CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026600010033-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: December 20, 2016
• Document Release Date: February 3, 2005
• Sequence Number: 33
• Publication Date: June 3, 1974
• Content Type: REPORT

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National Intelligence Bulletin
June 3, 1974
CONTENTS
SOUTH VIETNAM: Communist military activity remains
high. (Page 1)
USSR-ALGERIA: Soviet Defense Minister Grechko ends
visit. (Page 2)
USSR-EGYPT: Moscow exerting pressure on Sadat.
(Page 3)
US-USSR: Total trade for 1974 likely to remain at
last year's level. (Page 7)
CHILE: New austerity program to combat inflation.
(Page 8)
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National Intelligence Bulletin June 3, 1974
SOUTH VIETNAM
Military activity remains high as the Communists'
May-June campaign moves into its third week. Although
sharp clashes are being reported throughout the country,
the major fighting has been in the Binh Duong Province
battleground northwest of Saigon, and the Elephant's Foot
area of the northern delta.
Last night Communist gunners shelled Bien Hoa air-
base northeast of Saigon, hitting a napalm storage area
and killing several Viet Cong prisoners of war in a nearby
detention center, The Communists also sank a Korean mer-
chant ship moored in the Saigon River south of the capital.
In the Binh Duong fighting, elements of the ARVN's
18th Division have crossed the Thi Tinh River in an at-
tempt to recover three outposts west of Ben Cat. ARVN
commanders expect heavy fighting, as the NVA/VC have at
least two regiments of the 9th NVA Division in the area
along with supporting artillery, antiaircraft, and sapper
elements.
ARVN forces in the delta are attempting to dislodge
elements of the 5th NVA Division from the Long Khot oper-
ations base, abandoned to the Communists on May 20. Ini-
tial reports indicate that government troops have encoun-
tered stiff resistance to their efforts to retake the base.
In the central highlands of Military Region 2, the
government operation against Vo Dinh remains bogged down
a few miles north of Kontum city. The NVA/VC have thus
far been able to hinder the ARVN advance with harassing
attacks by fire.,
To the south, Communist attackers on May 30 overran
the government outpost at Tieu Atar, the second isolated
outpost, to fall in the highlands since the May-June cam-
pai.gn began. Government commanders are pessimistic about
the chances of protecting other isolated camps, but feel
the NVA/VC do not possess sufficient strength to threaten
seriously either Kontum or Pleiku cities.
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National Intelligence Bulletin June 3, 1974
USSR-ALGERIA
Soviet Defense Minister Grechko's four-day official
visit to Algeria,, which ended on May 31, was probably aimed
at strengthening Soviet-Algerian relations as part of Mos-
cow's effort to improve its position in the Middle East.
Press coverage of the visit and the final communique
indicate that Grechko's discussions with the Algerians
concentrated on the Middle East situation and attempted
to revitalize Moscow's lagging military aid program as a
way of strengthening bilateral-relations. The communique
did not, however, specify any new economic or military
aid agreements.
The highlight of the visit was Grechko's two meetings
with Boumediene, to whom Grechko delivered a personal mes-
sage from General. Secretary Brezhnev. Brezhnev reportedly
praised Algeria's role in the nonaligned movement and made
clear Moscow's determination to play an "active" role in
all phases of Middle East peace negotiations.
The Grechko visit is consistent with Soviet efforts
to consolidate relations with various Arab states in prep-
aration for an early resumption of the Geneva peace con-
ference. Moscow seems to be taking advantage of Algeria's
receptiveness in this regard. Grechko's visit and the
ensuing talks with Algerian leaders may be followed by a
trip to Algiers by Foreign Minister Gromyko, who reportedly
is scheduled to arrive there in early June.
Grechko arrived in Algeria only a few days after the
departure of the chairman of the Soviet State Committee
for Foreign Economic Relations, Skachkov, who signed a
Soviet-Al erian protocol on economic and technical coop-
eration.
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National Intelligence Bulletin
June 3, 1974
The Soviets may be trying to put further pressure on
Egyptian President Sadat by urging the East European states
to cool their relations with Egypt. Moscow has already
demonstrated its unhappiness with Sadat by holding back
its own deliveries of military equipment.
The East German regime, at the behest of Moscow, has
reportedly issued a directive that would limit existing
trade relations with Egypt and discourage new commercial
agreements. East German - Egyptian trade is not very sig-
nificant, but if other East European countries followed
suit, considerable pressure could be brought to bear on
Cairo.
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National Intelligence Bulletin June 3, 1974
US-USSR
Total trade between the US and the USSR in
1974
is
likely to remain at about last year's level, but
the
US
export surplus will be reduced by perhaps half.
US deliveries of grain and soybeans dropped sharply
in the first quarter. Unless a bad harvest forces Moscow
to buy more grain, total US deliveries of agricultural
products this year will probably be less than half the
1973 level. US exports of machinery and equipment are
climbing rapidly, and they will probably reach $300-400
million for the year. Total US exports to the USSR will
probably fall short of $1 billion, down from the record
$1.2 billion in 1973.
US imports from the USSR will probably top those of
any previous year. The sudden increase in fuel oil im-
ports thus far suggests at least a doubling of fuel oil
imports compared with 1973.
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National Intelligence Bulletin
CHILE
June 3, 1974
In adopting new austerity measures to combat runaway
inflation, the junta has signaled its support--at least
for now--for Minister Leniz' free market recovery program.
Despite increasing dissatisfaction with the slow
pace of recovery and growing consumer restiveness, Santi-
ago intends to cut government employment by about 14,000
persons to help reduce public expenditures. The cut could
eventually reach 50,000, adding to the 10-percent rate of
unemployment. Tie junta has also decided to prohibit new
public works projects.
Budget subsidies to most government agencies will be
ended, in another step to cut public spending. Junta
President Pinochet reportedly has also decided to elimi-
nate subsidies for the largely government-owned ports and
railroads, despite the possibility that these essential
operations could thereby be forced to shut down.
To spur increased agricultural production, the junta
has authorized $:L50 million in new credits to farmers and
is considering increasing taxes on unused or underutilized
land. Improved production is essential to the success of
the economic recovery program. Record copper prices and
production will enable Chile to finance a near-record
level of agricultural imports this year, but copper earn-
ings next year could fall because of a likely drop in
world copper prices.
More changes in the economic recovery program are
likely. The Copper Corporation is to be reorganized in
an attempt to reduce costs. The junta is also studying
ways to reduce tax evasion in order to increase public
revenues.
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