CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R000800020002-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 19, 2016
• Document Release Date: January 15, 2002
• Sequence Number: 2
• Publication Date: January 4, 1972
• Content Type: BULL

kppiobe'd For Release 2005/06109 : Clk R~P85T00875R0 0$00020002 6
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No Foreign Dissent
DIRECTORATE OF
INTELLIGENCE
Central Intelligence B"hulletin
State Dept. declassification & release instructions on file
Secret
N 569
4 Janh.iary 1972
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Beget
'11ht' CENTRAL !NTELLICis'NCE BULLETIN is produced by the
Director of Central lntelligcnce to meet his responsibilities for providing
current intelligence bearing oil issues of national security to the President,
the National Security Council, and other senior government officials. It
is produced in consultation with the Departments of State and Defense.
When, because of the time. factor, adequate consultation with the depart-
ment of prim_try concern is not feasible, items or portions thereof arc pro-
duced by CIA and enclosed in brackets.
Interpretations of intelligence information in this publication represent
immediate and prci.minary views which are subject to modification in the
right of further information and more complete analysis.
Certain Mtelligencc ik:r is in this publication may be designated specifically
for no further dissemination. Other intelligence items may be disseminated
further, but only on a need-to-know basis.
WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 79.1, of the US Code, as amended.
Its transmission Cr revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP 1
Excluded from automatic
downgrading and
declassification
MOR
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No. 0003/72
4 January 1972
Central Inteilz~ence bulletin
COMMTJNIST CHINA: Assessment of New Year's Day pro-
nouncement.(Page 1)
PAKISTAN: Bhutto rapidly implements new economic
program. (Page 3)
BANGLADESH: Economic restructuring under way.
(Page 4)
COMMUNIST CHINA: Impressive industrial growth
registered in 1971. (Page 5)
PARAGUAY: Doubts about government's willingness
to curtail drug trafficking. (Page 6)
PAKISTAN-BANGLADESH: Mujib's release (Page 7)
OMAN: Government reshuffle (Page 7)
SOUTH VIETNAM: New road under construction in
DMZ -Tp age 9
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SLCRIi T
COMMUNIST CHINA: Peking's low-key New Year's
Day pronouncement touted China's diplomatic and
economic progress but was uninformative on any po-
litical reorganization in the wake of the purge, of
Defense Minister Lin Piao and other top military
leaders.
The joint People's Daily - Red Flag - Libera-
tion Army Journal editorial on 31 December avoided
a public airing of the recent leadership upheaval
and forecast no sweeping purge in the ranks of the
army or party. The editorial's heavy emphasis on
promoting unity and educating'those who have com-
mitted mistakes seems designed to project an image
of leadership stability and to affirm that no major
alteration in the regional and provincial power
structure is in the offing. Indeed, the remarkable
absence of repercussions at the local level in the
months since Lin's fall suggests that specific re-
assurah'.es regarding their political tenure already
have been offered the majority of civilian and mil-
itary power-holders in the provinces.
On the other hand, the editorial's failure to
hail the complete reconstruction of party c.mmit-
tees at the provincial level over the past year and
its warning that much work remains to be done seem
to indicate that local party organs will at least
be selectively revamped. This impression has been
reinforced in recent weeks
that some provincial, municipal,
and county party committees will be disbanded and
25X1 C
new "elections" held--a move which, 25X10
may await the conclusion o President
INIxon's or hcoming visit to Peking.
Eventual alterations in the local power struc-
ture almost certainly will dilute the influence of
some military power-holders and remaining civilian
ultraleftists; sortie indication of this already has
been provided in the increasing number of radio
Central Intelligence Bulletin
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SECRET
broadcasts decrying attempts from the "left" to un-
dermine party control of the military. The politi-
cal status of the military establishment as a whole,
however, is still in question, and the sensitivity
of this issue was underscored by the New Year edi-
torial's stress on the importance of conventional
military activities as opposed to the army's polit-
ical chores.
