WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001000080038-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 28
• Document Creation Date: December 27, 2016
• Document Release Date: May 11, 2010
• Sequence Number: 38
• Publication Date: August 22, 1975
• Content Type: REPORT

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Top Secret
Weekly Review
Top Secret
75X1
August 22, 1975 25X1
Copy N2 665
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CONTENTS (August22, 1975)
The WEEKLY: REVIEW, issuer d every Frtday morning by the
Office:of Current Intelligence and analyzeb'significant
develonmentsof the week throughepoptenoon on;;Tnursdajr tt fre-
quently includes. material coordinated with, or prepared by the
Office of Economic Research the Office ofStrategic
Research, the Office of ;"Geographic and Cartographic
Research, and the Directorate of Science and Too,tnology
Topics. requiring more ;omprehenslve treatment ,And*
therefore published separately as Specialepo~ta are listed
In the; contents
MIDDLE EAST
AFRICA
WESTERN
HEMISPHERE
EAST ASIA
PACIFIC
1 Portugal: Goncalves' Support Wanes
3 U
pain: Crackdown on Terrorism
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7 Fedayeen: Agreement Opposed
8 Bangladesh: Military Coup
10 Nigeria: A Good Start
11 Angola: New Initiatives
12 Libya: Coup Foiled
13 Argentina: New Economy Minister
14 Mexico: World Tour
15 Uruguay: Economic Tension
16 Chile: Problems for Pinochet
18 Venezuela: Reversion Passes
19 Cambodia: International Debut
20 Laos: Liberating the Capital
21 Thailand: A New Look
21 Philippines - North Vietnam: Debacti
Comments and. queries on the contents of this
publication are welcome. They may be
directed to the editor of the Waekly Review,
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POR TUGAL: GONCALVES' SUPPORT WANES
Prime Minister Goncalves' position is
steadily weakening in the face of the combined
opposition of former foreign minister Melo
Antunes and internal security chief Carvalho.
Even the Communists, Goncalves' staunchest
supporters. appear resigned to his impending
ouster and are concentrating their efforts on
salvaging what they can of the party's influence.
President Costa Gomes' remark earlier this
week that the duration of Goncalves' left-wing
cabinet-now nearly two weeks old-can "be
expressed in days" has touched off speculation
that the Prime Minister is on his way out. Such
speculation is further fu,,Ied by the continuing
erosion of Goncalves' support within the armed
forces. Northern military region commander
Corvacho, the only regional commander who
has not taken a stand against Goncalves, has
been relieved of his duties and temporarily
replaced by an apolitical officer. Goncalves
suffered another blow v:-ith the firing of Colonel
Varela Gomes, a known Communist supporter,
from the propaganda division of the general
staff.
Lisbon radio reports that a group of offi-
rers headed by Antunes and Carvalho, ac-
companied by the army and air force chiefs of
staff and five other officers, met with President
Costa Gomes on August 19 to present a new
political action program. The program inclu
The document presented to Costa Gomes is
reported to be a synthesis of rival documents
presented in an attempt to resolve the current
power struggle. The first, drafted by Melo
Antunes, c,iticizes the "crisis of authority" in
the military government-mostly the fault of the
Communists-and calis for the construction of a
Prime Minister Goncalves at a recent press conference
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classless, socialist society "under conditions of
democracy and liberty." The second, drafted by
a group of radical populist officers under the
command of General Carvalho, blames both the
Communists and the non-Communist parties for
the present unrest. The Carvalho group foresees
a revolutionary government deriving its au-
thority from popular assemblies that would
cement the a:liance between the military and
the people.
Although both documents denounce the
Communi; cs, party leaders appear to reqard
?9herence to the radical populists' program as
the best way to maintain some of their in-
fluence. The Communists and the fellow-
traveling Portuguese Democratic Movement
joined in a demonstration sponsored by extreme
left-wing groups on August 20 in support of the
populist program, which is generally associated
with General Carvalho. Despite these gestures
inward Carvalho, the Communists will find it
difficult to overcome Carvalho's anti-Commu-
nist bias.
In the face of the contin ling attacks on the
Communist Party and its offices throughout
much of the north, party leaders have tried to
regain the initiative but have failed. They began
a campaign to reassert themselves in areas where
they had been forced out by anti-Communist
violence. A rally in the northern town of
Alcobaca on August 16 was broken up by anti-
Communists. The rising level of violence forced
the Communists to cancel a rally in Oporto
three days later. A 30-minute general strike,
organized by the Communist-controlled labor
federation and vigorously promoted by Gon-
calves, was almost a total failure.
Apparently taking heed of the changing
situation, Communist party leader Cunhal
softened his line at a press conterence on August
20. He reiterated support for the Goncalves gov-
ernment but added that the Communists were
prepared to participate in finding new solutions
for Portugal's political struggles. This is being
taken as acceptance of Goncalves' inevitable
downfall. Although he blamed the Socialists for
creating the split in the Armed Forces Move-
ment, Cunhal retained a conciliatory tone, as-
serting that "no one can place his interests
about the overall interests of the ravnliitinn "
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USSR-PORTUGAL
Preparing for the Worst
The deepening distress of the Portuguese
Communist Party has produced & marked
change in the Soviet perceptio of the situation,
at least as reflected in media reporting. Mos-
cow's relative confidence that events in Portugal
were going well has given way to shrill criticism
of outside meddling.
On two recent occasions, Moscow has
drawn an explicit analogy between current con-
ditions in Portugal and those in Chile just before
the overthrow of Allende. The theme first ap-
peared in a broadcast on August 15 and was
repeated in an authoritative article in Pravda on
August 19. The tenor of the Soviet statements
suggests that the Soviets see the odds increasing
for an outcome I;ke that in Chile.
Unlike most Soviet commentary on Por-
tugal, the Pravda article expressed Moscow's
views directly, rather than putting them in the
mouths of the Portuguese Communists or other
intermediaries. Much of the article is devoted to
harsh criticism of NATO, the Western press,
Western economic organizations, and "interna-
tional social democracy." The Chinese are also
dragged into the cast of evildoers; they are
accused of cooperating with international reac-
tion by fomenting discord in Angola and the
Azores.
Changing Emphasis
Much of the changing emphasis in Soviet
coverage of Portuguese events may be intended
to prepare foreign and domestic audiences for a
Communist setback in Portugal and to identify
villains for the period of recrimination that
would inevitably follow. The Soviets may also
be trying to rebut recent statements of high US
officials by building a case that it is really the
West, not the Soviets, th?t is interfering in Por-
tugal. 25X1
The Pravda article charges that the Por-
tuguese Socialists are providing a rallying point
for reactionaries by attacking the Communists,
but the tone is less strident than when Moscow
was denouncing the Socialists immediately after
they left the government. Indeed, Pravda calls
for "concerted action" by the Armed Forces
Portuguese Communist Party leader Cunhal
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Movement, the Communists, Socialists, and
other left progressive forces. The Soviets have
repeated this theme, which is nominally in
accord with Portuguese Communist Party leader
Cunhal's professed policies, more frequently in
recent days.
