EUROPEAN BRIEF 155-75.4

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000300010057-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 34
• Document Creation Date: December 19, 2016
• Document Release Date: June 14, 2005
• Sequence Number: 57
• Publication Date: October 9, 1975
• Content Type: CABLE

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1. PORTUGAL: PRIME MINISTER AZEVEDO HAS STEPPED UP HIS
CAMPAIGN TO RESTORE MILITARY DISCIPLINt, BUT HE CONTINUES TO FACE
OUTRIGHT DEFIANCE FROM LEFTIST UNITS'
GOVERNMENT EFFORTS TO TRANSFER DISRUPTIVE SOLDIERS AS A SHORT-TERM
SOLUTION TO GROWING INDISCIPLINE ARE BEING HOTLY CONTESTED. RADICALS
HAVE BANDED TOGETHER IN SUCH ORGANIZATIONS AS "SOLDIERS UNITED WILL
WIN^?AND "REVOLUTIONARY ACTION OF ARMY ENLISTED MEN," AND HAVE
ALLIED THEMSELVES WITH EXTREME LEFT-WING POLITICAL PARTIES. THEY PROBS?d
ABLY ARE RECEIVING VEILED SUPPORT FROM THE COMMUNISTS, WHO OFFICIALLY
CONTINUE TO SUPPORT THE AZEVEDO GOVERNMENT.','
LAST WEEKEND, AN ARMY TRANSPORTATION TRAINING UNIT IN PORTO
WAS DISBANDED AFTER ENLISTED MEN VOTED TO RESIST THE TRANSFER OF
TWO LEFTIST OFFICERS AND SEVERAL ENLISTED MEN. SOME OF THE SOLDIERS
ISSUED A STATEMENT WARNING THAT THE "STRUGGLE HAS NOT ENDED." THEY
WERE IMMEDIATELY SUPPORTED BY A COALITION OF SIX FAR-LEFTIST PARTIES,
WHICH CALLED FOR "MASS ACTION" TO PROTEST THE UNIT'S DISSOLUTION.Y
PRO-COMMUNIST DEMONSTRATIONS IN PORTO WERE BROKEN UP BY TROOPS
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LATE SATURDAY NIGHT AND EARLY SUNDAY MORNING. OTHER DEMONSTRATIONS
WERE REPORTED IN SOUTHERN PORTUGAL AND NEAR LISBON. "SOLDIERS
UNITED WILL WIN" HAS CALLED FOR A DEMONSTRATION THIS EVENING
IN PORTO?Y
RADICALS HAVE SUCCEEDED IN PREVENTING THE TRANSFER OF MORE THAN
40 SOLDIERS, SCCUSED OF PARTICIPATING IN ANTI-GOVERNMENT
DEMONSTRATIONS, FROM BEJA AIR BASE IN SOUTHERN PORTUGAL. THE
GOVERNMENT SENT LOYAL PARATROOPS TO BREAK UP A DEMONSTRATION OF
SEVERAL HUNDRED LEFTISTS OUTSIDE THE 8ASLi BUT THE TRANSFER ORDERS
WERE LATER RESCINDED. THE SOLDIERS WILL. ALSO BE ALLOWED TO
PARTICIPATE IN NONPARTISAN POLITICAL DEMONSTRATIONS.','
IN THE LISBON AREA, LEFTIST UNITS ARE CONTINUING THEIR CAMPAIGN
TO CAST DOUBT ON SOCIALIST PARTY CLAIMS THAT A LEFTIST COUP WAS
PLANNED FOR LAST WEEK. THE INTERNAL SECURITY COMMAND, HEADED BY
GENERAL CARVALHO, PUBLICLY DENIED SOCIALIST ALLEGATIONS THAT SOME
UNITS IN THE COMMAND WERE INVOLVED IN PLOTTING AGAINST THE GOVERNMENT.
ONE OF THE ACCUSED UNITS ISSUED A STATEMENT CHARGING THE SOCIALISTS
WITH WANTING TO INSTALL A RIGHT-WING DICTATORSHIP?Y
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IN A PRESS INTERVIEW, PRIME MINISTER AZEVEDO SIDED WITH THE
SOCIALISTS AND BLAMED THE FAR LEFT FOR THE BREAKDOWN IN MILITARY
DISCIPLINE WHICH PREVENTS THE GOVERNMENT FROM EXERCISING COMPLETE
CONTROL OVER THE LISBON AREA. THIS ASSERTION WAS BORNE OUT BY THE
REPORTED REFUSAL OF RADICAL SOLDIERS AT THE MAIN ARSENAL TO COMPLY
WITH AZEVEDO'S ORDER TO SUPPLY MORE AUTOMATIC RIFLES TO A DEPENDABLE
REGIMENT. THE RADICAL SOLDIERS HAVE HELPED THE FAR LEFT SMUGGLE ARMS
FROM THE ARSENAL TO SYMPATHETIC CADRES.'
AZEVEDO'S DECISIVENESS IN COMBATING REBELLIOUS TROOPS MAY BE
UNDERMINED BY THE RETURN ON SUNDAY OF PRESIDENT COSTA GOMES FROM
OFFICIAL VISITS TO POLAND AND THE USSR. COSTA GOMES IS NOTED FOR HIS
WILLINGNESS TO COMPROMISE AND HAS WEAKENED ANTI-COMMUNIST FORCES
IN THE PAST BY TRYING TO AVOID A CONFRONTATION AT ALL COSTS. HE
MAY SEE AZEVEDO'S ACTIONS AS DANGEROUS AND SEf K TO CURB HIS
AUTHORITY .'1'
DURING A SPEECH ON SUNDAY MARKING THE FOUNDING OF THE FIRST
PORTUGUESE REPUBLIC IN 1910, COSTA GOMES EMPHASIZED THE NEED TO HEAL
DIVISIONS AMONG THE PEOPLE AND THE ARMED FORCES, BUT ALSO DEPLORED
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ACTIONS THAT "PREJUDICE: THE EXERCISE OF AUTHORITY." FOLLOWING
THE CEREMONY, SOCIALIcc1' LEADER SOARES WAS ATTACKED BY A CROWD
OF RADICAL LEFTISTS AI:D HAD TO BE RESCUED BY ARMED NAVAL POLICE.
