CURRENT INTELLIGENCE BULLETIN - 1958/01/07

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02066864
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 13
• Document Creation Date: January 27, 2020
• Document Release Date: January 30, 2020
• Publication Date: January 7, 1958

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CURRENT
/ INTELLIGENCE
/ BULLETIN
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7 January 1958
Copy No. 143
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REVIEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
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CONTENTS
1. USSR ANNOUNCES FURTHER REDUCTION OF FORCES
(page 3).
ft.ie, 2. USSR REOPENS POSSIBILITY OF ASWAN DAM AID OFFER
(page 4).
3. TOP-LEVEL EAST GERMAN LEADERS OPPOSE ULBRICHT
(page 5).
4. INDONESIA SEEKING LARGE QUANTITIES OF MILITARY
EQUIPMENT IN EASTERN EUROPE (page 6).
5. INDONESIAN DISSIDENT LEADERS MEET IN CENTRAL
SUMATRA (page 7).
6. EGYPTIAN-DIRECTED VIOLENCE AGAINST JORDAN MAY
BE RESUMED (page 8).
7. GREEK PREMIER NOW CONVINCED OF NEED FOR AGREE-
MENT WITH TURKEY OVER CYPRUS (page 9).
8. WEST EUROPEAN REACTIONS TO RAPACKI PLAN
(page 10).
9, BRITISH APPROACHES ON GERMAN SUPPORT COST PAY-
MENTS (page 11).
10. VENEZUELAN SITUATION
7 Jan 58
(page 12).
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1. USSR ANNOUNCES FURTHER REDUCTION OF FORCES
Comment on:
The Soviet Union announced on 6 Jan-
uary that its armed forces will be
further reduced by 300,000 men, with
41,000 to be withdrawn from East Ger-
many and 17,000 from Hungary. By announcing a unilateral
cut, Moscow hopes to contrast its "peaceful outlook" with
efforts to strengthen the Western military posture, and thus
foster the impression�particularly in Western Europe--
that steps to enhance NATO's military potential are unneces-
sary.
Since May 1955, the Soviet Union has an-
nounced it would cut military manpower by about 1.8 million
men. While these cuts were not confirmed, there were indi-
cations that some reduction of force was completed. Current
Soviet strength, including security forces, is estimated about
4.6 million.
Khrushchev has said that the USSR's
scientific advances have created conditions favorable for the
cuts. A Supreme Soviet decree on 21 December, moreover,
explicitly called for maintaining the armed forces at a proper
level to ensure the defense interests of the Soviet Union. Since
Soviet military expenditures for 1958 are estimated at roughly
the same level as for the previous three years, a re-
duction of forces would indicate increased emphasis on other
phases of the military program.
The reductions to be made in East Germany
and Hungary would not affect Soviet security interests in those
countries. Presently the USSR has 380,000 personnel in East
Germany and about 70,000 in Hungary. Reductions there, how-
ever may be particularly effective for propaganda purposes.
7 Jan 58
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2. USSR REOPENS POSSIBILITY OF ASWAN DAM
AID OFFER
Comment on:
Moscow is endeavoring to keep alive
Egyptian hopes for Soviet economic
assistance on the Aswan high dam.
This may be a bargaining tactic for
the impending negotiations to implement the 19 November
Soviet-Egyptian credit agreement. Ambassador Thompson
suggests it may also be a hint to Nasir that his present
flirtation with the West is undesirable and that continued
reliance on the Soviet bloc will pay off with even bigger
dividends.
The Soviet foreign affairs journal
New Times on 26 December published an article on the
advantages of the Aswan dam project advising that Cairo
could rely on "disinterested aid of friendly countries, the
Soviet Union among them." The article warned that "aid
from Western countries is not to be reckoned on."
Over the past year and a half, the USSR
, has been reluctant to become involved in Aswan and has min-
imized the advantages of the dam, while advising Egypt to
concentrate on small-industry development. Soviet economic
assistance under the 19 November credit agreement will be
devoted primarily to shorter range projects which will pro-
duce more immediate political impact.
7 Jan 58
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3. TOP-LEVEL EAST GERMAN LEADERS
OPPOSE ULBRICHT
Comment on:
Top-level East German Communist
leaders are banding together for
a showdown with First Secretary Ul-
bricht at the Socialist Unity party's
(SED) 35th central committee plenum this month in an at-
tempt to force him to modify certain of his hard policies.
the opposition in-
cludes five of the nine politburo members, deputy pre-
mier, and the former security chief, most of whom are
also fundamentally hard-line Communists. Most of them
tried last year to divert Ulbricht from what they considered
his unrealistic economic policies of concentrating on basic
industries at the expense of consumer goods production and
exporting to the Soviet Union to the detriment of profitable
trade elsewhere.
the consolida-
tion of opposition to uibricnt was precipitated by Party Secre-
tary Ziller's suicide in mid-December, after an argument
with Ulbricht over consumer goods failures. The opposition
may also be trying to forestall appointment of more of Ul-
bricht's supporters to the secretariat. Ulbricht may be forced
to make some concessions, but the Soviet Union probably will
support him to ensure his continued dominant position.
