CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026900010042-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 26
• Document Creation Date: December 21, 2016
• Document Release Date: September 27, 2006
• Sequence Number: 42
• Content Type: REPORT

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Top Secret
Bugg W- =1
National Intelligence
Bulletin
State Dept. review completed
DIA review(s) completed.
Top Secret
N2 631
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National Intelligence Bulletin
August 23, 1974
CONTENTS
CYPRUS: Cypriot leaders moving toward peace talks.
(Page 1)
ITALY: Debate over Rome's role in NATO. (Page 3)
ISRAEL-EGYPT: Exercises by both countries cause con-
tinued uneasiness. (Page 5)
SPANISH SAHARA: Rabat's conditions on referendum spelled
out. (Page 7)
ITALY-GERMANY: Bonn supports Rome's bid for EC assistance.
(Page 10)
ICELAND: Coalition government to be announced shortly.
Page 11)
ARGENTINA: Montoneros threaten violence. (Page 13)
JAPAN: Tokyo attempts to slow decline of the yen.
Page 16)
LAOS: Souvanna Phouma departs Sunday; coalition
apprehensive. (Page 17)
World Faces Food Shortages: (Page 19)
FOR THE RECORD: (Page 22)
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Kyren'fa
Interr =tional
airport
CYPRUS
UK Sovereign base area
Turkish-Cypriot enclave
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National Intelligence Bulletin
CYPRUS
August 23, 1974
Greek and Turkish Cypriot leaders continue to move
slowly toward peace talks. Cypriot President Clerides is
in Athens today discussing negotiating strategies with
Greek Prime Minister Karamanlis. He is scheduled
edt to repre-
tomorrow afternoon in Nicosia with Turkish Cypriot
Rauf Denktash.
sentative
Clerides told US Ambassador Brown that he opposed a
Yugoslav proposal for a five-member UN Security Council
guarantee, describing it as a "hollow political effort."
Clerides added that he wants to be sure that the US is
involved so that some sort of pressure can be maintained
on Ankara.
Cypriot leader Denktash has stated that an indepen
e does not uickly
dent republic will be created if Greec
a ree to renew ease talks.
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National Intelligence Bulletin August 23, 1974
Although there have been no significant cease-fire
violations, UN forces on the island continue to have
trouble with local Turkish commanders. The UN commander
in Lefka was ordered by the Turks to confine his troops
to camp until arrangements could be made for their evac-
uation. In Nicosia the Turks have erected a road block
to stop UN patrols; the UN continues to patrol the area
by going around the road block. In Famagusta the Turks
continue to restrict the movement of UN convoys and
patrols. UN Secretary General Waldheim said today that
he had rejected a Turkish demand for the withdrawal of
UN forces from Turkish-held territory. Waldheim called
for an increase in the 4,300-man UN force on Cyprus.
Waldheim is expected to visit Cyprus this week to
meet Clerides and Denktash about the resumption of nego-
tiations. He also plans to visit Athens and Ankara for
similar discussions.
The Soviets late yesterday issued their first "offi-
cial government statement" on Cyprus since July 28. For
the first time, Moscow has called for the convening of an
international conference within the UN framework to pro-
tect Cyprus from outside interference, to ensure the
withdrawal of all foreign troops, and to allow the Cypriots
to solve their own problems. The participating states
would include Cyprus, Turkey, Greece, all Security Coun-
cil members, and other invited states, particularly from
among the nonaligned countries. These states would pro-
vide guarantees of the independence and territorial in-
tegrity of Cyprus.
Moscow's proposal probably is partially aimed at
placating the Greeks, who have been seeking evidence of
Soviet support. At the same time, Moscow continues to
avoid any direct, open criticism of the Turks.
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National Intelligence Bulletin
ITALY
August 23, 1974
The Greek announcement that it plans to withdraw
from NATO's military structure has led to a debate in
Italy over the implications for Rome's role in the al-
liance.
Socialist leader Pietro Nenni is arguing that US
forces ejected from Greece should not be allowed to re-
locate in Italy. Another prominent Socialist claims
that Italy is now the most threatened target among NATO
members in the Mediterranean and that this is ample rea-
son for Rome to press for more effective security guar-
antees.
