[1]27 December 1963
[3]SC No. 00624/63
[4]Copy
[6]bad
[8]is Sd A aha a SRAIOG AGNES LOO RINE ENN TRENT hy
[10]WEEKLY REVIEW.
[12]OFFICE OF CURRENT INTELLIGENCE
[14]ROAD POPLAR NE 19a Sie TA AE EM at RSet t inant ideinid
[16]CENTRAL INTELLIGENCE AG ENCY
[18]THIS DOCUMENT CONTAINS CODE WORD MATERIAL NO FOREIGN DISSEM TOP SECRET
[20]L : 7 GROUP | Excluded from automatic
[21]LILES v7) ~ downgrading ond seclassificction
[23]13-00000
[25]4
[29]This document contains classified information affecting the national
[30]security of the United States within the meaning of the espionage
[31]laws, US Code Title 18, Sections 793, 794, and 798. The law prohibits
[32]its transmission or the revelation of its contents in any manner to
[34]an unauthorized person, as well as its use in any manner prejudicial °
[36]to the safety or interest of the United States or for the benefit of any
[37]foreign government to the detriment of the United States.
[39]It is to be seen only by US personnel especially indoctrinated
[40]and authorized to receive COMMUNICATIONS INTELLIGENCE
[41]information; its security must be maintained in accordance with
[42]COMMUNICATIONS INTELLIGENCE REGULATIONS.
[44]No action is to be taken on any COMMUNICATIONS INTELLI-
[45]GENCE which may be contained herein, regardless of the advantages
[46]to be gained, unless such action is first approved by the Director
[47]of Central Intelligence.
[49]DISSEMINATION CONTROLS
[51]This document MUST NOT BE RELEASED TO FOREIGN
[52]GOVERNMENTS. If marked with specific dissemination
[53]controls in accordance with the provisions of DCID 1/7,
[54]the document must be handled within the framework of
[55]the limitation so imposed.
[59](> TOP.SECRET DINAR (
[61]CONTENTS
[62](Information as of 1200 EST, 26 December 1963)
[64]THE COMMUNIST WORLD ; Page
[66]SOVIET TRADE | ACTIVITY IN THE INDUSTRIAL WEST...
[67]Within: ‘a week. after the central committee approved
[68], Khrushchev’ s plan for the chemical industry, Sovie
[69]‘traders apparently_ -had_their_instructions and were
[71]\x@newing contacts in the industrial West. oe
[76]a
[78]Lae
[80]CHINESE COMMUNIST LEADERS' AFRICAN TOUR | ae 2
[81]‘While Chou En-lai and Chen Yi have been able to
[83]project an aura of Afro-Asian amity during the ~
[85]first two weeks of their two-month tour, they have
[86]' not scored-comparable successes-in- the political or
[87]>conomic. fields. ne rr et
[89]EAST [ GERMAN REACTION TO RELAXATION OF BERLIN TRAVEL
[91]“The East German people, _While elated over the holi-
[93]vercane -hope_that .they may—be_ permitted to visit
[94](their relatives in West Berlin and West Germany,
[95]NORTH KOREA IMPROVES AIR DEFENSE CAPABILITY 4
[96]‘Pyongyang haS more widely dispersed its supersonic
[97]feces has acquired relatively sophisticated new
[99]radar, and has-equipped its—IL-28s with an improved
[100]blind bombing and navigational system,
[102]NORTH VIETNAM'S MILITARY ESTABLISHMENT
[104]This 3 military - force, primarily a ground army | with
[106]never theless the most formidable in Southeast Asia,
[107]Its most notable achievement is its highly special-
[109]/ized capability to support and maintain insurgency; |
[110]‘ operations -in_ adjacent countries... (Published. sep-|
[111]\arately. as Special Report SC No. 00624/63B) __
[113]AS IA-AFRICA
[115]ENTHUSIASM FOR SOUTH VIETNAM REGIME FLAGGING
[116]The fhe military regime is beginning to take steps. to.
[117]| ma ke its Counterinsurgency effort more effective,
[118]but the generals _still_seem to have little idea_of
[120]how to rally significant popular support. __
[122]LAOS
[124]Communist forces have moved to erase recent: gains by,
[126]gightist units in central Laos. Neutralist and Pa the't \
[127]Lao representatives_are continuing their—-efforts to
[128]éase tension between the two >_ factions. _ a
[130]27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Page i
[132]TOP SECRET DINAR
[134]Pewee 7
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[137]Mane "TOP SECRET DINAR (-
[139]. ASIA-AFRICA (continued) Page
[140]FRENCH CABINET MINISTER TO VISIT CAMBODIA __. 7
[141]Armed Forces Minister Messmer's visit. in early. ra)
[142]iar is designed primarily to strengthen French in-
[143]fluence in the wake of Sihanouk's call. for. an-end—
[144]\to- the~ ‘the~US- aid: program. woe
[145]ARABS PLAN NO OVERT ACTION AGAINST ISRAELI PROJECT _ g
[147](Arab “military chiefs” apparently” feél that overt mil-
[148]jitary action against Israel's Jordan River diversion
[149]‘project is not feasible, but sabotage of its facili-
[152]CYPRUS DISPUTE FLARES AGAIN 9
[153]‘rhe new ‘outbreak of fighting on Cyprus is a reaction
[155]Ito President Makarios' determination to change the
[156](constitution so as _to limit the role of. the Turkish __
[157]minority. a . a
[159]BREAKUP OF THE FEDERATION OF RHODES TA AND NYASALAND _ .
[161]31 December because its black African population
[162]‘has persistently opposed it as a device to perpet~
[163]‘uate white rule. Its dissolution will end London's
[164]‘hopes for an economically integrated, multiracial
[165]istate and increase the danger of bitter clashes
[167]ibe tween white and black nationalists in its three
[168]erstwhile constituent territories. {(Tubiished sep-
[170]~T
[172]1
[174]AREA NOTE 10
[175]Saudi Arabia
[177]EUROPE
[179]THE COMMON MARKET CRISIS.
[180]vAgréements reached on agricultural policy on 23 De-.
[181]cember are apparently sufficient to discourage De | \
[182]Gaulle from breaking up the community. The agreement
[183]on a position for tne _Kennedy. Round. is—not t necessarily)
[185]favorable 1 to_the_US, ee ee
[187]K-US_FRICTIONS OVER SHIPPING POLICY .... 0 12
[188]‘The British tish Government has advised shipping circles
[189]Ut to comply with US demands for information relat
[191]ing’ tor rate discrimination | “against US exports.
[193]WEST_GERMAN POLITICAL DEVELOPMENTS _ ee os
[195]\Willy Brandt has again- taken the center “of the. polit-
[197]ical stage with the success of negotiations to open
[198]the Wall for the holiday season. He has been. named
[200]acting chairman” of” the SPN, ee ee
[202]27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Page ii
[204]TOP SECRET DINAR
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[208]-EUROPE (continued) Page
[209]AREA NOTES : 14
[211]NATO and Iceland
[212]WESTERN HEMISPHERE
[214]DOMESTIC POLITICS IN CUBA 15
[215]Castro has cautiously continued efforts to reduce
[216]the influence of the Moscow-oriented Cuban Com-
[217]munists, who are said to have banded together to
[218]work clandestinely against him.
[220]DOMINICAN REGIME FACES NEW POLITICAL CHALLENGES __._ 16
[222]The killing of 15 guerrillas by army troops ap-——.
[223]parently removes the insurgent threat but could
[224]provoke dangerous political repercussions. The
[225]head of the provisional government has already re-~
[229]BRAZIL ._ —_ . i _ 17
[230]‘Appointment of Ney Galvao as finance minister_.. 7
[232]itis the already slight prospect that Brazil's
[234]critical financial problems would be handled ef-— |
[236]féctively. Othér cabinet changes may follow.—.—
[238]AREA NOTE 18
[239]Bolivia
[240]27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Page iii
[242]TOP SECRET DINAR
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[246]TOP SECRET DINAR (|
[248]The Communist World
[250]SOVIET TRADE ACTIVITY IN THE INDUSTRIAL WEST
[252]Within a week after the |
[253]‘central “committee approved 7
[254]Khrushchev" S plan for the chem-
[255]ical industry, Soviet traders
[256]apparently had their instruc-
[257]tilons and budget allocations
[259]and were renewing their activ-
[260]ity in trade circles of the in-
[261]dustrial West.
