CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A022200060001-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 14, 2016
• Document Release Date: August 4, 2003
• Sequence Number: 1
• Publication Date: June 29, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
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No. 0155/72
29 June 1972
Central Intelligence Bulletin
VIETNAM: Communist command in southern South Viet-
nam has issued new directives. (Page 1)
ISRAEL-LEBANON: Israelis will seek to force Beirut
to curb fedayeen. (Page 5)
TURKEY: Ban on opium cultivation under criticism
in parliament. (Page 6)
FRANCE: Assessment of accord between Communist and
Socialist parties. (Page 7)
CZECHOSLOVAKIA - WEST GERMANY: New round of talks
on normalizing relations. (Page 9)
CENTRAL AMERICA: Common market faces new crisis.
(Page 10)
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INTERNATIONAL MONETARY DEVELOPMENTS: Status of
money markets (Page 11
PAKISTAN: Drop in industrial production (Page 12)
GUYANA: State-owned plant closed (Page 12)
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CVIETNAM: COSVN, the Communist command in south-
ern Sou th Vietnam, has ordered further offensive ac-
tion on the military and political fronts, possibly
in the belief that negotiations with the US may be
in the offing.
Communist cadre were
briefed on new directives rom the southern command.
The directives allegedly called for strenuous ef-
forts to seize territory, gain control over more
people, undermine the pacification program, and de-
feat the South Vietnamese Army.
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The directives may simply be designed to get
one more all-out effort from Communist cadres.
Communist commanders have tried in the past to ex-
hort their forces to better performance by holding
out the prospect of a cessation of the war after
certain objectives, usually the occupation of larger
areas, are achieved.
Central Intelligence Bulletin
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Q1:ANG,, TR!
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N VIETNAM
VIETNA
-THUA THIE
QUANG :NAM
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South Vietnamese forces have moved at least
three miles north of the My Chanh defense line in
a major drive into Quang Tri Province. Details
are still sketchy, but early reports indicate that
some heavy fighting has occurred west of Route 1,
where South Vietnamese paratroopers have encountered
substantial resistance, and about eight miles south-
east of Quang Tri City, where a marine task force
is attempting to move north along the coast.
(continued)
29 Jun 72 Central Intelligence Bulletin
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(The offensive is being supported by intensive
air, artillery, and naval bombardments, directed
mostly against Communist artillery positions in
the foothills to the west of Route 1. To head off
any Communist flanking attack against Hue, a bri-
gade of South Vietnamese paratroops from An Loc
and two regular army regiments have moved into the
defensive positions previously manned by the forces
now on the attack in Quang Tri. Nevertheless,
Saigon's forces are stretched somewhat thin north-
west of Hue, with few reserves available to meet
any major enemy effort along the western approach.
Prior to the government offensive, the Commu-
nists attacked South Vietnamese frontline positions
in the vicinity of the government's staging area
for operations west of Route l,.but were turned
back.
A supplementary economic and military aid
agreement between China and North Vietnam was signed
yesterday in Peking. The agreement came almost two
months after North Vietnam's chief negotiator ar-
rived in China, suggesting that things did not go
as smoothly as the Vietnamese may have wished. As
is customary, the amount of the aid, which includes
"gratuitous" militar equipment and materi 1, was
not disclosed.
Central Intelligence Bulletin
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ISRAEL-LEBANON: Israeli officials intend to
maintain constant diplomatic and military pressure
on Beirut to force Lebanon to curb fedayeen activ-
ities against Israel.
These officials are under no illusion that
Israel itself can solve the fedayeen problem, and
they believe that the Lebanese must crack down on
the fedayeen the way King Husayn did in 1970-71.
The Israelis clearly want to put a complete stop
to terrorism from the north. On 28 June Defense
Minister Dayan warned that henceforth Israel would
emphasize a "deterrent" policy and would take ac-
tion inside Lebanon to prevent commando activities
rather than undertake new defensive measures within
Israel. Dayan said Israel would not wait for the
fedayeen to strike, but would strike them first.
