WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A006500060001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 31
• Document Creation Date: December 20, 2016
• Document Release Date: May 3, 2006
• Sequence Number: 1
• Publication Date: July 12, 1968
• Content Type: SUMMARY

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DIRECTORATE OF
INTELLIGENCE
:secret
WEEKLY SUMMARY
State Dept. review completed
Secret
52
12 July 1968
No. 0028/68
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(Information as of noon EDT, 11 July 1968)
Page
THE WEEK IN PERSPECTIVE 1
VIETNAM
Military activity continues to taper off, reflected
in low casualty figures for allies and Communists.
Despite the lull, there are numerous indications of
preparations for renewed fighting although no major
Communist campaign is anticipated before the end of
July or early August. President Thieu appears to be
consolidating his support in the Lower House, and
other groups are beginning to organize to put for-
ward a loyal opposition front.
JAPANESE ELECTIONS STRENGTHEN SATO'S LEADERSHIP
The outcome of the upper house elections on 7 July
strengthened Prime Minister Sato's position as Lib-
eral Democratic Party leader and dealt a sharp set-
back to the conservatives' main opposition party.
MILITARY ACTIVITY IN LAOS REMAINS LIGHT
The Communists have interrupted the rainy season lull
with several small attacks over the past week, but
there is no indication that a significantly higher
level of fighting will soon occur.
PHILIPPINE-MALAYSIAN IMPASSE AROUSES REGIONAL CONCERN 8
Lack of progress in the talks between Malaysia and
the Philippines on the status of Sabah is causing
growing concern among other Southeast Asian nations
and Commonwealth governments.
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Europe
SOVIETS SET LIMITS ON DEALING WITH THE WEST
In three speeches last week, Brezhnev used strong
language to warn his listeners at home and in the
other Communist states to be vigilant against West-
ern ideas.
FRENCH ECONOMIC CONTROLS REFLECT DESIRE FOR STABILITY
Monetary and fiscal measures have been imposed in
France in a move to protect the franc, to shore up
the balance of payments and hold down reserve losses.
Further measures may be necessary as the results of
the crisis become clearer.
CZECHOSLOVAKIA BESET BY FOREIGN AND DOMESTIC PROBLEMS
The Dubcek regime, as it fends off increasingly se-
vere pressures from the Soviet Union and its orthodox
allies, is beset by a continuing intraparty struggle
and by a resurgence of antagonism between the Czechs
and Slovaks.
HARD LINERS GAIN IN POLISH PARTY LEADERSHIP
Shifts in the top party leadership announced after a
two-day central committee plenum ended on 9 July in-
dicate significant but not yet decisive gains for
the hard-line opponents of party leader Gomulka.
SOVIET NAVAL FORCE TOURS INDIAN OCEAN
A light cruiser, a guided missile frigate, and an
oiler made nine port calls in eight countries in
what appears to be part of a general expansion of
operations for the Soviet Navy.
NASIR COMPLETES EXTENDED VISIT TO MOSCOW
His talks with Soviet leaders apparently dealt with
Soviet military aid as well as the Arab-Israeli im-
passe, with the major focus on the Jarring mission.
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YEAR-OLD NIGERIAN WAR DRAGS ON
Federal forces have occupied two thirds of Biafra
since their invasion of eastern Nigeria on 6 July
1967. Lagos is determined to put an end to the Ibo
tribe's secession but the Ibos doggedly fight on in
spite of dwindling supplies and spreading famine and
disease.
Western Hemisphere
CENTRAL AMERICAN SUMMIT IMPROVES AREA OUTLOOK
Improved prospects for the area's Common Market,
regional unity, and future cooperation appear to be
the outcome of the five presidents' meeting.
A TIME OF TESTING IN BRAZIL
Student demonstrations have subsided, but the basic
issues remain, and military leaders are still not
happy with the President's failure to deal with
political turbulence.
URUGUAYAN GOVERNMENT STANDS FIRM
President Pacheco is making the first real effort in
many years to control spiraling inflation.
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VIETNAM
The tempo of military activ-
ity throughout South Vietnam has
continued to taper off as Commu-
nist combat units maintained
their generally nonaggressive
stance in the face of allied op-
erations against major infiltra-
tion and supply routes and base
areas.
The reduced pace was clearly
apparent in last week's battle
statistics. Allied casualties
for the week ending 6 July were
at the lowest point of the year,
while the Communist loss of 961
troops killed in action was the
lowest since the last week in
January 1967. Communist-ini-
tiated incidents for the week
also reflect the low level of
ground action.
Despite the lull in offen-
sive activities, there are numer-
ous indications from a wide
variety of sources that the Com-
munists are preparing for re-
newed fighting. In I Corps, pris
oner reports reveal that enemy
units in the vicinity of Hue have
been receiving replacements and
supplies at a high rate and may
soon be back up to full strength.
Despite continuing evidence
that the Communists intend to
mount a third campaign against
Saigon, the enemy's timetable
apparently has been disrupted by
his failure to complete prepara-
tions as well as by allied pre-
emptive actions. It now is esti-
mated that this campaign has been
postponed at least until the end
of July or early August. Hanoi
may already have issued prelimi-
nary directives outlining the
next "general offensive."
