- SINO-SOVIET TRADE DEAL. The Soviet Union and China reached swift agreement recently in Peking on expanding their economic relations. This move should improve the chances of future political progress. On the third day of his visit the Soviet First Deputy Premier, Mr. Ivan Arkhipov, agreed on a five-year plan for Sino-Soviet trade, and he met the Chinese Prime Minister Mr. Zhao Ziyang. The two countries also agreed to set up joint commissions for economic, trade, and science and technology cooperation. In their economic discussions both sides steered clear of the much advertised three political obstacles to better relations: Afghanistan, Soviet support for Vietnam, and the Soviet troops on the Chinese frontiers. The Third World diplomats in Peking believe that a significant improvement in one set of relations must influence the climate for progress on the other. The new agreement is expected to lead to discussions on re-equipping a number of Chinese industries (originally set up with Soviet aid) with new Soviet technology. The new five-year plan, which covers 1986 to 1990, is expected to be signed in the first half of this year.
- MAO ARMY-MEN FIRED. Dozens of China’s most senior military men have been sacked as part of the Peking Government’s campaign to promote capitalism and get rid of the old-style communism. The big purge, inspired by Chinese leader Deng Xiaoping, is aimed at removing the old-timers in China’s huge army who are still loyal to the principles laid down by Mao Tse-tung and who bitterly oppose any move which will bring China into line with Western democracies. So the purge is on. Deng’s evident determination is that when he dies his reforms will have gone too far for anybody to reverse them.
- CHINA FLEXES ITS MUSCLES. In what may be a harbinger of an increased communist presence in Hong Kong, China’s unofficial government representative there, Xinhua (New China News Agency), will be split into two separate operations: a news agency and a political arm. China-watchers believe that the new political department paves the way for an unprecedented degree of mainland participation in local affairs between now and 1997, when the British colony is scheduled to return to Chinese control. Xinhua is also planning to launch a new economic-information service early next year that will offer a wide range of economic, scientific and technological data on the region.
- SOVIET TROUBLE ON MADAGASCAR. Soviet penetration into the Indian Ocean island of Madagascar is proceeding apace, with the recent installation of a Russian radar station in Diego-Suarez. According to a French diplomat recently returned from the island, 3,000 Soviet citizens are there helping to keep left-wing President Didier Ratsiraka in power. In return the U.S.S.R. has been granted aid and naval facilities and a consulate with a staff of 250 in Tamatave, an east-coast port city where Soviet reconnaissance planes and fighter-bombers are permanently stationed.
- ISRAEL ‘IN HOCK TO U.S.’. Israel’s economy has deteriorated to a point where the country is totally dependent on the good will of the U.S., Communications Minister Mr. Amnon Rubinstein of Jerusalem said recently. Mr. Rubinstein, who represents the centrist Shinui party in the nine-party coalition, told Israeli radio that the government was sabotaging the success of a three-month price and wage freeze by printing huge quantities of money to finance subsidies of imported fuel and basic foodstuffs. “We are drowning in a torrent of bank notes”, he said. Bank of Israel officials have said that the government has been printing shekels at a rate of about $16 million a day. Israel’s economic situation “has brought us to total dependence on the U.S.”, Mr. Rubinstein said.
- RUSSIANS SAIL INTO CARIBBEAN. A Soviet naval flotilla recently headed for Cuba for at least a month’s stay, to participate in joint military exercises with Cuban forces, a U.S. navy spokesman said. Lieutenant Commander Quigley said that the naval frigate U.S.S. Vreeland and two P-3 Orion aircraft were keeping watch on the two guided-missile frigates, a replenishment oiler and a guided-missile destroyer.
- MID-EAST ARMS SALES. In anticipation of a showdown with the Reagan Administration Israel is preparing its plan to thwart the proposed sale of American arms to Jordan and Saudi Arabia. Prime Minister Shimon Peres is counting on Israel’s congressional supporters to block the deal with Amman by making it conditional on an agreement from King Hussein to engage in direct peace talks with Jerusalem – a step he has steadfastly refused to take. But Peres is unlikely to challenge the Saudi sale in Congress, a tactic that failed three years ago when Menachem Begin attempted to prevent Reagan from providing Riyadh with AWACS reconnaissance planes. Instead top Israeli officials want to strike a compromise with Secretaries Shultz and Weinberger: they will withdraw their objections if Reagan removes advanced systems like the F-15 fighters from the Saudi package.
- ARAFAT’S VOW. The P.L.O. Chairman Mr. Yasser Arafat vowed recently to step up armed struggle against Israel to seek an independent homeland for the Palestinian people. In a statement marking the twentieth anniversary of the Palestinian ‘revolution’ – the first guerilla attack against Israel – Mr. Arafat denounced the policies of the U.S. and Israel in the Middle East.
- CYPRUS MOVES FOR UNITY. A plan for the phased withdrawal of 20,000 Turkish troops from northern Cyprus to be offset by reductions in Greek Cypriot forces is expected to be agreed at talks in New York. The reduction of troops on either side of the ‘green line’ which has divided Cyprus between the Greek and Turkish communities for the past ten years would be a crucial element in a peace formula to unite the two regions in a federation. This withdrawal would be over a period of many months, leaving the Turkish Cypriot militia of nearly 8,000 men with considerable quantities of tanks, artillery and other weapons from Ankara. An added insurance for Turkish Cypriots will be the completion in coming months of the new air base at Lefkoniko. In the meantime the president of Cyprus, Mr. Spyros Kyprianou, has ended his alliance with the powerful Akel Communist Party recently, saying he needed broader political support before the crucial meeting with the Turkish-Cypriot leader Mr. Rauf Denktash in New York.
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- ETHIOPIA STRENGTHENS SOVIET LINKS. A firm strengthening of Marxist Ethiopia’s links with the Soviet bloc is being forged by a tour of communist capitals by the Ethiopian leader, Lieutenant Colonel Mengistu, despite the country’s almost total dependence on Western food aid. Ethiopian newspapers gave prominence to pictures of Colonel Mengistu with President Chernenko in Moscow and long reports of his talks with Bulgarian and East German leaders in Sofia and Berlin. The reports from the official Ethiopian news agency indicated that a major aim of Colonel Mengistu’s tour is to obtain Soviet-bloc help for water-development and irrigation schemes to rehabilitate Ethiopian agriculture and end its dependence on food aid from the West. Renewed official emphasis in Addis Ababa on Ethiopia’s ties with the Eastern bloc showed that Western hopes of political gains from emergency relief assistance for Ethiopia’s famine victims may prove illusory in the long term.
- FLOATING A NEW CURRENCY IN THE ANDES. In a rare show of unity the five Andean Pact countries – Venezuela, Colombia, Ecuador, Peru and Bolivia – have agreed to create a common monetary unit. Based on the same concept as the International Monetary Fund’s Special Drawing Rights, the new Andean peso will be pegged to the exchange rate of either the U.S. dollar or the SDR. The main purpose will be to provide new capital to boost regional trade and commerce. Should the new peso prove to be successful there may be an attempt to establish a Latin American system along similar lines.
The Borders of the Land of Israel