WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A006200010002-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 34
• Document Creation Date: December 20, 2016
• Document Release Date: June 8, 2006
• Sequence Number: 2
• Publication Date: December 15, 1967
• Content Type: SUMMARY

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DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
State Dept. review completed
Secret
47
15 December 1967
pp320/67
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(Information as of noon EST, 14 December 1967)
Far East
THE WEEK IN PERSPECTIVE
VIETNAM
The Communist "winter-spring" offensive has en-
countered a series of costly reverses and there
is evidence that enemy main force units hope to
evade major contact with allied forces on sweep
operations. On the political scene, the new Thieu
government has shown few signs so far of developing
promising new programs for the country.
PEKING STILL DEALING INDECISIVELY WITH CIVIL DISORDERS
The level of civil disorders remains high through-
out China, but leaders in Peking remain reluctant
to deal firmly with fractious and unruly Red Guards
who fight and disrupt transportation services.
PEKING REMAINS HOSTILE TOWARD BURMA
The worsening relations between Communist China and
Burma have been marked in recent weeks by increased
Chinese propaganda support for the insurgent Com-
munist Party of Burma.
Europe
THE WEEK IN PERSPECTIVE
FRENCH ARMS SALESMEN COURT ARABS
The French-Iraqi arms deal reportedly signed in late
November may be De Gaulle's first move toward re-
scinding his embargo on arms sales to all the belli-
gerents in the recent Arab-Israeli war.
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SOVIETS TO INCREASE SPENDING FOR "SCIENCE" AND SPACE
The Soviets :?lan in 1968 to increase expenditures
for "science" nearly 11 percent, almost double the
growth planned for this year.
USSR STANDS FAST ON GERMAN POLICY 12
Moscow's broadside against Bonn last week put it
clearly on record that the Soviets are holding the
line on their German policy. In essence the West
Germans were told that improved relations with the
USSR still depend on their acceptance of the results
of World War II.
:13
EAST GERMANY CURTAILS CONTACTS WITH EASTERN EUROPEANS
A recently issued East German directive curtailing
cultural exchanges with Eastern European countries
points out the Ulbricht regime's persistent ideo-
logical and political differences with'its allies.
14
NONPROLIFERATION TREATY NEGOTIATIONS AT IMPASSE
The control provisions of the draft nonproliferation
treaty are still the subject of controversy, and
the treaty is therefore not likely to be discussed
at this session of the UN General Assembly.
Middle East - Africa
THE WEEK IN PERSPECTIVE
GREEK COUNTERCOUP FAILS
An attempt by King Constantine to overthrow the
military government in Athens has failed. The junta,
with a newly juggled cabinet, seemed to be in full
control of the country on 14 December. The King and
his family have taken refuge in Rome.
YEMENI REPUBLICAN REGIME STALLS ]ROYALISTS 19
The royalist drive on Sana seems to have stalled,
primarily because of Soviet air attacks on royalist
positions.
CYPRUS DISPUTE AGAIN MOVING INTO DIPLOMATIC ARENA 19
Greek-Turkish tensions over Cyprus were relaxed mark-
edly prior to the abortive Greek royal coup attempt
on 13 December, and the island has since remained
generally quiet as the UN now considers a further
extension of its mandate.
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CONGOLESE ECONOMY WEATHERS MERCENARY CRISIS
The mercenary crisis did not seriously affect the
economic stabilization program, but Kinshasa faces
great problems in rehabilitating the economy after
seven years of turmoil.
Western Hemisphere
THE WEEK IN PERSPECTIVE
VENEZUELAN GUERRILLA ACTIVITY INCREASES 24
Two incidents in western Venezuela in the past two
weeks are reminders that the guerrillas, generally
quiescent for the past several months, retain a
capability for action.
FORMER DOMINICAN REBEL LEADER'S WHEREABOUTS REMAIN MYSTERY 25
Speculation that Colonel Francisco Caamano Deno is
in Cuba is adding to political tensions in Santo
Domingo.
COMMUNIST TRADE AND AID PROSPECTS IN LATIN AMERICA
Soviet Bloc trade with Latin America as a whole con-
tinues to be small and sporadic, but a recent flurry
of aid and trade offers may prove significant to
selected countries in the hemisphere.
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FAR EAST
Hanoi has again rejected United Nations com-
petence to deal with the Vietnam question. In its
first comment on US soundings concerning renewed
debate in the Security Council, Hanoi denounced
this step as an attempt to make the UN serve US
policy and to "scrap the 1954 Geneva agreements."
The National Liberation Front also denied that it
had tried to send representatives to the UN despite
U Thant's statement that such an approach had been
:made.
In a move to emphasize its ability and deter-
mination to continue the war without concessions,
Hanoi publicized a renewed pledge by Foreign Min-
ister Chen I of Chinese support "until complete
victory" has been won.
The struggle within the Chinese leadership
shows no sign of diminishing. The confusion and
indecision produced by this struggle underlie the
failure to deal firmly with unruly Red Guard groups
and to end civil disorders which have spread through-
out China.
The trend toward a moderation of the confron-
tation in Hong Kong continues. Local British au-
thorities seem to be more optimistic about the sit-
uation than at any time since demonstrations and
terrorism began last Spring,
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V[ETNAM
The Communist country--wide
"winter-spring" offensive has re-
cently encountered a series of
costly reverses.