[263]' Contracts for fertilizer
[264]installations, plastics and syn-
[265]thetic plants, petrochemical
[266]equipment, and mining machinery
[267]are already in various stages of
[268]negotiation. Officials in Bonn
[269]report they have under consider-
[270]ation a proposal by a West Ger-
[271]man consortium to supply the
[272]USSR with $400 million worth of
[273]petrochemical equipment. A
[274]| Soviet mission is negotiating
[275]with the British Imperial Chem-
[276]ical Industry (ICI), which here-
[277]| tofore has supplied the USSR
[278]with technical know-how. ICI
[280]reportedly has offered to de-
[281]liver equipment and processes
[282]for the production of fertiliz-
[283]ers, herbicides, rubber chem-
[284]icals, and plastics, Negotia-
[285]tions also are under way for
[286]large numbers of Japanese chemi-
[287]cal fertilizer plants.
[289]- Another Western consortium,
[290]involving US equipment and proc-
[291]esses, is discussing delivery
[292]of a large oil refinery. In
[293]addition, contracts for a wide
[294]vange of other machinery and
[295]equipment will probably soon be
[296]signed. These contracts appar-
[297]ently had been postponed until
[298]the new chemical equipment buy-
[304]27 Dec 63
[306]ing, program | was- presented to.
[308]CURRENT INTELLIGENCE WEEKLY REVIEW
[310]a |
[312]various trade corporations for
[313]next year were approved.
[315]The Soviet need for addi-
[316]tional credit to finance planned
[317]expanded purchases is crucial.
[318]The USSR presumably can generate,
[319]sufficient funds to meet down
[320]payments on sizable orders. !
[321]However, credit arrangements
[322]must be set now to spread out
[323]the heavy crush of payments
[324]which otherwise would fall due
[325]in 1965-66 when equipment con-
[326]tracted for next year will be
[327]delivered... Soviet ability to
[328]increase hard-currency reserves
[329]is not likely to improve in the
[330]near future, Moscow's current
[331]grain imports will reduce its
[332]gold reserves by 25 percent.
[334]If these continue beyond mid- |
[335]1964, the Soviet nard-currency
[336]position will be under further
[337]strain.
[339]|
[341]Despite the bleak foreign |
[342]exchange prospects for the USSR, 1]
[343]Soviet officials appear hopeful
[344]that Western competition for H
[345]Soviet orders will be adequate |
[346]to foster Western governmental
[347]and banking opinion favorable
[348]to more and longer term credit.
[349]Moscow may also hope that a
[350]continuation of its relatively
[351]restrained foreign policy will
[352]be helpful in this context. i
[353]While viewing the USSR as an
[354]acceptable commercial risk, the
[355]banking community has hereto-
[356]fore been unwilling to extend
[357]credits beyond a five-year pe- |
[358]riod because of uncertainty
[359]about future political develop- |
[360]“ments. (SECRET)
[362]t
[364]J
[366]Page 1
[368]TOP SECRET DINAR
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[373]The Communist World
[375]CHINESE COMMUNIST LEADERS’ AFRICAN TOUR ; ee eee ies
[376]wn “With. -two. weeks of their pro- | continent. Criticism of the >
[377]5 jected two-month tour of Africa USSR was reportedly a recurrent
[378]| completed, Chou En-lai and For- theme in Chou's four lengthy
[380]eign Minister Chen Yi can claim talks with Nasir. Nasir report-
[382]| high marks for their efforts to edly said that Chou talked about
[384]| project an aura of Afro-Asian the USSR the way the Soviets
[386]amity and to identify Peiping used to talk about the US. He |
[388]|with African aspirations. There accused the Soviets of trying
[390]is no evidence, however, that to colonize China, of breaking
[391]igen have scored any comparable political and economic promises,
[392]success in the political or eco- | and of becoming tools of the
[393]nomic fields. US, and he warned that any Afro-
[395]; Asian country which became de-
[397]The joint communiqué issued pendent on Moscow would suffer
[398]/on 21 December at the conclusion the same fate as Peiping.
[399], Of the Chinese leaders' visit to i
[401]Cairo contains few surprises, In Algeria, Chou sounded a
[403]and reports from Algiers suggest Similar note. He cited China's
[405]that discussions with Ben Bella early support for Algerian rev- |
[407]are following predictable lines. | olutionaries--support which ac-
[409]Thus far the Chinese have at- tually pre-dated that of the USSR.) |
[411]tempted to minimize differences, | He has also undoubtedly scored i fe
[413]play up past contacts, and press Soviet unreliability. The Chi- by
[414]such themes as militant struggle | nese may be pressing the Algerians
[415]against colonialism and "US im- to use some of the $50-million
[416]perialism," _| credit offered in October. This.
[417]offer was made to counter a $100- |
[419]In both Algiers and Cairo, million Soviet credit offered
[421]Chou! s hosts sought to demon- earlier the same month.
[423]strate their nonalignment by
[425]actions designed to play down Sino-Soviet rivalry for
[427]the impact of the Chinese lead- African support also flared at
[429]ers! arrival, Chou was greeted the UN, where Peiping outmaneu-
[431]in Cairo with a 2l-gun salute, vered Moscow on the question of
[433]but Nasir was not on hand. In enlarging the representation in
[435]Algeria, Ben Bella was on hand principal UN organs to accommo-
[437]to greet his guests, but the top- date the African bloc. Soviet |
[439]level delegation he sent to the delegate Fedorenko had attempted |
[441]Soviet Union just before Chou's to make it appear that the Chi- |
[443]arrival is receiving more pub- nese were opposed to the African-
[445]licity than the Chinese guests. sponsored expansion plan because:
[446]they insisted that any change
[448]It has become increasingly in the UN be tied to Peiping's |
[450]apparent that a major objective own admission to the Security |
[452]of the trip has been to undercut Council. The USSR found itself
[454]Soviet influence throughout the holding a suddenly emptied bag, |
[455]LO a 7 _. __ oo - . — at
[457]27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW , Page 2
[459]TOP SECRET DINAR
[461]13-00000 7 TOP SECRET DINAR ‘
[463]~ The Communist World
[464]; “however, when Peiping. loudly _ __..| Such_-secrecy-may-well_be_ prompted \
[466]repudiated Fedorenko's statement by security considerations. Chi+
[467]and . accused the Soviets of using nese officials were apparently
[469]i
[471]the issue as a pretext for op- seriously shaken by the abortive
[473]posing Afro-Asian demands. plot to kill Liu Shao-chi in
[475]Cambodia last spring. The Chi- |
[477]| Chou can be expected to nese envoy in Cairo reportedly
[479]| capitalize on this during next told Nasir of concern for Chou's! |
[480]week's visit to Morocco and in safety and asked that travel
[481]Subsequent stops in Guinea, plans during the Chinese leader's
[482]Ghana, and Mali. No details of visit to the UAR not be made
[483]Chou's itinerary beyond Rabat public. (SECRET NO FOREIGN. DIS-
[484]vhave. -been made_public—by-Peiping.|-SEM) ~~~ 7
[487]QU
[490]to, the agreement to let West fairly cautious: One party |
[491]Berliners visit relatives in member in Magdeburg said: "The \
[492]East Berlin is hopeful but still reason we don't let our citizens
[493]fairly cautious, judging by re- go to West Germany is that we }
[494]| Ports from local party officials. | are afraid they will defect."
[495]\ But he was promptly silenced by |
[496]\ The party central head- comrades who parroted the party |
[497]quarters, obviously concerned line on "the terror against our |
[498]that the agreement might have GDR citizens in West Germany." (
[499]domestic repercussions, ordered
[500]district officials to submit Public expression of dis- |
[501]immediate reports and detailed satisfaction with harsh travel \
[502]follow-ups on reactions to this and internal controls has been
[503]partial relaxation of travel / recurrent in recent months, {
[504]' curbs imposed in connection reaching a peak prior to the
[505]'|}with the building of the Berlin 20 October parliamentary elec-
[506]Wall. Most of the responses tions.
