WEEKLY SUMMARY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 03172658
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 68
• Document Creation Date: October 23, 2023
• Document Release Date: August 28, 2023
• Case Number: F-2022-01252
• Publication Date: June 19, 1970

Approved for Release: 2023/03/28 C03172658
Nee virt
DIRECTORATE OF
INTELLIGENCE
Itcret,
WEEKLY SUMMARY
-SeeFet
44
19 June 1970
No, 0375/70
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�SFEVA"R-E-
The WEEKLY SUMMARY, issued every Friday morning by the
Office of Current Intelligence, reports and analyzes significant
developments of the week through noon on Thursday. It fre-
quently includes material coordinated with or prepared by the
Office of Economic Research, the Office of Strategic Research,.
and the Directorate of Science and Technology. Topics requir-
ing more comprehensive treatment and therefore published sep-
arately as Special Reports are listed in the contents pages.
WARNING
The WEEKLY SUMMARY contains classified information af-
fecting the national security of the United States, within the
meaning of Title 18, sections 793 and 794, of the US Code, as
amended. Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP
Excluded from automatic
downgrading and
declassification
S
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vire NW'
CONTENTS
(Information as of noon EDT, 18 June 1970)
Page
NATO: Ministerial Aftermath in Review 1
FAR EAST
Vietnam 2
Laos: Portents of a Greater Communist Presence 5
Cambodia: After Angkor, What? 7
Asian Group Consults on Cambodia 8
Communist China: Where's Old Hsieh? 9
Communist China: Playing Its Cards Adroitly 10
Philippines: Student Unrest Brewing 11
CHINA STAYS EVEN IN FOOD/POPULATION RACE
EUROPE
USSR: Out of Step on Indochina 11
USSR-Romania: Victory for Whom? 12
Yugoslavia Seeks US Private Investment 13
USSR: Leaders' Speeches Wind up Election Campaign 14
Italy: Center-Left Optimistic 14
-speR-ET__
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SEeREZ. NNW
MIDDLE EAST - AFRICA
Jordan Still Verges on Disaster 17
Middle East 18
Tunisia Forms a New Government 19
India and Mrs. Gandhi 20
WESTERN HEMISPHERE
Diplonapings Continue in Latin America
Argentina: General Levingston, I Presume?
Peru-US: Earthquake Disaster
21
POLITICAL CHANGE IN GUATEMALA: ORDER vs. VIOLENCE
-57eRE-T._
22
24
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NraV NrO'
NATO: Ministerial Aftermath in Review
The Allies, during the traditional spring
meetings of defense and foreign ministers,
launched the most thorough examination of the
Alliance since the 1967 "Harmel Exercise." The
NATO members, through a study of Allied De-
fense Problems in the 1970s (AD-70), will
attempt to determine how the Alliance should
manage its defense in the coming decade. At the
same time, they will weigh the prospects for de-
tente by assessing the reception in the East to
their initiatives on European security and on
mutual and balanced force reductions.
The AD-70 study was given an official go-
ahead by the defense ministers last week in Brus-
sels, and the European members of NATO appar-
ently believe that the study may well imply an
increase in their share of the defense burden. The
European defense ministers seem convinced that
their countries cannot stand by passively in the
event the US reduces its presence in Europe.
Despite their view that it would be impossible to
increase their own defense budgets, they decided
to examine how, through better allocation of
expenditures, they could ease the cost to the US
in order to forestall or limit possible US troop
cutbacks.
Apparently on the initiative of West German
Defense Minister Schmidt, the group agreed to
explore the possibility of taking over part or all of
the US portion of NATO's infrastructure expendi-
tures. Schmidt reportedly told the others that the
issue was one of "cash from our budgets." British
Defense Minister Healey suggested that the Euro-
peans could be more helpful to the US by financ-
ing the local costs of US forces. Schmidt appar-
ently will be pressing the Europeans to come up
with some concrete proposals by late September
in the context of the AD-70 study for a more
effective European defense commitment.
The European defense ministers also dis-
cussed possible intra-European cooperative arma-
ment programs as a way of getting more for their
money. Dutch Defense Minister den Toom argued
that European political cohesion as well as mili-
tary and cost effectiveness required such coopera-
tion. The ministers made no firm decisions, but
they reacted favorably to a number of potential
programs�including exchanges of information on
long-term weapons programs and cooperation in
training. They also agreed that although there was
no hope of winning the early return of France to
NATO's integrated command structure, Paris
could be brought closer to the Alliance through
involvement in such cooperative ventures.
A number of NATO members already are
following up the agreement of their foreign min-
isters in Rome to multiply exploratory conversa-
tions with the East. The Rome communiqu�
stated that one of the main purposes of such
contacts would be to determine when one or a
series of conferences on European security and
cooperation would be fruitful. The initial Soviet
reaction to these initiatives has been predictably
negative, although less shrill than usual. Nonethe-
less, there is already speculation that the major
detente issue at the next meeting of the foreign
ministers in December will be whether enough
progress has been made on Germany, Berlin, and
other specific issues to justify undertaking the
more extensive multilateral contacts foreseen in
the communidue.I
� � �
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*410?
Vietnam
Swinging into Summer
The Communists' summer campaign is set to
get under way in the near future, possibly this
weekend. Captured documents and agent report-
ing strongly suggest that some sort of stepped-up
action is scheduled to begin on or around 20 June
in several sectors of South Vietnam, particularly
in the northern provinces.
The enemy's summer campaign will prob-
ably be similar to the relatively low-key spring
campaign, which was marked by three brief up-
surges of enemy attacks in the opening days of
April, May, and June. There are some indications,
however, that this time enemy forces may try to
sustain some of their shellings and limited sapper
and guerrilla actions over a longer period of time
for greater impact. It is also likely that the Com-
munists may try to hit hard at South Vietnamese
forces in certain localized areas, especially in
southern I Corps.
Enemy forces in the two northernmost prov-
inces of Quang Tri and Thua Thien may also be
getting set to take advantage of improving
weather conditions in the coastal regions. North
Vietnamese forces in the western reaches of these
provinces presumably are fully equipped, rested,
and ready for combat Combat-related activity,
such as reconnaissance and movement of supplies,
has picked up sharply in recent weeks, but these
could be partly defensive measures prompted by
growing enemy apprehensiveness over possible al-
lied incursions into Laotian border redoubts.
Saigon Agitation on Upbeat Again
The Thieu government is once again faced
with increasing protest activity despite its efforts
to appease the various groups involved. After sev-
eral weeks of relative quiet in Saigon, students
have renewed their protests by staging some of
the most violent antigovernment demonstrations
experienced so far this year. \
(b)(3)
(b)(1)
/ The government had at-
tempted to defuse the situation through a series
of conciliatory gestures including personal meet-
ings between Prime Minister Khiem and student
and veteran leaders, but so far its efforts have not
borne fruit.
The new student demonstrations, which
broke a temporary truce arranged by relatively
moderate student leaders, suggest that militants
have taken over leadership of the protests. The
government had provisionally released some of
the arrested student leaders whose imprisonment
has been a primary issue in the protests. The
militants, however, may regard government at-
tempts at conciliation as a sign of weakness and
an opportunity to press for further concessions.
The demonstrators, whose mood has become
clearly anti-American and antiwar, are now pro-
testing on a wide range of issues, including the US
presence in Vietnam and the government's alleged
failure to move toward peace.
(b)(3)
(b)(1)
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WEEKLY SUMMARY
19 Jun 70
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,P4S
(b)(3)
(b)(1)
Altholinh rtivist elements
would like to intensify their
antigovernment campaigns, the situation appears
fluid. The ability of these more militant leaders to
carry out their plans will depend partly on how
well they succeed in mobilizing their followers,
including elements that have heretofore been
more moderate, and partly on the effectiveness of
government countermeasures.
/ If they should join forces, however, the
government would be faced with a much more
serious situation. (SECRET NO FOREIGN
DISSEM)
� � �
ITC-REX_
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-.Stel?c�EZ
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Nine
Nod
Laos: Portents of a Greater Communist Presence
Laotian Army forces have so far been unsuc-
cessful in fulfilling Vientiane's pledge to retake
Saravane. During the past week the Communists
have turned aside repeated government probes in
and around the town. On 16 June they spiked the
first coordinated effort to recapture the pro-
vincial capital by seizing the base camp where
government units were assembling.
The Communists' apparent determination to
hold on to Saravane�despite its relatively minor
military significance�raises questions about the
enemy's current goals in the Laotian panhandle.
Beginning with the seizure of Attopeu on 30
April, North Vietnamese and Pathet Lao forces
have been unusually active in what has generally
been accepted as a campaign to gain additional
supply lines to Cambodia and South Vietnam.
There is no question that full control of the road
and river systems between Muong Phine and
Attopeu will provide the Communists a useful
alternative to the Ho Chi Minh trail system to the
east. It is not certain, however, that the enemy's
continuing high level of military activity has been
based on logistic considerations alone.