2. PORTUGAL-US::R: PRESIDENT COSTA GOMES RETURNED TO LISBON
ON SUNDAY FROM OFFI.IAL VISITS TO POLAND AND THE USSR. MOSCOW
TREATED THE FOUR-DAY VISIT TO THE USSR AS A MAJOR INTERNATIONAL
EVENT, EVIDENTLY ANXIOUS TO CULTIVATE TIES WITH THE NEW LISBON
GOVERNMENT DESPITE RECENT SETBACKS FOR THE PORTUGUESE COMMUNISTS.'
COSTA GOMES MET FOR TWO HOURS WITH GENERAL SECRETARY BREZHNEV ON
FRIDAY AND WITH SEVERAL OTHER SOVIET LEADERS, INCLUDING PRESIDENT
PODGORNY AND THE MINISTERS OF FOREIGN AFFAIRS, FOREIGN TRADE, AND
DEFENSE. THE RESULTS OF THE VISIT WERE PRIMARILY POLITICAL, AS
REFLECTED IN THE JOINT COMMUNIQUE AND IN A SEPARATE DECLARATION
SIGNED ON OCTOBER 3 BY PODGORNY AND COSTA GOMES. THE DECLARATION
ATTACHED "ESPECIAL-IMPORTANCE" TO THE PRINCIPLES OF NATIONAL
SELF-DETERMINATION AND NONINTERFERENCE, DIRECT OR INDIRECT, IN THE
INTERNAL AFFAIRS OF SOVEREIGN STATES. THE TWO SIDES PLEDGED TO HOLD
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REGULAR CONSULTATIONS AT VAKIOUS LEVELS TO DEVELOP BILATERAL
RELATIONS ON POLITICAL, ECONOMIC, SCIENTIFIC, AND CULTURAL MATTERS?Y
BEFORE THE ARRIVAL OF THE PORTUGUESE DELEGATION, THE SOVIET
PRESS EMPHASIZED-ECONOMIC RELATIONS BETWEEN THE TWO COUNTRIES. A
REPORTED AGREEMENT ON LONG-TERM ECONOMIC COOPERATION MAY BE THE
CULMINATION OF YEAR-LONG NEGOTIATIONS FOR SOVIET ECONOMIC ASSISTANCE
TO PORTUGAL, ALTHOUGH IT APPEARS UNLIKELY THAT MOSCOW PLEDGED
SUBSTANTIAL AID FOR ANY SPECIFIC PROJECTS.Y
THE COMMUNIQUE PLEDGES PORTUGUESE SUPPORT FOR PROGRESS TOWARD
FORCE REDUCTIONS IN CENTRAL EUROPE AND FOR A NUMBER OF PET SOVIET
DISARMAMENT INITIATIVES, INCLUDING A WORLD DISARMAMENT CONFERENCE,
A COMPREHENSIVE NUCLEAR WEAPONS TEST BAN, AND THE PROHIBITION OF NEW
' TEGOR'(ES OF WEAPONS OF MASS DESTRUCTION. THE DECLARATION, HOWEVER,
SPECtFlCALLY NOTES THAT ITS PROVISIONS "IN NO WAY AFFECT" EARLIER
114;ERNPTIONAL OBLIGATIONS, INCLUDING PRESUMABLY PORTUGAL'S NATO
CciMNtTHEN TS. Y
BOTH DOCUMENTS STRESS THE IMPORTANCE OF THE EUROPEAN SECURITY
AGREEMENT, AS DID THE RECENT PORTUGUESE-POLISH ACCORD. THE MOSCOW
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DECLARATION MAi;:.S THE FIRST INSTANCE SINCE HELSINKI IN WHICH THE
SOVIETS HAVE PLEDGED IN AN INTERNATIONAL DOCUMENT TO IMPLEMENT IN
FULL MEASURE THE PROVISIONS OF THAT AGREEMENT.
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3. PORTUGAL-AZORES-MADEIRAS: INDEPENDENCE MOVEMENTS REMAIN ACTIVE
IN BOTH THE AZORES AND THE MADEIRAS, BUT THE REPLACEMENT OF THE
PRO-COMMUNIST GONCALVES REGIME IN LISBON HAS SAPPED MUCH OF THEIR
MOMENTUM.V
THE AZORES LIBERATION FRONT IS CIRCULATING A NEW PROGRAM THAT
CALLS FOR NEGOTIATIONS WITH LISBON AND A REFERENDUM ON INDEPENDENCE.
SHOULD NEGOTIATIONS FAIL, HOWEVER, THE FRONT ADVOCATES A UNILATERAL
DECLARATION OF INDEPENDENCE.'
THE NEW PROGRAM REPRESENTS THE VIEWS OF THE LARGEST FACTION OF
THE FRONT WHICH IS DOMINATED BY THE CENTER-LEFT POPULAR DEMOCRATS,
IT INCLUDES PROVISIONS FOR LAND REFORM, THE DISSOLUTION OF
MONOPOLIES, FREE TRADE UNIONS, AND EQUALITY AMONG ALL. OF THE ISLANDS
OF THE ARCHIPELAGO.Y
THE PROGRESSIVE FEATURES OF THE PROGRAM MAY IMPROVE THE IMAGE
OF THE FRONT, WHICH HAS BEEN CLOSELY IDENTIFIED WITH THE AZOREAN
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UPPER CLASSES. AT THE SAME TIME, HOWEVER, IT COULD COST THE FRONT
THE FINANCIAL SUPPORT OF SOME OF THE LARGE LANDOWNERS AND WEALTHY
AZOREAN EMIGRES IN THE US WHO FIRST ORGANIZED THE MOVEMENT.'
INDEPENDENCE SENTIMENT IN THE MADEIRAS HAS BEEN EXAGGERATED
BY THE MAINLAND PRESS, BECAUSE MOST ISLANDERS SEEM TO PREFER
AUTONOMY. AT PRESENT, IT APPEARS THAT MADEIRANS WOULD MOVE FOR
INDEPENDENCE ONLY IN THE CASE OF A RESURGENCE OF COMMUNIST
INFLUENCE IN PORTUGAL OR THE DENIAL OF A: SATISFACTORY ARRANGEMENT
FOR AUTONOMY. REPORTEDLY, THERE ARE AS MANY AS FOUR INDEPENDENCE
GROUPS IN THE MADEIRAS, NONE OF WHICH IS EFFECTIVELY ORGANIZED.
