CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A022600090001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 15, 2016
• Document Release Date: November 3, 2003
• Sequence Number: 1
• Publication Date: August 26, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N9 042
State Department review completed 26 August 1972
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No. 0205/72
26 August 1972
Central Intelligence Bulletin
VIETNAM: Government counteroffensive is making
progress. (Page 1)
CAMBODIA: Enemy control of Route 5 may cause rice
shortage in Phnom Penh. (Page 3)
ARGENTINA: President Lanusse reaffirms decision
to 'o 1 cT-e1ections (Page 4)
CHILE: Allende trying to stimulate farm production.
Page 6)
FRANCE-EC: France may postpone October summit of
the EC Ten. (Page 7)
-
NORWAY: Labor government launches drive to join
tie EC. (Page 9)
HONDURAS: Disorders threaten the unsteady Cruz
regime. (Page 10)
ALGERIA: Effective action to deter hijackers re-
mains unlikely. (Page 11)
ITALY: Government's move to halt inflation (Page 12)
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Hue?
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f clue So
u ng.,.i r ,
etaken b govommenf
QUANG TIN
SOUTH
]VIETNAM
Qurng Ngai
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C VIETNAM: Government troops are making progress
in the coastal lowlands of Quang Nam Province.
Lead elements of the government counteroffen-
sive reportedly entered Que Son District town yes-
terday against only light opposition.. However, the
main body of government troops has met stiff re-
sistance about two miles east of the town.
two regiments of the
North Vietnamese ivision have been ordered
to hold off Saigon's counterthrust in Quang Nam
Province, while the division's third regiment and
sapper elements are to conduct operations against
the government staging area at Fire Support Base
Baldy and against nearby villages and lines of com-
munication.
;Fighting has intensified around Quang Tri City.
Several clashes occurred north of the city and near
the southeastern corner of the citadel. Marine
units trying to reach the citadel's west wall to
cut off enemy infiltration and resupply routes have
been unsuccessful so far. The government advance
has been hampered by intense enemy artillery bar-
rages--on 24 August the Communists directed almost
5,000 artillery and mortar rounds at Marine posi-
tions in the entire Quang Tri City vicinit/
West of Hue, South Vietnamese troops continue
attacks on enemy forces that have been pressuring
government strongpoints in the area since early
April. In the past two days, the South Vietnamese
have uncovered five enemy caches and confiscated
over 22 tons of munitions and rice
litary activity was light throughout the
rest of the country and consisted mostly of enemy
harassing attacks and government search operations.,'
26 Aug 72
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CAMBODIA
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Y 0 t I .N A M
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SECRET
THAILAND
q ?'~ Kompong
P ', u
m
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C.its N i~ F'.'j ompong Cham
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CAMBODIA: The Communists' control over a sec-
tion o Route 5 has increased the prospects for a
serious shortage of rice in Phnom Penh.
Enemy elements in northwestern Kompong Chhnang
Province are apparently consolidating their hold
over the 14-mile stretch of the highway se-ized in a
series of attacks a week ago. Previously, the Com-
munists confined themselves largely to minor hit-
and-run attacks along the highway, over which the
capital receives most of its rice supplies from Bat-
tambang Province. This time, however, there are
signs that they may be preparing for a protracted
campaign. Reports from villagers indicate, for ex-
ample, that enemy reinforcements from Kompong Thom
and Kompong Speu provinces are moving toward the
battle area.
So far, government efforts to clear Route 5 and
relieve several isolated outposts along the highway
have faltered in the face: of enemy resistance--which
appears to be led primarily by Khmer Communist forces.
Demoralized government commanders in Kompong Chhnang
are claiming that the road cannot be reopened with-
out massive reinforcements and heavy air support.
The enemy pressure against the highway comes
at a bad time. Even before the fighting began, the
minister of commerce admitted that rice supplies in
Battambang, intended for shipment to the capital,
were sufficient only for two :months' supply and
that the capital faced a rice shortage in mid-Octo-
ber. The government is now seeking increased rice
imports from the US, Japan, and Thailand.
Elsewhere, a combined Cambodian and South Viet-
namese force has re-entered the town of Kompong
Trabek on Route 1. The highway is open from Phnom
Penh to Kompong Trabek but apparently no decision
has been made whether to continue clearing opera-
tions eastward. These operations would threaten
vital lines of communication into South Vietnam's
Mekong Delta and would probably be strongly resisted.