In gaining control of the supply corridor via
Routes 23 and 16, the Communists did not need
to attack either Attopeu or Saravane. These pro-
vincial capitals, which had been in government
hands since the Geneva Accords were signed in
1962, have for some time been bypassed by
enemy truck traffic. Their seizure represents a
clear break�calculated in Hanoi�with the long-
standing, rules of the game in southern Laos. It is
possible that the North Vietnamese may have
intended to indicate that they are no longer con-
strained by the Geneva Accords and that they feel
free to pursue territorial ambitions in southern
Laos that go beyond controlling a supply conduit
to Cambodia and South Vietnam.
the Cornmu-
nists have been making a determined effort since
seizing the town to win over the population by
improving economic conditions, maintaining basic
government services, and taking a low military
posture. An extensive political indoctrination
program for Attopeu residents has included
propaganda statements that the Communists in-
tend to take all of southern Laos in the next six
months.
Northern Laos Quiet
(b)(1)
(b)(3)
In northern Laos, meanwhile, adverse
weather conditions have brought military activity
to a virtual standstill. With the advent of the rainy
season, the civilian population of the Long Tieng
area apparently has become convinced that the
Communist threat has receded. As of mid-June, (b)(3)
more than half of the inhabitants of the Long
Tieng Valley had returned to their homes and
resumed normal commercial activity.
� � �
-SECRET--
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Nome
Cambodia: Current Current Situation
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Cambodia: After After Angkor, What?
In Cambodia, the Lon Nol government's
position in the countryside continues to deteri-
orate rapidly in the face of increasing Communist
military operations. Since late March, for
example, the Communists have attacked 15 out
of 19 provincial capitals, and they still occupy
lour of these key population centers in the north-
east (Stung Treng, Kratie, Lomphat, and Sen-
monorom). The government's position in the
northeast has been reduced to two beleaguered
outposts in Ratanakiri Province, and these are
under continuing Communist harassment.
There are indications that the Communists
already are exploiting their de facto control over
this zone to develop a huge new base area.
West of the Mekong, the Vietnamese Com-
munists are making bold inroads in the northern
provinces of Siem Reap, Kompong Thom, and
Preah Vihear. The government apparently has
stabilized the situation at Siem Reap, but an
unknown number of Communist troops are re-
ported to be moving into the ruins at Angkor
Wat, seat of the ancient Khmer empire. If the
Communists succeed in maintaining a presence in
this area, it will constitute an important propa-
ganda and psychological gain for them.
In the eastern border province of Kompong
Cham, enemy activity appears to be rising again.
The province capital is defended by Khmer Krom
forces�ethnic Cambodians who had been fighting
under allied command in South Vietnam.
In the border provinces to the south and
southeast, the Communists continue to attack
and harass government positions despite the fre-
quent proximity of South Vietnamese troops.
Svay Rieng and Prey Veng cities are frequent
targets of such harassment, and large concentra-
tions of Communist forces are being reported in
Kandal Province.
West of Phnom Penh, the Communists have
attacked the capitals of Kompong Speu and Kom-
pong Chhnang provinces. The tenacity of their
attack on Kompong Speu suggests that they place
considerable emphasis on blocking Route 4,
which runs through the city and serves as Phnom
Penh's main overland access to the seaport of
Kompong Som�formerly Sihanoukville.
Enemy attacks in Kompong Chhnang prob-
ably also are directed primarily at key lines of
communications. On June 14 the Communists cut
Route 5, Phnom Penh's last remaining road link
to the Thai border. The parallel rail line to Thai-
land was also blocked by a Communist attack on
17 June.
Vietnamese Communist objectives in Cam-
bodia still remain open to speculation. Hanoi
clearly considers South Vietnam the main theater
in Indochina, but the speed and scope of Commu-
nist military operations in Cambodia since early
May suggest that Hanoi has decided attractive
opportunities for major gains have presented
themselves there. Although Hanoi obviously
would like to topple the Lon Nol regime, it is also
possible that�short of this�the spectacular at-
tacks west of the Mekong are designed to drama-
tize Phnom Penh's impotence, and to detract
from the success of US and South Vietnamese
operations against the border sanctuaries.
Hanoi may conclude that the early restora-
tion of Sihanouk is sufficiently essential to justify
all-out military operations in Cambodia, possibly
including a direct attack on Phnom Penh itself.
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They might also consider
the risks justified by the chance to undermine US
policy in Southeast Asia, intensify the antiwar
sentiment in the United States, and increase pres-
sures on Washington to negotiate on terms more
acceptable to Hanoi.
Whatever the case, it appears certain that at
a minimum the Vietnamese Communists are
determined to stay in Cambodia and to continue
using Cambodian territory to support their war
effort in South Vietnam. This is evident in the
determined efforts they are making to keep the
supply lines from North Vietnam open during the
rainy season, to launch an effective Cambodian
insurgent movement, and to keep the Cambodians
at bay while they Proceed with surh activi-
ties.
� � �
Asian Group Consults on Cambodia
The three-nation task force (Japan, Indo-
nesia, Malaysia) delegated by the mid-May Dja-
karta conference on Cambodia to seek support
for reactivating the International Control Com-
mission and for convening a broadly based confer-
ence has conferred so far at the United Nations
and in Moscow.
Results to date have been meager. U Thant
received the envoys sympathetically and promised
to support their efforts when he visits Moscow in
a few days. In Moscow, where the delegation
talked with Gromyko on 17 June, reaction was�as
expected�negative. Soviet officials continued to
oppose the convening of a Geneva conference or
any other kind of international gathering on the
subject of Cambodia.
From Moscow, the task force goes to New
Delhi, where soundings indicate the atmosphere
will be cool. It will then go to London and Paris,
where the three envoys may try to contact Com-
munist China and North Vietnam through the
French Government. Visits are also scheduled to
Warsaw, Ottawa, Washington, and again to the
UN. The task force expects to conclude its con-
sultations by 4 July.
e � � (b)(3)
(b)(1)
(b)(3)
(b)(3)
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more
Communist China: Where's Old Hsieh?
Politburo member Hsieh Fu-Chih's three-
month sojourn in the shadows suggests that some
unpublicized maneuvering has been under way
within China's ruling hierarchy. Hsieh, who also
serves as a vice premier and as boss of the Peking
municipal government, had been among the most
publicly active members of the Politburo until he
suddenly slipped from view after a brief appear-
ance on 19 March. His absence was all the more
remarkable when he failed to accompany the
other top leaders who attended the major rallies
and receptions held in Peking last month�
occasions when his presence would seem almost
obligatory.
/ There remains a measure of
doubt, however, as Canton television recently
showed an old film including shots of Hsieh, a
highly irregular practice if he is in political dis-
grace.
The suggestion that Hsieh's disappearance
may be related to political maneuvering at the top
is bolstered by an unexpected reversal in ranking
between two other Poliburo members. Until he
disappeared from view last March, Hsieh had al-
ways been sandwiched between Vice Premier Li
Hsien-nien and Air Force Commander Wu Fa-
hsien on the relatively small number of occasions
when China's top leaders have been publicly listed
by rank over the past year. On five separate
occasions in the past month, however, this peck-
ing order has been reversed and Wu has been
listed ahead of Li. Wu's sudden apparent gain in
political stature may be related to a change in
that of Hsieh Fu-chih. Politburo listings, unless
given in alphabetical order, are deliberately de-
signed to display relative power rankings.
Plausible explanations as to why Hsieh Fu-
chih may have fallen into political hot water are
still scarce, but the longer he is out of the lime-
light the more the Peking rumor mill rinds.
Explicit signs of such leadership squabbles
over the past few months have been only tenuous
at best. One diplomat in Peking recently claimed,
however, that the more radical elements in the
Politburo are currently intriguing in order to gain
increased representation for their followers in
various government and party organs. Muted
struggles of this nature have been almost a con-
stant in Chinese leadership politics since the
Ninth Party Congress, and it is possible that, in
the positional jockeying between political rivals
on the Politburo, Hsieh has fallen back in the
race.
Hsieh (on Mao's right) in 1966
Taken for another ride?
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*le
If Hsieh has suffered more than a temporary
downgrading, Peking is carefully trying to conceal
what would be the first major break in its ranks
since the stormy 1968 purge of acting army chief
of staff Yang Ch'eng-wu. In any case, Wu Fa-
�
hsien's elevation at the expense of Li Hsien-nien
suggests that an alteration in the balance of forces
within the leadership may be in the mak-
ing.
� �
Communist China: Playing Its Cards Adroitly
In the past several weeks Peking has been
pushing hard to improve its position among
independent-minded Communist states in an
effort to gain important political leverage against
the USSR. In particular, Peking has focused on a
strongly militant anti-US posture in support of
the Communists in Southeast Asia and has re-
asserted its firm backing for the sovereign rights
of Soviet bloc states. In so doing, the Chinese
believe they have been able to capitalize on Mos-
cow's cautious approach toward recent US
actions in Indochina and to play on anti-Soviet
feelings in Eastern Europe.
