SOVIET AND EAST EUROPEAN AID TO THE THIRD WORLD, 1981

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP08S01350R000601960004-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 30
• Document Creation Date: December 22, 2016
• Document Release Date: March 14, 2012
• Sequence Number: 4
• Publication Date: February 1, 1983
• Content Type: REPORT

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United States Department of State
Soviet and East European Aid
to the Third World, 1981
February 1983
STAT
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Department of State Publication 9345
Bureau of Intelligence and Research
Released February 1983
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United States Department of State
Soviet and East European Aid
to the Third World, 1981
February 1983
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Soviet and East European Aid
to the Third World, 1981
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Soviet and East European Aid
to the Third World, 1981
Summary
Warsaw Pact countries signed $8 billion worth of military agreements with Third World
countries in 1981, down sharply from the record $15 billion in orders in 1980. Soviet and
East European economic aid pledges to Third World countries also declined dramatically
in 1981 to a little more than $1 billion.
The decline in military agreements was entirely attributable to a drop from $14 billion to
$6 billion in Soviet military sales, as major clients absorbed heavy equipment deliveries'
under previous contracts. Traditional clients in Africa, the Middle East, and South Asia
accounted for 95 percent of new Soviet orders. Moscow added Jordan and Nicaragua to
its list of military customers in 1981. East European military sales of $2 billion (almost all
to the Middle East) nearly tripled the 1980 sales record.
Soviet economic assistance dropped to a four-year low of $450 million as several major
negotiations dragged on without final agreement. We do not believe this drop reflects
reduced Soviet interest in its foreign economic program. Most of the 1981 Soviet
economic credits went to small clients, were trade associated, and carried harder
repayment terms. East European economic assistance also dropped dramatically, to
$665 million.
The data on economic and military agreements reflect the latest information available and supersede
data in our previous publications.
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Contents
The Military Assistance Program in 1981
3
North Africa: An Integral Part of Moscow's
Arab Policies
9
South Asia: Invasion of Afghanistan
Clouds Relationship
10
Central America and the Caribbean:
Penetration Activities Increase
11
South America: Trade Considerations
Drive Aid Program
12
Sub-Saharan Africa:
Bases Primary Soviet Concern
12
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1.
USSR and Eastern Europe:
Military Agreements With LDCs, 1981
2
2.
USSR and Eastern Europe:
Military Deliveries to LDCs
2
5.
Eastern Europe:
Economic Aid Extended to LDCs, 1981
4
6.
USSR and Eastern Europe:
Military Relations With Non-Communist LDCs
4
7.
USSR and Eastern Europe:
Military Technicians in LDCs, 1981
14
8.
USSR and Eastern Europe: Training of LDC Military
Personnel in Communist Countries, 1955-81
15
9.
USSR and Eastern Europe: Economic Credits and
Grants to LDCs, Extended and Drawn, 1954-81
16
10.
USSR and Eastern Europe:
Economic Aid Extended to Non-Communist LDCs, by Country
17
11.
USSR and Eastern Europe:
Economic Technicians in LDCs, 1981
20
12.
Academic Students From LDCs Being Trained in the
USSR and Eastern Europe as of December 1981
22
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Soviet and East European Aid
to the Third World, 1981
Warsaw Pact agreements in 1981 continue
a post-World War II pattern of aggressive-
ly building Communist political, military,
and economic influence in the Third World.
The Communist programs emphasize mili-
tary rather than economic aid and focus on
a few key countries. Throughout the last
three decades, Moscow's basic objectives
have remained unchanged: (a) to erode
Western influence and substitute its own,
(b) to persuade Third World countries that
the Soviet economic model offers a solu-
tion to their economic problems, (c) to
establish military and political bases from
which to project Soviet power, and (d) to
gain access to strategic raw materials.
East European countries have pursued
similar aims in LDCs, and their economic
and military programs have complemented
those of the USSR.
The Soviet Military Program
Moscow's $6 billion of new military agree-
ments in 1981 brought the value of its
Third World military agreements to $70
billion over the past 26 years. Soviet arms
sales have been heavily concentrated on a
small number of countries-primarily those
that are strategically situated and/or have
friendly governments. The largest share
(95 percent since 1955) has gone to
nations on the Soviet border and to radical
North African and Middle Eastern states
such as Algeria, Libya, and Syria. A num-
ber of them-notably Afghanistan, Alge-
ria, Iraq, Libya, and Syria-have equipped
their military forces largely with Soviet
arms and remain dependent upon Moscow
for parts, supplies, and servicing.
The Economic Program
Moscow still considers economic aid a
useful tool for expanding Soviet influence
in the Third World despite the loss of much
of the early political dynamism of its pro-
gram, which now emphasizes economic
criteria rather than political criteria in de-
termining what countries will receive aid.
Because of its early emphasis on large,
showy projects in the industrial sector-
projects that often had been turned down
by Western donors because of question-
able economic returns to the client-the
USSR's aid has often gained a reputation
not warranted by its size. Indeed, the
USSR accounts for less than 3 percent of
international aid flows to non-Communist
LDCs. Still, the USSR gained entree into
Egypt, India, Iran, Syria, and a number of
other countries through its economic pro-
gram, and these ties endure even when
other relationships wither.