THE MOST WIDELY KNOWN GROUP, THE FRONT FOR THE LIBERATION OF THE
MADEIRAN ARCHIPELAGO, WAS FORMED EARLY LAST SUMMER BY CONSERVATIVE
BUSINESSMEN AND LANDOWNERS WORRIED ABOUT THE LEFTWARD TREND OF
MAINLAND POLITICS AND THE DAMAGING IMPACT OF THE SAGGING
PORTUGUESE ECONOMY ON THE MADEIRAS.Y
THE SEPARATIST MOVEMENT IN THE MADEIRA ISLANDS BEGAN MUCH
LIKE THE AZOREAN FRONT, WHICH WAS USED AS A MODEL. IN CONTRAST TO
THEIR AZOREAN COUNTERPARTS, HOWEVER, THE MADEIRAN SEPARATISTS
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0 IF FILES HAVE BEEN UNABLE TO STIMULATE MUCH INTEREST, ESPECIALLY AMONG
THE WORKING CLASS, WHICH MAKES UP ABOUT FOUR FIFTHS OF THE
THE BOMPING INCIDENTS ON THE ISLANDS OVER THE PAST FEW WEEKS
PROVOKED MUCH GREATER CONCERN ON THE MAINLAND THAN THEY DID AMONG
MADEIRANS. LISBON'S CONCERN AND THE HEAVY COVERAGE IN THE MAINLAND
PRESS, HOWEVER, HAS AIDED THE CONSTITUENT ASSEMBLY DELEGATES
FROM MADEIRA IN THEIR MOVE FOR GREATER AUTONOMY.Y
IF THE PORTUGUESE GOVERNMENT CONTINUES TO BE RECEPTIVE TO THE
DEMAND OF THE AZOREANS AND MADEIRANS FOR GREATER AUTONOMY, THE
INDEPENDENCE MOVEMENTS WILL FIND IT DIFFICULT TO FIND NEW
RECRUITS. IF LISBON RETURNS TO ITS OLD POLICY OF NEGLECT, HOWEVER,
OR SHOULD THE PRESENT GOVERNMENT CRUMBLE IN THE FACE OF LEFTIST
OPPOSITION, THE SEPARATISTS COULD QUICKLY BECOME A SERIOUS
1 THREAT.
4. EUROPEAN COMMUNIST CONFERENCE: IN AN EFFORT TO REVIVE THE
RAPIDLY FADING PROSPECTS FOR CONVENING A EUROPEAN COMMUNIST PARTY CON-
FERENCE THIS YEAR, THE SOVIETS AND EAST GERMANS
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HAVE CALLED A MEETING OF THE CONFERENCE DRAFTING
GROUP ON OCTOBER 8, ACCORDING TO AN EAST GERMAN
SOURCE. THIS GROUP, WHICH FIRST MET IN EAST BERLIN
ON FEBRUARY 17-19 AND THEN ON APRIL 8-10, IS CHARGED
WITH DRAWING UP THE CONFERENCE'S FINAL DOCUMENT.
THROUGHOUT ITS PROCEEDINGS, HOWEVER, THE GROUP HAS
BEEN PARALYZED BY SHARP DIFFERENCES BETWEEN THE
"CENTRALISTS" LED BY MOSCOW AND THE "INDEPENDENTS,"
INCLUDING THE YUGOSLAVS, ROMANIANS, SPANIARDS, AND
ITALIANS. IN AN ATTEMPT TO GET AROUND THIS PROB-
LEM, A SUBCOMMITTEE DIVIDED EVENLY BETWEEN THE TWO
GROUPS WAS CREATED TO HAMMER OUT THE CONCLUDING
DOCUMENT, BUT DURING ITS MEETINGS FROM MID-APRIL
THROUGH MID-JULY NO PROGRESS WAS MADE, AND IT WAS
FINALLY ADJOURNED SINE DIE.Y
FOR THE PAST THREE MONTHS NO DRAFTING MEETINGS
OF ANY SORT HAVE BEEN HELD AS THE TWO CONTENDING
FACTIONS HAVE HARDENED THEIR POSITIONS AND REVIEWED
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THEIR STRATEGY. ON THE SOVIET SIDE, STINGING
DENUNCIATIONS OF MAOISM AND "OPPORTUNISTS" WILLING
TO MAKE POLITICAL ALLIANCES WITH "BOUR&EOIS" PARTIES
RATHER THAN ADOPT A REVOLUTIONARY PATH TO POWER
APPEARED IN AUGUST IN KOMMUNIST AND PRAVDA, RESPECTIVELY.
THE YUGOSLAVS AND WEST EUROPEANS HAVE RESPONDED WITH
SHARP COUNTERATTACKS IN THEIR OWN MEDIA. THE SOVIETS
AND EAST GERMANS, RECOGNIZING THE DEPTH OF THE DIF-
FERENCES BETWEEN THE TWO SIDES, CONCEDE PRIVATELY
THAT NO CONFERENCE IS LIKELY THIS YEAR AND SOME RE-
PORTS SAY THEY ARE RECONCILED TO PUTTING IT OFF UNTIL
AFTER THE SOVIET PARTY CONGRESS NEXT FEBRUARY.
FF THE
MEETING IS NOT HELD BEFORE THE CONGRESS, THE WHOLE
PROJECT COULD BECOME A DEAD LETTER FOR AT LEAST TWO
YEARS?Y
IN AN ATTEMPT TO GET A CONFERENCE ON TRACK
AGAIN, THE SOVIETS HAVE GIVEN UP PUSHING FOR A
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PROGRAM OF COMMON ACTION BINDING ON ALL PARTIC-
IPATING PARTIES AND HAVE OPTED INSTEAD FOR A STATE-
MENT OF PRINCIPLES WITH SOME BINDING PROVISIONS.