The voluminous Soviet commentary on
Portugal does not offer any practical advice nor
does it provide any clues about what, if any,
action the Soviets might take in support of the
Portuguese party. The Pravda article concluded
with a call for "massive solidarity" with the
forces fighting reaction in Portugal. Under the
circumstances, this is the minimum that Moscow
might be expected to say to preserve its revolu-
tionary credentials.
On August 19, the Hungarian party issued
a short statement, clearly coordinated with Mos-
cow, that expressed solidarity with the Por-
tuguese Communists. Moscow's other friends in
East Eurone will nrohahki cnr,~ suit.
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SPAIN: CRACKDOWN ON TERRORISM
A tough new anti-terrorist law, expected to
be announced after the cabinet meeting on
August 22, will be the government's answer to
the new wave of violence that has hit the coun-
try. If the law leads to repressive measures
against a wide segment of thi' population, it
would play into the hands of they terrorists and
damage Prime Minister Arias' efforts to project a
favorable image abroad.
Arias had
draft law, which has been in preparation for
three months, but the cold-blooded killing of a
Civil Guard officer in Madrid by a Marxist ter-
rorist group last week ended that hope. This was
the third policeman killed since July 14. The
Anti-Fascist and Patriotic Revolutionary Front,
a dissident Communist terrorist group known by
its acronym FRAP, has claimed credit for the
killings, which it undertook to dramatize its
anti-Franco stand.
Rightist groups used the funeral of the
slain guardsman to protest his slaying and to
criticize the Arias government. An estimated
2,000 persons, including members of the Civil
Guard in mufti, participated in a demonstration
that nearly got out of hand. In addition to
blocking the cars of departing officials, the
demonstrators shouted "down with terrorism,"
"power to the army," and slogans critical of
Arias' liberalization program.
The new counter-terrorist measures will
raise new tensions in the Basque provinces,
where the emergency decree granting the police
extra powers was allowed to expire on July 26.
The recent terrorist incidents seem certain to
lead to a new crackdown, and Arias' plans to
devise regional development plans for the
Basque area are likely to be slowed.
The Spanish police have already scored
som? success with their roundup in Madrid,
Barcelona, and Galicia of terrorists who are
members of FRAP and of the Basque Father-
land and Liberty. The most important arrests of
Basques were made in Madrid and Barcelona
where four terrorists were seized and one was
killed. One of those arrested was allegedly
involved in the assassination of then prime
minister Luis Carrero Blanco and also had con-
tacts with Uruguayan Tupamaros and the Irish
Republican Army. The arrests allegedly broke
up plans to kidnap prominent officials as well as
to free some Basque terrorists from jail. There is
also press speculation that the Spanish police
have evidence that the Basque terrorists have
developed links with FRAP and a separatist
Galician organization, as well as with foreign
terrorist groups. Publication of such allegations
is likely to lead to further demands for harsh
measures against terrorists
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Leaders of the three least radical fedayeen
groups-including Fatah and Saiga, the two
largest-have joined with fedayeen and other
Arab radicals in publicly condemning Egypt's
moves toward a new disengagement agreement
with Israel. The possibility of an early agree-
ment has already strained Egyptian-Palestinian
relations and prompted the Palestinians to move
closer to Syria. Implementation of an accord
might lead these Palestinians to adopt more
extreme policies, including the increased use of
terrorism.
Palestine Liberation Organization Chair-
man Yasir Arafat, according to a pro-fedayeen
newspaper in Beirut, has said that his Fatah
organization "rejects the American settlement
and will resist it through the barrels of our
guns." Such rhetoric is usually intended for
internal fedayeen consumption, but might in
this case presage an increase in terrorist activity
designed to improve Arafat's political position.
Since Arafat's widely publicized appearance at
the UN last year, his prestige has diminished
steadily as a result of his failure to produce
anything concrete for the Palestinians.
Last March, Fatah commandos raided Tel
Aviv in an effort to undermine Secretary Kis-
singer's attempt to arrange a second Egyptian-
Israeli disengagement. That attack had no direct
effect on peace negotiations, but helped protect
Arafat against charges by fedayeen "rejec-
tionists" that he was cooperating with Egypt
and the US in the false hope that the Pales-
tinians would gain something from negotiations.
Syria's stand will be the most important
single force in determining the extent to which
the more conciliatory fedayeen groups oppose
Egyptian President Sadat. If the Egyptians are
able to reassure Syrian President Asad and limit
Syrian criticism of Egypt, those Palestinians will
have little choice but to follow Damascus' lead.
This would further weaken Arafat by providing
his opponents another opportunity to charge
that the Arab states are pursuing their own ends
in disregard of Palestinian interests.
Damascus so far has not joined the Pales-
tinians '? criticizing the Egyptians. This suggests
that , is views the prospect of another Sinai
accord with less alarm than it did last March and
will take no steps to upset it. The Syrians a--
parently have some confidence that Sadat wii!
include in any new agreement provisions for
negotiations on the Golan Heights.
More may be known of Syria's position
when Damascus responds to the latest Pales-
tinian initiative to implement the "Palestinian-
Syrian joint political and military command."
The command was originally proposed by
President Asad during the March round of peace
negotiations. The proposal lay dormant until
late last week, however, when the PLO central
committee called for the "highest speed pos-
sible" toward setting up a joint body that could
take a unified stand on "current developments."
If Syria becomes disillusioned with Egypt
and abets Palestinian obstructionism, Arafat and
his associates will more directly and forcefully
criticize Egypt, the US, and the principle of a
negotiated settlement. If unchecked by
Egyptian assurances of early negotiating
progress on Palestinian issues, such criticism
could lead ultimately to a new round of terrorist
activity in Israel and abroad.
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There have been no signs of resistance to
the new government since it came to power in a
military-led coup last Friday. Within the regime,
however, a power struggle may be developing
between the middle-grade army officers who led
the coup and senior officers who supported the
plotters but now want to assert their own
authority.
Several army majors have been identified as
the main instig'tors of the coup. They had been
planning for so?;-,e time to move against Presi-
dent Mujib's corruption-plagued, inefficient, and
increasingly authoritarian regime. Senior officers
presumably were aware of the plotting but did
not participate in the coup until after it was
under way. This week there were indications
that tension was starting to grow between the
two groups.
Khondakar Mushtaque Ahmed, Mujib's
commerce minister, was selected by the plotters
to serve as president. They appear to have given
him broad authority to administer the country.
