CURRENT INTELLIGENCE BULLETIN - 1955/03/24

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03162012
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: September 20, 2019
• Document Release Date: September 26, 2019
• Publication Date: March 24, 1955

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24 March 1955
Copy No.
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO.
NO CHANGE IN CLASS Cal
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CLASS, CHANGED TO: IS S C
NEXT REVIEW DATE: -t.) I 0
AUTH: HR 70-2
DATE- S -017K g0 REVIEWER
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
88
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SUMMARY
GENERAL
1.
SOUTHEAST ASIA
2. General Collins reports on situation arising from sects' "ulti-
matum" to Diem (pa0 3).
SOUTH ASIA
3. Pakistan faces serious foreign exchange deficit (page 4
NEAR EAST - AFRICA
4. Soviet ambassador friendly in discuSsing Turkish-Iikii pact
with Iranian leaders (page 5).
5. Egyptian requesf for French militarY aid indicated (page
WESTERN EUROPE
Faure asks rapid convocation of working group to prepare or
East-West talks (page 6).
THE FORMOSA STRAITS
(page 8)
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GENERAL
SOUTHEAST ASIA
2. General Collins reports on situation arising from sects' "ulti-
matum" to Diem:
Diem's position in his struggle with the
sects has been greatly weakened by the
adherence of Cao Dai generals Phuong
and The to the "united front," according
to General Collins. Collins believes the sects will continue pres-
sure on the political plane for the next few days, but that incidents
in the areas controlled by the sects, as well as possible attempts
at civil demonstrations in Saigon, may also be expected.
An economic blockade of Saigon is a
possible tactic, but Collins believes the sects will be deterred by
knowledge that the French would act to break it.
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Comment: In their "ultimatum" to
Diem on 20 March, the sect leaders threatened an "appeal to
the people" if he did not reconstitute his government by 25 March.
They probably now feel compelled to institute some sort of action
beyond the issuance of press releases.
Generals Phuong and The, whose signa-
tures were included on the "ultimatum," had, as the result of Siz-
able bribes, refrained from earlier antigovernment activity.
SOUTH ASIA
3. Pakistan faces serious foreign exchange deficit:
Pakistan's foreign exchange earnings
for the year ending 31 March will be
about $35,000,000 less than previously
believed. The gap between foreign ex-
change earnings and imports will therefore be over$125,000,000
for that year, according to the :Latest official Pakistani estimates.
Reduced foreign exchange earnings are expected to continue into
fiscal 1956 and 1957, thereby increasing the deficits for those
years above previously anticipated levels.
In view of current trends in Pakistan's
export trade, characterized principally by a sharp reduction in
cotton exports, the American embassy and foreign operations
mission believe the Pakistani figures are not overly pessimis-
tic.
Comment: The Pakistani government,
which has just emerged from a five-month constitutional crisis,
would be seriously embarrassed if public attention now became
focused on the critical economic situation.
This situation will not be significantly
improved until the fluctuations in Pakistan's income resulting
from unexpected changes in world prices and demand for its two
major export commodities, jute and cotton, can be offset by more
stable income from industries which are still in an incipient stage
of development.
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NEAR EAST - AFRICA
4. Soviet ambassador friendly in discussing Turkish-Iraqi pact with
:Iranian leaders:
Soviet ambassador Lavrentiev in Tehran,
who had been insistently seeking an audi-
ence with the Shah, was received by
Foreign Minister Entezam on 20 March
and later by the Shah. Lavrentiev concentrated his comments on
rumors of Iran's adherence to the Turkish-Iraqi pact, He stated
that the Soviet government would consider Iran's adherence to
the pact an unfriendly act and asked why it would consider joining
"an aggressive military bloc which threatens Soviet security." The
ambassador was friendly, however, employed no threats, and did
not mention the Soviet-Iranian treaties of 1921 and 1927. He also
said, in answer to a question, that Soviet ratification of the border
and financial agreements should not take much time.