THIS, HOWEVER, IS STILL UNSATISFACTORY TO THE
ROMANIANS AND OTHER "INDEPENDENTS," AND THE SOVIETS
ARE TOYING WITH A VAGUE, NON-BINDING DECLARATION
TO AVOID SINKING THE CONFERENCE PROJECT. SOVIET
PARTY SECRETARY KATUSHEV'S SUDDEN ARRIVAL IN
BUCHAREST ON WEDNESDAY MAY BE AN EFFORT TO PUT
PRESSURE ON THE ROMANIANS TO SOFTEN THEIR POSITION?Y
MOSCOW IS NO LONGER INSISTING ON REFERENCES
TO ITS LEADING ROLE IN THE INTERNATIONAL COMMUNIST
MOVEMENT AND MAY BE WILLING TO DELETE REFERENCES
TO "MAOIST" SUPPORT OF OPPONENTS OF DETENTE IF THIS
.THREATENS THE HOLDING OF THE CONFERENCE. THE STICK-
ING POINT IS THE ATTITUDE TO BE TAKEN BY THE CON-
FERENCE TOWARD THE SOCIAL DEMOCRATIC PARTIES IN
WESTERN EUROPE. IF THE CHOICE COMES DOWN TO DESCRIBING
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THEM UNQUALIFIEDLY AS "PROGRESSIVE," AND THEREFORE
SUITABLE POLITICAL ALLIES, AS THE "INDEPENDENTS"
WISH, OR SCUTTLING THE CONFERENCE, MOSCOW WILL CHOOSE
THE LATTER. THE DEPTH OF MOSCOW'S COMMITMENT TO
ITS POSITION, SPELLED OUT IN THE ZARODOV PRAVDA
ARTICLE IN AUGUST, WAS UNDERSCORED BY THE PUBLICITY
GIVEN ZARODOV'S MEETING WITH BREZHNEV LAST MONTH,
AND THIS DOES NOT AUGUR WELL EITHER FOR NEXT WEEK'S
MEETING OF THE DRAFTING GROUP OR THE EUROPEAN COM-
S. EAST GERMANY: EAST GERMANY SUSPENDED DIPLOMATIC RELATIONS
WITH SPAIN THURSDAY AFTERNOON. THE ACTION WAS
FORESHADOWED WHEN EAST BERLIN RECALLED ITS AMBAS-
SADOR ON SEPTEMBZR 27TH "AS AN EXPRESSION OF ITS
STRONG PROTEST AGAINST THE EXECUTIONS OF THE FIVE
SPANISH PATRIOTS." EAST GERMANY IS THE ONLY WAR-
SAW PACT COUNTRY THAT HAS HAD FULL DIPLOMATIC--
AS DISTINCT FROM CONSULAR--RELATIONS WITH MADRID.
MUNIST CONFERENCE PROJECT AS A WHOLE.
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THE ACTION WAS ALMOST CERTAINLY TAKEN AT MOSCOW'S
BEHEST, AND MAY HAVE BEEN ARRANGED DURING FOREIGN
MINISTER GROMYKO'S BRIEF VISIT TO EAST-BERLIN
EARLIER THIS WEFK.
6. CZECHOSLOVAKIA: PRAGUE NOW APPEARS TO BE HOLDING OUT
THE POSSIBILITY THAT THOSE WHO WERE PURGED IN THE WAKE OF THE
"PRAGUE SPRING" COULD RETURN TO THE PARTY RANKS IF
THEY ARE WILLING TO RECANT AND "WORK FOR SOCIALISM."Y
THE REHABILITATION OF ALMOST HALF A MILLION
FORMER PARTY MEMBERS HAS REPORTEDLY BEEN A CENTRAL
ISSUE IN A MAJOR DISPUTE THAT HAS PITTED HARD LINERS
AGAINST MODEtiATES IN THE TOP PARTY LEADERSHIP. THE
HARD LINERS FEAR THAT ANY RELAXATION OF IDEOLOGICAL
VIGILANCE COULD EVENTUALLY RESULT IN A RETURN TO THE
DEVIATIONS OF THE "PRAGUE SPRING," WHILE THE MODER-
-ATES ARGUE THAT SELECTIVE REHABILITATION WOULD AID
THE SLUGGISH CZECHOSLOVAK ECONOMY. PARTY LEADER
HUSAK REPO'?TEDLY FAVORED 'EHABILITATING MEMBERS WITH
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:CHNICAL EXPERTISE AS EARLY AS L970, BUT HE HAS BEEN
FORCEFULLY BLOCKED BY THE HARD LINE FACTION OF PARTY
SECRETARY VASIL BILAK.Y
IN AN INTERVIEW LAST MONTH, HOWEVER, BILAK RE-
MARKED THAT THE MAJORITY OF THOSE FORMER PARTY MEM-
BERS WHO DID NOT PASS THEIR RELIABILITY CLEARANCE
CHECKS "ARE TRYING TO MAKE UP FOR PAST MISTAKES AND
ERRORS BY HONEST WORK" AND THAT "MANY BELIEVE THAT
WITH THE PASSAGE OF TIME THEY WILL BE READMITTED TO
THE PARTY." THESE REMARKS HAVE SUBSEQUENTLY BEEN RE-
PEATED IN THE PARTY PRESS, WHICH LABELED THE INTERVIEW
"A DOCUMENT OF EXTRAORDINARY IMPORTANCE" THAT HAS
"GENERATED CONSIDERABLE, AND FULLY JUSTIFIED INTEREST
ALSO IN OUR COUNTRY."Y
BILAK'S STATEMENT STOPS SHORT OF A FIRM COMMIT-
MENT TO REINSTATE PURGED PARTY MEMBERS. ITS EVASIVE-
NESS ON A TIME FACTOR SUGGESTS A COMPROMISE IN WHICH
THE HARD LINERS HAVE GIVEN SOME GROUND BUT HAVE NOT
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CAPITULATED. IT WILL NEVERTHELESS RAISE THE HOPES OF
THOSE INDIVIDUALS WILLING TO RECANT. THEIR EXPECTA-
TIONS WILL PROBABLY BE FUELED BY THE PROMISE THAT
"A PROGRAM WHICH ALL HONEST PEOPLE IN OUR COUNTRY
COULD UNDERSTAND AND ACCEPT" WILL BE WORKED OUT FOR
THE 15TH PARTY CONGRESS SCHEDULED FOR NEXT APRIL.Y
BY HOLDING OUT THE CARROT, THE REGIME MAY BE
TRYING TO DIVIDE THE RANKS OF THE r .IRGE VICTIMS,
SPLITTING THE DISSIDENTS--THE SMALL MILITANT MINOR-
ITY--AWAY FROM THE MAJORITY, WHO MIGHT BE SWAYED BY
THE PROSPECTS OF RECONCILIATION AFTER SEVEN YEARS
OF FRUSTRATION AND ECONOMIC HARDSHIP. SINCE THE
P40VEMBER PLENUM LAST YEAR, THE PARTY HAS GIVEN IN-
CREASING ATTENTION TO ECONOMIC PERFORMANCE, AND THE
FORMER PARTY MEMBERS ARE AN UNTAPPED OR, AT LEAST,
UNDER-UTILIZED RESOURCE, PARTICULARLY IN THE AREA OF
BADLY NEEDED MANAGERIAL TALENT.