There have been reports of
a series of high-level meetings
NORTH VIETNAM
(?1_1,,_ g4DEMILITARIZED ZONE
~.?~ Hue*
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The continuing decline in the level of Communist-initiated military
activity in South Vietnam was reflected last week in the lowest Allied
casualties this year and the lowest Communist losses since January 1967.
Communist commands reportedly are holding strategy conferences and
reindoctrination meetings throughout the South. In the past, such con-
ferences have preceded major offensive actions. A variety of indicators
point to Communist preparations for another round of attacks on Saigon
in late July or early August.
North Vietnamese spokesmen so far have made no attempt to at-
tribute political significance to this lull or to represent it as a de facto
de-escalation in order to increase pressure for a complete cessation of US
bombing. In the most recent session of the Paris talks, Xuan Thuy again
emphasized that there can be no progress in the absence of an uncondi-
tional cessation of bombing. Hanoi's determination to keep the talks
focused on this issue was apparent in Thuy's blunt refutation of references
by American spokesmen to encouraging signs of progress.
In its first move against the new Communist-front Alliance of Na-
tional, Democratic and Peace Forces, the Saigon government reportedly
intends to try Alliance leaders in absentia for the capital crime of treason.
This step follows a warning by Prime Minister Huong that individuals
issuing "peace appeals" may be subject to arrest. These measures appear to
reflect Saigon's concern over recent appeals by student, labor and Bud-
dhist groups for an early end to the war and negotiations with the
National Liberation Front. There is a growing tendency among influential
South Vietnamese to view some accommodation with the Front as un-
avoidable. President Thieu's concern to check this trend was apparent in
his renewed rejection of talks with the Front and his insistence that
Saigon would deal only with Hanoi.
The outcome of the Japanese elections last weekend will strengthen
Prime Minister Sato's position as Liberal Democratic Party leader and
encourage him in his forthright advocacy of continuing the security treaty
with the US beyond 1970. The opposition Japan Socialist Party suffered
another sharp setback at the polls; its exploitation of recent incidents
related to US bases in Japan had little impact on the electorate.
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25X1 being held by various enemy com-
mands. These meetings apparently
include a major conference cur-
rently being held by the Central
Office for South Vietnam, the
senior Viet Cong authority, which
is scheduled to last until 15
25X1 Julv,
and "concerns trie Viet Cully
military offensive." The Commu-
nists subregions which control
enemy forces around Saigon are
apparently now holding meetings
to "reorient the cadre" and
discuss forthcoming operations.
Little hard evidence is
yet available on the content of
these meetings. In the past,
the Communists have made it a
practice to conduct similar ex-
tensive conferences prior to ma-
jor offensive campaigns. The
meetings, however, could also
reflect some subtle shift in
enemy strategy to coincide with
tactics at the Paris talks.
There is no evidence, how-
ever, that the low level of Com-
munist military activity has
political overtones. A North
Vietnamese maneuver to use the
lull as a device in the Paris
talks cannot be ruled out, but
the Communists have made no at-
tempts to portray the military
situation as significant. Viet-
namese Communist propaganda main-
tains its normal picture of con-
tinuous Communist military pres-
sure on all fronts. No spokes-
men or sources claiming to
speak for the Communists have
suggested that Hanoi might try
some kind of de facto de-escala-
tion.
Political Developments
In South Vietnam
In addition to encouraging
the establishment of a progovern-
ment political organization,
President Thieu also appears to
be consolidating his support in
the Lower House by promoting the
formation of a bloc responsive to
him. The new Democratic Progres-
sive Bloc was officially recognized
last week as the fifth Lower House
bloc. It has reportedly received
considerable financial assist-
ance from Thieu, and will appar-
ently look to the president for
guidance.
With 22 members, the bloc
ranks third among the five house
groups. It expects to expand
to approximately 30 by luring
members away from other blocs,
as it has already done with the
majority of its present members.
After completing recruitment,
the Democratic Progressives
hope to form a voting alliance
with one or more of the other
essentially progovernment blocs
to give Thieu something approach-
ing a working majority in the
house.
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Meanwhile, in the wake of
the launching last week of the
progovernment front--the Na-
tional Revolutionary Socialist
Alliance--and of Thieu's call
for a two-party system, groups
in opposition to the government
are beginning to organize. Al-
most simultaneous with the an-
nouncement of the Alliance, Hoa
Hao notable Pham Ba Cam unveiled
his Vietnam People's Force,
which claims to be a loyal op-
position group numbering in the
hundreds of thousands. The
party's stated aims are to con-
tribute to the formation of a
stable political structure by
rallying nationalist ranks and
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to work for the unification of
"the whole national territory."
The militant Buddhists are
also apparently getting into
the act. A wing of the mili-
tants, apparently at odds with
the extremist views of their
leader Thich Tri Quang, has re-
portedly decided to form the
Buddhist Socialist Bloc. The
leader of this splinter group,
Thich Thien Minh, apparently
hopes that the new group will be
looked on as part of the loyal
opposition which, while not sup-
porting, the government will
back its anti-Communist fi ht.
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JAPANESE ELECTIONS STRENGTHEN SATO'S LEADERSHIP
The outcome of the upper
house elections on 7 July strength-
ened Prime Minister Sato's posi-
tion as Liberal Democratic Party
leader and dealt a sharp setback
to the conservatives' main oppo-
sition party.
