ECONOMIC AND POLITICAL WEEKLY May 22, 1976

South Africa is now looking for a wide range and variety of military hardware. For instance, Pretoria does not produce jet fighters, but it manu- factures Atlas transport aircraft. The country seems keen to exchange these aircraft for Israeli ICFR jet fighters and also tanks. Und.er the long stand- ing collaboration in nuclear research, South Africa offers Tel Aviv enriched uranium in return for counter insur- gency equipment. Eventually South Africa will try to seek Israeli know- how in the Tnanufacture of nuclear bombs. Sufficient documentary evidence is also there to show that Israel is a transit station for Soutn African nuclear scientists going to %Vest Ger- many for training. Some stolen docu- ments, which ended up in the hands of the African National Congress of South Africa, clearly show that West Germany has been secretly co-operat- ing with Pretoria in developing nuclear rower for both peaceful purposes and fcr making bombs.

Further, South Africa is learning

from its friends how to effectively seal the borders, now under the imminent threat of incursions from African guerillas. Apparently Pretoria has ad- miration for Israeli methods of sealing borders as it has done in the West Bank against Palestinian guerillas. Technical adviser-s from Tel Aviv are keenly awaited by the Vorster regime. Both are obviously drawing up schemes to ward off the hour of their impending doom. How long they can do it remains to be seen. Meanwhile the national liberation movements in 1)oth the regions countinue to make decisive gains.

Rhodesia has become, in this bilateral deal, a non-issue. Vorster has his own skin to save without being the knight errant to the hopelessly lost cause of Ian Smith. In any case, in the Pretoria-Tel Aviv axis, Rhcdesia's fragile military strength is incon- sequential. By this move, Israel in- cidentally has lost all chances of being friends with black Africa, but for South Africa, Israel is the only cption.

SOUTHERN AFRICA - II

Mercenaries for Rhodesia Ramesh Jaura

"VETERAN military personnel wanted: Threatened African nation paying 1,600 dollars monthly. Tax Free. Travel Paid. Complete information 5 dollars (includes Mideast Military Employment Inform.ation). Mr Renzi, 2111 Francisco, Long Beach, California 90806."

Advertisements like this have been appearing in almost every issue of official American GI newspapers, meant for the American forces in Europe. Renzi, who solicits mercenaries for Rhodesia and Oman regularly in the C1I newspaper Overseas Weekly, works hand in hand with Lamprecht, a ma- jor in the Rhodesian army, who too has tried to enlist mercenaries by placing advertisements in West Ger- man newspapers. His contactman in West Germany, Edgar Thelen, who had interviewed prospective mercena- ries, was arrested last year, but was soon set free after paying, as report- ed, a fine of 4,000 marks. After his acquittal, he, followed Lamprecht to Rhodesia.

But this is no new development; even in the Angolan war, US mercena- ries were involved; and according to a UPI report (March 4) four of them died. Commenting on the report, offi-

cials in Washington said: "In case there really have been American mer- cenaries in Angola, they have in no case anything to do with the US gov- ernment ... The U S are in no manner involved, whether recruitment or train- ing of mercenaries." But these offi- cial disclaimers have been exposed as lies in an article in the Washington Star. One of the biggest trairning camps for merCenaries situated in Langley, Virginia, is directly owned by the CIA. Though it is supervised by the so-called Veterans Opportunity Project, "the CIA owns this terrain where mercenaries are trained". One of the camp commanders is reported to have stated: "The recruitment started a few months back; some groups have started with the training a month ago... Secrecy is absolutely important for these recruitments, which till now have been made in Washington, Baltimore, Los Angeles and Philadelphia". Special importan- ce is attached to Vietnam war veterans. One of the recruiting officers is Ro- bert K Brown, who heads the so-called "Phoenix Associates" in Denver, Co- lorado. Earlier he belonged to the notorious Green Berets. Now his job is to provide information on how one

can join the Rhodesian military and police. He even provides tips on the daily life in Rhodesia. "Take your own whisky and car or motor-bike... All the imported goods are expensive." Brown finds his recruits among readers of newspapers published by paramili- tary shooting societies in USA like, for example, the Shooting Times.

Another group of agents operates in Anaheim, California, under the code- name "El Lamas Enterprises". Des- cribing the activities of this firm, the San Diego Tribune recently wrote: "The firm enrols mercenaries as secu- rity experts for international concerns and governments, in order to help them in case of warring disputes." Angola, Israel, Rhodesia, Latin Ameri- ca were mentioned as "operation areas". One of the officers of this organisation is James A Scott. He was identified recently by another re- cruitment expert and anti-guerilla specialist, Major Carlos Wilson, as "a CIA-man, who represents only one among several CIA hireling organisa- tions which enlist veterans for deploy- ment as mercenaries" According to the San Diego Tribune, at least 10,000 U S veterans have till now been en- rolled as mercenaries.

Reporting about "CIA-mercenaries for Rhodesia", Extra-Dienst, a bi-week- ly from West Berlin recently wrote: "The fact that the mercenaries are inainly deployed by racist regimes in South Africa and Rhodesia has caused protests among black US soldiers." The paper reported that it is in pos- session of a letter which was a reply to a fake application in response to an advertisement placed by a recruitment enterprise in an American newspaper. One Major Charles Black - probably a pseudonym - wrote on behalf of the "Military Advisory Command In- ternational-Ladco International (MALI- CI)" in Abington, Post Box 41, Pen- nsylvania 19001: "MALICI is a group of specialists in all fields related to the calling of a mercenary: pilots, me- di cal doctors, drivers, extras, clandes- tine activities, etc. WVe ascertain the needs and requirements for operations and for that purpose contact the ne- cessary people. Required for that are valid US driving licence, an interna- tional driving licence, a valid passport and a vaccination certificate."

