CURRENT INTELLIGENCE BULLETIN - 1956/08/05

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03185130
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 14
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: August 5, 1956

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CURRENT
INTELLIGENCE
BULLETIN
c;c:11517 3.3(h)(2)
3.5(c)
5 August 1956 t;
Copy No . a 5 ,
DOCUMENT NO -
NO CHANGE IN CLASS.
1 I DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE:
AUfl H
DATE.
REVIEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
fiee, (17A,
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CONTENTS
1. EGYPT ORDERS PREPARATIONS FOR SABOTAGE OF
WESTERN OIL INSTALLATIONS IN NEAR EAST
(page 3).
2. PEIPING COMMENTS ON TROOP MOVES IN BURMA
BORDER AREA (page 5).
3, YUGOSLAVS ACCEPT LARGE SOVIET-EAST GERMAN
ALUMINUM DEVELOPMENT LOAN (page 6).
4. COLOMBIAN GOVERNMENT MAY BE OVERTHROWN SOON
) (page 1).
5. NEPALESE PRIME MINISTER REQUESTS AMERICAN
(page 8).
INDUSTRIAL ASSISTANCE
6. BRITISH URGING NEUTRALITY FOR LAOS
7. SOVIET MID-YEAR PLAN FULFILLMENT
page 9).
8. JAPAN OBTAINS BRITISH S7PPORT FOR TERRITORIAL
STAND AGAINST THE USSR (page 11).
THE ARAB-ISRAELI SITUATION
(page 12)
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(page 10).
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1.
WESTERN OIL INSTALLATIONS IN NEAR EAST
The oil refinery at Sidon on the Lebanese
coast is owned by an American company, ARAMCO, as is TAP-
LINE, the pipeline which brings crude oil from Saudi Arabia to
the Sidon terminal.
Egypt's "fedayeen" apparatus has demon-
strated in Israel a capability to conduct successful sabotage.
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Petroleum facilities in Lebanon, Syria and Jordan appear
particularly vulnerable. Egypt also can be expected to
utilize contacts it has made in other Arab states in the
course of its efforts over the last several months to or-
ganize a pan-Arab petroleum workers' union.
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2. PEIPING COMMENTS ON TROOP MOVES IN BURMA
BORDER AREA
Peiping's first statement about the
alleged Communist military intrusion
in the disputed Sino-Burmese border
area is clearly an attempt to minimize
damage to the Communist peace cam-
paign without retreating from the unyielding position the
Chinese have taken on the Sino-Burmese border question.
In a broadcast of 3 August, the authorita-
tive "Observer" of People's Daily dismisses newspaper re-
ports that Chinese troops have occupied Burmese territory
as "groundless" and "absurd:' "The American propaganda
machine" is accused of exploiting the situation in an attempt
to draw Burma into SEATO and create tension between Burma
and Communist China.
Peiping tacitly admits the presence of
some Chinese troops in the disputed territory along unde-
marcated portions of the Sino-Burmese border but claims
that their mission is to "preserve the status quo" until bound-
ary questions can be settled by diplomatic means through
"peaceful consultations and negotiations'
Since 1954, Communist China has brusquely
parried repeated Burmese efforts to obtain a negotiated settle-
ment. Peiping's statement suggests the Communists plan to
keep their new military outposts in place along the disputed
border in order to strengthen Chinese territorial claims.
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LITVIDENH-AL-
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Nue
3. YUGOSLAVS ACCEPT LARGE SOVIET-EAST GERMAN
ALUMINUM DEVELOPMENT LOAN
Under an agreement signed in Moscow
and announced on 3 August, the USSR
and East Germany have granted Yugo-
slavia an immediate long term credit of 700,000,000 rubles
($175,000,000) for the development of a Yugoslav aluminum
project, including necessary hydroelectric power facilities.
This agreement is to finance construction of facilities with
an annual production of 50,000 tons. A future credit for
doubling this capacity has been promised.
East Germany and the USSR are each to
give an equal share of the present credit, but part of the
Soviet share is apparently to be in the form of wheat deliv-
eries. The Yugoslays will sell the wheat internally to meet
the construction costs of the project. All the credits are to
be repaid by aluminum exports, which are to start not later
than 1961.
Comment Since mid-June, Belgrade has insisted it
was looking for Western financing for both
power and aluminum production facilities. As recently as 14
July it publicly reiterated its desire for West European foreign
exchange credits and American wheat on credit for local cur-
rency needs.
Previous Soviet bloc credits accepted by
Yugoslavia totaled $289,000,000. This newest credit will
help satisfy Soviet aluminum needs and Yugoslav wheat needs.
