CURRENT INTELLIGENCE BULLETIN - 1957/05/18

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03160455
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 13
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: May 18, 1957

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CURRENT
INTELLIGENCE
BULLETIN
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18 May 1957
Copy No. 134
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OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
3.5(c)
3.3(h)(2)
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PIA
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1 JI J.JUJA
18 May 57
CONTENTS
1. ISRAELI OFFICIALS SAY SUEZ TEST NOT IMMINENT
(page 3).
(1/0 2. CENTRAL SUMATRAN COMMANDER SENDS "FINAL
G" TO INDONESIAN GOVERNMENT
(page 4).
fki 3. FURTHER INDICATIONS OF SOVIET PREPARATIONS FOR
FIRING OF A TEST ICBM OR AN EARTH SATELLITE
(page 5).
4. RUMORED CUTBACK IN 1960 SOVIET INDUSTRIAL GOALS
(page 6).
5. INDIA WIDENS TAX BASE TO SUPPORT SECOND FIVE-
YEAR PLAN (page 7).
HANOI INSTRUCTS PATHET LAO AGENTS TO DESTROY
KATAY'S INFLUENCE (page 8).
6/4 7. HIGH-LEVEL SOVIET ECONOMIC DELEGATION IN PRAGUE
(page 9).
0/4 B. USSR SUGGESTS DIRECT TALKS WITH ITALY
(page 10).
9. COMMENT ON ANNOUNCEMENT OF BRITISH NUCLEAR TEST
(page 11).
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1. ISRAELI OFFICIALS SAY SUEZ TEST NOT IMMINENT
Reference:
Israeli ambassador Eban informed the
United States UN delegation on 16 May
that Israel has no present plans for-an
actual test of its right to transit the
Suez Canal, although Israel is still de-
termined to exercise its rights. Eban
said a test probably would not take place
within the next few weeks, and that Israel
intends to consult "friendly governments"
about the method and timing of such an
attempt.
The American embassy in Tel Aviv has
learned from a "middle-grade" official of the Israeli For-
eign Ministry that the government is "not displeased" by
the speculation aroused by newspaper reports and foreign
comment on the possibility of a test, since from the Israeli
point of view "the issue has to be kept alive:' Both Eban and
this official stated that Israel would appeal to the UN Security
Council rather than to the World Court in case Egypt refuses
passage to an Israeli vessel, but neither specifically ruled
out the possibility of more forceful action.
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2. CENTRAL SUMATRAN COMMANDER SENDS "FINAL
WARNING" TO INDONESIAN GOVERNMENT
\ Lt. Vol. Hussein, dissident military
commander of Central Sumatra, has
issued a "final warning" to the Djakarta
government
that his people "can no longer
be reStraihed" it the two Sumatran officials arrested in
� ediatel released.
the arrests a
"greatly shaken the ideas of the people of Central Sumatra."
Comment
The arrested Sumatrans are members
of the revolutionary group that began an
autonomy movement last December.
Although
Sukanto promised to seek a settlement of the issue in Djakarta,
the prisoners' release has not yet been announced.
Sumatrans in the capital city will probably continue to be ar-
rested and interrogated, thus further straining relations be-
tween the provinces and the Djakarta government.
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3. FURTHER INDICATIONS OF SOVIET PREPARATIONS FOR
FIRING OF A TEST ICBM OR AN EARTH SATELLITE
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4. RUMORED CUTBACK IN 1960 SOVIET INDUSTRIAL GOALS
Comment on:
The USSR is still considering the final
figures of a downward revision of the
Sixth Five-Year Plan (1956-1960), but
industrial output during the five years
will probably be scheduled to increase
about 58 percent rather than 65 percent as originally planned.
Heavy industry is reportedly now to rise 61 percent
rather than 70 percent, and light industry 53 percent instead
of 60 percent. The originally scheduled 70-percent growth in
agricultural production would remain unchanged.
Other recent evidence had suggested that
the Soviet regime intended to make no significant reduction in
the ambitious goals of the Five-Year Han, despite the fact
that these goals could probably not be achieved, and despite
the sharp reduction of output goals in the 1957 annual plan.
The investment resources and labor force
which will probably be available in the next three years would
support an increase in the order of 55 to 60 percent in indus-
trial output, but not the 65-percent growth originally planned.
The agricultural production goal continues to appear unrealis-
tically high.
If a downward revision of this magnitude
occurred, it would indicate that the Soviet leaders had been
forced by economic facts to accept a slowdown in the drive to
catch up with the West in industrial production.