The most striking example of this approach
was the reception accorded a high-ranking
Romanian Government delegation that visited
Peking last week. Although the Romanians appar-
ently had planned only a short stopover in
Peking, the Chinese offered an effusive welcome,
including a reception with Mao and Lin Piao�an
unusual accolade. Following this, Chou En-lai in a
speech to the visitors pointedly underscored
China's support for Bucharest's independent
posture within the Soviet bloc and indirectly
swiped at Moscow's disrespect for the political
and economic rights of East European states.
At the same time, the Chinese used the
occasion of the Romanian visit further to enhance
Peking's effort to build its influence among Asian
Communist states at Soviet expense. In an obvi-
ous attempt to exacerbate Soviet - North Viet-
namese friction over Moscow's failure to break
with the Lon Nol government in Cambodia, Polit-
buro member Kang Sheng in a speech on 9 June
pointedly praised the Romanians for their quick
recognition of the Sihanouk government-in-exile.
In addition, Kang voiced strong support for North
Korean charges that a US "spy ship" violated
North Korean waters in early June�charges that
Peking recognizes are false but which have been
repeated to please Pyongyang.
Complementing this approach, Peking since
early May has generally avoided direct polemics
against the USSR in order to soothe sensitivities
regarding the Sino-Soviet dispute, particularly in
Hanoi and Pyongyang. For example, Peking has
not responded to a series of vituperative Russian
attacks, including one on the extremely touchy
issue of China's relations with Hong Kong. This
discreet tack was dramatically underlined last
week when Chou En-lai countered attacks from
the three top Soviet leaders against alleged Chi-
nese "intransigence" toward the USSR by ex-
pressing Peking's "sympathy" over recent natural
disasters in the USSR.
This grandstand gesture clearly reflects
China's judgment that its anti-US line is currently
scoring important political points against Moscow
and that it has no need to engage in unproductive
polemical exchanges. Indeed, the recall of se-
lected Chinese chiefs of missions to Peking over
the past week almost certainly was designed to
bring Peking's diplomats up to date on its present
line of march. There is no sign that the Chinese
are about to alter their strategy; on the contrary,
they seem confident that they have a number of
high cards and are apparently quite willing to play
out their present hand.
� � �
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Philippines: Student Unrest Brewing
President Marcos' inept handling of student
unrest portends a resurgence and an intensifica-
tion of the protest movement with the opening of
the new school year. His most recent action�the
jailing of the head of the militant Kabataang
Makabayan (KM-Nationalist Youth) on the charge
of subversion�is certain to infuriate the KM's
members, who were in the forefront of the vio-
lent student demonstrations early this year. The
KM, along with other student organizations, has
been conducting teach-ins in the provinces in an
effort to win broader support from the public,
which had been alienated by the KM's frequent
resort to violence.
The arrest will probably more than outweigh
Marcos' effort to meet student objections to a
sharp rise in the over-all cost of education, espe-
cially at private schools. Marcos has delayed the
opening of the school year for nearly a month�
until the end of July�and has ordered a halt to
price increases on textbooks and supplies. He also
is trying to persuade private schools to rescind
�
USSR: Out of Step on Indochina
Moscow's decision not to recognize Siha-
nouk and to retain its presence in Phnom Penh
has been accompanied by a number of less signifi-
cant moves that indicate continuing differences
with Hanoi over current tactics in Indochina. The
decision, which marks the first time in years that
the two countries have been openly out of step
on a major policy issue was taken principally
because of Sihanouk's sponsorship by Peking.
Subsequent Soviet moves indicate that Sino-So-
viet considerations will continue to dominate
Moscow's thinking on Indochina and that ma-
terial support for North Vietnam will continue.
At the same time that North Vietnam and
China have been denouncing all efforts to achieve
a negotiated solution in Indochina, the Soviets
have let it be known that they think this is the
�
increases in school fees. Marcos probably hoped
that he could soften student hostility toward him
and give himself time to prepare for the antici-
pated renewal of the protest movement.
Another reaction to the arrest has come
from Congress, where questions have been put as
to whether a violation of civil liberties has oc-
curred. The arrest may also heighten popular dis-
gust over Marcos' increasing attraction to dicta-
torial methods. A furor was created last month by
the high- handed deportation to Taiwan of two
Manila-born Chinese newspaper editors on flimsy
charges of subversion.
Even though the student movement remains
sharply divided into moderate and radical wings,
students will view the detention of the radical
leader as reflecting Marcos' lack of sympathy for
all students and will sharpen their focus on him as
the source of all Philippine Ms.(
�
best if not the only way the conflict should be
resolved. The Soviet-French communique follow-
ing Foreign Minister Gronnyko's visit to Paris
noted the "closeness of Soviet-French views on
the question of solving the Indochina problem
Moscow's
reception of two peace-seeking missions has also
served to keep the negotiating option highly visi-
ble. These moves are in direct contrast with those
of the Chinese, who have been openly advising
the North Vietnamese to persist in a protracted
war.
Moscow's dissatisfaction with Hanoi's poli-
cies, however, has not meant any slackening in
-Sr eit-F..1_
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4roli
Soviet material support for the North Viet-
namese. The Soviet-DRV aid agreement signed in
Moscow early this week served to underscore
Moscow's long-standing commitment to the DRV
and at the same time balanced a similar agreement
concluded in late May between Hanoi and Peking.
There is little question,
however, that Moscow would agree to an in-
USSR-Romania: Victory for Whom?
creased aid program if it believed the situation
required it.
For the present, Moscow has clearly decided
upon a course of action that involves providing
Hanoi with substantial�but not unlimited�
political, economic, and military support while
gambling that, under the pressure of arduous
fighting and the prospects of increased depend-
ence on Peking, Hanoi will again see the advan-
tages of negotiating, and the Soviets will have an
opportunity to restore their influence. The
USSR's tactics will continue to be designed to
minimize Peking's gains.
� � �
Moscow and Bucharest announced on 12
June that Soviet party leader Brezhnev will visit
Romania early in July to sign a long-delayed
treaty of friendship and mutual assistance. Agree-
ment for this trip was probably reached during
Romanian party boss Ceausescu's trip to Moscow
In mid-May.
The Romanians have implied that the treaty
is the one drafted and initialed in 1968, when the
old 20-year treaty expired. If so, it will not in-
clude the opprobrious language of the recently
signed Soviet-Czechoslovak treaty, which incor-
porated the essence of the so-called Brezhnev
doctrine of limited sovereignty and implicitly
broadened mutual defense commitments beyond
Europe.
Obtaining signature of the treaty on Ro-
manian terms will be a victory of sorts for Buch-
arest, but it may have been gained at the expense
of concessions in other areas. Romania, for ex-
ample, may have agreed to closer economic and
military cooperation with Moscow. According to
various reports, the USSR is continuing to put
pressure on Bucharest to participate in Warsaw
Pact maneuvers, but the issue of maneuvers on
Romanian soil in 1970 apparently is still unset-
tled. At any rate, the two sides apparently are
playing down their differences for the moment.
Nevertheless, the Romanians are taking steps
to bolster their policy of independence. Earlier
this month a high-level party and government
delegation to North Korea and Communist China
was feted in Peking with great ceremony. More-
over, Ceausescu's trip to France this week and
Premier Maurer's scheduled visit to West Germany
later this month are being touted as evidence of
Romania's wide-ranging friendships, with the im-
plicit hint that these governments might be
counted on for political support vis-a-vis the
USSR.
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Yugoslavia Seeks Seeks US Private Investment
In an effort to expand trade with the US and to
attract more American investment, a Yugoslav
delegation is currently negotiating the establish-
ment of a joint corporation with US industrialists
and financiers. Yugoslav Government agencies
and some 90 firms reportedly responsible for one
fifth of Yugoslavia's total trade will participate.
The organization is to be the exclusive agent
for sales and purchases in 1:he US by participating
members. It also will secure advanced technology,
provide funds for plant expansion in Yugoslavia,
and arrange for the joint exploitation of ventures
in third countries. Belgrade believes that, with
Yugoslavia's "prestige in the third world" and US
financial resources, third-country ventures could
be particularly profitable. President Tito stressed
such possibilities in recent talks with President
Kearns of the US Export-Import Bank in which
he sought more US investment. The Yugoslays
rolled out the red carpet for Kearns, who re-
ported that talks with the Yugoslav premier,
cabinet officers, and leading businessmen had laid
the foundation for a "significant increase" in
� �
UN: The UN Security Council unanimously de-
cided last week to hold periodic, closed meetings
at the foreign-minister level, thus putting into
effect one of the original provisions of the UN
Charter. The meetings will provide a chance for
more general, and less vitriolic, exchanges of
�
bank participation in any expansion of the Ameri-
can role in Yugoslav economic development.
Yugoslavia, up to its ears in debt payments,
may hope that a large expansion in direct private
Western investment will reduce the need for gov-
ernment borrowing. Furthermore, Belgrade stands
to benefit greatly from more efficient manage-
ment and production, and from increased at-
tention to market forces that would be a by-
product of US and Western investment. A direct
western stake in the success of Yugoslav enter-
prises also could lead to a wider promotion of
Yugoslav goods in international markets.