[507]state that the people are elated
[508]but are publicly voicing hope The people's reaction to
[509]that they may be permitted to the pass agreement with West
[510]visit their relatives in West Berlin points up one of the re-
[511]Berlin and West Germany. Many gime's major problems: how to
[512]East Germans express hope that project an image of itself as a
[513]the present move will be followed | sovereign state and of East Ber-
[514]by other relaxations--a reaction | lin as its capital without in-
[516]0
[518]| probably quite unpalatable to creasing discontent among its
[520]the regime. population, who still risk shoot-
[521]ing if they attempt to escape
[523]Public comment--at least to West Berlin, (SECRET KIMBO) |
[525]Sa nnaeni . |
[527]_ a an od
[529]Sa reported by the various
[531]27 Dec 63 ‘CURRENT INTELLIGENCE WEEKLY REVIEW Page 3
[532]TOP SECRET DINAR
[534]13-00000
[536]SY PUXCHANGNI
[537]Yorrosens
[539]MatiNL
[540]Pronnind'@) Micron |
[541]NCHONY. va
[542]Q HWARGH
[546]i
[547]i
[549]Jom
[550]7
[551]I
[553]} SAM site
[554]. fe Bomber elements
[555], ¥ Fighter defense elements
[556]- %& Combined command headquarte
[557]© Radar station “
[558]a East coast filter center
[560]arly watning radar coverage
[562]TOP SECRET DINAR |
[563]27 DECEMGER 1963
[564]MILES 100
[565]Q.mibes
[566]Mu7T
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[575]Ae
[577]a
[580]TOP SECRET DINAR (_
[582]The Communist World
[584]NORTH KOREA IMPROVES AIR DEFENSE CAPABILITY
[586]__North Korea has recently —-—-1.
[588]taken several steps which signif-
[589]icantly strengthen its air de-
[590]fenses. MIG-21 (Fishbed) jet
[591]fighters, which were first de-
[592]tected only at Pukchang-ni air-
[593]field, now are being stationed
[594]at other airfields. Pyongyang
[595]has also apparently just acquired
[596]a large number of relatively
[597]sophisticated types of radar
[598]sets. In addition, the North
[599]Korean bomber force, which has
[600]a total of about 100 IL-28
[601](Beagle) jet light bombers, is
[602]in part now equipped with, and
[603]has been training with, an im-
[604]proved blind bombing and naviga-
[605]tional system,
[606]! .
[608]Testing of and flight train-
[609]ing with the new fighters-~10
[610]to 14 of which were apparently
[611]obtained from the USSR in the
[612]fall of 1962--were first noted
[613]in communications intelligence
[614]in June 1963, Since that time
[615]the MIG-21s have been detected
[616]frequently in flight activity
[617]involving ground controlled in-
[618]tercept exercises,
[620]Beginning in October, MIG~
[621]21s have been noted operating
[622]from Wonsan on the east coast
[623]of North Korea. Their deploy-
[624]ment to this airfield places
[625]supersonic fighters on both the
[626]east and west coasts of North
[627]Korea.
[629]The North Koreans have re-
[630]cently--expanded—their radar
[632]coverage.
[634]_Six_new_types 0 of >]
[635]radar, at least one of which
[637][
[638]is believed to be exclusively \
[639]of Chinese Communist manufacture, | \
[640]have been detected. For the
[641]present these radars will ap- 1
[645]parently supplement rather than :
[646]replace North Korea's original
[647]three types--Kniferest A, SCR-
[649]270, and Token,
[650]The identifiable new types
[651]include Kniferest B, Spoonrest i
[652]A, and a new type of Chinese Com- |
[653]munist origin which is probably | \
[654]a substantial modification of
[656]the SCR-270. Spoonrest A is |
[657]sometimes used as the acquisi-
[658]tion radar for surface-to-air
[659]missile sites, but it is also
[660]used in an early warning role
[662]and is probably intended for that
[663]use in North Korea. Acquisition
[664]of these new radars reflects
[666]North Korea's efforts to extend l
[667]the range of its early warning
[668]detection system. To improve
[669]height-finding capability, Pyong-
[670]yang has also introduced more
[671]sophisticated radars such as
[672]Rockcake and Stonecake.
[674]Another improvement in North
[675]Korea's air capability is the
[676]equipment of about twenty IL-28s
[677]with an improved blind bombing
[678]and navigational radar system des-
[679]ignated Shorewalk. When properly
[680]used, this system permits preci- |
[682]sion navigation and blind bombing
[683]without the use of ground communi-
[684]cations which would betray the di- }
[685]rection of the flight and the tar-|
[687]27 Dec 63
[689]CURRENT INTELLIGENCE WEEKLY REVIEW
[691]get” designation. ‘(Top “SECRET “DINAR)
[695]Page 4
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[703]Southeast Asia
[705]ENTHUSIASM FOR SOUTH VIETNAM REGIME FLAGGING
[709]—— Communist. guerrilla activ-
[710]ity increased only slightly in
[711]connection with the third anni-
[712]_ versary, on 20 December, of the
[713]Viet Cong's Liberation Front,
[714]despite advance Communist propa-
[715]ganda exhortation for a major
[716]military effort. The Viet Cong
[717]continued to direct attacks and
[718]harassing activities primarily
[719]at strategic hamlets.
[720]| -.
[722]i South Vietnam's new govern-
[723]ment is showing extreme sensi-
[724]tivity to discussion of a "neu-
[725]tralist solution" to its in-
[726]surgency problem. The Communists'
[727]Liberation Front has repeatedly
[728]proposed Such a settlement, and
[729]the idea is gaining new advocates
[730]as a result of Cambodia's call
[732]for an international conference.
[734]week closed down a newspaper
[736]| Saigon' S military rulers last
[738]which was expressing interest in
[739]neutralism, However, editorials
[740]in the vernacular press, even
[741]though attacking neutralism, have
[742]kept the debate in the public eye.
[743]On 20 December, Saigon students--
[744]possibly encouraged by the re-
[745]gime--demonstrated against neu-
[747]| tralism.
[749]On the military front, the
[750]government is beginning to take
[751]some steps to overcome the leth-
[753]| argy that has affected its coun-
[755]; terinsurgency effort since the
[756]coup. A long~range pacification
[757]program has been launched in one
[758]of the most troublesome provinces
[759]in the northern part of the coun-
[760]try, and broad command changes
[761]have been introduced in two prov-
[762]inces south of Saigon where
[763]security has been deteriorating.
[765]In the political field,
[769]27 Dee 63
[771]‘cles with Premier Tho's provi-
[773]CURRENT INTELLIGENCE WEEKLY REVIEW
[775]‘members of the civilian-advisory >
[777]Council of Notables. Returned
[778]exiles apparently are not rep-
[779]resented, and there is a dearth
[780]of direct provincial represen~
[781]tation. Many appointees, how-
[782]ever, are prominent political,
[783]professional and lay religious
[784]leaders who could provide effec-
[785]tive guidance to the regime if
[786]they are given a chance,
[788]Apathy and disenchantment
[789]over the new government are wide-
[790]spread among such key elements
[791]as middle-grade officers, stu-
[792]dents and politicians. Criti-
[793]cism centers on the lack of
[794]firm direction by the ruling gen-
[795]erals, on repeated reshuffling
[796]of local officials deemed in-
[797]competent, corrupt or close to
[798]the Diem regime, and on the rise
[799]in Viet Cong activity. There
[800]are signs that junta members
[801]themselves are beginning to share
[802]the disillusionment of some cir-
[804]Sional cabinet, which is described
[805]as ineffective and regional in
[806]outlook,
[808]Leading generals nevertheless
[809]seem to have few effective steps
[810]in mind to rally popular support.
[811]Three generals recently complained
[812]to US officials that they were hav-~
[813]ing trouble finding qualified
[814]Vietnamese to fill government posi-
[815]tions and that press criticism
[816]of their efforts was unhelpful.
