CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A022800080001-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 15, 2016
• Document Release Date: October 3, 2003
• Sequence Number: 1
• Publication Date: September 23, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
State Department review completed
Secret
it !`J
23 September 1972
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No. 0229/72
23 September 1972
Central Intelligence Bulletin
JAPAN-USSR: Tokyo presses Moscow on Northern
Territories issue. (Page 1)
SOUTH KOREA - JAPAN: President Pak Chong-hui to
visit Tokyo.'
o yo. Page 3)
VENEZUELA-COLOMBIA: Boundary dispute in the oil-
rich Gulf of Venezuela. (Page 5)
THE NETHERLANDS: Prime Minister Biesheuvel is in
political trouble. (Page 7)
BRITISH HONDURAS: Timetable for independence ex-
tended. (Page )
JAPAN:
Economic growth rate picking up
(Page 10)
USSR:
Soviet gold sales continue apace
(Page 10)
CHILE:
Consumer price index jumps (Page 11)
CHILE:
Beef imports banned (Page 11)
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JAPAN-USSR: On the eve of his visit to China,
Prime Minister Tanaka has reminded Moscow of the
importance of settling the Northern Territories
issue.
Tanaka sent a letter to Brezhnev on Thursday
stating Tokyo's desire to conclude a peace treaty,
but emphasized the need to resolve Japan's claim
to the islands seized by the Soviet Union at the
end of World War II. The letter was given to Soviet
Party Secretary Ponomarev by the leader of the Japa-
nese parliamentary delegation, which has been visit-
ing the USSR since 7 September.
Ponomarev expressed Moscow's willingness to
discuss any problems Japan wishes during talks on
a peace treaty, according to a Japanese press re-
port. During a visit to Tokyo last January, For-
eign Minister Gromyko indicated Moscow's willingness
to discuss the status of the Northern Territories,
and there have been several hints since then that
the Soviets have been mulling over various compromise
proposals. Although the Soviet leaders are anxious
to begin peace treaty talks, they are unlikely to
satisfy Japanese claims in advance. Even after the
negotiations finally get under way, the Soviets will
probably be most reluctant to return the islands,
unless they can be convinced that this would give
a significant and lasting boost to Soviet stock in
Japan vis-a-vis the Chinese.
A high Japanese Foreign Ministry official
privately confirmed recently that Japan does not
intend even to begin discussions with the Russians
on a treaty unless Moscow indicates that there is
a clear prospect for movement on the Northern Ter-
ritories issue. Vice Foreign Minister Hogen said
that Gromyko has ignored a request by the Japanese
ambassador in Moscow for an appointment, during
which the latter presumably planned to re-emphasize
Tokyo's firm position.
23 Sep 72
Central Intelligence Bulletin
(continued)
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Moscow recently proposed that the Japanese
send a high-ranking official to begin "substantive"
negotiations on concluding a peace treaty. Tokyo,
upset with Gromyko's actions, has counterproposed
that the Soviets instead send a high-ranking offi-
cial to Tokyo. The Japanese Government apparently
does not expect a favorable Soviet response in the
near future. Earlier plans to hold preliminary
talks in Moscow this month were dropped.
There apparently is growing sentiment in the
Foreign Office to delay further discussions of
Japanese participation in developing the Tyumen
oil fields until Moscow shows a more forthcoming
attitude on the Northern Territories issue. Tokyo,
cognizant of Moscow's concern over improving Sino-
Japanese ties, clearly feels it is in a stronger
bargaining position. In view of widespread Japa-
nese suspicions of the Soviet Union, Tokyo is under
no great political pressure to improve relations
with Moscow. In an;y case, the problem of building
bridges to Peking is of far greater political im-
ortance to the Tanaka government at this time.
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SOUTH KOREA - JAPAN: President Pak Chong-hui
will make his first state visit to Japan this fall
in a personal effort to strengthen Tokyo's commit-
ment to Seoul.
