to stick together on as many issues as
possible, even though the most pro-US govern-
ments are sometimes uncomfortable with the
accompanying strain on their bilateral relations
with Washington.
With inter-American relations so in flux, the
outcome of the various proposals for meetings
and for boycotts of meetings remains unclear.
While most governments seem in agreement that
Buenos Aires will afford a good chance to deal
directly with the US on contentious issues, this
next foreign ministers' meeting is not vet rlefi-
25X1 25X1
CUBA: DETENTE, HAVANA STYLE
Fidel Castro's statement last week that the
US constitutes less of a threat to Cuba now than
in the past does not signal a change in the policy
toward this country that Havana has followed
during the last year or so. Although Cuba is
willing to work toward a reconciliation that
would give it access to US trade and technology,
it is still committed to promoting a confrontation
between the US and the countries of Latin
America.
In his press conference in Havana last week,
Castro took the position that the danger of "US
aggression" against Cuba had diminished, stating:
"We cannot say that the danger no longer exists,
but we can say that at present there is less danger
than there was ten years ago." In response to a
question, he reiterated an earlier offer to sell
sugar to the US, but he tried to appear noncom-
mittal on this point. He indicated that he does
not think such a sale is possible in the immediate
future and again said that Cuba can afford to wait
ten more years because there is a market else-
where. He thereby implied that he considers a
resumption of trade as inevitable. It is clear that
Castro would welcome a change in the status quo
between the two countries and that he sees an
improvement in relations as being of substantial
benefit to Cuba.
It is also clear, however, that Castro is not
going to stop trying to drive a wedge between the
US and Latin America just to encourage a
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reconciliation with the US. In his statements he
appeared intent on getting across he message that
Cuba is no longer involved in promoting violent
revolution in Latin America, and that Cuba and
Latin America have a common enemy in the US
that can best be countered through a unified
effort. He described the current movement to-
ward Latin American integration as "a positive
change" and pledged Cuba's support to "every
continental anti-imperialist policy and the search
for new means of Latin American integration."
There is apparently some concern in Havana
that Castro's remarks may be misinterpreted by
Latin revolutionaries us a sign that Cuba is
abandoning them. Castro had said: "We cannot
extend our private revolutionary objectives to
Latin America because I think a revolution
belongs to the people of each : ation and no one
can conduct it for them." In reporting Mexican
press reaction to his statements, for example, the
official Cuban press agency tried to clarify the
Cuban position by carefully selecting what it con-
sidered to be accurate reelections of Cuban
policy, namely that reconciliation with the US is
a bil?teral matter and will be pursued separately
e
from Cu
pheric initiatives.
I
The military government is trying to im-
prove its international image by demonstrating
"generosity and good will" on human rights
issues. On January 11, the government released
and deported to Romania former foreign and
defense minister Clodomiro Almeyda, former
justice and education minister Jorge Tapia, and
three lesser lights of the Allende era. They had
been in custody since the military take-over in
September 1973.
Other recent moves related to human rights
include the drastic reduction of some 30 sen-
tences imposed by a provincial military court in
December 1973. Press accounts suggest that mili-
tary reviewing officers will continue to rectify
errors or excesses that may have been committed
by military tribunals in the hectic weeks after the
coup. On January 10, Gaston Pascal, the father of
Movement of the Revolutionary Left leader
Andres Pascal Allende, was released after a month
of imprisonment. Andres' mother, Laura, sister of
the late president Allende, remains behind bars,
but her name is on a list of 200 detainees that the
government has offered to fly to exile in Mexico.
The government also appears to be seriously
interested in getting on with the detainee release
program it launched last September. Willing
recipient countries are being sought for the initial
group of 100, and another list of 100 has been
prepared.
In recent months, Chilean leaders appear to
have gained a fuller appreciation of just how low
their international stock had sunk. Unfavorable
action by the US Congress on military aid and
sales of equipment undoubtedly helped drive the
point home, and pressure from within for im-
provement in the government's hi-in rights
performance has been building. 25X1 25X1
and-line military and civilian opposi-
ion to an easing of internal security measures
now appears to be weakening, and additional
moves may be in the offing. These are likely to
include a declaration of a lower level state of
siege, which would make wartime provisions of
the military justice code inapplicable and permit
appeals from military tribunals to civilian courts.