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5. INDIA WIDENS TAX BASE TO SUPPORT SECOND
FIVE-YEAR PLAN
Comment on:
The sharp rise in taxes on consumer
goods called for in the 1957-58 Indian
budget, which was presented to parlia-
ment on 15 May, indicates that the gov-
ernment intends to continue the rapid
pace of economic development even though this requires
imposing additional sacrifices on the general public. These
increased taxes will adversely affect the government's pop-
ularity, but Congress Party leaders apparently feel that
they must pay this price if the Second Five-Year Plan (1956-
61), on which they have staked their future, is to succeed.
Most of the burden of the new taxes will
be placed on consumers in an attempt to divert resources to
investment and export channels. Although a new tax on
wealth has been added, income tax rates for earned incomes
in the upper and middle levels will be reduced in order to in-
crease incentives and encourage savings, and the income tax
was extended to lower income groups.
Foreign-owned companies operating in
India will be given some tax relief in an effort to attract
foreign investors. While these new revenues will enable
the government to obtain most of the domestic resources
needed to carry out the plan, the success of the plan will
depend on closing the foreign exchange gap now amounting
to more than $1 billion.
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6. HANOI INSTRUCTS PATHET LAO AGENTS TO DESTROY
KATAY'S INFLUENCE
To "repel American influence" in Laos,
the Pathet Lao has been instructed by
Hanoi to start a propaganda campaign
to "break" Laotian deputy premier Katay
politically by depicting him as a traitor.
Deputies and ministers, especially, are to be inculcated with
the thought that Katay is the greatest threat to Laotian peace
and unity. Prince Petsarath's influence is to be exploited in
molding public opinion against Katay.
The Pathet Lao has been advised to use
extreme caution to prevent its identification with this effort.
Comment Successful vilification of Katay would
weaken anti-Communist efforts in Laos.
Katay, who is considered pro-American in Laotian circles,
was largely responsible for the government's stiffer attitude
toward the Pathets after earlier concessions. Souvanna Phou-
ma's plan to seek support in the National Assembly for a new
try at reaching a political settlement will give the Pathets an
opportunity to shift the blame for past negotiation difficulties
on Katay as an instrument of American interference.
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7. HIGH-LEVEL SOVIET ECONOMIC DELEGATION
IN PRAGUE
A Soviet delegation headed by party
presidium member Saburov arrived
in Prague on 14 May for the first meet-
ing of a Soviet-Czech commission for
economic co-operation. The delegation included the for-
eign trade minister, the head of the Chief Directorate for
Economic Relations, and a first deputy chairman of Gosplan.
This commission is the first such organization to be estab-
lished by Moscow with a Satellite,
Comment
Moscow now apparently intends to rely
more on direct bilateral relations for
co-ordinating economic planning with the Satellites than on
organizations of a multilateral nature such as the Council
for Economic Mutual Assistance (CEM,A). The Soviet-Czech
meeting is the result of the January agreement which called
for increased co-ordination of the two economies.
The presence of Saburov on the commis-
sion is a further indication of his increasingly active role in
Soviet-Satellite economic planning. Saburov reportedly acted
as Soviet delegate to a Berlin CEMA meeting in August-Sep-
tember 1956, and, since his removal last December from the
chairmanship of the State Economic Commission, he has ap-
peared proMinently in negotiations with Satellite delegations
to Moscow.
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8. USSR SUGGESTS DIRECT TALKS WITH ITALY
The Soviet ambassador to Italy proposed
to Rossi Longhi, secretary
general of the Italian Foreign Ministry,
that their countries discuss matters
"directly as great powers1
Rossi Longhi rejected the offer on the basis
that Italy is not a great power and could conduct its foreign
relations only within the framework of its alliances.
Comment
Moscow is continuing its efforts to pro�
-
mote bilateral discussions with Western
governments. Despite ostensible interest in another summit
conference, the Soviet government has recently made pro-
posals for contacts and meetings which suggest that Moscow
is primarily interested in bilateral, rather than multilateral,
talks with Western governments, probably for the divisive
effect they would have on NATO.
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9. COMMENT ON ANNOUNCEMENT OF BRITISH
NUCLEAR TEST
According to an bfficial British announce-
ment,the first explosion in the current series of British nu-
clear tests occurred on 15 May in the area of Christmas Island,
1,400 miles south of Honolulu. In earlier statements, British
government officials had stated that at least one test of the
current series would be "in the megaton range" and would be
a "high air burst without heavy fallout."
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CORRECTION TO ITEM 12 PAGE. 3, OF CURRENT
INTELLIGENCE BULLETIN DATED 17 MAY 1957
The first paragraph of Comment should
read: "France could test an atomic bomb in late 1957 or early
1958
weapons research has been under way for the past two or tnree
years. Otherwise, at least a year to 18 months would be re-
quired from the date of decision to manufacture such weapons."
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