More recently, Moscow has pressed for
broad, long-term cooperation agreements
with all of its major LDC clients to synchro-
nize their planning cycles with Moscow's.
These open-ended, nonbinding agree-
ments are designed to provide a firmer
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Table 1
USSR and Eastern Europe: Military
Agreements With LDCs,1981
Total a
6,060
2,030
North Africa
650
Sub-Saharan Africa
1,910
5
Latin America
105
10
Middle East
3,505
1,365
South Asia
535
5
a Because of rounding, components may not add to totals shown.
Table 2
USSR and Eastern Europe:
Military Deliveries to LDCs
1977
4,740
355
1978
5,705
550
1979
7,615
635
1980
6,290
525
1981
6,445
775
Table 3
Military Technicians
in LDCs,1981 a
Total
16,280
1,925
39,175 b
North Africa
4,000
600
50
Sub-Saharan Africa
4,535
765
36,910
Latin America
165
60
1,715
Middle East
5,425
500
500
South Asia
2,155
NA
aNumbers are rounded to the nearest 5.
b Includes combat units in Angola and Ethiopia.
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economic base for long-term planning by
client countries, while increasing the
USSR's assurance of a stable flow of raw
materials.
Over the past 27 years, East European
countries have pledged nearly $12 billion
of aid to more than 60 countries, of which
The Military Assistance Soviet Arms Sales Slip
Program in 1981 Moscow continued as a major supplier of
weapons systems to the Third World in
1981,' despite a sharp drop in contracts to
$6 billion from the record $14 billion in
1980 (table 1). Moscow's military sales
program scored important gains in the
Middle East, the Caribbean, and in key
black African states. The Kremlin added
Jordan and Nicaragua to its list of arms
clients and received record reorders from
Syria. We had anticipated the falloff in new
agreements last year from the record-shat-
tering 1980 sales of $14 billion since:
? Some major buyers stayed out of the
market to absorb large delivery backlogs
from record orders placed in 1979-80.
? Moscow would not sign large new weap-
ons contracts with Iraq and Iran because
of the war.
Moscow made inroads into new markets in
1981 with its first arms agreements with
Jordan and Nicaragua. Soviet officials un-
doubtedly consider their sale of air defense
equipment to Jordan a major break-
through among conservative Arab
customers.
' Includes aircraft, ground armaments, missiles,
and naval craft.
$4.3 billion has been disbursed. The com-
mercially oriented East European program,
which usually provides financing for equip-
ment purchases rather than large, high-
visibility projects, has not had much politi-
cal impact in LDCs.
Arms Deliveries
Second Highest on Record
In contrast to sales, Soviet equipment de-
liveries rose slightly in 1981 to $6.4 billion,
pushed by transfers under multibillion-dol-
lar contracts signed with major clients in
1979-80 (table 2). Since the mid-1970s,
the growing arms buildup in the Middle
East financed by oil money has meant that
Arab countries have overwhelmingly domi-
nated the Soviet arms supply program.
Military Technical Services:
An Expanding Presence
Military programs in the Third World re-
quired the services of 57,400 military per-
sonnel from the USSR, Eastern Europe,
and Cuba in 34 Third World countries
during 1981, 8,700 more than in 1980
(table 3). The Soviet presence continues
to focus on advisory and training functions
in Africa and the Middle East. The Soviets
have played a key role in improving the
capabilities of established clients-mainly
Algeria, Angola, Ethiopia, Libya, and Syr-
ia-with a pervasive advisory and techni-
cal presence that sometimes reaches
down to the company level.
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Table 4
USSR: Economic Aid Extended
to LDCs
13,060
430
1978
3,000
1979
3,345
1980
2,070
1981
450
Table 5
Eastern Europe: Economic Aid
Extended to LDCs, 1981
355
30
Table 6
USSR and Eastern Europe:
Military Relations With Non-Communist LDCs
Total a
1955-71
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
USSR
Eastern
Europe
USSR
Eastern
Europe
08,415
7,630
49,415
4,905
8,615
1,115
6,920
1,040
1,680
155
1,215
75
2,890
130
3,135
130
5,735
600
2,225
210
3,205
635
2,045
280
6,100
355
3,085
335
9,335
650
4,740
355
2,520
565
5,705
550
8,360
675
7,615
635
13,915
710
6,290
525
6,060
2,030
6,445
775
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USSR: No New Directions
The USSR's economic program fell to its
lowest level in the past four years with only
$450 million in new credits to a few small
recipients (table 4). Following recent pat-
terns, the USSR's new credits in 1981
were designed primarily to promote the
sale of Soviet equipment and were less
concessionary than traditional develop-
ment aid that allows 12-year payments at
2.5- to 3-percent interest.
The decline in Soviet extensions this year
does not reflect reduced Soviet interest in
its economic program. Rather, negotia-
tions were under way on several billion
dollars in projects at yearend, which, if
completed, could have upped the total
close to earlier levels. For example, various
press sources report that the USSR signed
a $2 billion accord with Angola early in
1982 that calls for large, new credits to
development projects.
In 1981 the bulk of Moscow's new aid
went to hitherto small recipients of Soviet
economic assistance. The USSR provided
a well-publicized grant of 20,000 tons of
wheat (to replace US supplies) and $75
million of other aid to Nicaragua-Mos-
cow's largest economic commitment in
1981-for developing agriculture and
communications. The development credits
are the first specific allocation of Soviet aid
to Managua and come under the broad,
open-ended framework accord of 1980.