Manlio Brosio, former secretary general of NATO,
has responded by insisting that this would be the worst
possible moment for Rome to reopen negotiations on the
use of NATO bases in Italy. He predicts that an attempt
to take advantage of present difficulties within the
alliance would only work against Italy's security inter-
ests.
Although the Communists oppose any increase in US
forces in Italy, they probably hope that the issue does
not reach the point where they have to take a stand. The
Communists have lately been playing down their hostility
to NATO in an effort to increase the party's acceptabil-
ity as a member of a potential governing coalition.
The dominant Christian Democrats have not yet re-
sponded officially to the Socialists. While sympathetic
to the problems facing NATO, the Christian Democrats'
leverage has been diminished by recent political setbacks,
and they also hope to avoid having to deal with the con-
sequences of a Greek pull out from the alliance.
This is probably one of the factors behind a de-
marche presented to the Turkish government by Rome yes-
terday. The Italian demarche stressed the necessity
for compromise on the Cyprus issue and emphasized the
serious problems that a neutralist Greece would pose
for NATO's Mediterranean powers.
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ypt
Eastern line ` f
Egyptian fortes 7
"A" Eastern line of limited Egyptian forces
"B" Western line of limited Israeli forces
"C" Western line of Israeli forces
United Nations Emergency force
buffer area
0 20 Statute miles
0 20 Kilometers
Line B"-
line C'l
Guff
of
Serez
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National Intelligence Bulletin August 23, 1974
ISRAEL-EGYPT
Exercises by both Egyptian and Israeli forces near
the disengagement lines are causing continued uneasiness
on both sides.
Egyptian chief of staff Gamasy informed the US at-
tache in Cairo on Wednesday that the Egyptian army was
conducting a four-day exercise to .familiarize troops
with their new positions along a defensive line west of
the Suez Canal. According to the Egyptian commander,
no artillery or air defense guns will be moved, because
of the limitations of the disengagement agreement. More-
over, the exercise will not be publicized to avoid rais-
ing tensions, but UN Emergency Force representatives
will be advised to avoid any misinterpretation of what
is going on. This is the first instance of Cairo alert-
ing US and UN officials of a major exercise--information
that Cairo must assume will be passed to Tel Aviv.
On Tuesday, Egyptian forces fired an SA-7 missile
at an Israeli F-4 aircraft flying over the Sinai east
of Suez City. The aircraft was not hit. According to
the Egyptian chief of staff, the missile was fired from
the west bank after the Israeli reconnaissance aircraft
had penetrated the UN buffer zone. The Israelis lodged
a protest with the UN forces claiming that the plane
had not crossed the line of separation and was over
Israeli-held territory when fired upon.
The Egyptian-Israeli disengagement agreement pro-
hibits weapons capable of interfering with the other
party's flights over its own forces in the limited-arms
zones on the east bank. It also prohibits surface-to-
air missiles in the Egyptian and Israeli 30-kilometer
zones--that is, on the west bank where the Egyptians
claim the missile was fired.
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National Intelligence Bulletin August 23, 1974
With a maximum range of about two nautical miles,
there are few areas along the edge of the Egyptian
limited-arms zone where an SA-7 can be launched to inter-
cept a target flying over Israeli-held territory. At
this range, the SA-7 would only be effective against
large, slow targets such as a heavy helicopter, and
would have virtually no capability against modern jets
such as the F-4.
Earlier this week, Gamasy made a speech designed
to reassure the Arab world, and Egyptians in particular,
that Cairo's military forces were stronger than ever and
fully alerted to Israeli actions. In a clear but calm
warning to Tel Aviv, he said that if political efforts
fail, the Egyptain armed forces are prepared to resume
fighting. He pointed out that Cairo was both studying
what Tel Aviv said, and watching the movements and par-
tial mobilization of Israeli forces.
Meanwhile, Israel has set the stage for its mili-
tary exercises. According to the US defense attache in
Tel Aviv, the Israelis will conduct a combined arms ex-
ercise in the Sinai on the night of August 26. The
attache believes the exercise will involve less than
one army division and that it will include tactical
air support. The Israelis also conducted a large-scale
tactical air exercise earlier this month.
