WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A005000130001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 30
• Document Creation Date: December 20, 2016
• Document Release Date: March 23, 2006
• Sequence Number: 1
• Publication Date: November 5, 1965
• Content Type: SUMMARY

2007/03/07: CIA-RDP79-00927A00 130001-4
f.CENTRAL INTELLIGENCE AGE
OFFICE OF CURRENT INTELLIGENCE
State Dept. review completed
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(Information as of noon EST, 4 November 1965)
VIETNAM
There have been no major Viet Cong initiatives since
last week's sabotage effort against US air installations
at Da Nang and Chu Lai, but reports of infiltration by
additional North Vietnamese units and of regrouping of
Communist forces in the I, II, and III Corps areas may
foreshadow new large-scale activity. Vietnamese Com-
munist propaganda is showing sensitivity over the growing
number of reports implying that the US buildup is taking
the military initiative from the Viet Cong. Hanoi's
defensive tone probably reflects to some extent the mixed
advice it is getting from its allies.
The Communist World
PROGRESS OF THE SOVIET MILITARY AID PROGRAM
Soviet efforts to fulfill this year's arms agreements
are reflected in a recent surge of military cargo de-
liveries, and the flow is expected to increase further
to meet year-end quotas.
Asia-Africa
AFRO-ASIAN CONFERENCE SEEMS OFF FOR GOOD
Indefinitely postponed from 5_ November chiefly at the
insistence of the Chinese, it is unlikely to be backed
again by many non-Communist nations. Peking's heavy-
handed pressure tactics probably cost it prestige in
Africa.
INDONESIAN ARMY PRESSES CAMPAIGN AGAINST COMMUNISTS
While fighting armed Communists in Central Java and
fostering criticism of Foreign Minister Subandrio and
the Chinese Communists, the army is Still avoiding any
open break with President Sukarno.
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INDIA AND PAKISTAN IN ECONOMIC SHIFTS 10
They are giving higher priority to defense needs at
the expense of economic programs. Moscow is suggesting
it may give more economic aid to Pakistan. Minor cease-
fire violations continue.
11
US ROLE AT ISSUE IN OKINAWAN ELECTIONS ON 14 NOVEMBER
All parties are urging that the chief executive of the
Ryukyuan Government be popularly elected rather than ap-
pointed by the US.
LAOTIAN MILITARY SITUATION STABILIZING 12
Limited rightist offensive operations continue in the
north, but the Communists' truck traffic both there and
in the south appears to be resuming with the end of the
rainy season.
REFORM PROGRESS AT STAKE IN 9 NOVEMBER PHILIPPINE ELECTION 12
Both President Diosdado Macapagal, seeking re-election,
and his main challenger, Ferdinand Marcos, are Western
oriented. The winner's ability to institute needed
reforms will be limited by a closely balanced Congress.
IRANIAN - SOVIET BLOC ECONOMIC RELATIONS EXPAND 15
This trend will probably continue at a very gradual
pace. It offers Iran, besides commercial advantages,
the chance to demonstrate some freedom of action despite
its close Western ties, and it enhances the USSR's ef-
fort to encourage an "independent" nonalignment in Iran.
RHODESIAN INDEPENDENCE AGAIN DELAYED 16
The agreement on a joint Rhodesian-British Royal Com-
mission has put off Salisbury's threatened unilateral
declaration for the moment, but radicals in the Rhodesian
governing party may upset the arrangement.
TRIBAL TENSIONS REMAIN HIGH IN BURUNDI 17
The King's departure for an extended stay in Europe opens
the way for the extremist anti-Western leaders of the
Tutsi minority to bid for power.
Europe
EEC COUNCIL MEETS AS FRENCH BOYCOTT CONTINUES
At last week's meeting, the five participates EEC members
held out concessions aimed at inducing France to re-
occupy its empty chair, but they also laid the basis for
proceeding if need be as an interim community of five.
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FRENCH FOREIGN MINISTER'S VISIT TO MOSCOW
The growing French-Soviet contacts serve the foreign
policy interests of both sides to some extent, but
there appears to be little prospect at present of an
entente that would seriously affect East-West issues.
SOME PROGRESS MADE IN NATO-MALTA RELATIONS
The NATO resolution accepted by Malta last week is a
step toward an eventual permanent association and
strengthens an earlier tentative agreement to keep
NATO's top Mediterranean naval headquarters in the new
island nation.
Western Hemisphere
THIS WEEK IN THE DOMINICAN REPUBLIC 22
The government is planning to make some changes in the
military high command and to send leading rebels into
diplomatic exile--moves that may improve the outlook
for short-term political stability. The most serious
obstacle is still the attitude of military leaders.
BRAZILIAN PRESIDENT USING BROAD NEW POWERS CAUTIOUSLY 24
Castello Branco apparently intends to achieve his goals
by persuasion, where possible. Administration leaders
emphasize that there will be no intervention in the
state governments or removal of congressmen "unless
demanded by the situation."
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Reports of infiltration by
additional North Vietnamese
(PAVN) units into South Viet-
nam and of regrouping of enemy
forces in the I, II, and III
Corps areas may foreshadow large-
scale Communist activity.
The three regiments of the
PAVN 325th Division, believed
to have been operating in the
central highlands area of South
Vietnam during the summer months,
have moved into the coastal
provinces of Binh Dinh and Phu
Yen and into Quang Duc Province.
Within the last two months, they
have been augmented by the ar-
rival from the DRV of one and
possibly two PAVN regiments now
located in Pleiku Province, and
another regiment in Quang Duc
Province.