Moscow also extended a 10-year, $70
million credit to Bangladesh, under their
trade agreement, for two 110-MW genera-
tors to expand the Soviet-built Ghorosal
electric plant.
The USSR signed contracts with India and
Turkey, allocating credits under earlier
agreements to projects in metals process-
ing. India received permission to use $350
million of outstanding credits to finance a
blast furnace complex at Visakhapatnam.
Moscow approved $200 million under a
1975 Soviet-Turkish accord to expand the
Soviet-built aluminum complex at Seydise-
hir, and Soviet officials continued negotia-
tions with Ankara for expanding the Isken-
derun steel mill. The USSR will receive
payment in output from these plants, an
arrangement that is becoming increasingly
beneficial to the beleaguered Soviet econ-
omy. Moscow's large new allocations to
India and Turkey for steel and aluminum
development underline the importance the
Soviets have long placed on aiding Third
World public-sector minerals and metals
industries.
Eastern Europe:
Promoting Business Interests
East European economic agreements with
13 diverse Third World clients totaled $665
million in 1981, one-half the previous
year's level (table 5). While East Europe-
an countries did not provide new aid to
their major Middle Eastern clients, they
were able to capitalize on unsettled events
to promote commercial relationships (al-
ways the major aim of the aid program)
without the use of credits. At least 100,000
b/d of barter oil flowed to Eastern Europe
in 1981 from Iran and Iraq (despite their
production cutbacks) in return for military
and industrial goods, food, and consumer
items. Growing hard currency shortages,
as the costly war dragged on, assured
even more comprehensive barter deals
with Baghdad and Tehran that will help
alleviate severe hard currency shortages in
Eastern Europe.
Disbursements Still High
Soviet deliveries of project and commodity
aid under earlier agreements sustained
their momentum in 1981, although they
dipped from the record level achieved in
1980, when grant consumer goods and
food to Afghanistan raised total aid dis-
bursements to $810 million. Support to
Afghanistan and Ethiopia kept disburse-
ments in 1981 well above levels in previous
years. The USSR did not begin any major
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new projects in LDCs in 1981. East Euro-
pean disbursements recovered somewhat
from the five-year low of 1980 but still did
not reach levels set in the mid-1970s,
because:
? Economic deterioration in Poland forced
Warsaw to renege on some project
commitments.
? Romania has completed $350 million
worth of projects in Syria that kept deliv-
ery levels high for several years.
? Programs in Iran and Iraq were curtailed
because of the war.
Technical Services:
A Source of Ready Cash
The Soviet Bloc technical presence in the
Third World rose to a record high of
115,000 personnel in 1981, a 15-percent
jump from the previous year. For the USSR
and Eastern Europe, the civilian technical
services program is one of their most prof-
itable undertakings in LDCs. From a small
effort employing only a few hundred peo-
ple in the 1960s, it has evolved into a high-
visibility program involving 96,000 Soviet
and East European technicians in 75 coun-
tries in 1981. About two-thirds of these
personnel were working in Arab and other
countries that pay hard currency for
services.
Academic Training:
The Most Concessional Program
About 72,000 students from LDCs were
enrolled in universities in the USSR and
Eastern Europe at the end of 1981, over
one-half in the Soviet Union. Students from
African countries made up nearly one-half
of the total. Both Soviet and East Europe-
an scholarship support was heaviest to
Marxist LDCs, whose personnel accounted
for one-third of all students from develop-
ing nations studying in the USSR and
Eastern Europe.
European Communist countries provide
most academic training to LDCs free of
charge. Students are awarded full scholar-
ships, which cover subsistence, living quar-
ters, tuition, and transportation. Some East
European countries value this assistance
at the equivalent of $10,000 per student
per year.
We believe that the USSR, in particular,
views its academic program as a potential-
ly high-yield effort. Scholarships have fa-
vored African countries (50 percent) ,
touching 50 of them on that continent. For
many African countries, the Soviet scholar-
ship program is Moscow's only aid effort.
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Economic and
Military Programs:
A Regional Analysis
The Middle East:
New Opportunities for Moscow
Selling arms to Jordan and successfully
balancing its aid program among regional
antagonists were the most notable accom-
plishments of the USSR's efforts in the
Middle East in 1981. Military sales to the
region, the most important asset of Mos-
cow's Middle East policy, rebounded
strongly to $3.5 billion, the third-best year
ever. For the third year, Moscow sent more
than $3 billion worth of modern armaments
into the Middle East.
Economic Aid Slips
to 20-Year Low
Commercial interests (always close to the
surface in Communist aid relations with
Arab countries) took the lead in Bloc
economic relations with Middle Eastern
customers during 1981; for the first time in
nearly two decades, the USSR and its
European allies did not promise new eco-
nomic aid to a major Middle Eastern client.
Only North Yemen received new aid. Mos-
cow also allocated $200 million under an
earlier framework agreement with Turkey
to expand the Seydisehir aluminum com-
plex. Nonetheless, Soviet and East Euro-
pean willingness to supply food and other
consumer goods to Iran and Iraq paid
handsome dividends in a resumed flow of
oil and burgeoning trade. Trade data show
that Soviet exchanges with Iran were re-
stored to prerevolutionary levels-$1.1 bil-
lion-and Moscow received 2.5 million
tons of Iranian oil (shipped to India).