7. HUNGARY: IN A RECENT SPEECH TO PARLIAMENT, PREMIER
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TOLD THE HUNGARIAN CONSUMER TO EXPECT A SLOWDOWN IN
IMPROVEMENTS IN THE STANDARD OF LIVING DURING THE
NEXT FIVE YEARS. HIS WARNING IS THE LATEST IN A
SERIES OF STATEMENTS BY HIGH-LEVEL HUNGARIAN SPOKES-
MEN THAT ARE INTENDED TO SCALE BACK POPULAR EXPECTA-
TIONS.Y
IN A PARTIAL PREVIEW OF THE FIVE YEAR PLAN,
WHICH WILL BE PUBLISHED WITHIN THE NEXT SEVERAL MONTHS,
LAZAR SAID THAT BUDAPEST CAN NOT AVOID FURTHER IN-
CREASES IN CONSUMER PRICES, AND REVEALED THAT "GUAR-
ANTEED" RISES IN LIVING STANDARDS WOULD BE "SEVERAL
PERCENT" LESS THAN IN PAST YEARS. HE IMPLIED THAT
INCREASES IN REAL INCOME WOULD BE ESPECIALLY MODEST
DURING 1976 AND 1977. A HUNGARIAN ECONOMIST TOLD THE
EMBASSY THAT THE REGIME WOULD LIKE TO HOLD THIS IN-
.CREASE TO 1.5 PERCENT PER YEAR, BUT WOULD PROBABLY
NOT DO SO BECAUSE OF THE DOMESTIC POL..ITICAL EFFECT.
REAL INCOME HAS BEEN INCREASING AT AN AVERAGE ANNUAL
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RATE OF 5 PERCENT SINCE 1970.'
L.A?,AR WAS FRANK ABOUT THE DIFFICULTIES THAT WEST-
ERN INFLATION AND RECESSION AND SOVIET. PRICE INCREASES
ARE CAUSING FOR HUNGARY. HE CALLED FOR GREATER WORKER
PRODUCTIVITY, CUTBACKS IN LUXURY IMPORTS, MORE EXPORTS,
AND'GREATER MODERNIZATION IN INDUSTRY. HE SAID THAT
THE OVERALL GROWTH OF INVESTMENTS WOULD BE HALF THE
FATE SUSTAINED DURING 1971-75, DESPITE AN INCREASE
IN ENERGY-RELATED INVESTMENT OUTL AYS.Y
ON THE SE1SITIVE SUBJECT OF MANAGEMENT POLICY,
LAZAR SUGGESTED A COMMITMENT TO BUDAPEST'S FLEXIBLE
ECONOMIC SYSTEM WHEN HE SAID "THERE IS NO NEED TO
CHANGE THE BASIC PRINCIPLES." HE CITED THE INITIA-
TIVE AND IMAGINATION OF ENTERPRISES AS A "PRECONDI-
TION" FOR NATIONAL ECONOMIC GROWTH. AT THE SAME TIME,
LAZAR ACKNOWLEDGED THAT SOME MODIFICATIONS ARE IN
THE WORKS THAT WILL INCREASE THE ROLE OF THE CEN-
TRAL BUREAUCRACY. LAZAR SAID "IT IS NOT OUR-AIM
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TO OVER-REGULATE," BUT POINTED TO CURRENT ECONOMIC
PRESSURES AS JUSTIFICATION FOR THE CHANGES.
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8. CZECHOSLOVAKIA: DISCUSSIONS OF BILATERAL ECONOMIC RELATIONS
DOMINATED THE VISIT OF IRANIAN PREMIER HOVEYDA TO
PRAGUE EARLIER THIS WEEK. THE CZECHS, ANXIOUS TO
GET FURTHER COOPERATION FROM TEHRAN, ROLLED OUT
THE RED CARPET, AND PRESIDENT HUSAK PRESENTED
HOVEYDA WITH THE COUNTRY'S HIGHEST AWARD, THE ORDER
OF THE WHITE LION, FIRST CLASSY
THE CZECHOSLOVAK MEDIA GAVE PROMINENT AND FA-
VORABLE PLAY TO CZECHOSLOVAK-IRANIAN RELATIONS
THROUGHOUT THE VISIT. A COMMENTARY IN THE PARTY
DAILY, FOR EXAMPLE, UNDERSCORED CZECHOSLOVAKIA'S
ROLE IN THE REALIZATION OF IRAN'S DEVELOPMENT PLANS
AND TEHRAN'S ELIMINATION OF "IMPERIALISTS" FROM KEY
SECTORS OF THE ECONOMY.Y
ACCORDING TO THE COMMUNIQUE ON HOVEYDA'S TALKS
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WITH PREMIER STROUGAL, THE TWO SIDES AGREED THAT
THE FORTHCOMING JOINT COMMISSION MEETING.IN TEHRAN
WOULD WORK TOWARD A LONG-TERM AGREEMENT ON ECONOMIC,
SCIENTIFIC, AND TECHNICAL COOPERATION. THE PREMIERS
ALSO DISCUSSED COOPERATION--INCLUDING JOINT PROJECTS
IN THIRD COUNTRIES--IN "NEW INDUSTRIAL" AND AGRICUL-
TURAL FIELDS. NO DETAILS WERE GIVEN. THE COMMUNIQUE
INDICATED THAT FINANCIAL COOPERATION WAS ANOTHER
TOPIC DISCUSSED. THIS SUGGESTS THAT AT LONG LAST
PRAGUE MAY BE ON THE VERGE OF ENTERING THE WESTERN
MONEY MARKET.Y
ALTHOUGH THERE WAS NO SUGGESTION IN EITHER THE
OFFICIAL COVERAGE OR IN THE COMMUNIQUE THAT THE SUB-
JECT OF OIL WAS BROUGHT UP, PREMIER STROUGAL WENT OUT
.OF HIS WAY TO SUPPORT THE 10-PERCENT INCREASE IN OIL
PRICES RECENTLY DECIDED BY THE OPEC NATIONS. ACCORD-
ING TO STROUGAL, CZECHOSLOVAKIA CONSIDERS THE INCREASE,
"AS DESIRED BY IRAN, VERY REASONABLE AND LOGICAL."