Other reports have pointed
to the continuing presence of a
sizable Communist force in the
Ba Long valley area of Quang Tri
Province, recently the scene of
an unsuccessful Viet Cong -
multibattalion attack.
There have been no major
Communist military initiatives
since the Viet Cong's sabotage
effort directed at US Marine
air installations at Da Nang
and Chu Lai on 27-28 October.
On 30 October US troops killed
more than 50 Viet Cong during
an attempted night attack by
several enemy companies against
the main air base at Da Nang.
In the central highlands area,
elements of the First US Cavalry
Division conducting clearing
operations near the Plei Me Spe-
cial Forces camp suffered only
light losses while killing some
95 Communist troops and captur-
ing 40 others on 31 October and
1 November. Elsewhere, major
US and Vietnamese operations
continued without significant
enemy contact, but Viet Cong
terrorism and small-scale sabo-
tage remained widespread.
North Vietnamese Air Defense
US Air Force and Navy air-
craft provoked a vigorous but
unsuccessful defensive effort
by North Vietnamese missile and
antiaircraft artillery instal-
lations on 31 October in the
vicinity of Kep. Strike air-
craft completely demolished a
major highway bridge and heavily
damaged three SAM sites. Some
13 missiles were fired at US
aircraft but all missed their
mark. The spirited defense put
up by the Vietnamese underscores
their concern over keeping open
the vital lines of communication
between Hanoi and China.
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Hanoi Defends VC Capabilities
Vietnamese Communist propa-
ganda is showing some sensitivity
over the growing number of re-
ports which imply that the US
build-up in South Vietnam is
taking the military initiative
from the Viet Cong. Last
week Hanoi took special pains
to refute allegations that
the Viet Cong's monsoon cam-
paign was a failure, calling
the claims a "propaganda stunt."
According to Hanoi, the VC
have been achieving spectacular
victories regularly in all
types of climate and further
disastrous defeats are in store
for the US and South Vietnamese
forces as dry weather settles
in for the next few months
over much of South Vietnam.
Radio Hanoi played up last
week's attacks on Plei Me, Chu
Lai, and Da Nang as proof that
the Communists still retain the
military initiative and that
they had not been reduced to
"Just hit-and-run guerrilla
skirmishes."
The defensive tone of
this propaganda is apparently
not solely a reaction to West-
ern press reports. It prob-
ably also reflects the mixed
advice that Hanoi is getting
from its Communist allies.
The East European press
last week ran several commen-
taries which cast some oblique
aspersions on Viet Cong in-
vincibility. On 25 October a
Sofia daily claimed that with
the passing of the monsoon sea-
son, the Communists had lost a
tactical advantage. The
paper contrasted the great en-
ergy of the Americans in wag-
ing defensive operations dur-
ing the monsoon season with the
small unit operations of the
guerrillas. The article was
implicitly critical of this
strategy, noting that the guer-
rillas "did not commit them-
selves to large operative
tasks."
A series of eyewitness
reports on Vietnam by a Hun-
garian correspondent also pre-
sented a rather sober assess-
ment of the Communist mili-
tary situation. Although
the commentary routinely argued
that there can be no doubt of
the final victory of the Viet-
namese insurgents, it also im-
plicitly warned that the dura-
tion and cost of the conflict
must eventually affect North
Vietnam as well as the US. Mos-
cow's commentary has been more
in line with Hanoi's public
stance.
The Chinese Communists
have not generated any signifi-
cant original comment on the
individual battles in South
Vietnam for some time. Chinese
propaganda has for the most part
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been limited to a selective
rebroadcasting of DRV material.
This contrasts with the trend
last summer when Chinese propa-
ganda was loudly touting the
alleged Communist victories
at Song Be and other sites.
Peking has, however, con-
tinued to use the Vietnamese
war as an issue in its dispute
with Moscow and to charge So-
viet collaboration with the US
to "sell out the Vietnamese
people." In support of the
Soviets, Hungary and Czechoslo-
vakia have increased their at-
tacks on Peking's Vietnam pol-
icy. Radio Prague last week
called Peking's advice to con-
tinue the war despite its present
costs an "example of China's
unrealistic and war seeking pol-
icies."
PROGRESS OF THE SOVIET MILITARY AID PROGRAM
A recent surge in deliv-
eries of military cargoes
abroad reflects Soviet efforts
to fulfill arms pacts con-
cluded in the past year. The
flow is expected to increase
further as shippers try as
usual to meet their year-end
quotas.
In recent weeks three
shiploads of military materiel
plus a subchaser have arrived
in Algeria. These shipments--
probably largely arranged by
Colonel Boumedienne when he
visited Moscow last May--sup-
plement materiel provided under
the original 1963 arms pact. In
addition to acquiring late-
model rocket launchers, armored
cars, and artillery, Algeria
will be able to strengthen its
air defense with newly received
surface-to-air missiles, which
were displayed in the 1 November
military parade in Algiers.
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More naval ships and aircraft--
possibly SU-7 jet fighter-bomb-
ers--may arrive soon.
Military deliveries to
Egypt under the massive arms
pact of November 1964 are pick-
ing up. Soviet ships recently
have delivered new artillery
and tanks, and a second ship-
ment of SU-7 aircraft is be-
lieved to have arrived last week.
Deliveries to Yemen under
the July military aid arrange-
ment are expected to continue.
The most recent shipment in mid-
October included two P-6 motor-
torpedo boats.
No major shipments to Iraq
have taken place this year, but
the army deputy chief of staff
declared Iraq would shortly re-
ceive a "number of most modern
MIG aircraft." He was probably
referring to the 20 MIG-21 all-
weather fighters ordered in
June 1964.