[817]General "Big" Minh, the chief of
[818]state, has indicated a personal
[819]distaste for a prominent role,
[820]and has asserted that the people
[821]would gradually come to appreciate
[822]the new government as problems
[823]were solved on a province-by
[825]province-basis. (SECRET NO FOR- |
[827]| EIGN  DISSEM/BACKGROUND || USE ONLY) _
[829]Page 5
[831]TOP SECRET DINAR
[833]'
[835]1
[838]GULF OF TONKIN
[840]Road Lo
[841]Track or trail
[843]> Reilroad oo
[845]© STATUTE MILES 100
[846]SS re Crean naneee |
[848]CAMBODIA
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[852]"3,00000 -” TOP SECRET DINAR {—
[854]' ‘ Asia-Africa
[856]amontst 3 orces have
[857]: ved to erase recent gains
[858]made by rightist units in cen-
[859]ytral Laos. Pathet Lao troops,
[860]portedly supported by sub-
[861]tantial numbers of North Viet-
[862]mese, on 19 December captured
[864]m Keut and the nearby airfield,
[865]ree days after occupying the
[867]y route junction at Lak Sao.
[868]ght-wing messages have de-
[869]ribed a key rightist parabattal-
[870]n as "completely smashed,"
[871]mmunist units have advanced
[873]uth of Lak Sao toward neutral.
[874]t positions along Route 8-A,
[876]t there have been no indica- ~
[878]a meeting on 20 December in the
[880]Plaine des Jarres, both sides
[881]called for an "early" meeting
[882]between Premier Souvanna and
[883]Prince Souphannouvong. They
[884]also agreed, in principle, that
[885]elements of the coalition govern-
[886]ment should be transferred from
[887]Vientiane to the royal capital
[888]at Luang Prabang, which would be
[889]neutralized and placed under tri-
[890]partite control. Both factions
[891]reiterated their support for
[892]the formation of a mixed police
[893]force in a neutralized Vientiane,
[895]General Phoumi's right-
[896]wing faction, which was not
[897]represented at the meeting,
[898]remains skeptical of Pathet
[899]Lao intentions, Phoumi apparently
[900]believes that an agreement for
[901]the neutralization of Luang
[902]Prabang is unlikely, but he may
[903]join in talks on the subject.
[905]He has indicated, however ,that
[907]the neutralization of Vientiane
[908]‘is contingent on the willingness
[909]of the Pathet Lao to allow free
[910]movement in areas of Laos now
[911]under their control. (TOP SE-
[913]Nhommarath, which is still
[914]ld by rightist forces. In
[915]her areas, there have been
[916]ports of only limited activ-
[917]y, involving scattered skir-
[918]shes and artillery exchanges.
[920]HeH OPOdd oR OND Dee
[922]Meanwhile, neutralist and
[923]thet Lao representatives are
[924]ntinuing their efforts to
[925]gotiate an easing of tensions
[926]between the two factions. At
[928]27 Dec 63
[930]CURRENT INTELLIGENCE WEEKLY REVIEW
[932]Page 6
[933]TOP SECRET DINAR
[935]TOP SECRET DINAR !
[937]—_—.
[939]Asia-Africa
[941]FRENCH CABINET MINISTER TO VISIT CAMBODIA
[943]-== Armed Forces=Minister
[944]jerre Messmer's visit to Cam-
[945]festa from 4-7 January is de-
[946]signed primarily to strengthen
[947]rench influence there in the
[948]_wake of Prince Sihanouk's call
[949]‘for an end to the US aid pro-
[951]. gram. Messmer's high-level
[952]ntourage, which includes the
[953]-¢hiefs of the Foreign Ministry's
[954]fadochina and Cultural and Tech-
[955]ical divisions, will probably
[956]; recommend some increases in aid,
[957]but De Gaulle apparently has
[958]no intention of taking on any:
[960]parge new commitments.
[962]French-grant aid to Can-
[963]- ‘pbodia since 1956 has amounted
[964]to only $15 million. Current
[965]assistance is threefold: a
[966]military training mission of at
[967]east 250 men; cultural aid in
[968]_jthe form of a university mission
[969]and 319 teachers in Cambodian
[970]schools; and the maintenance of
[971]{about 40 experts in the fields
[972]of health and public works. In
[973]addition, a number of French
[974]nationals hired by the Cambodian
[975]Government hold positions of
[976]considerable influence in the
[977]inistry of Finance, the Treas-
[978]ry, and the premier's office,
[979]nd are among Prince Sihanouk's
[980]advisers.
[982]Paris has indicated it has
[983]no intention of equaling the
[984]|) aid _program.—Any—incre
[986]27 Dec 63
[988]CURRENT INTELLIGENCE WEEKLY REVIEW
[992]i-military~—aid-probably—wovt
[993]be limited to reconditioned and
[994]obsolete equipment, such as
[995]trucks and light armored vehicles).
[996]Increased cultural and technical
[997]assistance probably would include
[998]further help for the French uni-
[999]versity mission, more teachers,
[1000]and 30 or 40 additional technical
[1001]experts, especially agricultural-
[1002]ists.
[1004]The extension of French aid
[1005]will be complicated by Cambodia's
[1006]claims for compensation for
[1007]losses incurred as a result of
[1008]the 1958 devaluation of the
[1009]French franc. Since 1958 France
[1010]has asserted that a large-scale
[1011]aid program would be impossi-
[1012]ble until there is agreement on
[1013]an exchange rate, but a compro-
[1014]mise may now be in sight.
[1016]Sihanouk has sought French
[1017]help in maintaining Cambodia's ©
[1018]policy of neutrality, and in
[1019]recent talks with the US and the
[1020]UK, France has supported his
[1021]call for an international con-
[1022]ference on Cambodian neutral-
[1023]ity, despite US objections. |
[1024]Indeed, De Gaulle has consist-—
[1025]ently sought to meet Sihanouk
[1026]more than half way, and Paris
[1027]may now encourage Sihanouk
[1028]to press this issue. (CON-
[1029]FIDENTIAL) :
[1031]Page 7
[1033]TOP SECRET DINAR
[1035]13-00000
[1037]4
[1039]ISRAEL'S
[1041]JORDAN RIVER
[1042]DIVERSION PROJECT
[1044]ewes Canal or conduit,
[1045]proposed or under construction
[1047]N88 enilitarized Zone
[1051]Sony
[1053]Pumping Station
[1054](Under Construction)
[1056]tums,
[1058]Reservoirs or”
[1059]Tunnel / _
[1060]F
[1062]tant, ISRAEL
[1064]SONAR
[1066]NEGEV
[1067]DESERT
[1071]CODE WORD MATERIAL ON REVERSE OF PAGE
[1074]13-00000
[1076]’ TOP SECRET DINAR
[1078]a
[1079]'
[1081]Asia~Africa
[1083]ARABS PLAN NO OVERT ACTION AGAINST ISRAELI PROJECT
[1085]- TheAtab States *eyidently |
[1086]not plan any overt military
[1087](ction against Israel when in
[1088]te January or early February
[1089]e Israelis begin pumping tests
[1090]r their Jordan River diversion
[1091]oject, but sabotage of the
[1092]roject's facilities may be at-
[1093]mpted.
[1095]ot The Arab military chiefs
[1096]‘|who met in Cairo in mid-December
[1097]apparently decided that direct
[1098]military attacks are not feasi-
[1099]bie - The chiefs reportedly
[1100]agreed, however, that the states
[1101]ordering on Israel should.
[1102]mount independent and uncoor-
[1103]inated clandestine operations.
[1105]The Arab League Defense
[1106]Council, which meets in January,
[1107]probably will approve this rec-
[1108]ommendation, but its implementa-
[1109]ion is another matter. Egyp-
[1110]ian, Jordanian, and Lebanese
[1111]officials have indicated pri-
[1112]vately that their governments
[1113]have no intention of taking
[1114]aggressive action of any Kind
[1115]qeninse the Israeli project.
[1117]Nasir, however, told the
[1118]Canadian ambassador in early
[1119]Seat Sen that he was. worried
[1120]that Syria might act unilater-
[1121]adly and present the other Arab
[1123];. coming involved in a war with
[1125]seek a solution.