F7 I
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ARGENTINA: President Lanusse has reaffirmed
his decision hold elections next March and has
imposed new measures to combat terrorism and public
disorders.
Lanusse promised the nation in a speech on 24
August that the elections would be completely fair
and said that Juan Peron had excluded himself by
deciding not to return to Argentina by 25 August,
the deadline the government has imposed for all
candidates to be in the country. At the same time
he declared that neither he nor the other two armed
services commanders would stand for election. The
President announced constitutional reforms that will
reduce the presidential. term from six to four years
and that call for the direct popular election of
the president and congress.
Lanusse also defended the action of the mili-
tary guards in Trelew who, during an alleged escape
attempt last Tuesday, gunned down 16 of the 19 ter-
rorists recaptured after the prison break and airline
hijacking a week earlier. The "massacre" has prompted
demonstrations against the government but the mili-
tary has moved quickly to put down disorders and the
army has taken control of several interior cities
to prevent the trouble from spreading.
The President's speech demonstrates his deter-
mination to maintain control in the face of mounting
problems, and there is some indication that his
tougher approach to terrorism will, temporarily at
least, mollify some of his critics in the military.
The Peronists and many other civilian politicians,
however, probably found little satisfaction in the
President's statements. The political parties have
been nearly unanimous in opposing any military tink-
ering with the constitution. The Peronists, further-
more, argue that the arbitrary setting of the 25
August deadline was a deliberate attempt to prohibit
Peron's candidacy. They claim they will not accept
such an exclusion and that Peron is planning to
26 Aug 72 Central Intelligence Bulletin 4
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return to his homeland in time for the traditional
Peronist celebration on 17 October--the date on
which crowds of workers forced the release of Peron
from military detention 27 years ago.
Despite his determination to plow ahead with
his plan for political normalization, Lanusse seems
to be in for continuing difficulties on every front.
The Peronists are likely to become even tougher in
opposing his political and economic moves. On the
international scene, the good relations between
Argentina and Chile--carefully nurtured by both
presidents--could be in jeopardy because Allende
has permitted the ten Argentine terrorists who
escaped to Chile on a hijacked plane to travel on
to asylum--presumably in Cuba.
26 Aug 72
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CHILE: The Allende government is raising farm
pricesT in an effort to stimulate agricultural pro-
duction.
Agriculture Minister Chonchol has announced
increases ranging from about 36 to 118 percent in
prices paid to producers for most farm products.
Real agricultural prices are at. their lowest point
in many years, because farm wages and other costs
have risen rapidly since Allende took office while
producer prices have been controlled to hold down
retail food costs for the urban electorate. Re-
duced profitability of farm operations has been an
important factor in the substantial decline in
Chile's agricultural output in recent years.
Increased costs to farmers because of an al-
most simultaneous wage hike, possibly exceeding 60
percent, and higher agricultural input prices pre-
sumably will not totally offset the rise in pro-
ducer prices. Even with more attractive farm prices,
however, the short-term prospects for agricultural
output are not very favorable. About 45 percent
of Chile's irrigated land is now in government hands,
and much of the farm property expropriated by the
regime has not been organized into production units
because of shortages of capital and agricultural
technicians. Private producer performance probably
will continue to be hampered by unrest and periodic
violence in the countryside as well as by shortages
of material inputs and credit. 25X1
26 Aug 72
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FRANCE-EC: France has again raised the possi-
bility of postponing the October summit of the EC Ten
if prior agreements, primarily on monetary issues,
are not reached?
French Foreign Minister Schumann made whirlwind
visits to Bonn and London on 2:3-24 August to push for
substantial agreements on further commitments toward
EC economic and monetary union and on international
monetary issues at the summit preparatory meetings
of the finance and foreign ministers on 11 and 12
September. Any European agreements on monetary mat-
ters would be especially welcomed by Paris prior to
the IMF meetings in Washington later in September.
Pompidou also would appreciate agreements reflecting
French positions, assuring a summit which would help
bolster his image before the French legislative elec-
tions.
In Bonn, Schumann reportedly concentrated on
describing the proposed European Monetary Fund, a
project under discussion for some time within the
EC. Pompidou evidently believes that announcement
of the fund would be a considerable achievement for
the summit. Bonn is sympathetic to a fund--which it
sees as the first step toward a European "federal
reserve system"?--but differs with Paris on crucial
points such as the expansion of credit lines between
EC central banks and movement toward a pooling of EC
currency reserves. The Germans, moreover, were cool
to a suggestion for raising the price of gold in
intra-EC reserve bank settlements. The Germans were
surprised by Schumann's again stressing the location
of a political. secretariat in :Paris, and are worried
that--despite Bonn's and London's favoring Brussels
as the site--a consensus may favor the French posi-
tion.
