CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A019700080001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: December 15, 2016
• Document Release Date: February 25, 2004
• Sequence Number: 1
• Publication Date: August 10, 1971
• Content Type: REPORT

Approved For Release 2004/04/19 : CIA-RDP79T00975A01970008Sec'et
25X1
DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N2 42
10 August 1971
State Department review completed
Approved For Release 2004/04/19 : CIA-RDP79T00975A019700080001-5
 25X1 Approved For Release 2004/04/19 : CIA-RDP79T00975AO19700080001-5
Approved For Release 2004/04/19 : CIA-RDP79T00975AO19700080001-5
 Approved For Release 2004/04/1t PLTNF9T00975A019700080001-5
No. 0190/71
10 August 1971
Central Intelligence Bulletin
CONTENTS
INDIA-USSR: The friendship treaty. (Page 1)
CHILE: The resignation of four ministers. (Page 2)
25X6
ITALY: Housing and tax reform. (Page 4)
AFGHANISTAN: Appeal for emergency relief aid.
(P g 5
SECRE'T'
Approved For Release 2004/04/19 : CIA-RDP79T00975A019700080001-5
 Approved For Release 2004/04/19 : CIA-RDP79T00975AO19700080001-5
SECRET
INDIA-USSR: Moscow's purpose in signing the
Soviet-Indian friendship treaty" is to forestall
precipitate Indian action on the East Pakistan ques-
tion.
The 20-year Indo-Soviet treaty signed yesterday
in New Delhi reflects both Soviet willingness to sup-
port India and the limited nature of Moscow's commit-
ment. The two countries agreed on consultations with
a view toward taking "appropriate effective measures"
if either were attacked and to cut off assistance to
the aggressor.
Heightened tensions on the subcontinent appear
to have overcome Mrs. Gandhi's dislike of an agree-
ment that conflicts with India's nonaligned posture.
For their part, the Soviets apparently believed such
a treaty was necessary to prevent India from taking
more drastic action in East Pakistan,
25X1
According to press reports, romy o
has also been invited to visit Islamabad.
In the meantime, Islamabad has announced that
the treason trial of East Pakistani leader Mujibur
Rahman will begin tomorrow. If he is given a death
sentence, pressure for intervention will increase in
India.
10 Aug 71 Central Intelligence Bulletin
SECRET
Approved For Release 2004/04/19 : CIA-RDP79T00975AO19700080001-5
 Approved For Release 2004/04/1gE99T00975A019700080001-5
CHILE: President Allende's delay in acting on
the resignations proffered by four ministers on 6
August reflects an intensification of conflicting
pressures on him.
The resignations were offered by three minis-
ters of the Radical Party (PR) and one former mem-
ber of the Unitary Movement of Popular Action (MAPU)
following recent moves by both parties to adopt Marx-
ist credentials. Allende wishes to avoid alienating
either these governing coalition parties or the less
extremist dissidents who resigned in protest. Al-
lende values the non-Marxist window dressing the PR
provides his government and he refused the resigna-
tions of the same PR cabinet ministers in April fol-
lowing their party's poor electoral performance.
Cabinet changes would also be unwelcome to Al-
lende in that they could trigger other readjustments
unsettling to his uneasy coalition. For similar rea-
sons he prefers not to accept the fourth resignation,
from Agriculture Minister Chonchol, who has left the
MAPU to join the new Christian Left movement, which
does not belong to the coalition.
Allende is also under pressure in the economic
field. If he meets the demands of striking copper
workers at one mine, it would set an expensive prec-
edent when Chile urgently needs every penny from its
major export because of its mounting economic prob-
lems. These problems also make Allende and the
pragmatic Communists reluctant to threaten Chile's
international economic standing by a flat refusal
to compensate the US copper companies. Allende's
Socialist colleagues are pressing for such a refusal
in the conviction that a confrontation with the US
would mobilize the Chilean masses behind the Presi-
dent and enable him to move faster toward socializa-
tion.