The need for absolute secrecy arises out of the fact that "mercenary work" could even violate the US Neutrality Act, particularly in case of actioRs "which are aimed against governments with whom the US maintains frieTdly relations". On that pretext, the appli-

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May 22, 1976 ECONOMIC ANJY POLiTCAL WEEKLY

cant is threatened with imprisonment upto 10 years, if he reveals the nature of his work. Further: "We work ac- cording to the rule: 'nobody should know more than it is necessary for him to know'. Never ask questions about others and never say too much. You would come to learn what is important for you."

Major Black of MALICI demands of Jbe prospective mercenaries detailed personal data as well as military quali- fications. The letter should also con- tain the motives why the applicant wants to become a mercenary. These particulars accompanied by a photo- graph should then be addressed to the Post Box in Abington. "Please don't address the envelop to. me. Don't

mention the sender either on the re- verse side of .he envelope. Don't write anything which in case of need you cannot defend in a court of law. We have other possibilities for communi- cation than the post; that good old telephone."

According to Extra-Dienst, many US soldiers stationed in West Germany have protested against advertisements scliciting mercenaries in official publi- cations of the Army. A soldier of the First Battalion of the 40th Artillery Regiment in Hanau (West Germany) has called upon the commander-in- 'chief of US troops in Europe to pro- hibit the supply of Overseas Weekly in army circles.

OFFICIAL PAPER

Public Sector : 'Who Benefits ? Anand P Gupta

MUCH has been said and written about the growth of public sector enterprises in the country. A report released recently by the Bureau of -Public Enterprises shows that, while the capital employed in Central Government enter- prises (other than departmental pro- jects) increased in 1974-75 by 26.09 per cent (from Rs 5,255.90 crores to Rs 6,627.15 crores), the value of pro- duction from these enterprises went up by as much as 44.07 per cent (from Rs 7,362.69 crores to Rs 10,607.47 crores). Equally impressive has been the performance in profits: while the gross profit has registered an increase of 67.63 per cent (from Rs 333.59 crores to Rs 559.21 crores), the overall net profit (after tax) has recorded a much sharper rise of 184.57 per cent (from Rs 64.50 crores to Rs 183.55 crores). Profitability, too, improved sizeably: the return on capital employ- ed shows a rise from 6.35 per cent in 1973-74 to 8.44 per cent in 1974-75.

These figures are impressive, but let us not be carried away by them. Not all the Central Government enterprises have done well. Indeed, out of the 120 operating companies covered by the Bureau of Public Enterprises in its report for 1974-75, as many as 39 com- panies have suffered losses - with 'the average loss per company being as high as Rs 3.56 crores. In the previous year, only 30 companies had suffered losses, and the average loss per company had been lower at Rs 2.62 crores. It may

also he noted that the financial results, as presented by the Bureau in its 1974-75 report, have not taken into account the losses incurred by the nine subsidiaries of the National Textile Corporation. If these losses - which amounted to about Rs 34 crores - are taken into account, the total losses suffered by the operating companies of the Central Govemment in 1974-75 aggregate as high as Rs 172.79 crores as against only Rs 78.50 crores in 1973-74.

As for the profit-making companies, there is at least one point which merits mention. While it is true that better utilisation of capacity has been of con- siderable significance in improving the pre-tax profits of these companies (which rose by 98.51 per cent over the pre- vious year, to Rs 451.27 crores), the tact remaiins that inflation too has made an important contribution to this in- crease. And this becomes obvious if one looks into the perforrmance of some of the biggest profitmakers. The Oil and Natural Gas Commission more than doubled its pre-tax profit, from Rs 24.51 crores to Rs 50.77 crores, largely because of the rise in oil price. The Indian Oil Corporation's pre-tax profit rose by Rs 21.33 crores, part of which was due to stock profits accruing as a result of the rise in prices. Hindustan Steel improved its performance by as much as 924.20 per cent (from Rs 4.71 crores. to Rs 48.24 crores), only partly on account of improved output, but

partly also because of the dual pricing system.

Another way to evaluate the perfor- mance of public sector enterprises is to take a careful look at the impact the growth of these enterprises has on the income distribution in the country. An approach such as this becomes particularly relevant if one recalls the Prime Minister's recent statement that "our public sector is an essential feature and dynamic instrument of socialism". This suggests that while improved per- formance of public sector enterprises, in terms of profits, profitability, and capacity utilisation, is important, one must also judge their performance by what they have done, and are doing, to ensure that the fruits of their deve- lopment reach the vast majority of the people - particularly those living below the poverty line.

The Bureau of Public Enterprises (BPE) provides no information on the extent to which the fruits accruing from the growth and development of the Central Government enterprises have reached the poor. It is a pity that, although the Bureau has now been in existence for as many as 11 years, it has not undertaken any analysis of the impact the growth of public sector enterprises has had on income distribu- tion in the country. I fully recognise the various problems generally con- fronting such an analysis. However, I do feel that an attempt can neverthe- less yield results that may be regarded as reasonably meaningful.

Considering that development strategies which concentrate on gainful employ- ment are the best means of getting rid of mass poverty and human misery and of improving income distribution, let us first take a careful look at what the Central Government enterprises have done to meet the challenge on the employment front in the country. An analysis based on the BPE data shows that growth of employment in these enterprises has lagged behind the growth in capital employed and that in value added. What is worse, one even finds examples of enterprises in which growth in investment and that in value

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