The Liberal Democrats lost
two seats but retained their ma-
jority. The expected affilia-
tion of a few conservative inde-
pendents should further strengthen
the party's position in the upper
house. Barring a setback such as
might be caused by a major politi-
cal scandal prior to the party
convention late this year, Sato
is unlikely to encounter a serious
challenge to his renomination as
party president.
The election outcome will
encourage Sato to pursue Japan's
current domestic and foreign poli-
cies, including forthright advo-
cacy of continuing the security
treaty with the US beyond 1970.
Sato now has more maneuvering
room in dealing with issues such
as Okinawa's return to Japanese
control and the status of US bases
in Japan.
The Japan Socialist Party's
exploitation of recent incidents
related to US bases had little
impact at the polls and the party
suffered a sharp setback, its
second reversal in 18 months.
The Socialists not only lost five
seats, but the party's share of
the popular vote also decreased
substantially compared with the
upper house elections of 1965.
This poor performance has tar-
nished the Socialists' image as
Japan's leading opposition party
and probably will lead to another
struggle for control between the
party's moderate and radical ele-
ments.
The Japan Communist Party
gained three additional seats in
the upper house, most probably
as a result of the party's abil-
ity to maintain voting discipline
for its limited number of candi-
dates.
The elections also pointed
up the continued viability of
Japan's middle-of-the-road par-
ties, Komeito and the Democratic
Socialist Party, which gained
eight seats, largely at the ex-
pense of the Japan Socialist
Party. Their gains indicate the
continuation of a "drift to the
middle" in Japanese politics which 25X1
was first clearly demonstrated in
the lower house elections of Jan-
uary 1967.
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LAOS: Current Situation
ZN
Muong n
C H
HANOI*.
', VIENTI NE
? Government-held location
Communist-controlled territory
Contested territory
BOLOVE
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25X1 I I
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( SOUTH
?_VIETNAM
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MILITARY ACTIVITY IN LAOS REMAINS LIGHT
The Communists have inter-
rupted the rainy season lull with
several small attacks over the
past week, but there is no indi-
cation that a significantly higher
level of fighting will soon occur.
In north Laos, Communist
forces are intensifying a six-
month-old clearing operation
against government guerrilla units
operating deep within enemy-con-
trolled territory between Nam Bac
and the North Vietnamese border.
A guerrilla base some 30 miles
southeast of Phong Saly was re-
cently abandoned as a result of
enemy pressure, and government
forces are having difficulty hold-
ing other positions in the face
of an estimated 3,000 enemy troops.
The guerrillas have suffered heavy
casualties, but their losses have
been replaced by villagers alien-
ated by enemy terrorism. Intensi-
fied air support is being used to
give the guerrillas an opportunity
to regroup.
Farther east, government
forces have thus far encountered
little opposition in an operation
to recapture Muong Son, which was
lost during the past dry season.
The government hopes to install an
air navigational facility at Muong
Son and is watching closely to see
how tenaciously the enemy will
hold on to its dry season prizes
this year.
There has apparently been
no significant withdrawal of North
Vietnamese forces from the Bolo- 25X1
vens Plateau area, and the enemy
may hope to take some government
positions there as they did last
year during July and Aug ust.
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PHILIPPINE-MALAYSIAN IMPASSE AROUSES REGIONAL CONCERN
Lack of progress in the talks
between Malaysia and the Philip-
pines on the status of Sabah is
causing growing concern among
other Southeast Asian nations and
Commonwealth governments about
regional cooperation and security.
The Philippine Government
continues to call for a settle-
ment of its claim on Sabah by the
International Court of Justice
but Malaysia has rejected this
approach, contending that the dis-
pute is political and has no firm
legal basis.
oreign Ministry has stimulated
press articles reminding the part-
ners of the disputants in the
Association of Southeast Asian
Nations--Indonesia, Thailand, and
Singapore--of their "moral obliga-
tion" to offer collective media-
tion, solicited or not.
Both governments have ex-
pressed a cautious interest in the
"good offices" of a third party.
Malaysia, however, has indicated
that it would only accept a media-
tor predisposed to confirm its
sovereignty over Sabah. Future
talks on a foreign minister or
"summit" level have been suggested
by the Philippines, but Malaysia
maintains that such a meeting
would be useless unless the pres-
ent talks make some progress.
Other Southeast Asian nations
as well as the UK, are seeking
ways to ease the situation and
The UK is concerned that the
dispute could result in a diplo-
matic break and even hostilities.
A New Zealand spokesman has sug-
gested the possibility of "corri-
dor conversations" during the
Asian and Pacific Council meeting
as an appropriate method of exert-
ing pressure. Australia's ambas-
sador in Manila, moreover, has
been instructed to encourage the
Filipinos to ease tensions. It
seems doubtful, however, that the
Australian and New Zealand efforts
would be more than counsel for
restraint and moderation.
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During Nasir's visit to Moscow this week, there were hints that the
Russians may have pressed him to show greater flexibility in the Arab-Is-
raeli dispute. Premier Kosygin is believed to be holding further discussions
on this question with UN negotiator Jarring during Kosygin's current visit
to Sweden.
The USSR and its orthodox Eastern European allies raised their
political and propaganda pressure on Prague. Soviet military units which
were moved into Czechoslovakia under cover of the recently concluded
Warsaw Pact exercise remained in position.
In Prague, party leader Dubcek gave further evidence that he is not
prepared to curtail the activities of progressive elements in the party.
These elements continued to consolidate their positions in preparation for
the party congress scheduled for September.