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CHINA: PEKING'S NATIONAL DAY REPORTING ON THE ECONOMY POINTS
TO A STRONG RECOVERY IN 1975 FROM THE SLOW GROWTH ACHIEVED LAST
YEAR-4'
ACCORDING TO FIGURES FOR THE FIRST'EIGHT MONTHS, OVERALL
INDUSTRIAL OUTPUT INCREASED 17.3 PERCENT COMPARED WITH THE SAME
PERIOD LAST YEAR. CRUDE OIL PRODUCTION REPORTEDLY WENT UP 25.5
PERCENT AND ELECTRIC POWER 15.7 PERCENT-.CONSIDERABLY SMALLER
INCREASES WERE IMPLIED FOR OTHER INDUSTRIES, INCLUDING SUCH
TROUBLED SECTORS AS COAL AND IRON AND STEEL. "GOOD HARVESTS" WERE
CLAIMED FOR SUMMER CROPS AND EARLY RICE, DESPITE ACKNOWLEDGED
DRY SPEELS, CONTINUOUS WET WEATHER, LOW TEMPERATURES, AND FLOODS
IN VARIOUS PARTS OF THE COUNTRY.'
THESE REPORTS DO NOT, HOWEVER, GIVE A TRUE PICTURE OF ECONOMIC
GROWTH. PEKING FAILED TO INDICATE THAT THE LARGE GAINS IN INDUSTRY
WERE ATTAINABLE MAINLY BECAUSE THE ECONOMY WAS OPERATING WELL BELOW
CAPACITY OVER MUCH OF LAST YEAR, AS A RESULT OF FACTIONAL STRIFE,
.LABOR UNREST, TRANSPORT TIE-UPS, AND SHORTAGES OF COAL AND OTHER
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RAW MATERIALS.
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ARGENTINA: ECONOMY MINISTER CAFIERO. WHO FOR A TIME HAD BENEFITED
FROM A RELATIVE POLITICAL LULL. IS COMING UNDER INCREASING PRES&tJRE
FROM UNION LEADERS FOR FURTHER WAGE HIKES-Y
SPOKESMAN FOR THE WORKERS CLAIM THAT CONTINUING 6JIG.i RATES OF
INFLATION HAVE BEGUN TO NEGATE HUGE INCREASES WON IN LAST SUMMER'S
CONFRONTATION WITH THE ADMINISTRATION- CAFIERO. WHO WAS A LANG-TIME
ADVISER TO PERONIST LABOR AND THUS FAR HAS ITS SUPPORT. SEEKS TO
STAVE OFF FURTHER WAGE INCREASES AS A VITAL PART OF HIS EFFORT TO
RESTORE ORDER TO THE ECONOMY. ALTHOUGH CAFIERO HAS ADMITTED THAT
WORKERS' PURCHASING POWER HAS DECLINED SINCE THE LAST INCREASE. HE
HAS'ALSO DECLARED THAT AN ADDITIONAL INCREASE IS NOT JUSTIFIED AT
THIS TIME AND THAT FURURE PAY HIKES SHOULD RE TIED TO INCREASED
PRODUCTIVITY?Y
IN CALLING FOR HIGHER SALARIES. LABOR SEADERS ARE RESPOR'DIMG
TO WORKER RESTIVENESS OVER THE CONSTANTLY RISING COST OF LIVING. THE
TOP UNIONISTS RICOGNIZE THE INFLATIONARY EFFECTS OF SUCH INCREASES.
BUT THEY NONETHELESS FEEL COMPELLED TO ECHO THE WORKERS' DEMANDS
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FOR MORE MONEY, LEST THEY LOSE CONTROL Of THE LA90R MOVEMENT. THE
ADMINISTRATION HAS RESPONDED BY ANNOUNCING PLANS TO FORM A NATIONAL
WAGE INSTITUTE TO EVALUATE THE EFFECTS of INFLATION AND RECOMMEND
SALARY INCREASES WHEN IT DEEMS THEM NECESSARY?Y
FEARING THE LOSS Of IS AUTHORITY, AT LEAST ONE TOP LABOR UEADER
HAS SIDED WITH PRESIDENT MARIA ESTELAPPERON IN HER RECENT POLITICAL
TROUBLES, IN HOPES THAT AY STRESSING HIS SUPPORT FOR PERONrSM AND
FOR THE HEIR Of THE DEAD LOADER, HE CAN MAINTAIN AIS PRESTIGE WITI1
WORKERS- SUPPORT FOR THE PRESIDENT, HOWEVER, PLACES HIM IN OPPOSI-
TION TO ACTING PRESIDENT LUDER, WHO LIKE MANY INFLUENTIAL MILITARY
MEN FAVORS PERON'S CONTINUED ABSENCE, If NOT HER OUSTER. CAFIERO MUST
REMAIN OUTSIDE THIS DISPUTE If HE IS TO RETAIN l.Rf1OR'S BACKING AND
AN EFFECTIVE ROLE ON THE LUDER TEAM?Y
MEANWHILE, THE ADMINISTRATION HAS ANNOUNCED TUUE CREATION OF A
NATIONAL DEFENSE COUNCIL TO CENTRALIZE AUTHNEZTY FOR THE ANTI-
TERRORIST EFFORT WITHIN THE FEDERAL GOVERNMENT, PARTICULARLY THE
ARMED FORCES. THE COUNCIL, LED BY THE ACTING PRESIDENT, IS MADE UP
OF THE DEFENSE MINISTER AND THE COMMANDERS OF TNF ARMED SERVICES.
