CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A021300020001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 14, 2016
• Document Release Date: April 18, 2003
• Sequence Number: 1
• Publication Date: February 25, 1972
• Content Type: REPORT

Approved Fq elease 2003/05/21 : CIA-RDP79T00 02135 crI81-2
25X1
DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N2 041
25 February 1972
Approved For Release 2003/05/21 : CIA-RDP79T00975AO21300020001-2
 25X1 Approved For Release 2003/05/21 : CIA-RDP79T00975AO21300020001-2
Approved For Release 2003/05/21 : CIA-RDP79T00975AO21300020001-2
 Approved For Rr ase 2003/05/ LCRBclP79T00975 1300020001-2
No. 0048/72
25 February 1972
Central Intelligence Bulletin
USSR-EGYPT: Grechko mission probably assessed
Cairo's military needs. (Page 1)
PAKISTAN: President Bhutto may face political
crisis over martial law issue. (Page 2)
ISRAEL-LEBANON: Killing of civilians by fedayeen
likely to draw Israeli. reprisal. (Page 4)
JAPAN: Foreign exchange controls reimposed to
limit dollar inflow. (Page 5)
JAPAN-USSR: Agreement for further study of joint
development of Siberian oil resources. (Page 6)
FINLAND: Assessment of new minority government.
(Page 7)
MEXICO: Choice of new president of ruling party
reflects Echeverria's desire to ease rigid politi-
cal system. (Page 9)
EL SALVADOR: Military may decide disputed presi-
dential election. (Page 10)
ECUADOR: Leftists plan to support Rodriguez gov-
ernment. (Page 11)
EUROPEAN COMMUNITIES - JAPAN: Differences over
"safeguards" remain unresolved. (Page 12)
CHINA: "Acting" chief of state named (Page 13)
WEST GERMANY: Discount rate cut (Page 13)
BELGIUM: Budget proposals (Page 14)
MOROCCO: Opposition front to boycott referendum
(Page T4)
GHANA: Economic projects may be reactivated (Page 15)
TURKEY: Martial law issue (Page 15)
SECRET
Approved For Release 2003/05/21 : CIA-RDP79T00975A021300020001-2
 Approved Fo Release 2003/05 /5SE(WJ pP79T009 A021300020001-2
USSR-EGYPT: The presence of senior Soviet mil-
itary leaders in the delegation which accompanied
Defense Minister Grechko to Egypt last weekend sug-
gests that Grechko's mission was to conduct an on-
the-spot, detailed study of Egypt's military needs,
as well as those of Soviet forces in the area.
The delegation included Army General Yepishev,
the top political commissar, Air Marshal Kutakhov,
the commander of the air force, and Admiral Kasatonov
and Army General Shcheglov, the first deputy command-
ers of the navy and of the air defense forces. Their
presence, along with Colonel Generals Ogarkov, a
first deputy chief of the General Staff and Dagayev,
head of the General Staff's Military Assistance Di-
rectorate, would indicate that Moscow is conducting
a broad review of its military programs in Egypt.
The visit took place only two weeks after Egyp-
tian President Sadat was in the USSR for talks with
the Soviet leaders. During his talks in Moscow in
early February, President Sadat probably renewed
his pleas for additional weaponry, even though he
probably realizes additional weapons, alone, will
not provide an answer to his problems vis-a-vis Is-
rael.
Whatever the scope of the study conducted by
the Grechko mission, the communiga~enisdecisions uats
departure from Cairo suggests will
be made until Grechko reports his findings to the
Soviet leadership.
25 Feb 72
Central Intelligence Bulletin
SECRET
25X1
Approved For Release 2003/05/21 : CIA-RDP79T00975A021300020001-2
 Approved For Pease 2003/05/ ~12 DP79T00975 1300020001-2
PAKISTAN: President Bhutto, faced with diffi-
cult negotiations abroad and a deteriorating economy
at home, appears to be heading into a growing polit-
ical crisis over his refusal to end martial law.
Bhutto's opposition, which has tended to coa-
lesce around the National Awami Party/Requisitionist
(NAP/R), continues to focus on the President's re-
fusal to set a date for the end of martial law. The
opposition is strongest in the Northwest Frontier
Province and Baluchistan, the two provinces out of
the four remaining in Pakistan where Bhutto's Paki-
stan People's Party (PPP) is weakest. Of late, the
dissatisfaction in these provinces, which has cen-
tered on demands for provincial autonomy, has begun
to take on ominous ethnic overtones. The Pathans
of the Northwest Frontier and the Baluchis of
Baluchistan have long resented domination of Paki-
stan by the Punjabis and, to a lesser degree, by
the Sindhis. Bhutto is a Sindhi but much of the
government administration remains in Punjabi hands.