[1127]‘chief of Israeli military in-
[1128]‘telligence, considers there is
[1130]states with a dilemma. ‘Damascus
[1131]will be under strong pressure
[1132]to fulfill its threats against
[1133]the Israeli scheme, particularly
[1134]in view of the close proximity
[1136]of the Syrian border to Israel's
[1137]pumping station on Lake Tiberias.|
[1139]‘Nasir's wariness about be-
[1141]Israel over Jordan waters was
[1142]also evident in a speech he
[1144]made on 23 December. He empha-
[1145]sized that the problem is polit-
[1146]ical rather than military in
[1147]nature and that the chiefs of
[1148]staff cannot solve it. He
[1149]called for a summit meeting of
[1150]Arab presidents and kings to
[1152]Israel, according to the
[1154]an outside possibility that
[1155]Syria might bomb or shell the
[1156]pumping facility's transformer
[1157]station. However, the Israelis |
[1158]believe the primary threat stems
[1159]from former Palestinians now
[1160]living in Syria, Jordan or
[1161]Lebanon, who might make a dra-
[1162]matic effort to sabotage the
[1163]project even though they prob-
[1164]ably could not cause serious
[1165]damage. (SECRET NO FOREIGN
[1166]DISSEM/BACKGROUND USE ONL:
[1168]27 Dec 63
[1170]CURRENT INTELLIGENCE WEEKLY REVIEW Page 8
[1172]TOP SECRET DINAR
[1174]13-00000
[1176]rd
[1178]TOP SECRET DINAR |
[1180], , Asia-Africa
[1182]CYPRUS DISPUTE FLARES AGAIN
[1184]In the face of these de=—~|
[1185]velopments, the Turkish Govern-
[1186]ment threatened to exercise its
[1187]right under the 1959 agreement
[1188]to intervene on Cyprus. Three
[1189]Turkish jet fighters flew over
[1190]Nicosia on 25 December, and
[1191]Turkish naval units appeared off
[1192]the island. Part of the 650-man
[1193]Turkish garrison on Cyprus left
[1194]its barracks to move into one
[1196]of the Turkish quarters of the
[1197]capital. Part of the 950-man
[1198]Greek contingent then moved to
[1199]protect Greek areas. The situa-
[1200]tion evidently prodded Athens
[1201]and London into a more active
[1202]role, and Greek, Turkish and
[1203]British forces on Cyprus have
[1204]been placed under a unified Brit
[1205]ish-led command. Britain has an
[1206]nounced it is sending 150 ad-
[1207]ditional troops.
[1209]—=FFpiting between the Gree
[1210]and Turkish Cypriot communities,
[1211]which. began on 21 December and
[1213]s continuing on 26 December
[1214]espite efforts to obtain a cease-
[1215]ire, is the culmination of a
[1216]teady growth of tension on the
[1217]sland during the past few weeks.
[1218]he new tension followed Presi-
[1219]ent Makarios' presentation to
[1220]rkish Cypriot leaders of propos-
[1221]1s for changing the Cyprus con-
[1222]-/stitution. The proposals, which
[1223]jessentially involved removing the
[1224]guarantees to the Turkish minor-
[1225]_\ity that had been written into
[1226]-\the Cyprus settlement of 1959,
[1227]-\were rejected by the Turkish Gov-
[1228]ernment even before the Turkish
[1229]. (Cypriots had made their views
[1231]known.
[1233]Most of the initial fight-
[1234]ing appears to have been between:
[1235]|Greek Cypriot police and the Turk-
[1236]_jish underground, and to have taken
[1237]place in the Turkish areas of Nic-
[1239]osia.. The situation there de-
[1240]teriorated progressively during
[1241]ithe week, as the police lost con-
[1242]trol to extremist groups of ir-
[1243]regulars from both communities.
[1244]TA cease-fire, to be supervised
[1246]i by the British, had not been ef-
[1248]The violence may make lead-
[1249]ers of both sides more cautious
[1250]in pressing political demands.
[1251]Soon after the outbreak, Makarios
[1252]told the US ambassador he would
[1253]go more slowly in pushing his con-
[1254]stitutional revisions. Both eth-
[1255]nic groups, however, will be fur-/
[1256]ther embittered--particularly
[1257]the Turkish community, which
[1258]is believed to have suffered
[1259]much the heavier casualties.
[1260](CONFIDENTIAL)
[1262]4 fective as of the morning of 26
[1263]| December. Fighting had also con-
[1264]| tinued at the port city of Lar-
[1265]naca; the rest of the island was
[1267]tense.
[1269]t
[1271]27 Bec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Page 9
[1273]TOP SECRET DINAR
[1275]13-0000
[1277]r
[1279]TOP SECRET DINAR ({_
[1282]AREA NOTE
[1284]; Saudi Arabia: ‘Crown Prince were variously reported to have °
[1285]——. cl = <i on - ooo SS
[1286]¢ Faysal appears to haye weathered {been the new budget, which cuts
[1288]j his latest dispute with King
[1289]/ Saud without making any conces-
[1290]| The details of a new
[1291]| arrangement between the two are
[1293]sions.
[1295]not known, but Faysal is still
[1297]firmly in control of the govern-
[1298]ment. Royal Guard elements
[1300]| which the King ordered to posi-
[1301]tions around his palace at the
[1303]height of the dispute have now family. Throughout the crisis
[1304]been withdrawn,
[1306]Saud's attempt to resume per-
[1307]sonal control of the government,
[1309]| { The dispute centered on
[1310]| Sener he relinquished to Faysal
[1312]posts to two
[1314]funds allotted to the royal
[1315]family, and Faysal's refusal
[1316]to give cabinet
[1317]of Saud's sons.
[1319]In blocking Saud's chal- «
[1320]lenge, Faysal apparently was
[1321]supported by most of the im-
[1322]portant members of the royal
[1324]the Saudi regular army remained | \
[1325]under the orders of the minis-
[1326]ter of defense, Prince Sultan,
[1327]a Faysal adherent.
[1328]servers have reported that the
[1329]King's action has actually served
[1331]Some ob-
[1333]|
[1335]'
[1337]4 \
[1342]|
[1346]“hy
[1351]\3_vear ago when his health. | to strengthen Faysal's-position. 4
[1352]\broke. The immediate issues 7 | (CONFIDENTIAL NO FOREIGN DISSEM) /
[1354]27 Dec 63
[1356]CURRENT INTELLIGENCE WEEKLY REVIEW
[1357]TOP SECRET DINAR
[1359]Page
[1361]10
[1363]13-00000
[1365]y . ,
[1367]THE TARIFF DISPARITIES ISSUE.
[1369]4 “The tariff disparities issue which has plagied preparations for” the Kennedy Round for many’ 4
[1370]: “months ‘originates-in the-fact-that-there are substantial: differerices between the EEC rand US ~ .
[1371]~ fariffs on individual items, even though over-all tariff: levels are roughly the-same. Because “> ;
[1372]) _ the EEC common external, tariff was orrived at by: averaging the tariffs of the member states, ”: i.
[1373]| the EEC tariff schedule is characterized by the absence of “peaks and lows"; z.in the’ us schedule,
[1374][ 6n the other hand, the rates vory much more, Gnd some individual tariffs remain very high in ‘
[1375]\ comparison with those of the EEC. Accordingly, the EEC and the French in particular have:
[1376]‘Yong insisted that a 50=percent cut in tariffs by both the US and the EEC would leave the US -
[1377]with substontidl protection on certain items and deprive the EEC of F bargaining power to > effect
[1378]their future reduction. Sas :
[1379]i
[1381]|. Jispe arities issue was ‘believed to have been settled at. the GATT ministerial meeting”
[1383]* last May ‘with a formula which provided that tariffs'on industrial. items would i general bes -
[1384]“reduced equally and across.the board, except that "special rules™ ‘would apply:"wheré sig-.
[1385]- nificant adverse effects on trade would result from disporjties.in tariff levels: In fact’, how- -
[1386]“ever, this formula merely shifted the argument to the problem of deterniining what dispari! ties
[1387]are’ “significant” or "meaningful in trade terms." Because the’ "special tules" Would mean ‘ins
[1388]most cases o smaller tariff reduction by the EEC than by the US, the EEC has attempted to
[1389]maximize the area to which these rules would opel while the Us has sought | to minimize their
[1390]opplication. - . .