Negotiations with Indi2
have continued throughout the
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Kashmir crisis. More tanks and
artillery are to be delivered
by the end of this year and ad-
ditional MIG-21 aircraft are
expected to be shipped by Janu-
ary. Indian arms missions are
still scurrying to Moscow--one
recently ordered T-55 tanks--
and delivery dates for planes
and ground equipment scheduled
for 1966 may be advanced.
New delivery schedules for
military equipment to Indonesia
also may be set whenever the
political situation there sta-
bilizes. Moscow had agreed to
delivery in 1965 of all-weather
MIG-21 aircraft, naval vessels,
and AN-12 transports.
Shipments elsewhere have
been spotty. Small naval ves-
sels have been delivered to
various African countries i
Moreover, the Cuban defense min-
ister, now in Moscow, may be
pushing for more shipments to
Havana. This year only three
ships have delivered full mili- 25X1
tary cargoes to Cuba, just
enough to maintain the Soviet
military aid program.
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Asia-Africa
With the indefinite post-
ponement of the second Afro-Asian
Conference, which was to begin
on 5 November in Algiers, it now
is doubtful that such a meeting
will be held any time in the
foreseeable future.
During their preconference
consultations in Algiers from
28 October to 2 November, African
and Asian foreign ministers were
in sharp disagreement on a wide
range of issues. Many of their
governments, moreover, had long
been lukewarm to a chiefs-of-
state gathering. Faced with
China's boycott and the prospect
of many absentees, the foreign
ministers proposed that the sum-
mit conference be put off until
conditions were "more favorable."
As a face-saving device, they
recommended that the conference
be convened in Algiers at "a
date to be fixed later," and
that a 15-nation preparatory com-
mittee be set up.
The ministers failed to set-
tle the question of Soviet par-
ticipation. This issue is likely
to recur in any future discus-
sions of a conference. Peking
will remain adamantly opposed,
especially in view of what the
Chinese must see as the success
of their obstinacy ir. demanding
the postponement.
The postponement is a Pyr-
rhic victory for Peking. Because
of its heavy-handed pressure tac-
tics, China's relations with
some African countries,particu-
larly Algeria, will probably be
cool for some time. The Chinese
antagonized a number of African
leaders, and may have raised
doubts throughout Africa about
whether China is really interested
in an Afro-Asian movement unless
it can have the controlling
voice. Many African moderates
have long doubted the value of
any kind of Afro-Asian confer-
ence and may come to see meet-
ings of the Organization of
African Unity as more useful
than large gatherings where East-
West and Sino-Soviet rivalries
are likely to be injected.
The decision to call off
the conference probably comes
as a relief to the Algerians.
While the Boumedienne government
fulfilled its role as host by
completing the necessary physical
preparations begun by the Ben
Bella regime, Premier Boumedienne
himself reportedly was never en-
thusiastic and appeared eager
to get it out of the way and
move ahead on Algeria's many in-
ternal problems. With the need
to maintain an atmosphere of
stability now removed, he may
reshuffle his cabinet to broaden
the regimd's base. Among those
mentioned as possible losers is
Foreign Minister Bouteflika, a
strong supporter of Boumedienne
in the coup against Ben Bella.
Differences have reportedly
arisen between the two men, due
in part at least to Bouteflika's
efforts to hold the conference on
schedule.
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INDONESIAN ARMY PRESSES CAMPAIGN AGAINST COMMUNISTS
The Indonesian Communists'
armed opposition to the army con-
tinues to mount. The army, mean-
while, is still avoiding any direct
criticism of President Sukarno but
is pressing its campaign against
Foreign Minister Suba.ndrio and Chi-
nese Communist influence.
In Central Java, the Commu-
nists' stronghold, the army claims
to have killed, captured, or ar-
rested hundreds of Communist youths.
On 1 November it scored a major
psychological gain when Sukarno
confirmed the earlier declaration
of a "state of war" by the provin-
cial military command. This was
Sukarno's first public acknowledg-
ment of armed Communist activity.
The army is nevertheless handi-
capped by its doubts about the
loyalty of its troops in Central
Java. According to the US Embassy,
military leaders are uncertain
about eight of the 19 combat bat-
talions in that province. Loyal
troops are being sent in from Su-
matra and Borneo and questionable
units transferred out.
The campaign against Subandrio
is gaining momentum. On 29 Octo-
ber a. Djakarta Muslim newspaper
and a Muslim political party called
for his expulsion from the cabinet.
On 3 November army commander Su-
harto stated that Suba.ndrio's Cen-
tral Intelligence Bureau ultimately
would be "coordinated" with the
army-controlled Supreme Operations
Command.
In its anti-Chinese efforts,
the army inspired a demonstration
of some 100,000 persons against
Peking's consulate in Medan, North
Sumatra, on 2 November. A petition
was presented protesting alleged
Chinese support for the 30 Septem-
ber movement, and the crowd tore
down the flag and consular shield.
In an even sharper break with past
policy, the army had already sus-
pended all exports to Communist
China. This has not yet been an-
nounced in the press, possibly be-
cause Sukarno has not been con-
sulted or, if consulted, did not
agree.
Army leaders believe that
continuation of the present un-
settled conditions will facilitate
its suppression of the Communists,
but still feel obliged to pay lip
service to Suka.rno's role in view
of his unrivaled political posi-
tion. Thus, on 30 October Suharto
publicly stated that the army
would unreservedly respect Sukar-
no's decision with respect to a
political settlement,but obliquely
criticized him by adding that
a "gloomy social-economic atmos-
phere--created beforehand" had
contributed to the current unrest.
