NATIONAL INTELLIGENCE BULLETIN

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CIA-RDP79T00975A027000010014-6
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Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6 Top Secret National 1 ntel l igen~e bulletin State Dept. review completed. DIA review completed. Top Secret 25X1 N? 639 Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 National Intelligence Bulletin September 25, 1974 CONTENTS FEDAYEEN-EGXPT-JORDAN: Interpretations of tripartite communique. Page l OIL: World reaction to President Ford's and Secretary Kissinger?s speeches concerning oil price rigging. (Page 3 ) PAKISTAN-AFGHANISTAN: Islamabad's operations against the Baluchi insurgents may lead Kabul to step up anti- Pakistan propaganda. (Page 7) CYPRUS: Makarios'' role. (Page 9) TURKEY: Democratic Party rejects Ecevit's ofd"er. (Page 10 ) GREECE: Ban on Communist Party lifted. (Page 111 PORTUGAL: Spinola to play a direct role in nE:gotiations affecting Angola and Cape Verde. (Page 12) ETHIOPIA: General strike called. (Page 14) SOUTH KOREA: Opposition stirring once again. CPage 18) JAPAN: Oil supply plan. (Page 20) JAPAN-CHINA: Tokyo approves loan to Peking. (.Page 21) FOR THE RECORD: (Page 22) Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 I I N~tIOP'1~1'1ltC~~iC~e!~lCe ~t.J~~G'tli"1 September 25, 1974 Palestine Liberation Organization spokesmen are interpreting the Egyptian-Syrian-Palestinian com~;uniq.ue issued in Cairo last weekend as a rejection of ar.~.y Jor- danian role in negotiations on the future of the occupied territgries. They contend that the designation of the PLO as the only representative of the Palestinian people denies Jordan the right to represent any Palestinians and therefore the right to negotiate with Israel for a withdrawal from the West Bank. Moderate Palestinian .leaders are promoting this embellished version of the communique primarily t:o con- vince the Arab states and the major powers that t:he PLO must be included in future sessions of the peace talks. They are also trying to counter the arguments an~i re- duce the appeal of the more radical fedayeen leaders, who have been criticizing PLO chairman Yasir Arafat and his supporters far pursuing a conciliatory coursE;. PLO leaders are meeting in Damascus this w~E~k to debate future strategy. They are likely to focus; on a response to Egyptian Foreign Minister Fahrni?s ca_ls for expanded Arab consultations to include representatives of Egypt, Syria, the PLO, and Jordan. PLO officials have so far declined to enter into formal negotiations with the Jordanians. They may now conclude-?-in view of Amman?s summary rejection lest weekend of an invitation to participate in four-party talks--that a private expression of willingness ~.o un- dertake informal consultations with the Jordanians as part of a general Arab effort to coordinate policy would demonstrate Palestinian '?respansibility" and woueLd fur- ther isolate King Husayn. Should the moderates 1~ake this step, it would increase the likelihood that the more radical fedayeen groups would withdraw from the PLO. The Egyptians, for their part, are arguing _Ln pri- vate that their concession to the Palestine Libe.~ation Organization does not negate their earlier agreement Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 S'lfatlOl'le"a~ ~~t~~llc~' er~~~ BU!letin September 25, 1974 with King Husayn that Jordan represents Palestinians living in Jordan. The Egyptians are developing their. own interpretation of the tripartite communique?s key word, ?'only,?' that limits its application to Palestinians who have not pledged allegiance to Arab governments. In Cairo?s view, the concession to t:he P]LO extends only to the form, not the substance, of t:he dispute that has prevented Arab agreement on who will negotiate for the return of the Israeli--occupied West Bank. The Egyp- tians are insisting they have not conceded t~f~ key point: that Jordan should. take the lead in those nego- ti ati ons . Cairo's calculated ambiguity has angered the Jor- danians. Nonetheless, recent Jordanian public state- ments give some evidence that Amman understands the critical difference between form and substance. An Amman radio commentary on Monday rejected as a "sterile" exercise the argument over who represents ~,ahorn. It noted that the key problem centers not on who represents the people, but on who in fact "liberates" the Zarld--on who, in other words, can realistically expect to sit opposite Israel at the negotiating table. What Jordan fears, the commentary noted, is that the Arabs will ignore the heart of the issue in their concentration on applying labels. Amman?s dismissal of the representation issue as of minimal importance sug- gests that the Jordanians might, with pressurE: from Cairo, be brought to tolerate the PLO nominally as the "only" representative of the, Palestinian people, so long as Amman retains the right to negotiate the da_sposition of West Bank territory and to govern Palestinians re- siding in Jordan. Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 25X1 25X1 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 I~lational Intelligence Bulletin September 2:i, 1974 Governments everywhere appear to be trying to as- sess the implications of President Ford's and Secretary Kissinger"s speeches Monday on artificial rigging t~f oil prices. Few have reacted so far; many of them are prob- ably looking for ways to avoid offending either thF~ US or the oil exporters. The West Germans, for example, have informed the press that they would have no comment because the ~~ov- ernment is "striving to improve relations with the Arabs." The British Department of Energy urged consultatio~is be- tween producers and consumers, keeping the needs o:E de- veloping countries in view. The Oil Exhorters Respond Oil exporters were defensive. Most, like Ira~zian Prime Minister Hoveyda, justified high oil prices `with references to the high cost of Western-manufactured goods. Representatives of OPEC were most aggressi~~e, denying that oil prices had been used politically ~~r that inflation began with oil price hikes . TYiese :~pokes- men argued that oil rates had been adjusted because o~ inflation. OPEC, they said, had acted only to red~~ace "windfall profits made by international companies, mostly American companies." Sheikh Zayid, President of the United Arab Em:i~'a~es, was more conciliatory, supporting cooperation to c~a.t prices of all products in international trade. He claimed that oil--exporting states are ready to lower their prices in return for lower prices on manufactured goods and food. Saudi Oil Minister Yamani initially endorsed President Ford's appeal for interdependen~~e in world resources, but in a later interview cautioned3, "as a friend," that the US should avoid actions th~~t oil producers and developing states will view as "~~co- nomic imperialism." Kuwaiti Oil Minister Abd-al-R,~hman a1 Atigi warned that consumer states could hurt th+~ir own interests by forming a front. He explained th,~t it would put the oil states on alert to protect their own interests. Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 National Intelligence Bulletin September 25, 1974 Twice within the past week Venezuelan President Carlos Andres Perez has pub7_icly criticized President Ford's remarks on the world energy crisis an,d aggres- sively defended the right of Venezuela and other coun- tries to get a better deal for their raw materials on the world market. In a public statement yesterday, Perez again defended his administration's oil-pricing policy. Some officials are saying Venezuela plans new taxes that may have the effect of raising the price of Venezuelan oil. Perez has made clear that his adminis- tration is not picking a fight with the US and wants to maintain cordial relations with Washington. Middle East Reaction The Arab press has reacted sharply, giving wide circulation to an Iraqi-controlled Beirut newspaper's headline charging that President Ford had threatened to seize Arab oil by force of arms. A Syrian--subsi- dized paper in Beirut claimed that the US threatened nuclear war over petroleum. Only one commentator has cautioned that the Arab states cannot win. a food-versus-oil confrontation with the US. Amman radio highlighted President Ford's call for a comprehensive world energy plan and cooperation between exporters and importers. One Israeli commentary has appeared in the influ- ential paper Ma?ariv, saying that US leaders -are wrong to assume thatt tYiere is any usefulness to approaching Arab oil producers. Communist Reaction The Soviets have avoided reporting proposals on global food and energy policies and econom%c interde- pendence contained in President Ford's speE~ch to the UN last week. Tass has reported only that the Presi-~ dent's speech in Detroit "contained a warning" to pe- troleum-producing countries that had increased their Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 (~lational Intelligence Bulletin September ~:5, 1974 prices. A Radio Moscow broadcast in Arabic last night quoted the Kuwaitis as viewing the President's dill for a conference of Western oil-consuming states as t:he first step toward creating a bloc "hostile" to tYie oil- exporting countries. As of this morning, there has been no mention on Peking Radio of either President Ford's speech in De- troit or Secretary Kissinger's speech at the UN. Radio Hanoi called the tone of the President's speech Yiarsh, but its report was brief and relatively straightj=ooward. Hanoi has broadcast a long and reasonably factua_. ac- count of Secretary Kissinger's speech, character=_zing it as an attempt to intimidate oil exporters whi_Le prom- ising to help them increase agricultural product__on. Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6 I I Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 i i National Intelligence Bulletin September 25 p 1974 PAKISTAN-AFGHANISTAN Recent and projected Pakistani military opex?ations against tribal a,nsurgents in Baluch~,stan Provinces will probably lead Afghanistan to step up its anti~Pak:istan propaganda, but there has been li~.tle evidence sc~ far that either count~?y is getting ready to initiate hostil- ities. According to the US army attache in Pakistan, who toured Baluchistan last week, the Pakistani army recently made at least two sweeps in the area. There havE~ been conflicting reports as to how successful these o~~erations were; the army?s claims that it captured or killE~d large numbers of rebel tribesmen are probably exaggerat~edo In Afghanistan, where sympathy is strong for Pak- istani dissidents both in Baluchistan and irs the neighm boring North-West Frontier Province, there has bE~en considerable official criticism of Pakistan's la?~est actions. President Daoud has sent a strong lettE~r of protest to the UN sec~?etary general. An irrational move or escalation of a local inci- dent cannot be ruled out, but both sides seem t.o want to avoid a war. Daoud has strong feelings about the long-standing dispute over the status of Pakista:~'s two frontier provinces and is apparently convinced that they will eventually come under Afghan control, but hw knows that his army is-much weaker than Pakistan?s. H? also knows that, although Moscow has been giving Kabul sub- stantial economic and military assistance and relations with India have improved steadily, he cannot be sure either wquld come to Afgk~ax~istan's rescue in the event. of a war with Pakistan. He may step up propaganda and even move some troops around, however, particularly if a major Pakistani offensive against the Baluchi rebels materializes. Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 National Intelligence Bulletin 5eptem:ber 25 ~ .1974 Pakistan, for its part, wall probably continue to try to avoid violating the Afghan border as it seeks to bring the Baluchi rebels to heele Afghanistan has long been giving sanctuary and some material help to dissi~ dents in both of the Pakistani frontier provinces, but this assistance has not been so extensive that Islamabad would be likely to view a strike against Afghanistan as a military necessityo The two countries have never actually gone to war over their border dispute, although they came close in 1962, In that year, strong protests against Pakistan's frontier policies by the Afghan pub lic and the government of then-prime minister Daoud led to a sharp deterioration in relations that did not ease until after Daoud had been replaced the following year by more moderate leaderse Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 I\l~tional intelligence Bulletin September 25, 1.974 CYPRUS Archbishop Makarios has been giving mixed signals regarding his future role in Cyprus. His appearance at the UN this week will provide him with a forum from which to explore the various possibilities open to him. He has not given up the idea of returning to the island, but it is not clear in what capacity or at what time he would do so. In Belgrade last Monday, Makarios said he might return to the island in two or three weeks. He said he would decide the exact date after the UN General Assembly debate later this month. Makarios said earlier he would not return until all the Greek officers who participated in the coup against him left the island. The rotation of these officers will not be completed f_or several weeks. Makarios' activities have complicated actinc~ Greek Cypriot President Clerides? efforts to achieve a Cyprus settlement. .The Turks prefer to deal with Clerides and would probably stiffen their negotiating positions should Makarios return to the island. Recently, both Greek Foreign N[inister Mavroa and a Makarios-Clerides go-between have privately floated the possibility that Makarios might return to the island Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 ~~tIQ-t'1~I rl"1t~'~e1C~Gt1~~ ~lAf'E,''~Ir'1 Septernber 25, 1974 solely in an eccelesiastical capacity. It is unlikely that he would be long content with such a role, nor would Clerides welcome his return in such a capacity. Although Clerides does not want Maka:rios back, ~e does not want him to resign either. His :resignation would require new elections at a time when no one is sure what kind of government Cyprus will have. Clerides, therefore, continues to support P~akarios' plan to ad- dress the UN as President of Cyprus, even though he re- alizes the archbishop may use the opportunity to upstage Clerides' efforts to secure peace. The Democratic Party yesterday rejected Prime Min- ister Ecevit's offer to join in a coalition government, but left the door open for further negoti~.tions. The wording o.f the rejection announcement by Demo-~ cratic Party leader Bozbeyli indicated that it was Ecevit's insistence on elections this December that prompted the party council to reject the coalition pro- posal. Leading Democrats :have suggested, however, that the party was ready to overlook ideological differences with Ecevit and, if he drops his insistence on holding elections in 1974, they might agree to join a