.10 Aug 71 Central Intelligence Bulletin 2
SECRET
Approved For Release 2004/04/19 : CIA-RDP79T00975AO19700080001-5
25X1
 25X6 Approved For Release 2004/04/19 : CIA-RDP79T00975AO19700080001-5
Approved For Release 2004/04/19 : CIA-RDP79T00975AO19700080001-5
 Approved For Release 2004/04/1BE79T00975A019700080001-5
ITALY: Senate approval of crucial bills on
housing and tax reform gives some respite to the
government, but internal tensions among the gov-
erning parties are still acute.
Because the two bills--and particularly the
housing measure--had been the object of much con-
troversy among the Socialists, Social Democrats,
and Christian Democrats, the fact that the govern-
ment majority remained basically intact is a dis-
tinct plus for Premier Colombo. Prior to the vote,
he reportedly made clear to Socialist Party leaders
that he would quit rather than accept their pro-
posal to postpone the housing vote until autumn.
Both bills are expected to pass the Chamber of Dep-
uties with relative ease this autumn.
The housing bill, aimed at easing the shortage
of low-cost housing, provides for increased public
housing expenditures, expropriation of private urban
land, and aid to private builders. The tax bill is
intended to simplify the tax structure and collec-
tion as well as cut down on evasion. A single pro-
gressive tax will replace 16 different taxes and
surcharges on personal income and a standard tax on
company profits will replace all current corporate
levies. The tax on production will now be on the
value added at each stage of production, as is de-
manded by European Community rules.
Despite the cohesion evidenced by the coalition
in Parliament on the bills, the indication in local
elections last June that the electorate had moved
right is having continuing repercussions within the
coalition in local and regional government matters.
As the Christian Democrats give slightly more em-
phasis to conservatism, more municipal and provin-
cial coalition governments are being formed without
the Socialists. In Genoa and the province of
Liguria, moreover, Social Democratic members of the
center-left administrations resigned in what may be
a test of an over-all strategy to promote the for-
mation of centrist administrations on l0 1 and
al levels without the Socialists.
i
c
on
10 Aug 71 Central Intelligence Bulletin
SECRET"
25X1
Approved For Release 2004/04/19 : CIA-RDP79T00975AO19700080001-5
 Approved For Release 2004/04/19 : CIA-RDP79T00975AO19700080001-5
SECRET
AFGHANISTAN= The government, faced with a
critical si"'itEation because of prolonged drought,
is appealing for emergency relief aid.
Unless extraordinary relief measures are
undertaken, two consecutive years of drought are
expected to culminate in a shortfall of about 25
percent in the country's wheat crop and the death
of up to 70 percent of its sheep. In the barren
northwest livestock losses may be total, and wide-
spread famine has been predicted.
A-major price depression in the sheep market
already has resulted from the dumping of animals
by owners in an attempt to avoid total loss. In
addition, the grain shortage has driven the price
of domestic wheat to 300 percent of its pre-drought
value. Since wool, rugs, and related materials
produce more than one third of total export earn-
ings, Kabul's already serious balance-of-payments
difficulties are being compounded.
The new government, which took office in late
July and is headed by Prime Minister Abdul Zahir,
has so far shown considerably greater speed and
resolve than the previous administration in attempt-
ing to deal with the economic crisis. It has in-
stituted a series of specific steps aimed at less-
ening crop and livestock losses and is seeking
domestic support and foreign assistance. Addition-
ally, in a meeting with the US ambassador, the new
deputy prime minister indicated that the government
will request a short-term debt moratorium from all
creditors on $18 million due through next March.
10 Aug 71 Central Intelligence Bulletin 5
SECRET
Approved For Release 2004/04/19 : CIA-RDP79T00975AO19700080001-5
 S e d For Release 2004/04/19: CIA-RDP79T00975A019700080001-5
Secret
Approved For Release 2004/04/19 : CIA-RDP79T00975AO19700080001-5