The largest action occurred
last weekend when a three batt:al?-
ion enemy force engaged two bat-
talions of the South Vietnamese
21st Division in the Mekong Delta
province of Chuong '.Chien. Such
a concentration of enemy troops
is unusual in the delta where the
enemy for more than a year has
operated primarily in company-size
formations, and has launched only
occasional battalion-size attacks.
The encounter reportedly cost the
Viet Cong some 450 killed. Sixty
South Vietnamese were killed and
102 wounded.
Large-scale fighting con-
tinued in the rice-rich coastal
flatlands of northeastern Binh
Dinh Province near Bong Son where
elements of the 22nd Regiment, a
subordinate of the North Vietnam-
ese 3rd Division, have been at-
tempting to fight their way out
of an Allied encirclement. This
engagement--known as the "Battle
of Tam Quang"--has thus far re?-
sulted in more than 500 enemy
soldiers killed since it began
on 6 December. The fighting sug-
gests that the North Vietnamese
3rd Division forces, which have
suffered serious losses since
early 1966, have been reinforced
and resupplied.
There continues to be evi-
dence that some Communist main
force units hope to evade major
contact with allied forces on
sweep operations.
Elements of the North Viet-
namese 2nd Division also continue.
to avoid major confrontation with
US sweeps in central I Corps.
This division, which reportedly
is beset with morale and leader-
ship problems, has suffered heavy
losses in the Quang Tin - Quang
Nam province area in recent
months.
South Vietnamese: Political
STFuati on
The new government of Presi-
dent Thieu after a month and a
:half in office has shown few signs
of developing promising new pro-
grams for the country. Thus far,
the government seems to be mainly
concerned with its own internal
organization and relationships.
There are indications that the
unsettled feud between Thieu and
dice President Ky may be compli-
cating the whole process of work-
ing out future programs. Although
not deliberately sabotaging Thieu's
efforts, Ky appears content to
adopt a wait-and-see attitude in
the apparent expectation that the
President will commit serious po-
litical errors which will enhance
Ky's own future political pros-
pects.
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Complaints have been voiced
by persons close to the govern-
ment about what they call Thieu's
dilettante approach to the day-
to-day problems of governing.
Moreover, Thieu is evidently not
providing adequate guidance to
Prime Minister Loc who appears to
be waiting for cues from the Pres-
ident before moving ahead. Loc's
cabinet, composed largely of tech-
nicians, has yet to come up with
any significant new programs. It
appears particularly reluctant to
take any bold steps in the eco-
nomic sphere which might draw
criticism from influential circles.
In addition to the internal
pressures which are contributing
to the government's lack of de-
cisiveness, Thieu is reportedly
faced with a rising tide of re-
sentment from certain military
officers who fear they may lose
their prerogatives under the ci-
vilian government. Such attitudes
among the military, which must
still be taken into consideration
by the new administration, seem
to be delaying the government's
anticipated reorganization of the
military establishment, and may
further hinder its promised re-
forms of the civil administration,
including the anticorruption
drive.
Neither house of the National
Assembly is yet in a position to
enact legislation, and no legis-
lative proposals have yet been
placed before it. Both the Upper
and Lower houses are still preoc-
cupied with their own internal or-
ganizations--a process which may
continue into early 1968. So far,
members of both houses have been
content only to present resolu-
tions calling the government to
task for its manpower mobiliza-
tion decree and its handling of
political prisoners.
Certain antigovernment ele-
ments, particularly in the Lower
House, may be expected to continue
such efforts which are mainly de-
signed to embarrass the government.
Although a majority in each house
appears basically inclined toward
cooperation with the government,
National Assembly members gener-
ally seem eager to demonstrate
their independence of the execu-
tive branch and to ingratiate
themselves with their constituents.
Hanoi Again Rejects UN
Jurisdiction
In its first comment on the
possibility of renewed UN con-
sideration of the Vietnam ques-
tion, the party daily, Nhan Dan,
on 12 December charged that the
US was up to its "old tricks" of
making the UN serve its "aggres-
sive plan against Vietnam" and of
"scrapping the Geneva agreements."
It reiterated Hanoi's contention
that the UN has "no jurisdiction
whatsoever" in the Vietnam prob-
lem. The article insisted once
again that the Geneva Conference
is the only international body
with any responsibility for the
Vietnam problem and that the UN
has the duty to respect
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PEKING STILL DEALING INDECISIVELY WITH CIVIL DISORDERS
The level of civil disorders
remains high throughout China,
but leaders in Peking remain re-
luctant to deal firmly with frac-
tions and unruly Red Guards who
fight and disrupt transportation
services.
In many areas, the targets
of current Red Guard attacks are
military officers now exercising
civil governing responsibilities,
although it is seldom clear why
they have been selected as
targets.
This confusion and vacilla-
tion at the center may in part
reflect a continuing decline in
Mao's physical and mental state.
He will be 74 on 26 December, and
appears to be suffering from
progressive hardening of the
cerebral arteries.
Nevertheless, they appear to
be doing what they can to cope
with disruptions to the economy.
normally have obtained.
severely weakened in the past
year, and it is unlikely that the
government will succeed in se-
curing the share of grain it would
The Cultural Revolution is
being conducted very cautiously
in rural areas. Although the
1967 harvest was probably larger
than in 1966, the regime faces
a serious problem in collecting
food and distributing it to gov-
ernment warehouses. Nevertheless,
the rural control apparatus has been
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PEKING REMAINS HOSTILE TOWARD BURMA
The worsening relations be-
tween Communist China and Burma
have been marked in recent weeks
by increased Chinese propaganda
support for the insurgent Commu-
nist Party of Burma (CPB). Pe-
king's covert assistance to the
Communist guerrillas has remained
cautious, however, and the Chinese
apparently see little prospect of
developing an effective Communist
insurgency movement against the
Ne Win government.
