THE PRESIDENT'S DAILY BRIEF 13 FEBRUARY 1975

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007941
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: February 13, 1975

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The President's Daily Brief
February 13, 1975
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Exempt from general
declassification schedule of E.O. 11652
exemption category 5B(
declassified only on approval of
the Director of Central Intelligence
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USSR
FOR THE PRESIDENT ONLY
February 13, 1975
Table, of; Contents,
(Page 1)
Vietnam: The communists
Ninh .Province,
'(Page 3)
plan major attacks in Tay
OPEC: There is growing concern in several oil-
producing'states over the size of production
cuts they have had to make during the past
several weeks, the steady increase in their
underutilized production capacity, and the
? issue of prices. (Page 4)
Turkey: The Turkish government reportedly will wait
until the end of the month before taking any
major retaliatory moves against the US. (page 6)
UK-USSR: Neither side expects dramatic developments
from Prime Minister Wilson's visit. Brezhnev
reportedly is beginning to work again. (Page 7)
India-USSR:. Soviet Defense Minister Grechko, the
most important Soviet official to visit India
since late 1973, arrives there on February 24.
(Page 9)
?
Venezuela: President Perez' oil nationalization
plans may be linked to the US Trade Reform Act.
(Page 10)
Notes: Portugal-Spain Libya; Japan (Page 11)
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USSR
Since late 1970, the Soviets have been construct-
ing a new type of silo--designated the III-X--at the
launch groups being prepared for the new generation
of ICBMs.
(continued)
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104
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Demilitarized Zone
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MR 1
Tonle
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CAIMBODI
Mekong
Gulf of
Thailand
114
MR 4
106
R3
Capital Special Zone
110
MR 2
South
China
Sea
SOUTH VIETNAM
100
MILES
16-
14-
10--
110
557313 2-75 CIA
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VIETNAM
The communists plan major attacks in
Tay Ninh Provincej
The plans, which are part of an
early February COSVN "resolution," call
for the use of two regular divisions, sup-
ported by armor, artillery, and local
units. The timing of the attacks is to
remain secret until the last moment to
ensure maximum security.
The purpose of the action is to overrun all of
Tay Ninh Province, as the communists did in Phuoc
Long Province last month. If this ambitious goal
is not met, the communists will try to make Tay Ninh
City a second An Loc. An Loc is the neighboring
provincial capital which withstood prolonged attacks
in 1972 and is today only a government island deep
in communist-held territory.
? The communists have been shifting some of their
main-force combat units into Tay Ninh Province, in-
cluding some of the regimental formations
There had been indications for sev-
eral weeks that the communist 9th Division would
move to Tay Ninh, but the division headquarters and
one subordinate regiment earlier this week were ten-
tatively identified moving eastward into Bien Hoa
Province.
Saigon will make strenuous efforts to defend
Tay Ninh Province. Its loss would be a major set-
back for the South Vietnamese. The province has
been a major battleground since the early 1960s
and, unlike Phuoc Long Province, has a relatively
large population and is nearly self-sufficient in
food production. It is defended by a South Vietnam-
ese division, as well as by its territorial forces.
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OPEC
Sharp cuts in oil production by the
Organization of Petroleum Exporting Coun-
tries during the past several weeks and
the decisions by several oil-producing
states to reduce prices have given rise
to press speculation that OPEC is or soon
will be in disarray. While this specula-
tion is largely overdrawn, there clearly
is growing concern in some OPEC nations
over the size of the cuts that they have
had to make as well as the steady increase
in underutilized production capacity, which
now is an extraordinary 11.6 million bar-
rels a day.
Venezuela especially fears that the recently
announced US program to reduce oil imports by 1 mil-
lion barrels a day--and to a lesser extent the pro-
posed cut of 1 million barrels a day by other mem-
bers of the International Energy Agency--will have
a sharp impact on its oil sales in the "captive"
US market. Caracas reportedly has proposed that
OPEC set mandatory quotas for each member country
in order to curtail output and support current
prices and to guarantee Venezuela its current share
of the international oil market.
If other OPEC members go along with the Vene-
zuelan plan, the organization could face its first
real test. Any prorationing scheme would have to
contend with the national and economic ambitions
of the diverse OPEC membership.
Another issue that promises to test OPEC's
mettle is prices. OPEC oil ministers, in response
to a Kuwaiti request, will meet next week in Vienna
to discuss the dollar's recent decline relative to
most other major currencies.