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LUDER HAS COMPLETED FOR THE TIME BEING AT LEAST THE REORGANIZA-
TION OF TOE CABINET BY NAMING SUPREME COURT JUSTICE ARALIZ CASTEX
FOREIGN MINISTER. THE APPOINTMENT FREES ANGEL RO LCDO, WHO HAD PEE14
HEADING THE FOREIGN MINISTRY AS WELL AS THE INTERIOR JIINISTRY.TO
CONCENTRATE FITS FULL ATTENTION ON THE LATTER ANDPPOLITICALLY MORE
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1. EGYPT: THE EGYPTIAN STUDENT DEMONSTRATIONS HELD LAST WEEK
TO PROTEST THE SECOND SINAI DISENGAGEMENT AGREEMENT APPARENTLY GREW
OUT OF A WEEK-LONG "NASIRIST THOUGHT CONFERENCE" AT A CAIRO
UNIVERSITY. THE CONFERENCE ATTACKED THE GOVERNMENT ON A BROAD FRONT
AND CALLED FOR A RETURN OF NASIRISM?Y
ALTHOUGH SPEECHES AT THE CONFERENCE AND AN OPENING COMMUNIQUE
AVOIDED REFERENCE TO THE SINAI ACCORD AND REFRAINED FROM DIRECT
ATTACKS ON PRESIDENT SADAT, THE THEME OF THE STUDENT-SPONSORED
CONFERENCE WAS BITTER CRITICISM OF GOVERNMENT POLICIES IN GENERAL?V
IN THE FIRST ORGANIZED ATTACK ON THE GOVERNMENT IN SEVERAL
MONTHS, SPEAKERS WARNED AGAINST THE ALLEGED DANGERS OF THE
GOVERNMENT'S EFFORTS TO LIBERALIZE THE ECONOMY, DECRIED CORRUPTION
AND THE RISE OF "NOUVEAU RICHE CAPITALISTS," AND DENOUNCED THE.
RIGHTWARD TURN OF EGYPT'S SOLE POLITICAL PARTY. ORGANIZERS ARRANGED
FOR THREE OF N".S:R'S CHILDREN TO ATTEND, AND HIS SON-IN-LAW DELIVERED
A SPEECH LAMENTING EGYPT'S MOVE AWAY FROM NASIRISM.Y
IN AN EFFORT TO GAIN WIDE PUBLICITY, THE ORGANIZERS INVITED
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LARGE NUMBERS OF PRESS AND RADIO REPORTERS. ALL NEWS OF THE
CONFERENCE HAS BEEN SUPPRESSED, HOWEVER, EXCEPT IN LEFTIST STUDENT
WEEKLIES--AN OBVIOUS GOVERNMENT EFFORT TO AVOID FUELING FURTHER
PROTESTS.','
GOVERNMENT OFFICIALS ARE BECOMING INCREASINGLY CONCERNED THAT
THE OPENING OF THE SCHOOL YEAR ON OCTOBER 18 WILL BRING MORE
DISTURBANCES ON UNIVERSITY CAMPUSES. PRESIDENT SADAT SAID IN A
SPEECH LAST WEEK THAT HE WOULD NOT TOLERATE LEFTIST STUDENT
PROTESTS, AND HE UNDOUBTEDLY MEANS WHAT HE SAYS.','
SECURITY FORCES WERE MUCH IN EVIDENCE DURING THE CONFERENCE,
AND THEY CAN PROBABLY HANDLE ANY DISTURBANCES. THEY QUICKLY PUT
DOWN A SIZABLE LABOR DEMONSTRATION IN CAIRO ON NEW YEAR'S DAY
AND SUCCEEDED, THROUGH WIDESPREAD ARRESTS OF ACTIVE AND POTENTIAL
AGITATORS, IN DISCOURAGING A RECURRENCE.','
NONETHELESS, THE STUDENTS AND OPPORTUNISTIC POLITICIANS INCLINED
TO MANIPULATE THEM HAVE A REAL POTENTIAL FOR CAUSE FOR ADDITIONAL DIS-
CONTENT. ALTHOUGH MOST EGYPTIANS STILL APPEAR TO SUPPORT THE
DISENGAGEMENT AGREEMENT, THERE ARE LEGITIMATE ECONOMIC GRIEVANCES
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THAT LEFTISTS WILL PROBABLY ATTEMPT TO EXPLOIT.Y
THE DISENGAGEMENT HAS GIVEN AGITATORS ANOTHER EMOTIONAL ISSUE
OVER WHICH THEY MIGHT MORE EASILY STIRS UP TROUBLE. BECAUSE THE
DISENGAGEMENT HAS UNDERMINED THE POSITION OF LEADERSHIP IN THE ARAB
WORLD THAT NASIR BUILT UP FOR EGYPT, SADAT IS MORE VULNERABLE TO
CHARGES--EVEN FROM THOSE WHO DO NOT OPPOSE THE AGREEMENT--OF DESTROY-
ING THE NASIR LEGACY.','
IN AN EFFORT TO FOMENT DISCONTENT IN EGYPT ON PRECISELY THESE
GROUNDS, SOVIET AND SYRIAN PROPAGANDISTS INVOKED NASIR'S MEMORNY
EXTENSIVELY IN COMMENTARIES ON THE ANNIVERSARY OF HIS DEATH LAST
SUNDAY. NEITHER MOSCOW NOR DAMASCUS HAD EVER PREVIOUSLY TAKEN NOTE
OF THE ANNIVERSARY, AND THE SYRIANS WERE AT LOGGERHEADS WITH NASIR
DURING MOST OF HIS RULE.','
APPARENTLY FEARING THE EFFECT IN EGYPT OF AN EMOTIONAL APPEAL
.FOR THE RETURN OF NASIRISM, SADAT DURING HIS SPEECH ON THE ANNIVERSARY
DENOUNCED THOSE WHO, HAVING "SPENT THEIR LIVES COMBATING NASIR, ARE
NOW TRYING TO USE HIS HERITAGE AS MERCHANDISE AND AN EXCUSE TO ATTACK
EGYPT."
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2. ANGOLA: THERE HAS BEEN A LULL IN THE CIVIL WAR BETWEEN
THE TERRITORY'S THREE RIVAL LIBERATION GROUPS. ALL THREE GROUPS
APPEAR TO BE CONCENTRATING ON BUILDING UP THEIR SUPPLIES FOR MORE
SERIOUS FIGHT] NG IN THE NEAR FUTURE.'
