COMMUNIST AID TO LESS DEVELOPED COUNTRIES OF THE FREE WORLD, 1975

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CIA-RDP08S01350R000602020001-7
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RIFPUB
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K
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38
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December 27, 2016
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April 10, 2012
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1
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Publication Date: 
July 1, 1976
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REPORT
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Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Communist Aid to Less Developed Countries of the Free World, 1975 ER 76-10372U July 1976 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 This publication is prepared for the use of U.S. Government officials. The format, coverage and contents of the publication are designed to meet the specific requirements of those users. U.S. Government officials may obtain additional copies of this document directly or through liaison channels from the Central Intelligence Agency. Non-U.S. Government users may obtain this along with similar CIA publications on a subscription basis by addressing inquiries to: Document Expediting (DOCEX) Project Exchange and Gift Division Library of Congress Washington, D.C. 20540 Non-U.S. Government users not interested in the DOCEX Project subscription service may purchase reproductions of specific publications on an individual basis from: Photoduplication Service Library of Congress Washington, D.C. 20540 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 In this report the term Communist countries refers to the USSR, the People's Republic of China, and the following countries of Eastern Europe - Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, and Romania. The term less developed countries of the Free World includes the following: (1). all countries of Africa except the Republic of South Africa; (2) all countries of East Asia except Hong Kong and Japan; (3) Malta, Greece, Portugal, and Spain in Europe; (4) all countries in Latin America except Cuba; and (5) all countries in the Near East and South Asia. The term extension refers to a commitment to provide goods and services either on deferred payment terms (five or more years with maximum 8% interest) or as grants. Assistance is considered to have been extended when accords are initialed and constitute a formal declaration of intent. The term drawings refers to the delivery of goods or the use of services. Estimates of the value of Communist military agreements and deliveries are in Soviet trade prices. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Page The Military Program . . . . . . . . . . . . . . . . . . . . . . . . . 1 Arab States Still Moscow's Prime Customers . . . . . . . . . . . . . . . 2 USSR Upgrades Inventories of Border States . . . . . . . . . . . . . . . 3 Stepped-Up Arms Supplies to Southern Africa . . . . . . . . . . . . . . 3 Military Technicians in LDCs . . . . . . . . . . . . . . . . . . . . . 3 Military Training . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Soviet Aid-Broader Agreements with Old Clients . . . . . . . . . . . . 6 East European Aid: Limited in Scope . . . . . . . . . . . . . . . . 7 China: An African Program . . . . . . . . . . . . . . . . . . . . . . 7 Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 The Communist Technical Presence Rose . . . . . . . . . . . . . . . . 8 Academic Training: Investment in the Future . . . . . . . . . . . . . . 9 Appendixes A. Country Sections . . . . . . . . . . . . . . . . . . . . . . . . . 11 B. Statistical Tables . . . . . . . . . . . . . . . . . . . . . . . . . 31 1. Communist Military Agreements with and Deliveries to Less Developed Countries . . . . . . . . . . . . . . . . . . . . 1 2. Communist Military Technicians in the Less Developed Countries, 1975 . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3. Military Personnel from the Less Developed Countries Being Trained in Communist Countries, as of December 1975 . . . . . . . . . . . . 4 4. Communist Economic Aid to Less Developed Countries, Extensions and Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Page 5. Communist Economic'Technicians in Less Developed Countries . . . . . . 8 6. Academic Students from Selected Less Developed Countries Being Trained in Communist Countries, as of December 1975 . . . . . . . . . . . 10 7. Military Personnel from the Less Developed Countries Trained in Communist Countries, 1955-75 . . . . . . . . . . . . . . . . . 31 8. Communist Economic Credits and Grants Extended to Less Developed Countries, 1954-75 and Years 1974 and 1975 . . . . . . . . . . . . 