CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A023400130001-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 8
• Document Creation Date: December 14, 2016
• Document Release Date: August 6, 2003
• Sequence Number: 1
• Publication Date: December 27, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
N2 42
27 December 1972
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No. 0310/72
27 December 1972
Central Intelligence Bulletin
CONTENTS
USSR: Spending for defense, including military re-
search and development, to increase moderately.
(Page 1)
USSR: Brezhnev's speech on domestic affairs. (Page 2)
INTERNATIONAL COPPER: Copper-producing nations hope
to force prices up. (Page 4)
JAPAN: Tokyo encouraging foreign borrowing in
Japan (Page 5)
SWEDEN: Price freeze on food (Page 5)
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USSR: Soviet spending for defense, including
military research and development, is expected to
increase moderately next year.
The announced 1973 defense budget of 17.9
billion rubles--unchanged for the fourth year in
a row--does not include a number of allocations
normally associated with defense. The most sig-
nificant exclusion is military research and de-
velopment, which is funded principally from the
science allocation. Science outlays have in-
creased steadily for the past several years, and
the 1973 allocation is seven percent greater than
last year's spending.
Based on observed Soviet force structure and
programs, intelligence analysis projects a slight
rise for 1973 in Soviet spending on deployed forces.
Military research and development expenditures are
expected to rise more rapidly. Total outlays for
deployed forces and for research and development
next year are expected to reach the equivalent of
nearl $70 billion valued at 1970 US costs.
27 Dec 72 Central Intelligence Bulletin
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USSR: In the domestic portion of his speech
saluting the USSR's 50th anniversary, General
Secretary Brezhnev devoted primary attention to
relations among the various Soviet nationalities.
He also revived the promise of a new state consti-
tution.
Rendering the obligatory praise for the mutual
benefits that all Soviet nationalities have derived
from their union, Brezhnev nevertheless chose the
occasion to warn bluntly of the dangers of persisting
nationalistic tendencies that "interweave" with
special local or regional interests. His Soviet
audience would have no difficulty in recognizing
this reference to recent developments in both the
Ukrainian and Georgian republics. Brezhnev also
referred frankly to "objective problems" that arise
in attempts to achieve a balance between the in-
terests of individual nationalities and the inter-
ests of the Soviet Union as a whole. In the con-
text of long-term (1976-1990) planning, he flatly
stated that the task of enabling underdeveloped or
"backward" republics to catch up economically has
been completed "in the main," and that "now" Soviet
planners can approach economic problems primarily
from the view of the needs of the economy as a
whole.
Brezhnev also unveiled another "new" stage in
Soviet development, declaring that the time is now
ripe for a new constitution that would reflect the
changes that have taken place in Soviet society
since the present constitution was adopted in 1936.
He said that the draft of the new version will be
submitted for nationwide discussion before the next
party congress, due to be held in 1976. A new So-
viet constitution was one of Khrushchev's pet pro-
jects that seemed too have fallen by the wayside
since 1966 when Brezhnev last referred to it.
(continued)
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Brezhnev's remarks on the Soviet economy in-
dicated once again that the goals set for the five-
year plan would be difficult to achieve unless the
entire population makes a major effort. He offered
no new approach that might accomplish this mobili-
zation, however.
Although Brezhnev looked haggard and tired
by the final day of the celebration, he delivered
his three-and-one-half hour speech with vigor and
appeared to have recovered from the illness that
sidelined him during part of October and November.
Central Intelligence Bulletin
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INTERNATIONAL COPPER: The four major copper
exporting countries wi attempt to develop joint
action to force a substantial rise in world copper
prices.
tive e intergovernmental Council ofeCopperta-
Exporting Countries (Chile, Peru, Zaire, and Zambia)
will meet in London in early JanuarvF-
The CIPEC countries account for more than
60 percent of the world's primary copper exports.
Agreement on joint action at this time is un-
likely, although. publicly there will probably be
some expression of unanimity. CIPEC has held public
meetings since the world copper price dropped in
1970, but it has been unable to agree to withhold
copper from the market. Because the copper market
is weak, such a program would require costly stock-
piling or cutbacks in production, alternatives
which conflict with member countries' national ob-
jectives. CIPEC's most recent display of verbal
solidarity occurred at a meeting in Santiago where
they condemned legal actions taken by the Kennecott
Copper Corporation against Chilean copper shipments.
This pronouncement, however, did not prevent Peru
and the African members from continuing to take
advantage of Chile's discomfiture by arranging
long-term sales contracts with Chile's European
customers.
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JAPAN: Japan is emerging as an important
source of international capital, partly as a re-
sult of the government's policy of encouraging
foreign borrowing in Japan. The net long-term
capital outflow this year will exceed $4 billion,
compared with only $1.2 billion last year. In
recent agreements, one Japanese banking syndicate
will provide Brazil with $200 million and another
will market $60 million worth of debentures in
Japan for the Ford Motor Company. The easing of
restrictions on capital outflows is part of the
government's effort to cope with Tokyo's very
large trade surplus and rowing supply of dollars.
SWEDEN: In response to growing dissatisfac-
tion over rapidly rising food prices, the govern-
ment will institute a price freeze on selected
food products on 1 January. With the government
set to stimulate the slowly growing but highly
inflationary economy, this action may be pre-
liminary to a general price freeze. In 1970 a
similar price freeze on food was followed by a
general price freeze. If the ruling Social Demo-
crats are to quell increasing public discontent
over the economic situation, prices must be con-
tained while the economy expands. Prime Minister
Palme's handling of the economy has come under
increasing criticism and could hurt the party in
the elections next September.
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