Belgrade recently has instituted legislation
protecting western ownership rights and profit
repatriation. There has been no mass rush to
experiment in investment in Yugoslavia as yet,
but more than a dozen Western companies are
testing the water to the tune of nearly $50 mil-
lion. Successful conclusion of the negotiations to
be held next month when American officers of
the proposed corporation visit Yugoslavia could
encourage an acceleration of such participa-
tion.
�
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views, and the Council members hope that the
new procedure will "enhance the authority of the
Security Council and make it a more effective
instrument for the maintenance of international
peace." Some delegates, however, have empha-
sized the need for caution and the careful
preparation of agenda.
� �
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Novi -SreR-E-T- Nosio
USSR: Leaders' Speeches Wind up Election Campaign
The elections to the Supreme Soviet on 14
June climaxed over two weeks of "campaign"
speech making by Soviet leaders. Their review of
the past and future offered nothing dramatic but
presented quite an orderly picture of collective
leadership.
The final week was devoted to addresses by
the four senior leaders: Suslov, Kosygin, Pod-
gorny, and Brezhnev. Earlier speeches were not
delivered in strict order of precedence, and party
secretary Ustinov was unable to meet his con-
stituents because of illness. The occasion of Brezh-
nev's speech at the Kremlin Palace of Con-
gresses on 12 June was attended by the other
leaders and carried in full by the major news-
papers.
The leadership recounted the economic suc-
cesses achieved under the present five-year plan
but noted the need for increased labor produc-
tivity, speedier construction, and greater "scien-
tific-technical progress." Vague allusions to the
forthcoming plan (1971-75) indicate that major
guidelines are still being hammered out. Brezhnev
hinted, however, that 1he main beneficiary would
be heavy industry, at the expense of the con-
sumer. Brezhnev, President Podgorny, and Polit-
buro member Polyansky all promised that the
agricultural sector would receive "increased capi-
tal investments" during 1971-75.
Premier Kosygin's address included the most
comprehensive treatment of the economy as well
as the most spirited defense of the reform. He
said a reorganization of administration is under
way to reduce bureaucratic layers and personnel
�
Italy: Center-Left Optimistic
In the wake of the regional, provincial, and
municipal elections of 7-8 June, center-left politi-
cal leaders are showing increased optimism. The
prospect that parliament will be dissolved and
national elections held earlier than 1973 now
seems remote, although party differences or per-
and to improve specialization in industry. He
called for more discipline but did not lean as
heavily on this theme as did Brezhnev.
As he did at his press conference on 4 May,
Kosygin discounted Western press speculation
that an "internal struggle" was under way in the
USSR. Brezhnev noted that foreigners had seized
upon the exercise of criticism and self-criticism to
allege that an economic crisis exists in the USSR.
These references to Western commentary may be
the outgrowth of debate on such issues among the
leaders and their concern over the interpretation
given Soviet political and economic decisions
abroad.
The leaders addressed foreign affairs in
broad and generally moderate terms. Kosygin and
Podgorny spoke in more rigid and stereotyped
terms while Brezhnev allowed himself more flexi-
bility. All three offered strong backing for the
Arab cause in the Middle East and criticized US
policies in Indochina. They were milder, however,
in treating US-Soviet relations and West Germany.
Brezhnev's speech contained one minor in-
novation in Moscow's European policy. In what
may be intended as a counter to the NATO pro-
posals made at the Rome ministerial in May for
talks with the bloc on European security matters
and on mutual force reductions, he suggested the
creation of "some sort of permanently operating
mechanism" to carry out agreed measures aimed
at European detente. He did not flesh out this
idea and made no specific reference either to the
Rome 7 ronosals or to a mite similar Rritish nro-
posal.
� �
sonal ambitions could always bring about cabinet
changes.
The center-left gains in elections at all three
levels were accompanied by losses on both the far
left and right with the single exception of a gain
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1"lis
for the far left in provincial elections. Prime Min-
ister Rumor, however, probably mindful of the
misplaced optimism inspired by apparent Com-
munist losses in the 1964-66 local elections, has
warned his colleagues against complacency. He
believes the Communists will start now, probably
with increased Soviet financial support, to pre-
pare for the 1973 parliamentary elections and will
encourage increased labor violence this summer to
arrest Italy's steady economic progress. Rumor
sees his problem as being curtailment of disrup-
tion this summer and motivation of his coalition
to move on long-overdue social, economic, and
administrative reforms.
Communist election analysts are generally
disappointed in the returns but see some compen-
sations. The party (PCI) officially expressed re-
gret for the relatively serious losses in the regional
elections for the Proletarian Socialist Party
(PSIUP), a Moscow-supported grouping of ex-
treme leftists that, unlike the PCI, supported the
Soviet intervention in Czechoslovakia in 1968.
/ The PCI now feels more
secure on its left flank and in particular is relieved
that the PSIUP was unsuccessful in the bold pitch
it made to Communist voters in some areas in the
enter lefl
Mb
[gilt
Municipal
PCI.:25.5;
PSIUP-3.1)
13.3
flicipal 1964
7
58.8 55.8
28.1 . 22
(pc
25.5
'PrSCIOIP,2,261.4C,
'nor seli,t!ters,
south. Communist leaders were also pleased that
the orthodox Socialists did better than most ob-
servers expected. The Socialists are more willing
than other
PCI
� � �
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Nkomo
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EAST GERMANY: Communist party member-
ship, which numbers an unwieldy 1.9 million out
of a population of 17 million, may be signifi-
cantly reduced. Extensive organizational prepara-
tions have been initiated for an exchange of
membership cards, and twice as much time has
been alloted for the exchange as in 1960 when a
similar program was undertaken. Although regime
spokesmen have attempted to play down the sig-
nificance of the program by characterizing it as
routinely necessary before the "expiration date"
of the present cards, no such date appears on the
cards and none is mentioned in the party statutes.
The top and middle levels of the party are
cohesive, and the intent of the regime probably is
to purge inactive, incompetent, and politically
unreliable members at the grass-roots level, in-
cluding many economic officials who have bee,
accused of "revisionism."
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%se SECIt-h4..
Jordan Still Verges on Disaster
King Husayn's capitulation to fedayeen de-
mands has partially defused the situation, but it
could be reignited by the activities of extremists
on either side.
After a succession of abortive cease-fires had
failed to put an end to last week's heavy fighting,
King Husayn bowed to fedayeen insistence that
he dismiss the commander in chief of his army
and the head of his third armored division�both
particularly detested by the fedayeen. The deci-
sive factor appears to have been the seizure of
two Amman hotels by the Popular Front for the
Liberation of Palestine (PFLP), which dissociated
itself from the earlier attempts at cease-fires
arranged by the King and Fatah's Yasir Arafat
and held out for the dismissal of the two com-
manders.
According to Iraqi press reports, the cease-
fire agreement contains five points: the with-
drawal of Jordanian Army forces to their previous
positions; the return of all fedayeen to their
former positions; the immediate formation of a
commission to investigate the causes of the crisis;
the dismissal of the two army leaders; and the
formation of a committee to oversee implementa-
tion of the agreement. The composition of the
two committees, which included representatives
from both sides, was promptly announced. Sub-
sequent incidents appear to have been minor,
with joint army-fedayeen patrols successfully
keeping the lid on in Amman.
One of the results of the crisis so far has
been an upsurge in the prestige of the PFLP and
its leader, George Habbash. Arafat has already
taken some steps to respond to Habbash's chal-
lenge: in a press conference on 14 June, he retro-
actively approved of the PFLP's seizure of foreign
hostages, thus taking partial credit for the action
generally thought to have turned the tide in favor
of the fedayeen.
�
Meanwhile, bitterness is said to be wide-
spread among army units over the firing of its two
leaders.
the danger remains that at least some of the
military, unable to swallow the King's capitula-
tion and refusal to crack down on the fedayeen,
could reach the point of actual mutiny. This pos-
sibility will be increased if Husayn is forced to
make further concessions.
At the same time, there are indications that
the fedayeen may be stepping up their demands.
An unidentified Fatah leader, writing in the
group's newspaper, which has begun publishing in
Amman since the cease-fire, called for the trial of
those responsible for the outbreak�presumably
the two army leaders�and for the dissolution of
Jordan's internal security apparatus "and other
suspicious groups." A spokesman for one of the
more extreme fedayeen groups has issued similar
demands. Should the fedayeen stiffen their terms
in the negotiations now taking place in Amman,
Husayn's dilemma will grow still more acute. If he
backs down yet again before the fedayeen, he
could face serious disaffection within the ranks of
his army. A refusal to concede, however, could
result in renewed fighting with unpredictable con-
sequences.
� �
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Noiroi
Middle East
Israel:and the Fedayeen
The Israelis last week cast a wary eye over
developments in Jordan, watching the renewed
struggle between King Husayn and the fedayeen.
They fear the emergence of a more radical Jordan
through a take-over by fedayeen or by more
direct involvement of Syrian and Iraqi military
personnel ,or even of the Soviets. Government
leaders in Tel Aviv have issued warnings that
Israel could not sit idly by and permit a change
"in the balance" in Jordan.