32 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Communist Aid to Less Developed Countries of the Free World 1975 Soviet military assistance dominated Communist relations with the LDCs in 1975. Arms aid was especially important in supporting Moscow's political objectives in the Middle East and the African countries of Angola and Somalia. Communist economic programs meanwhile continued as a low-key effort. Highlights of the Communist military and economic programs were: ? A cutoff of major Soviet military deliveries to Egypt at midyear. ? A heavy infusion of Soviet military support for the Marxist faction in the Angolan struggle. ? A signing of large new Soviet economic and military accords with Somalia. ? A large increase in Soviet economic aid commitments to the border countries of Afghanistan and Turkey (see Appendix A). These two received more than 85% of 1975 Soviet commitments. Moscow also signed its largest military agreement ever with Afghanistan. ? A sharp rise in the number of Communist technicians in LDCs. About a 20% larger contingent of military advisors followed new equipment into areas where Soviet interest was high, especially Syria, Libya, Mozambique, and Uganda. The number of economic technicians increased more than 15%, mostly in North Africa and the Near East. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 1. Communist countries signed arms accords totaling $925 million with the Third World in 1975 and delivered $1.5 billion worth of equipment (see Table 1). Table 1 Communist Military Agreements with and Deliveries to Less Developed Countries Million US $ Total USSR Eastern Europe China Agree- ments Deliv- eries Agree- ments Deliv- eries Agree- ments Deliv- eries Agree- ments Deliv- eries Total 16,600 14,375 14,350 12,475 1,675 1,375 575 525 1955-65 4,750 3,675 4,025 3,075 625 575 100 25 1966-75 11,850 10,700 10,325 9,400 1,050 800 475 500 1966 525 625 450 500 25 50 50 75 1967 675 550 525 500 100 25 50 25 1968 575 600 500 500 50 75 25 25 1969 450 525 350 450 100 50 Negl. 25 1970 1,150 1,100 1,025 1,000 50 75 75 25 1971 1,625 1,000 1,450 850 100 75 75 75 1972 1,150 925 925 800 150 50 75 75 1973 2,025 2,225 1,900 2,075 100 75 25 75 1974 2,750 1,600 2,475 1,450 200 125 75 25 1975 925 1,550 725 1,275 175 200 25 75 Deliveries were less than the emergency assistance of 1973 and 1974 in the aftermath of the Arab-Israeli war but still were a peacetime record. Soviet arms agreements again accounted for about 80% of Communist arms supplied LDCs, with Eastern Europe providing small amounts of support equipment to Soviet clients and China's military aid continuing as a marginal program. 2. Although 1975 Communist agreements were less than 10% of global military sales to the Third World, Communist arms deliveries accounted for 22% of the total delivered. The small Communist share in military sales reflects the continuing large orders the West has received from Persian Gulf countries as well as the drop in Communist orders from the record 1973-74 levels. On the other hand, Communist deliveries were a larger share of total deliveries to LDCs because the Soviets were able to fill orders mainly from inventories while new Western orders are taking years to produce and deliver. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 3. Moscow still concentrates its military program in the strategic Middle Eastern area. In 1975 Moscow also used its military program to promote political and military objectives elsewhere. It provided arms to Angola, Mozambique, and Somalia in Africa and continued to strengthen the armies of the LDC border states, such as India and Afghanistan. Moscow's efforts were not always successful, however. Its attempt to force Egypt to resolve outstanding difference by denying spare parts and other essential military items backfired. 4. Most Soviet military sales to the LDCs were in the Near East, where about two-thirds of Soviet military technicians continued to be stationed. Deliveries to the area also remained high, reaching a peacetime peak despite reduced deliveries to Iraq and Syria, which dropped from record 1973-74 levels. They reflected a winding down of the Near East crisis and the need to assimilate the advanced hardware already received. Large deliveries to Libya are resulting in a buildup of modem equipment that is giving Tripoli arsenal status among Arab belligerants. 5. Moscow's withholding of arms supplies as a weapon in its debt negotiations with Cairo contributed to the deterioration of Soviet-Egyptian relations. Moscow lost its largest arms customer in the Third World as Cairo shopped for alternative supply sources and early in 1976 abrogated its Friendship Treaty with the USSR. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 USSR Upgrades Inventories of Border States 6. Moscow reaffirmed its support for its Asian neighbors in 1975, with agreements to modernize Afghanistan's armed services and to provide India with a continuing stream of sophisticated equipment. The USSR continues as Afghanistan's major supplier of military goods and India continues to be almost entirely dependent on the USSR for military equipment. Stepped-Up Arms Supplies to Southern Africa 7. Turmoil in sub-Saharan Africa provided opportunities for Soviet arms support. The Popular Movement for the Liberation of Angola received Soviet military supplies and military advisers, accompanied by Cuban equipment and personnel. 