The NAP/R has been encouraged by several re-
cent events. On 19 February, the government bowed
to opposition demands and postponed local elections
that had been scheduled for 15 March. In elections
on 20 February to fill some seats in the four pro-
vincial assemblies the NAP/R and its allies won
every contested seat in both the Northwest Frontier
and Baluchistan. The NAP/R probably will have firm
control of the future assembly in the. Northwest
Frontier and is slightly stronger than the PPP in
Baluchistan. The PPP suffered a further blow in
the Northwest Frontier on Wednesday when party of-
ficials were forced to accept most of the demands
of striking policemen in Peshawar, capital of the
province. The police returned to duty after four
days on strike but only after they received as-
surances of raises and an apology on behalf of the
PPP for the party's previous handling of police
matters.
(continued)
25 Feb 72 Central Intelligence Bulletin 2
SECRET
Approved For Release 2003/05/21 : CIA-RDP79T00975A021300020001-2
 Approved For$elease 2003/09kiff- DP79T009 021300020001-2
The next test of strength between Bhutto and
his political opposition is likely to come over his
plans to convene the four provincial assemblies on
23 March. The opposition adamantly insists that a
date must be set for ending martial law. Bhutto,
thus far, has refused to give in on this issue and
serious disorders are possible as the date for con-
vening the assemblies approaches.
As his domestic problems mount, Bhutto may be
forced to rely increasingly on the army. Many army
members are from the Northwest Frontier and Baluchistan,
however, and therefore probably would be reluctant to
use force in security operations in these provinces.
25X1
25 Feb 72 Central Intelligence Bulletin 3
SECRET
Approved For Release 2003/05/21 : CIA-RDP79T00975AO21300020001-2
 Approved Fo lease 2003/05 1 P79T0097 x021300020001-2
ISRAEL-LEBANON: The killing of two Israeli
civilians by fe ayeen along the Lebanese border on
Wednesday is almost certain to draw an Israeli re-
sponse.
Following this incident, Israeli Chief of Staff
Elazar said, "We warned the Lebanese authorities we
don't intend to tolerate terrorist activities along
the Lebanese border. I believe we shall be obliged
to react." Most recent Israeli reprisals against
fedayeen in Lebanon have involved ground units.
The border had been relatively quiet since
mid-January when the Israelis threatened "permanent
occupation" of Lebanese territory if fedayeen at-
tacks continued. An Israeli strike will come at a
bad time for the Lebanese, whose election campaign
has just begun. If fedayeen leaders fail to control
the commandos, the government again may be fob
to out pressure on the maverick guerrillas.
25 Feb 72 Central Intelligence Bulletin
SECRET
25X1
Approved For Release 2003/05/21 : CIA-RDP79T00975A021300020001-2
 Approved For. please 2003/05/21 : CIA-RDP79T0097f,pO21300020001-2
SECRET
JAPAN: Tokyo has reimposed some foreign ex-
change controls in an effort to limit dollar flows
into Japan.
According to press reports, the Bank of Japan
in the last few days has purchased $190 million as
the yen approached the upper limit of its new wider
band. The closing rate on 24 February was 302.25
yen to the dollar. This represents an appreciation
of 19 percent over the rate that prevailed prior to
28 August 1971.
Local banks henceforth will not be allowed to
convert into yen any dollars received as advance
payments for exports. This move effectively will
prohibit the prepayment of exports because banks
currently have no desire to hold dollars. Moreover,
effective next month foreign banks will be unable
to increase their dollar conversions above their
present outstanding balances in an effort to put
these banks on an equal footing with domestic banks.
These moves, however, will not completely stem
the flow of dollars ir!t'o Japan and further dollar
purchases by the Bank of Japan probably will
25 Feb 72 Central Intelligence Bulletin
SECRET
Approved For Release 2003/05/21 : CIA-RDP79T00975AO21300020001-2
25X1
 Approved Fo elease 2003/05/21 : CIA-RDP79T00974 021300020001-2
SECRET
JAPAN-USSR: The semi-official Japan-Soviet
Economic Committee concluded its meetings yester-
day, agreeing only to subsequent study of the
joint development of West Siberian oil resources.
Japanese delegates, representing private
industry, and government observers, reviewed a
Soviet study of the feasibility of expanding pro-
duction at the Tyumen oil field and of constructing
a 2,670-mile pipeline from Irkutsk to Nakhodka.
Other proposals to develop Siberian natural gas
and coal resources were also reviewed but little
progress was made toward reaching agreements.