The nationwide mobilization exercise that has been
anticipated for several weeks also appears to be immi-
nent. "Thousands" of reservists from all military serv-
ices reportedly are to be recalled for the 24-hour exer-
cise. The exercise is to train the reservists in the
revised public call-up system. According to Israeli
military spokesmen, the s stem was last used era-
tionally in 1967.
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I I
National Intelligence Bulletin
SPANISH SAHARA
August 23, 1974
Morocco has hardened its position on Spanish Sahara
in reaction to Madrid's decision to hold a referendum
under UN auspices in the territory next year.
In a speech on August 20--the same day Madrid noti-
fied the UN Secretary General of its intentions--King
Hassan attached tough conditions to Morocco's agreement
to a referendum. He insisted that any vote must occur
under international control after the Spanish presence
had been withdrawn. He further indicated that if the
principle of independence for Sahara were included,
Morocco would be obliged, for the first time, to reject
a "decision of the UN." In the past, Rabat had implicitly
accepted independence as one option, provided the Saharans
living in Morocco were allowed to vote.
The King repeated that the best way to settle the
Sahara question was through bilateral negotiations with
Spain. He cited the UN's handling of the West Irian
problem between the Netherlands and Indonesia as the
best example to follow. Instead of holding a referendum
as was originally proposed, West Irian was returned to
Indonesia through bilateral talks facilitated by a UN
mediator.
The King's tough line will reduce his ability to
make compromises for anything less than Moroccan control
of all the territory, Although the King stressed his
hopes of acquiring the area through peaceful means, he
repeated the threat he made last month to resort to
force if necessary. The continuing movement of Moroccan
troops to the south is designed to give added meaning to
his words.
Algeria and Mauritania, which also have an interest
in the Sahara's future, will probably support the Spanish
proposal. Unlike Morocco, they will almost certainly
insist that the peoples of Spanish Sahara be allowed to
choose independence if they so wish. Both countries
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National Intelligence Bulletin
August 23, 1974
continue to support UN resolutions that explicitly state
that indigenous Saharans should be allowed to "exercise
their right to self-determination and independence."
Both would prefer an independent Sahara, perhaps guaran-
teed and financially supported by the four concerned
parties.
The Saharans might well be encouraged by the Spanish
in a future referendum to vote against union with Morocco.
An aide to Spanish Prime Minister Navarro claims that
most Saharan sheikhs and many others have become increas-
ingly aware of future riches that will accrue to them
through exploitation of phosphates and other mineral re-
sources. Saharans allegedly believe absorption by Mo-
rocco would leave them the poorest province of a poor
country. The aide commented that the sheikhs believe
anti-Moroccan sentiment is shared by many Saharans living
in Morocco and that their votes in a referendum would
not be overwhelmingly pro-Moroccan. es.
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National Intelligence Bulletin
ITALY-GERMANY
August 23, 1974
Rome has obtained Bonn's support in securing EC as-
sistance to help finance Italy's large balance-of-payments
deficit. On Tuesday Rome succeeded in getting West
Germany's support at a meeting of the two countries' fi-
nance ministers in Bonn. These discussions are a prelude
to a meeting of Prime Minister Rumor and Chancellor
Schmidt on August 30-31.
Finance Minister Apel agreed to vote for a three-
month extension of Italy's outstanding $1.9-billion
short-term EC credit, which is scheduled to expire on
September 18. The credit, arranged this spring, has
already been extended once.
Apel and Treasury Minister Colombo discussed a pro-
posed long-term EC loan for EC member countries with
balance-of-payments problems. The commission proposal
would have the EC borrow on the international market,
with the proceeds going to Italy in several installments.
Apel supports such a loan and said he felt that favorable
action would be taken by other EC members.
The finance ministers also explored the possibility
of standby assistance between the two countries' central
banks. Discussion apparently was general, however, and
no definitive agreement was reached.
Newspapers in both Italy and West Germany reported
that Italy would agree to drop its import deposit re-
quirements in exchange for Bonn's assistance. Rome has
already agreed to terminate its requirements by March
31, 1975, as part of its standby credit agreement with
the International Monetary Fund.
The slight softening in West Germany's attitude
follows parliamentary ratification of austerity tax
measures in Italy last. week. Apel praised the measures,
claiming that they are an effective contribution to
monetary stability
between EC members.