8. Elsewhere in Africa, Moscow focused on clients that have offered facilities for Soviet military forces, especially Somalia and Guinea. Somalia's willingness to provide military facilities to the USSR led to heavy Soviet support, and Moscow has developed the port at Berbera for Soviet and Somali use. Guinea, which has provided air and naval facilities for Soviet reconnaissance units and a stopover point for the Angolan airlift, received additional military equipment. Military Technicians in LDCs 9. The number of Communist military advisors and technicians in LDCs increased about 20% to 9,300 in 1975 (see Table 2). Advisors followed new equipment into Communist-supplied areas and were concentrated in the countries Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Communist Military Technicians' in the Less Developed Countries, 1975 Total USSR and Eastern Europe China Total 9,300 8,090 1,210 Africa 3,745 2,605 1,140 Latin America 35 35 Near East and South Asia 5,520 5,450 70 1. Rounded to the nearest five persons. Data are minimum estimates of the number of persons present for a period of one month or more. Persons engaged solely in commercial activities are excluded. where Soviet military activity was high. Syria received the largest share of the increase. Iraq, Somalia, Algeria, and Afghanistan (in that order) employed almost a third. Somalia had 1,000 technicians in residence, the same number as in 1974. Most of China's 1,200 technicians abroad were in Tanzania, the second largest recipient of Chinese military aid. Military Training 10. LDC personnel receiving military training in Communist countries rose almost 30% in 1975. Most of the 4,400 trainees were in the USSR (see Table 3*). Military Personnel from the Less Developed Countries Being Trained in Communist Countries, as of December 1975 Total' USSR' Eastern Europe' China' Total 4,400 3,575 200 625 Africa 3,025 2,325 100 600 Latin America 50 50 .... Near East and South Asia 1,325 1,200 100 25 1. Rounded to the nearest five persons. Data refer to the number of persons departing for or in training but not necessarily completing training. * For further details on military training, see Appendix B, Table 7. 4 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Libya, Somalia, Tanzania, and a number of African countries that have received small amounts of Soviet aid were responsible for most of the increase. 11. Communist economic aid to LDCs has remained approximately constant since 1971. Commitments in 1975 amounted to almost $1.9 billion with Moscow's share unusually high because of sizable credits to Afghanistan and Turkey (see Table 4*). China's contribution was well below that of the early 1970s, and East European commitments reached a new low. Aid deliveries of about $680 million in 1975 dropped below the yearly shipments since 1971, mainly because of the sharp decline in China's outlays as its major project - the Tan-Zam Railroad - was virtually completed in 1975. Table 4 Communist Economic Aid to Less Developed Countries, Extensions and Drawings Million US $ Eastern Total USSR Europe China Ex- tended Drawn Ex- tended Drawn Ex- tended Drawn Ex- tended Drawn Total 20,529 9,282 10,859 5,900 5,830 1,722 3,840 1,660 1954-65 6,295 2,657 3,833 1,915 1,719 487 743 255 1966-75 14,234 6,625 7,026 3,985 4,111 1,235 3,097 1,405 1966 1,699 500 1,241 335 294 75 164 90 1967 473 520 291 305 132 115 50 100 1968 638 495 379 305 205 120 54 70 1969 933 520 494 350 426 100 13 70 1970 1,101 570 198 375 175 125 728 70 1971 2,171 770 1,125 430 484 150 562 190 1972 2,188 735 802 370 828 110 558 255 1973 1,569 805 657 435 484 140 428 230 1974 1,610 1,030 575 665 764 145 271 220 1975 1,852 680 1,264 415 319 155 269 110 12. Communist economic aid, which has never bulked large in the global aid picture, contributed less than 10% of all official aid agreements with LDCs in 1975 and only 2%-3% of global aid deliveries. Communist aid shipments lag commitments by a much longer time than do those of the West, in part because * For further details on individual economic agreements, see Appendix B, Table 8. 5 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 the Communists provide a higher share of project aid in contrast to greater Western emphasis on balance-of-payments assistance. 13. When aid repayments by LDCs are included, the Communist share of net global aid is less than 2%. For some recipients, there was actually a net outflow of goods in 1975 as repayments topped new aid receipts. 