Although Husayn is still on the throne and
Damascus and Baghdad did not get militarily in-
volved, Tel Aviv almost certainly estimates that
the fedayeen have increased their power and that
most of the curbs Husayn was able to impose on
the feda een now have Drobablv disaoneared.
Israel and Egypt
Tel Aviv's main concerns at the moment,
however, are forthcoming decisions in Washington
regarding future supplies of aircraft and develo -
ments on the EclvDtia
Tel Aviv con-
tinued to avoid any deep penetration raids, and
Soviet pilots kept out of the Suez Canal area.
Egyptian aircraft, however, went into action
briefly on Tuesday for the first time in some two
weeks, attacking Israeli military positions in the
northern sector of the canal.
Israel and Syria
An Israeli commando force on 16 June
struck deep into Syria, mortaring a military camp
some 40 miles northeast of Damascus and striking
a bridge about 30 miles south of the Syrian
capital. A spokesman in Tel Aviv said the raid was
in retaliation for Syrian and Arab guerrilla attacks
over the past month against Israeli troops and
settlements in the occupied Golan Heights area.
Lebanon
An anticipated clash between government
forces and the fedayeen failed to materialize this
past week. In late May the government an-
nounced that after 15 June it would no longer
allow the fedayeen to fire into Israeli territory
from southern Lebanon or to carry arms within
Lebanese cities and villages. It had been feared
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vise
that fighting might erupt if the government at-
tempted to enforce this ban. Both sides, however,
apparently were sobered by reports of large num-
bers of casualties during the recent fighting in
Jordan and wanted to avoid a similar showdown
in Lebanon.
� � �
Tunisia Forms a New Government
Prime Minister Ladgham has formed a new
and somewhat streamlined government repre-
senting most of the moderate and conservative
blocs within the ruling Destourian Socialist Party.
The 16-man government will probably serve in a
caretaker capacity until the party congress is held
this fall, at which time more extensive changes
may be announced. Meanwhile, a special com-
mittee appointed by President Bourguiba to plan
the party congress is also charged with drafting
important revisions to the country's constitution.
The deliberations of the new government
and of the special committee�which Ladgham
will chair�are likely to be marked by friction. Six
of the eight members of the committee are also
the strongest and most influential members of the
government. Two of the six are political rivals of
the prime minister and have long had close per-
sonal ties to Bourguiba. At least one of these men
sparked the President's public rebuke to Ladgham
last March, an incident that aroused speculation
that the prime minister was about to be replaced.
The committee's proposals for constitutional
revisions will concentrate mainly on the problem
of succession. President Bourguiba, who recently
returned from a lengthy convalescence in France,
is again preoccupied with ensuring an orderly
succession to the presidency. One proposal he has
already proffered to the committee would make
the government responsible to the national
assembly as well as to the president. This would
establish a better balance between the currently
powerful presidency and the essentially advisory
assembly. The committee's recommendations will
be submitted to the party congress for approval.
The committee's other role�preparation for
the party congress�may be the more time con-
suming. Local party units have already elected
their representatives to the congress, but the na-
tional committee will probably want to ensure
that these representatives have been properly
"instructed" before the congress con-
venes.
� � �
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Are Nue
India and Mrs. Gandhi
Recent meetings of high-level committees of
the ruling Congress Party further indicate that
Mrs. Gandhi plans to base her political strategy on
attacking the right, while avoiding issues that
could endanger her support among leftist opposi-
tion parties. Although there are a number of
problems involved, such an approach has been
one of the reasons her minority government has
survived since the Congress Party split last
November.
The main issues discussed at the meetings,
which ended last weekend, were communalism,
regionalism, and extremism, all of which were
used primarily as vehicles to attack the right. The
most popular target was the Hindu nationalist
Jana Sangh Party, which Congress has tried to
blame for recent communal riots.
In attacking the right, Mrs. Gandhi is prob-
ably trying to set up a favorable framework for
any future elections, and she may even hope that
in such an atmosphere some of the right-wing
parties will not risk going to the polls. In the
budget session of Parliament this spring, an im-
portant factor in her government's survival was
the reluctance of any opposition party to risk
bringing down the government and forcing early
elections.
Mrs. Gandhi has relied on votes from the
left�including moderate Communists�for her
programs, and in the Congress Party meetings
only the most extreme Communist faction came
in for criticism. Moreover, the party's leadership
gave in easily to demands that the foreign-policy
resolution call specifically for the withdrawal of
American troops from Vietnam as the first step
leading to evacuation of all foreign troops from
that country.
The party gatherings revealed no substantial
opposition to Mrs. Gandhi, and no dissension
among party leaders. This might have been due,
however, to the careful avoidance of a number of
issues�such as the ending of subsidies to India's
former princes and the question of nuclear weap-
ons�that could be divisive for the party. Mrs.
Gandhi promised to speed up economic progress,
but made no specific proposals, thus avoiding
controversy.
Despite the difficulties of maintaining a
minority government, a multitude of issues that
could divide her supporters both within and
outside the party, and the threat to her from
other potential party leaders, Mrs. Gandhi has not
only survived for over seven months, but her
position appears stronger than it was last No-
vember.
� � �
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Now%
-STC*14.1._
Diplonapings Continue in Latin America
The kidnaping in Brazil last week of West
German Ambassador von Holleben, coming
shortly after the abduction and murder of Argen-
tina's former president Aramburu, has raised once
again the specter of further "diplonapings" in
Latin America. The fact that the Brazilian opera-
tion occurred despite increased security precau-
tions and a roundup of subversives heightens the
anxiety being felt in Latin American capitals.
Even as normally tranquil a place as Costa
Rica has not been spared. High-ranking govern-
ment officials there, including the second vice
president, have been threatened. The government
is considering sending an imprisoned, pro-Castro
Nicaraguan guerrilla leader to another country so
terrorists will no longer have a motive for action.
In addition to "diplonaping," the hoary tac-
tic of kidnaping to obtain ransom money is con-
tinuing. Such instances have occurred recently in
Colombia, Guatemala, and the Dominican Re-
public. In Uruguay a pro-Castro group raided the
Swiss Embassy, locked up the ambassador and his
staff, and stole mimeographing equipment.
� � �
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� � �
Argentina: General Levingston, I Presume?
Brigadier General Roberto Marcelo Leving-
ston, a 50-year-old ,officer who has been Argen-
tine military attache to Washington since January
1969, was installed as president on 18 June by
the military junta.
In plucking Levingston out of obscurity and
thrusting him into the presidential palace, the
junta members have made it clear that they, not
Levingston, will make all the major decisions in
the new administration.
New Argentine President
He is reported to be close to the
junta strong man, Army Commander General
Alejandro Lanusse, and is regarded as a political
liberal and strongly anti-Peronist.
apparently ha no part in
events leading to the move against Ongania on 8
June.
Little is known of Levingston's political and
economic views, and he is relatively unknown to
Military Junta That Will Co-govern with Levingston
(1) Admiral Gnavi (2) Lt. General Lanusse
extreme right) Brig. General Rey
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Now Noe'
the Argentine people. This lack of political iden-
tification with any particular group probably was
a major factor in his selection.
Perhaps in an effort to counter the widely
held view that Levingston will be no more than a
front for Lanusse and other junta members, Ar-
gentine officials are emphasizing the strong will
and stubbornness of the new president. He is said
to be pro-US but has criticized this country for
not helping Argentina more at a time when "Chile
is going red and Brazil is going black." He report-
edly favors a reunification of the Argentine labor
movement and winning over the Peronist-
dominated workers through positive reforms. He
is said to support the economic policies of former
economy minister Krieger Vasena, the author of
the Ongania government's stabilization and devel-
opment program.
Not surprisingly, Levingston is said to favor
General Lanusse's plan for a phased return to
democratic, representative government. Junta
members have generally committed themselves to
restoring some of the democratic processes sus-
pended since the June 1966 coup. Their com-
mitment is general enough, however, to permit
modification at any time.
Levingston now is conferring with junta
members to fill government posts. Six of the
seven cabinet members have already been named.
The key economy and labor post went to Carlos
Moyano Llerena, an adviser to a former minister,
Krieger Vasena. The defense minister in Ongania's
government, Jose Caceres Monie, retains his port-
folio, and- Eduardo McLoughlin, former ambas-
sador to Britain, becomes interior minister. The
Foreign Ministry post went to Luis Maria de
Pablo Pardo, a professor of international law and
former ambassador to Chile. The junta also an-
nounced the selection of a newspaperman, David
Kaplan, as interim information secretary. Kaplan
is the first Jew to hold a major position in the
government. He is a highly respected journalist
and a close friend of Lanusse's, and his appoint-
ment may prove permanent.
While the new administration is settling in,
there is already some speculation as to how long
Levingston will remain in the obviously secondary
role which the junta has assigned to him. The
1966 Statute of Revolution�the basic law of the
land�is now being amended to make the military
junta a co-governing partner with the new chief
executive. His tenure will obviously depend on
the extent to which his personality will conform
to or conflict with the views of the junta and
especially with those of General Lanusse.1
� � �
CUBA-PERU: Castro is still going to great lengths
to publicize Cuba's role in Peruvian earthquake
relief and to promote international aid commit-
ments. On 14 June he sent Cuban minister Carlos
Rafael Rodriguez to Geneva to solicit reconstruc-
tion funds from the UN Development Program.