Former air force chief Mar-
shal Dani, who was deeply involved
in the 30 September plot, arrived
in Amsterdam on a purchasing mis-
sion on 30 October. By earlier
reports the army had returned him
to Djakarta and placed him under
detention.
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INDIA AND PAKISTAN IN ECONOMIC SHIFTS
India and Pakistan each con-
tinue to report minor cease-fire
violations, but both countries
now are turning their attention
to the political aspects of their
dispute and to budgetary adjust-
ments impelled by the recent
fighting.
At the UN, lack of unanimity
in the UN Security Council has
blocked any new resolution call-
ing for strict observance of
the cease-fire and withdrawal
of the opposing armies to posi-
tions held prior to 5 August.
A deadlock has developed on a
result of Soviet efforts to
limit the secretary general `s
authority by putting a three-
month limit on the newly re-
cruited UN observer mission along
the Indo=Pakistan border.
The Pakistani Government
appears to be adopting a some-
what less instransigent position
toward a political settlement.
It may be reacting to the gen-
eral deterioration of its mili-
tary position caused largely by
the termination of US military
assistance. In speeches on 27
October and 1 November, Presi-
dent Ayub did not repeat pre-
vious demands for a plebiscite
for Kashmir but stressed the
need for India and Pakistan to
live in peace on terms "honor-
able" to both countries. A
high Pakistani official termed
the first speech a "carefully
phrased olive branch to India."
Economic dislocations,
caused in part at least by the
recent conflict and resultant
loss or reduction of foreign
military and economic assistance,
continue to be felt in both
countries. Although Indian of-
ficials state that no decision
to increase the military budget
has yet been taken, it appears
that the Indians have in fact
decided that defense and defense-
related expenditures will be
accorded higher priority in
the future than civilian-
oriented development projects.
On 29 October, Rawalpindi an-
nounced that $166 million would
be diverted for defense needs
from the $886 million originally
programed for economic develop-
ment in the year ending June
1966.
Pakistan may benefit from
further Soviet aid to its third
five-year plan (1965-1970).
Before hostilities broke out,
the Soviets reportedly had of-
fered "substantial assistance"
and in recent weeks several
Soviet delegations have been
discussing a wide range of pos-
sible aid projects.
The USSR may hope that eco-
nomic aid offers will encourage
Pakistan to pursue a course
more independent of the West
and particularly China. How-
ever, the scope of any further
Soviet aid to Pakistan will be
tempered by Moscow's recognition
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that meaningful political divi-
dends would flow only if it
simultaneously decreased its
support of India--still a key-
stone of Soviet policy in South
Asia. For several years the
Soviets have provided large-
scale economic and military aid
to India.
Pakistan is not known to
have received any significant
Communist military aid., While
Peking has engaged in military
talks with Rawalpindi, it prob-
ably could not sustain a military
aid program that would be attrac~
tive to the Pakistanis.
US ROLE AT ISSUE IN OKINAWAN ELECTIONS ON 14 NOVEMBER
The 14 November triennial
election for the Ryukyuan legis-
lature has assumed importance
chiefly for its bearing on the
subsequent selection of the chief
executive of the government on
Okinawa.
All parties are pressing
for popular election of this
official rather than, as at
present, his appointment by the
US administration following
nomination by the Ryukyuan leg-
islature. The conservative ma-
~jority party, the Democratic
Party (DP), had earlier expressed
to US authorities its willing-
ness to accept temporarily a
system of indirect election by
the legislature. After the elec-
tion,however, the party may
feel obliged to oppose this be-
cause of its participation in
the campaign clamor for his
public election.
A leftist coalition is fo-
cusing on the chief-executive
question in challenging the DP's
control of the legislature, which
is being expanded from 29 to 32
seats. With 18 seats needed for
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a working majority, political
observers favor the DP to win
16, and believe it has a fight-
ing chance for five more. Its
chief rival, the Okinawa Social-
ist Masses Party (OSMP), is rela-
tively moderate in orientation
and holds only seven seats but
now is working with the smaller,
radical Socialist Party and the
Communist-controlled People's
Party to elect a leftist majority.
The triparty coalition arrange-
ment has not been achieved in all
districts, but it is strengthen-
ing the prospects of leftists in
several close races.
Leftist success in denying
the DP a working majority would
aggravate the US administration's
problems in dealing with the leg-
islature. Although US executive
orders empower the US high com-
missioner to override an impasse
in the legislature, exercising
this authority could embroil Ja-
pan in the situation. Japan's
ruling Liberal Democrats feel po-
litically compelled to support
in principle the extension of
Ryukyuan autonomy.
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The military situation in
Laos appears generally to be stabil-
ized, with only limited rightist
offensive operations continuing in
the north.
North of the Plaine des Jarres,
regular and Meo guerrilla forces
under the command of General Vang
Pao are expanding their area of
control along Route 6 between Ban
Ban and Samneua. Only a few months
ago these forces were compressed
in the area immediately surround-
ing Na Khang, a key Meo strong-
point in the hills north of Ban
Ban. Since then, Vang Pao has
moved his forces north past Hua
Muong, and in recent weeks has
pushed south to recapture posi-
tions at Houei Sa An and Muong
Kha o .
The Communists, however, may
be beefing up their forces for
countermoves in the area. Sup-
plies have been spotted moving
north from Ban Ban, and there are
indications that Route 7--closed
since the beginning of the rainy
season last June--may be open for
limited truck movement from North
Vietnam. Sizable truck convoys
were seen moving near Ban Ban at
the end of October.
