CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A019300040001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 14, 2016
• Document Release Date: June 10, 2003
• Sequence Number: 1
• Publication Date: June 6, 1971
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N2 040
State Dept. review completed
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No. 0143/71
16 June 1971
Central Intelligence Bulletin
CONTENTS
SOUTH VIETNAM: Big Minh's camp will help Ky qualify
to run for president. (Page 1)
LAOS: Military situation report. (Page 3)
COMMUNIST CHINA: Naval activity in the Paracel
Islands. (Page 5)
ITALY: Election results. (Page 6)
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EUROPEAN COMMUNITIES - US: The EC apparently hopes
to develop a dialogue. Page 8)
PERU-CUBA: Sale of fishmeal. (Page 10)
NIGERIA: Chief Awolowo is resigning from the fed-
eral government. (Page 11)
USSR: Research ships in the Caribbean (Page 12)
JAPAN: Pressure for yen revaluation (Page 12)
CUBA-US: Fining of US citizens (Page 13)
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SOUTH VIETNAM: Big Minh's camp has confirmed
that it will try to help Vice President Ky qualify
to run for president.
Minh's advisers, confident that Minh can easil
qualify on his own 25X6
will attempt to persuade provincial councilors sym-
pathetic to Minh to nominate Ky, in order that the
latter also can get the required endorsements under
the provisions of the election bill. Ky had previ-
ously indicated that he would be unable on his own
to gain endorsements from more than 50 to 75 of the
_
necessar 100 councilors. F
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many Buddhist councilors are afraid to go
on record as backers of the vice president, F_ I 25X1
Minh presumably will benefit if Ky runs,
because the vice president probably would draw votes
away from President Thieu.
There is further evidence that some An Quang
Buddhist leaders have cooled toward Minh. Tri Quang,
who publicly washed his hands of the presidential
election last month, reportedly told associates re-
cently that his statement to that effect was made
because none of the prospective candidates is capa-
ble of bringing an end to the war. In response to
charges that the statement would benefit Thieu, Tri
Quang argued that unless the US changed its policy,
it would be best for the Buddhists to acquiesce in
Thieu's re-election so that the Catholics would bear
the onus for the unpopular war. Despite these re-
marks, some other An Quang leaders are working with
Minh, and a large majority of the Buddhist faithful
will support him in any case.
16 Jun 71 Central Intelligence Bulletin
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THAILAND
Hue
Govern t 94
atta "i n
tta ed
Poksong, ur
p 8 Houei
23 Kong
ase' \
BID ns
Plateau
krafay
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Area of
maps
Government-held location
Communist-held location
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LAOS: The Communists have renewed pressure on
Lao Army units on the western Bolovens Plateau, but
elsewhere in Laos action has been relatively light.
North Vietnamese Army forces, estimated at two
to three companies, yesterday attacked a Lao Army
battalion five miles east of the junction of Routes
23 and 231. Government troops were forced to pull
back from their outlying positions, but the battalion
command post stood its ground and, with support from
gunships and artillery, inflicted heavy casualties
on the enemy. To the east, irregular battalions are
still operating south of Paksong but have had little
contact with the enemy.
As of 14 June, the government estimated that 465
of its nearly 1,600 troops committed to the abortive
operation to retake Paksong were still missing as a
result of the North Vietnamese counterattack last
week. In addition, at least 175 soldiers and irreg-
ulars were wounded and 26 irregulars were killed.
There are no definitive estimates of North Vietnam-
ese casualties, but air observers and army commanders
on the ground believe that as many as 500-600 enemy
were killed or wounded by air and artillery attacks.
To the north, irregular units have entered the
abandoned town of Dong Hene and occupied some enemy
positions east of the town. The irregulars have so
far encountered little enemy resistance, tending to
confirm reports that enemy units have pulled back
toward Muong Phalane. The irregular task force plans
to sweep toward Muong Phalane in the next few days.
In northern Laos, action consisted principally
of small-unit clashes and shelling attacks on irreg-
ular positions near Bouam Long and on the southern
and western edges of the Plaine des Jarres. No ma-
jor Communist attack has been launched in either lo-
cation.
16 Jun 71 Central Intelligence Bulletin 3
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Communist Chinese Expanding Naval Activity in the Paracel Islands
CHINA
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Canton
MACAO
(PORT.)
HONG
KONG
(U.K.)