coalition. Ecevit, in fact, appears to have little choice now but to give up the idea o.f immediate elections. The Democrats were his best chance to obtain the parliamen- tary majority necessary to approve early elections. Ecevit?s next effort to form a new government will probably be another proposal to the Democratic Party, possibly calling for elections next spring. The Demo- crats would be more likely to accept such an offer? If Ecevit fails to entice the Democrats into a co- alition, he may try to form a minority government. If both efforts fail, President Koruturk could burn to Suleyman Demirel, leader of the opposition Justice Party, to try to organize a coalition. In any event, Ecevit will continue to head the caretaker government until a new government is formed. Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 25X1 25X1 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 National Intelligence bulletin GREECE September 25, 1974 The Greek government's announcement on September 23 lifting the ban on the Communist Party is the latest step the civilian government has taken toward a national election. The ban on the Greek Communist Party, imposed in 1936, was reaffirmed during Greece's civil war in 1947. Last week, the cabinet approved a new law on pro- portional representation; another law now being prepared will outline the requirements necessary to qualify as a political party. Prime Minister Karamanlis must now set an election date. Most reports indicate the election will be in late November? An early election has the advantage, for Kara- manlis, of capitalizing on his image of a returned hero. It will also get the Greeks to the polls before the badly fragmented left can organize. The Communists, for example, are split into three groups: the Moscow-backed Communist :Party (the KKF;-. exterior}, the dissident Communist Party (the KKE- interioz), and the United Democratic Left (EDA), a Com- munist front group which represented the Communists in parliament from 1952-1967. EDA won 11 percent of t:he vote in the 1964 elections. The legalization of the Greek Communist Party will intensify the current debate over which group i~ trie legitimate one and may lead to a court fight betweE~n the two sections of the party over the title of thE:ir respective organizations. The Moscow-backed faction has thus far shown great unwillingness to join with otr~er leftists, and this should harm the left's showing ~~t the polls. Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 National Intelligence Bulletin September 25, 1974 President Spinola apparently plans to play a direct role in the negotiations involving the decolonization of Angola and Cape Verde. An aide of the President told a US embassy officer that Spinola is not entirely pleased with the settlements achieved in Guinea-Bissau and Mozambique. Spinola's displeasure presumably centers around the concessions that granted power to one guerrilla group without hold- ing a referendum to test a variety of other options, including a federation with Portugal. Spinola would like to see Angola, the richest of the overseas territories, handled in a way that will allow Lisbon to play the various guerrilla groups vying for power a ainst each other accordin to the ;President's aide. Spinola will no a emp o a er a eco onization ormula for P!tozambique, but will caricentrate on ensuring that the referendum route is followed in Angola. Spinola's personal involvement in Angola also was endorsed by the Portuguese president of the territorial junta on September 23, prior to his departure to Luanda. He said Spinola had "decided to take in his hands all in- ternational matters bearing upon the future of .Angola." In a speech that day at the swearing-in ceremony of the new governor of Cape Verde, Spinola warned that Portugal will use force if necessary to guarantee freedom of choice for the people of Cape Verde. Spinola's new assertiveness may be related to in- dications of a campaign for a pro-Spinola, anti-extrem- ist rally. Press reports indicate that some 50,000 posters calling for such a rally on an unspecified date appeared in Lisbon on September 19. The leftist-dominated press is billing the campaign as a maneuver by "reactionary elements" to discredit Spinola. The known involvement of at least one junta Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 I I National Intelligence Bulletin September 25, 1974 member, however, suggests that the campaign has ;apinola?s approval. The press has refused to print the details of the rally, The brochures advertising the rally indicate that one of the themes of the demonstration will be the return to the original Spinola decolonization formula, i.e., the referendum. Spinola's position on this point seems to have hardened, and his unyielding attitude could polar- ize forces within the establishment;, and particularly in the armed forces, on this issue. A political rally could also present other dangers. A large turnout might trigger violence which eventually could lead to an attempted take-over by ext:rernists of the right or left. 25X1 25X1'. Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 National Intelligence Bulletin September 25, 1974 ETHIOPIA The Confederation of Ethiopian Labor Unions has called a general strike for today. Union leaders have asked workers to remain home, but disord~:rs are possible. An extended strike would produce serious economic dis- location and increase chances for more unrest. The strike call came at the same time the military government faced problems with ethnic dissidents out:.side the capital. The canfederation?s demand last week for a quick end to military rule resulted in a public condemnation of the labor leadership by the armed forces, Subsequent nego- tiations to resolve differences between the two sides were unproductive, and this week, the military arrested three confederation leaders ? Other labor. officia]_s then called for a general strike to last until the three are released. The confederation, which claims over. 100,000 mem- bers, is ably led and has close ties with European and US labor organizations. Organized labor's militancy contributed to the overthrow of the cabinet last Febru- ary. A disciplined general strike by thE~ confederation in March culminated in an agreement with then-prime minister Endelkatchew to return to work in exchange for a labor law sought by the confederation. The military may be compelled to use force i_f vola- tile students and others demonstrate in ~cupport of the confederation? A prolongE~d strike could result in shortages of fuel and other necessities. This would add to urban tensions and the already considerable hard- ships of Ethiopian city dwellers. The military is also being confronted by signs of opposition outside the capital. In Tigre Province, a popular aristocrat, Governor General Ras Mengesha Seyoum, has eluded the troops sent to keep him under control and has taken to the countryside with a few Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 25X1 25X1 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 National Intelligence Bulletin September. ~,5, _1974 The military regime is also reported to ha~re pro- voked the Danakils, a large warlike group of nomads in the northeasternmost part of Ethiopia. The military ordered the group's traditional leader to turn ~iimself in, along with the rest of Ethiopia's aristocrai:s, but backed down in the face of threatened armed trik~al re- sistance to any arrest attempt. Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6 Q Next 1 Page(s) In Document Denied Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Nc'~$I~r'1~d mrl$E'~~~Ig~1lCe ~l.l~I@$if'1 September 25, X974 SOUTH KOREA Opposition forces in South Korea are stirring once again in the aftermath of the Seoul-Tokyo diplomatic dispute. President Pak has already taken a number of steps aimed at heading off domestic criticism, and he reportedly is planning to take a more conciliatory ap- proach toward opposition elements--if only as a temporary tactical maneuver. Nevertheless, there is likely to be a confrontation with the government, perhaps including action in the streets, before President Ford visits Seoul in late November. During the past few days, relatively small student and Christian groups have resumed signature campaigns and protest prayer meetings aimed at obtaining the re- lease of comrades imprisoned during the spring and sum- mer under the government?s emergency decrease Govern- ment security forces have moved quickly to pick up th.e leaders of these activities for questioni.:nga In the National Assembly, the newly elected leader of the major opposition party is planning a vigorous attach: pn gov- ernment policies, which reportedly will include demands that the emergency decrees remaining in effect be re- scinded, that the constitution and criminal code be re- vised to restore individual liberties, and that the role of the Korean CIA be sharply curtailed. The government?s position is complicated by eco- nomic problems Last weep the largest and most. violent strike since 19'72 took place in Ulsan, and officials fear that a predicted 30-percent shortfall in this year?s harvest could cause food shortages President Pak, in moves aimed in part at satisfy- ing opposition claims, last month lifted two of the four emergency decrees imposed earlier this year, and last week he carried out a cabinet shuffle. The cabinet changes did not presage any significant policy shifts, but they did bring in a number of new faces, ~>reempt a planned opposition attack on government corruption, and Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6 I I National Intelligence Bulletin September: 25, ].974 remove education and information ministers who wf?re un- popular with students and the press. A desire tc~ deflect popular resentment was one factor behind Seoul's harsh anti-Japanese campaign of recent weeks. Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 National Intelligence Bulletin JAPAN September 25, 1974 Tokyo has just completed the annual revision of its five-year petroleum supply plan. The plan for 1974 to 1978 provides fors slower growth. in consumption; in- creasing stocks to 90 days of supply; dirE~ct deals with producers when possible; and reorganization of the do- mestic oil industry to strengthen exploration and pro- duction capabilities. Crude oil consumption in Japan is expected to de- cline by about 2 percent this year. It i.a projected to grow during 1975 to 1978 by about 4 percent a year, com- pared with annual growth of about 12 percent in recent years. In place of mandatory conservation measures in- stituted last winter, a cabinet--level. committee has been established to monitor consumption by large energy users. The committee has no enforcement powers, but can request firms to use restraint if their consumption is judged to be excessiveo The Ministry of International Trade and Industry is prepared to submit legislation requiring private oil firms to maintain 90-day stocks by 1978? A minimum of 60 days of supply will be :required when the law is en- acted, probably by next spring at the earliest. Addi- tional storage facilities and oil purchasEa will be fi- nanced largely by the government. The Ministry of Finance is balking at the cost of this plan--estimated at about $5 billion--.but Trade Ministry oi=ficials are confident of eventual approval. Tokyo intends to pursue bilateral supply arrange- ments, but has decided against setting up a public cor- poration for that purpose. Procedures for handling government-to-government deals will be determined on a case-by-case basis, If price negotiation~c with Baghdad later this month are successful? for exams>le, the oil will be resold to private companies, with the semi- governmental Japan Petroleum Development Corporation providing the necessary financing. The International Trade Ministry is convinced that most of the 40 to 50 small? poorly financed Japanese Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 I I National Intelligence Bulletin September 25 , 19 74 refining and exploration companies must merge if J~ipan is to have much. chance of competing or even working in conjunction with the large international oil firms in developing new sources of supply. Because industry opposition probably would prE~clude legislative action, the ministry will try to persu~ide companies to cooperate, using stockpile requirements as leverage. Since each company will be obligated to main- tain stocks proportionate to its productive capacii_y, the financially weak will be forced to merge or go under. JAPAN-CHITIA With a view toward boosting sales to China, Tokyo's Export-Import Bank has, after protracted negotiations, formally approved its first loan to Peking in ten ~~rears. The $30-million credit carries an annual interest :rate of 5.5 percent and is repayable in five years. It will help finance Peking's purchase of a 300,000-metric?-ton ethylene plant, worth nearly $50 million. Japanese com- mercial banks will finance part of the remaining c~~sts at 8-percent interest. Over $80 million in other Exim Bank loans to .Peking are due for final approval this year. These credits will help finance the purchase of two more chE~mical plants, a fertilizer plant, and a thermal powf~r plant, having a total value of some $130 million. More loans are likely to be approved next year. Japanese exports to China, although relativelX small, are growing rapidly. Sales totaled over $1 bil- lion in 1973 and are likely to reach $1.5 billion this yearn Japan has run a small surplus in its trade with China, but large imports of Chinese crude oil will prob- ab ly reverse this trend by the end of the decade, unless sales are substantially increased. With Exim Bank fi- nancing now availab le to Japanese exporters, further expansion of Japanese plant sales to China appears likely , Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 National I ntelligence Bulletin September 25 , l9 74 Israel: The Israeli military command announced that Israeli aircraft struck Arab guerrilla camps in southeast Lebanon yesterday in a "preemptive" strike aimed at foiling terrorist raids planned for the Yom Kippur holiday. Press reports from Lebanon indicate that six Israeli aircraft were involved in the attack, which lasted about 15 minutes; there were no reoorts Syria-USSR: the US R wi egin to expand facilities at e port of Latakia in Syria by the end of the year, The project will double the number of berths to 12 and expand cargo handling capacity to accommodate the large flow of goods coming over the nearly completed 420-mile rail line connecting Latakia. with northeastern Syria. Port construction will take three years to comp:Lete, Soviet participation in the project was arranged under an economic agreement signed Burin President Asad's visit to Moscow i.n April. Approved For Release 2008/08/08: CIA-RDP79T00975A027000010014-6 25X1 25X1 Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6 Top Secret Top Secret Approved For Release 2008/08/08 :CIA-RDP79T00975A027000010014-6