In other areas where govern-
ment troops have recently been
engaged in clearing operations
against the Communists,there has
been little conflict and the posi-
tions have stabilized. Rightist
units west of Luang Prabang are con-
solidating their hold on the north-
ern bank of the Mekong following re-
cently concluded mopping-up opera--
tious. In central Laos, government
forces have concluded a clearing op-
eration north of Thakhek and now
are positioned on the west bank of
the Nam Theun River.
The air force continues to
play an important role in govern-
ment operations, averaging about 150
attack sorties a week over the past
few months. Originally assigned a
bombing role to counter Communist
attacks on the Plaine des Jarres in
the spring of 1964, it has since ex-
panded its attack operations to al-
most all of the Pathet Lao - con-
trolled territory.
In the panhandle, there is
fragmentary information suggesting
that the North Vietnamese have re-
sumed at least :Limited truck resup-
ply operations. Recent photography
has indicated that the Mu Gia Pass
is open for trucks and that a road
net leading southward--including
several new roads--may be almost
ready to carry through truck traf-
fic to the South Vietnamese border
area.
The Philippine elections of
9 November are expected to be
close, but no major foreign or do-
mestic policy differences among
the candidates have emerged dur-
ing the campaign. In the presiden-
tial contest, some 9 million voters
will choose between the incumbent,
Diosdado Macapagal of the Liberal
Party (LP), and Senate President
SECRET
25X1
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 SECRET
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NAMES AID ARE NOT NGC G96ARIL Y AUTTHHOO.RITATIVE
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i Demarcation Line
?Dong Ha
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SECRET
Ferdinand Marcos of the Naciona- LP is given the edge in the con-
lista Party (NP). Raul Mangla- ( test for the House because of
pus, candidate of the Party of the generally stronger position
Philippine Progress, is expected of incumbent congressmen and
to run a poor third. All three the superior resources of the
are committed to continued close Macapagal administration.
relations with the United States
and the West.
Because of the lack of fund-
amental policy differences at-
tention is being focused prin-
cipally on Macapagal's record
and the personal qualifications
of Marcos. Marcos charges the
Macapagal administration with
broken promises, high prices,
graft, and corruption. He also
criticizes Macapagal for inade-
quate maintenance of law and or-
der that has resulted in in-
creased smuggling and crime. In
turn, Macapagal points to his
land-reform law and the avail-
ability of low-priced rice, and
accuses the Nacionalista-con-
trolled Senate of obstructing
much of his promised reform pro-
gram. Macapagal alleges that
Marcos is corrupt and a murderer.
Also at stake are the vice-
presidency, one third of the
Senate's 24 seats, and all 104
seats in the House of Representa-
tives. The LP's Senator Gerardo
Roxas is expected to win the
vice-presidency, although a sub-
stantial victory by Marcos might
carry his running mate, Senator
Fernando Lopez, with him. A
4-4 division ~Lf the eight con-
tested Senate seats between the
LP and NP is indicated by a pub-
lic opinion survey, and would
leave the Nacionalistas with a
slim margin of control. The
Whatever the outcome, the
inclination and ability of the
winner to institute socioeco-
nomic reforms will determine
the future course of Philippine
politics and the country's con-
tinued stability. Without re-
forms, public discontent will
increase and be subject to ex-
ploitation by leftist elements,
which now are insignificant.
Macapagal's record in this re-
gard is no better than fair,
at least partly because of the
Nacionalistas' control of the
Senate. Marcos, too, however
good his intentions, would prob-
ably be initially handicapped
by a need to work with a Lib-
eral-dominated House.
Philippine election cam-
paigns traditionally have been
attended by violence, and re-
ports of politically inspired
incidents are increasing, with
some 30 persons killed thus far.
Macapagal has expressed a fear
that Marcos will foment civil
war if he is defeated. As a
precautionary measure, the con-
stabulary was placed on partial
alert on 2 November and will
advance to full alert two days
before the election. The armed
forces are prepared to take ac-
tion if major violence threat-
ens.
SECRET
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 Approved For Rel se 2007/0!Yk]CREIbP79-00927A0Q900130001-4
IRANIAN - SOVIET BLOC ECONOMIC RELATIONS EXPAND
The Soviet bloc, which has
long pressed Iran to expand eco-
nomic ties, has achieved some
success.
Iran has accepted a long-
standing Soviet offer to con-
struct a steel plant, and in
early October initialed an agree-
ment that provides also for the
construction of a machine-tool
factory and a gas pipeline. De-
tails of the projects and the
amount of Soviet credit involved
remain to be worked out.
A high-level Rumanian trade
delegation that recently visited
Tehran concluded a ten-year
agreement for an exchange of $100
million each way. Rumania ap-
parently obtained an Iranian com-
mitment to supply 3 million tons
of crude oil--the first to be ex-
ported to a bloc country by Iran.
For its part, Rumania reportedly
is to deliver a cement plant and
petroleum equipment, including
a small refinery.
Prior to 1963 when a Soviet
credit offer of $39 million was
accepted, Iran showed little
interest in bloc overtures and
the only bloc-sponsored projects
in the country were two sugar
refineries built by Poland un-
der credits of about $6 million.
The Soviet-Iranian economic
and technical cooperation agree-
ment of July 1963 paved the way
for closer ties. It provided
for Soviet assistance for the
construction of a dam on the
Aras River, the construction of
a number of grain silos, and the
development of Caspian Sea fish
hatcheries. Although there ap-
pears to have been little prog-
ress in the grain silo or fish-
ery projects, work is going for-
ward on the dam, which will prob-
ably take six years to complete.