The Israelis may be asking Beirut to do more
than it is capable of in cracking down hard on the
fedayeen. Beirut nevertheless appears to be making
some attempts to meet Israeli demands despite Leba-
nese Army weaknesses and domestic political differ-
ences regarding the fedayeen. President Franjiyah
announced yesterday that the fedayeen have agreed
to suspend at least temporarily operations against
Israel. It is questionable, however, whether all
fedayeen groups will honor the agreement. A spokes-
man in Damascus for the more radical Popular Front
for the Liberation of Palestine (PFLP) has publicly
rejected the idea of freezing fedayeen operations,
stating that it was necessar to maintain them on
all Arab borders.
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TURKEY: The government's ban on opium cultiva-
tion is running into new criticism and opposition in
parliament.
Several prominent politicians representing both
major parties recently have been criticizing various
aspects of the ban; 112 members of parliament, from
the predominant Justice Party, are sponsoring legis-
lation to permit the resumption of poppy cultivation
under strict government controls. Under this plan,
the farmers would be allowed to resume opium poppy
cultivation, but government factories would process
the entire crop, presumably for pharmaceuticals.
Although the growers would be forbidden to extract
opium from the plants, the proposed scheme would
allow traffic in illicit opium to increase and
greatly complicate the problem of government con-
trol.
The Melen government, however, appears deter-
mined to continue the ban and to move ahead with
related compensation and crop substitution projects.
The prime minister reportedly has said he would
never reverse the ban. Nevertheless, with national
elections only 15 months away, the opium question
could become a thorny campaign issue.
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FRANCE: The accord reached by the Communist
and Socialist parties on a common program for gov-
erning puts them in a stronger position to face
elections. The accord, however, papers over sub-
stantial differences about key policy issues and
basic party goals.
Both sides apparently made a number of conces-
sions in the accord, which among other things would
nationalize much of French industry and financial
institutions, freeze France's nuclear program at its
current level, restrict the powers and term of the
president, and grant major benefits to workers.
The Communists in particular seem to have abandoned
some-long-held demands, perhaps spurred by fears
that the Socialists would try to construct a non-
Communist opposition if the impasse over an accord
continued.
The accord does represent an important step
forward in Communist-Socialist cooperation and may
prove an attractive vote-getter in the parliamentary
elections, which must be held by next spring. None-
theless, the document is vague--probably deliber-
ately--and reflects the inability of the parties to
agree fully on certain crucial issues. NATO as such
is not even mentioned, despite the fact that the
Communists want to withdraw while the Socialists
want to stay in until both NATO and the Warsaw Pact
are dismantled. The accord merely calls for an end
to military groupings. The commitment to take part
in the construction of Europe and to support its
institutions is a significant concession by the Com-
munists. There are nonetheless disagreements as to
how Europe should develop and function.
The disarray in the government camp in recent
months and the hope of capitalizing on it gave new
impetus to the two parties. They hope through the
accord to make more credible their claim to represent
a workable alternative to the Pompidou government.
(continued)
29 Jun 72 Central Intelligence Bulletin 7
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They are handicapped, however, by divisions within
the Socialist Party and by the fact that the two
parties together hold less than one sixth of the
seats in the Gaullist-dominated parliament. Finally,
they may discover that the accord serves to re-unite
the Gaullists as nothing else could. De Gaulle`s
emphasis on the "Communist threat" was a key factor
in the massive Gaullist parliamentary victory in
1968.
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CZECHOSLOVAKIA - WEST G8RMANY: Another round
of talks aimed at normalizing relations opens today
in Prague.
In the scheduled two-day session, Czechoslovak
Deputy Foreign Minister Goetz and West German State
Secretary Frank will grapple with the problem of the
Munich Agreement of. 1938, the issue that has dead-
locked previous negotiations. Prague has demanded
that West Germany declare the agreement null and
void from the beginning. For legal reasons, in-
cluding the citizenship status of the Sudeten Ger-
mans, Bonn has refused. The Brandt government had
agreed to declare the agreement unjust from the
beginning and therefore invalid now, but has given
no indication it is willing to go further.