[1392]4 * After: lengthy negotiation ,a GATT subcommitt: tee reached a ; considerable measure of
[1393]vd agreement last month on a formula which would identify a “significant tariff disparity in
[1394]"| the first instance as one in which the high rate is at least 30 percent of value and at least,
[1395]- 10 percent above the lower rate. Because this formula would identify some 850 US items as
[1396]eligible for "special treatment,“ the subcommittee proposed seven additional qualitative,
[1397]teria which would reduce considerably the number of eligible items... The three to which,
[1398]‘Us attaches ‘special importance would (1) require t ‘that there be ‘substantial imports of the item
[1399]7 concerned from the high tariff country into the low; (2) exclude items where there ore sub-
[1400]stantial. imports into the high tariff country: and (@) exclude tems on which the low tariff
[1402]ule epproved by the EEC on 23 Deceinber would sub:
[1403]. a’: 7/1 formula. A disparity would be identified as one in which the high tariff i is ‘twice
[1404]high as the low one, apparently with the additional qualification’ that,. in most cases,
[1405]‘!”" would have to be a ten-point percentage spread between the two rates. This formula w
[1406]“{ pfovide for special treatment for far more than 850 items, including items of special US
[1407]i export interest. The arrangements for qualitative criteria also-seem | to.have been-modified-
[1409]NY to the US! disadvantage
[1411]SECRET NO FOREIGN DISSEM
[1413]CODE WORD MATERIAL ON REVERSE OF PAGE
[1416]- TOP SECRET DINAR
[1418]THE COMMON MARKET CRISIS
[1420]The Common Market appears to |
[1421]averted disaster for the sec—
[1422]nd time in less than a year. The
[1423]eleventh-—hour agreements reached
[1425]‘on agricultural policy on 23 De-
[1426]“cember are apparently sufficient
[1428]o discourage De Gaulle from carry-
[1429]ing out his threat to break up the
[1430]ommunity. Moreover, the Germans
[1431]and Dutch succeeded in extracting
[1432]limited commitments from Paris on
[1433]EEC participation in the Kennedy
[1434]Round of tariff negotiations. These
[1435]agreements donot cover all the out-
[1436]standing issues, however, and the
[1437]lanner in which they were reached
[1438]will leave a residue of bitterness.
[1439]Nor is it certain that major US
[1440]interests have fared well.
[1442]The main agricultural elements
[1443]in the "package" deal are the reg-~
[1444]ulations concerning intracommunity
[1445]trade in beef, rice, and dairy prod-
[1446]cts and the rules governing the
[1448]ommunity farm fund. Their effect
[1449]‘is to open the large West German
[1451]rket to farm exports of France,
[1452]Italy, and the Netherlands--gen-
[1453]erally at a substantial advantage
[1454]over the exports of nonmembers, Al-
[1455]though approval of these and the
[1456]financial regulations is an im-
[1457]portant step forward, the key ques-
[1458]tet of grain price unification is
[1459]still unsettled. Further considera-
[1460]tion of the formula proposed by Com~
[1461]missioner Mansholt has been delayed
[1462]until next year. t
[1464]The agreement on a Kennedy
[1465]Round position is likewise an ad-
[1466]vance for the community, but from
[1467]the US view not necessarily favor-
[1469]ble. On the long-standing problem
[1470]of tariff "disparities," the EEC
[1471]adopted a formula which would
[1472]exempt from the proposed 50-per-
[1473]cent linear reduction in tariffs
[1474]a| far larger number of itens than
[1476]the US “hoped for.—The EEC positio
[1478]27 Dec 63
[1480]CURRENT INTELLIGENCE WEEKLY REVIEW
[1482]Europe
[1484]on farm products in the trade ne- es
[1486]gotiations--although an improvenient
[1487]over the initial Mansholt propos- |
[1488]als--also leaves much to be desire
[1489]from the US view. In general, the |
[1490]EEC proposes that, if its levy sys-
[1491]tem operates in such a way as to
[1492]cause difficulties for the exports
[1493]of nonmembers, then the EEC Commis
[1494]sion will be called on to propose
[1495]"appropriate," but unspecified,
[1496]measures. These would not apply
[1497]if it is technically impossible to
[1498]determine how much protection is
[1499]actually involved in the levy sys-
[1500]tem.
[1502]The general relief within
[1503]the community which greeted these
[1504]agreements reflects both the :
[1505]depth of the crisis and some op-
[1506]timism that the Common Market's
[1507]unity may have been restored. The
[1508]prominent role played by the
[1509]EEC's commission in achieving
[1510]the compromise has in particu-
[1511]lar encouraged those who hope to
[1512]strengthen the community's in-
[1513]stitutional structure.
[1515]In France the conviction
[1516]was evidently widespread, how-
[1517]ever, that both Bonn and The
[1518]Hague were quite prepared to see
[1519]the French "leave" the Common Mar-
[1520]ket, and in the event of its
[1521]breakup, to seek alternative
[1522]ties with the Outer Seven. More-
[1523]over, while it may prove healthy
[1524]that Bonn "stood up" to De Gaulle
[1525]in this instance, its motive was |
[1526]strongly colored by a desire to pro-
[1527]tect its inefficient farmers. Nor
[1528]does it augur well for US-EEC re-
[1529]lations that the French blame the
[1530]US for much of the opposition
[1531]they_encountered, —_ (SEGREF_-NO.
[1532]FOREIGN DISSEM)
[1534]Page 11
[1536]TOP SECRET DINAR
[1539]13-00900
[1541]TOP SECRET DINAR -
[1543]Europe
[1545]UK-US FRICTIONS OVER SHIPPING POLICY
[1547]jclal circles are incensed over
[1548]recent US demands for informa-
[1549]tion relating to rate discrim-
[1550]jnation against US exports.
[1551]The British Government has ad-
[1552]vised against compliance on
[1553]the grounds that this informa-
[1554]tion is commercially confiden-
[1555]tial, and that the US cannot
[1556]demand what the UK Government
[1557]cannot obtain.
[1559]Following a recent con-
[1560]gressional investigation into
[1561]alleged rate discrimination
[1562]against American exports, the
[1563]US Maritime Commission asked
[1564]the North Atlantic Freight Con-
[1565]ference to explain the differ-—
[1566]‘ehtials on a long list of items,
[1568]tting a 20 January deadline
[1569]a: compliance under penalty
[1571]heavy fines. The US posi-
[1572]ti n is that US exporters are
[1573]being penalized because outward
[1574]rates are higher on the average
[1575]than the inward rates.
[1577]British and other shipping
[1578]lines regard the differentials
[1579]s| economically justified. The
[1580]tonnage of US exports is much
[1581]gre ater than import tonnage,
[1583]nd Shipping lines--anxious to
[1584]avoid half-loaded or in-ballast
[1585]estbound voyages--have tradi-
[1586]ionally charged lower rates
[1587]or items imported into the US
[1589]than for exports from this
[1590](country .
[1592]27 Dec 63
[1594]j-——_British shippin ‘and offi-
[1596]Thus, what are seen as
[1598]American efforts to regulate
[1599]international shipping lines in
[1600]order to improve the unfavorabl
[1601]US balance of payments have
[1602]caused increasing rancor in
[1603]Britain. Before Parliament ad-
[1604]journed for its Christmas recess
[1605]on 20 December, some Conserva- J
[1606]tive MPS called for retaliator
[1607]restrictions on US ships arriv-
[1608]ing at UK ports. Although the
[1609]MPS did not specify what re-
[1610]strictions they had in mind,
[1612]the government cannot afford
[1614]in the present pre-election
[1615]period to leave itself open :
[1616]to charges that it is not atten-/ .
[1617]tive enough to domestic interests.