The USSR may have to help finance at least
part of East Germany's share of the credit. This credit may be
considered by the Yugoslays as payment of the East German war
reparations. The Yugoslays may have informally promised dip-
lomatic recognition of East Germany in the near future as a
quid pro quo, despite the fact that Tito told the West Germans
only three weeks ago that his "present" policy was not to do so.
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4. COLOMBIAN GOVERNMENT MAY BE OVERTHROWN SOON
Comment
President Rojas Pinilla's repeated efforts
to create organized mass support have
been opposed by the two major political parties, the largest
labor group, and the Catholic church, which is politically power-
ful in Colombia. Opposition to Rojas has appeared to be largely
passive, however, and opportunities for graft for military offi-
cers apparently has ensured army support of the Rojas' regime.
A declaration by two ex-presidents, the
present leaders of Colombia's two major parties, was recently
published in Columbia calling for joint action to re-establish
"liberty and constitutional guarantees." This declaration will
probably strengthen civilian support for a military coup.
A new military junta in Colombia would
probably be friendly to the United States.
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NitAve
5. NEPALESE PRIME MINISTER REQUESTS AMERICAN
INDUSTRIAL ASSISTANCE
The Nepalese prime minister informed
the acting director of the American ICA
mission in Katmandu on 30 July of his
cabinet's strong feeling that a program of
industrial development in Nepal must have
iority for fiscal year 1957. The prime minister
stated that Nepal needed certain machinery, foreign commodi-
ties, and other industrial equipment and technical aid which
India could not furnish. Indicating that the development pro-
gram must begin immediately if free government is to survive
in Nepal, the prime minister clearly implied that if the United
States could not provide the necessary materials, Katmandu
must "reluctantly" accept Communist assistance. The prime
minister also implied that the United States should aid Nepal
despite Indian efforts to minimize American influence in that
country.
Comment Nepal recently agreed to establish diplo-
matic relations with Communist China and
the USSR, and has received offers of aid from both countries.
India is jealous of its dominant position in Nepal and would be
uneasy over a material increase in American aid to that coun-
try.
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Nur
6. BRITISH URGING NEUTRALITY FOR LAOS
The British Foreign Office has re-
iterated to the American embassy
in London its belief that Laos will
Inevitably become neutral, and has
suggested a the time is ripe to solicit from Laotian
premier. Souvanna Phouma a "favorable" foreign policy
statement confirming Laotian neutrality. This statement
would declare Laotian neutrality, a foreign policy based
on the "five principles of Pandit Nehru," and the intention
to defend Laotian independence against any threat.
Comment The British evidently have been press-
ing these views on Souvanna Phouma
for some time. The measure of their success is indicated
by the closeness with which the premier has followed the
British line in his current negotiations with the Pathet Lao.
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CONTRYENTha
Now,
7. SOVIET MID-YEAR PLAN FULFILLMENT
The report on plan fulfillment for the
first half of 1956 shows that the Soviet
economy is off to a good start on the
Sixth Five-Year Plan. Industrial pro-
duction maintained the 12 percent annual
growth rate of the last three years and exceeded the plan by
two percent. Targets for principal producer and consumer
goods were met or almost met, and data on the production of
specific commodities suggest a slight yet noticeable shift in
favor of consumer goods. Increases in sown acreage and in
deliveries of machinery and fertilizer to agriculture, coupled
with continuing good weather, presage a good harvest this fall.
Labor productivity increased to the planned degree in both in-
dustry (eight percent) and construction (10 percent).
The volume of state investments during the
half year, although 10 percent greater than in the correspond-
ing period of 1955, represented only 86 percent of the plan.
This performance is attributable primarily to chronic construc-
tion difficulties and secondarily to shortfalls in the production
of equipment, and, if not corrected, m77 complicate fulfillment
of Five-Year Plan production targets.
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8. JAPAN OBTAINS BRITISH SUPPORT FOR TERRITORIAL
STAND AGAINST THE USSR
Comment
The British Foreign Office has granted
the Japanese permission to quote as of-
ficial the British government's opinion
that the Yalta agreement is not binding
on Japan under the terms of the Potsdam
declaration, which provided the basis for
Japan's surrender in 1945. London has in-
dicated that Japanese foreign minister
Shigemitsu may express this view in con-
fidence to the USSR during the present
negotiations in Moscow.
Moscow is unlikely to give any weight to
this argument. It has steadfastly main-
tained that disposition of South Sakhalin and the Kuril Islands
was settled by the Yalta agreement, which granted these terri-
tories to the USSR, and by Japan's acceptance at the time of
its surrender of the Potsdam declaration, which stipulated that
Japanese sovereignty would be limited to the four main islands
and such minor islands as were determined by the allied powers.
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Nome
THE ARAB-ISRAELI SITUATION
(Information as of 1700, 5 August)
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