Chinese propaganda has been
calling for a Communist-led "peo-
ples revolution" against the
"fascist Ne Win clique" and has
been reporting "victories" of
the CPB in its 20-year guerrilla
war against Rangoon. Peking has
for years been harboring exiled
Burmese Communist leaders and in
the past has unsuccessfully
pressed Ne Win to make peace with
the party and allow Communist
participation in his government.
Last summer, heavy-handed Chinese
attempts to promote the Cultural
Revolution in Burma led to anti-
Peking demonstrations and a gov-
ernment crackdown on Chinese
propaganda activity in Burma.
Peking, then, for the first time
openly supported the CPB.
The Burmese Communists do
not represent a serious threat to
the regime. The CPB's 4,000-man
guerrilla force, which operates
mostly in the interior of Burma
where government control and mil-
itary capability is greatest, has
to date been little more than a
nuisance. Unlike the ethnic in-
surgents who operate in Burma's
remote and rugged minority areas,
the CPB has had no success in de-
veloping a popular base. In fact,
open Chinese support for the party
has probably lessened its appeal
to the average. Burmese peasant, who
is generally anti-Chinese.
Substantial Chinese material
support for the Burmese Communists
would be difficult to deliver
since the party's area of operation
is far from the Chinese border.
The problem of Chinese support is
compounded by the fact that most
Burmese territory adjacent to China
is under control of traditionally
anti-Communist Kachin and Shan eth-
nic insurgents. Although reports
indicate that the CPB may now be
trying to establish a presence in
the border area, significant co-
operation between the party and
the ethnic insurgents appears un-
likely.
The CPB probably has received
some limited financial and material
support from China. The Chinese
have apparently also been provid-
ing some paramilitary training for
CPB members.
I ware of
-the present low state of the Commu-
nist movement in Burma, Peking un-
doubtedly hopes that such low-keyed
assistance will lead to a gradual
strengthening of the CPB. In the
foreseeable future, however, Ran-
goon should continue to have little
difficulty in containing Communist
insurgency.
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Principal Areas of Operation
and Strengths of Major
Insurgent Groups
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EUROPE
There was unusual high-level diplomatic activ-
ity during the past week as the Eastern Europeans
consulted with the Russians on a variety of urgent
national problems and policy questions regarding
Germany and Western Europe.
Soviet Foreign Minister Gromyko went to Poland
for discussions with Gomulka and other leaders
mainly on Germany and European security problems.
Soviet party leader Brezhnev probably discussed the
same topics with Czech leader Novotny in Prague as
well as Novotny's pressing troubles in his party.
East German party boss Ulbricht hastened to
Moscow for a short visit to receive reassurances
once again that Moscow would not make concessions
either to Bonn or on European security matters at
his expense. The strong statement out of Moscow
last week on West Germany was intended in part to
do this. Ulbricht also probably expected to work
out means for dealing with his large trade deficit
with the USSR, at present a sore subject in Soviet-
GDR relations. Simultaneously East German Foreign
Minister Winzer arrived in Belgrade on a probably
hopeless last-ditch mission to dissuade the Yugo-
slavs from re-establishing relations with Bonn.
Rumanian party leader Ceausescu, bearing his
new government title of President, arrived in Mos-
cow on 13 December, his political energies freshly
fired up by the just concluded Rumanian party con-
ference. He probably intends to go over economic
troubles between the two countries, differences
concerning the upcoming consultative meeting of
Communist parties in Budapest, and the question
of their friendship treaty which expires early
next year.
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FRENCH ARMS SALESMEN COURT ARABS
The French-Iraqi arms deal
reportedly signed in late Novem-
ber may be De Gaulle's first move
toward rescinding his embargo on
arms sales to all the belligerents
in the recent Arab-Israeli war.
The agreement calls for
France to supply mortars and ar-
mored cars valued at nearly $22
million. Paris has attempted to
justify the sale by claiming that
its embargo does not apply to
countries providing "energy" to
France. Iraq, which sells petro-
leum to French refineries, is the
only belligerent excluded from
the embargo under this clause.
Israeli news serv-
ice reported in late November
that Iraq will turn over Hunters
to Jordan. Jordan had two squad-
rons of Hawker Hunters before the
war but. lost 20 aircraft during
the hostilities. Twelve aircraft
from Iraq, four acquired from the
UK since the hostilities, and the
four that survived the war would
bring Jordan's squadrons nearly
to full. strength.
Other Arab countries may
also request French arms. A
high-level Syrian Government del-
egation that arrived in Paris on
10 December for economic talks may
want to discuss a possible arms
deal as well.
The recent opening up of
sales to Arab countries may sig-
nal the eventual lifting of the
embargo against Israel's 50 Mi-
rage 5s. The French Government
issued a statement on 8 December
claiming that France is deliver-
ing to Israel all military equip-
ment ordered prior to the embargo,
with the exception of Mirages.
