ANOTHER COMMUNIST HIGHWAY

Created: 9/14/1973

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Ihe first meeting, Souvanna's most Outspoken military critic, the Deputyin Chic* Of the Lao Army, General Kouprasith. and several other influential officers pledged their support to the prime minister. Their shift isolated Souvanna's chief civilian opponents in the cabinet.esult. Finance Minister Sisouk and Transportation Minister Ngon Sananikone informed Souvanna that they would raise no further objections to the agreement.

Once the protocol is signed, Souvanna's task will be to ease it through the National Assembly. That body, which is dominated by the rightistfamily, has in the past opposedon many issues. In anticipation of some assembly opposition to the protocol, Souvanna may decide merely to discuss the agreement with the deputies rather than submit it to them for formal approval.

COMMUNIST HIGHWAY

new,

panhandle is under construction. The road begins on the North Vietnamese border and probably will run all the way to Cambodia;about one half of the road has been built since March. The rapid pace of construction suggests that the Northare getting ready for another substantial dry-season logistical campaign. The road probably will not be open for through traffic until

Like the new north-south corridor inSouth Vietnam, the Laos route has twowell-drained, and may be able to supporttraffic. When completed, the twogive the Communists great flexibility intheir widely scattered military forcesDuring the summer rainy seasonthe Communists can use the routeSouth Vietnam; during the winter

APPROVED FORIAIUFO DATE;1

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A BIG SPENDER

Almostillion in long-term capita: was invested or loaned overseas by Japan dying the first seven monthshe figure approaches the highest one-yea' level of capital exportsby the US and compares with theillion sent abroad during the same period last year.

In the summor2 Japan moved to reduce its enormous loreign exchange reserves by stimulating the export of capital. Tokyothe remaining direct controls and deposited large amounts of dollars in commercial banks, thereby increasing their lending capacity. The government also used tax inducements todirect investment abroad as well as theof foreign securities. These government efforts had an effect; Japanese industrial firms and large trading companies have expanded their foreign operations, and Japanese banks havelarge sums to countries where interest rates are higher thanapan.

A major feature of Japan's investment and lending activities overseas this year has been the rapid expansion of syndicated loans, often issued in conjunction with foreign banks. Two such loans have been made to European public utility corporations this year, with the Japanese share totalingmillion. Large loans also have been maO* to US multinational firms, including IBM.

Japanese direct investment activity isbutemains small compared with that of the US. During the first halfirect investment abroad by Japan amounted toqualing the level for allhis is well short of US direct investment abroad, which has averaged more thanillion annuallyuch o* the Japanese money is going into purchases of oil concessions in the Persian Gulf. Japanese purchases ot foreign securitiese floating of foreign bonds in the Tokyo money market have boosted capital exports.

Although Japan has emergedajorof capital, this activity is likely to How in the coming months, perhaps to less than half the recent levels. Foreign exchange reserves have been reducedillion, and according to some sources. Tokyo has no wish to cut them much more. To hold reservesillion during the neat year, long-term investments and lending overseas will have to be reduced to aboutillion unless Japan eases its tight controls on capital imports. Moves in this direction are now ir consideration in

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