Most oil contracts are written in dollars or
sterling. The drop in both currencies has reduced
the value of OPEC revenues and foreign reserve ac-
cumulations relative to the cost of imports from
countries whose currencies have appreciated vis-a-
vis the dollar. Less than 20 percent of OPEC's
imports are from the US.
(continued)
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One immediate consequence of the dollar's de-
cline was the decision yesterday by Iran to separate
its currency from the dollar and to peg it to the
International Monetary Fund's special drawing rights.
The value of the special drawing rights is based on
a weighted average of the value of 16 major curren-
cies. Tehran expects the move to decrease somewhat
the domestic cost of Iran's imports and relieve
Iran's inflation slightly.
Other oil producers with currencies pegged to
the dollar may be inclined to follow Tehran's ex-
ample. This includes the majority of OPEC members.
A number have complained in recent weeks about the
gyrations of the dollar and about the rising cost
of foreign imports.
There is no indication, however, that Iran
will tie oil prices to the special drawing rights
as a hedge against a further downward movement of
the dollar. Despite their concerns over the dol-
lar's decline, it is unlikely that OPEC members
will decide to change their oil-pricing practices
soon. Some OPEC members, such as Saudi Arabia,
view the dollar as only temporarily depreciated
and, hence, do not feel compelled to protect the
value of their receipts by changing pricing prac-
tices now.
Most OPEC members, including Algeria, have
expressed a willingness .to maintain the oil price
freeze--now-scheduled to end in September--to the
end of the year or beyond. Implicit in their po-
sition is the recognition that, by freezing the
nominal price of oil, OPEC is allowing the real
price of oil to fall with inflation.
This position on prices and exchange rates
represents a marked, if only temporary, shift in
OPEC's outlook of only a few weeks ago, when the
main thrust of the organization's pricing policy
was to implement an indexing scheme that would
maintain the real value of their current oil pro-
duction.
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TURKEY
The Turkish government reiterated
yesterday that all defense agreements
with the US will be subject to renegotia-
tion unless military equipment deliveries
to Turkey are resumed. The Turks re-
portedly are prepared to wait until the
end of the month before taking any major
retaliatory moves against the US.
The Turks have informed NATO of the problems
the US action will cause Turkey in carrying out its
obligations to the alliance. They have also asked
the NATO Defense Planning Committee to conduct an
investigation into the effects the "US arms embargo"
will have on defense in the eastern Mediterranean.
The Turks reportedly have suspended payment to US
contractors who are working on NATO projects in
Turkey. Ankara will send emissaries to other NATO
countries to determine whether they can provide
equipment and spare parts.
The Turkish government is trying to assess the
extent of public sentiment favoring retaliatory
measures against the US and is attempting to monitor
the activities of groups that might seek to protest
actively.
the Turkish teachers' association is planning anti-
American demonstrations Saturday in provinces where
US installations are located. Such demonstrations
are likely to be watched closely by Turkish security
officials, and they may be canceled in those prov-
inces where martial law is still in force.
The Turkish foreign ministry has ?used the risk
of anti-American incidents to turn aside a US re-
quest for the visit of three US navy ships to a
Turkish port. The foreign ministry's action was
not an outright rejection of the request on polit-
ical grounds, but it was clearly a retaliatory move,
and other such steps are likely to follow.
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UK-USSR
Neither side expects dramatic de-
velopments to come from Prime Minister
Wilson's five-day visit, which begins
today. London has trailed well behind
the other major Western nations in im-
proving relations with the USSR, partly
because of the UK's mass expulsion in
1971 of Soviet intelligence personnel.
The British have tried to beat the Soviets at
their own game by submitting a large package of
topics for discussion, including a draft of a joint
declaration on nonproliferation of nuclear weapons.
The British expect that the Soviets will press for
their usual formulations on European security and
mutual balanced,force reductions and that these
will be the main sticking points. While the Brit-
ish have adopted a more conciliatory tone on Euro-
pean security in Western councils, there is still
a, sizable gap between the Soviet and British posi-
tions.
Several routine bilateral accords will prob-
ably be signed, but a Soviet foreign ministry offi-
cial has said that any political documents emerging
from the visit will be far less important than
those Moscow has signed with the US, West Germany,
and France. He added that an increase in trade
between the two countries would depend on "polit-
ical developments," an apparent reference to Brit-
ish concessions on European security and force re-
ductions.
