CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A019900020001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 14, 2016
• Document Release Date: June 16, 2003
• Sequence Number: 1
• Publication Date: August 28, 1971
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
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No. 0206/71
28 August 1971
Central Intelligence Bulletin
CUBA: Reduction in aid to guerrillas. (Page 1)
BOLIVIA: Banzer is moving to consolidate his posi-
tion. _(Page 3)
INTERNATIONAL ECONOMIC DEVELOPMENTS: Tokyo has an-
nounced that the yen would e a owed to float.
(Page 5)
NEPAL: The prime minister has resigned. (Page 6)
ECUADOR-CHILE: Allende's visit (Page 7)
CENTRAL AMERICA: Trade agreement (Page 7)
CHAD: Coup attempt fails (Page 8)
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CUBA:
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Havana has
sharply reduced its aid to guerrilla-oriented revolu-
tionary movements in Latin America.
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the turning point in Cu Dan support to
guerrilla warfare protagonists occurred in early 1968
after continuous reverses were suffered by Cuban-
assisted rebel groups,
the govern- 25X1
ment drastically reduced its aid to national libera-
tion movements and concentrated its efforts on solving
pressing domestic problems. Training in guerrilla
warfare and other paramilitary subjects is now given
only to small, select groups. Logistical support
still continues to some rebel groups but it is re-
stricted to very small amounts of arms, ammunition,
and communications equipment.
I IChile, Peru, Uruguay, Bo-
ivia, and Guatemala, in that order, as the most im-
portant Latin American countries in Havana's foreign
policy scheme. Fidel Castro has issued
instructions to maintain complete cooperation with
Chile at all costs. In the case of Peru, where the
situation is very promising, no operations are to
be undertaken for fear of upsetting the favorable
trend of events. Subversive groups in Nicaragua,
Colombia, and Venezuela are considered too disorgan-
ized, undisciplined, and untrustworthy to merit more
than token Cuban support and, except for Mexico, all
other Latin American countries are considered un-
worthy of Cuban attention. Mexico is a special case
because it has always been a center of Cuban opera-
tions targeted against other countries; Castro has
ordered that no operations are to be undertaken
against the Mexican Government and that no assistance
is to be given to any Mexican subversive group.
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Castro reassessed his policy of support-
.
Guevara fiasco in Bolivia the previous year, and
opted for a more realistic approach to international
relations. Analysis of Castro's speeches over the
past two years shows clearly the emphasis he has
placed on nurturing the development of friendly gov-
ernments in Chile, Peru, and, until the recent coup,
in Bolivia, and indicates that he has decided that
a less violent approach is more likely to diminish
Cuba's isolation t4an continuation of support to
guerrilla groups.
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BOLIVIA: The country remains on an emergency
footing while President Banzer moves to consolidate
his position.
Most of the resistance to the Banzer government
has been quieted, although occasional bursts of gun-
fire are still heard in La Paz at night and army
troops continue to occupy the main campus of the
university. Leftist students, many of them still
armed, provide the primary source of continuing op-
position to the government now that the miners have
returned to their mines.
In the hope of pacifying the miners, who make
up the largest and most radical labor organization
in Bolivia, the Banzer government has given assur-
ances that no troops will be sent to the mines, that
trade union rights will be guaranteed, and that the
miners' present salary system will be respected.
Banzer has also taken steps to obtain the support
of the rural peasants, saying that domestic policies
will be designed to "solve the problems of the major-
ity of Bolivians, the campesinos."
President Banzer is also seeking to strengthen
his position in the military by giving many of the
most important posts to officers involved from the
beginning in the plotting against the Torres govern-
ment. This has contributed to some ill feeling
among senior officers who now find themselves work-
ing for their former subordinates. The naming of
Colonel Arana Serrudo as commander of the army, for
example, has annoyed many and could eventually cause
problems for the new president.
On the international scene, the new Bolivian
foreign minister has openly and repeatedly stated
that his government will seek close relations with
the US while maintaining relations with the Soviet
Union and other Communist countries. The Soviet
press has so far generally given factual coverage
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to the change in government in Bolivia, but Cuba has
made considerable propaganda over the "fascist coup"
and alleged US involvement. The Cuban press service
has also given full coverage to a statement attrib-
uted to former President Torres--now in exile in
Peru--calling on the people of Bolivia to be prepared
to fight for the "revolution" when the time is right.
F
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INTERNATIONAL ECONOMIC DEVELOPMENTS : Tokyo an-
nounce late Friday t at the yen would be allowed
to float. When the Japanese exchange market opened
this morning the yen appreciated by 5.2 percent in
slow trading.
The governor of the Bank of Japan told report-
ers that the bank would support the dollar if the
yen appreciated too much, but he gave no indication
of the point at which intervention would occur.