In Poland, hard-line elements in the party significantly advanced their
interests at a two-day party central committee meeting, further weakening
Gomulka's leadership. Their most important gain was the appointment of
hard-line Interior Minister Moczar to the party secretariat and to the
politburo.
In France, newly appointed Prime Minister Maurice Couve de
Murville, considered to be the "perfect reflection of De Gaulle's policy,"
has presented his cabinet. His predecessor, Georges Pompidou, was not
appointed to a new job-an indication that De Gaulle probably disap-
proved of some of Pompidou's attitudes and actions during recent months.
A confrontation over France's emergency economic measures will
take place in the Council of the European Communities next week, but
there will probably be little immediate pressure for substantial change in
Paris' position. This may come later. The Commission has already im-
plicitly warned France against unduly prolonging its restrictive measures.
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SOVIETS SET LIMITS ON DEALING WITH THE WEST
In three speeches last week,
Brezhnev used strong language
to warn his listeners at home
and in the other Communist states
to be vigilant against Western
ideas. He reiterated the party's
determination to hold the line
against "ideological subversion"
from the West, to guard the cohe-
sion of the "socialist camp,"
and to maintain the Soviet Union's
stature as a great power.
Brezhnev confirmed party ap-
proval of further negotiations
with Western powers on arms lim-
itations, but sternly warned
against traffic with the "rot-
ting, degenerating capitalist
society" in the world of ideas.
His equally stern warning against
the dangers of "nationalism"
seemed designed not only to main-
tain Soviet pressure against the
Czechoslovak movement for "de-
mocratization" but also to ensure
that the recently announced Soviet
readiness to negotiate with the
US on strategic missiles would
not be misread by Eastern Europe
as permission to seek agreements
with the "capitalists" on other
subjects.
The call for "vigilance"
against "hostile bourgeois"
ideas has been a staple in So-
viet propaganda for several years.
At the central committee plenum
last April it emerged as a dom-
inant theme--a latter-day re-
placement for Stalin's warnings
of "capitalist encirclement"--
designed to raise a psychological
barrier against the "enemy" with-
out limiting the Soviet Union's
freedom of action in any given
situation. Its concept of tti;
antagonistic worlds is charac-
teristic of the generally tough
foreign and domestic policy of
the current leadership, and ap-
parently represents the majority
view in the 11-man coalition in
the politburo. This concept does
not, however, preclude the pos-
sibility of negotiation between
the two worlds in areas which are
judged to be of compelling im-
portance to Soviet interests.
The obviously difficult de-
cision to open talks with the US
on strategic missiles was un-
doubtedly more palatable to some
members of the politburo than to
others, involving as it did a
complex of political, economic,
military and technical considera-
tions, presumably too sensitive
for public airing. In the end
the decision was presented to the
Soviet public as evidence of the
Soviet Union's "peace-loving" for-
eign policy.
Brezhnev's subsequent re-
affirmation of the vigilance theme
was intended, however, to dispel
any thoughts of a fundamental
change in outlook. It also served
to refocus public attention on the
role of the party and its chief as
the principal policy maker and de-
fender of the system.
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FRENCH ECONOMIC CONTROLS REFLECT DESIRE FOR STABILITY
The monetary and fiscal meas-
ures as well as other economic
controls now being imposed in
France reflect President de
Gaulle's strong desire to restore
stability and avoid devaluation
of the franc. Further measures
will almost certainly be neces-
sary as the economic results of
the crisis become clearer and as
plans for economic and social re-
form are elaborated.
The general strike virtually
ended during the fourth week of
June, although some 50,000 workers
remained idle in scattered areas.
Strike settlements brought wage
increases that will average about
15 percent and boost household
incomes by about $3 billion.
This is expected to induce an up-
surge of consumer spending that
may generate boom conditions and
a rise of 7 to 8 percent in the
price level for the year.
To combat inflation, the gov-
ernment has taken a number of
steps; price guideposts were is-
sued for industry and the Bank
of France discount rate was in-
creased from 3.5 to 5 percent.
Supplementary budgetary expendi-
tures of $1.5 billion, however,
have also been announced. These
will be partly offset by higher
tax revenues and cutbacks in ex-
penditures, such as those for the
nuclear forces. Larger budget defi-
cits are nevertheless expected
and these will increase infla-
tionary pressures.
To protect the balance of
payments from an import boom, an
export slump, and capital flight,
the government has adopted severe
exchange controls, import quotas,
and export subsidies designed to
keep export goods competitive.
The temporary nature of these
measures has been emphasized.
Honoring a longer term commit-
ment, France implemented on 1
July the final stage of tariff
reductions under the Treaty of
Rome, reducing all barriers to
EEC imports and conforming to
the EEC Common External Tariff
(CXT) against all non-EEC coun-
tries.
France lost almost $1.8 bil-
lion of its reserves as a result
of operations to support the franc
from 1 May to 2 July. On 2 July,
French gold and foreign exchange
reserves stood at $5.2 billion--
about 25 percent lower than the
$6.9 billion held before the
crisis. Reserve losses are ex-
pected to continue in light of the
balance of payments deficit of $1
billion or more forecast for 1968.