This agreement was followed
by Iranian acceptance of long-
standing credit offers by Poland
of $15 million in early 1964 and
by Hungary of $10 million in May
1965. To date, however, little
use has been made of these cred-
its.
Moscow's aid program in Iran
is part of a continuing effort to
enhance the USSR's influence in
the pro-Western countries along
its southern border and to en-
courage them to pursue an "inde-
pendent" nonaligned foreign pol-
icy. Moscow does not anticipate
any quick political dividends.
As for Iran, the general
lessening of tensions between
the Soviet bloc and the West and
the feeling that the USSR no
longer constitutes an immediate
threat has led Tehran to welcome
bloc initiatives. Aside from
the commercial advantages, ac-
ceptance of bloc aid enables the
Shah to demonstrate that he re-
tains freedom of action despite
his ties with the West. In any
case, any significant further
increase in bloc activities in
Iran is likel to be 1
gradual.
SECRET
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SECRET
A last-minute agreement by
Prime Ministers Smith and Wilson
to establish a joint Royal Com-
mission has again delayed the
threatened Rhodesian unilateral
declaration of independence (UDI),
but the two sides are as far apart
as ever on the crucial issue of
progress toward rule by Rhode-
sia's African majority.
At the end of five days of
talks in Salisbury, Wilson ad-
vanced the idea of a commission,
evidently in an effort to gain
more time and to allow an aware-
ness of the economic consequences
of UDI to slow the Rhodesian
radicals' headlong rush toward
independence. The final agree-
ment resulted from the desire
of both governments to avoid the
onus for a final breakdown in
negotiations. The three-man
commission, composed of the Rhode-
sian chief justice and Rhode-
sian and UK appointees, would
be charged with deciding whether
the 1961 constitution, "with ad-
justments to make the country
independent," would be acceptable
to the people as a whole.
To break the deadlock be-
tween the two governments over
what these "adjustments" might
be, Wilson agreed to Smith's de-
mand that the commission present
the present constitution, with
only token revisions, to the
people. Wilson made it clear,
however, that the UK still be-
lieves this constitution is an
unacceptable basis for independ-
ence. He reserved the right to
renounce the method adopted by
the commission for canvassing
Rhodesian opinion, and would not
commit his government to accept-
ing the commission's final
report.
On the most vital point at
issue, Smith continues to make it
clear that the white Rhodesians
will determine the pace of African
political advancement. He prob-
ably would still prefer, if pos-
sible, to attain independence
with Britain's blessing rather
than provoke economic and polit-
ical retaliation, but is under
heavy pressure from the majority
of his Rhodesia Front party. The
US Consulate in Salisbury fears
that he may not be able to hold
this group in line for longer than
a week, and so be forced either
to pronounce the commission a
failure and declare UDI, or to
resign his office.
The leaders of Rhodesia's
divided African nationalist move-
ment have not modified signifi-
cantly their demand for majority
rule before independence. Indica-
tions are that they will refuse
to cooperate with the commission,
particularly since Smith would
not permit them to participate
freely in a nationwide constitu-
tional referendum.
In London, Wilson has clearly
strengthened his hand by meeting
the opposition insistence that
he explore all avenues of recon-
ciliation with Smith. He scored
a political triumph in Commons
this week when he detailed his
government's efforts to avert a
UDI. The US Embassy in London
comments that a noticeable result
of the trip is a strong bipartisan
stamp, at least for the moment,
on Wilson's Rhodesian policy.
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SECRET
The departure of Burundi's
King Mwambutsa on 2 November for
an extended stay in Europe opens
the way for a power bid by ex-
tremist anti-Western leaders of
the Tutsi minority. Tribal ten-
sions between the Hutu majority
and the Tutsis remain high in
the wake of last month's Hutu-
inspired coup attempt and the
subsequent executions of the Hutu
leaders.
The King in the past has
served as a moderating influence
in Hutu-Tutsi relations. US Em-
bassy officials feel that the
tribal cleavage is complete and
that a bloody Hutu-Tutsi struggle
for power is probably on the way.
At the moment the Hutus are virtu-
ally leaderless as a result of
the executions, although some of
the Hutu plotters escaped to
neighboring Rwanda.
Most immediately, extremist
Tutsi elements largely under the
leadership of former prime minis-
ter Andre Muhirwa seem bent on
establishing themselves in power.
They may be thwarted by a group
of moderate Tutsis who have some
backing in the army. If the ex-
tremists win out, however, it
seems likely that they will ask
the Chinese Communists to return--
their diplomats were expelled last
January. An extremist-inspired
anti-American campaign is under
way and may end in the expulsion
of US diplomats.
Europe
The Common Market members
that attended the meeting of the
EEC Council last week "appealed"
to France to reoccupy its empty
chair, but laid the basis for
proceeding if necessary as an
interim community of five.
At the Brussels meeting the
Five held out to Paris the pros-
pect of a favorable settlement
of the agricultural financing
issue which had precipitated the
French walkout. They also of-
fered an exceptional meeting of
the council without the commis-
sion in which the "general situa-
tion" of the community could be
discussed. The farm agreement
is contingent on a French re-
turn to Brussels, however, and
the Five have a "confidential"
understanding on resisting EEC
treaty changes or any other ar-
rangement to diminish the Com-
mission's powers or eliminate the
majority vote.
Paris has merely acknowl-
edged these offers, and there is
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P'"''N
SECRET
little prospect of any six-nation
meeting before early next year.
A French Foreign Ministry offi-
cial has told the US Embassy his
government expects such a meet-
ing "sometime, someplace." He
seemed supremely confident that
the Five would not insist on
Brussels as its locale and would
--after blowing more steam--
accept the "sensible" French
position on substance as well.