Egypt
Just before his death, President Sadat
surprised Moscow in September by expel-
ling some 400 Soviet economic and some
diplomatic personnel (including the Am-
bassador) for alleged involvement in sub-
versive activities. Sadat also announced
the canceling of all outstanding contracts
between the two countries and closed
military offices in Cairo and Moscow. Presi-
dent Mubarak at the end of the year
requested the return of Soviet personnel
needed for the operation of Soviet-built
facilities, such as the Aswan dam, the
Asyut cement plant, and the aluminum
plant at Nag Hammadi. Mubarak also lifted
the ban on cotton sales to the USSR and
Eastern Europe imposed by Sadat in 1977.
Iran
Tehran guardedly expanded its relations
with the USSR to gain access to badly
needed military equipment and technical
assistance, industrial products, and com-
modities for its faltering economy. The
Khomeini regime reportedly signed a new
military agreement and asked Moscow to
accelerate work on several ongoing devel-
opment projects. Nonmilitary trade was
restored to prerevolutionary levels because
Iran sold its first oil to the USSR (40,000
b/d for India) as a substitute for gas that
was used until 1980 to settle accounts.
Although Iran and the USSR were not able
to resolve pricing problems to restore gas
deliveries to the USSR, the two sides re-
sumed discussions on development pro-
jects under at least $1 billion in agree-
ments signed with the Shah. According to
the Soviet news agency, TASS, work will
begin soon on two power and irrigation
dams on the Araks border river, a mining
machinery plant at Kerman, and a welding
electrodes plant.
More than 2,000 Soviet personnel were
back at work after Iranian forces managed
to secure Soviet project sites that were
under attack by Iraq. They activated two
smelters at the Isfahan steel plant, stepped
up work on the Isfahan power plant, and
completed electrification of the Tabriz-
Julfa railway under a 1968 agreement.
Press reports indicate that the USSR
agreed in May to accept more transit
goods for Iran, and assigned personnel
and locomotives to the Iranian railway or-
ganization to help clear backlogs at the
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Iranian border and to get Soviet and West-
ern transit goods flowing more smoothly
into Iran. Improved transport facilities,
along with the USSR's first Iranian oil deliv-
eries, restored trade to $1 billion in 1981,
about the level reached before the Kho-
meini takeover.
Iraq
The USSR's influence with the ruling re-
gime in Iraq was severely eroded by Bagh-
dad's belief that Moscow had let it down at
a time when its arms requirements had
been most urgent. In fact, the Soviets
maintained a complete embargo on arms
shipments until the early spring, but they
did endorse East European arms agree-
ments with Iraq.
Hastening to cash in on lucrative trading
opportunities, the USSR and Eastern Eu-
rope concluded several large commercial
contracts with Iraq in 1981. Soviet exports
topped $1.2 billion in spite of Iraq's refusal
to allocate any of its limited oil exports to
the USSR in return. In the past, Moscow
had made a considerable profit in reex-
porting barter oil from Iraq to hard curren-
cy customers in Europe and elsewhere.
Moscow probably was able to clear the
10,000-ton backlog of Iraq-bound equip-
ment that piled up after the closure of Iraqi
ports in 1980. Still, activity on projects did
not reach prewar heights as Iraq's costly
war with Iran (estimated at $1 billion a
month) drained resources from
development.
Romania maintained the fast pace of activ-
ity that has made it Baghdad's most im-
portant East European partner with con-
tracts to assist power and petroleum
development. According to press reports
from Sofia, Bulgaria offered aid to airport
construction and other communications
projects and signed a trade protocol call-
ing for exports to reach $350 million in
1982. Hungary signed a contract to supply
$20 million worth of cold storage facilities,
while 8,000 Polish technicians worked on a
variety of projects under technical services
contracts.
Jordan
Moscow's $200 million sale of air defense
equipment to Jordan provided the USSR
with a long-sought breakthrough in rela-
tions with this moderate Arab state. Mos-
cow is expected to begin military deliveries
to Jordan in second-half 1982.
Syria
Damascus remained one of the most im-
portant elements in Moscow's Middle East
policy in 1981. The mutually supportive
relationship, formalized in the long-term
Treaty of Friendship signed in October
1980, was reinforced by a large new arms
agreement calling for the introduction of
new missile systems, advanced aircraft,
and tanks.
Communist countries continued their
broad-based effort in Syria's economic
sector with 4,100 personnel working on
projects under $740 million of outstanding
credits. European Communist countries
signed agreements for trade valued at
more than $3 billion over the next five
years, and an estimated $500 million in
new development contracts, repayable in
Syrian goods such as petroleum, phos-
phates, and cotton.
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The USSR also signed protocols to contin-
ue prospecting for the Communist-built oil
industry, handed over the 750-kilometer
Latakia-Qamishlie rail line and began ne-
gotiating further rail construction that will
enable Syria to develop the port of Banias.
