CURRENT INTELLIGENCE BULLETIN - 1953/10/01

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02026931
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 7
• Document Creation Date: July 15, 2019
• Document Release Date: July 22, 2019
• Publication Date: October 1, 1953

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SECU INFORMATION
1 October 1953
Copy No. 67
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO .47
NO CHANGE IN CLASS. RAI
CI DECLASSIFIED
CLASS. CHANGED TO: TS S C ---
NEM-REVIEW DATE 20 0_9
AUTH: HR 70-2
DATE: ,a0//2/7"...9, REVIEWER.
Office of Current Intelligence
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CENTRAL INTELLIGENCE AGENCY
TOP SECRET
SECU INFORMATION
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SUMMARY
GENERAL
1. Ceylon to sell Peiping another 50,000 tons of rubber in 1954
(page 3).
FAR EAST
VRhee blocking implementation of American aid program (page 3).
SOUTHEAST ASIA
Civil war seen possible in Indonesia (page 4).
NEAR EAST - AFRICA
4.
5. Iraq favors Turkey for UN seat despite Arab League opposition
(page 5).
Egypt to send troops to Israeli border (page 5).
WESTERN EUROPE
7. French charge Austrian leaders are "completely neutralist"
(page 6).
8.
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GENERAL
1.
Ceylon to sell Peiping another 50,000 tons of rubber in 1954:
As a result of talks just concluded in
3.3(h)(2)
Peiping, Ceylon has agreed to exchange
50,000 tons of rubber for 270,000 tons
of Chinese rice in 1954, according to
the Ceylonese minister of agriculture and food. The embassy
calculates that Peiping will be paying a premium of $12,000,000
to $13,000,000 over world market prices.
Comment: The quantities of rubber
and rice to be traded next year are the same as in 1953. The
embassy estimated that this year China is paying a premium
of about $15,000,000.
Ceylon's acceptance of Peiping's
attractive barter offers is apparently due to its financial prob-
lems. As a result, China will continue to receive sufficient raw
rubber despite a UN embargo on shipment of strategic goods to
China.
FAR EAST
2. Rhee blocking implementation of American aid program:
President Rhee is insisting on South
Korea's prior approval on all contracts
allocated under the US aid program,
according to American economic co-
ordinator Wood. Although not specifically stated, Wood believes
that the demand is motivated by a desire to eliminate or boycott
procurement from Japan, and to maximize economic ties with
the United States. He adds that this issue is a major block to a
comprehensive economic agreement.
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Comment: American commitments to
maintain Japan's special dollar earnings at a high level for two
more years were predicated on sizable purchases there for Korean
reconstruction. If Rhee succeeds in blocking such expenditures, it
would seriously weaken Japan's ability to increase its defense effort,
to repay American aid rendered during the occupation, and to meet
Its obligations arising out of the peace treaty.
SOUTHEAST ASIA
3. Civil war seen possible in Indonesia:
4.
/the revolt in North Sumatra re-
/Wets a moslem resurgence in Indonesia
which has resulted from the maneuvers of
tne new communist- Influenced government, the govern-
ment is moving further to the left and the opposition, in turn, is moving
toward an Islamic state. Either the cabinet will soon fall or the country
will be thrown into a holy war on a nationwide scale.
Comment: Elements in the Masjumi, the
government's principal political opposition, who favor "direct action"
have become stronger as a result of recent events. While the out-
break of civil war at this time does not appear likely, the security
situation will probably continue to deteriorate.
NEAR EAST - AFRICA
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Iraq favors Turkey for UN seat despite Arab League opposition:
Iraqi prime minister Jamali states that his 3.3(h)(2)
government is willing to support the Turkish
bid for the UN Security Council seat now held
by Greece despite the Arab League's opposi-
tion to Turkey. He is ready to do this in order to cultivate Ankara's
friendship and to oppose communism.
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3.3(h)(2)
Jamali stated that most of the Arabs believe
that a Satellite would occasionally side with them in the United Nations,
particularly on the North African question, but that Turkey would un-
doubtedly follow the lead of the United States and France.
Comment: Turkey appears to have about
35 of the maximum 40 votTsii-e�e-ae-d for election. Iraqi support of
Turkey indicates that Arab League control of its members is not firm,
even on major issues. Moreover, Iraq's decision indicates an increas-
ing interest in participating with Turkey and Greece in a defense line
extending to the Persian Gulf.
6. Egypt to send troops to Israeli border:
Egyptian vice premier Nasr told American 3.3(h)(2)
ambassador Caffery that Egypt "must imme-
diately" send armed forces to the Israeli
border because 300 Israeli troops had occu-
pied the demilTtaiId zone on 28 September and were fortifying it.
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Nasr said that "at least for the present"
Egyptian troops will not enter the zone, but that he fears the pub-
lic reaction when the Israeli move is known.
Comment: Tel Aviv has denied occupa-
tion of the demilitarized FOR71 however,
the past three months Israel has made various incursions
into the zone. These actions,/
/represent a
"major move" by the Israelis to gain control of it.
Egypt is preoccupied with its efforts to
settle the Suez dispute with Britain and probably wishes to avoid
trouble with Israel.
WESTERN EUROPE
7. French charge Austrian leaders are "completely neutralist":
French foreign minister Bidault and defense 3.3(h)(2)
minister Pleven informed Ambassador Dillon
that Austrian chancellor Raab, foreign minis-
ter Gruber, and state secretary Kreisky, who
have been consulting with them in Paris, were
"complete neutralists and could not be counted
on by the Western powers."
3.3(h)(2)
Ambassador Thompson in Vienna comments
that the French reaction may in part be accounted for by French re-
sentment at current Austrian unwillingness to make concessions in
response to France's agreement to pay its own occupation costs.
Comment: The basically pro-Western Austrian
government seems at present committed to a policy of foregoing future
military alliances, of accepting even onerous economic terms in return
for a state treaty, and of eliminating insofar as it can any obstacles to
the resumption of treaty negotiations. France's failure to follow a strong
line on the treaty may have encouraged the Austrians to seek French
Support of this policy.
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