NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026700010040-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 16, 2016
• Document Release Date: January 4, 2005
• Sequence Number: 40
• Publication Date: July 11, 1974
• Content Type: REPORT

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National Intelligence
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National Intelligence Bulletin
July 11, 1974
USSR-EGYPT: Soviet Union postpones until fall Fahmi
visit scheduled for July 15. (Page 1)
EC - ARAB STATES: EC-Arab representatives to meet this
month. (Page 3
LAOS: Cabinet agrees to dissolve National Assembly.
Page 8)
CYPRUS-GREECE: Makarios stands firm in his efforts to
reduce Greek influence on the island. (Page 9)
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PORTUGAL: Spinola delays accepting resignations of five
ministers. (Page 11)
JAPAN: Further weakening of the yen may necessitate
central bank intervention. (Page 12)
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CHILE: Army gains in new cabinet shake-up. (Page 14)
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FOR THE RECORD: (Page 18)
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National Intelligence :Bulletin July 11, 1974
The USSR has suddenly postponed the visit to Moscow
of Egyptian Foreign Minister Fahmi that was scheduled for
July 15. Fahmi said in Cairo yesterday that Soviet party
boss Brezhnev had sent an "urgent message" asking that
the visit be put off until October because "circumstances"
prevented adequate preparation.
It is possible that some as-yet-undisclosed problem
arose between the two countries in the past few days that
prompted the postponement. The wording of the Egyptian
announcement of the Soviet action suggests, however, that
Cairo was caught by surprise.
The postponement may have been caused by the unwill-
ingness of the Soviets to make hard decisions on resuming
military aid to Cairo and the venue of a Brezhnev-Sadat
meeting. On the other hand, Moscow may have very recently
decided to switch tactics toward the Egyptians. The So-
viets may have decided to play tougher with Cairo in the
expectation that Sadat will be weakened domestically when
it becomes clear that Egyptian military forces have no
alternative to the USSR for equipment. The immediate
impact of the postponement, however, is likely to further
sour Sadat on the Soviets.
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National Intelligence :Bulletin July 11, 1974
It is also possible that the postponement of the
Fahmi visit is related to the cancellation of visits by
two other foreign leaders. The Soviets on July 2 canceled
a visit by Pakistani Prime Minister Bhutto only five days
before he was to be in Moscow. A mid-July visit by Indo-
nesian Foreign Minister Malik was also canceled. These
cancellations may be only coincidental, but in all three
cases the Soviets have cited the press of other business
as necessitating the postponements.
One such piece of business is a Central Committee
plenum apparently scheduled for July 23-24. If more than
routine matters are to be considered, the Soviets may
not want to be saddled with important foreign visitors.
The French foreign minister, however, is due in Moscow
tomorrow, and Brezhnev is going to Poland for a ceremonial
visit just before the plenum.
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National Intelligence Bulletin
July 11, 1974
The EC-Arab dialogue: is making progress, but it is
evidently not taking the place of efforts by individual
EC countries to develop extensive bilateral arrangements
with various Arab states.
The long-pending meeting between EC and Arab leaders
has been set for July 31 in Paris, The participants, EC
Commission President Ortoli, French Foreign Minister
Sauvagnargues as president of the EC Council, Arab League
Secretary General Riyad, and Kuwaiti Foreign Minister
Sabah as president of the Arab League? will try to reach
agreement on areas of cooperation that have thus far been
described only in general. terms,
By the end of the year, groups of experts are ex-
pected to begin serious work on outlining specific proj-
ects to be undertaken,, The last obstacle was removed
on July 10 when the Arabs lifted their oil embargo
against the Netherlands-a condition The Hague insisted
on before giving its consent to meetings of the experts.
Meanwhile, both West. Germany and Denmark are eagerly
pushing ahead with plans for large-scale bilateral deals
with the Arab states. At. the first meeting of the Joint
West German - Egyptian Economic Commission last week,
Bonn agreed to provide some $200 million in capital as-
sistance over the next three years, Half of the aid will
be tied to specific projects, while the remainder may be
used for the purchase of essential imports.
Bonn also committed itself to provide export credit
guarantees of about $110 million,
IThe amount of aid offered to
g Egypt second only to India as
a West German aid recipient
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National Intelligence ]Bulletin
July 11, 1974
The Danes, with the same objective in mind, have
sent Foreign Minister Guldberg on an official visit to
Cairo. He is expected to sign a $7-million developmental
loan and discuss future Danish. technical aid to Egypt.
The visit coincides with other moves by Copenhagen to
foster better relations with the Arab states. For ex-
ample, the Danes have invited Saudi Minister of State for
Foreign Affairs Saqqaf to visit Copenhagen next month.
Such attention contrasts with Denmark's traditional close
ties with Israel and reflects Copenhagen's continuing con-
cern about the vulnerability of its oil su lies.
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National Intelligence Bulletin
July 11, 1974
The coalition cabinet yesterday agreed to dissolve
the dormant, rightist-controlled National Assembly, ac-
cording to press from Vientiane.
Prime Minister Souvanna had earlier proposed that
the advisory political council, chaired and dominated
by Pathet Lao leader Souphanouvong,be expanded and
turned into a new legislative body. Initial press re-
ports, however, say only that the cabinet decided on an
early dissolution of the present assembly, with elec-
tions for a new body 90 days thereafter.