7 Jan 58
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4. INDONESIA SEEKING LARGE QUANTITIES OF MILITARY
EQUIPMENT IN EASTERN EUROPE
Comment on:
The Indonesian arms purchasing mission
now in Eastern Europe is interested in ob-
taining large quantities of equipment for
all three services from Yugoslavia, Czech-
oslovakia and Poland
The air force wants 114 Soviet aircraft, in-
cluding MIG fighters, IL-14 and 1L-28
bombers and transports, and helicopters and
trainers. The army is seeking heavy infantry weapons and light
artillery, and the navy wants a destroyer, a submarine, frigates,
and a variety of small vessels. The Indonesians also want am-
munition and spare parts, with delivery to begin 90 days after
purchase.
A shipment of Soviet Jeeps, contracted for
approximately a year ago, arrived in Indonesia on 4 January,
bringing to about 1,700 the number of Soviet jeeps delivered out
of 4,000 purchased.
Foreign Minister Subandrio has publicly re-
iterated that Indonesia does not intend to purchase Soviet arms if
there is an "alternative source," and the purchasing mission is
scheduled to visit a few Western countries. All indications, how-
ever, are that the Indonesians anticipate making most of their
purchases in the bloc and in Yugoslavia. While the Indonesians
need replacements, the type of equipment sought would contribute
to a capability for an attack on West Irian.
7 Jan 58
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5. INDONESIAN DISSIDENT LEADERS MEET IN
CENTRAL SUMATRA
Comment on:
Indonesia's dissident leaders
have met in Padang,
Central Sumatra, to discuss the policy
they will follow during President Sukarno's
trip abroad, which began on 6 January.
Sumatra does not want to break
completely with Djakarta but "will not tolerate additional Com-
munist moves" during Sukarno's absence.
Sumatran leaders may be contemplating
the application of additional economic pressures on Djakarta.
Such measures probably would involve foreign companies, in-
cluding oil firms, which have continued to pay taxes to and share
profits with the central government. Sumatran leaders may be-
lieve that in view of the anti-Dutch campaign in Java, they can
persuade these companies to divert funds and services to pro-
vincial governments.
"additional
Communist moves" which could prompt new Sumatran counter-
measures. The Communists are unlikely to make 77 drastic
move during Sukarno's absence.
7 Jan 58
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EGYPTIAN-DIRECTED VIOLENCE AGAINST JORDAN
MAY BE RESUMED
Comment on:
Recent Egyptian interest in assembling
a large quantity of arms and explosives
in Damascus suggests that a new cam-
paign of violence may be planned against
the pro-Western government of Jor-
dan,
requestea
that Cairo furnish "urgently as large a
quantity as possible of revolvers, sub-
machine guns, hand grenades, and time
fuses." Last fall delivery of time fuses
was followed by an outbreak of nuisance
bombing in both Jordan and Lebanon.
Although the overt propaganda war be-
tween Amman and Cairo has subsided, Jordan's King Hussayn
has again challenged Nasir by a well-publicized grant of asylum
to an anti-Nasir Egyptian Air Force officer. Hussayn is also re-
ported in contact with members of the anti-Nasir "free Egypt"
group, several of whom he invited to Amman last month in the
hope of arranging a meeting with King Saud.
In view of these developments, Nasir may
soon carry the struggle into Jordan, possibly at the time of new
parliamentary by-elections scheduled for 20 January to replace
anti-Western deputies who fled to Syria last April. According
to other reports, an Egyptian-Syrian commando group has been
established in southern Syria to train individuals for sabotage in
Jordan and the Persian Gulf area, and to plan for sabotage in
Jordan of the American-owned Trans-Arabian Pipeline, which
carries Saudi oil to the Mediterranean.
7 Jan 58 Current Intelligence Bulletin
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7. GREEK PREMIER NOW CONVINCED OF NEED FOR
AGREEMENT wrni TURKEY OVER CYPRUS
Comment on:
Prime Minister Karamanlis returned
from the NATO conference in Paris con-
vinced that an understanding with Turkey
is a prerequisite to any solution of the
Cyprus problem but dispirited by the apparent hopelessness
of overcoming Turkish resistance. Karamanlis now sees Turk-
ish hostility as "genuine, emotional and widespread" and im-
possible of mollification by outside pressure. Consequently,
he no longer believes that appeals to the United Nations, diplo-
matic pressure on London, or merely waiting for the Labor
party to assume power in Britain will result in a settlement
of the issue.
