of the fight v/aged by PRELIMO«
contradictions within imperialism
In spite of the apparently brilliant nature of the Cahora Bassa scheme
as one to unite Portuguese Fascism, Western Capitalism and South African
Apartheid, there are certain serious problems which Portugal's ruling
clique have to face.  To begin v/ith, Portugal is caught in the middle of
capitalist interests from different imperialist countries which are competing among themselves. The contract to build the first stage of the
Cahora Bassa dam v/as signed on 10 July, 1963 with ZAMCO (Zambeze Con-
sorcio Hydro-Electric), which is a consortium of German, Swedish,
French and South African firms - tender the control of the notorious
South African company, Anglo-American, By awarding the contract to
ZAMCO, Portugal satisfied German-and South African capitalists in
particular, but the British and the powerful US capitalists were left
out of the picture*  This raises contradictions for Portugal's foreign
policy, since Caetano clearly hopes for more-US and NATO aid to conduct
his wars against FRELIMO, MPLA. and PAIGC,   :.
Another contradiction met; within.Portugal's colonial and foreign policy
is that while it needs South Africa's support to maintain Mozambique and
Angola, it is also afraid of:a: South African takeover of these regions,
v/ith the support of the whites already resident there..  Further, white
immigration into Mozambique, (such as the million farmers whom they v/ould
like to settle on the Zambezi), will net necessarily improve Portugal's
position since the plan:is to attract those settlers from European
countries, and they may prefer South Africa rather than Portugal as
their master*  Besides, the close association with South Africa embarrasses Caetano's attempts to portray himself as a 'Liberal'*  The
ties v/ith South x^frica are being strengthened every day and_ in Angola
there is another hydro-electric scheme (the Cunene dam) v/hich involves
South Africa,  But the evidence is that some elements within..Portugal's
ruling circle do not like these developments *
In ..April .this year, while visiting Mozambique (the areas still safe for
Portugal) Marcelo Caetano announced that the agreement with ZAMCO was
broken off*  But that decision has been reversed in favour of ZAMCO
once more0  The changes and the uncertainty v/ere probably due to fear
of South African influence in Mozambique along with Portuguese hopes
that United'States investors would build the dam and bring the support
of their jpvernmentc  It was widely rumoured that since the Spanish
government v/as raising problems over the American bases in Spain, the
Portuguese government was willing to allow the Yankees to transfer
their bases from Spain to Portugal*  This major step, along v/ith the
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