North Africa:
An Integral Part
of Moscow's Arab Policies
Algeria and Libya demonstrated both di-
rect and indirect support of Soviet foreign
policy objectives last year. Both stepped
up assistance-military and financial-to
the Marxist regime in Nicaragua, in concert
with expanded Soviet and Cuban aid pro-
grams. The escalation of Libyan activities
aimed at undermining moderate Arab and
African Governments also serves Soviet
interests. Colonel Qadhafi's tripartite co-
operation agreement with Ethiopia and
South Yemen had Soviet encouragement
and should facilitate coordination of Mos-
cow's interests between these three major
arms recipients.
Soviet economic and commercial ties with
other North African countries were
strained by the USSR's indirect support to
the Polisario rebels fighting Moroccan rule
in Western Sahara and disapproval of the
USSR's occupation of Afghanistan. De-
spite these problems, Mauritania signed a
joint venture fishing agreement under ne-
gotiation since 1979, and Tunisia permit-
ted continuing access to ship repair facili-
ties at Menzel Bourguiba. In Morocco,
work proceeded on the multibillion-dollar
Meskala phosphate project. East Europe-
an business activities were not affected by
Soviet actions.
Algeria
Moscow's economic relationship with Al-
geria took on new dimensions with several
hundred million dollars of agreements to
construct priority projects in Algeria's cur-
rent five-year development plan. Terms for
these new agreements were not revealed.
The USSR also is considering aid to Alge-
ria's extensive planned railway construc-
tion and to the minerals industry.
Libya
Libya is by far the USSR's largest Third
World arms client, having purchased about
$15 billion of military materiel from the
USSR since the 1973 Middle East war.
About one-half of these purchases have
been delivered and include a wide variety
of advanced ground forces weapons, fight-
er aircraft, air defense systems, and naval
vessels. Although Colonel Qadhafi's mas-
sive defense procurement project has giv-
en Libya one of the largest and most
modern inventory of arms and equipment
in Africa, shoddy maintenance and storage
practices seriously impair its operational
readiness.
The Communist economic effort in Libya
has been nearly as large as the military
program and just as profitable. Commer-
cial construction and services contracts
are valued at several billion dollars, and
there were no cutbacks in development
projects in 1981 in spite of Libya's worsen-
ing cash flow problems.
Even as several major projects drew to a
close, Moscow deepened its involvement
in Libya's economy with contracts to con-
struct a nuclear power plant at Surt and to
participate in the second stage of the
Misurata steel complex. The number of
East European technicians employed in
Libya soared to 30,000, supplementing
lucrative equipment sales to Tripoli with
hard currency earnings from technical
services.
Morocco
East European countries have adopted a
noncontroversial posture on the Western
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Sahara and pursued low-key commercial
exchanges of goods and services for Mo-
roccan phosphates.
Technical assistance was the mainstay of
most East European programs as nearly
2,200 teachers, doctors, and other person-
nel worked in Morocco during the year.
Romania offered to expand construction
activities to include an airport, a steel mill,
hydropower plants, and road projects. Bul-
garia offered joint ventures in lead, zinc,
and silver production under a December
protocol, while Hungary agreed to provide
silver-refining equipment valued at $1.5
million.
South Asia:
Invasion of Afghanistan
Clouds Relationships
European Communist initiatives in South
Asia during 1981 were tempered by con-
tinuing adverse South Asian political reac-
tions to the Soviet occupation of Afghani-
stan. Area leaders were alarmed by
Moscow's military support of the Marxist
regime in Kabul. To counter Soviet pres-
sures, they emphasized their already warm
ties with China and the West. Pakistan also
enlisted the political and financial support
of the moderate Arab states.
Afghanistan
The military takeover in Afghanistan has
forced Moscow to augment its already
large aid commitments to shore up the
Afghan economy and rebuild the military
structure.
Moscow's political stake in Afghanistan is
underlined by its unprecedented $800 mil-
lion of economic support to the Marxist
government, one-half of it free of charge.
Moscow is refashioning Afghan Govern-
ment institutions along the Soviet model by
placing hundreds of advisers in ministries
and financial institutions. The USSR also
has tied Afghanistan's economy more
closely to its own by monopolizing trade
and developing industries whose produc-
tion is oriented toward the Soviet econo-
my. Among the hundreds of agreements
announced during the year, the most nota-
ble were:
? A five-year trade agreement (1981-85)
designed to triple trade over the 500-
million-ruble level of 1980.
? An agreement to proceed with transpor-
tation and servicing facilities that will
almost certainly be used to supply Soviet
troops.
? A contract to deliver 150,000 tons of
wheat as a grant.
? An agreement to supply 300,000 tons of
petroleum products.
The USSR continued work on oil and gas
development, the half-billion-dollar Ainak
copper complex, and agricultural develop-
ment and processing projects. Soviet tech-
nicians also started work on a $200 million
power transmission project; on straighten-
ing border rivers; and on truck mainte-
nance, bridge, railway, and oil storage
facilities that will support the Soviet military
presence.
East European countries have actively sup-
ported Soviet aims in the country with
$170 million of credits since the Marxist
takeover to finance agriculture and indus-
try. Czechoslovakia agreed to refurbish the
US-built Helmand Valley irrigation project
and had delivered half of the equipment
necessary by yearend. Bulgaria worked on
agriculture and processing projects, while
East Germany delivered communications
and power equipment.