NATIONAL FRONT FORCES IN THE NORTH HAVE NOT MOVED FORWARD
SIGNIFICANTLY SINCE MID-SEPTEMBER, WHEN THEY RETOOK THE IMPORTANT
JUNCTION TOWN OF CAXITO, SOME 40 MILES NORTHEAST OF LUANDA. THEY
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ARE, HOWEVER, PROBING OUTLYING DEFENSES OF THE POPULAR MOVEMENT
FOR THE LIBERATION OF ANGOLA-Y
In Corr' I /~-r\SoVo,{`rLCs ' -t:.e Vat~oc~,l d?t r&ror~P.~.~~AcE
NOVA LISBOA HAS BEEN A MAJOR REFUGEE RECEPTION CENTER, AND
A
THE LIBERATION GROUPS HAVE BEEN WAITING FOR THE EVACUATION OF
REFUGEES TO BE COMPLETED BEFORE LAUNCHING MILITARY OPERATIONS IN
THE AREA. THE AIRLIFT FROM NOVA LISBOA ENDS M.Y
PORTUGUESE EVACUATION EFFORTS WILL. NOW BE CONCENTRATED IN
LUANDA AND SEVERAL SMALL PORTS ALONG THE SOUTHERN AND CENTRAL
COAST- OFFICIALS IN LISBON ESTIMATE THAT 140,000 WHITES HAVE BEEN
AIRLIFTED FROM THE TERRITORY SINCE THE EVACUATION GOT UNDER WAY IN
EARLY AUGUST. ANOTHER 140,000 REFUGEES ARE STILL WAITING.'
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THE HIGH COMMISSIONER PROFESSES TO BE OPTIMISTIC THAT THE
POPULAR MOVEMENT AND THE NATIONAL UNION WILL COME TO A PPLITICAL
ACCOMMODATION, PERHAPS BY LATE OCTOBER. SO FAR, HOWEVER, THE
PORTUGUESE HAVE NOT BEEN SUCCESSFUL IN THEIR EFFORTS TO PROMOTE
SUCH AN ARRANGEMENT. THE POPULAR MOVEMENT STILL HOLDS THE ADVANTAGE,
BOTH POLITICALLY AND MILITARILY, AND SHOWS NO WILLINGNESS TO MAK!
CONCESSIONS TO ANYONE. ITS LEADERS EXPECT THAT ON NOVEMBER 11, LISBON
WILL HAVE NO ALTERNATIVE BUT TO LEAVE TH.E POPULAR MOVEMENT-IN CON-
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AT THIS STAGE, PROBABLY ONLY A MASSIVE MILITARY EFFORT BY THE
NATIONAL UNION AND THE NATIONAL FRONT SUBJECTING THE POPULAR MOVEMENT
TO INTENSE, SUSTAINED PRESSURE COULD MAKE THE MOVEMENT RELENT AND AC-
CEPT A COALITION GOVERNMENT. SO FAR, THE LEVEL OF MILITARY OPERATIONS
OF BOTH GROUPS DO NOT INDICATE THAT SUCH AN EFFORT IS DEVELOPING.
3. NIGERIA: THE PROGRAM ANNOUNCED THIS WEEK BY THE NEW NIGERIAN
::MILITARY REGIME FOR TURNING POWER BACK TO CIVILIANS WITHIN FOUR YEARS
HAS UNDOUBTEDLY UPSET IMPORTANT CIVILIAN GROUPS-STUDENTS,
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INTELLECTUALS, AND FORMER POLITICIANS-WHO WANT AN EARLY END OF
MILITARY RULE.'
THE REGIME'S EXTENSION OF THE BAN ON POLITICAL ACTIVITIES
I'OR AT LEAST THREE MORE YEARS WILL INCREASE SKEPTICISM ABOUT
THE MILITARY'S PROMISE TO HAND BACK POWER. THE NEW PROGRAM ALSO
PROVIDES NO CLUES ABOUT THE FUTURE SHAPE OF POLITICAL INSTITUTIONS
OR WHAT ROLE THE MILITARY ENVISIONS FOR ITSELF UNDER A CIVILIAN
GOVERNMENT.Y
THE PROGRAM WAS ANNOUNCED BY BRIGADIER MUHAMMED, WHO REPLACED
GENERAL GOWON AS HEAD OF STATE IN THE COUP LAST JULY, IN A SPEECH
ON WEDNESDAY MARKING NIGERIA'S 15TH ANNIVERSARY OF INDEPENDENCE.
IT CONTAINED A SERIES OF DEADLINES FOR ACCOMPLISHING MAJOR
NATIONAL TASKS THAT MUHAMMED INDICATED MUST BE COMPLETED BEFORE
THE GOVERNMENT COULD BE TURNED OVER TO ELECTED CIVILIAN
REPRESENTATIVES.''
DESPITE MUHAMMED'S ASSERTION THAT THE MILITARY DOES NOT
:INTEND TO STAY IN OFFICE A DAY LONGER THAN NECESSARY, THERE IS
LITTLE DOUBT THAT THE REGIME INTENDS TO CONTROL THE PACE AND
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DIRECTION OF ITS PROGRAM. MUHAMMED AND OTHER KEY MEMBERS OF THE
SUPREME MILITARY COUNCIL SAY PUBLICLY THAT NIGERIAN UNITY AND
STABILITY ARE THE FIRST PRIORITIES. IFS NIGERIA'S TRIBAL AND
REGIONAL ANIMOSITIES GET OUT OF HAND, THE REGIME PROBABLY WOULD
NOT HESITATE TO RENEGE ON ITS PROMISE TO RESTORE CIVILIAN RULE.Y
THE NEW MILITARY LEADERSHIP DISTRUSTS THE COUNTRY'S OLD-LINE
CIVILIAN POLITICIANS, WHOSE ETHNIC POLITICS LED TO TWO MILITARY
COUPS IN 1966 AND A CIVIL WAR A YEAR LATER. THE POLITICIANS ARE
STILL AROUND AND IT'IS UNCLEAR HOW THE MILITARY LEADERS INTEND TO
HANDLE THEM AS THEY MOVE TOWARD CIVILIAN RULE. NONE OF THE
CIVILIANS HAS POLITICAL SUPPORT THAT TRANSCENDS EITHER AN ETHNIC 25X1
OR SECTIONAL BASE, AND NONE OF THE YOUNGER, MORE NATIONALISTIC
POLITICIANS HAS ENOUGH SUPPORT YET TO BE A FACTOR.
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