Mushtaque, however, is unlikely to act against
the wishes of whoever emerges in control of the
army; which is the dominant force in the new
regime.
Mushtaque was long regarded as one of
Mujib's more pro-West and conservative political
lieutenants. He has named a cabinet comprised
largely of middle-of-the-road civilians from
Mujib's government and Awami League. The
regime apparently wants to restore democratic
government and civil liberties, abrogated by
Mujib early this year, but Bangladesh's massive
economic and social problems may make it dif-
ficult to abandon martial law soon.
The government's initial statements on for-
eign relations indicate a strong interest in
establishing closer ties with other Islamic
nations. Islamabad, with which relations had
been very limited under Mujib's leadership since
Bangladesh became independent from Pakistan
in 1971, was the first to extend recognition. The
Pakistanis also promised emergency economic
assistance in the form of rice and cloth. Several
Arab nations, including Saudi Arabia, have
extended recognition, as have the UK and
Japan.
The emphasis on Islamic ties, and Pak-
istan's enthusiasm for the new regime, are
causing some concern in New Delhi, which
enjoyed good relations with Mujib's secular and
generally pro-Indian government. The Indians
probably are also uneasy about the possibility
that the new regime will be friendlier toward
China than toward the USSR. So far, India has
adopted a cautious stance. It reportedly has
sealed the border and reinforced police and
army units in the area, but US officials in India
believe these are only contingency moves aimed
at preventing a possible influx of Hindu refugees
who may fear future communal strife in Bangla-
desh.
The Indians m em unlikely to intervene
militarily in Bangladesh, unless major instability
develops there or the new regime pursues
strongly anti-Indian policies. Mushtaque is
regarded as somewhat cool toward India, and
anti-Indian sentiment has been re-emerging in
Bangladesh during the past couple of years, but
the new government is making efforts to avoid
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Mujib
antagonizing its much larger and stronger
neighbor to the west. For example, it appears to
be backing away from its initial moves toward
designating Bangladesh an "Islamic republic."
Mushtaque has declared that his govern-
ment wants friendly ties with all three major
powers. Mujib's regime had generally good rela-
tions with the US and the Soviet Union and was
on poor terms with China, which had sided with
Islamabad during Bangladesh's independence
struggle.
The Soviets have been publicly non-
committal about the coup, but-like most
observers-presumably see it as a setback for
both the USSR and its ally, India. Moscow is
unhappy about what it sees as pro-US sympa-
thies of the new rulers. Its greatest concern,
however, is that Dacca may now seek to im-
prove relations with Peking.
Until the Soviets have a better idea of
Dacca's intentions, they are unlikely to do or
say anything to antagonize the new leaders.
Moscow will probably let India take the lead in
testing the sincerity of the new government's
expressions of desire for friendship with all. The
Soviets may caution India against over-reacting,
although India apparently needs no such advice.
China is guardedly optimistic about
developments in Dacca. This was reflected in its
prompt reporting of the coup. Peking no doubt
is encouraged by indications that the new
regime is moving toward better relations with
Pakistan. If this trend continues and the new
government displays staying power, the Chinese,
who see Bangiadesh as a potential source of
leverage in dealing with India, will probably
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vision by the Supreme Military Council is in
store. In outlining the regime's mode of opera-
tion last weeK, he declared that cabinet deci-
sions would be made collectively and within
guidelines set by the Supreme Military Council.
An advisory role is envisioned for senior civil
servants who exercised considerable indepen-
dence under Gowon.
Mohammed (1) with Brigadier Obasanjo
NIGERIA: A GOOD START
The new military regime that took power
late last month has made a good initial impres-
sion on the Nigerian public by avoiding any
suggestion of ethnic favoritism so far and by
moving to tackle several long-standing domestic
problems. Foreign policy remains on the back
burner for now, although continuity in Nigeria's
relations is heing stressed.
Head of state Brigadier Muhammed, who
comes from the large Hausa-Fulani tribal group-
ing of northern Nigeria, has taken a hard line
against the corruption endemic in the gov-
ernment and has indicated that closer super-
State military governors have been ad-
monished not to tolerate graft or abuse of
power in their administrations. They are dis-
missing large numbers of allegedly corrupt state
officials. At the federal level, steps are beirg
taken to revitalize the watchdog role of the
auditor general. Despite clamor by the press and
student groups, it does not appear that assets of
high-level officials who had been in the govern-
ment of deposed head of state Yakubu Gowon
will be investigated. Such a move could result in
embarrassing counter charges against some mem-
bers of the new regime, including Mohammed
himself.
Panels have been set up to examine the
feasibility of relocating the federal capital from
overcrowded Lagos and to determine whether
additional states should be created within Ni-
geria's federal system. Both issues involve tribal
interests and are politically sensitive. The ques-
tion of more states, is particularly thorny. The
regime risks opening a Pandora's box of agita-
tion fo, the creation of numerous tribally ori-
ented mini-states that would be economicariy
weak.
On the economic front, the regime has
thrown its support behind the $48-billion five-
year development plan Gowon introduced last
April. A task force is being formed to recom-
mend ways to control Nigeria's soaring rate of
inflation, now approaching 40 percent. The gov-
ernment has also issued new scheduling direc-
tives intended to help ease the country's sev:,.re
port congestion that has resulted in shortages of
many essential imports. Various proposals are
being considered to expand and modernize port
facilities.
Nigeria's new rulers may not fully appre-
ciate the complexity of some of the problems
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they intend to tackle. They will soon have to
translate their good intentions into some more
visible progross or face early public disenchant-
ment with their performance and increased pres-
sure for a commitment to return Nigeria to
ANGOLA: NEW INITIATIVES
The Soviet-backed Popular Movement for
the Liberation of Angola, having succeeded in
driving the two rival nationalist groups from
Luanda, is jockeying with the Portuguese for
political control there. At the same time, the
organization is trying to strengthen its hand by
taking military control of the territory's major
economic centers.
On August 19, the Popular Movement an-
nounced that it will establish paramilitary
"people's defense committees" in Luanda. The
committees will be under the administrative
control of the Movement's armed forces. They
will be composed primarily of the thousands of
civilians in the Angolan capital who were armed
by the Movement earlier this year. Similar com-
mittees will probably be established in other
areas where the Movement is militarily domi-
nant, such as Cabinda.
The Popular Movement has long had the
support of the bulk of Luanda's population, but
in the past that support has been unorganized or
diffused among disparate social or quasi-political
organizations. The defense committees will give
the Movement an umbrella organization under
which to mobilize popular support. As part of
the Movement's military force, the committees
will also be an effective means of intimidating
what little popular support the other liberation
groups may still have in the capital.