In one area concerning human rights, how-
ever, the government is moving in a different
direction. International agencies or commissions -
no longer will have almost automatic permission
to study and report on the situation. Henceforth,
any organization desiring to investigate conditions
in Chile will have to show that it has received
permission to undertake similar missions in the
Soviet Union and
25X1 25
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CHILE: EASING UP
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ARGENTINA: LULL IN TERRORISM
Terrorist activity has fallen off in recent
weeks, in large part because of a successful gov-
ernment crackdown. Left-wing revolutionaries are
on the defensive and reportedly are considering
alternative tactics. Despite this slackening in vio-
lence, the continuing warfare between the left
and right remains a serious problem for the Peron
government.
Wide:,pread arrests, effective joint operations
by military 9nd police forces, and an apparent
change in the psychological climate are causing
the terrorists to retrench and take stock of their
situation. The People's Revolutionary Army-the
major terrorist group-met recently with several
Trotskyist and radical student organizations to
discuss plans for a political alliance that would
serve as a nucleus for a broader based coalition of
leftist revolutionary parties.
Although these moves appear to signal a
switch in emphasis from military to political strat-
egy, there is no indication that th,i terrorists in-
tend to abandon completely the campaign of kid-
napi+-gs and armed attacks that has become their
trademark. They will probably continue to use
these tactics to raise funds and to demonstrate
their active comrr*'ment to armed struggle.
25X1
The army, meanwhile, has reportedly
learned the location of key guerrilla encampments
in the northwestern province of Tucuman, and
plans are under way for a major sweep of the
area. Tucuman, the birthplace of the People's
Revolutionary Army, has been a base for rural
insurgency and the training of urban terrorist
squads. If security forces can severely cripple the
Tucuman stronghold, they will have moved a long
way toward weakeni gan;,=-
tion. 25X1
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GUATEMALA: AVENGING AN EXECUTION
The outlawed Guatemalan Labor Party, the
country's communist party, may resume acts of
terrorism to avenge the execution of its secretary
general, Huberto Alvarado, by a government
"death squad" nearly a month ago.
After a similar incident in September 1972,
in which six members of the party's Central Com-
mittee were captured and killed, allegedly by a
government death squad, the party had opted to
abstain from terrorist activity. Now, however,
Joaquin Noval, the head of the Revolutionary
Armed Forces, the party's terrorist group, seems
likely to take over as leader of the party. If he
does, the chances are that this time the party and
its terrorist action arm will retaliate with violence
of its own. Noval reportedly has talked of carry-
ing out a murder campaign against wealthy
landowners.
Little if any effort was made to conceal the
government's involvement in Alvarado's death. He
was captured by army and police forces during a
shootout on December 20 as he and other party
members were trying to collect a kidnap ransom.
The following day, his body, showing signs of
torture, was found along a highway near Guate-
mala City.
The communist party, 25 years old last year,
is now only a shadow of its old self. Its hard-core
membership has declined from about 800 to
about 500, and it probably has no more tnan half
that many nonaffiliated sympathizers. Over the
years, the party has had difficulty maintaining a
balance between political action and terror.
Decisions to cease or reduce terrorism have
caused morale problems among the younger
members hungry for armed action. This has led to
splits in the party's action arm as more radical
members, resisting party discipline, have sought
to continue a more activist posture. Since the
election of President Laugerud last March, the
radicals seem to have been winning their argu-
ment. The party's action arm has carried out
several robberies and kidnapings to acquire
money.
The execution of Alvarado, however, is a
fresh reminder that the L.augerud government in-
tends to be as vigorous and brutal as its predeces-
sor in countering the terrorism of the communists
and other extreme leftists. Stern, revengeful anti-
communism is basic to Laugerud's military and
religious background, and nothing is likely to
change his outlook.
Government forces are strong enough to
keep the lid on the security situation. Isolated
successes by terrorists-followed by government
reprisals-could, however, create a period of polit-
ical instabilit .
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