14. Iran offered Moscow its first credits from the Third World to finance a paper plant in the USSR. East European nations, which had received commercial loans from OPEC countries before, also accepted project credits from the LDCs for the first time as Bulgaria and Poland received commitments from Iran. 15. In 1975, Mexico and Iraq signed general agreements with CEMA, its first with countries of the Third World. Soviet Aid - Broader Agreements with Old Clients 16. Some Soviet economic aid patterns that have emerged in recent years became clearer in 1975. The USSR provided larger individual credits, and broad agreements-were signed with Turkey and Cyprus that are similar to the "framework" agreements concluded with Argentina and Indonesia in 1974. 17. These give Moscow greater flexibility in implementing project proposals. Follow-on negotiations will be required to set credit terms for each project or elements thereof under these open-ended credits. The result will likely be a mix of terms, including commercial-like trade credits as well as aid loans with repayment periods exceeding 10 years and interest rates of 2-1/2%-3%. These more flexible agreements appear to be a compromise between the concessional umbrella credits common during the 1950s and early 1960s and the well-defined allocations with harder terms often used since then. 18. More than 80% of the $1.3 billion in 1975 Soviet pledges went to two already large clients - $437 million to Afghanistan and $650 million to Turkey. These credits were the largest Moscow had ever extended to LDCs. Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 19. Continuing its emphasis on expensive, eye-catching heavy industrial public sector projects, Moscow's new assistance to Turkey included expansion of Soviet-built steel and aluminum plants. In Afghanistan, where Soviet development aid is pervasive, the new assistance includes 20 major projects in agriculture, irrigation, electric power, natural gas and petroleum development, mineral and metal processing, and transportation. 20. Somalia, Sri Lanka, and Bangladesh also received Soviet aid in 1975. Sri Lanka's $57 million credit will assist hydropower development, and Bangladesh's $46 million credit will be used for additional commodity assistance and several new industrial projects. Somalia, a continuing major Soviet target, received its largest commitment ($62 million) from Moscow, of which $60 million went toward port and fisheries development. East European Aid: Limited in Scope 21. East European donors reduced their aid commitments in 1975. The $319 million of East European aid was less than half the 1974 level because of large reductions in the amounts provided Latin America and the Near East. Almost a third of the aid went to Africa for expanding commercial ties with Algeria and Tunisia. Romania remained the largest donor despite a 50% cut in aid, accounting for 54% of the East European total. Bucharest's aid included a $150 million credit to the steel industry in Brazil and the first Communist credit to the Philippines ($30 million for a powerplant). China: An African Program 22. Chinese commitments of $270 million dropped below the unprecedentedly high levels of the early seventies, when China mounted its new aid offensive, but it demonstrated China's continuing effort to project itself as a stable source of cheap development financing for poor countries. 23. The Chinese program again emphasized Africa, where Peking has become a source of well-organized aid projects for poorer countries. About 55% of China's 1975 commitments went to Africa. Nepal, a longstanding client, received most of Peking's non-African aid to extend a road system. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Implementation 24. Aid deliveries dropped almost a third in 1975 because (a) the huge 1974 Soviet emergency wheat shipments to India were not repeated and (b) China's major project - the Tan-Zam Railroad - was completed. Soviet deliveries were highly concentrated, with more than half for major industrial plants under way in Egypt, Iran, and Turkey and for oilfield and pipeline construction in Iraq. These projects employed almost 40% of the nearly 18,000 Soviet technicians in LDCs. Egypt received the largest deliveries despite political strains from their military supply relationship. East European deliveries remained at about the level of the past two years and again were concentrated in the Near East and South Asia, with Egypt, India, and Syria receiving the largest amounts. 25. Communist economic technicians in the Third World rose by a fourth, bringing the total number to 55,290 (see Table 5). The East European contingent, Communist Economic Technicians in Less Developed Countries' Total 24,010 35,050 39,295 43,960 47,355 55,290 China total2 8,110 18,600 22,165 23,540 22,945 23,590 Africa 6,960 17,200 20,275 22,010 20,675 21,325 East Asia 150 .... 30 40 75 35 Europe .... .... .... .... 1203 703 Latin America .... .... 