SOUTH
CHINA
SEA
Construction activity
on Woody 1.
Paracel
Islands
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COMMUNIST CHINA: Peking is expanding its naval
activity in the Paracel Islands in the South China
Sea some 200 miles southeast of Hai-nan Island.
Naval convoys from Yu-lin on Hai-nan now visit
the Paracels frequently, particularly Woody Island,
one of the largest of the group. Security for the
convoys is being provided primarily by destroyer
escorts, the largest warships'in China's South Sea
Fleet. Recent aerial photography of Woody Island
shows that the Chinese are building a berthing area,
dredging a channel, constructing a jetty, and erect-
ing new buildings on the island. The convoys are
bringing construction materials and supplies for the
operation.
The Paracels consist of a large number of coral
reefs, only a few of which are large enough to sup-
port habitation. Sovereignty of the islands is in
dispute and claims are made by at least three other
nations--South Vietnam, Nationalist China, and the
Philippines. Peking has maintained a naval communica-
tions and observation post on Woody Island for years
and the island has long been used as a fishing base
and source of guano by the Chinese.
Communist China is sensitive about the present
operation in the Paracels and most of the "serious
warnings" to the US in the last six months for vio-
lations of its sovereignty have involved overflights
of the islands. The reason for the increased naval
activity and construction program is not entirely
clear, but they strengthen Peking's claim to the
islands. The Chinese may feel the need for a new
naval facility in the Paracels to provide limited.
support for the expanding naval operations of their
growing South Sea Fleet.
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ITALY: Losses for the Christian Democrats in
the elections of 13-14 June may cause interparty
tensions in Prime Minister Colombo's coalition but
do not appear to threaten the formula for national
government by a center-left alliance.
In local and regional contests involving about
one fourth of the national electorate, the Christian
Democrats lost ground almost everywhere. The losses
were particularly sharp in Sicily, but in mainland
Italy their average loss was between one and two
percent. Nevertheless, the center-left alliance of
Christian Democrats, Socialists, Social Democrats,
and Republicans remained the predominant force in
most of the assemblies and councils that were elected.
A further factor for stability of center-left gov-
ernment on the national level is the beginning on 28
June of the so-called "white semester," a six-month
period preceding the presidential election next De-
cember during which the President cannot dissolve
Parliament.
Election successes for the neofascist Italian
Social Movement (MSI) are a particular victory for
Giorgio Almirante, who has headed the party since
1969. Almirante, who often criticized his predeces-
sor for being too moderate, has himself enforced
extremism as the party line.
The MSI increased
its vote rom seven to 16 percent of the total in
Sicily and improved its showing elsewhere as well.
The Italian Communist Party and its ally, the
Proletarian Socialists, lost about two percent on
the average.
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EUROPEAN COMMUNITIES - US: The EC Commission
apparently hopes to develop a constructive dialogue
with the US on economic problems that may emerge as
a result of the EC's prospective enlargement.
In meetings last week with a US delegation led
by Deputy Undersecretary Samuels, the Commission in-
dicated its intention to promote trade liberalization
and to maintain good relations with the US during the
difficult period after the UK and other countries
join the EC. For example, the Commission suggested
that before the EC's arrangements with the Common-
wealth countries are definitely determined, a fur-
ther hearing of the US attitude might be possible.
The Commission also explained that it is opposed to
any legal restrictions on foreign investment in the
EC.
The Commission affirmed its support for the
high-level committee that the members of the organiza-
tion of Economic Cooperation and Development have
established at US urging to explore ways of resolving
some of the problems currently plaguing international
economic relations. The US and EC officials also
discussed ways of expanding their bilateral relation-
ship and agreed to study jointly the impact of pollu-
tion abatement measures on trade.
The Commission representatives explained that
their recent offer to improve the access of US
oranges to the EC market was designed to help end
what was becoming a dangerous circle of recrimina-
tions. The Commission said that the offer, which
could be approved by the EC Council in July, requires
no reciprocal US action, although the EC would hope
for a gesture in return. A number of other specific
trade problems were discussed and will continue on
the agenda for future talks.
Although the Commission does not make the final
decisions affecting US-EC relations, its current
attitude should help assure consideration for US
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interests in the course of the EC's probable enlarge-
ment. Ambassador Schaetzel has commented that this
second in a series of consultations informally estab-
lished last July was the most useful and constructive
exchange of views yet between the US and thP,EC.