The Movement's announcement is also a
strong challenge to Lisbon to either recognize
the Movement as the only effective political
organization in the territory or back up its own
claim to sovereignty by suppressing the com-
mittees. Last weekend, the Movement rejected
an announcement by the acting high commis-
sioner on August 12 that he was assuming ad-
ministrative control of the territory because the
transitional government that had included all
three nationalist groups was no longer func-
tioning.
The Movement is trying to capture An-
gola's major port of Lobito and the nearby rail
head at Benguela. The fighting there is now into
its second week. The Movement appears to be
encountering stiff opposition from the National
Union for the Total Independence of Angola,
which has strong popular support in that area, as
well as from the National Front for the Libera-
tion of Angola, the Movement's main rival.
Portuguese military officials have been
unable to arrange a cease-fire through nego-
tiations and are unwilling to use their own
troops to impose a truce. In any event, it is
probably too late for the Portuguese to impose a
truce or reassert their authority over Angola.
The territory's future is in the hands of the
liberation groups, who appear determined to
settle the question on the battlefield.
Condo
Brazzaville
Kinshas
C~~Inda ~~
1
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LIBYA! COUP FOILED
Libyan President Qadhafi foiled a coup
attempt last week led by two members of the
ruling Revolutionary Command Council. Al-
though Qadhafi easily countered the conspiracy,
.ie has now lost the mystique of the "unchal-
Iengeable" leader that provided part of the
underpinning for his special brand of personal
rule.
Major Umar Muhayshi and Major Bashir
Hawadi-two of the lesser lights on the 11-man
council-are the only members directly
implicated in the piot, although Egyptian media
claim others were involved. Muhayshi escaped to
Tunisia where he apparently will be allowed to
remain, despite Libyan efforts to have hire
extradited. Hawadi is under arrest in Tripoli.
The ease with which the coup was
squelched and the relatively relaxed atmosphere
in Tripoli suggest that Qadhafi still commands
the loyalty of key officials in the security and
military services. The search for other plotters is
apparently still going on, but Egyptian press
reports of massive arrests and widespread defec-
tions are almost certainly exaggerated.
Muhayshi has had a stormy relationship
with Qadhafi, who has never trusted him fully
and has occasionally manipulated his assign-
ments and responsibilities within the council.
Muhayshi has had no direct command over mili-
tary or security forces since 1969 and often
chafed under Qadhafi's high-handed ways.
Hawadi is the secretary general of Libya's sole
political party; he, too, has never had direct
access to the levers of power in Libya. Both men
have in the past been harshly disciplined by
their leader for "immoral" behavior and, there-
fore, were motivated at least in part by personal
grievance. However, their defections were p ob-
ably also prompted by broader differences with
Qadhafi over foreign policy and economic issues
and thus may well be a measure of growing
frustration with Qadhafi throughout the regime.
References to tha coup attempt in several
Libyan newspapers suggest that Qadhati is not
especially worried about public reaction, al-
though one editorial-probably written by
Qadhafi himself-warns of a possible purge. This
warning was underscored by a series of council
decrees issued last weekend making subversion,
contact with foreign powers, and other political
crimes punishable by life imprisonment and in
some cases death.
That Qadhafi has ruled Libya for six years
without such laws and without being challenged
attests to his reliance on personal charisma, the
loyalty of his colleagues, and "revolutionary"
esprit de corps as sources of power and
authority. The defection of two of the original
12 leaders of the 1969 coup will erode these
intangibles and presumably the confidence and
security with which Qadhafi has ruled. The
Libyan leader is adept at using other instru-
ments of control, however, and will be forced to
do so in the months ahead. Over the long term,
his stern hand will create new stress in a regime
already strained by internal differences.
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Economy Minister Cafiero (second from left) attends cabinet meeting with President Peron
ARGENTINA: NEW ECONOMY MINISTER
Antonio Cafiero, a 52-year-old Peronist
economist, was appointed minister of economy
late last week. The last member of the new
cabinet to be named and by far its most pres-
tigious minister, he faces an ever deepening
recession that could lead to further troubles
with labor.
During the 1950s, Cafiero held several
important positions under Juan Peron. Most
recently, he was his country's ambassador to the
European Common Market. He has served as an
adviser to the powerful Peronist labor con-
federation and has long been thought to be
labor's choice for the post he now holds.
Cafiero will find it difficult to retain the
support of organized labor, however, because of
t: ,,e effect of the recession on workers already
angered by the precipitous rise of prices. As
demand reacts to rising prices, thousands of jobs
are being wiped out. The US embassy reports a
sharp upsurge in the number of dismissal notices
this month, and many firms have been forced to
curtail or cease operations because they cannot
pay the huge wage increases won by labor.
Accelerating unemployment could lead labor-
which had a major hand in the ouster of Lopez
Rega-to take to the streets again for a new
round of protests over government failure to
reverse economic deterioration.
Cafiero's only specific policy statement
thus far has been .a declaration that he is con-
templating no new devaluations of the peso.
Large, successive devaluations earlier in the year
provoked angry reactions from businessmen and
consumers alike, since the moves contributed to
rising prices. For the moment, Cafiero is limiting
himself to statements of the need for the co-
operation of all sectors in problems that he
admits are serious but claims can he solved.
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25X1
President Echeverria returned home today
from a grueling 45-day, 14-nation trip whose
purpose, although unstated, was to launch his
campaign to become the next secretary gent-?'
of the United Nations.
At each stop on the tour of Africa, Asia,
the Middle East, and the Caribbean, the usual
economic, cultural, and technical agreements
were signed, but most were of dubious signifi-
cance. Of more importance to Echeverria was
the chance to be seen and heard in countries
whose support he will need for the UN post.
Should Echeverria actually run, his most
obvious opponent would be the current secre-
tary general, Kurt Waldheim, whose term ends
on December 31, 1976. Waldheim has given no
indication of his intentions about seeking re-
election.
Since entering office in December 1970,
Echeverria has visited 36 foreign countries and
established diplomatic relations with over 25,
most of them within the past six months.
Clearly, he has been attempting to portray
Mexico and himself as dynamic and "revolu-
tionary" leaders of the develcr+ng world. The
fact that this image does not quite square with
Mexico's national reality nor with Echeverria's
own international stature apparently does not
trouble him.
The President appears to have convinced
himself that he has the answers to troublesome
world problems. His dogged pursuit of support
for his Charter of Economic Rights and Duties
of States, a UN document that attempts to
reorder international economic activity, is an
example of his messianic character. While in
Egypt, Echeverria announced another brain-
storm-an organization to defer i Third World
economic interests. This organization, according
to Echeverria, would go beyond the scope of the
nonaligned group to counter the "imperialism"
of transnational enterprises.