India
Under its economic program, the USSR
focused on projects to be constructed
during India's Sixth Plan (1980-85) with
some $800 million of outstanding Soviet
credits. Contracts were signed for: (a)
$350 million of equipment for a 3-million-
ton steel complex at Vishakapatnam, (b)
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a dam and irrigation project using experi-
mental blasting techniques in Himachal
Pradesh, (c) oil prospecting over the next
10 years, (d) a comprehensive power
development plan for Madhya Pradesh
that will take five years to complete, and
(e) coal development that could result in
an annual production increase of 50 million
tons. Work proceeded on modernization of
the Bhilai and Bokaro steel plants, and the
6-million-ton Mathura oil refinery began
trial production. The two countries also
continued to explore opportunities for Indi-
an participation in Soviet projects abroad.
East European countries focused on ex-
panding trade by selling industrial plants.
Czechoslovakia offered to participate in
metallurgy and power development pro-
jects, particularly through the Czech-built
Bharat heavy electrical equipment plant.
Romania won a contract to build an iron
ore pelletizing plant. Hungary plans to
build a heavy truck manufacturing facility,
while Bulgaria agreed to expand economic
and commercial ties.
The USSR agreed to provide military
equipment to Afghanistan and India. In
addition, Moscow provided new economic
aid to Afghanistan ($25 million in com-
modities) and Bangladesh ($70 million for
a power plant).
East Asia:
Resisting Soviet Political Overtures
The USSR's continued occupation of Af-
ghanistan, its support of Vietnam's aggres-
sion in Kampuchea, and its military pres-
ence in Vietnam puts it at odds with most
nations in East Asia, and Moscow's politi-
cal overtures during the year were largely
rebuffed. East European countries, whose
$665 million credit program in the area has
always been designed to promote their
commercial interests, expanded ex-
changes of equipment for raw materials.
Latin America
Central America and the Caribbean:
Penetration Activities Increase
Communist countries intensified their aid
activities last year to strengthen leftist re-
gimes in Central America and the Caribbe-
an. These countries accounted for almost
all of the Communist military agreements
and one-half of the economic commit-
ments to all of Latin America. Nicaragua
was the main recipient, signing agreements
for $100 million in military assistance and
nearly $200 million in economic aid. The
Cubans, acting to consolidate their own
influence as well as to serve Moscow,
dispatched 2,000 more technicians to the
Caribbean and Central America in 1981,
accounting for most of the 50-percent
increase (to 6,900) in the Communist
presence over 1980.
Nicaragua. The Soviet Union actively ex-
ploited new opportunities to forge military
and economic aid ties with Nicaragua in
1981, signing new military agreements and
providing $80 million in economic aid un-
der a 1980 framework agreement that calls
for assistance to agriculture, fisheries, min-
ing, and energy. In an unusual move, the
Soviets provided 20,000 metric tons of
wheat in the spring as a grant, which,
together with 60,000 tons of free grain
from Bulgaria and East Germany, more
than made up for the cancellation of P.L.
480 grain deliveries for 1981. In July the
USSR allocated $50 million in 10-year
credits for the purchase of agricultural,
roadbuilding, and communications equip-
ment, which already has begun to arrive in
Nicaragua. The USSR also has sent six
research vessels to conduct an extensive
survey of Nicaraguan fisheries resources.
Nicaraguan press reports indicate that Ma-
nagua is negotiating for Soviet participa-
tion in a 180-MW hydropower project.
Clearly supporting Moscow's initiatives,
East European countries provided upward
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of $40 million in new economic commit-
ments as well as an estimated $20 million
in short-term financing for commodities
and raw materials. The new pledges bring
Communist commitments since the leftist
takeover in 1979 to $170 million. East
Germany has been the most active under a
program that began in 1979, providing
food and aid to public health. Bulgaria
appears ready to move rapidly on $25
million in aid for agriculture, industry, and
mining promised in 1981 and is negotiating
an additional $30 million for power devel-
opment. Cuba provided $70 million in new
aid, mostly to support the activity of 4,000
teachers, doctors, and other civilian
personnel.
South America:
Trade Considerations Drive
Aid Program
Since the early 1960s, when the USSR and
Eastern Europe began their drive to ex-
pand relationships with South America,
they have provided nearly $3 billion in
credits for development projects, largely in
the electric power industry. The credits
were provided to penetrate Latin American
equipment markets, historically dependent
on Western (particularly US) suppliers.
Even with these inducements, Communist
countries still find themselves on the buy-
ing side of a commercial relationship char-
acterized by heavy purchases of agricultur-
al products, large trade imbalances, and
local apathy toward Communist offers to
finance equipment for development.
This trend was intensified in 1981 as the
USSR restructured its food imports by
turning to Argentina and Brazil following
the US ban on agricultural sales to the
USSR. These purchases made Moscow's
goal of reducing its traditional large Latin
American trade deficit even more elusive,
and its deficit in 1981 soared to $4 billion,
more than double that of the previous
year. The USSR was able to conclude only
about $200 million in civilian equipment
contracts with the two countries.
Argentina. Argentina's growing economic
relationship with the USSR has not yet
been translated into broader political sup-
port for Soviet policies. In 1981 Buenos
Aires was the main beneficiary of the US
embargo on Soviet grain purchases with
sales to the USSR that reached 10 million
tons valued at $3.2 billion. The USSR also
signed agreements to buy a minimum of 5
million tons of grain annually over the next
five years.