Rodriguez also plans to attend the 22 June ses-
sion of the Economic Commission for Latin
America in New York, where he will probably
submit the same proposal. The Cuban airlift to
Peru has brought at least 18 planeloads of aid to
Lima, and more flights are expected. In addition,
a large Cuban trawler arrived at Callao, Peru, on
18 June carrying a cargo of shoes and portable
kitchens.
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Peru-US: Earthquake Disaster
The warm official Peruvian response to US
assistance in the earthquake disaster area has
quieted anti-US feeling among some groups in the
country, at least in the short run. The quake, the
most disastrous recorded in the Western Hemi-
sphere in recent times, affected nearly 800,000
Peruvians, including dead, injured, and homeless.
Latest government estimates place the number of
dead at more than 50,000.
President Velasco and other high-ranking
government officials have expressed their appreci-
ation and gratitude for the help provided by the
US, stating that without it Peru "would not have
made it" through the first tragic days or have as
much hope for the future. The normally critical
Lima daily, El Comercio, praised US relief efforts,
singling out President INlixon's "Declaration of
Solidarity," grant aid totaling $10 million, heli-
copter assistance, and the arrival of high-ranking
US officials to supervise relief efforts in the quake
area. El Comercio's laudatory comments were
particularly significant not only because they
were Peru's first and most complete recognition
of US relief efforts but also because they came
from a newspaper that is usually highly national-
istic and generally suspiciious of or hostile to US
interests in Peru.
The US response to the disaster has generally
dissipated the atmosphere of suspicion and re-
crimination generated by the Peruvian regime's
disputes with US companies. The disaster also has
brought Peruvians together and at least tempo-
rarily quieted much of the criticism directed at
the government from both right and left.
The quake could swell the flow of rural
people to urban areas, particularly to Lima. The
influx will add to the problem of inadequate
housing and facilities, fueling the present dis-
content in the country's urban slums.
The earthquake's immediate impact on the
economy is not likely to be serious. The most
severely devastated area, the Callejon de Huaylas,
was not an important producer of minerals or
export crops. Although the coastal area around
Chimbota was also severely damaged, the area's
most important industries�steel, sugar, and fish-
meal production�should not suffer major set-
backs. Initial reports indicate that the damage to
the steel mill�Peru's only steel facility�although
extensive, should interrupt production for only
six to nine months. The fishing season is closed,
and the loss in output of the fishmeal industry
thus should be minimal.
Initial reports indicate that damage to irriga-
tion canals, reservoirs, and hydroelectric facilities
could depress output. Moreover, land trans-
portation routes in the region should be repaired
at least temporarily in the near future. The great
bulk of the losses suffered were to housing,
schools, and public buildings.
Expenditures for relief and rehabilitation
could be beneficial to the economy. Peru has
been suffering from an inadequate rate of eco-
nomic growth and widespread unemployment,
largely because its economic reform and stabiliza-
tion programs have discouraged both public and
private investment. The expected large increase in
public expenditures should stimulate the de-
pressed construction industry and lead to a re-
surgence of economic growth.
Because the disaster relief efforts have im-
proved US-Peruvian relations, they may also have
been instrumental in bringing about better rela-
tions between the regime and foreign investors
such as Cerro and I PC, which have been conspicu-
ous for their contributions to relief efforts. A
better investment climate could also spur eco-
nomic growth.
� �
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DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
China Stays Even in Food/Population Race
Iteret
N2 44
19 June 1970
No. 0375/70A
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or..k
NW' 74111111
SPECIAL REPORTS are supplements to the Current Intelli-
gence Weeklies issued by the Office of Current Intelligence.
The Special Reports are published separately to permit more
comprehensive treatment of a subject. They are prepared by
the Office of Current Intelligence, the Office of Economic Re-
search, the Office of Strategic Research, and the Directorate of
Science and Technology. Special Reports are coordinated as
appropriate among the Directorates of CIA but, except for the
normal substantive exchange with other agencies at the working
level, have not been coordinated outside CIA unless specifically
indicated.
WARNING
The SPECIAL REPORT contains classified information affect-
ing the national defense of the United States, within the mean-
ing of Title 18, sections 793 and 794. of the US Code, as
amended. Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP
Excluckd from automatic
downgroding and
dectostirscation
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A RURAL FERTILIZER FACTORY AND ITS PRODUCT ON WAY TO CONSUMERS
CHINA STAYS EVEN IN FOOD/POPULATION RACE
China enters the 1970s with its food problems more or less under control. Current food supplies
appear adequate, whether measured by annual production of grain or size of the average diet. Peking
sees availability exceeding current needs to such an extent that it has launched a national campaign to
increase grain stocks for the first time in many years.
In 1960, the collapse of the Great Leap i=orvvard was accompanied by a drastic fall in grain
production. Peking was forced to abandon its rather utopian programs for restructuring rural institu-
tions to tackle the fundamental problem of feeding the population. Aside from concern for human
misery, there was the overriding consideration that mass starvation could undermine the viability of rhe
Communist regime. By importing grain and by reversing collectivization policies that had sapped
incentive and public morale, the government arrested the decline in food supplies. During the last half
of the 1960s, food production was nursed back to pre - Leap Forward levels by the regime's increased
allocation of resources to agriculture.
The food problem has not been solved, however, and China apparently still is far from achieving a
breakthrough similar to the "green revolution" that has occurred elsewhere in Asia. Food supplies
exceed the needs of the population by so slight a margin that bad weather alone could start a new
downward trend. Moreover, the possibility that Mao Tse-tung may again attempt to introduce radical
changes in the countrystle that could lead to agricUltural problems similar to those of the early 1960s
continues to loom as a threat to China's modest agricultural achievements.
Special Report
1 19 June 1970
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Agricultural Crisis
Agricultural output fell drastically during
1959-61, confronting the regime with one of its
most serious economic crises. The crisis, although
precipitated by almost catastrophic weather con-
ditions, was also the outgrowth of the regime's
earlier policies toward agriculture. During the
1950s the regime had looked to collectivization
and to the exploitation of existing resources in
the countryside for rapid agricultural growth
rather than to infusions of scarce capital and
technology. Such efforts, moreover, were either
"once and for all" types of improvements or were
subject to increasingly severe diminishing returns.
Agricultural output did increase in the 1950s, but
the surpluses that could be converted to capital
for investment became smaller and smaller as the
population continued to grow. Three consecutive
years of poor weather in 1959-61 forced food
production far below the minimum levels re-
quired to sustain the population.
Change in Agricultural Policies
In September 1962 the "agriculture first"
policy was adopted, which provided a somewhat
larger share of state investment as well as greater
industrial support for agriculture. By 1964 chemi-
cal fertilizers, mechanical water pumps, and farm
tools and equipment had become available in suf-
ficient quantities to make an impact on agricul-
tural production. These inputs were allocated
primarily to commercial grains (rice and wheat),
corn, and cotton, andwere concentrated in areas
capable of returning high yields despite flood or
drought. Such areas constitute only a minor share
of China's farmland; the bulk of the country's
farming areas were left more or less to fend for
themselves. Nevertheless, changes in management
practices were made�notably in regard to crop
rotations and the substitution of grains for indus-
trial crops�that affected most of China's culti-
vated areas. Corn, for example, has been popu-
larized for cultivation in areas with marginal
water supplies, chiefly because corn is more re-
sponsive to fertilizer than is wheat or rice. In large
Special Report
- 2 -
areas of north China, a single crop of spring-sown
corn, heavily fertilized, has been substituted for
the traditional rotation of winter wheat followed
by a summer-sown grain crop. Under favorable
conditions, the single crop of corn has yielded
more than have wheat and a summer-sown crop
combined, thus increasing grain available in these
areas.
Grain and Fertilizer Imports
Among the policies adopted during the
1960s to cope with food exigencies was the im-
port of food and chemical fertilizers. Of the two,
the import of grain has attracted more attention
from the West, which considers this trade the
bellwether of the Chinese food situation. When
China in the 1960-61 food year broke precedent
and began importing grain from Canada and Aus-
tralia, the need was clearly desperate.
Net imports reached 5.5 million tons in
1961 and since then have averaged a little over
five million tons annually despite improvements
in cereal grain harvests. They have become an
important element in stabilizing levels of cereal
consumption in the urban areas of East and North
China and in maintaining adequate levels of Chi-
nese grain stocks. These imports are also useful in
reducing the volume of internal transport needed
to distribute food to cities.
Chinese imports of chemical fertilizer, which
increased only gradually during 1961-64, began to
expand rapidly in 1965. By 1969 these imports,
combined with the slowly expanding domestic
fertilizer industry, had more than doubled the
total amount of fertilizer available in Communist
China, and have been the key factor in agricul-
tural performance. Nevertheless, the regime still
has not allocated sizable resources to the develop-
ment of the chemical fertilizer industry, and im-
ports continue to provide the bulk of available
fertilizer. In 1969, for example, they constituted
more than 60 percent of the total fertilizer avail-
able. Given the lagging development of the do-
mestic fertilizer industry, China is likely to
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remain dependent upon imported fertilizer for
some time to come.