Czechoslovak leaders have been conciliatory
in recent public statements. On several occasions
.party chief Husak has avoided use of Prague's strict
formulation on the Munich agreement and has stated
that Czechoslovakia was ready to negotiate a treaty
with West Germany. The Czechoslovaks, who initiated
the resumption of the talks, have little to gain by
prolonging the impasse and may be prepared to ex-
plore possibilities of a compromise.
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CENTRAL AMERICA: The already troubled Central
American Common Market is on the verge of a new
crisis as a result: of Costa Rican intransigence.
Troubled by fiscal, and balance-of-payments
problems, Costa Rica has delayed payment of a
US$22.2-million debt it. owes to the four other Mar-
ket countries. Nicaragua has threatened to suspend
exports to Costa Rica, and other member states seem
ready to follow.
The Central American Monetary Council is pre-
pared to help Costa Rica resolve its payment diffi-
culties but insists in return that the Figueres
government effect a stabilization plan that would
probably have to include currency devaluation and
the reduction of government expenditures. Figueres
has vetoed both proposals and has rebuffed several
efforts by the council to mediate a solution.
The Common Market, for many years the shining
example of Latin American integration, has fallen
on hard times since El Salvador and Honduras briefly
went to war in 1969. Over the past few months, the
two have made serious efforts to resolve outstanding
problems, particularly their long-standing border
dispute. Secret negotiations in Guatemala have
reached the point where a modicum of flexibility
could yield impressive results, but this step con-
tinues to elude the negotiators.
Despite continued problems there seems to be
a general consensus that the Common Market ought to
be saved. Nevertheless, prospects for its early
revitalization, are not good. 17
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INTERNATIONAL MONETARY DEVELOPMENTS: Major
European money markets were generally quiet yester-
day in the wake of the decision to maintain existing
exchange rate bands, but new measures, perhaps only
temporary, have been introduced to restrict short-
term capital movements. When major continental
foreign exchanges opened yesterday for the first
time since last Thursday, the US dollar opened under
its previous low against most currencies and de-
clined somewhat. Central banks did not have to
provide much support for the dollar, which closed
above its floor. Sterling experienced little move-
ment during light trading and its dollar value re-
mained about four percent below the old central
rate. Switzerland and Italy will restrict short-
term capital movements while West Germany, in an
effort to halt a renewed speculative inflow of
dollars, will tighten rules that increase the cost
of foreign borrowing by German firms.
(continued)
29 Jun 72 Central Intelligence Bulletin
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PAKISTAN: Industrial production dropped al-
most six percent in the fiscal year ending this
month, and over-all economic growth amounted to
only 1.7 percent, according to preliminary figures
from Islamabad. Per capita income declined for the
second straight year. The principal reason for the
industrial recession was the loss of markets in
Bangladesh. Pakistan's most important industry,
cotton textiles, was especially hard hit. Although
textile exports rose sharply, the increase was not
enough to offset the loss of sales to Bangladesh.
Labor unrest, especially in recent months; the low
level of investor confidence; and power shortages
resulting from drought conditions also contributed
to reduced industrial output. The drought last
year also resulted in disappointing food crops,
but a bumper cotton crop enabled the agricultural
sector to show a 2.8-percent increase in output in
the fiscal year and contributed to a significant
growth in exports.
GUYANA: The government has temporarily closed
its state-owned alumina plant because of the de-
pressed international market for aluminum. Unless
the Guyana Bauxite Company (GUYBAU) is willing to
sell alumina at a loss, the plant may be closed
considerably longer than the three-week period an-
nounced. An extended shutdown would lead to a
significant loss of much-needed foreign exchange
and could heighten current labor unrest at the
GUYBAU facility. In addition, the depressed market
conditions should further discourage the threatened
nationalization proceedings against the US-owned
Reynold's Guyana Mines in the near future. Since
the government take-over in July, GUYBAU has en-
countered increasing difficulty in marketing alumina
and metal grade bauxite and recently has been forced
to sell alumina at gost while tine back sharply
on bauxite output.
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