During the week of 8 July, the US
Federal Reserve System and other
major central banks pledged a
total of $1.3 billion in standby
credits (so-called "swaps") to
help support the franc in comin
months. 25X1
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CZECHOSLOVAKIA BESET BY FOREIGN AND DOMESTIC PROBLEMS
Even as it is fending off
increasingly severe pressures
from the Soviet Union and its
orthodox allies, the Dubcek re-
gime is beset by continuing in-
traparty factional struggle and
by the resurgence of longstand-
ing antagonism between Czechs and
Slovaks.
Moscow has maintained its
military pressure on Czechoslo-
vakia by keeping in place the
Soviet units moved in during the
Warsaw Pact exercise. The size
of these forces is unknown.
Moscow may be searching for
a pretext to keep these troops
The Czechoslovaks continue to
maintain that Soviet units will
leave the country, but apparently
are having difficulty in getting
them to do so. Defense Minister
Dzur stated on 9 July that Prague
was "negotiating" with the Warsaw
Pact command about the withdrawal.
On 11 July the government's press
spokesman reported that the Pact com-
mand had empowered Prague to announce
that "further military units"
will "begin to withdraw as of 13
July." Even this statement, which
is the most specific yet issued by
Prague, begs the question when,
or if, all the Soviet troops will
depart.
Moscow capped off ten days
of increased political pressure
on Prague when Pravda cited the
"2000 Words" appeal of Czechoslo-
vak liberals as evidence of the
"activization of right-wing a,id
directly counterrevolutionary
forces in Czechoslovakia." Pravda
expressed confidence that the
Czechoslovak party and working
people would administer a "severe
rebuff" to the alleged reactionary
forces.
It seems clear, however, that
the article was designed as a fol-
low-up to a letter sent by Moscow
to the Czechoslovak party which
criticized the liberal appeal for
the ouster of conservatives, again
questioned whether the Dubcek lead-
ership is in control, and issued
a summons for another summit meet-
ing. Moscow's like-minded allies--
East Germany, Poland, Bulgaria,
and Hungary--sent similar letters
to Prague.
The Pravda article was pre-
ceded by three speeches within
seven days by party leader Brezhnev
designed, in part, to remind Prague
that Soviet "tolerance" is not un-
limited. On 3 July Brezhnev, point-
edly referring to the "trials" of
the Hungarians in 1956, warned that
the USSR will help to put down any
antisocialist threats.
The Czechoslovak party pre-
sidium met on 8 and 9 July to as-
sess these letters, and, although
offering to discuss issues bilat-
erally, rejected the idea of a
summit meeting. The presidium
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added that any talks must be based
on the principles of equality and
sovereignty. Some Czechoslovak
party officials, including party
secretary Cisar, reacted more ve-
hemently to the letters.
Apparently buoyed by the con-
tinuing Soviet pressure campaign,
conservatives within the party
have attempted to use the "2000
Words" appeal to discredit the
liberal-moderate coalition. The
latter, however, scored a victory
last weekend as regional party
conferences elected a substantial
majority of Dubcek supporters to
be delegates to the forthcoming
party congress. A liberal Slovak,
deputy premier Husak, has spoken
out urging that conservatives be
ousted from the Slovak party lead-
ership.
The Dubcek regime has not
yet won a complete victory over
the conservatives, however, and
the factional strife is likely to
continue through the summer. The
intensity of this struggle was in-
dicated by an article in the writ-
ers journal on 4 July which re-
ferred to an open "attempt" at a
reactionary coup, and implied that
party secretary Indra, a conserva-
tive spokesman, was involved.
Prague, meanwhile, still has
not drawn up a detailed program for
either the procurement or use of
Western aid. The Czechoslovaks
have approached the West for both
hard-currency loans to finance con-
sumer goods and long-term credits
to buy advanced Western equipment
and technology. Discussions have
centered on an immediate need for
$400-500 million. A good portion
of this sum is likely to be used
to forestall a drop in living
standards, which, without outside
help, could come in the initial
stages of proposed economic reforms.
Rome is prepared to expand
significantly the $20 million al-
ready extended in short-term cred-
its, while Paris has remained non-
committal. The Czechoslovaks are
also engaged in talks with West
German financial officials, and
various West German schemes for
helping Prague appear to be under
consideration. At present, these
schemes center on private loans,
presumably government-guaranteed.
The Czechoslovaks are trying
also to obtain aid from the USSR.
Moscow reportedly already has 25X1
agreed to provide additional grain
this year, and the Soviets con-
tinue to hold out the hope of a
loan to Prague.
HARD LINERS GAIN IN POLISH PARTY LEADERSHIP
Shifts in the top party
leadership announced at the end
of a two-day central committee
plenum on 9 July indicate sig-
nificant but not yet decisive
gains for the hard-line opponents
of party leader Gomulka.
The appointment of Interior
Minister Moczar, the leader of
the nationalistic, hard-line
faction, to the party secretar-
iat and to the junior policy-
making position of candidate
politburo member, gives him a
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long-sought position within the
top leadership. The promotion
of former candidate politburo
member Jaszczuk to full, i.e.
voting, politburo membership
nonetheless maintains the pro-
Gomulka majority in the party's
policy-making body.
Most important for Moczar
is the fact that he replaces the
retiring party secretary in
charge of security, Wladyslaw
Wicha, who, like his successor,
moved to the secretariat from
the Interior Ministry. As Go-
mulka's trusted lieutenant, Wicha
was charged primarily with keep-
ing an eye on the ambitious Moc-
zar. Moczar probably will as-
sume Wicha's security functions,
but because party secretaries
customarily are not members of
the government, he may soon re-
linquish his post as interior
minister. This and other possi-
ble shifts in the government
may be announced at a parliamen-
tary session reportedly scheduled
for 15 July.