The Food Situation
On a purely bulk basis, the Chinese are not
eating as well as they did in 1957 or 1958. Never-
theless, food supplies have clearly been adequate
for the past several years. A representative ration
before the Leap Forward was between 2,200 and
2,300 calories a day. Rations fell to a low of
about 1,400 calories during the disaster years of
1960 and 1961, but by 3.965 they had recovered
to a level of about 2,000 calories. This level has
since been maintained.
Although some Western nutritionists con-
sider 2,000 calories a day short of minimum re-
quirements for an adequate diet, the Chinese ap-
pear to be living reasonably well at this level.
In terms of the amount of cereal grains in
the individual rations, there is still a gap of about
20 percent as compared with the 1957s. This gap,
however, has been norrowed on a caloric basis by
the inclusion of larger quantities of potatoes in
the ration and on a quality basis by an increase in
the availability of fruits, vegetables, eggs, and
meats. Relatively small increases in eggs and
meats significantly offset the nutritional defi-
ciencies inherent in an overwhelmingly grain diet.
An important share of the potatoes and most of
the fruits, vegetables, eggs, and meats are pro-
duced on the peasants' private plots./
]since 1967, some 20 to 25
percent of the peasant's consumption, by weight,
has originated from these plots.
The government has openly acknowledged
that it cannot reform rural institutions radically
Special Report
until a satisfactory substitute for private plots is
found. The provincial press has categorically
stated that the plots will continue to play a role
in the foreseeable future. The national press in-
directly endorses this line by banning articles con-
demning the plots. The five-percent limit placed
on the arable land devoted to these plots con-
strains their growth, however, and there has been
a leveling off of production on private plots over
the past two years.
Impact of New Policies
Stabilization policies since 1962, together
with restoration of the private plot, have eased
the food situation. The infusion of large quanti-
ties of items such as chemical fertilizer and im-
proved tools has enabled the Chinese to increase
grain output at a much higher rate than could be
achieved with traditional inputs alone. Finally,
the Chinese have been favored by six years of
normal or above-average weather conditions. This
has meant that the average grain harvest level in
China has increased from the 180 million metric
ton level of 1957 to as much as 205-210 million
tons in 1967. Grain production since 1967 has
probably been somewhat lower. Production
dropped in 1968 as the result of interruptions
caused by the Cultural Revolution to the flow of
industrial goods in support of agriculture. Produc-
tion in 1969 suffered from a deterioration in
weather conditions that was only partially offset
by increased supplies of chemical fertilizers and
other inputs.
Peking seems only mildly aware that the
present breather in the food population race must
be used to make fast progress in food-raising
technology. Thus, the regime still appears unwill-
ing to provide the increased resources necessary
to bring about a technological breakthrough.
Prospects for Growth
China's agricultural development program
lacks a key element of the approach that has led
to the so-called "green revolution" from which
other Asian countries have benefited. The
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introduction of new high-yielding varieties of seed
has been the key to recent agricultural growth in
India, Pakistan, and other countries. China has
improved its water control and has increased the
availability of chemical fertilizers and pesticides,
electricity, and agricultural machinery, but the
development of new seeds capable of producing
very high yields under Chinese conditions has not
been emphasized. China could import Mexican
varieties of wheat and Philippine varieties of rice,
but these have been developed for tropical or
subtropical environments and are largely unsuited
to the Chinese environment.
Special Report
PEKING STUDENTS ON WAY TO RESETTLEMENT IN COUNTRYSIDE
In the short run, China may be able to
achieve annual increases in grain production to
match or slightly exceed population growth. Even
Sc), however, any progress toward a more comfort-
able margin between the availability of food and
consumption requirements is likely to be small at
best and would only extend the hiatus inthe food/
population race. Although Chinese agriculture ap-
pears generally stronger now than in the late
1950s, it remains to be seen whether it will be
able to withstand successive years of bad weather
such as that in 1959-61.
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Over the long run, higher rates of agricul-
tural growth will hinge on the ability of the
Chinese to develop food-raising techniques suited
to their conditions. In time, irrigation can be
expanded and chemical fertilizers of suitable
types and quality could be made available if the
regime chooses to allocate more resources to this
effort. But the development of high-yielding seeds
will remain a serious problem. Possibly the most
serious impact of the Cultural Revolution on
agriculture will prove to be the disruption of
plant breeding programs. Not only have the sci-
entific methods most instrumental in the success
of the "green revolution" in other countries been
rejected, but many Chinese breeding programs
have been terminated and the scientists running
them dispersed throughout the country.
Instead of capital investment, the regime is
relying increasingly on investment in human tal-
ent, which is not likely to bring dividends for
�many years. The transfer to the farms of excess
urban population, consisting mostly of students,
has been pursued with unusual vigor and con-
Special Report
sistency since the Cultural Revolution subsided.
These transfers serve multiple purposes, including
making available to communes literate, relatively
trained, manpower suited for professional, techni-
cal, medical, and other tasks. Educated youths, if
they can be persuaded or forced to settle per-
manently in the communes, could potentially up-
grade all but the purely physical work being per-
formed and could gradually heighten the respon-
siveness of the entire rural population to new
ideas. Although some of these youths reportedly
have been assigned managerial and accounting
tasks, the regime so far appears to be emphasizing
their reform-through-labor, and little of their po-
tential value to the communes has been realized.
Lastly, the stability that has marked Chinese
agriculture for the past few years is fragile. Aside
from the hazards of weather, doctrinally moti-
vated measures to increase the degree of collec-
tivization in rural areas and to eliminate "revi-
sionist" phenomena such as the private plots
could lead to agricultural problems similar to
those of the early 1960s.
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-SvecaL
DIRECTORATE OF
INTELLIGENCE
No Foreign Dissem
WEEKLY SUMMARY
Special Report
Political Change in Guatemala: Order vs. Violence
-Seurat._
NIJ 44
19 June 1970
No. 0375/70B
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NNW
SPECIAL REPORTS are supplements to the Current Intelli-
gence Weeklies issued by the Office of Current Intelligence.
The Special Reports are published separately to permit more
comprehensive treatment of a subject. They are prepared by
the Office of Current Intelligence, the Office of Economic Re-
search, the Office of Strategic Research, and the Directorate of
Science and Technology. Special Reports are coordinated as
appropriate among the Directorates of CIA but, except for the
normal substantive exchange with other agencies at the working
level, have not been coordinated outside CIA unless specifically
indicated.
WARNING
The SPECIAL REPORT contains classified information affect-
ing the national defense of the United States, within the mean-
ing of Title 18, sections 793 and 794, of the US Code, as
amended. Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
DISSEMINATION CONTROLS
THE SPECIAL REPORT MUST NOT BE RELEASED TO
FOREIGN GOVERNMENTS and must be handled within the
framework of specific dissemination control provisions of
DC1D 1/7.
GROUP 1
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doclaniAtation
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NEW'
POLITICAL CHANGE IN GUATEMALA: ORDER vs. VIOLENCE
The inauguration of Carlos Arana as president of Guatemala on 1 July will mark both a
high point in the country's feeble democratic record and a test of the forces of orderly
process.
Arana will be Guatemala's first freely elected president to receive the office from the
political opposition. Outgoing president Mendez Montenegro will be the first president to
have completed his term since 1951 and only the third in the country's history to have done
so. All legitimate forces have displayed a conOrnitment to set new constitutional political
patterns and to break the country's traditional antidemocratic habits.
Arana's victory, hovvever, represented a demand for greater governmental effectiveness
against Communist terrorism; Arana came to nAitional prominence by decimating terrorists in
the northeast a few years ago. Communists have long anticipated that popular aversion to the
expected excesses of a right-wing government would provide them their greatest opportunity.
The re-emergence of a rightist terrorist force in the past month provides a grim backdrop to
the coming political change and has already dimmed hopes for peaceful progress.
A Background of Terrorism
The electorate, wearied by years of Commu-
nist terrorism and disillusioned by the bland
government of the Revolutionary Party, turned to
the anti-Communist champion, Colonel Arana,
whose promise of peace and order won him a
plurality in the elections on 1 March. Arana's
reputation as an effective lawman rests on his
eradication of guerrillas in the northeast between
1966 and 1968. In that operation he turned
armed rightist civilians against the guerrillas and
their suspected supporters, effectively ending the
strong Communist influence in the area. During
the same period, special units of the army and
police also launched an all-out attack on the sub-
versives, employing clandestine groups as assassi-
nation squads. The program of counterterrorism
was highly effective in disrupting the Commu-
nists' networks and bases and in inhibiting sup-
port from their sympathizers. The attendant wave
Special Report
President - elect Arana
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of violence, however, also victimized many in-
nocents and evoked an international and domestic
outcry. Stung by widespread publicity and criti-
cism, President Mendez halted the campaign in
March 1968 and sent Colonel Arana to Nicaragua
as ambassador.
