CURRENT INTELLIGENCE BULLETIN - 1953/08/07

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02872252
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 7
• Document Creation Date: July 15, 2019
• Document Release Date: July 22, 2019
• Publication Date: August 7, 1953

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CURRENT INTELLIGENCE BULLETIN
UM ENT NO.
17: CL.
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AL11)2.1-Crit7214
DAT !..AV", "REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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INFORMATION
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SUMMARY
SOVIET UNION
Comment on the 1953 Soviet budget (page 3).
fiComment on absence of presidium member from Supreme
Soviet meetings (page 3).
FAR EAST
3. North Korean purges attributed to corruption and inefficiency
(page 4).
4. Chinese Nationalists capture large Western-flag vessel (page 5).
WESTERN EUROPE
5, Opportunity seen to exploit Moscow inconsistencies on Austrian
treaty (page 5).
6. Comment on French strike wave (page 6).
* * * *
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SOVIET UNION
1. Comment on the 1953 Soviet budget:
For the first time since 1947 the Soviet
budget, presented on 5 August, shows a decline in direct military
expenditures. In contrast to 16 and 18 percent increases for each
of the preceding two years, the 1953 military allocation is 3.2 per-
cent below 1952. Nevertheless, direct allotments to the military,
not including defense outlays hidden in other parts of the budget,
are still more than one fifth of total expenditures.
The military capability of the Soviet Union
since the war will not be significantly affected by this slight decrease
in defense allotments, particularly since the drain of supplying arma-
ments for the Korean war has ended.
A departure from previous budgetary
practice is the unprecedented size, almost double, of undisclosed
expenditures, amounting to about 16 percent of the total. In past
years part of these outlays supported MVD and MGB administra-
tions as well as government loans and reserve funds.
Capital investment has been raised by
more than 9 percent and funds for heavy industry and agriculture
show a sharper increase over the previous year than other parts
of the budget. This indicates that the USSR will continue heavy
stress on basic economic development which is imperative if the
major 1955 economic goals of the current Five-Year Plan are to
be realized. In comparison the new government is increasing con-
sumer goods production but at a lower rate. To offset the effect
of the April decree lowering the prices for agricultural goods, the
budget calls for very sharp reductions in taxes levied on members
of collective farms and also for the cancellation of all agricultural
tax arrears.
2. Comment on absence of presidium member from Supreme Soviet
meetings:
The only member of the top party pre-
sidiUm not present at the Supreme Soviet on 5 August was P. K.
Ponomarenko, minister of culture and alternate member of the
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presidium. Ponomarenko, who rose through party ranks to
become a member from 1947 to 1953 of the important all-union
Secretariat, was shifted after Stalin's death to the government
position of minister of culture which includes responsibility for
propaganda media.
While Ponomarenko's absence is not
necessarily evidence of any fall from power, it recalls Beria's
failure to attend the opera on 27 June. If he has been deposed,
it should become clear after the last session which ratifies all
ministerial shifts.
FAR EAST
3. North Korean purges attributed to corruption and inefficiency:
/top-level personnel changes
during the past few months in North
Korea are due primarily to corruption
and inefficiency, factionalism among Soviet,
Chinese, and domestic Communist leaders is not a major factor.
The officials ousted since February
were all closely connected with political operations against
South Korea and may have been purged for failing to infiltrate
the Rhee government effectively. The new leadership may
revitalize its penetration efforts and guerrilla warfare against
South Korea.
It is believed that the pro-Soviet group,
which has controlled North Korea since 1945, has never been
seriously challenged. The appointment on 3 August of Nam II
as foreign minister is regarded as natural in the light of his
solid Soviet background and the important role the foreign minis-
ter is destined to play in the forthcoming political conference.
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4. Chinese Nationalists capture large Western-flag vessel:
Nationalist naval forces_ intercepted the
Italian freighter. Marilu in the Formosa
Strait on 31 July,
The 6,000-ton vessel,
with its cargo of iron ore, silk and peanut
cake loaded at Tsingtao and Shanghai, was
reportedly escorted to Keelung, Formosa,
on 6 August.
Comment: This is the fifth Nationalist
interception during July of Western-flag ships engaged in trading
with the China mainland. It reflects a stepped-up campaign to
harass such shipping, at least in the Formosa Strait The four
other vessels intercepted in July were small British coasters, as
have been most of the 60-odd ships intercepted in the past three
years.
WESTERN EUROPE
5. Opportunity seen to exploit Moscow inconsistencies on Austrian
treaty:
British and French officials in London
believe that recent Soviet notes have at
least provided the West an excellent
opportunity to exploit obvious Soviet
inconsistencies on the Austrian question. While Moscow in its
notes of 29 and 30 July to Austria and the Western powers re-
spectively held out the prospect of an Austrian settlement, the
4 August note openly ties such a settlement to "possible successes"
in negotiations on Germany.
In the opinion of these officials, the
West should reassert its opposition to linking the Austrian
question with extraneous issues, and should also make clear
that it is not committed to any specific text of an Austrian treaty.
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6. Comment on French strike wave:
The strike of public utility workers
throughout France, which was initiated by non-Communist
unions in protest against the government's announced adminis-
trative economies, threatens Premier Laniel's whole financial
program.
The spread of the present work stoppages
has been unexpectedly rapid because the Socialist-oriented Force
Ouvriere has pressed strike action in order to preserve its leader-
ship in its only important labor stronghold. The Socialists are de-
termined to extend the gains made in the May municipal elections
and exploit their role in opposition to the right-wing government's
policies. The utilities have been slow in granting general wage
Increases and have long suffered from deep-seated labor unrest
Efforts to prolong the strikes can be
expected to fail because neither workers nor unions are financially
prepared. Government concessions in the event of labor solidarity
would hasten a cabinet crisis after parliament reconvenes on 12
October.
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