The statement added that in view
of the explosive situation in
the Middle East, France is not
now delivering Mirages to any
country in the region but that
this position is not to be con-
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SOVIETS TO INCREASE SPENDING FOR "SCIENCE" AND SPACE
The Soviets plan in 1968
to increase expenditures for
"science" nearly 11 percent,
almost double the growth planned
for this year. The "science"
category includes the costs of
the Soviet space program and
of military and nonmilitary
research and development in the
USSR.
for military R&D and space grew
from six percent of the total
military and space spending in
1955 to 25 percent in 1965; in
the same period military R&D
and space outlays in the US
increased from eight percent of
the defense and space budget
to 28 percent.
While part of the increase
undoubtedly reflects price in-
creases made in 1967, in terms
of equivalent US resource costs
next year's allocations still
will exceed significantly the
$17 billion the Soviets are
estimated to be spending this
year. About $13 billion of
this year's expenditure has
gone to the space program and
to military R&D. Military-
related research and space
currently are costing the USSR
as much as the deployment and
operation of its strategic of-
fensive and defensive forces.
Since 1950, Soviet expend-
itures for R&D and space have
grown more than sevenfold, and
expenditures for military R&D
and space have increased twelve-
fold. Allocations in the US
have followed a similar trend.
For example, Soviet expenditures
The rates of growth recently
have slackened in both coun-
tries, but much less so in the
USSR, which in absolute terms
still is spending less than the
US. To some extent, in both
countries this slackening is
due to the fact that large
parts of the investment in
facilities for some major
military and space programs
already have been made.
The perennial Soviet boasting
about the allocation of resources
to R&D in the USSR recently has
been tempered by concern for
greater efficiency. This interest
in better utilization of rubles
for research reflects the heavy
claim on Soviet resources now
being made by military and
space programs. In the eyes of
some Soviets, a portion of this
effort might better be channeled
to the improvement of industrial
technology and general economic
development.
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USSR STANDS FAST ON GERMAN POLICY
Moscow's verbal attack on
Bonn last week made clear that
there is virtually no give in
Soviet policy toward West Germany.
Ostensibly, the statement
handed to the West German ambas-
sador was occasioned by the re-
cent activities of the right-wing
National Democratic Party, and
the document accused Bonn of nur-
turing neo-Naziism. Essentially,
however, the statement only reit-
erated long-standing Soviet pol-
icy. Thus Bonn and other inter-
ested parties were told that im-
proved relations with the Soviet
Union still depend on West German.
acceptance of the results of
World War II, that is to say,
the existence of two German states,
the permanence of Germany's bor-
ders, and the separate identity
of West Berlin.
The Soviet broadside, like
one last January, appears to be
aimed at dispelling any impression
that Moscow's price for better
relations with Bonn is going down?
The statement in January came just
before the opening of diplomatic
relations between Bonn and Bucha-
rest, and the recent one was is-
sued at a time when the early re-
sumption of relations between Bonn
and Belgrade appeared likely. It
was also clearly meant to reassure
East Germany publicly that the
Soviets had not been careless of
Pankow's interests during the se-
ries of conversations between
Brandt and Soviet Ambassador
Tsarapkin in Bonn.
Presumably Bonn would have
to meet various prerequisites
for a general improvement in So-
viet-FRG relations to make pos-
sible an exchange of agreements
on the renunciation of force, a
topic that was a focal point of
the Brandt-Tsarapkin talks. Mos-
cow, although abusing Bonn in
public, evidently wants to keep
some conversations gcing on the
quiet.
Moscow's informal, explora-
tory conversations with Brandt,
however, are not accompanied by
evidence that the USSR is prepared
for serious negotiation on the
German question. Moscow probably
considers the contacts with Brandt
a useful and inexpensive way of
sounding out the Germans on what
they might do in the interest of
c.etente, and of encouraging Bonn
to try its ideas on Soviet ears
first.
In Bonn, the harshness of
the Soviet note was taken as a
confirmation of Chancellor Kie-
singer's pessimism and a blow to
Foreign Minister Brandt's optimism
over the state of relations with
Moscow. Brandt., however, still
hopes to pursue improved rela-
tions by continuing the dialogue
with Tsarapkin? The German For-
eign Ministry is contemplating
only a brief, nonpolemical reply,
to refute the Soviet allegations.
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EAST GERMANY CURTAILS CONTACTS WITH EASTERN EUROPEANS
A recently issued East Ger-
man directive curtailing cultural
exchanges with Eastern European
countries points out the Ulbricht
regime's persistent ideological
and political differences with
its allies.
lays down guidelines to be fol-
lowed by members of the East Ger-
man Film Studio. The directive
apparently also applies to any
East German who comes into con-
tact with Eastern European cul-
tural delegations.
The East German regime has
long feared the adverse political
effects that might ensue if East
German intellectuals were permit-
ted to exchange ideas freely with
colleagues elsewhere in Eastern
Europe. Such exchanges could
lead to attempts to follow artis-
tic theories other than the "so-
cialist realism" sanctioned by
the regime.
The regime has thus curtailed
nearly all cultural exchanges with
Western Europe, and has attempted
to prevent the introduction into
the GDR of the "revisionist"
theories and works of leading
Eastern European intellectuals.
The regime, for example, has pub-
licly criticized the works of
leading Marxist theoreticians
such as Poland's Adam Schaff and
Austria's Ernest Fischer and in
1964 publicly rebuked the Czech
party for its "permissive" atti-
tude toward intellectuals.