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National Intelligence Bulletin
ICELAND
August 23, 1974
Foreign Minister Einar Agustsson has told the US
ambassador in Reykjavik that the formation of a Progres-
sive Party - Independence Party coalition government will
be announced this weekend.
The latest negotiations are the third attempt to
put together a coalition since the inconclusive elections
on June 30. Pa!rtlebeforeawagenand increasing
to form a government
pire at the end of the month.
The large Independence Party, with 25 of the 60
seats in parliament, would normally dominate any coali-
tion. Chairman Haligrimson, however, may have forfeited
the prime ministership in order to persuade Progressive
Party chairman Johannesson, to link his party's 17 seats
with those of the Independence Party. The result ap-
parently will be a center-right coalition, with Johan-
nesson continuing as Prime Minister and Haligrimson be-
coming Foreign Minister.
Agustsson and Haligrimson are trying to work out
a compromise policy on the US-manned NATO base at Kef-
lavik as a pre-condition for the coalition. In order
to "save face," Agustsson is insisting that the US re-
spond to the defense force reduction proposals submitted
in April by his center-left government. He indicated,
however, that a report explaining why these proposals
are not feasible would probably be sufficient. If the
ma resume
i
ons
coalition talks succeed, base negotiat
as early as next month.
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National Intelligence Bulletin
August 23, 1974
The nominally Peronist Montonero guerrillas, who
have widespread support among university and youth groups,
are threatening open warfare against the Peron government.
Less than a month ago they disavowed Mrs. Peron's leader-
ship and warned that their patience was wearing thin.
Since Peron's death, the breach between divergent
Peronist factions has widened as Mrs. Peron's rightist
orientation became more evident. The Montoneros--who
maintained peace with the former president despite dis-
agreements over government policy--are now edging closer
to espousing the terrorist tactics of the Marxist People's
Revolutionary Army. Until recently, the Montoneros had
publicly disclaimed association with the violence of
Marxist and Trotskyite guerrillas.
Now, however, a Montonero publication edited by a
rabid left-wing Peronist youth leader has given tacit
endorsement to armed struggle charging that the govern-
ment is "no longer Peronist." In an article entitled
"Has the Hour of the Guerrilla Arrived?," the Montoneros
allude to Mrs. Peron's "unpopularity" and charge that
clashes last week in northern Argentina between the out-
lawed People's Revolutionary Army and the "forces of
repression" point up the erosion within her administra-
tion.
The government has been at pains in recent weeks to
deny speculation it was about to outlaw the Montoneros.
The government would have no recourse but to clamp down
on them if they resort to violence, as seems likely.
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National Intelligence Bulletin
August 23, 1974
The central bank is increasing its intervention in
the foreign exchange market to slow the yen's decline.
In the first three trading sessions this week, the cen-
tral bank sold $150 million, but downward pressure on the
yen is still fairly strong. Within the past month, the
yen has depreciated almost 5 percent and about 9 percent
since April.
The weakening of the yen largely reflects the con-
tinuing balance-of-payments deficit and government ef-
forts to hold down short-term borrowing abroad by Japa-
nese commercial banks. The Ministry of Finance began
restricting overseas borrowing in June because commercial
banks were overextending themselves in the Eurodollar
market. The ministry has taken several steps to help
fill the dollar gap, including the deposit of some $750
million in commercial banks during the past month. In
addition, Tokyo has permitted increased long-term bor-
rowing abroad by Japanese firms and is seeking direct
loans from oil producers in the Middle East.
Pressure on the yen should ease as the balance-of-
payments deficit narrows. The payments deficit was only
$200 million last month, compared with an average monthly
deficit of $1.2 billion between January and June. Japan
registered a $320-million surplus in trade last month,
compared with an average monthly deficit of $460 million
during the first half. The trade account during the
second half of the ear robabl will show a substantial
surplus.
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I I
National Intelligence Bulletin August 23, 1974
Prime Minister Souvanna Phouma is scheduled to leave
Laos on Sunday for several months convalescence in France.
Souvanna has been making slow but steady progress from the
massive heart attack he suffered six weeks ago, but his
condition is still considered very serious.