British officials say they have hinted broadly
that a meeting between Wilson and Soviet party
chief Brezhnev would be desirable. The Soviets
have made no commitment, but they have unofficially
leaked stories that have kept the possibility alive.
Brezhnev definitely will meet with Wilson and the
event will be shown on Soviet television.
(continued)
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expected Brezhnev to continue in his post, but that
party secretary Kirilenko and first deputy premier
Mazurov will assume heavier responsibilities in the
future. Kirilenko has been the acting party chief
during Brezhnev's hospitalLzation. In the past,
he has filled in during Brezhnev's temporary ab-
sences, but never for such a long period of time
nor under what appear to be fairly formalized ar-
rangements.
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INDIA-USSR
Soviet Defense Minister Grechko is
scheduled to arrive in New Delhi on Feb-
ruary 24 for a four-day visit. He is the
most important Soviet official to visit
India since General Secretary Brezhnev
went there in late 1973.
Indian military procurement apparently will
receive major attention. Tactical strike aircraft,
guided-missile cruisers or destroyers, minesweepers,
and anti-submarine warfare aircraft probably are at
the top of India's shopping list. India tried sev-
eral times last year to arrange new purchases of
arms from the Soviet Union, but differences over
types of equipment and repayment terms prevented
agreement.
The Indians expect that Defense Minister Grechko
will press Prime Minister Gandhi to visit Moscow.
Her last trip was in 1971, and she reportedly is
considering another visit this spring. Her reluc-
tance to go to Moscow partly reflects New Delhi's
dissatisfaction with aid and trade relations with
the Soviet Union. The USSR's refusal--or inability--
last year to repeat the 2-million-ton grain shipments
of 1973 was a major disappointment to India at a time
of widespread food shortages.
India wants to maintain close relations with
Moscow, but at the same time wishes to establish a
more balanced relationship with other major powers.
New Delhi is unlikely to grant such long-standing
Soviet requests as endorsement of the Brezhnev
scheme for Asian collective security or the grant
of greater access to Indian naval facilities.
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VENEZUELA
President Perez' oil nationalization
plans may be linked to the US Trade Re-
form Act.
The director general of the petroleum ministry
recently claimed that Caracas had plans to retaliate
against the US if the trade act is not revised. He
warned that Perez is under increasing pressure from
influential members of his political party as well
as the opposition to take a tougher line on the
nationalization plans to be announced on March 2.
In fact, given his present domination of the
political scene, including control of congress,
Perez probably can get any type of nationalization
bill he wants through the legislature. Perez' re-
curring references to "pressures" appear to be ex-
cuses to justify his future actions.
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NOTES
The Portuguese have begun propagandizing events
in Spain in ways that Madrid will regard as inter-
ference in Spanish internal affairs.
Since January 28, Radio Portugal has been
broadcasting nightly half-hour programs to Europe
featuring anti-regime activities in Spain. The
program calls attention to civil and labor unrest
and demands by Spanish groups for democratic rights.
In another incident this week, the Portuguese Trade
Union of Public Entertainment Workers issued a com-
munique supporting eight recently arrested Spanish
actors, and cables protesting the arrests were sent
to Spanish officials.
Libya reportedly has reduced prices for most
of its crude oil for the second time this year, with
average costs to the companies to be lowered 8 to
14 cents a barrel.
A desire to boost foreign exchange receipts
through greater sales is probably the main reason
for the change in pricing policy. Sharp declines
in oil output due to non-competitive prices have
caused Libya's revenues to fall below the level of
foreign exchange expenditures late in 1974. Some
industry analysts feel further price reductions
will be necessary to raise production substantially.
Japan is not expected to ratify the nuclear
non-proliferation treaty before the conference of
ratifying states scheduled for May.
In the last few days, Prime Minister Miki and
Foreign Minister Miyazawa have publicly backed
away from previous commitments to push for ratifi-
cation this year. The policy change was apparently
made at a meeting of ruling party officials last
weekend at which right-wing opponents of the treaty
openly balked at the idea of foreclosing Japan's
nuclear weapons option. Long-time opponents of
ratification probably made their stand now because
of recent rapid progress in Japanese negotiations
with the International Atomic Energy Agency in
Vienna on a safeguards agreement. The Miki govern-
ment has clearly chosen not to buck intra-party
opposition on the issue; Miki is saving his politi-
cal capital with the right-wingers for what he sees
as more important uses.
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Top Secret
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