According to press reports, Argentina
agreed to let the Soviets supply 15 percent
of the equipment for the multibillion-dollar
Yacyreta hydropower project, but Moscow
is pressing for more meaningful participa-
tion in Argentina's power development
program. The USSR also signed agree-
ments to supply enriched uranium and
heavy water to the nuclear industry and
has begun fishing research under an
agreement ratified in 1981.
Brazil. Brazil, the largest Latin American
recipient of Communist economic aid
($925 million), also has emphasized the
commercial side of its Communist relation-
ship. Brazil's view of European Communist
countries as promising markets for Brazil-
ian goods was reinforced in 1981 by major
Soviet purchases of grain and the conclu-
sion of a long-term trade agreement that
press reports say is worth $6 billion, mostly
in Brazilian exports. The USSR's attempts
to sell hydropower equipment on deferred
terms resulted only in a $135 million con-
tract to supply equipment to the Ilha Gran-
de hydropower project. Nor did Brazil
agree to draw on some $650 million of
East European aid pledged in previous
years.
Sub-Saharan Africa:
Bases Primary Soviet Concern
Moscow's military sales to Sub-Saharan
Africa rose to a record $1.9 billion in 1981
as Soviet military supply relationships with
key clients matured and Moscow consoli-
dated its position with pledges of greater
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arms support. In contrast, economic
agreements reached only $125 million, al-
though there are some indications that the
USSR is considering increasing economic
support to Africa. The Soviet, East Europe-
an, and Cuban military and economic
presence on the subcontinent rose to its
highest level ever-more than 65,000
troops, advisers, and military and econom-
ic technicians, nearly all Cubans.
Soviet Economic Aid Levels Still Low
Moscow provided only $125 million in new
economic credits to African countries in
1981. East European countries almost
matched the Soviet contribution with $115
million in new pledges focused on Mozam-
bique, Nigeria, and Zimbabwe. Nonethe-
less, there are several indications that
Moscow may be preparing to reverse its
longstanding neglect of African economic
development needs, particularly if the re-
cipient's politics are compatible with Sovi-
et goals. Early in 1982 Moscow signed a
$2 billion, 10-year economic agreement
with Angola that calls for aid to develop-
ment projects. Other outstanding offers
include hydropower assistance to Mozam-
bique and aid for port development in the
Seychelles.
Angola
A 10-year trade and economic coopera-
tion agreement signed by the USSR early
in 1982 and valued at $2 billion should
sweeten relations, although it has become
obvious to Angolan officials that the Com-
munist countries will not commit sufficient
resources to assist economic recovery as
military expenditures continue to drain the
economy. Even with 10,500 Communist
economic personnel, Angola has not been
able to restore production of basic neces-
sities to prewar levels; Luanda now wants
to hire Portuguese experts to rebuild the
country's basic infrastructure. Most Ango-
lans strongly resent the Communist, partic-
ularly Soviet, exploitation of their econo-
my. Moscow has been harshly criticized for
causing domestic shortages by overfishing
Angolan waters under their fishing treaty
and for siphoning off hard currency to pay
for inferior goods and services.
Nonetheless, Angola signed agreements
with several Communist countries to move
ahead with economic projects that have
been under discussion for some time. Bul-
garia agreed to build assembly and rrmain-
tenance shops for road transport equip-
ment and completed a project to process
rock phosphates. Czechoslovakia agreed
to provide credits for unidentified projects,
while East Germany signed protocols to
aid energy and mining.
Mozambique
Mozambique considers Communist coun-
tries its natural allies and has relied on
them to fill its defense needs. South Afri-
can cross-border raids and intensified
South African-supported dissident activi-
ties in 1981 pushed Mozambique toward
greater dependence on the USSR and its
allies for more advanced support and se-
curity assistance.
European Communist countries have not
gained as much influence over Mozam-
bique's economic affairs because Maputo
has followed more pragmatic policies and
has encouraged Western aid, trade, and
investment. Still, the economy was the
focus of Communist attention in 1981, as
the USSR and Eastern Europe took steps
to enhance their presence with new eco-
nomic pledges and a 10-year Soviet-
Mozambican economic cooperation agree-
ment. The USSR and East European
countries apparently turned down Mozam-
bique's application to join the Council for
Mutual Economic Assistance.
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Table 7
USSR and Eastern Europe:
Military Technicians In LDCs, 1981
USSR and
Eastern Europe
Cuba b
Total
18,208
39,175
Africa
9,900
36,960
North Africa
4,600
50
Algeria
2,000
NA
Other
2,600
50
Sub-Saharan Africa
5,300
36,910
Angola
1,600
23,000
Ethiopia
1,900
12,000
Guinea
50
10
50
205
Mozambique
550
1,000
Other
945
850
Latin America
225
1,715
Nicaragua
125
1,700
Peru
100
5,925
550
700
1,100
Syria
3,300
Other
275
South Asia
2,155
Afghanistan
2,000
India
150
a Minimum estimates of the number of persons present for a period
of one month or more. Numbers are rounded to the nearest 5.
b Including combat units In Angola and Ethiopia.