[1619]while hopeful of some compromise
[1620]before the 20 January deadline,
[1621]is busily lining up international
[1622]support. At the recently con-
[1623]cluded conference of transport
[1624]ministers of 10 European mari-
[1625]time nations, Britain proposed
[1626]that Japan be invited to join
[1627]the united front of European
[1628]maritime countries in a general
[1629]protest against US shipping
[1630]policies, thereby aligning
[1631]roughly three quarters of the
[1632]world's shipping business against
[1633]the US position. Japan agreed
[1635]to do so, and the collective
[1636]protest was filed with the
[1638]State Department on 23 Decem-
[1640]ber. (CONFIDENTIAL NO_FOR-
[1641]EIGN -DISSEM)
[1643]The Douglas-Home compronise|
[1645]CURRENT INTELLIGENCE WEEKLY REVIEW Page 12
[1647]TOP SECRET DINAR
[1649]13-00000
[1651]od
[1653]December
[1655]~ TOP SECRET DINAR C
[1657]WEST GERMAN POLITICAL DEVELOPMENTS
[1659]a The he _openini of the Berlin _
[1660]Wall during the holiday season
[1662]and the death of Social Demo-
[1664]cratic Party (SPD) chairman
[1666]Erich Ollenhauer have placed
[1668]Willy Brandt once again in the
[1669]enter of the German political
[1671]stage. ;
[1673]The agreement to open the
[1674]Wall resulted from Brandt's un-
[1675]ceasing efforts to ease condi-
[1676]tions for Berliners. His will-
[1677]the Eas to reach agreement with
[1678]he East Zone authorities on
[1679]the pass issue is being criticized
[1680]y some Christian Democratic
[1681]nion (CDU) leaders and by the
[1682]DU-oriented press in West Ger-
[1683]any. Brandt, however, is bank-
[1684]ng on the expectation that most
[1685]est Germans, like the Berliners,
[1686]ill approve his action. He
[1687]has even hinted that there may
[1688]be further negotiations with the
[1689]East Germans to extend the period
[1690]of the passes beyond the 5 Jan-
[1691]uary cutoff date. There is also
[1692]‘ eculation that both East and
[1693]st Germany will find the pass
[1694]agreenent a model for agreement
[1695]n other issues.
[1697]Brandt, who was the most
[1698]logical choice, was named acting
[1699]chairman of the SPD immediately
[1700]fter Ollenhauer's death on 14
[1702]> eputy Chairman Her=-
[1703]9 ehner has proposed that
[1705]27 Dec 63
[1707]CURRENT INTELLIGENCE WEEKLY REVIEW
[1709]Europe
[1711]Brandt's position be formalize:
[1712]at a special party convention
[1713]next month. Fritz Erler, the
[1714]party's foreign and defense
[1715]expert, is slated to take
[1716]Brandt's place in the hierarchy
[1717]as second deputy chairman. As
[1718]the SPD leader, Brandt would
[1719]stand to be candidate for chan-
[1720]cellor in the 1965 general elec-
[1721]tions. If current opinion polls
[1722]are any indication, the SPD
[1723]will give the CDU a strong race
[1724]in that contest.
[1726]Brandt, however, has not
[1727]yet committed himself, since
[1728]to accept the SPD chairmanship
[1729]might require him to resign as
[1731]In so doing he would have to
[1732]operate at a distance from his
[1733]political bastion.
[1735]Whatever Brandt decides,
[1736]the SPD is bound to miss the
[1737]conciliating influence of Ollen-
[1738]hauer, who was able to hold
[1739]together the often highly
[1740]antagonistic factions of the
[1741]party. Brandt, with his ideas
[1742]of greater flexibility in
[1743]foreign policy, may be expected
[1744]to clash more frequently with
[1745]Wehner, who--despite his Com-
[1746]munist past--has come to rep-
[1747]resent the SPD's right wing.
[1749](SECRET -NO-FOREEGN-DISSEM)——————~"
[1751]S.
[1753]Page 13
[1755]TOP SECRET DINAR
[1757]mayor of Berlin and move to Bonn.
[1759]Jo
[1762]| that the alliance should explor
[1764]AREA NOTES
[1766]NATO: 3.
[1767]vial meeting in Paris; which
[1768]ended on 1 ecember, avoided
[1770]erious discussion of the more
[1771]ontentious issues facing the
[1773]alliance. There was, for in-
[1774]stance, only passing reference
[1775]to the matter of nuclear shar-
[1776]ing. While NATO's military
[1778]posture was generally recognized -
[1780]as still inadequate, the Force
[1781]Planning exercise--which is
[1782]designed to help correct this
[1783]situation--was not discussed
[1784]at all. The dispute over basi
[1786]strategy, the chief stumbling
[1787]biock to the exercise, was put
[1788]off until after De Gaulle's
[1789]press conference.sometime in
[1790]January.
[1792]All but the French agreed
[1793]e
[1795]possibilities of negotiating ;
[1796]with the Soviets on outstanding
[1797]Zast-West issues. The. Germans
[1798]as usual, indicated some reser-
[1799]vations because of their sensi+
[1801]tivity regarding Berlin and Ger-
[1803]man reunification. The question
[1804]f restricting Western ceestta,
[1806]o the Soviet bloc was reserve
[1807]for-future consideration. —¢
[1809]\CRET_NO-FOREIGN DISSEM)
[1811]27 Dec 63
[1813]CURRENT ™NTELLIGENCE WEEKLY REVIEW
[1815]TOP SECRET DINAR (—
[1817]Europe
[1819]Iceland's (near general . .
[1820]strike was settled on'21 Decém-
[1821]‘Her! when ‘labor—and-manat
[1822]agreed to a 25-percent wage in
[1823]crease. The li-day work stop-
[1824]page was led by Communist-dom-
[1825]inated unions seeking, as in
[1827]e past, to force the resigna-
[1828]t jon of the Conservative - So-
[1829]cial Democratic government by
[1831]discrediting its economic poli-
[1833]Minister Benediktsson's govern-
[1834]ment, since the Communists were,
[1835]unable to maintain a solid grip
[1836]on labor.
[1838]r The settlement, however,
[1839]will intensify inflationary
[1840]pressures and will probably
[1841]force Benediktsson to take ex-
[1842]tyaordinary measures to maintai
[1843]e¢ onomic stability. For polit-
[1845]ip reasons he will try to avoid
[1846]another currency devaluation, |.
[1847]but it is doubtful that the
[1848]gi vernment can maintain its
[1849]economic stabilization program |-
[1851]ure... (CONFIDENTIAL ae
[1853]Page 14
[1855]TOP SECRET DINAR
[1858]’ TOP SECRET DINAR ‘—
[1860]DOMESTIC POLITICS IN CUBA
[1862]Fidel Castro is continuing his
[1863]effort to reduce the influence of
[1865]the veteran Communists who were lead-
[1867]ers of the Moscow-oriented, pre-rev-
[1868]olutionary Communist party of Cuba.
[1869]Castro's campaign against then,
[1870]launched in a bitter attack in March
[1871]1962, subsequently seemed to lose
[1872]steam. Recent reports from knowl-
[1873]edgeable clandestine sources, how-
[1874]ever, indicate that the old liners
[1875]are again on the defensive and are
[1876]likely to suffer further in govern-
[1877]ment shake-ups which may be in the
[1878]offing. Castro nevertheless con-
[1879]tinues to move slowly in order to
[1880]avoid undue disruption within his
[1881]regime,
[1883]The only major veteran Commu-
[1884]nist figure to remain in Castro's
[1885]good graces is Carlos Rafael Rod-
[1886]riguez, the head of the National
[1887]Agrarian Reform Institute. Rod-
[1888]riguez' position has actually been
[1889]strengthened in recent weeks with
[1890]the raising of his job to cabinet
[1891]level. He has evidently convinced
[1892]Castro of his personal loyalty and
[1893]of his ability as an administrator,
[1894]It is also possible that Rodriguez
[1895]performs a useful and trusted liai-
[1896]son role between Castro and Soviet
[1897]leaders. He returned to Havana on
[1898]22 December after a two-week trip
[1900]to the USSR and several Soviet satel-
[1902]lites where, according to press ac-
[1903]counts, he. was in contact with high-
[1904]ranking Communist Party officials.
[1906]The old-line Cuban Communists
[1908]remain strong, according to a re-
[1910]cent clandestine report, in the in-
[1911]termediate and lower echelons of
[1912]the military and party hierarchies.
[1913]Wherever possible, they continue
[1915]27 Dec 63
[1917]Western Hemisphere
[1919]their "sectarian" efforts to secure
[1920]positions for their comrades at the
[1921]expense of Fidelistas. A clandes-
[1922]tine source reported hearing "ru-
[1923]mors" in high regime circles late
[1924]last month that veteran Communists
[1925]have banded together in clandestine
[1926]cells to work against Castro.
[1928]Che Guevara continues to be the
[1929]Cuban leader most openly critical of
[1930]the Soviet Union and the most’ insist-
[1931]ent on the “necessity" of accelerat-
[1932]ing the revolution in Latin America.