The trumpeting of China's success in the in-
ternational and domestic economic arenas highlights
the absence of a discernible impact on the nation's
decision-making process by the recent high-level
purges. The situation in the leadership hierarchy
is still fluid, however, and the editorial provided
no clues as to the eventual political settlement to
be hammered out in Peking. Approximately nine ci-
vilian and military politburo members are appearing
regularly in public but the current hierarchy clearly
constitutes a rump body and the process of filling
existing vacancies on the 25-member politburo al-
most certainly has generated considerable behind-
the-scenes maneuvering.
The editorial's praise of China's diplomatic
successes appears to offer indirect testimony to
Chou En-lai's influence. Reflecting predictable
Chinese pleasure over Peking's enhanced interna-
tional position during the past year, the editorial
devoted considerable attention to such conventional
diplomatic achievements as Peking's entry into the
UN and its new diplomatic ties abroad. The US was
treated in markedly low-keyed fashion. By contrast
the Soviet leadership came in for some polemical
hard knocks, including a personal criticism of party
chief Brezhnev. Contrary to last year when Japan
was treated as a major Chinese adversary, this
year's pronouncement omitted almost all anti-Tokyo
commentary. The Taiwan issue was treated in unusual
detail, reflecting Peking's immediate and ser.U.)us
concern over the island's future status. (CONFI-
DENTIAL NO FOREIGN DISSEM)
4 Jan 72 Central Intelligence Bulletin
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PAKISTAN: President Bhutto is moving ahead
rapidly with changes in economic policy.
Islamabad has announced that it has taken over
management of 20 firms in such industries as gas,
iron and steel, engineering goods, chemicals, rayon,
cars and tractors. The government stressed, how-
ever, that it had not acquired any financial inter-
est in the firms; thus, the action so far falls
short of complete nationalization. Although the
take-over encompassed an important part of indus-
try, the cotton textile sector--the nation's lead-
ing industrial employer and forei.gn exchange earner--
remain: untouched.
President Bhutto, aware that his actions en-
danger prospects for new foreign investment and aid
for Pakistan, has attempted to assure the foreign
community of his moderation. He emphasized that
foreign investment contracts and credits would not
be affected by the new arrangements and that gov-
ernment controls would not be extended to other man-
ufacturing industries.
The government contemplates further economic
changes. Land and tax reform, and government con-
trol of banking and insurance are under serious
consideration. In a move to conserve the country's
financial resources and to strengthen government
control, the heads of two rich industrial families
were put under house arrest for six months and pass-
ports of members of the country's so-called 22
richest families remain impounded. Those families
which supported Bhutto's political opponents seem
most affected by government actions thus far.
(CONFIDENTIAL)
4 Jan 72 Central Intelligence Bulletin
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BANGLADESH: Dacca is restructuring its econ-
omy as it attempts to restore some semblance of
order, but a return to pre-war economic conditions
will require substantial inflows of foreign aid.
The government has taken control of 274 firms,
in addition to the jute and tea industries that
were taken over last week. Ceilings have been set
for private salaries. A food corporation has been
formed to procure and distribute rice, and efforts
are being made to get fertilizer and machinery into
those areas where the rice crop currently is being
planted. Some money and food have been allocated
for the returning refugees. Trade pacts with the
USSR, Bulgaria, and Czechoslovakia reportedly will
soon be signed.
The Bangladesh rupee has been set at less than
14 cents compared with 21 cents previously main-
tained for Pakistan's currency. This devaluation,
however, will not necessarily mean a rapid improve-
ment in the new country's foreign trade. Under the
previous exchange rate structure, exporters received
a favorable rate of exchange--up to 35 percent
higher for their sales. Moreover, mos` sectors of
the economy, including shipping and industry, must
first be set in order. Furthermore, Dacca's major
exports, raw jute and jute manufactures, are suf-
fering from a declining world demand as consumers
switch to synthetic fibers. The new regime also
must renegotiate jute sales contracts which it had
canceled. (CONFIDENTIAL)
Central Intelligence Bidletin
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COMMUNIST CHINA: Peking achieved impressive
industrial growth in 1971 without sacrificing living
standards. Output of basic metals, fuel, power,
industrial equipment, and military end products
reached record levels.