Gomulka's politburo aides
strongly supported his efforts
to call off the anti-Semitic
propaganda campaign and to re-
view some of the recent purges.
Politburo member Kliszko's re-
marks in this regard were echoed
by several of the central commit-
tee members who had already been
ousted from their government and
academic positions.
Although Gomulka was able
to prevent the resignations of
approximately a dozen central
committee members under fire from
the hard liners, he did not have
his usual control over the plenum.
His supporters openly clashed
with the leaders of middle ech-
elon party organizations where
Moczar's support is the strongest.
The plenum did not conclu-
sively resolve the factional strug-
gle, consequently there will be
intense campaigning for delegates
to the forthcoming party congress.
The congress, which was set for
11 November, will elect a new
central committee, which in turn
will choose a new leadership.
The full impact of Moczar's
gains on Gomulka's power position
within the party cannot yet be
precisely defined, but the psy-
chological effect on the party's
rank and file, especially its
Jewish segment, probably will be
significant. Gomulka spoke at
the plenum, but his remarks have
not been made public, and this
may be another sign of his weak-
ness.
In the long run, the fail-
ure of the plenum to address it-
self to the demands for reform
from the party's younger, better
educated members may prove to
be both Moczar's and Gomulka's
Achilles heel. Except for polit-
buro member Gierek, who for the
time being is supporting Gomulka,
no speaker raised such problems,
suggesting that no lessons were
learned from the March riots
of youth and students. The de-
mands of Polish youth, however,
are basic, and will probably
have an impact on the course of
the party congress.
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UN emissary Gunnar Jarring has been probing Arab-Israeli differences
on substantive issues during talks he has had in the last two weeks in
Europe with foreign ministers Riad of Egypt, Al Rifa'i of Jordan, Eban of
Israel, and with Kosygin and Gromyko of the USSR. The Soviets have
encouraged Jarring to draw up concrete proposals for submission to each
side as a means of finding areas of potential accommodation. The Jarring
mission undoubtedly was the primary topic of President Nasir's talks in
Moscow this week but the results of his short visit are still obscure.
The Jordan-Israel frontier area has been relatively quiet, but along the
Suez Canal the most serious clash in months occurred on 8 July, culmi-
nating in the Israeli shelling of an Egyptian town.
The Greek Government finally published its version of the proposed
constitution this week, apparently only after considerable cabinet debate.
Early indications suggest that both royal and parliamentary prerogatives
have been limited; further revisions may occur before the promised Sep-
tember referendum.
Tunisian President Bourguiba is visiting Bulgaria, a major Communist
aid donor to Tunisia, and Rumania to balance his recent trip to Canada,
the United States and Spain. Bourguiba's last stop on his tour will be
Turkey, which may contribute some military assistance.
In the Persian Gulf area, the members of the embryonic Federation
of Arab Amirates have agreed on the first steps toward creating a working
government.
Tribal disturbances of rather serious proportions have reportedly
erupted in West Pakistan near the Afghan border, and the authorities have
moved in troops to restore order.
The Indians are reacting with alarm to the reported Soviet decision to
sell arms to Pakistan. Mrs. Gandhi has described the development as
"fraught with danger," and is protesting to Moscow.
With increased world attention focusing on the plight of the Biafran
populace and cease-fire prospects as dim as ever, the Nigerian Government
may seek to shorten the war by increa ' temno of its militar
operations against the secessionist forces. 25X1 25X1
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SOVIET NAVAL FORCE TOURS INDIAN OCEAN
The small Soviet naval force
making a good-will tour in the
Indian Ocean reportedly is sched-
uled to start home late this week
after a port call in Ceylon. The
force--a light cruiser, a guided
missile frigate, and an oiler--
made port calls in eight coun-
tries.
When the ships left Vladi-
vostok in mid-March, their sole
announced mission was a courtesy
visit to India. After visiting
Madras and Bombay, however, the
force continued on an extempora-
neous tour of South Asia, Africa,
and the Middle East. No country
is known to have refused a visit
by the Soviets. Some of the nations
visited, such as Pakistan, did not
welcome the Soviet ships but did
approve their calls to demon-
strate neutrality.
The Indian Ocean tour, the
first such cruise in the area, ap-
pears to be part of the general
expansion of operations by the
Soviet Navy over the past year or
two. There are no indications
that the Soviets are planning to
maintain a permanent naval pres-
ence in the Indian Ocean, but a
good-will tour could become a
regular feature
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NASIR COMPLETES EXTENDED VISIT TO MOSCOW
Nasir's talks in Moscow from
4 through 10 July--his first visit
to the Soviet Union since 1965--
apparently dealt with Soviet mil-
itary aid as well as the Arab-
Israeli impasse, but as yet there
is no clear picture of the re-
sults.
The USSR undoubtedly used
the occasion to prompt Cairo to
loosen the Gordian knot in the
Middle East. The early phase of
the talks reportedly focused on
UN emissary Jarring's mission.
The Soviets have favored increased
Arab cooperation with Jarring,
probably to the extent of indirect
talks with Israel, and they previ-
ously have fended off Arab efforts
to return the issue to the Secu-
rity Council.
rally around Nasir's leadership.