Full reports of Schumann's conversations in Lon-
don are not yet available, but it is likely that
the two sides remain apart on a number of important
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questions. Prime Minister Heath apparently suggested
that the UK considers agreement on industrial, re-
gional, and energy policies for the community neces-
sary in return for progress toward monetary union.
A German Foreign Office official has also suggested
that getting French agreement to place policies in
those areas within the scope of EC Commission Coun-
cil decision making might be a quid pro quo for per-
mitting the political secretariat to move to Paris.
Neither Bonn nor London has responded directly
to Paris' hint about postponing the summit. The
Germans simply stated publicly after the meeting
that they expect it to be held in October as sched-
uled. Schumann'ssuggestion as he left London was
that the timing was still uncertain, and this was
echoed after a French cabinet meeting. Before the
preparatory meeting on 12 September there will be
further attempts to align positions. German Econom-
ics and Finance Minister Schmidt reportedly will
visit London on 7 September and Pompidou will meet
Brandt at Munich on the 9th.
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NORWAY: The Labor Party government on 24 Au-
gust launched the final drive in its uphill struggle
to win the approaching referendum on joining the
European Communities.
During a four-day meeting of governmental, party,
and trade union leaders this week, Prime Minister
Bratteli made it, clear that his minority government
will resign if the vote goes against it on 24-25
September. Although party sentiment is not unani-
mous on EC membership, the connection between the
Communities issue and the party's future should serve
to stiffen discipline. The party has mobilized its
entire campaign apparatus for this 11th-hour effort.
Bratteli hopes to show support for his campaign
from the other Nordic prime ministers. He has in-
vited them to Oslo on 1 September for a meeting to
discuss the situation in the area now that all five
governments have completed their negotiations with
the Communities. The high point of Bratteli's cam-
paign will be a mass rally in Oslo on 14 September,
at which he and West Germany's Willy Brandt--once a
Norwegian citizen and highly popular--will be the
featured speakers.
Bratteli needs all the help he can gets Public
opinion polls indicate that the government will
have to win over most of the 21 percent of the voters
who remain "uncertain" on the issue, and that the
growth in Norwegian su port peaked in June.
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HONDURAS: Disorders are again threatening the
uns a y Cruz government.
There have been clashes recently between rival
groups of teachers, and a struggle between student
factions for control of university buildings has the
potential for greater violence. In addition, the
Liberal Party's threat to withdraw from government
posts imperils the "unity" government itself. Eco-
nomic problems, which have been accumulating since
Cruz took office last year, have become acute as a
result of reduced tax receipts and plummeting busi-
ness confidence.
The Cruz administration has survived a seem-
ingly endless parade of ;problems, but it has never
disorders time.jr
faced so many
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ALGERIA: The government remains unlikely to
make any public statements that would deter hijack-
ers from seeking refuge, despite its embarrassment
over the two most recent incidents of air piracy.
Following the return this week of the $1-mil-
lion ransom to Delta Airlines, an official in the
Algerian presidency reiterated his government's be-
lief that growing public awareness of Algeria's dis-
enchantment with the Black Panthers and with hijack-
ers in general would be a sufficient deterrent. Al-
though the Algerians would like to prevent hijackers
from coming to their country, they also are con-
vinced of the need to maintain a revolutionary image
and a strongly anti-imperialist posture.
Algeria also would like to divest itself of its
growing colony of foreign political "celebrities,"
especially the hijackers, but it does not want to
appear to be doing so in response to US pressure.
As a result, the Black Panthers are likely to stay,
and the possibility that future hijackers will come
has not been foreclosed.
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NOTE
ITALY: The government has called for careful
price-monitoring at the local level following the
recent spurt in food prices. Rome's provincial
price committee immediately imposed direct price
controls on some essential food items while other
provincial officials merely established "watchdog"
committees. The government's move was inspired by
increases in food prices in August and fears that
upcoming labor contract: negotiations will aggravate
inflation. The cost of living has been growing at
an annual rate of about five percent this year,
roughly the same rate as in 1971. The price meas-
ures have evoked sharp criticism from the left-wing
press, which hopes to prevent the center-right gov-
ernment from gaining any political benefit from its
efforts to reduce inflation.
26 Aug 72 Central Intelligence Bulletin
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Secret
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