The Communists, who control only a small portion of
the Lao population, have made clear their opposition to
an early national election. It is possible, therefore,
that Souvanna may intend to utilize a vague provision
of the Lao constitution that permits the King to form a
new assembly, either by "limited vote" or "limited con-
sultation." In this manner a new legislative body pre-
sumably could be created with equal representation for
the Pathet Lao and non-Communist sides.
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National Intelligence Bulletin
CYPRUS-GREECE
July 11, 1974
President Makarios has refused to back down in the
current test of wills with Athens over his efforts to
reduce Greek influence on the island. He has not ac-
cepted Athens" view that a reduction in the number of
Cypriot national guardsmen and a withdrawal of mainland
Greek officers would seriously weaken the island's de-
fense. Athens has not yet formally responded to Makarios'
demands, but it would be reluctant to lose its influence
over the National Guard. An attempt by the junta to re-
move Makarios from power cannot be ruled out.
Makarios appears to have precipitated a crisis at
this time for a variety of reasons. Athens is currently
preoccupied with the dispute with Ankara over mineral
rights in the Aegean and may be less willing to become
involved in a conflict with Nicosia at the same time.
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July 11, 1974
The Turkish Foreign Ministry is taking a relaxed
view of the crisis, confident thatMakarios can handle
any effort by Athens to remove him from power. The Turks
do not believe that their interests would be either
threatened or advanced by a clash between Makarios and
Athens, but they have been. concerned for a long time that
EOAK-B elements might take action against the Turkish com-
munity on the island. The Turks view a Greek Cypriot -
commanded National Guard as no more dangerous to the Turk-
ish community than a guard. under the control of Pro-enosis
mainlanders. F777 I
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National. Intelligence Bulletin
July 11, 1974
President Spinola's delay in accepting the resigna-
tions tendered yesterday by Prime Minister Palma Carlos
and four centrist ministers raises the possibility that
a compromise is being worked out to maintain centrist
representation in the cabinet.
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There continue to be conflicting reports on what
triggered the resignations. Among the factors involved
were:
--difficulties Palma Carlos had getting approval of
legislation to deal with the present economic dif-
ficulties;
--dissatisfaction on the part of the left with the
slow pace of withdrawal from Africa;
--possibly a power play by Spinola designed to
strengthen his position and make the cabinet more
conservative.
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If a balanced government is re-established, it will
appear most likely that Spinola ran into objections from
the Armed Forces Movement, which brought him to power.
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National Intelligence Bulletin July 11, 1974
JAPAN
The yen is beginning to weaken after remaining
fairly steady for several months. The mounting oil bill
had been causing a gradual deterioration since May, but
the pace accelerated last. month after the Finance Ministry
began restraining Eurodollar borrowing by Japanese banks.
Yesterday, the yen fell 1 percent against the dol-
lar, its sharpest decline since January. If the slide
continues, the Bank of Japan may soon begin to supply
dollars to the Tokyo foreign exchange market, either by
increasing its deposits in foreign exchange banks or by
direct intervention. The last major intervention by the
central bank occurred in January when the exchange rate
fell to 300 yen to the dollar. The yen closed at 291
yesterday and exporters are holding back dollar earnings
in anticipation of a further weakening.
Heavy short-term Eurodollar borrowing by Japanese
banks was contributing to the yen's stability, despite
a balance-of-payments deficit of about $6.5 billion dur-
ing the first half of 1974. With this source now limited
and increased borrowing in the US making up only part of
the difference, the immediate outlook is for the yen to
weaken further unless the Bank of Japan takes some action.
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National Intelligence Bulletin
CHILE
July 11, 1974
The new cabinet announced yesterday reflects the
trend toward army primacy in the military government and
indicates that the armed forces' determination to recon-
struct Chile in their own way is as strong as ever after
ten months of military rule.
Ten new ministers entered the cabinet--which was
expanded to 17 members with the creation of a new Trans-
portation Ministry--while three changed jobs and four
remained in their posts. Army representation jumped from
three to five, while that of the navy dropped from four
to three. The air force and carabineros retained three
ministries apiece, and civilians hold three. cabinet posts.
The military men who lost their cabinet jobs were
mainly those, such as Admiral Huerta at the Foreign Min-
istry, whose performances had been disappointing. Army
General Bonilla's shift from the Interior Ministry indi-
cates that there will be no early softening of the polit-
ical "recess" that has hamstrung the Christian Democratic
Party. Bonilla is thought by many of his colleagues to
be overly sympathetic toward the party. The continued
almost exclusively military cast of the cabinet could be
offset somewhat by the naming of civilians to key under
secretary positions. New under secretaries are due to
be named today.
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National Intelligence ]Bulletin
July 11, 1974
Germany: Pankow is apparently following Moscow's
lead in responding to Bonn's plans to open an environ-
mental office in West Berlin.
Since
the fall of Brandt Pankow reportedly had been under
pressure from Moscow to be more conciliatory in negotia-
tions with Bonn. While the East German media blast
Bonn's "attempts to undermine the Quadripartite Agree-
ment," no decision has yet: been made by Pankow on how t
respond to the actual opening.
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National Intelligence Bulletin.
July 11, 1974
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South Korea: The government has released Catholic
Bishop Chi Hak-sun, who had been held for four days on a
charge of having supported a student conspiracy to over-
throw the government. Chi was freed after Cardinal Kim
met with President Pak. The cardinal had been trying to
negotiate Chi's release in order to defuse Catholic pro-
tests.
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