If the French showed any
real desire for compromise, pres-
sures on the Five to reciprocate
would no doubt become stronger
again. Some among them have al-
ready indicated they would not
be sticky about the site of "po-
litical" discussions, and even
the firmest among them--the
Dutch--would consider delaying
further expansion of the majority
rule until major agricultural
regulations have been decided
by unanimous vote.
In ruling out more far-
reaching concessions, however,
the Five have responded to the
further evidence that De Gaulle's
present demands could not be
met without changing the commu-
nity's basic character. Accord-
ing to the US Mission in Brussels,
the Five were "stiffened" not
only by Couve de Murville's hard-
line restatement of the French
position on 20 October, but
even more so by the widely cir-
culated reports of De Gaulle's
intransigence in his earlier
interview with the Dutch am-
bassador.
Barring some conciliatory
gesture from the French, it
therefore seems likely that the
EEC Council meeting now scheduled
for the end of November will
carry the Five farther along
the road of trying to proceed
without Paris. Several important
internal community matters are
expected to be considered at
that time. Moreover, the Five
are agreed that by the end of
January it will be necessary to
give the commission whatever
additional instructions are
necessary to get on with the
Kennedy Round.
How long this five-power
"coalition" can last, however,
is difficult to say because as
much may depend on Erhard's
leadership as on. De Gaulle's
stubbornness. The pro-French
wing of Erhard's coalition in
Bonn will be trying to prevent
any final rupture with Paris,
and despite their desire for an
anti-Gaullist front, the Five's
smaller three are showing some
uneasiness at the prospect of
German pre-eminence in the com-
munity. It would thus appear
that, if there is no reconcilia-
tion with France, the effort
to preserve the community would
sooner or later depend on re-
opening the question of Britain's
accession.
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Conversations just con-
cluded in the USSR between So-
viet leaders and French Foreign
Minister Couve de Murville
fostered Moscow's hopes for ex-
panding its contacts with Paris
and encouraging De Gaulle's pur-
suit of an independent policy.
Although the talks, which ended
on 2 November, apparently opened
no dramatic prospects for So-
viet-French cooperation, Paris
is probably satisfied to have
continued the dialogue that be-
gan with Soviet Foreign Minister
Gromyko's visit to France last
April. France has welcomed con-
tact with the USSR on a variety
of levels and subjects over the
last six months, and if, as ex-
pected, De Gaulle is re-elected
to another seven-year term in
December, he may accept a So-
viet invitation to visit the
USSR.
Couve engaged in a tour
d'horizon in separate talks with
Kosygin, Brezhnev, Mikoyan, and
Gromyko. The discussions seem
to have been purely exploratory.
Although the subject of Germany
was not specifically mentioned
in the final communique, it un-
doubtedly was thoroughly disc
cussed. The French, in fact,
informed the US Embassy in Mos-
cow that the Soviets were pre-
occupied with possible German
acquisition of nuclear weapons,
almost to the exclusion of other
topics such as Vietnam.
The communique emphasized
the concurrence of Soviet and
French views on certain major
international issues. Both
countries oppose US policy in
Southeast Asia and the creation
of a NATO multilateral nuclear
force, and favor greater Secu-
rity Council control over UN
peacekeeping operations. The
communique shed no light on dif-
ferences that are known to exist
on some aspects of such criti-
cal questions as European secu-
rity, nuclear nonproliferation,
and German reunification.
The communique was very
carefully worded on possible
Franco-Soviet space collabora-
tion and, according to the
French ambassador in Moscow,
the reference was inserted at
Soviet insistence. The commu-
niqud's failure to mention any
new projects indicates that no
firm decisions came out of the
specific talks on this subject
which took place recently in
Paris and undoubtedly will con-
tinue. Any agreements reached
are likely to be limited in
scope, but may involve a joint
effort to develop a communica-
tions satellite TV relay system
that both partners would hope
to use to undercut the US lead-
ership in this field.
With tensions high because
of the Vietnam crisis, the USSR
is anxious to stress the signifi-
cance of its dialogue with De
Gaulle. Although the growing
Soviet-French contacts serve the
foreign policy interests of each
side to some extent, there ap-
pears to be little prospect at
present of an entente between
the two that would have a seri-
ous impact on major East-West
issues.
SECRET
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The government of Malta last
week accepted a NATO resolution
that should ease the effort to
work out a permanent association
between the new island nation
and the Western alliance. The
resolution not only affirms NATO's
interest in Malta's territorial
integrity, political independ-
ence, and security, but also ex-
presses its members' willingness
to discuss these matters as well
as the question of future NATO-
Malta arrangements.
Before achieving independ-
ence in September 1964, Malta,
as part of the UK's European ter-
ritories, was within NATO's de-
fensive zone as defined by Arti-
cle 6 of the North Atlantic
Treaty. NATO's top Mediter-
ranean naval headquarters (HAFMED)
was located there, as was an im-
portant UK naval base. After
Malta's independence, however,
the UK naval presence practically
disappeared, and both Malta and
the Allied forces stationed there
ceased to be covered by the
treaty.
litical realities--specifically
Greek and Turkish rivalry with
Italy--also make it advisable to
keep HAFMED on Malta.
Although independent Malta
early agreed to respect HAFMED's
legal status for the time being,
NATO has since been searching for
a formula that would give Malta
substantial security guarantees
and provide for mutual consulta-
tion in return for a firmer guar-
antee that HAFMED could remain.
The recent agreement should ease
the Allies' immediate strategic
fears.