The newest directive, issued
by the party central committee,
In issuing the directive,
an East German cultural function-
ary reportedly stated that East
Germans must guard against sub-
versive influences being spread
by "avant garde" and "too inter-
national" cultural figures in
Poland, Czechoslovakia, Hungary,
and Rumania. The restrictions
on contacting delegations from
these countries reportedly are
now virtually as severe as those
on contacting Western European
groups.
This latest move to restrict
cultural contacts with Eastern
Europe is likely to add to the
current political difficulties
the regime is having with its
allies. The Czechs in particular
have resented past criticisms by
Pankow, and both the Czechs and
Hungarians have recently com-
plained of the GDR's refusal to 25X1
improve its relations with West
Germany and its interference in
their attempts to do so.
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NONPROLIFERATION TREATY NEGOTIATIONS AT IMPASSE
The control provisions of
the draft nonproliferation treaty
(NPT) are still the subject of
controversy, and the treaty will
therefore not be discussed at,
this session of the UN General
Assembly.
The fundamental problem is
that the five EURATOM countries
consider that the treaty as
drafted "discriminates" against
presently nonnuclear countries;
they have indicated, however,
that they can tolerate this if
adjustments are made on certain
points. They want assurance
that the treaty will not set
aside the EURATOM safeguards
system, and have objected to
the language of the Soviet draft:
which specifically calls for
application of the safeguards
system of the International
Atomic Energy Authority (IAEA).
They much prefer the US draft
which calls for safeguards as
set forth by an agreement to be
negotiated between EURATOM and
:IAEA. Furthermore, they want
assurance that during what may
be a prolonged period when a
safeguards agreement is being
negotiated between IAEA and
EURATOM there will be no inter-
ruption in the US supply of
nuclear materials to EURATOM.
According to the US draft article,
nonnuclear countries shall not
receive nuclear material not
subject to control. The Belgians
have suggested that the US and
EURATOM conduct informal talks
to determine the feasibility of
an IAEA-EURATOM agreement.
The Europeans are also un-
willing to immobilize their
nuclear development in perpetuity
and want the duration of the
treaty limited to 10 to 25
years. They want to change
the amendment provisions so
that these will not be binding
for those countries not voting
for them. Finally, they want
the treaty to provide specif-
ically for periodic conferences
to review the situation and
possibly negotiate changes that
then seem necessary or desirable.
All of these European
concerns are the subject of
discussion between the US and
the Soviet Union. Moscow is
reluctant to work out com-
promises until the safeguards
article has been completed.
Although this article may be
worked out by the end of next
month, there are still a host
of other problems to be dealt
with in Geneva, such as peace-
ful uses of nuclear energy,
Security assurances, and
disarmament obligations for
nuclear powers.
After the Geneva talks are
completed, the treaty will go
to the UN General Assembly or
to the UN Disarmament Commission,
where, although it would be time
consuming, the treaty would under.-
go a comprehensive review and
then be reported to the General
Assembly in the fall. There is
increasing pressure in New York
to hold a resumed session of the
General Assembly in the spring.
However, if the NPT is placed
on the agenda of such a session,
it would have to compete for
attention with Middle Eastern
problems.
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MIDDLE EAST - AFRICA
Some tense situations in the area seemed to be
cooling off last week, but new crises quickly sprang up.
The potential Greek-Turkish military confrontation
over Cyprus was defused as the troop withdrawal from
the island proceeded normally. King Constantine, how-
ever, seized the occasion to attempt a coup against
the Athens junta, probably counting on disgruntlement
in the army over the "humiliation" of Greece on the
Cyprus issue. He misjudged the strength of his support
and his effort failed.
In Turkey, there has been some strong criticism
of the Demirel government's handling of the Cyprus is-
sue, but the political situation generally still appears
to be under control.
In Yemen, royalist elements in various parts of
the country have moved into the vacuum left by the
withdrawn Egyptian troops. Soviet aid has enabled the
republican government to hold off the immediate royal-
ist threat, and Moscow's determination to save the be-
leaguered republicans has shown no sign of flagging.
In fact, evidence of direct participation of Soviet
personnel in the conflict is increasing.
The Arab summit conference has been delayed until
17 January, probably to allow time to persuade Saudi
King Faysal to attend. In any event, the Arabs are
unlikely to agree on a common policy toward a settle-
ment with Israel.
Indian Prime Minister Gandhi's government contin-
ues to move ahead on several controversial fronts.
The Kashmiri nationalist leader Sheik Abdullah, under
intermittent detention for 14 years, has now been per-
mitted some freedom of movement, but the "lion of Kash-
mir" is demanding complete freedom or nothing. A con-
troversial language bill which ensures the continued
official use of English along with Hindi was passed
after five stormy days in Parliament.
In Africa, the shaky regime in Dahomey has been
subjected to new strains by another flare-up between
President Soglo and the politically important chief of
staff of the army, coincidental with another wave of
labor unrest. At a minimum, Soglo's prestige will be
further diminished and his government weakened by the
crisis.
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GREEK COUNTERCOUP FAILS
An attempt by King Constan-
tine to overthrow the military
government in Athens has failed.
The junta, with a newly juggled
cabinet, seemed to be in full
control of the country on 14 De-
cember. The King and his family
have taken refuge in Rome.
The King left for Kavalla,
about 100 miles east of Salonika,
on the morning of 13 December.