The Japanese will send a joint government-
industry team, probably in May, for on-site in-
spection of the Tyumen oil field, until now for-
bidden by Moscow. Tokyo probably will delay plans
to send a government mission to Moscow to discuss
financing, pending the outcome of this survey.
Although Japanese businessmen who stand to
profit from the venture have been enthusiastic,
the Sato government remains cautious. Tokyo has
not fully assessed the strategic implications of
helping the Soviets in this project and may ul-
timately hope to condition approval to obtaining
political concessions from Moscow, particularly
on the southern Kuriles issue.
The USSR hopes that Tokyo will be more forth-
coming but is nevertheless gratified by the prospect
of additional study. Moscow attaches considerable
political as well as economic importance to the
project, viewing it as a way to u grade Soviet-
2 5 Feb 72 Central Intelligence Bulletin
SECRET
Approved For Release 2003/05/21 : CIA-RDP79T00975AO21300020001-2
25X1
 Approved For {j lease 2003/05/28E FET79T009754 f 21300020001-2
FINLAND: The Social Democratic minority gov-
ernment announced yesterday is not likely to be
long-lived, but its installation will restore order
to the domestic political situation on the eve of
President Kekkonen's visit to the USSR.
Kekkonen had hoped to put together a five-
party, center-left government. However, the Com-
munists, after five weeks of hard bargaining and
a trip to Moscow dropped out on 16 February. The
remaining four parties had a parliamentary majority,
but were unable on 21 February to form a cabinet
when the Center and Social Democratic parties con-
tinued to disagree on agricultural policy.
With only 55 of the 200 parliamentary seats,
the Social Democrats are unlikely to adopt bold
policies. Moreover, Kekkonen will probably have
to intervene personally in order to produce the
parliamentary majorities needed for critical
legislation such as extension of the economic
stabilization program that expires in March. For-
eign policy will remain under the President's
personal control.
Municipal elections next fall may serve as
the catalyst for another governmental change. At
present, however, Finland's parties are in con-
siderable disarray, highly protective of the
special interests they represent, and anxious to
avoid responsibility for difficult decisions that
need to be made.
In part because of the Communists' behavior,
Kekkonen will wish to re-assure himself during his
visit to Moscow on 25-26 February that his rela-
tions with the Soviets are healthy. Some Finns
are worried that Moscow's rejection of their can-
didate for the UN Secretary-General post, plus
25 Feb 72 Central Intelligence Bulletin
SECRET
Approved For Release 2003/05/21 : CIA-RDP79T00975AO21300020001-2
 Approved For Release 2003/05/21 : CIA-RDP79T00975R021300020001-2
SECRET
hints that the Soviets might prefer a site other
than Helsinki for a Conference on Security and
Cooperation in Europe, signaled a broader dis-
satisfaction. These anxieties are probably un-
warranted.
On the question of Finland's future relations
with the European Community--probably the main
topic of his visit--Kekkonen has ground for con-
cern. He believes that an arrangement is essential
even given the problems raised by Brussels' terms
and the Finnish Communists' adamant opposition.
Although Moscow blessed Finland's membership in
the European Free Trade Association, its opposi-
tion was the major factor in killing Finnish par-
ticipation in the Nordic Economic Community, and
Central Intelligence Bulletin 8
SECRET
25X1
Approved For Release 2003/05/21 : CIA-RDP79T00975A021300020001-2
 Approved Focelease 2003/05t P79T0097rnkO21300020001-2
MEXICO: The choice of a young, respected in-
tellectual with "progressive tendencies" as the new
president of the ruling Institutional Revolutionary
Party (PRI) points up President Echeverria's desire
to open up the country's rigid political system.
The new PRI boss, Jesus Reyes Heroles, is a
former director of Mexico's petroleum agency where
he proved to be an able administrator. He has been
characterized as "a man to watch" by political
commentators. In his "election" speech Reyes pro-
claimed his support for Echeverria's liberal policy,
saying that the party is in need of "purification"
and "profound revolutionary reforms." A new PRI
secretary-general--a senator also with established
progressive and intellectual credentials--was also
named.
The old PRI president may have become an em-
barrassment to Echeverria. He had been veering
from Echeverria's reformist policy and had harshly
criticized the major opposition party, while
Echeverria was talking about democratic openings
and inviting pressure groups to form new parties.
25X1
25 Feb 72 Central Intelligence Bulletin 9
SECRET
Approved For Release 2003/05/21 : CIA-RDP79T00975A021300020001-2
 Approved For R ease 2003/05/ e61 RgP79T0097 21300020001-2
25X1
25X1
EL SALVADOR: Military pressure is likely to
deci die outcome of the disputed presidential
elections.