Echeverria is not inclined to rely much on
his institutional advisers and frequently
bewilders them with unexpected decisions,
leaving them to pick up the pieces. His sudden
decision to break relations with Chile last year
left the Foreign Secretariat groping for a
rational explanation. His announcement during
his latest trip that Mexico claimed a 200-mile
maritime zone had the appearance of another
hasty presidential decision. Official spokesmen
later offered assurances that Mexico was not
claiming a territorial sea, but the unilateral move
ran counter to the apparent policy in the For-
eign Secretariat of working in harmony with the
US on matters concerninq law of the sea.
Despite his frequent travels abroad,
Echeverria remains unsophisticated in his world
views, and his dazzi',ng solutions to international
issues derive from oversimplification, if not
ignorance. In the Middle East, for instance, his
hopes of playing the role of peacemaker in the
Arab-Israeli dispute prompted a naive effort to
arrange a meeting between Sadat and Rabin, a
typical instance of his disregard for expert
advice. While in the area, Echeverria added
another fillip to his radical foreign policy by
meeting with Palestine Liberation leader Arafat
and announcing Mexico's recognition of his
organization.
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Although he sees the major world problems
as economic in nature, he does not have a good
grasp of the subject. As in foreign relations,
Echeverria appears to rely little on his advisers.
Under Echeverria, inflation in Mexico has be-
come a serious problem, the balance of pay-
ments has deteriorattd, and private investment
has stagnated. Many of his economic decisions
seem intended for short-run political gain. The
recent agreements with the EC and CEMA may
eventually benefit the country economically,
but during their early years their impact will be
primarily political.
Echeverria's five-day visit to Cuba this
week completed his tour. Squired around the
island by Prime Minister Castro, Echeverria was
rich in his praise of the Cuban revolution and
critical of US actions against the Castro regime.
The two leaders shared their enthusiasm for the
Latin American Economic System, another
Echeverria brainchild.
The President's next trip abroad will prob-
ably be to the UN in October, where he no
doubt will all but offer himself as a candidate
for secretary general.
URUGUAY: ECONOMIC TENSION
The confrontation last week between
civilian and military officials over economic
policy-making was settled by an imposed com-
promise, but the underlying causes remain and
could resurface at any time.
The focal point for the continuing dispute
is the personality and policies of Minister of
Economy and Finance Alejandro Vegh, who
advocates a strict austerity program to cope
with the country's inflation-ridden economy.
His program is designed to reform the nation's
cumbersome economic system, restore its
credit-worthiness in the eyes of international
financial institutions, and attract badly needed
foreign investment.
Some nationalistic officers such as General
Gregorio Alvarez, the ambitious commander of
the Fourth Army, and General Abdon Rai-
mundez, vice president of the Bank of the
Republic, disagree with many of Vegh's policies
and criticize his alleged subservience to the re-
quirements of international financial institutions
and his favorable treatment of multinational
corporations. Most members of the military high
command tend to agree with Vegh's views but
not his independent approach to economic
policy. President Bordaberry, however, sees this
independence on the part of a civilian cabinet
member as giving him some maneuverability in
the military-dominated government.
The most recent clash between Vegh and
the military was triggered by the armed forces'
attempt to cancel a $110-million loan, secured
by Uruguay's gold reserves, that he had nego-
tiated with a consortium of foreign banks. The
irate cabinet officer submitted his resignation,
which Bordaberry refused to accept. In a sub-
sequent acrimonious meeting with the armed
service chiefs, Vegh demanded that his program
be implemented without interference and that
Raimundez and other directors of the bank be
removed and replaced by persons who had his
confidence. 25X1
As in previous conflicts between civilian
and military officials, both sides eventually com-
promised to avoi-+ a national crisis. Vegh's gold-
backed loan was approved, and Raimundez re-
mained in his post, although he apparently was
told to stop meddling in the economy minister's
activities.
While this agreement provides some tempo-
rary stability, the continuing struggle over the
nation's economic policy-making machinery
undermines foreign and domestic confidence in
Uruguay's long-term economic prospects. Vegh
may be able to centralize economic decision-
making within his office for a while, but his
moves will be closely scrutinized by the military
high command, and the conflict between civilian
and military officials over who makes economic
policy will continue to be a major political irri-
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General Leigh
CHILE: NEW PROBLEMS FOR PINOCHET
Chile's economic plight and the govern-
ment's poor image abroad have increased fric-
tion within the ruling junta. So far, dissatisfac-
tion with President Pinochet has been low key
and has not threatened his authority, but criti-
cism is likely to grow stronger in the months
ahead.
General Leigh, a key junta member, di-
rectly criticized policies closely linked to Pino-
chet during recent talks with Ambassador
Popper and visiting USIA Director Keogh.
Leigh's remarks were in line with earlier reports
that he had serious reservations about the ef-
fects of the government's austerity measures,
especially their impact on the poor.
Economic conditions have deteriorated
rapidly during the past year; there is en indus-
trial slowdown and unemployment has jumped
significantly. Predictions that some Chileans will
starve are being heard more frequently as winter
in the Southern Hemisphere adds to existing
hardships for the middle and lower classes.
Growing numbers of beggars are on the streets
of the capital and soup kitchens have sprung up.
The government's resources are limited, and it is
unlikely to be able to ease the situation much.
General Leigh's concern about the gov-
ernment's ability to survive the high unemploy-
ment rate and the almost certain spread of
discontent is shared by others in the military.
Unless some improvement can be shown by the
end of the year, pressure is likely to increase for
a shift in economic policies and replacement of
the present economic advisers.
In his conversations with the US ambas-
sador and Keogh, General Leigh also took issue
with Pinochet's view on the future of the mili-
tary government. Pinochet has announced pub-
licly that the military intends to stay in power
for an indefinite period. Leigh suggested that
this is impossible and that Chile must find a way
to return to a democratic system with a strong
executive.
Pinochet's handling of human rights issues
has also become a source of friction. General
Leigh expressed dismay at the government's
public image and strongly criticized the way
Pinochet handled decisions concerning the UN
Human Rights Commission's efforts to visit
Santiago. Leigh said something must be done to
refurbish Chile's international reputation, and
he intends to request a special junta meeting
soon to take up the matter.
Other top officials are disturbed over the
image problem, but the government continues
to crack down on dissidents. Last week, for
example, as many as 44 persons-professors,
students, and employees at the University of
Chile-were arrested for "Marxist" activity. The
education minister, Rear Admiral Troncoso, said
that those in custody had been meeting clan-
destinely to plan protests against university
policies. The minister also said that an investiga-
tion was under way and that the government
wou!d prevent a return to "unrestricted per-
missiveness." The minister told the press that
some persons will be released, but that they will
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still be fired from their jobs or expelled from
the university. He added that arrests may also be
made at other universities.
The military government probably intends
the crackdown as a warning to opponents who
may have been planning to exploit the junta's
poor economic performance and international
reputation. The latest round of arrests, however,
following last month's detention and exile of
labor leaders in the north, will only aggravate
the regime's difficulties in trying to convince
international opinion that it has moderated its
internal security practices.
