CURRENT INTELLIGENCE BULLETIN - 1957/07/21

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03169393
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 13
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: July 21, 1957

Approved for Release:
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CURRENT
INTELLIGENCE
BULLETIN
21 July 1957
Copy No. 1,;
NEX1 1:E LI
DATE.
LViEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
This document contains classified information affecting
the national security of the United States within the
meaning of the espionage laws, US Code Title 18, Sections
793, 794, and 798. The law prohibits its transmission
or the revelation of its contents in any manner to an un-
authorized person, as well as its use in any manner
prejudicial to the safety or interest of the United States
or for the benefit of any foreign government to the detri-
ment of the United States.
TOPS
ET
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CONTENTS
:j 1 SOVIET REPORT ON 1957 HALF-YEAR ECONOMIC
ACHIEVEMENTS (page 3).
KUZMIN POSSIBLY OUT AS SOVIET ECONOMIC PLANNING
CHIEF (page 5).
3. BRITISH CONCERN OVER REBELLION IN MUSCAT
(page 6).
-21. ANTI-AMERICAN INCIDENT ON TAIWAN BATHING BEACH
(page 9).
5. SUICARNO DISCLOSES CHINESE COMMUNIST ARMS OFFER
(page 10).
6. MOROCCANS SEEK TO ENLARGE SCOPE OF BASE NEGO-
TIATIONS WITH UNITED STATES (page 12).
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4 .{3.1.1-11./ELL 11.1114
1. SOVIET REPORT ON 1957 HALF-YEAR
ECONOMIC ACHIEVEMENTS
Comment on:
According to the Soviet mid-1957 plan
fulfillment report,ex-planning chief
Pervukhin's modest industrial produc-
tion goal of 7.1 percent for 1957 is being
overfulfilled. Total industrial produc-
tion increased 10 percent in the first six months of this year
over the same period of 1956, and correspondingly large in-
creases were reported for producer goods (11 percent) and
consumer goods (8 percent). Capital investment and housing
construction were reported somewhat ahead of schedule.
If the rate of growth achieved thus far in
1957 were maintained for the rest of the five-year plan period,
the original 1960 goal for a 65-percent increase in industrial
production would nearly be reached. However, the general opti-
mism of the report is probably not justified in view of continu-
ing serious weaknesses in the basic materials industries. For
example, steel output increased only 4 percent.
The addition of a large number of workers
to the state labor force--2,100,000 over the June 1956 level-
played an important role in the industrial achievement. This
increase supports other indications that the USSR has accom-
plished a substantial proportion of its announced demobilization
of 1,840,000 men from the armed forces.
Industrial labor productivity reportedly
increased 6 percent compared to the 5.4 percent planned for
the full year and to the 8.4 percent average annual increase
necessary to meet the goals of the Sixth Five-Year Plan.
While original sixth plan labor productivity goals thus appear
to be wholly out of reach, demobilization is apparently per-
mitting above-plan expansion of the industrial labor force
which partially offsets labor productivity shortfalls.
In agriculture, very large increases were
reported for socialized meat (30 percent) and milk (26 percent)
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production over the same period last year. However, it is
unlikely that total results for the entire year will be as good,
because of the slower growth of private plot production and
because of harvest prospects less favorable than last year.
Retail trade volume reportedly increased
16 percent, which is well ahead of plan and which probably re-
flects the need to absorb increased consumer purchasing power.
The relatively slow growth of consumer industry production in
the face of rapid growth of retail trade suggests that stocks and
inventories are being reduced.
In an editorial on the plan results, Pravda
ascribed the rapid growth rate of the first six months (T1-7557
to the\ benefits of the industrial reorganization; but it is doubt-
ful that the reorganization had any significant positive or nega-
tive effect since the new administrative structure has only just
begun to function. Pravda cited the economic successes through
the simultaneous, rapid develOpMent of all sectors of the economy as
evidence of the fallacy of the opposition of Malenkov, Molotov,
and Kaganovich.
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2. KUZMIN POSSIBLY OUT AS SOVIET ECONOMIC
PLANNING CHIEF
The American embassy in Moscow
notes that Iosif I. Kuzmin has been
identified for two consecutive days
in both Pravda and Izvestia as "dep-
uty chairman of the USSR Council of
Ministers." As recently as 9 and 12 July he was referred
to as "first deputy chairman of the Council of Ministers
and chairman of the State Planning Commission (Gosplan)."
The embassy concludes that Kuzmin has been demoted to
deputy chairman of the Council of Ministers and is probably
out as chairman of Gosplan, although there has been no an-
nouncement of his removal or of an appointment of his suc-
cessor.
Comment Kuzmin was not named to the party
presidium, either as full or deputy
candidate, after the June purge, but one of his first deputy
chairmen, Aleksei N. Kosygin, was named candidate member
of the party presidium and deputy premier. This anomaly--
a deputy premier having more party rank than a first deputy
premier--suggests that further changes are likely. Also,
there are now only two first deputy premiers and one deputy
premier, compared with the five first deputy and eight deputy
premiers in late 1956.
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3. BRITISH CONCERN OVER REBELLION IN MUSCAT
Comment on:
Headquarters
RIYADH
Britain has agreed to help the Sultan
of Muscat and Oman in suppressing a
rebellion according to an official Brit-
ish spokesman on Bahrein on 21 July.
A British official in Muscat has reported
by radio that the rebels now control the
interior of Oman, which forms the hinter-
land of the Sultanate. He added that the
Sultan was confident of regaining control
"fairly soon, with proper assistance."