He issued an appeal calling for
a "reforming of the government
without the villainous elements"
who falsified his name on the
coup decree of 21 April. The
junta reacted swiftly, declaring
its intention to pursue the 21'
April revolution, and calling
for national unity and calm.
The general military sup-
port for which Constantine hoped
never materialized. The junta
gained firm control of Athens and
arrested a few key military of-
ficers whose loyalty was uncer-
tain.
The junta has formed a new
cabinet with Papadopoulos acting
as prime minister, minister to
the prime minister, and minister
of defense. Lieutenant General
Zoitakis has been appointed "re-
gent" in the absence of the King.
Some instances of fighting were
reported on 13 December, but no
major battles or bloodshed have
been confirmed. Athens appeared
to be calm, if somewhat dazed, and
there were no reports of widespread
arrests such as those which oc-
curred in the wake of the coup in
April.
The King appears to have acted
on impulse rather than from a con-
crete plan, probably with the full
confidence that his mere presence
in the north would rally support
for his revolt. The junta had pre-
viously expressed concern that Con-
stantine would attempt to take ad-
vantage of reported discontent in
Greece over the Cyprus settlement.
The King's departure raises
the question of the future of the
monarchy in Greece. Although the
appointment of a "regent" to serve
in the King's stead may leave some
room for accommodation with the
Palace, any such arrangement is
likely to be on the junta's terms.
Even before the King's flight,
the junta was expected to insist
on pruning his former political
prerogatives, if and when parlia-
mentary government was resumed.
A new draft constitution re-
portedly was scheduled to be sub-
mitted to the regime sometime
this month, with a constitutional
referendum and elections to be
held possibly during the next year.
It is likely that the attempted re-
volt will delay a return to parlia-
mentary government, however.
Greek troops continued to
leave Cyprus this week and Greek
Foreign Minister Pipinelis has
assured the Turks that his govern-
ment intends to honor the Greek-
Turkish agreement. 25X1
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YEMENI REPUBLICAN REGIME STALLS ROYALISTS
The royalist drive on Sana
seems to have stalled, primarily
because of Soviet air attacks on
royalist; positions.
The royalists had been clos-
ing in on the capital for weeks,
and last week appeared to be on
the verge of taking the city.
On 10 December, however, a battle
was fought which appears to have
gone against the royalists, de-
spite the fact that both sides
claimed victory. The Sana air-
fields, previously reported under
royalist control, seem to have
been reopened.
The key factor turning the
tide against the royalists is the
support of Soviet pilots and air
force ground personnel.
Another battle was fought on
12 December in the mountainous
north of ?Sana between a republican
force using tanks and heavy weap-
ons and a royalist force of unknown
strength. It seems evident that,
although the royalists had possessed
the ability to harass the capital
with artillery from the surround-
ing heights, they lacked sufficient
manpower to storm the city, at
least in the face of effective air
support.
CYPRUS DISPUTE AGAIN MOVING INTO DIPLOMATIC ARENA
Greek-Turkish tensions over
Cyrpus were relaxed markedly
prior to the abortive Greek royal
coup attempt on 13 December, and
the island has since remained
generally quiet as the UN now
considers a further extension of
its mandate. As of mid-week,
Greek troops were leaving the
island at a faster rate than
earlier anticipated, and all
sides were trying to ensure that
there would be no provocative in-
cidents to hamper the operation.
In Turkey, the military
alert over Cyprus appeared to be
relaxing. The Turkish Army, how-
ever, apparently intends to main-
tain about one third of the forces
it has deployed along the south-
ern coast and near the Greek-
Turkish border until a satisfac-
tory diplomatic settlement has
been reached. The Turks are not
planning any immediate removal of
their unauthorized troops from
Cyprus.
The unstable political situ-
ation in Greece may lead to in-
creased Turkish vigilance along
its western border and may slow
troop withdrawal from the area,
but it probably will not alter
appreciably Ankara's attitude
toward Cyprus. The Turks pre-
sumably regard the Greek problem
as strictly internal; they may
even believe that it will
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accelerate the withdrawal of Greek
forces from the island.
With Athens diverted by a
new domestic crisis, Ankara and
Nicosia may try--within the con-
text of an independent Cyprus--
some moves toward a mutually ac-
ceptable resolution of their dif?-
ferences. A high-level Turkish
Cypriot leader recently declared
for the first time that the Turk-
ish Cypriot community is pre-
pared to negotiate a revision
of the 1960 Cyprus constitution.
The UN Security Council meets
this week to consider a further
extension of its peacekeeping
mission on Cyprus. While there
may be some opposition within
the Council, the mandate probably
will be renewed, although prob-
ably for less than the usual six
months. There is general agree-
ment among the interested parties
that the mandate should be ex-
tended., but the debate could
nonetheless become heated. Pres-
ident Makarios, who personally
favors a simple extension of the
mandate, says he is worried that
the USSR might try to exploit
the debate. He characterized
the Soviet role during the re-
cent crisis as "ambiguous."
On Cyprus? Makarios' "nor-
malization" program is having
trouble getting started. He fears
that armed extremist groups of
both the left and right may
emerge following the withdrawal
of the mainland Greek troops.
The Greek Cypriots have offered
to relax controls on "strategic"
materials and abandon a number
of armed positions if the Turk-
ish Cypriots withdraw from cer-
tain key positions. The initial
Turkish and Turkish Cypriot re-
action has been negative, but
there may be some maneuverability
on this issue. The Turks also
have been critical of the inef-
fectiveness of the UN force in
controlling the fighting during
the recent crisis and have little
confidence that it would inter-
vene to protect them in the fu-
ture.