Chile's attempt to improve its international
standing through a broad diplomatic offensive
has run into trouble. Goodwill missions planned
for Europe, Africa, and the Middle East have
become bogged down in scheduling difficulties
and postponements that clearly reflect a lack of
interest on the part of most prospective host
countries.
A number of European longshoremen's
unions are studying the idea of supporting a
trade embargo against Chile, apparently at the
behest of Chilean exile groups headquartered in
Helsinki. The prospect of a boycott of cargoes
shipped to and from Chile is causing cor?cern in
Santiago, and the Pinochet government has
probably instructed its ambassadors in Europe
to take whatever steps they can to avert this
possibility. There is a good chance that some
economic sanctions will be imposed, which in
turn would aggravate the country's already
dismal economic situation.
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On September 2, President Perez will sign
legislation nationalizing the billion-dollar for-
eign-owned petroleum industry. The for.ial
transfer of the facilities to state control is to
take place on December 31.
The bill's passage through both legislative
chambers was marked by stormy debate and
charges that steamroller tactics were used by the
governing Democratic Action Party, which com-
mands a majority in the Congress. All political
parties agreed that the time had come for Vene-
zuela to take over and operate for its own
benefit the country's major extractive industry.
Nevertheless, sharp differences emerged over
what role, if any, the roreign petroleum com-
panies would be permitted after nationalization.
President Perez insisted on being given maxi-
mum flexibility to enter intc "association agree-
ments" with the companies if he considered
them to be in the national interest.
Although Democratic Action leaders have
privately criticized the government's handling of
the oil bill, they gave Perez full backing in the
several months of intense congressional debate.
In dealing with his own party as well as the
opposition, Perez' hand was strengthened by his
personal popularity, rising nationalistic senti-
ment, and the apparent inability of the opposi-
tion parties to generate public inta-est in either
the vulnerable features of the nationalization
program or the government's failure to specify
how it intends to run the industry.
A major reason for the lack of effective
opposition is the internal dissension that is
debilitating the major opposition groups. The
Social Christian party is in the midst of a power
struggle between former president Rafael
Caldera and left-wing leader Herrera Campins
for the secretary-generalship of the party, a
traditional stepping stone to the presidential
nomination. Further left, the Marxist Movement
to Socialism, which for some time was con-
sidered a leftist party with real political poten-
tial in 1978, is having similar problems. r he
dissension, which began in 1974 as largely
philosophical, has now been accelerat,;.d by the
personal ambitions of the party's various
leaders.
With the passage of the nationalization bill,
the government and the companies can be ex-
pected to get down to serious negotiations. A
Venezuelan team headed by Mines and Hydro-
carbons Minister Valentin Hernandez has been
holding separate talks with representatives of
the major oil firms since June to consider
possible post-reversion contract arrangements as
well as compensation.
Following President Perez' promulgation of
the nationalization act, the government, under
terms of the bill, must submit a formal offer of
compensation within 45 days. The former con-
cessionaires must then reply to the offer within
15 days. If the petroleum companies do not
agree to the offer, then article 13-which re-
quires the Venezuelan Supreme Court to deter-
mine the ar Dunt of compensation-would take
effect.
The talks so far have been conducted pri-
vately, but Venezuelan officials report they are
going well. This optimistic appraisal appears to
be supported by some companies' interest in
supplying technology, transportation, marketing
outlets, and management, in order to maintain
access to the oil.
With approximately 19 foreign oil firms
operating in Venezuela, the negotiations will
probably take some time to compete. The cur-
rent Venezuelan negotiating strategy is to con-
centrate on reaching a settlement first with the
largest producing companies--Creole (EXXON),
Mene Grande (GULF), and Shell of Venezuela-
with the thought that the others will fall quickly
in line. Such thinking may be unrealistic-with
less at stake and not as dependent on Venezue-
lan petroleum, the smaller concessionaries may
be tough bargainers. This phase of the talks
could become acrimonious and lengthy.
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CAMBODIA: INTERNATIONAL DEBUT
In preparation for an international debut in
Lima and the UN, Phnom Penh's communists
are bestowing government titles on several of
their prominent party leaders and are trying to
resolve the problem of Sihanouk. The new gov-
ernment has sent its first official delegation
abroatt since the communist take-ove;-a short
visit to Peking and Pyongyang led by Deputy
Prime Minister Khieu Samphan.
The four-day visit to China generated a
spate of mutually laudatory public statements,
effusive praise of the close relations between the
two countries, and a joint expression of opposi-
tion to "hegemonism," Peking's label for Soviet
expansionism. The Cambodians were treated to
talks with Premier Chou En-lai and Vice Premier
Teng Hsiao-ping.
The signir g of an economic and technical
cooperation agreement highlighted the visit, and
Samphan referred to it as "unconditional and
gratis aid." The Cambodian leader also hinted
that an agreement covering telecommunications
and civil air service was reached.
The Cambodians said they agreed with
Peking on "the current international situation,"
a probable indicaflc.n that the Cambodians
accept Peking's dark view of Soviet and North
Vietnamese designs in Southeast Asia-and the
joint communique refers specifically to the close
unity between the two sidr's in the "struggle
ahead against colonialism, imperialism, and
hegemonism."
The only apparent problem in the visit was
what to do with "head of state" Prince
Sihanouk. The Chinese made a pro forma refer-
ence to Sihanouk in their section of the com-
munique; the Cambodians did not. More im-
portant, Sihanouk did not return to China to
meet with the Cambodian leaders. The fact that
the meetings with Sihanouk took place in
Pyongyang, where Sihanouk has been since May,
is a clear signal that the Chinese are not anxious
to get directly involved in determining
Sihanouk's future role in the new regime.
The brief announcement from Pyongyang
revealed at least an interim agreement on the
Sihanouk issue and indicated that the prince
would accompany Khieu Samphan back to
Phnom Penh, would retain his position as chief
of state, and will probably continue to perform
ceremonial duties. Thore was no indication,
however, that this is a long-term solution.
Earlier reports have indicated that the prince's
return to Cambodia could well be temporary
and that he may soon make another trip abroad.
In Pyongyang, the prince himself said that he
will return to North Korea to celebrate the
anniversary of the Korean Workers' Party in
October.
Even before Khieu Samphan's trip to sort
out the Sihanouk issue, Phnom Penh named two
more leading in-country communists as deputy
prime ministers, further eroding the position of
the Prince and his supporters in the government.