Private bankers predicted that the yen would be al-
lowed to appreciate by about 6 percent. Tokyo's
relaxation of restrictions on Japanese commercial.
banks earlier this week, which resulted in the Bank
of Japan purchasing about $1.8 billion on Thursday
and Friday, should have taken some of the steam out
of the drive to get out of dollars, and activity on
the Tokyo exchange Saturday will probably be moder-
ate. Japanese official reserves now stand at about
$12.5 billion.
Meanwhile in Europe, large gold sales by spec-
ulators in bullion markets yesterday drove the free
market price down to $41.12 per ounce at the final
fixing in London. This represents a decline of
$1.87 per ounce in the two full weeks since announce-
ment of the new US economic policy. Speculators
apparently are beginning to realize that there is
little likelihood of an early increase in the offi-
cial price of gold. Euro-dollar rate increases,
which raise financing costs, also discourage spec-
ulation. The floating of many major currencies fa-
vors the chances for a permanent, general realign-
ment of foreign currencies, reducing the possibil.-
it of a rise in lar price of gold.
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NEPAL: Prime Minister Bista has resigned under
pressure from King Mahendra.
The ostensible cause of Bista'-s resignation was
the King's decision to pardon a member of the national
legislature, Ram Raja Prasad Singh, who had been ar-
rested for his public criticism of the limitations
of Nepal's system of "guided democracy." In the par-
don message, Mahendra was critical of the Bista gov-
ernment's handling of the case.
Other factors, however, may have been as impor-
tant. Bista was appointed last April, largely because
the King believed his anti-Indian reputation would
allow him to go further than other Nepalese in making
concessions to India in the deadlocked trade-and-
transit talks. With the recent signing of a trade
and transit treaty and growing public dissatisfaction
with concessions that were.made, the King may well
have felt Bista had outlived his usefulness. Mahen-
dra, moreover, may believe that the recent conclusion
of the Indo-Soviet friendship treaty enhances India's
power position on the subcontinent and thus furnishes
an added reason for replacing the anti-Indian prime
minister. Recent reports of corruption in the Bista
cabinet may have also contributed to the King's de-
cision.
A variety of politicians are being rumored as
possible successors to Bista. The King could decide
to head the cabinet himself, however, as he did for
the year preceding Bista's appointment. In any event,
the change of government is not likely to have much
effect on government policies, because the King him-
self makes the final decisions on all important mat-
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NOTES
ECUADOR-CHILE: The visit this week of Chilean
President Salvador Allende to Ecuador is causing
some problems for Ecuadorean President Jose Velasco
Ibarra. Government Minister Nebot, a key man in the
cabinet, may resign because Velasco has been so
abusive about the inability of security forces to
prevent the crowds that greeted Allende from adding
uncomplimentary remarks about Velasco. Other Ecua-
dorean officials are disturbed because Velasco has
taken stands similar to Allende's on issues such as
the reintegration of Cuba into the inter-American
system. Most of Allende's public remarks have been
uninflammatory. His only action that would seem
likely to upset Velasco was his meeting with repre-
sentatives of the antigovernment extreme leftist
university student association. President Velasco,
however, may be picking up the domestic pieces from
the visit long after its end. F7 I
CENTRAL AMERICA: Nicaragua, Guatemala, and
Costa Rica have signed an agreement with Honduras
renewing free trade, which may resurrect the Cen-,
tral American Common Market (CACM). The agreement
allows Honduran goods to enter the other three coun-
tries duty-free while permitting Honduras to impose
import duties at agreed upon rates. It signifies a
major breakthrough toward re-establishing regional
trade deadlocked since the soccer war between Hon-
duras and El Salvador in 1969, when Honduras imposed
tariffs on Central American products equal to those
on imports from the rest of the world. The agree-
ment apparently is a concession to long-standing
Honduran complaints that CACM membership has caused
growing deficits in its regional trade and slowed
its industrial development. El Salvador, the re-
maining member of CACM, was not a participant in the
negotiations but will be under considerable pressure
to accede to the agreemento
28 Aug 71
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(continued)
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E CHAD: President Tombalbaye remains in control
following an apparent coup attempt during the night
of 26 August. Few details are available, but Tom-
balbaye has announced the arrest of two unidentified
government ministers and the alleged plot leader, a
Muslim former parliamentary deputy, who later com-
mitted suicide. Chad also broke diplomatic rela-
tions with Libya following a radiobroadcast by the
Chadian foreign minister in which he accused the
Libyans of meddling in his country's internal af-
fairs with the aid of "a large foreign power." Fort
Lamy is reportedly under heavy guard and outside
communications are sus ended pending_j:he roundup of
additional suspects.
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