The South Korean leader will seek assurances
from the Japanese that they will not expand their
contacts with Pyongyang rapidly in a way that would
adversely affect South Korean interests. Seoul is
concerned about a possible unfavorable shift in
Japanese orientation following the Tanaka visit to
China. Additional economic assistance to help
service Seoul's mounting foreign debt repayments is
also high on Pak's list of priorities. Tokyo re-
cently pledged $170 million to Seoul--considerably
less than the South Koreans need and hope to obtain.
The visit will be an opportunity for the Japa-
nese to demonstrate the importance they attach to
their relations with Seoul, and Tokyo probably will
seal it with promises of additional economic as-
sistance. The Tanaka government, however, is likely
to avoid a commitment to limit the extent of its
economic and perhaps political dealings with Pyong-
yang, although the Japanese probably hope that the
visit will help allay South Korean concerns.
I I
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Northern Segment of the COLOMBIA-VENEZUELA Boundary
Venezuelan NETHERLANDS
claim Colombian ?ARUBA ANTILLES
claim
t CURACAO
Wi lemstad?-
s Santa Marta
Valleduparo
COLOMBIA
Barhosa Paz do Rio
0
statute miles
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VENEZUELA-COLOMBIA: Talks will resume in Rome
on 4 October on the boundary dispute in the oil-rich
Gulf of Venezuela.
The major stumbling block is the definition of
the territorial sea and continental shelf boundaries.
Caracas maintains the entire gulf is its own inland
water, and that the boundary line should be a pro-
jection of the land border. Bogota takes the posi-
tion that the boundary should be drawn into the gulf
at a right angle to the northern shore. Both sides
believe that the seabed in the disputed area contains
substantial oil deposits.
Other irritants on the agenda include the il-
legal immigration of hundreds of thousands of Colom-
bians whom Venezuela considers a potential fifth
column, and substantial contraband operations along
the border.
One of the Venezuelan negotiators told a'US
Embassy official recently that Caracas views this
session as crucial because failure now would delay
agreement for years because of the coming elections
in both countries. During previous sessions, both
sides held rigidly to their positions and chances of
a settlement this time appear slight.
President Caldera is under heavy pressure from
nationalist and military groups to maintain a hard
line. A concerted media campaign reportedly will be
launched soon to head off any agreement that would
give up any of Venezuela's territory or its potential
petroleum resources. In this pre-election period, it
will be extremely difficult for Caldera to soften
Venezuela's position to the extent necessary for
agreement with Colombia and, at the same time, re-
tain the military support on which his government
depends. F7 I
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THE NETHERLANDS: With elections only two
months off the prospects of Prime Minister Biesheu-
vel's coalition are increasingly gloomy.
On the labor front, several hundred Dutch work-
ers have seized a factory in Breda to protest manage-
ment plans to close several plants and dismiss some
2,200 employees. The workers' unprecedented action
won the immediate backing of three national unions
and sparked a sympathy strike in a German subsidiary
of the same multi-national corporation.
The government, having failed in desultory ef-
forts to head off this long-brewing crisis, has not
yet decided on a suitable response. The Liberal
(conservative) minister of economic affairs has
criticized the workers' action, while the Anti-
Revolutionary Party (ARP) minister of social affairs
has termed the union position regrettable but under-
standable. The ARP and the two additional confes-
sional parties, which together with the Liberals
comprise the governing coalition, will be hesitant
to accede to anticipated Liberal demands for further
government intervention. The confessionals are
mindful of the possibility of a post-election coal-
ition with the Labor Party and are thus reluctant
to antagonize the left.
Meanwhile, a dispute in the Defense Ministry
has provided the opposition with additional ammuni-
tion should they choose to exploit it. Defense
State Secretary Van Es resigned on 15 September in
a disagreement with Defense Minister De Koster over
organizational matters. Although the controversy
primarily reflects personal rather than party dif-
ferences, it further tarnishes the government's
image and makes the controversial subject of de-
fense policy increasingly vulnerable to politically
inspired forays.