CONGOLESE ECONOMY WEATHERS MERCENARY CRISIS
The mercenary crisis did not
seriously affect Kinshasa's eco-
nomic stabilization program. In
the aftermath of the crisis, how-
ever, the government faces great
problems in rehabilitating the
economy after seven years of al-
most continuous turmoil.
On 24 JunEe President Mobutu
announced sweeping monetary and
fiscal reforms designed to stimu-
late the sagging economy. These
reforms were approved by the In-
ternational Monetary Fund.
Less than two weeks later
the mercenary-led revolt broke
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out. Mercenary occupation of
Bukavu--an important commercial
center in eastern Congo--brought
economic! activities there to a
near standstill; but elsewhere
most of the Congo's economic
problems were caused by the an-
tics of the Congolese National
Army (ANC). Looting of homes and
businesses, for example, was ex-
tensive when Bukavu and other
cities were reoccupied by the
ANC. Their brutal treatment of
white expatriates--largely Bel-
gians--in Katanga resulted in a
substantial departure of European
mining technicians. Manganese
mining operations in western
Katanga have been completely dis-
rupted.
Nevertheless, the Congo
economy has weathered the crisis.
Mobutu's moves to improve secu-
rity for the expatriates slowed
the departure of the Europeans
and permitted continuous opera-
tions in the copperbelt and at
most other important economic in-
stallations. Fortunately a factor
outside the Congo's control
helped: the prolonged US copper
strike, which kept world prices
high, benefited Kinshasa's fi-
nancial reform program. Copper
revenues amount to about half of
all funds collected by the cen-
tral government.
Thus, despite higher than
anticipated military expenditures,
the Congo has had a balanced
budget since July because of the
larger copper revenues. Higher
export earnings from copper--
which account for about two
thirds of all foreign sales--have
also been the major reason for
the rapid rise in foreign ex-
change holdings since July.
The five-month revolt has,
however, further damaged the Con-
go's longer term prospects. The
exodus of European mining person-
nel from the copperbelt has seri-
ously affected operational effi-
ciency and forced a cutback in
necessary research and explora-
tion work. Any further substan-
tial loss of expatriate techni-
cians would certainly mean a de-
cline in copper production.
Moreover, Belgium and other gov-
ernments now want to restrict
technical assistance personnel
to a few major cities where there
is a better chance for safety.
Thus, the populace of the Congo's
vast rural areas will get even
less attention than before.
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WESTERN HEMISPHERE
The deadlock in the election of a new secre-
tary qeneral for the organization of American
States (OAS) continued to be a subject of major
interest this week. The OAS met on 14 December to
consider a number of proposals for dealing with
the problem. No dark horse candidate for the po-
sition has as yet emerged. Indeed, it appears
that the three candidates who have brought on the
impasse, which is lessening the prestige of the
OAS, are still in the race. The election may well
be put off until early next year.
Several countries seemed to be more receptive
than formerly to aid and trade offers from the
USSR and other Communist countries of Eastern Eu-
rope, but as yet no significant deals have been
reported.
Guerrillas in Venezuela clashed twice with
army patrols in the first serious encounters in
several months. In Uruguay, the growing strength
of the radical left finally provoked the govern-
ment to crack down on its activities. Six leftist
parties were banned and several prominent extrem-
ists were held for criminal action suits.
Tensions heightened in the Dominican Republic
amid rumors of coup planning among rightists, and
the mysterious disappearance of a former "consti-
tutionalist" leader has further complicated the
political scene. In Haiti, the number two leader
of Duvalier's feared Ton Ton Macoute was wounded
by a would-be assassin on 7 December. Some of the
many rumors suggest that the shooting resulted
from a personal vendetta while others intimate the
involvement of palace "insiders." There i
evidence as vet to support either thesis, I
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VENEZUELAN GUERRILLA ACTIVITY INCREASES
Two encounters between gov-
ernment troops and guerrillas in
Western Venezuela in the past
two weeks are sharp reminders that
the guerrillas retain a capabil-
ity for action. On 7 December an
unknown number of insurgents am-
bushed an army convoy and in-
jured eight soldiers. A clash on
11 December reportedly left four
guerrillas and one soldier dead.
VENEZUELA
These are the most serious
incidents in this area since last
spring. Both took place in the
part of Venezuela where Douglas
Bravo's Cuban-supported insurgent
group usually operates. Bravo
has been reported on the run re-
cently, and the guerrilla initia-
tive may have been designed to
deflect government pressure from
one of his units.
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The increase in guerrilla
activity may also be related to
the restoration last month of
constitutional guarantees, hich
had been suspended in March. Al-
though the direct effect on the
guerrillas would be minimal, the
task of their support apparatus
would be eased considerably by the
reimposition of constitutional
limitations on the investigation
and detention powers of the police.
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FORMER DOMINICAN REBEL LEADER'S WHEREABOUTS REMAIN MYSTERY
The continuing mystery con-
cerning the whereabouts of Colonel
Francisco Caamano Deno, leader
of the "constitutionalist" forces
during the 1965 civil war in the
Dominican Republic, is adding to
political tensions in Santo Do-
mingo.