Communist activity during the following
months was mostly organizational, although
sporadic hit-and-run terrorism created a con-
tinuing security problem. Beginning last Decem-
ber, the Communists stepped up their efforts at
sabotage and assassination in an abortive attempt
to disrupt the elections. During the campaign
period the terrorists, with virtual impunity, at-
tacked and killed more than a dozen security
officials, a candidate for mayor of Guatemala
City, and a highly regarded editor of the coun-
try's largest newspaper. They caused damage
estimated in the millions of dollars in a series of
fire-bombings in the capital. On the eve of the
elections in March, they secured the release of a
guerrilla by kidnaping the foreign minister, and a
week later obtained the release of two others in
exchange for the US labor attache. In these cir-
cumstances, the electorate gave the incumbent
Revolutionary Party a no-confidence vote; it ran
second to the rightist coalition backing Arana.
Post-Election Violence
The popular euphoria that resulted from fol-
lowing democratic processes and experiencing an
unprecedented opposition victory in an honest
election was short-lived. The nation was embar-
rassed and the world was shocked by the Com-
munists' brutal murder of the kidnaped West
German ambassador on 5 April after the govern-
ment refused to ransom him. Even the Guate-
malan public, which might have been inured to
brutality after a decade of terrorism, was stunned
by the event.
Mendez imposed a state of siege. Beyond
press censorship designed mainly to squelch criti-
cism of the government, however, only token
security measures were taken. Clearly Mendez had
Special Report - 2 -
decided that it was not in his interest to tackle
the security problem. The security forces have all
but suspended their normal activities, construing
the administration's release of prisoners and other
measures that undercut their efforts as Mendez'
withdrawal from the battle against insurgency.
Mendez' overriding desire has been and remains
survival in office through his entire term, and he
is a practiced advocate of sitting tight to ride out
the storm. His motive for suspending animation
may also be political, as Arana and his followers
believe, because any successful anti-Communist
activity would ease the insurgency problem for
the new government.
The unwillingness of the Mendez govern-
ment to move against the extreme left goaded the
right again into wreaking its own vengeance. In
late April, the extreme right's response to the
violence of the left and the apathy of the govern-
ment was revealed by the discovery of the first
mutilated victim of a new counterterror organiza-
tion. The new group, calling itself "Ojo por Ojo"
(Eye for an Eye), appears to be made up of some
former members of the army's clandestine assas-
sination squads as well as extremist civilians in
Arana's camp. Ojo por Ojo has been responsible
for as many as a dozen recent murders, whose
victims had been tortured before death.
The rightist revenge for Communist ter-
rorism, directed partly against the leftist intel-
lectual community, has evoked outraged denunci-
ation from university and other liberal circles.
Following the assassination of an economics
professor early this month, the university's
governing council issued a declaration attacking
government security forces for their passivity in
the face of continuing violence. It called on the
army to fulfill its constitutional role and to put
an end to the terrorist acts. Other organizations
associated with the left have issued similar state-
ments condemning threats by Ojo por Ojo re-
ceived recently by a number of their members.
The obvious concern in these liberal circles is
that the current wave of rightist terrorism is a
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No Foreign Dissem
prelude to the policies of Arana's government.
Arana apparently condones the Ojo organization's
actions as a necessary expedient now but claims
he will implement a strictly legal assault on the
terrorist problem after his inauguration. Although
he probably can rein in most of his extremist
associates, his willingness to do so probably will
depend on the level of Communist activity during
the first days of his administration.
Arana vs. the Insurgents
Arana takes seriously his mandate to elimi-
nate the insurgency problem, and his enemies as
well as his supporters expect a full-scale anti-
Communist campaign after he takes office. His
more rabid backers and his opponents assume
that Arana will pursue the same program against
the Communists that he used earlier, that is, more
widespread employment of Ojo-style tactics.
Arana repeatedly has forsworn illegal meth-
ods and has assured the public that he has a plan
of action within the law, although he declines to
reveal it. In his contacts with US officials, the
president-elect has discussed the need for better
training for the security forces, better police
laboratories and technical equipment, more per-
sonnel, better maintenance of arms, and improved
communications and coordination of intelligence.
He is contemplating the establishment of an "elite
police corps," a small, trained outfit whose work
would focus exclusively in the terrorist field. His
advisers have spoken of using military tribunals to
try accused subversives in order to bypass legally
the established judicial system, which is weak and
corrupt.
Arana feels under great pressure to produce
immediate results, but transforming the present
security forces and judicial system into com-
petent, efficient organizations is at best a long-
range process. His major assets on 1 July when he
begins his presidency are the good will of the
armed forces and their desire to cooperate with
him. Their past performance, however, has
demonstrated their limited abilities. Moreover,
Special Report
continual personnel shifts and enforced inaction
during the preinaugural period have thrown the
security organizations, particularly the police,
into administrative chaos.
It seems unlikely, Arana's statements not-
withstanding, that he or his advisers have as yet
constructed a legal plan for quick results. Arana's
directness and his evident earnestness may lead
him to make an immediate appeal for public
support for, and patience with, his administra-
tion. Since entering politics last year, Arana has
observed and commented on Guatemala's serious
deficiencies in the social sphere. He promises to
fight ignorance, poverty, and disease, so as to
remove the causes of violent political dissidence.
He probably hopes to play on these themes to
gain acceptance and cooperation among those
sectors of the public that are apprehensive and
fearful that his may be a tyrannical regime.
Counterguerrilla Activity in Guatemala City
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Fear on the Left
The moderation and social concern dis-
played by Arana as candidate and as president-
elect have not erased his image as "the butcher of
Zacapa" held by many, and the Ojo's activities
have added to the fear among the leftist opposi-
tion. Even the vice president elect, one of Arana's
closest advisers, has expressed concern over the
rightist terrorism and the characterization in the
international press of the new leadership as
"assassins."
The presentiment that the Arana administra-
tion is a threat prevails in the intellectual com-
munity, the opposition political parties, the press,
and labor organizations, as well as among Arana's
obvious targets, the guerrillas and terrorists. Their
foreboding will lead them to interpret Arana's
actions and policies in the worst light, and if he
proves thin-skinned, the gap between the opposi-
tion and the government will grow.
The Communists
Communist terrorism since the murder of
the West German ambassador in April has con-
tinued at a relatively low level. The Ojo murders
have claimed no victims among the hard-core ter-
rorists and therefore have probably only a mar-
ginal relationship to the Communist pull-back.
The Communists may have an arranged or im-
plicit "deal" with the Mendez government to hold
off terrorism in exchange for the virtual retire-
ment of the security forces for the rest of his
term.
It is clear that the insurgents hope to prove
that the vaunted anti-Communist Arana can con-
trol them no better than past presidents. It seems
likely that they will attempt to challenge him in
the first days of his presidency and that they will
attempt a terrorist act aimed at gaining wide
publicity, such as the kidnaping or assassination
of a prominent Guatemalan or a foreign diplomat.
Unless the Arana administration can achieve an
unprecedented breakthrough against the clan-
Special Report
- 4 -
destine terrorist organizations, this kind of hit-
and-run action will be almost impossible to stop.
The Communists are believed to have the assets
for a fairly prolonged period of terrorist activity
in Guatemala City.
The bulk of leftist terrorism is perpetrated
by the fanatical Rebel Armed Forces (FAR),
which is made up mainly of young, rabid leftists
who consider violence the only method of un-
doing Guatemala's feudalistic socioeconomic
structure. They are said to believe that their per-
sistent provocation of the security forces will lead
to a bitterly harsh repressive period, which in turn
will so alienate the general public that active
popular support for the revolutionaries will result.
The appearance of Ojo and the public outrage and
revulsion that its activities have provoked are
probably seen by the FAR as encouraging de-
velopments.
Less devoted to violence but hardly averse to
it, the Guatemalan Communist Party (PGT) has
been under pressure for some weeks to avenge the
recent deaths of two party members. The PGT,
reportedly with some cooperation from the FAR,
has been concentrating on US targets, and clan-
destine sources indicate that plans to assassinate
US Embassy officials have failed only because of
increased security measures in effect at the
Mission. The Communists identify US representa-
tives with the Guatemalan security forces and
with the "repressive" government policies because
of US military training of and aid to the security
forces.
Arana's Dilemma
If the Communists launch a terrorist
campaign early in July, Arana is likely to find the
legal weapons at his disposal as ineffective as they
have been in the past. In office, as now, he may
find it difficult to resist reverting to methods he
has seen work well in the past. In any event, the
strength of his resolve to resist it should become
apparent soon after he takes office.
19 June 1970
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New' No Foreign Dissem
The brutal cycle of score-settling between
the left and right now in progress presents a grim
outlook for Guatemala and for the US Mission
there. Continuing Communist surveillance of US
officials makes plain the terrorists' determination
to put pressure on the government partly by
attacking the Americans. Arana and his ministers
Special Report
will be under the constant threat of assassination.
The democratic process begun by the con-
stitutional transfer of power will come under
heavy strains, and the prospect is for difficult
days ahead for the new government and for the
steadily polarizing society. (SECRET NO FOR-
EIGN DISSEM)
-5-
19 June 1970
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