Both incidents point up the increasing dis-
array within Biesheuvel's coalition. In its weak-
ened condition the government can expect to achieve
23 Sep 72
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little more than the caretaker status the opposition
demanded it assume last month. The price of gov-
ernment impotence, however, is continued economic
malaise and the consequent disaffection of more
Dutch voters. Barring an
adroit performance by Biesheuvel during the coming
months, the widely anticipated turn to the left in
November could prove still sharper.
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BRITISH HONDURAS: Premier Price has apparently
extended his timetable for independence.
In a recent speech, Price gave an elaborate
rationale why 1972 was not the promised year. He
pointedly avoided any mention of independence in
1973 and instead devoted a major portion of his ad-
dress to cataloguing the economic progress achieved
under his stewardship.
Each year since 1964, when the colony received
full internal self-government, Price and his People's
United Party have promised that independence was
just around the corner. Each year, however, Britain
has refused to extend a post-independence security
guarantee and Guatemala has indicated that it would
invade the colony if independence were granted be-
fore its territorial claim was settled.
The dispute with Guatemala reached near crisis
proportions in early 1972 when the British, motivated
by rumors of a planned Guatemalan invasion of British
Honduras, substantially increased their garrison in
the colony. Guatemala denounced the buildup, sent
more troops to the border area, and sought an OAS
condemnation of the British move. Although tensions
have eased, the incident convinced British Honduras
that Guatemala would not tolerate unilateral inde-
pendence.
Given this new sober public mood, Price is not
under any immediate pressure to redeem his inde-
pendence promises. Under the parliamentary system
in effect in British Honduras, Price need not call
a general election until December 1974, and 1973
may pass without a resurgence of the independence
issue. There is time, therefore, for negotiations,
but thus far Guatemala has demonstrated no serious
interest in a negotiated settlement.
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JAPAN: Economic recovery is proceeding rapidly.
During th e second quarter of this year real gross
national product was 8.2 percent higher than in the
same period last year. This translates into an
11.7-percent upswing at seasonally adjusted annual
rates when measured against the first quarter of
1972. The pace of economic growth began picking
up earlier this year following an 18-month slow-
down, with a sharp increase in government outlays
leading the way. In recent months a rise in per-
sonal consumption has helped the recovery process,
but investment in plant and equipment is still
sluggish because of continued excess capacity.
USSR: Soviet gold sales on the international
market are continuing apace.
procee s rom the sales e p
efray the cost of grain and other purchases from
the West. Reports this week of Soviet gold ship-
ments to Zurich probably represent delivery of gold
sold recently and were responsible for some fluctua-
tion in gold prices. The Soviets are reported to
have sold some 30 to 35 tons in the first quarter
of this year, and sales probably have continued at
least at this level. Discreet handling by the USSR
and by bankers probably will continue t revent
any sharp reaction in the gold market.
1 -1
(continued)
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CHILE: The 23?-percent jump in the consumer
price index in August was higher than expected, and
brings the total price rise for the first eight
months of the year to almost 64 percent. The August
increase, which was larger than the rise during all
of 1971, was due largely to higher food costs, al-
though prices of most other items also increased.
Because prices are continuing to rise rapidly this
month, the cost-of-living wage adjustment promised
by Allende for October could be as high as 80 per-
cent. This will further boost the government's
enormous budget deficit, which is financed almost
entirely by printing new money. This deficit fi-
nancing, together with refueled consumer demand,
will result in formidable inflationary pressures
in the months ahead.
CHILE: The government is banning beef imports
until Christmas because of a severe shortage of
foreign exchange. The economics minister has stated
that Chile cannot afford further beef imports, which
have cost the country more than $90 million so far
this year. Imports of all agricultural products
during 1972 are expected to absorb almost one half
of Chile's export earnings. Foreign reserves have
continued to decline this year, following a $304-
million drop in 1971, and by June were $80 million
in the red. The beef ban will fuel consumer dis-
content, already high because of spiraling prices
and spreading shortages. President Allende can be
expected, however, to apply whatever cosmetic meas-
ures he can to improve consumption just prior to
the important congressional elections scheduled for
March.
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Secret
Secret
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