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Table 8
USSR and Eastern Europe:
Training of LDC Military Personnel
in Communist Countries, 1955-81 a
Total
57,795
Africa
18,330
North Africa
4,530
Algeria
2,395
Libya
1,990
Morocco
145
13,800
180
Equatorial Guinea
200
Ethiopia
2,095
Ghana
180
530
850
2,600
350
East Asia
9,300
Indonesia
9,270
Kampuchea
30
1,050
260
Middle East
20,750
Egypt
6,255
Iran
395
2,060
1,115
South Asia
8,365
Afghanistan
5,580
Bangladesh
445
2,285
45
a Data refer to the minimum number of persons departing for
training; numbers are rounded to the nearest 5.
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Table 9
USSR and Eastern Europe: Economic
Credits and Grants to LDCs,
Extended and Drawn, 1954-81
Total a
1954-71
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
USSR
Eastern
Europe
USSR
Eastern
Europe
22,355
11,885
9,765
4,295
7,890
3,435
4,030
1,255
655
925
430
175
715
630
500
230
815
840
700
235
1,955
545
500
270
1,030
835
475
385
430
460
550
480
3,000
1,575
480
405
3,345
645
575
290
2,070
1,330
810
255
450
665
715
325
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Table 10
USSR and Eastern Europe: Economic Aid Extended
to Non-Communist LDCs, by Country a
1954-81
1980
1981
USSR
Eastern
Europe
USSR
Eastern
Europe
USSR
Eastern
Europe
Total
22,355
11,885
2,070
1,330
445
865
North Africa
3,250
980
315
Algeria
1,045
525
315
Mauritania
10
10
Morocco
2,100
215
Tunisia
95
230
Sub-Saharan Africa
2,870
1,990
310
280
125
115
Angola
30
100
Benin
10
NA
5
Central African
Republic
5
Ghana
95
145
Guinea
215
110
5
Guinea-Bissau
10
5
Madagascar
70
35
50
35
Mali
100
25
Mauritius
5
Sao Tome and
Principe
NA
NA
Somalia
165
10
Sudan
65
270
Tanzania
40
75
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Table 10 (continued)
USSR and Eastern Europe: Economic Aid Extended
to Non-Communist LDCs, by Country a
1954-81
1980
1981
USSR
_
Eastern
Europe
USSR
Eastern
Europe
USSR
Eastern
Europe
Zambia
20
165
30
Other
1,275
250
255
185
100
90
East Asia
260
665
40
Burma
15
215
40
Indonesia
215
365
Kampuchea
25
15
Laos
5
5
Philippines
65
Latin America
1,420
2,135
250
195
170
50
Argentina
225
300
Bolivia
100
75
15
Brazil
145
780
150
55
10
Chile
240
145
Colombia
215
80
Costa Rica
15
10
Ecuador
NEGL
20
275 215 250
60 30
NA 10
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Table 10 (continued) Million US $
1954-81
1980
1981
USSR
Eastern
Europe
USSR
Eastern
Europe
USSR
Eastern
Europe
Middle East
7,925
4,495
675
55
Cyprus
15
10
5
Egypt
1,440
1,225
300
Greece
5
NA
Iran
1,165
685
Iraq
705
495
Jordan
30
NA
South Yemen
205
125
15
Syria
770
1,155
Turkey
3,400
755
355
Other
55
55
South Asia
6,625
1,370
1,195
135
100
250
Afghanistan
2,120
210
395
135
25
Bangladesh
375
320
70
250
India
3,080
455
800
Nepal
30
Pakistan
920
150
Sri Lanka
100
95
Other
140
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Table 11
USSR and Eastern Europe: Economic
Technicians in LDCs,1981 a
USSR and
Eastern Europe
Cuba
Total
95,685
23,075
Africa
60,600
14,685
North Africa
45,870
5,250
Algeria
11,150
250
Libya
31,700
5,000
Mauritania
50
2.350
600
Sub-Saharan Africa
14,730
9,435
Angola
3,900
6,500
Ethiopia
1,800
1,000
Gabon
10
660
275
100
425
1,800
15
4,400
10
395
60
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Table 11 (continued) Number of persons
USSR and Cuba
Eastern Europe
930
75
200
125
330 640
27,150 3,650
2,450 3,500
13,000
South Asia 6,795 100
Afghanistan 3,750 100
Bangladesh 125
India 1,625
Nepal 10
Sri Lanka 125
Other 10
a Minimum estimates of number present for a period of one month
or more. Numbers are rounded to nearest 5.
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Table 12
Academic Students From LDCs Being
Trained in the USSR and Eastern
Europe, as of December 19818
Africa 34,805
North Africa 4,485
Algeria 2,225
Libya _ 275
Mauritania 280
Morocco 650
1,055
30,320
1,655
400
Cape Verde 340
Central African Republic 525
Chad 235
Comoros 30
Congo 1,845
Djibouti 20
Equatorial Guinea 250
Ethiopia 5,355
Gabon 325
The Gambia 45
Ghana 1,135
Guinea 825
Guinea-Bissau 425
Ivory Coast 595
Kenya 805
Liberia 110
Madagascar 2,180
Mall 735
Mauritius 230
2,535
205
310
470
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Table 12 (continued) Number of persons
350
405
6,800
105
800
835
Middle East 18,650
Egypt 775
Iraq 2,275
South Yemen 1,335
Syria 3,665
Other 9,280
Afghanistan 8,700
Bangladesh 905
India 1,130
a Numbers are rounded to nearest 5. Most of the estimates are
based on scholarship awards.
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