A press report from British Middle East
on Cyprus on 21 July said that an infantry
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company had already moved from the British base at
Bahrein to Sharja in the Trucial states, about 200 miles
north of the rebellion. The report added that the RAF was
prepared if necessary to fly jet fighter-bomber sorties
from Sharja. A spokesman on Cyprus indicated on 20 July
that British troops from Aden were expected to be air-lifted
to Muscat within the next few days.
The core of the rebellion is the 600-man
"Omani Liberation Army" which infiltrated Inner Oman in
mid-June following a year of training in Saudi Arabia by
Saudi and Egyptian officers. This force, centering around
Nizwa has been joined by interior tribes, and has success-
fully resisted the Sultan's efforts to dislodge it.
The London Times on 20 July commented
that the struggle for control over Nizwa parallels the struggle
for control of Buraimi. Both command a network of strategic
desert routes controlling access to large areas of interior Oman.
Nizwa also controls the principal route from the Muscati coast
to British oil drilling operations in the interior.
The British now have 16 jet fighter-bombers,
1,200troops, and at least 13 transport planes in Aden, and about
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800 troops on Bahrein. If London does not wish to deplete
the Aden force because of increasing border trouble there
and recent large Soviet arms deliveries to Yemen, elements
of an infantry battalion in Kenya might be air-lifted. The
British-officered armed forces of Muscat number approx-
imately 1,600.
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4. ANTI-AMERICAN INCIDENT ON TAIWAN
BATHING BEACH
On the afternoon of 20 July, a number
of Chinese attempted to "take over" the
American military club at Tamsui bath-
ing beach near Taipei. The Chinese had
been attending a party given by the commander of the Tamsui
military school; there were more than 100 guests including
the Minister of Defense.
The Chinese became disorderly after at-
tempting to purchase post exchange items at the American
club. Some of them began bothering American women on the
beach. American military personnel in charge of the club at-
tempted to wait on and be polite to the Chinese. No fighting
took place and the Americans evacuated the club without inci-
dent. By late evening, all Americans were ordered to evacu-
ate the beach and the area was placed out of bounds. By 2330
hours the beach was under the guard of 60 fully armed Chinese
troops.
The beach at Tamsui has been restricted
to Chinese Nationalist military personnel and to foreigners
with passes. It is to be opened to Chinese on 1 August The
Chinese press has recently criticized plans for dividing the
beach into sections--one for foreigners, one for Nationalist
VIP's and one for the Chinese public--as a form of "colonialism"
and "privilege."
Comment This incident of further disregard of Amer-
ican rights comes only a few weeks after,
Chiang Kai-shek's public appeal to preserve friendly relations
with Americans.
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5. SUKARNO DISCLOSES CHINESE COMMUNIST
ARMS OFFER
Comment on:
President Sukarno, while touring Borneo
in a campaign to restore the Djakarta gov-
ernment's prestige, disclosed on 19 July
that when he was in Peiping last October
Mao Tse-tung had made him an informal offer of military
equipment. According to Sukarno, Mao stated during a mil-
itary parade, "Just inform me if you need such materials."
This apparently off-hand statement probably reflects Mao's
willingness to consider favorably any Indonesian application
for military equipment.
An Indonesian military mission which spent
six weeks in China in May and June 1957 reportedly was told
that China would accept Indonesian cadets for military training.
No Indonesian overtures to Peiping to take advantage of these
offers have been reported.
Indonesia is negotiating the purchase of
substantial quantities of military equipment from the United
States. There are also indications that individual Indonesian
air force officials have held exploratory talks with the Soviet
embassy in Djakarta regarding the possibility of obtaining So-
viet jets.
Sukarno has made no apparent attempt to
obstruct efforts to obtain US equipment. On the other hand,
he probably would not be averse to promoting closer relations
with Communist China and accepting military equipment from
it if Indonesia's needs are not met by the United States.
Peiping could easily supply from its own
factories small arms and ammunition. In addition, the Chinese
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probably produce light artillery, recently began production
of trucks, and might offer limited quantities of such equip-
ment for prestige reasons. Peiping could also transship
heavier equipment obtained from the USSR.
Any transfer of arms to Indonesia would
be the first instance of Chinese Communist military shipments
to a non-Communist government in Southeast Asia.
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6, MOROCCANS SEEK TO ENLARGE SCOPE OF BASE
NEGOTIATIONS WITH UNITED STATES
When American-Moroccan base nego-
tiations resumed on 17 July after a
seven-week recess, Moroccan nego-
tiators made clear that they intended
to enlarge the scope of the discussions and to seek a quid
pro quo in the form of military and economic aid in return
for an agreement.
The Moroccans hinted that a base
agreement should take into consideration the possible cre-
ation of a regional pact or Moroccan membership in NATO.
They indicated they would ask for American military assist-
ance to equip and train an enlarged Moroccan army. They
may also seek American assistance in removing French forces
from those jointly operated American bases which are essen-
tially American in character, and a commitment regarding
the defense of Morocco.
Rabat may wish budgetary support amount-
ing to about $60,000,000, or more if the French continue to de-
lay granting financial support. It may also seek larger grants
of American commodities and loans from the Export-Import
Bank to finance Moroccan economic development.
Comment Although the Moroccan government had
pressed for some time for the opening of
base negotiations, which began in mid-May, it has not yet
presented any specific proposals for American consideration.
Indications are that negotiations will be protracted and diffi-
cult. The Sultan is scheduled to visit Washington from 25
through 27 November.
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