Greek leaders had long tended to disre-
gard official Turkish statements on Cyprus, believing them to
be either British-inspired or issued as maneuvers in the in-
ternal politics of Turkey. Turkish leaders remain firm in
their demands for retaining the status quo on Cyprus or parti-
tioning the island. While some Greek and Greek Cypriot lead-
ers who demanded immediate pelf-determination now are will-
ing to accept self-government with eventual self-determination
not precluded, none could retain his political support if he ac-
cepted the Turkish position. Karamanlis, however, now seems
to realize that an agreement with Ankara is necessary and that
attacks on Turkey by Greek and Cypriot leaders and in the Greek
press contribute substantially to making such agreement vir-
tually impossible.
7 Jan 58
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8. WEST EUROPEAN REACTIONS TO RAPACK1 PLAN
Comment on:
Preliminary official reactions from
France, Belgium, and Luxembourg
to Polish Foreign Minister Rapacki's
plan for an atom-free zone in central
Europe tend to emphasize the political
and military impracticability of the
plan. Most officials believe, however,
a reply must not be entirely negative be-
cause of public interest in renewed East-
West negotiations.
Both French Premier Gaillard and For-
eign Minister Pineau have publicly taken a negative line on
Rapacki's proposals; the French ambassador in Warsaw has
been instructed to reject the plan "firmly." The Foreign Min-
istry's director of European affairs, Jean Laloy, believes,
however, that from the standpoint of French public opinion,
the premier's reply was "too abrupt." Laloy had indicated in
December that the idea of a "thinned-out zone" in central Eu-
rope advocated by French disarmament expert Jules Moch
was gaining headway in France as well as in Germany and
Britain. He is concerned that Britain may not go along with
the negative French response to the Rapacki suggestion.
Belgian Foreign Minister Victor Larock,
in a public statement on 3 January, characterized the Rapacki
proposal as "interesting, but imprecise and too limited." He
reiterated Belgium's support of international control and in-
spection mechanisms as the proper basis for a disarmament
agreement. A spokesman for the Luxembourg Foreign Min-
istry has stated that Western Europe could not agree to a
3,000-mile withdrawal of American troops while Soviet troops
remained 300 miles away.
'7 Jan 58
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9. BRITISH APPROACHES ON GERMAN SUPPORT
COST PAYMENTS
Comment on:
Prime Minister Macmillan evidently
believes the United States holds the
key to Bonn's continued defrayment
after March of the Deutsche mark
costs of maintaining British troops in Germany. A draft
letter to President Eisenhower urges that, if UK-German
negotiations are resumed at the request of NATO, the
United States tell the Federal Republic that it will not seek
further support cost payments for American forces. This
would make it easier for the Germans to comply with the
British request. A parallel letter is being sent to Chancel-
lor Adenauer asking his cooperation toward resolving the
dispute.
Britain seeks the equivalent of
$140,000,000 in support of its forces. So far Bonn has
only offered to advance payments on other normal trans-
actions, but London has rejected this offer. London is
probably hoping that its veiled threat to reduce its forces
still further than now planned will induce other European
NATO members to press Bonn and Washington to find a
compromise.
Three Spaak-appointed financial ex-
perts will report to the North Atlantic Council on 8 January
that Britain's currency difficulties entitle it to request NAC
discussion of the problem. London, which asserts it needs
to settle the dispute by mid-Jan.uary to meet budget planning
needs, expects the NA to urge resumption of British-German
negotiations.
7 Jan 58
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10. VENEZUELAN SITUATION
Comment on:
Venezuelan Government reprisals
following the abortive 1-2 January
military revolt might touch off fur-
ther violence. The government's
uncertainty over the loyalty of the
armed forces is indicated by exten-
sive arrests among the military. In
the first active civilian opposition to
President Perez since the revolt began, a number of news-
papers in Caracas have either suspended publication briefly or
otherwise defied a. government order to print condemna-
tions of the revolt. At least two prominent newspapermen,
including the editor of the Catholic church organ, have been
arrested.
Official measures against the church,
already at odds with the government, could draw the hier-
archy into open support of the opposition and have a perceptible
effect on participation of civilian elements in future opposition.
In addition to the Catholic editor, five other priests have been
arrested, and , the
archbishop primate has been advised to remain in his palace.
7 Jan 58
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