[1933]Fidel Castro is said to agree with
[1934]Guevara's position, but awareness of
[1935]Cuba's own self-interest still com-
[1936]pels him to be more cautious in pur-
[1937]suing policies that could be inter-
[1938]preted as anti-Soviet. It neverthe-
[1939]less remains a key regime policy to
[1940]encourage Communist revolution in
[1941]Latin America.
[1943]A clandestine source who is a
[1944]high-level Cuban diplomat asserts
[1945]that Cuban leaders privately recog-
[1946]nize that popular discontent with
[1947]the regime is widespread. He claims,
[1948]however, that they are confident
[1949]their unpopularity has reached its
[1950]nadir, and that they are beginning
[1951]to make up lost ground. They ex-
[1952]pect, for instance, that economic
[1953]difficulties--a major source of
[1954]discontent--will be largely over-
[1955]come within three years. The strat-
[1956]egy of the government, this source re-
[1957]ports, is to hold on untiis the econ-
[1958]omy improves and until Cuban subver-
[1959]sive efforts elsewhere in Latin
[1960]America result in the establishment
[1961]of one or more Communist allies in
[1962]the hemisphere. Then, the regime
[1963]feels, it will be secure. (SECRET NO
[1964]FOREIGN DISSEM/BACKGROUND USE ONLY)
[1966]CURRENT INTELLIGENCE WEEKLY REVIEW Page 15
[1968]TOP SECRET DINAR
[1970]TOP SECRET DINAR (—
[1972]» . Western Hemisphere
[1974]‘ DOMINICAN REGIME FACES NEW POLITICAL CHALLENGES
[1976]p——~The_kilLinig=of_15 guerrillas | among civilian and militar
[1978]y Dominican Army troops on 21 elements. Only the prompt ap-
[1979]December apparently removes the pointment of Foreign Minister
[1980]jast pocket of insurgents op- Donald Reid to the vacant post
[1981]posing the government. However, in the triumvirate appears to
[1982]the incident could provoke dan- have helped avert a serious
[1983]gerous political repercussions. political crisis for. the moment.
[1984]Emilio De Los Santos, head The triumvirate has asked |
[1985]of the governing military-in- the cabinet--which was chosen
[1986]talled triumvirate, resigned in from and is responsible to six
[1987]rotest over what he regarded as minority political. parties--to
[1988]ithe brutal and unnecessary kill- resign to permit the appoint-—
[1989]ing of the insurgents, includ- ment of a more independent group,| .
[1990]ing the president of the pro- This move has promnted strong
[1991]Castro 14th of June Political protests from four of the splint
[1992]Group. The army commander of parties backing the regime, who
[1993]the area in which the incident stand to lose patronage; the
[1994]took place insists the deaths outcome is unclear, ,
[1996]were the unavoidable result of
[1997]a ifire fight. If stories of
[1999]-aymed forces "brutality" be- However, the National
[2000]‘come widespread, however, they Civic Union, the only sizable
[2001]could provoke dangerous hostility party in the government, backs
[2002]toward the regime from rank-and- the cabinet reorganization.
[2003]file Dominicans, who recall the More important, the key leaders
[2004]repressive measures of former of the armed forces are provid-
[2005]dictator Trujillo, , ing the triumvirate with their
[2006]. support, which could prove cru-
[2007]The resignation of De Los cial in a political showdown.
[2009]ntos precipitated frantic ma- | (SECRET _NO FOREIGN DISSEM
[2010]neuvering-within-the=governnent § [- nl
[2012]27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Page 16
[2014]TOP SECRET DINAR
[2016]3
[2018]TOP SECRET DINAR ©
[2020]SfurtherGhianges | in the Bra-
[2021]ilian cabinet are expected fol-
[2022]lowing the resignation last week
[2023]f£ Finance Minister Carvalho
[2024]Pinto. A moderate leftist, Ney
[2025]alvao, was appointed Pinto's
[2026]uccessor, but there remains a
[2027]possibility that Leonel Brizola--
[2029]who had been actively pushed for
[2030]the post by the extreme left--
[2032]y eventually receive some min-
[2033]idtry. There is widespread be-
[2034]lief in the army that War Min-
[2035]ister Jair Ribeiro will also be
[2036]raéplaced in the near future. As
[2038]ne responsible Brazilian com-
[2039]entator has remarked, with Gou-
[2040]lart “every minister is an in-
[2041]erim one."
[2043]Ney Galvao's appointment
[2044]actually reduces the previously
[2045]slight prospect that Brazil's
[2046]eritical financial problems would
[2047]ibe handled effectively. Galvao's
[2049]lifications in the economic
[2051]field are weak at best and his rec-
[2052]ord as head of the Bank of Brazil
[2054]does not command confidence with-
[2055]in the business community. Be-
[2056]fore taking his new post, he.
[2057]served as minister without port-—
[2058]fdlio in charge of coordinating
[2059]foreign trade policies, a job
[2061]he performed without any par-
[2062]ticular distinction.
[2064]Although his views are
[2065]Rs haps Soétiewhat-to—the-right~ of
[2067]27 Dec 63
[2069]- Goulart's
[2071]’ vestors.
[2073]CURRENT INTELLIGENCE WEEKLY REVIEW
[2075]Western Hemisphere
[2077]falvao can be expected
[2078]to toe the adminstration line
[2079]faithfully. Moreover, Galvao's
[2080]appointment may be a temporary
[2081]expedient designed to allay
[2082]fears that Brizola would succeed
[2083]Pinto. Galvao is a versonal.
[2084]friend of Brizola and there is
[2085]speculation that Brizola will,
[2086]in fact, eventually move into
[2087]the Finance Ministry.
[2089]The new finance minister
[2090]inherits almost insurmountable
[2091]economic and financial problems.
[2092]Chief among these are a rampant
[2093]inflation that may see the cost
[2094]of living increase 80 percent
[2095]this year, and a staggering
[2096]foreign debt involving approxi-
[2097]mately $1 billion in payments
[2098]due over the next two years.
[2100]The severity of the eco-
[2101]nomic situation and Goulart's
[2102]apparent intention to assume
[2103]greater personal direction over
[2104]financial policies increase
[2105]the possibility of radical meas-
[2106]ures that might be detrimental
[2107]to foreign creditors and in- .
[2108]Goulart reportedly is
[2109]considering nationalization of
[2110]all public utilities and can-
[2111]cellation of mining concessions.
[2113]Measures such as these could
[2115]lead to further deterioration
[2116]of Brazil's economic position.
[2117](SECRET)
[2121]Page 17
[2123]TOP SECRET DINAR
[2125]|
[2128]TOP SECRET DINAR '.
[2130]a Western Hemisphere
[2131]AREA NOTE
[2132]Bolivia:,The political assure his renomination, and
[2133]“competition between Bolivian / | designate his own running mate. >
[2135]| Vice-President Juan Lechin and
[2137]President Victor Paz Estenssoro If the forthcoming conven-=
[2138]is bound to intensify sharply tion repudiates Lechin, he may
[2139]as each maneuvers to line up well withdraw from the MNR and
[2141]| Support for the presidential establish a "popular front" po-
[2142]nomination at next month's con- litical party. He probably
[2143]vention of the Nationalist could count on the support of
[2145]: Revolutionary Movement (MNR). political groups ranging from
[2146]Lechin probably still hopes to leftist extremists to disgruntled
[2147]pull an upset by dislodging Paz factions within right-wing parties:
[2148]or at least to demonstrate suf- It would seem unlikely, though,
[2149]ficient strength to assure him- that these disparate groups could
[2150]self of retaining his vice~ coalesce into an organization
[2151]presidential post. Paz seems powerful enough to defeat Paz’
[2152]certain, however, to be able to well-organized machine in the J
[2153]control’ the party" S- ‘convention;~~“I~ elections Set for June. (SECRET) /
[2156]27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Page 18
[2158]TOP SECRET DINAR
[2160]1 « . decietenen fees ct awe nme em ee tT eeek cee nee meee ne cient nm de att eammnaicanas sae sarc atelaa Bee Tebabe ce dee ee mates ene oy me Ppa t ne
[2162]; ase - JOP SECRET '
[2164]. Ld .
[2165]pene rn on ee ee erreneepeenanenrrammisommemnraratGnactnage spate 11
[2167]TOP SECRET