The leftist opposition coalition is still
claiming that its candidate, Napoleon Duarte,
actually won a plurality and has convinced many
that the electoral council is falsifying the re-
sults. In addition to publicizing discrepancies
in the vote counting between local totals and
those announced by the central electoral council,
it has resorted to threats against members of the
legislature, who will have to choose between the
two front-runners.
would be discredited in the eyes of many from the
start. Duarte, on the other hand, is distrusted
by the military, and a coup would be a serious
setback to the constitutional process that has
is possible, but some arrangement within the con-
stitutional framework appears more likely.
If the military becomes convinced that Duarte
actually edged out Molina, the government's can-
didate., it might support Duarte's succession if he
would agree to dissociate himself from his Com-
munist supporters and to go slow on controversial
policies such as agrarian reform. This option
appears remote, however, in view of the military's
long-standing distrust of the left-of-center parties,
including Duarte's Christian Democrats, and the
ill feeling caused by the coalition's campaign
attacks on the military.
The outcome hinges largely on how military
leaders read public opinion and how valid they
believe the election results to be. They met
twice on 23 February with President Sanchez, but
their decisions, if any, are not yet known. Should
Molina be declared the winner, his administration
prevailed overhe past ten years.
25 Feb 72 Central Intelligence Bulletin
SECRET
Approved For Release 2003/05/21 : CIA-RDP79T009 -
25X1
25X1
 Approved ForBelease 2003/05 Mi,RDP79T00974A021300020001-2
ECUADOR: Leftist politicians and military
officers -plan to support the Rodriguez government,
at least for the time being.
The secretary-general of the Communist Party,
Pedro Saad, and other leaders have ex-
pressed enthusiasm for President Ro riguez
hey are p ease
because Rodriguez has reinstated tie 1945 constitu-
tion, of which Saad was a principal author, and
because the new government has not ordered the ar-
rest of any Communists. Only the extreme leftist
pro-Chinese Communist Party has called for active
opposition to the government, but its factionalism
and weakness limit the extent to which it can act.
A group of left-wing army officers reportedly
plans to work with Rodriguez while urging lower-
ranking officers and enlisted men to press for more
radical policies. This group believes that Rodriguez
has the right qualities to establish a "revolutionary"
administration and that if the new military govern-
ment does not undertake the needed reforms, the
armed forces will fall into utter disrepute.
Support from leftists inside and outside the
military will help Rodriguez while he consolidates
his position. Pressures on him for radical actions,
however. may be stronaer -than he now anticipates.
25 Feb 72 Central Intelligence Bulletin 11
SECRET
Approved For Release 2003/05/21 : CIA-RDP79T00975A021300020001-2
25X1
25X1
25X1
 Approved For Re ease 2003105/2?E79T009721300020001-2
EUROPEAN COMMUNITIES - JAPAN: Discussions in
Tokyo last week between EC Commission President
Malfatti and Japanese leaders failed to resolve
differences over "safeguards" against excessive
Japanese exports to the EC, an issue which has
long stymied progress on an EC-Japan trade agree-
ment.
Increasing concern among EC members about
Japanese competition in their domestic markets
has stiffened the community's insistence that lib-
eralization of Japanese imports be accompanied by
a specific safeguard clause. The Commission prob-
ably fears that--in the absence of an over-all EC-
Japan agreement--the individual EC countries might
take their own steps effectively to restrict im-
ports. Tokyo objects to safeguard clauses in prin-
ciple and fears the precedent they might set for
its trade with others, including the US. A speech
by Ma:lfatti in Tokyo suggests that the commission
may hope to use the Japanese desire for periodic
consultations--which could be established in the
context of a trade agreement--to induce Tokyo to
modify its position on the safeguard issue.
The question of resuming the EC-Japan negotia-
tions will probably be taken up again when an EC
mission visits Tokyo in April. r
25 Feb 72 Central Intelligence Bulletin
SECRET
25X1
Approved For Release 2003/05/21 CIA-RDP79 -
 Approved FoWelease 2003/0~VcfI DP79T009 iA021300020001-2
CHINA: The designation yesterday of party
elder Tung Pi-wu as "acting" chief of state suggests
that the regime wishes to project an image of sta-
bility and orderliness in the wake of the recent
purges that ravaged the politburo. In October 1969,
Tung was briefly identified by this title, but the
formal decision to award him the post was evidently
postponed because of disagreement over the precise
shape and structure of China's rebuilt governing
apparatus. A draft state constitution circulated
throughout the mainland in the fall of 1970, for
example, pointedly ignored the question of the role
and functions of the chief of state. The 85-year-
old Tung is, in any case, a figurehead and his ap-
pointment is not likely to have any major impact
on the power alignment in Peking, which is currently
d th
e
weighted in favor of Premier Chou En-lai an
ads
l
h
.