The coalition government has continued to function
without Souvanna's strong hand, but both Communist and
non-Communist members are apprehensive about the effect
of the Prime Minister's absence on the currently quiet
political scene. The non-Communists are worried that
the Pathet Lao will try to take advantage of Souvanna's
absence, especially since Communist Deputy,Prime Minister
Phoumi Vongvichit will be serving as temporary leader of
the coalition. The Pathet Lao, for their part, are antic-
ipating rightist intrasigence to Communist policy initia-
tives and may fear other forms of troublemaking as well.
As a result, they may well choose to proceed cautiously
rather than risk disrupting a political situation that
has been evolving in their favor since the formation of
the new government.
Souvanna will travel first to Bangkok for a brief
rest stop. He will undergo a medical examination there
Vientiane
f
.
rom
to determine the effects of the flight
If his condition is satisfactory, he will be permitted
to continue to France.
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I I
Change in Population Distribution
1970 and 2000
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National Intelligence Bulletin August 23, 1974
WORLD FACES FOOD SHORTAGES
Trying to provide adequate world food supplies will
become a problem of overriding priority in the years
and decades immediately ahead--and a key role in any
successful effort must fall to the US. Even in the most
favorable circumstances, with increased devotion of
scarce resources and technical expertise, the outcome
will be doubtful; in the event of adverse changes in
climate, the outcome can only be grave.
The momentum of world population growth, especially
in the less developed countries, is such that even
strong measures taken now to reduce fertility would not
stop rapid growth for decades. Thus, most less-de-
veloped countries must cope with the needs of much
larger populations or face the political and other con-
sequences of rising death rates.
Demand for food rises inexorably with the growth
of population and of affluence. Increases in supply
are less certain. Man's age-old concerns about the
adequacy of food supplies have resumed with particular
urgency since the crop failures of 1972. The rich coun-
tries need have no fear of hunger, though the relative
price of food will probably rise at times.
The poor, food-deficit less developed countries
must produce most of the additional food they will
need to support their growing populations. They cannot
afford to import it, nor is it likely they can count
on getting enough aid from the food-exporting countries.
They face, however, serious political, economic, and
cultural obstacles to raising output and are in for
considerable strain, at the least, and probably for
periods of famine.
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Direction of Net Grain Trade
1948-52 and 1973-74 (prelim.)
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National Intelligence Bulletin
August 23, 1974
The US now provides nearly three fourths of the
world?s net grain exports, and its role is almost cer-
tain to grow over the next several decades, The world's
increasing dependence on American surpluses portends
an increase in US power and influence, especially vis-a-
vis the food-deficit poor countries, Indeed, in times
of shortage, the 'US will face difficult, choices about
how to allocate its surplus between affluent purchasers
and the hungry world.
Implications of Climate Change
The implications for the world food situation and
for US interests would be considerably greater if clima-
tologists who believe a cooling trend is under way prove
to be right,
--If the trend continues for several decades, there
would almost certainly be an absolute shortage of
food, The high-latitude areas, including the USSR
and north China, would experience shorter growing
seasons and a drop in output. The monsoon-fed
lands in Asia and Africa would also be adversely
affected.
--US production would probably not be hurt much.
As custodian of the bulk of the world's exportable
grain, the US might regain the primacy in world
affairs it held in the immediate post-World War II
era.
In the worst case, if climate change caused grave
shortages of food despite US exports, the potential
risks to the US would also rise? There would be
increasingly desperate attempts on the part of
powerful but hungry nations to get grain any way
they could, Massive migrations, sometimes backed
by force, would become a live issue and political
and economic instability would be widespread,
--In the poor and powerless areas, populaion, would
have to drop to levels that could be suppt
The population "problem" would ba-re ved itself
in the most unpleasant fashion.
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National Intelligence Bulletin August 23, 1974
China: Recent reporting from South China suggests
that the early rice crop may be somewhat better than
Peking had anticipated earlier this summer. The crop
was late and got off to a poor start. Timely rainfall
later in the growing season, however, has improved pros-
pects for the harvest. The current high price for rice
may now tempt Peking to re-enter the international rice
market. China curtailed commercial sales of rice last
winter because of the poor harvest of late rice.
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Top Secret
Top Secret
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