Widely traveled leng Sary, who probably holds a
top position in the Khmer Communist Party,
was named deputy prime minister for foreign
affairs. Up to now, Foreign Minister Sarin
Chhak, who has been a Sihanouk loyalist and is
based in Peking, has handled most foreign con-
facts for the new communist regime. Son Sen, a
member of the central committee of the Khmer
Communist Party and former chief of staff of
the Cambodian People's National Liberation
Armed Forces, is the new deputy prime minister
for national defense affairs.
Deputy Prime Minister Khieu Samphan's
reception in Peking--equal to a visiting head of
state-reinforces the belief that he is in fact
Cambodia's prime minister, although Penn
Nouth, a Sihanouk loyalist, still holds the
formal title. Phnom Penh's announcement of
Samphan's visit to China listed him as Deputy
Prime Minister for "general affairs" and as Com-
mander in Chief of the People's National Libera-
tion Armed Forces, omitting his former position
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Aug 22, 75
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as defense minister. Son Sen probably has
primary responsibility for military affairs.
The communists appear to be retaining
Penn Nouth for the sake of appearance. He
played a secondary role in the Cambodian del-
egation's visit to China but, in a possible show
of deference to Sihanouk, Penn Nouth was
listed as the leader of the Cambodian delegation
in its visit to North Korea, and Khieu Samphan
was listed as deputy chief.
LAOS: LIBERATING THE CAPI-AL
After nearly three months of painstak-
ing preparations, the communists on August
15 began the "liberation" of' Vientiane.
Their objective is to end the joint commu-
nist and non-communist control of the ad-
ministrative capital in Vientiane and the
royal capital in Luang Prabang that was set
up in accordance with the 1973 Lao peace
accords.
Communist organizers mustered several
thousand people for rallies in various sec-
tions of Vientiane and for one rally in Luang
Prabang on August 18. The participants, ac-
companied by Pathet Lao troops and cadre,
followed instructions by shouting slogans
calling for changes in the local government,
but in general the crowds seemed unenthusi-
astic. Nevertheless, Radio Pathet Lao
quickly announced that the government had
bowed to the will of the people and had
replaced corrupt non-communist officials
with those of proper revolutionary spirit.
The demonstrations are supposed to be
followed by a massive rally in downtown
Vientiane where the crowds will ask the
government to change the 1973 accords to
end the city's neutral status. Restrained anti-
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leng Sary's prominence in foreign affairs is
highlighted by his role as deputy in the delega-
tion to China and as head of the delegation to
the nonaligned conference to be held in Peru in
late August. There has been no indication of any
intention to include Sihanouk in the delegation,
but Sarin Chhak is the deputy. Attendance at
the nonaligned conference will mark Cambodia's
first participation in an international event since
the communists carne to power in mid-Anril
US demonstrations are expected to coincide
with the final mass rally. Anti-US propa-
ganda has increased measurably in the past
several days, with the US being blamed as
the source of most problems in Laos and
elsewhere in Indochina. As the process of
"liberation" progresses, the Communists are
moving quickly to tighten population con-
trols. Pathet Lao troops have set up ro?d-
blocks throughout the city and are ex
amining documentation and searching
vehicles.
Communist organizers are reportedly
claiming they will not use this round of
demonstrations to alter the arrangements yet
up for the national coalition in the 1973
agreements. Many Lao suspect, however,
that the communists will use the rally to
pressure non-communist ministers to resign
by instigating charges of corruption. Min-
ister of Defense Pheng Phongsavan, once
one of the leading "neutralist" politicians,
believes he will be a target and reportedly is 25X1
making final preparations for his flight. The
vacant cabinet post almost certainly would
be filled by lesser known fiaures rlpnpnrlpn4
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THAILAND: A NEW LOOK
Thailand's increasingly tough stance to-
ward Laos and North Vietnam in recent weeks
points to a new and more balanced conduct of
Thai foreign affairs.
During the past week, Bangkok expelled
two Lao diplomats in retaliation for the arrest
of two Thai military attaches in Vientiane and
was prepared to order an economic boycott if
the attaches had not been released. The Thai are
convinced that the release of the attaches was
prompted as much by their toughness as by
Vientiane's desire to preserv- :,ood relations.
Bangkok is also convinced that improving
relations with Peking has helped in dealing with
Hanoi. In sharp contrast to a desire to accom-
modate to Hanoi's demands several months ago,
Bangkok is stiffening its bargaining position and
appears in no hurry to establish diplomatic rela-
tions. Foreign Minister Chatchai, who had been
the most prominent advocate of accommoda-
tion with the North, recently told Hanoi to
"mind its own business" in response to a Viet-
namese broadcast attacking a joint US-Thai
naval exercise.
be neutralist in orientation and anchored to
efforts to develop balanced relations with the
great powers as the principal means of assuring
Thailand's security. In an effort to restrict
Vietnamese influence in Southeast Asia, the
Thai will seek to maintain good relations with
the US, the Soviets, and the Chinese. To prevent
Thailand from being dragged into great-power
competition, Bangkok will use ASEAN to try to
make the region a "zone of peace and
neutrality."
The Thai will also work to strengthen their
neutralist credentials by becorning more active
in Third World political and economic causes.
Bangkok will probably vote more frequently
PHILIPPINES - NORTH VIETNAM
Diplomatic Debacle
The shift from a precipitate embrace of
communist neighbors and cooling of relations
with the US can be attributed in part to Prime
Minister Khukrit's efforts to put his personal
stamp on Thai diplomacy. Within the past
month Khukrit not only has conferred with
Chinese leaders but has visited Kuala Lumpur,
Jakarta, Manila, and Singapore, his partners in
the Association of Southeast Asian Nations.
The Prime Minister returned from his
travels convinced that Thailand should work to
strengthen ASEAN politically and economically
as a means of countering communist influence.
Toward this end, he has encouraged an early
convening of an ASEAN summit conference and
the early implementation of proposals for a free
trade area and joint economic projects.
While the process of adjusting Thai foreign
policy to post-Vietnam realities is far from
complete, the broad outlines of Khukrit's new
directions are already clear. Foreign policy will
Page 21 WEEKLY REVIEW Aug 22, 75
President Marcos is in a diplomatic bind.
Earlier this month an overeager career diplomat
exceeded his authority by signing a joint com-
munique establishing relations with North
Vietnam on terms that are unacceptable to
Manila.
According to Philippine officials, Ambas-
sador Mangila was sent to Hanoi to discuss the
repatriation of several hundred Philippine citi-
zens stranded in Saigon when the communists
took over, but he was told to sound out pros-
pects for diplomatic relations if the opportunity
arose. The main discussio.is on establishing rela-
tions have been going on in Paris between the
Philippine and North Vietnamese ambassadors.
The joint communique, which Mangila
signed in Hanoi on August 7, contained pro-
visions with an anti-US tone that Manila had
already rejected in Paris as "totally unaccept-
able." In the communique, Manila promised not
to let the US use Philippine territory "to oppose
the Vietnamese people," and agreed that all
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property belonging to the former Saigon gov-
ernment should be returned to the communist
regime.