Comment: Iranian government leaders
have been greatly concerned over Soviet reactions to indications
that Iran was giving favorable consideration to joining the Turkish-
Iraqi pact. Their ultimate decision, however, is unlikely to be
affected by the ambassador's approach.
Soviet propaganda attention to Iran during
the past week reached its highest point since mid-October 1954
and has contained pointed references to article 3 of the 1927 Soviet-
Iranian treaty. This article provides that each party agrees not
to take part in political alliances directed against the territory,
Integrity, independence and sovereignty of the other party. Lay-
rentiev's approach probably was intended to weaken the strong re-
action of Iranian officials to Soviet propaganda which was evidenced
earlier this-month.
5. Egyptian request for French military aid indicated:
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CURRENT INTELLIGENCE BULLETIN
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Comment: This is the first indication
that Egypt is expecting "military supplies" from France.
France professes to favor the "northern
tier" approach to Middle East defense, but actively opposed the
conclusion of the Turkish-Iraqi treaty, an agreement also op-
posed by Egypt. Military aid to Egypt could have the double ef-
fect of lessening anti-French propaganda in North Africa and of
indirectly shoring up Arab opposition to the Turkish-Iraqi pact,
WESTERN EUROPE
6. Faure asks rapid convocation of working group to prepare for
East-West talks:
French premier Faure on 22 March
handed the American charg�nd the
British ambassador in Paris an aide-
memoire calling for rapid convocation
repare for talks with the USSR. The note
states that Faure undertook a moral commitment to work for
early East-West talks when he pressed for prompt and uncondi-
tional ratification of the Paris agreements by the Council of the
Republic.
Faure stated that he envisaged initially
only a tripartite group, excluding West Germany. He thought an
agreed approach to the USSR should be made as soon as possible,
since some Frenchmen are still thinking in terms of a conference
in May as was proposed by Mendes-France.
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Comment: Such a tripartite study group
was suggested by the Mendes-France government in January, but
the proposal was sidetracked during the government crisis the
following month. Temporary exclusion from the working group
would annoy the West Germans, but they would probably ultimately
be included. It is likely that this would be acceptable to Chancel-
lor Adenauer. London has favored including Bonn in any such dis-
cussions.
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THE FORMOSA STRAITS
Report of the IAC Current Intelligence Group
for the Formosa Straits Problem
This report is based on information received in Washington
up to 1100 hours 23 March 1955.
1. The only Chinese Communist military activity reported
during the period consisted of scattered artillery firing against
Quemoy Island.
2. Analysis of photographs of Nanchang New airfield taken
on 17 March confirms that YAK-11 or YAK-18 (single piston-
engine trainers) aircraft are being assembled there. Fabricated
parts storage areas, assembly and fitting-out hangars, three
large shops, and two assembly lines were reported.
A few facilities for assembly of Soviet-designed light
aircraft have been known to exist in Communist China, relying
almost exclusively on Soviet-built major components. The Chi-
nese Communists are not considered capable of designing and
building modern combat aircraft.
3. MIG-17's have reportedly again been observed in the
Shanghai area. Due to the great similarity in conformation be-
tween the MIG-15 and MIG-17, any identification based on obser-
vation alone must be treated with some reserve. However, 21
MIG-17's were positively identified at Chiahsing airfield, 50 NM
southwest of Shanghai, late in January. Addition of significant
numbers of MIG-17's to the Chinese Communist Air Force would
enhance its air defense capability. The MIG-17 is currently con-
sidered capable of a maximum speed of 570 knots at 35,000 feet.
Its service ceiling is estimated at 58,800 feet, and combat radius
at 190 NM (460 NM with external fuel).
4. Chinese Corn-
munist pilots may be flying Soviet 1L-28 jet bombers in the Port
Arthur area. At least some of the Soviet aircraft now located
there may be left behind for the Chinese Communists when Soviet
Forces withdraw from the area, as they are scheduled to do by
31 May.
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