Caamano, who went into "vol-
untary exile" as Dominican mili-
tary attache in London in Janu-
ary 1966, was last seen on 25 Oc-
tober in The Hague where he was
visiting two former "constitu-
tionalist" officers.
Since the news of Caamano's
disappearance was made public
in late November, Santo Domingo
has been full of rumors that he
has defected to Cuba, that he has
returned secretly to the Dominican
Republic to lead a guerrilla move-
ment, that he returned to the
country at President Balaguer's
behest and is in hiding, that he
was the victim of foul play by
"foreign intelligence agencies,"
or that he is simply "out on a
spree."
High-ranking military offi-
cers are reportedly convinced that
Caamano is in Cuba. They have in-
dicated that if they are proven
right Caamano will be separated
from the military as a traitor
and they will use his dismissal
as an excuse for removing all
former "constitutionalist" offi-
cers from the armed forces and
labeling them as traitors.
Juan Bosch and other leaders
of the Dominican Revolutionary
Party (PRD) have intimated they
know of Caamano's whereabouts and
activities. Bosch sent several
newspapers a written statement,
which clarified little but in-
sinuated a good deal, that Caamano
had "voluntarily absented" him-
self from duty in London, that
he had left Europe willingly and
"gone to a place in the world
where he can prepare himself, ac-
cording to his conscience, so
that Dominicans will not again
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suffer abuses and mockeries." His
statement seems to have been in-
tended to alert Caamano's "con-
stitutionalist" followers to pre-
pare themselves for his eventual
reappearance in the role of a
"savior" of his people.
Caamano's disappearance is
another ingredient in the current
state of unease characterized by
rumors of a coup from the right
and by the first public disorders
since last April and May. If
Caamano returns to the country he
might serve as a rallying point
for dissident :Leftist elements.
Although he is not believed to
have widespread popular support
nor many followers in the military,
his return would have an unset-
tling effect on the country.
COMMUNIST TRADE AND AID PROSPECTS IN LATIN AMERICA
A recent flurry of aid and
trade offers by the Soviet Union
and certain Eastern European na-
tions may prove significant for
some individual Latin. American
countries. These offers, how-
ever, will not result in any sub-
stantial broadening of over-all
Communist trade ties in this
hemisphere.
Soviet trade with Latin
America continues to be small and
sporadic, and has fallen off this
year after completion of the
large Soviet wheat purchases
from Argentina in 1966. Although
East European countries have in-
creased some trade ties in Latin
America, they have only a limited
demand for the area's major agri-
cultural exports. Recent Soviet
aid offers to Argentina and
Uruguay have yet to be accepted,
while an earlier Soviet credit to
Brazil and a credit extended to
Chile this year, which total some
$160 million, remain largely un-
spent.
A high-level Soviet trade
delegation is expected to arrive
in Brazil soon with new credit and
commercial offers. The Soviets
may urge Brazil to use some por-
tion of the $100-million trade
credit they extended last year.
Another Soviet trade delegation
is expected to visit Uruguay on
20 December to discuss a $20-mil-
lion Soviet credit offer made last
year. Uruguay may accept the of-
fer, but the US Embassy in Monte-
video expects :Little trade to re-
sult from the agreement.
The Soviets have expressed
willingness to enter into a con-
sortium with Western countries by
offering a $60--million credit to
aid in the construction of the
E:L Chocon hydroelectric project
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in Argentina.
I
UK and West Germany
the
have made additional offers of
aid and equipment for the proj-
ect. The USSR had made a similar
offer before, but the Argentine
government has been reluctant to
deal with the Soviets.
A Hungarian trade mission re-
cently offered Argentina a $30-
million credit on commercial
terms for the purchase of in-
dustrial and railroad equipment.
The Hungarians also offered a
$5-million credit to Chile, a
$10-million credit to Uruguay,
and urged implementation of a $40-
million credit offered to Brazil
last year.
The Soviet and Hungarian aid
offers come at a time when a
number of Latin American govern-
ments are seeking to demonstrate
their independent initiatives in
foreign policy and trying to es-
tablish new markets in the USSR
and Eastern Europe for their
agricultural commodities and
manufactured goods--some of which
are hard to sell in the West.
Colombia, Venezuela, Ecuador,
and Peru have recently made moves
toward increasing trade with East-
ern Europe or the USSR.
To aid Colombian sales to
the USSR, President Lleras is
planning to establish consular
relations with the USSR in Jan-
uary or February 1968. An of-
ficial Venezuelan delegation plans
to visit the USSR early next year
to explore possibilities for ex-
panding trade. The delegation is
prepared to move toward resuming
diplomatic relations to.assist
the discussions on trade. The
simultaneous presence last week: in
Ecuador of Czech, Polish, and Hun-
garian economic missions illustrates
the marked increase in Ecuadorean
interest in trade with Eastern Eu-
rope. Hungarian and Yugoslav trade
missions have been warmly received
by Peruvian officials who hope to
find new markets for-coffee and
cotton. In another move, Czech
trade officials have offered a
Costa Rican firm the rights to
distribute and assemble Skoda cars
in Costa Rica and the Central Ameri-
can Common Market countries.
Some increase in trade for
Latin America may occur.from ex-
panding commercial contacts, but
the USSR and Eastern Europe prob-
ably will not be willing to accept
the sustained increases in pur-
chases of agricultural products
or manufactured goods necessary to
bring about a rapid trade expan-
sion. The Communist aid proffered
is similarl not likely to be used
rapidly.
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