e
e
moderate civilian-military coalition that
WEST GERMANY: In a major move designed to
slow the inflow of US dollars, the central bank
yesterday cut its discount rate from four to three
percent, the lowest rate in Europe. The associated
rate charged banks for loans secured by collateral
was reduced from five to four percent. This ac-
tion should substantially narrow the interest rate
differential between German and foreign money mar-
kets that had generated sizable dollar flows into
Germany in recent weeks. In order to discourage
foreign borrowing by German firms, the bank also
increased the minimum reserve requirements for
the commercial banks' foreign liabilities above
the level of last November. In a related move,
the Economics Ministry announced that it would rec-
ommend implementation of the cash deposit law de-
signed to curb foreign borrowing by private German
corporations.
(continued)
25 FeF -12 Central Inte igence Bu =e in 13
SECRET
25X1
25X1
Approved For Release 2003/05/21 : CIA-RDP79T00975A021300020001-2
 Approved For Re ease 2003/05/2151 j F 9T00975 ^1300020001-2
BELGIUM: The new government's budget propos-
als reflect a shift to an expansionary economic
policy to spur the slackening economy. Ordinary
budget expenditures are slated to increase 13 per-
cent over 1971, and $233 million is being provided
exclusively for economic stimulation. In an un-
precedented departure from Brussels' traditionally
balanced budget, the proposed budget shows an es-
timated deficit of over $100 million. The actual
deficit, however, probably will be considerably
larger. According to Belgian financial observers,
the government's increased expenditures will be
the only expansive component of demand this year.
Economic growth therefore will be well under the
government's optimistic prediction of 3.8 percent
and revenues will fall short of the budget projec-
tions. Such a development would justify the con-
siderable criticism of the government's policy
that has come from the opposition Liberal Party
and th
--J-'----I ---
e
MOROCCO: The opposition National Front has
declared it will not participate in the constitu-
tional referendum on 1 March. The Front's decla-
ration attacked the regime for misrule and respon-
sibility for the present political crisis and
called for the dissolution of parliament and the
banning of repression, corruption, and nepotism.
The declaration neither criticized the King's pro-
posed constitutional amendments nor specifically
enjoined its member organizations to boycott the
referendum. This suggests that Front leaders
still have not closed the door to future collabo-
ration with the Kincr_
(continued)
25 Feb 72 Central Intelligence Bulletin
SECRET
25X1
25X1
Approved For Release 2003/05/21 : CI - -
 Approved For Lease 2003/05S121
Edw - P79TOO9754921300020001-2
GHANA: Accra apparently wishes to reactivate
several economic projects originally started with
Communist aid but suspended following the .1966
coup that ousted Nkrumah. According to a Ghanaian
press report, the National Investment Bank has
been commissioned to seek local and foreign part-
ners to help finance completion of five projects
started with Soviet, Czechoslovak, and Chinese
assistance. No mention was made of possible Com-
munist participation, but both Accra and Moscow
recently have shown some interest in a resumption
of the Soviet aid program. The conflict over
Ghana's unilateral alteration of debt servicing
terms that included repudiation of some debts wi:l.l,
hinder efforts to interest Western firms in these
TURKEY: A recent Constitutional Court ruling
increases the probability of strong military pres-
sure for another extension of martial law when it
comes up for renewal in a few weeks. In a decision
bordering on defiance of the military leaders, the
court has declared unconstitutional those provi-
sions of the recently revised law which provide
that cases being heard before martial law courts
may be continued even if martial law is terminated.
Many cases are currently in process, including
the trial of over 200 members of the leftist Revo-
lutionary Youth Federation. The federation was
responsible for most of the violence that preceded
the declaration of martial law in 11 key provinces
last April. If the government does decide to end
martial law in March, it may establish special
civilian tribunals to carry on for the martial :law
courts. Such courts could be modeled after the
highly controversial French tribunals set up during
the Algerian War.
25 Feb 72 Central Intelligence Bulletin
SECRET
25X1
25X1
Approved For Release 2003/05/21 : CIA-RDP79T00975AO21300020001-2
 Approved For lease 2003/05/21 : CIA-RDP79T009021300020001-2
Secret
Secret
Approved For Release 2003/05/21 : CIA-RDP79T00975AO21300020001-2