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PERU-CUBA: Peru will sell a large quantity of
fishmeal to Cuba in contravention of the 1964 OAS
resolution against such trade.
The official Peruvian newspaper reported on 14
June that agreement had been reached with a visiting
Cuban trade delegation on a sale of 105,000 tons of
fishmeal. The price and terms of the sale have not
been announced, but the state marketing agency would
receive about $20 million if the fishmeal were sold
at the officially fixed Peruvian price. Cuba's con-
sumption of fishmeal is only about 20,000 tons per
year, indicating that the actual shipments may be
drawn out over a long period. The government jour-
nal also noted that future trade relations between
the two countries had been considered during the ne-
gotiations, but apparently no decision was reached.
The sale puts Peru in violation of the 1964 OAS
resolution banning trade with Cuba, but there is
little likelihood of any official OAS sanctions. A
more immediate problem is the effect on current US-
Peruvian negotiations for a PL-480 wheat sale, part
of the continuing US assistance to victims of last
year's major earthquake in northern Peru. One pro-
vision of Public Law 480 makes countries that trade
with Cuba ineligible for PL-480 sales unless the
sales are deemed to be in the US national interest.
The agreement with Peru is scheduled to be signed
next week, and a failure to follow through is likely
to provoke a strong adverse reaction in Peru.
The sale to Cuba is part of an intensive effort
by the Velasco government to dispose of its excess
fishmeal stocks through sales to Communist countries.
A trade mission led by the Peruvian minister of fish-
eries has recently traveled to Peking to negotiate
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NIGERIA: Yoruba Chief Awolowo, the highest rank-
ing civilian in the federal military government (FMG),
has submitted his resignation, effective at the end
of June.
Awolowo reportedly tried to quit last January,
but FMG head Gowon refused to accept his resignation.
This time, however, the resignation may finally go
through. Several other ambitious politicians are
critical of the FMG's failure to consult them before
making decisions, and may be weighing the merits of
continued association with the regime, but it is
unlikely that they will resign immediately.
Awolowo's major reason for resigning appears to
be his belief that he is lending his prestige to a
government from which he gains very little. Although
critical of the FMG's lack of direction, Awolowo says
that he does not plan any political activity that
would embarrass the government. He intends to do
some writing and will probably be circumspect in any
sub rosa political activity in which he engages.
Awolowo's replacement as federal commissioner
for finance will certainly be.a lesser political fig-
ure. Over the long run the government may take on a
more technocratic complexion if other politicians
who may want to build their personal political bases
dissociate themselves from the government and are
replaced by civil servants.
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USSR: Three Soviet oceanographic research
ships that were in Cienfuegos last week operated
for several days in the central Gulf of Mexico.
The three ships, currently heading east toward the
Straits of Florida, were probably studying the
hydrographic and acoustic properties of the waters
in which Soviet submarines and ASW ships are now
operating with greater frequency. Increased Soviet
research activity began in the Caribbean a year ago
and has continued intermittently since then. This
type of basic data, as well as tactical training
conducted in the area, is required for effective
submarine and antisubmarine operations.
JAPAN: Pressure for yen revaluation is likely
to increase as a result of the continuing massive
flow of dollars into Japan. Japan's foreign ex-
change reserves now stand at nearly $8 billion and
are third behind those of the US and West Germany.
Japan ranked sixth in June 1970. The dollar inflow
last week reached the second highest level since
early May, even though Tokyo had been able to reduce
gradually the inflow through the first week in June.
Japanese monetary. authorities have admitted diffi-
culties in curbing hedging by Japanese businessmen
against yen revaluation. They believe, however,
they have been able to stem the speculative dollar
influx that began in earnest following the West
European currency turmoil in May.
(continued)
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CUBA-US: Havana announced yesterday that five
US cit.Izezens had been fined $20,000 apiece for vio-
lating Cuban territorial waters. This is the latest
step taken by the Cuban Government in response to
the sentencing of four Cubans convicted last week
of fishing within 12 miles of Dry Tortugas. The
four were sentenced to six months in jail and fined
$10,000 each. Eight crew members of another US
boat are also being detained, pending an "investiga-
tion"; they may also be tried if the four Cubans
are not released soon. The prison sentence received
by the four Cubans placed Castro in a position where
he felt obliged to make a strong response or suffer
an apparent defeat in the eyes of the Cuban people.
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