Malta's eventual relation-
ship to NATO, however, is likely
to remain an open question for
some time. For example, insist-
ence that the resolution be
worded so as to make NATO's sec-
retary general the point of con-
tact between Malta and the North
Atlantic Council reflected the
wariness of alliance members
against committing NATO to guar-
antee Malta's security at this
stage.
Maltese membership in the
alliance has been opposed by
France, which wants no expansion
of NATO's size or functions,
and by the Scandinavian members,
who feel Malta would be more a
liability than an asset. They
maintain this opposition despite
the testimony of military ex-
perts as to the island's stra-
tegic importance. In these ex-
perts' view, access to the east-
ern Mediterranean could be ef-
fectively denied to NATO naval
forces if use of Malta as an op-
erating base were impeded. Po-
SECRET
The pro-Western Borg-Olivier
government in Malta is dissatis-
fied with the provisional status of
its relation with NATO and can
be expected to keep alive hopes
for some form of alliance mem-
bership. It seems likely to win
next year's general elections
but if it should lose, the situa-
tion would be quite different.
Dom Mintoff, leader of the op-
position party, is hostile toward
NATO and is reputed to be soft
toward the Communist bloc.
ppaA l20 2d /07 RDP79-5 00927A005000130001-4 65
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CORSICA '
BALEARIC ALBANIA
y Valletta
M A L T A I6
7
GREECE
TUNISIA MALTA
MILES
49543
( UAR
LIBYA } (EGYPT)
SE CRE T
ISRAEL `.. :
JORDAN
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 Approved For Release 20Q-7;;;4-RDP79-00005000130001-4
ECRET
THIS WEEK IN THE DOMINICAN REPUBLIC
The Dominican Republic's
provisional government is plan-
ning a series of moves which,
if successfully executed, may
improve the outlook for short-
term political stability. I
The most serious obstacle
to these plans is the attitude
of the military leaders. Gar-
cia Godoy apparently hopes to
SECRET
ApproFMfo$$zelea-4 O K-RDPMM92TA005000130001-4
Western Hemisphere
 Approved For Relewee 2007/03/07SferPJ,9-00927A00p0130001-4
win their cooperation, thus
making the changes he desires
without forfeiting military
support for his government
and possibly triggering a mili-
tary coup attempt. The Pres-
ident may place more confidence
in the military if it is under
new leadership and be more
willing to utilize it for
internal security purposes
such as arms control.
Last week, however, some
600 officers presented Ambas-
sador Bunker with a petition
stating that they would resist
changes in the top military
leadership.
If the military leaders
have a chance to select their
successors and leave their
posts with honor, they may be
willing to cooperate with the
provisional government. On
the other hand right-wing
civilian plotters may try to
inflame the issue, and they
have had an unwitting assist
from Garcia Godoy, who has given
many officers the impression
that he plans no changes in
leadership at the present.
There is some indication 25X1
that rebel leaders may not re- 25X1
sist the President's plans for
their diplomatic exile.
At the same time, however,
no progress has been made on
arms collection or the integra-
tion of rebels into the military,
and a purge of leftist govern-
ment appointees does not seem
likely.
In the former rebel zone,
the presence of the Inter-Amer-
ican Peace Force has brought
about some normalcy. The major
Santo Domingo banks opened their
downtown offices for the first
time in over six months, and
the two major papers have resumed
publishing--offering moderate
commentary. in contrast to the
Communist line of Patria, pub-
lished by rebel ex remists,
which the provisional govern-
ment has kept closed.
SECRET
Approved Forpf Pea 2007) 4cIW-**M%-009 '1 066130001-4
 Approves r Release 20071 ;,~JA-RDP79- 7A005000130001-4
BRAZILIAN PRESIDENT USING BROAD NEW POWERS CAUTIOUSLY
Brazilian President Castello
Branco has proceeded cautiously
thus far in exercising the broad
new powers he acquired under the
second Institutional Act that was
promulgated on 27 October. He
apparently intends, at least ini-
tially, to employ persuasion
rather than arbitrary action to
achieve his goals. Administra-
tion leaders have emphasized pub-
licly, for example, that there
will be no intervention in the
state governments or removal of
congressmen "unless demanded by
the situation."
The regime apparently in-
tends to rely heavily on provi-
sions of the act regulating press
reporting of political statements
made by the opposition.
Some congressmen, such as ou e
de Andrade and Ivete Vargas, lead-
ers of the former Labor party's
left wing, may lose their man-
dates.
It appears likely that cab-
inet changes will be made soon
to give the government wider po-
litical representation. The gov-
ernment has also begun exploring
means of promoting the formation
of new political parties to re-
place the traditional ones abol-
ished by the Institutional Act.
The administration is giving
priority to organizing a "party
of the revolution" to assure that
the man elected to succeed Cas-
tello Branco will continue the
revolution.
Castello Branco's caution
may lead to further trouble with
those military elements that ex-
pect him to use his new author-
ity to the fullest and crack down
on opposition politicians and
subversives.
Castello Branco's personal
authority may indeed have slipped
during the past two weeks despite
the vast increase in presidential
powers accorded him by the new
act. There is some speculation
that he recognizes this and is
considering calling a presiden-
tial election within the next
few months.
Costa e Silva and to a
lesser extent Justice Minister
Juracy Magalhaes seem to have
gained stature, on the other
hand, and may well become dom-
inant influences in the adminis-
tration. Both are inclined to-
ward a firmer revolutionary line
than the President, although
there is no evidence that this
has affected their loyalty to
him. They will have decisive
roles to play in the power strug-
gle that is likely to develop
in the coming months over the
presidential succession.
SECRET
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