Soviet leaders would especially
like to draw Egypt and Syria
closer together and end Damascus'
postwar isolation.
There is no indication, how-
ever, that the plaudits for Nasir
were accompanied by new military
and economic aid agreements. The
Egyptian delegation did not in-
clude a senior-level economic
official, and further arms discus-
sions may occur if Soviet Defense
Minister Grechko stops in Cairo
during his trip to Algiers later
this month. Also, a Cairo news
agency reported that Chief of
of Staff Riyad will remain in
Moscow after Nasir's departure
to continue his talks with
Grechko.
The USSR, in Pravda's own
words, gave President Nasir a
"particularly warm and hearty
reception," probably going to
great lengths to convince him
that Egypt remains the keystone
of Soviet policies in the Middle
East. Moscow is still trying to
get Arab progressive elements to
The fact that Nasir's visit
was longer than originally planned
suggests that differences may have
arisen. Nasir undoubtedly also
unburdened himself to Tito on the
question of an accommodation with 25X1
Israel during Nasir's subsequent
stopover in Yugoslavia.
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SECRET
YEAR-OLD NIGERIAN CIVIL WAR DRAGS ON
After a year of hard-fought
operations, federal military forces
dispatched to put down the seces-
sionist Ibo tribe of eastern Ni-
geria have occupied about two
thirds of Biafra. Lagos, regard-
less of international pressures
for an early cease-fire, is de-
termined to prosecute the war
until the Ibos renounce secession.
The Ibos, who view the war as a
struggle for survival, are still
fighting doggedly on, in spite
of dwindling military supplies
and spreading famine and disease.
Federal military strategy
has been to try to avoid a direct
invasion of the densely populated
Ibo heartland. As the Ibos show
no sign of giving up, however,
General Gowon appears to be more
inclined to heed the pleas of
field commanders for the complete
occupation of the East Central
State. This would be a long and
costly operation, and could well
ensure the permanent alienation
of all Ibos from the Nigerian fed-
eration.
Federal military forces in
the southern sector are slowly
occupying the rest of Rivers State
against increasing opposition. To
the east of Port Harcourt, some
of the worst devastation of the
war is reportedly taking place
as the two sides chase each other
back and forth over the same
terrain. Some federal reinforce-
ments have been transported to
the overextended division in
this area.
In the northern sector, fed-
eral troops have taken Awgu and
have driven within a few miles of
Nnewi, birthplace of Biafran leader
Ojukwu. A major objective is
the improvised rebel airstrip
near Ihiala, and another brigade
is being brought in to assist
this operation. Federal progress
in this area is impeded by Biafran
elements infiltrating across the
Niger River into the Mid-Western
State, where they are harassing
supply lines along the roads lead-
ing to Asaba, as well as limiting
use of the river.
Biafra is keeping small
quantities of arms and ammunition
flowing to its troops via its
tenuous air link to Portugal.
On 30 June one aircraft regularly
used on this route crashed on
landing while transferring Red
Cross relief supplies from Fernando
Po Island.
Major Western relief agencies,
led by the International Commit-
tee of the Red Cross, are mount-
ing sizable efforts to bring food
and medicines to the war-torn
areas and to the impacted Ibo
population. The Biafrans, how-
ever, are insisting that all
relief supplies be brought di-
rectly by air rather than over-
land through federally held
territory. The rising incidence
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of malnutrition, famine, and
disease, especially among several
hundred thousand refugees, prob-
ably now requires a larger scale
relief effort than can be pro-
vided by air.
While British and Common-
wealth officials continue to try
to bring the Nigerian combatants
together for new peace talks,
the organization of African Unity
has also turned its attention to
the problem again. Its long dor-
mant Nigerian Consultative Commit-
tee now is scheduled to meet in
Niamey, Niger, on 15 July, but
this group is unlikely to influence
either side in the civil war.
Nigeria: Status of Federal Advance Into Biafra
Makurdi #P
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Federal advance
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25 50
STATUTE MILES
EQUATORIAL GUINEA
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CAMEROON
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The Central American summit meeting in El Salvador last weekend
highlighted events in the hemisphere.
The Central American Common Market, the principal topic of the
conference, appears to have been strengthened somewhat, and President
Johnson's attendance served to emphasize the importance of continued
efforts to make it a permanent working arrangement.
News media in the five republics gave extensive and largely favorable
coverage to the meeting, but Moscow, Peking, and Havana, were sharply
critical, saying that the Common Market was a means of "plundering the
people," and that President Johnson's trip was aimed only at salvaging it
from bankruptcy.'
Elections are still making news in several countries. In Chile, Presi-
dent Frei's Christian Democratic Party won an impressive victory in a
congressional by-election on 7 July. Although the results cannot be ex-
trapolated into a national trend, the victory will provide the Christian
Democrats with a strong psychological stimulus as they prepare for the
national congressional elections next March. The defeat of the leftist
candidate indicates that the Communists' goal of a broad leftist coalition
is still some way from realization.
In Ecuador, President-elect Jose Maria Velasco has still not been
proclaimed the official winner in the elections of 2 June. Velasco believes
that the major obstacles to certification of his victory have been over-
come, but he is still threatening "civil war" if anything goes wrong.