Backtracking
Marcos has already formally apologized to
the US government for the communique and
told Ambassador Sullivan that Manila regards it
as invalid. He said the Philippine ambassador in
Paris will be instructed to inform his Vietnamese
counterpart that diplomatic relations have not
been established and that negotiations should
continue on the basis of the status quo ante. He
has also promised to inform his partners in the
Association of Southeast As' m Nations about
the fiasco and is ready to give the US assurance
that none of the Vietnamese equipment will be
turned over to the communists. The North Viet-
namese have already used the Philippine com-
munique to criticize Thai refusal to return such
equipment.
Hanoi has apparently not yet been offi-
cially informed that Manila repudiates the com-
munique, but the Vietnamese undoubtedly are
suspicious. Mangila did not confirm diplomatic
relations publicly on his arrival in Manila this
week, as stipulated in the communique. He said
only that he had submitted his report to the
president.
Marcos is doubtless aware that once the
affair becomes public, he will be subjected to a
propaganda barrage from Hanoi and be vilified
as a US puppet who buckled under pressure
from Washington. The debacle is not only an
acute diplomatic embarrassment for Marcos but
a setback in his careful campaign to improve his
nonaligned image and end Manila's close public
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CHINA: MODERNIZING THE MILITARY
The Chinese reportedly have decided to
improve the combat effectiveness of their armed
forces by selectively reducing nonessential and
over-age personnel. This is not expected to lead
to any radical changes in military organization
or doctrine, but over the longer term the
Chinese clearly are working toward a more
streamlined and modern combat force. The
decision may also have important implications
for Mao's influence over the military.
only passing reference to Mao. Mao is both the
chairman of the military commission-the body
which hosted the meetings-and, as party chair-
man, titular commander in chief of the armed
forces. His authority would normally be invoked
in a matter of this importance. Although there is
no hard evidence that Mao opposed the plan, it
does go against his oft-stated preference for men
over weapons. Shortly after last month's meet-
ing, former army chief of staff Lo Jui-ching
reappeared in public. The reappearance of Lo,
who was purged by Mao and Lin during the
Cult-oral Revolution-in part for espousing
greaten professionalism in the PLA-may have
been intended to underscore the commitment to
modernization.
The Chinese apparently
elieve that the army is too large and too inef-
ficient to meet effectively the increasingly
sophisticated requirements of modern warfare.
In high-level group discussions, cadre members
concluded that the military is to be modernized
and new emphasis given to advanced technical
areas such as mechanized, anti-tank, chemical,
and missile forces as well as the air force.
Mao's position on the reorganization
unclear.
speec es by Teng Hsiao-ping and
Yeh Chien-ying at the meeting last month made
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The military can be expected initially to
reallocate its resources rather than benefit from
a budget increase. Over time, however, recogni-
tion of the need for more sophisticated
equipment and more technically skilled troops
can only increase pressures to give a larger share
of the budget to the military.
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Peking realizes that the disposition of
personnel affected by the reduction is a sensitive
and difficult problem. Senior cadre with long
military experience will be retained as "con-
sultants," but will have little power. The
younger and physically able cadre will be sent to
rural areas to train local militia and act as militia
officers in wartime. Still others will be assigned
to factories and communes and will not be
allowed to settle in the cities.
During the past few years, Peking has been
vigorously moving toward reducing the mili-
tary's role in politics and focusing the military
only on military matters. Recent events in
Chekiang Province, however, point up the
leadership's willingness to continue to use the
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UN: SPECIAL SESSION INDICATORS
The outcome of the meeting of nonaligned
foreign ministers in Lima next week will be the
single most important factor determining
whether the 7th Special Session of the UN Gen-
eral Assembly on development and economic
cooperation-which opens September 1-can
avoid another open fight between rich and poor
states. Representatives of some developing states
and many industrialized nations have been
lobbying against possible efforts by other
developing states such as Algeria to launch an
offensive against the developed states in Lima
that will carry through the special session. The
radical wing of the developing state group is
seeking a fundamental realignment of the inter-
national economic system to one more favorable
to all developing states.
Although the radicals remain in firm con-
trol of the nonaligned movement, their victory
at Lima-which appeared likely earlier this
year-no longer is a foregone conclusion. They
have dominated the nonaligned movement since
before the Algiers nonaligned summit in
September 1973 and have increasingly pushed
the group to set the policy for developing states
on economic issues. Control over the nonaligned
by extremists has lessened of late, in part be-
cause their very success in promoting the move-
ment has led to more competition for leader-
ship.
Those developing countries that oppose the
Algerian stand meanwhile have had some success
in moderating the stand of the poor-country
caucus at several international meetings this
summer. At last month's session in Geneva of
the UN Economic and Social Council-which
was almost exclusively devoted to setting an
agenda for the 7th Special Session-less extreme
developing states were instrumental in forging
an agreement with the industrial states on a
"neutral" agenda. The ECOSOC session thus
became the only productive forum so far in
preparation for the special session. Its con-
ciliatory tone was sustained at the meeting of
the Trade Development Board of the United
Nations Conference on Trade and Development
last week and in this week's meeting of the third
preparatory conference for the special session.
Although the Algerians and their allies did
not impose their will at the summer meetings,
they made sure their presence was felt. Algeria
went out of its way during informal talks with
several EC states to lecture them about their
"unsatisfactory" policy with respect to the
demands of the developing states. Algeria also
lashed out at a group of African states that
challenged Algeria's opposition to singling out
the need for aid to the poorest developing
states.
Negotiations in several other forums will
also have an impact on the deliberations of the
special session.
The International Monetary Fund meets at
the end of August in Washington. If the indus-
trialized states settle some of the outstanding
issues on monetary reform, they may get around
to establishing a special fund to help developing
states. Such a decision, immediately preceding
the special session, would strengthen the influ-
ence of the less extreme developing states; fail-
ure would strengthen radical arguments for con-
frontation.
The Commonwealth finance ministers will
meet in Guyana on August 26 to consider a
document which reportedly endorses many of
the fundamental demands of the developing
states. Although the genesis of the document
was a speech by British Prime Minister Wilson in
Jamaica last spring, the paper, as it is currently
formulated, goes well beyond Wilson's original
suggestions. If the UK officially endorses the
paper, those developing states that seek dialogue
over confrontation would presumably be heart-
ened-even though Britain could by such en-
dorsemer,t cause strains among the developed
countries.
Should details on calling another confer-
ence of oil producers and consumers be settled
before the special session begins, the less ex-
treme developing states might also be strength-
ened in their arguments that prospects for a
meaningful dialogue with the developed states
should not be stymied by creating an outright
clash at the New York qp,,,,inn
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