Recently announced Chinese claims for economic
output in 1971--the most complete set of economic
statistics released since 1959--appear inflated.
Industrial production nonetheless probably grew by
some ten percent over the 1970 level. This was
slower than the estimated 17-percent growth achieved
in 1970, but growth that year was atypical because
the Chinese easily put back into use much plant
capacity previously idle. In 1971, the Chinese re-
lied more on new facilities.
Agricultural performance probably disappointed
the regime. Weather conditions during most of 1971
largely nullified the benefits derived from increased
supplies of farm equipment and chemical fertilizers.
Total grain output may not have exceeded the 1970
level of 215-220 million tons. China has food re-
serves, however, and also can afford to buy more
grain than the three million tons already purchased
for 1972 delivery. (SECRET)
4 Jan 72 Central Intelligence Bulletin
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PARAGUAY: The court decision not to extradite
to the US an accused narcotics smuggler poses ques-
tions about Paraguay's willingness to cooperate in
stopping the drug traffic.
The US Embassy was informed on 31 December that
a Paraguayan court had refused to extradite August
Ricord, an important figure in the international
drug smuggling network. The court based its opinion
on the fact that drug trafficking is not an extra-
ditable offense under the present US-Paraguayan
treaty. The government intends to appeal the case
and meanwhile will request a cash bail of almost
$250,000. Even so, Ricord probably will post bond
and it is possible that he will leave the country.
Paraguayan officials had assured the US that
the court, which can easily be influenced by Pres-
ident Stroessner, would approve extradition even
if the treaty did not appear to apply. The court's
decision, however, would seem to indicate that
Stroessner remains reluctant to confront the strong
Paraguayan interests involved in drug traffic.
(CONFIDENTIAL)
4 Jan 72 Central Intelligence Bulletin
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PAKISTAN-BANGLADESH: By freeing Mujibur Rahman
ur.:on iitiona ly, President Bhutto apparently intended
both to satisfy international opinion and to improve
prospects for the repatriation of the Pakistani
troops and civilians held by the Indians. Bhutto
presumably was given little reason from his talks
with Mujib to believe he could extract meaningful
concessions fror, the Bengali leader and may have
concluded that his unconditional release was the
only way to limit Indian influence in the former
province. (CONFIDENTIAL)
OMAN: Sultan Qabus announced the resignation
of Price Minister Tariq and an extensive reshuffling
of government posltaons on 1 January. The Sultan
and the prime minister had been engaged in a quiet
power struggle since mid-1970 when they took office
following a coup which ousted the Sultan's father.
Asim al-Jamali, minister of health, has been named
acting prime minister. The Sultan apparently in-
tends to keep power, centralized in the palace.
(CONFIDENTIAL)
(continued)
4 Jan 72 Central Intelligence Bulletin
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New Communist Road Construction
c
f
QyANG, TRI iii Qu TO
Now road Omit, 11,E
AKha
Saab' ,,- `. ti
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SECRET
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SOUTH VIETNAM: A recent pilot report indicates
that the Communists are constructing a new road
within the DMZ branching off Route 102 toward the
central region of northern Quang Tri Province. Sen-
sors and pilot reports also indicate that work has
begun to repair the rain and bomb damage on a ^om-
munist road begun last May that runs through the
western end of the DMZ and into Quang Tri Province.
Both roads will facilitate the movement of supplies
to Cuinmunist forces in this region of South Vietnam.
(SECRET NO FOREIGN DISSEM)
4 Jan 72 Central Intelligence Bulietin
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NATIONAL INTELLIGENCE ESTIMATE
The United States Intelligence Board on 30
December 1971 approved the following national. in-
telligence estimate:
NIE 80/90-1-71: "Nationalism and Change
in Latin America" (SE-
CRET)
4 Jan 72
Central Intelligence Bulletin 10
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