Student demonstrations in Brazil and Argentina, and labor protests in
Uruguay have subsided, but the threat of further violence has preoccupied
government leaders. The Brazilian military is increasingly dissatisfied with
the president's handling of student and other problems. In Argentina, the
government has made it clear it will not tolerate disorder. The chiefs of
the Uruguayan armed forces reportedly are pressing for more stringent
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CENTRAL AMERICAN SUMMIT IMPROVES AREA OUTLOOK
Last weekend's Central Amer-
ican summit meeting in El Salva-
dor was a great help to Central
American integration efforts.
The Central American Com-
mon Market (CACM), the principal
topic at the conference, appears
to have been strengthened. An ex-
port-induced economic slowdown
that began in 1966 has impeded
progress toward integration. The
new attitude that the CACM must
be a permanent working arrange-
ment came about when the five
presidents agreed to push for
quick ratification of a 30-per-
cent tariff surcharge on imports
from outside the area.
This surcharge, designed
to ease the area's balance of
payments problem, was not to have
been applied by any of the mem-
ber countries until ratified by
at least three legislatures.
Nicaraguan President Somoza, how-
ever, imposed it unilaterally
and threatened to destroy the
five-nation market if the other
countries did not quickly follow
suit.
When the meeting was called
Somoza altered his stand, report-
edly stating that Nicaragua's
interests were the same as those
of the other Central American
countries. The Guatemalan and
Honduran legislatures are ap-
parently on the verge of ratify-
ing the surcharge.
Relations between El Salvador
and Honduras were normalized on
the eve of the meeting when the
two presidents announced an ex-
change of prisoners taken in
last year's border clashes. The
dispute over the prisoners had
marred relations between the two
countries and impeded final set-
tlement of the long-standing
border problem. It will prob-
ably be some time, however, be-
fore a border is officially
delineated in the disputed ter-
ritory. Further progress de-
pends on a joint Salvadoran-Hon-
duran commission established
early this year to study the
problem and mark the border.
News media in the five re-
publics have given extensive
and largely favorable coverage
to the San Salvador meeting,
which has been acclaimed a great
success. In Guatemala, the legis-
lature reflected public opinion
with a congressional resolution
expressing satisfaction with the
results of the summit. Dailies ban-
nered the regional unity theme and
the impetus given the Common Market
by President Johnson's visit. Costa
Rican President Trejos, however,
stated that declarations are only
words and it remains to be seen
whether the problems of economic
integration can be overcome.
Cooperation is likely to
improve as a result of the con-
ference, even though a basic dis-
trust between some of the presi-
dents probably remains. Future
problems may be handled with
more cordiality and there are
plans afoot to continue presi-
dential meetings at regular in-
tervals.
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A TIME OF TESTING IN BRAZIL
Student demonstrations have
subsided, but the basic issues
remain and military leaders are
still not happy about President
Costa e Silva's failure to deal
with political turbulence. He
has so far avoided harsh repres-
sive measures but there is an
increasing possibility that he
will have to bow to "hard-line"
demands.
The administration has im-
posed a ban on demonstrations for
an indefinite period, but since
few are scheduled during the
present vacation period, the move
appears to be mainly a sop to
"hard-line" military men. it
could boomerang, however, and
lead to further violence if stu-
dents decide it is just one more
item in their long list of griev-
ances.
Demonstrations on 2, 3, and
4 July in Recife, Sao Paulo, and
Rio de Janeiro failed to attract
as much nonstudent support as had
earlier protests. Leftist ex-
tremists harangued the crowds,
stressing principally antigovern-
ment themes. The US came in for
its share of the tongue-lashings",
and two US flags were burned.
Urban terrorists are con-
tinuing their activities in Sao
Paulo. Early on 7 July five
bombs damaged railway facilities
and severed an oil pipeline. Au-
thorities have not yet identified
the group responsible, but sus-
pect that dissident Communist
leader Carlos Marighella may be
involved. More trouble seems to
be in prospect following the re-
cent theft of nearly 1,000 pounds
of dynamite from a rock quarry.
The next few weeks will be 25X1
a time of testing for the present
administration. Costa e Silva may
take advantage of the vacation
period to implement some of the
educational reforms demanded by
students. If progress is not evi-
dent soon, however, new demonstra-
tions are likely. They would no
doubt be accompanied by heightened
discontent and stepped up military
pressure, both of which would be
detrimental to government stabil-
T e President held a
meeting of his National Security
Council on 11 July to discuss stu-
dent disturbances, urban terrorism,
and "counterrevolutionary trends."
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URUGUAYAN GOVERNMENT STANDS FIRM
President Pacheco is making
the first real effort in many
years to control spiraling infla-
tion.
Operating under the limited
state of siege that began on
13 June, he has imposed economic
sanctions on several businesses
that defied his emergency decree
freezing prices and wages. Pa-
checo's choice of targets, which
included high mark-up credit out-
lets, appears calculated to gain
the support of the general public.
He still lacks formal legislative
approval for his emergency secu-
rity measures, but he apparently
has the tacit support of the ma-
jority of congressmen, including
several leaders of the opposition
Blanco party.
Communist leaders are again
fearful that their party may be
Several minor labor dis-
s have occurred this week
and the embassy reports that the
Communist-controlled labor con-
federation has planned for an
"undeclared" general strike to
begin about midday on 11 July.
The government has given no
indication that it plans to lift
the limited state of siege, but
Pacheco will probably make some
wage adjustments within the con-
text of his tough Policy line.
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