30 50 75 70 Near East and South Asia4 1,000 1,400 1,830 1,440 2,000 2,090 USSR total 10,600 11,025 11,200 13,095 14,685 17,785 Africa 4,010 4,200 3,760 4,590 6,000 5,930 East Asia 100 150 25 25 10 25 Latin America 35 75 190 185 300 330 Near East and South Asia 6,455 6,600 7,225 8,295 8,375 11,500 Eastern Europe total 5,300 5,425 5,930 7,325 9,725 13,915 Africa 3,150 3,300 3,805 5,075 7,450 10,290 East Asia 60 75 20 10 25 30 Latin America 140 150 130 165 175 225 Near East and South Asia 1,950 1,900 1,975 2,075 2,075 3,370 1. Minimum estimates of persons present for a period of one month or more. 2. Including laborers in some countries, especially Tanzania, Zambia, and Somalia. 3. Malta. 4. Excluding the large number of Chinese personnel reported working on the Karakoram Highway in Pakistan. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 up by 4,190 in 1975, saw the largest increase. Soviet and East European technicians were concentrated in Algeria, Libya, Morocco, Egypt, India, Iran, Iraq, and Syria. The largest East European group was in Libya, working under commercial contracts. 26. Moscow expanded its program in 1975 by 3,100 technicians, mostly in Iran and Iraq. Tehran now hosts the largest number of Soviet technicians. 27. China increased its already huge technical force to 23,590. They surpassed both the Soviet and the East European teams, which together totaled 31,700. Some 90% of the Chinese were working in Africa on major projects such as the Tan-Zam Railroad and road construction in Somalia and Sudan. 28. The Chinese provide technical services without charge, equivalent to more than a $100 million grant in 1975. The USSR usually allows LDCs to defer payment of project technicians' salaries, although LDCs must pay cash for administrative services. Academic Training: Investment in the Future 29. LDC students resident in Communist educational establishments rose to 27,275 in 1975 (see Table 6). The USSR still hosted about two-thirds of the LDC students. Acedemic training has provided entree to some countries that have refused other forms of cooperation with the Communist world. Spanning two decades, the program has reached more than 72,000 Third World students and has cost Communist countries only $70 million a year. Graduates of Communist universities are beginning to move into influential positions in their home countries, especially in Africa. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Academic Students from Selected Less Developed Countries Being Trained in Communist Countries, as of December 1975 Total 27,275 Zambia 295 Africa 14,895 Other 615 Algeria 1,750 East Asia 335 Angola 300 Indonesia 50 Botswana 25 Laos 190 Burundi 145 Other 95 Cameroon 180 Latin America 2,940 Central African Bolivia 240 Republic 305 Brazil 140 Chad 190 Chile 245 Congo 885 Colombia 460 Dahomey 115 Costa Rica 320 Equatorial Ecuador 385 Guinea 85 El Salvador 165 Ethiopia 920 Guatemala 25 Gambia 55 Mexico 35 Ghana 315 Nicaragua 60 Guinea 365 Peru 190 Ivory Coast 30 Venezuela 60 Kenya Malagasy 300 Other Near East and South 675 Republic 425 Asia 9,105 Mali 585 Afghanistan 895 Mauritania 185 Bangladesh 1,105 Mauritius 180 Cyprus 990 Morocco 270 Egypt 815 Nigeria 1,140 India 545 Rwanda 245 Iraq 650 Senegal 215 Jordan 650 Sierra Leone 415 Lebanon 465 Somalia 600 Nepal 100 Sudan 1,575 North Yemen 410 Tanzania 655 Pakistan 180 Togo 150 South Yemen 470 Tunisia 350 Sri Lanka 175 Uganda 290 Syria 1,125 Upper Volta 215 Other 530 Zaire 525 Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Algeria While no new movement was perceptible in Algeria's longstanding economic ties with the USSR, Algeria has been expanding its relations with Eastern Europe. In 1975 East European countries committed nearly $70 million in new aid, and for the first time their technicians outnumbered the Soviet contingent (3,100 compared with 2,500). Hungary's $70 million November credit for industrial equipment underlined Algeria's continuing success in attracting East European development financing. The new aid brings Eastern Europe's total commitment to $414 million. East European nations had responded quickly to Algeria's requests for aid for its first four-year plan (1970-73), and after 1970 Algeria became the second largest East European aid client. Credit use is expected to accelerate under recent contracts. Most important is a contract signed in June 1975 for Czech and East German collaboration on a $57 million pump manufacturing plant at Medea. Rapidly rising trade with Eastern Europe provides Algeria with needed industrial equipment and services at moderate prices. For Eastern Europe, Algeria is an important market and a source of oil and phosphates. By 1974, trade had risen more than six times the 1970 level, to an estimated $215 million, and it continued upward in 1975. Moscow's most important contribution to Algerian development is $300 million in credits for a 2-million-ton steel mill at Annaba, which on completion will be the largest in Africa. The plant now is operating near its initial capacity of 400,000 tons annually. Plagued by continuing construction delays, its expansion is running several years behind the 1977 scheduled completion date. Soviet personnel still are conducting extensive minerals and metals prospecting that began in 1969 and have drawn up long-term plans for petroleum development. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Algerian-Soviet trade increased about 75% between 1970 and 1974 to $225 million. Imports have outrun exports because of the sharp rise in Soviet commodity prices while Algerian wine prices rose marginally. Machinery and equipment have accounted for one-fourth of Algerian imports while cement, building materials, edible oils, steel, coal, and other raw materials also were important. Wine accounted for 90% of Algeria's exports to the USSR. The Kindia bauxite mine - Moscow's major aid undertaking in Guinea - approached its annual capacity production rate of 2.5 to 3 million metric tons by the end of 1975. The project was initiated in 1970 with $92 million in Soviet aid. About 90% of the output is shipped to the USSR, 55% for repayment of Guinea's debt and 35% on barter account. Guinea has demanded renegotiation of the 20-year 1970 agreement, hoping Moscow will raise the price it pays for bauxite, which has been about $10 a ton below the market price. Libya USSR - Focus on Military Sales Libya views its large modem arsenal of Soviet equipment as a prestige symbol and as a possible warehouse for equipment needed by other Arab nations. Moscow has delivered T-62 tanks, SA-2 missiles, and TU-22 bombers. Soviet Premier Kosygin's May visit to Tripoli underscores the importance Moscow attaches to this relationship. Outside the military program, the most important development was a June agreement for a Soviet 2-megawatt (MW) nuclear reactor and a nuclear research center in Tripoli. Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 East European Countries Still Major Contractors East European countries are more deeply involved than Moscow in Libyan development projects, on a commercial basis. Under the auspices of recently formed joint economic commissions for planning and development, East European countries concluded large new contracts in 1975. Hungary and Romania agreed to study the feasibility of three major rail lines, to assist in oil exploration, and to aid in the construction of refineries and petrochemical and fertilizer plants. Poland will assist with several new roads and water resources development. An estimated 5,000 East Europeans were employed in virtually all sectors of the Libyan economy, under commercial contracts. Poland was most active with 3,000 technicians working on road and bridge construction, urban development, port modernization, agriculture, and geological exploration. Romania's largest project, a housing complex, depended on the services of more than a thousand Romanian technicians. Libya pays for these goods and services in cash or oil. Barter agreements to exchange petroleum for goods and services were signed with Bulgaria, Hungary, Poland, and Romania in 1974. Rabat, irritated by Soviet support for Algeria in the western Saharan dispute, stalled decisions in 1975 on new long-term Soviet economic programs in Morocco. Existing economic relationships with the USSR continued, and relations with most East European countries remained cordial. Economic Relations: Setbacks for Moscow By October, Soviet-Moroccan relations had undergone a severe deterioration as the Moroccans felt the Soviets were supporting Algeria's position on the Sahara question. The agreement on phosphate development at Meskala was not signed. The draft on Meskala called for Soviet financing and construction of a phosphate mine, processing facilities, and a 20-mile railroad to the port of Essouira. Moscow also was to install phosphate handling equipment at the port. In return, the USSR was to receive 2-5 million tons of phosphate rock a year during 1980-90 and 10 million tons annually over the next 15-20 years. The phosphate deal could reach $5 billion and is the largest the USSR has ever proposed to a Third World country. Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 The Meskala project was to be the linchpin of Soviet economic policy in Morocco. Until now Soviet economic activity had focused on implementation of $100 million in Soviet credits provided during the past ten years. Moscow already has constructed dams, irrigation facilities, cold storage plants, and powerplants. In spite of political frictions, commercial relations proceeded normally. Moscow agreed in December 1975 to increase its 1976 oil exports to Morocco in exchange for citrus fruit. Eastern Europe During 1975, more than 500 East European technical personnel, mostly Bulgarians and Romanians, were working in Morocco. Poland made its first deliveries under an agreement to provide two sulfuric acid plants, while Romania was involved in mineral and metal prospecting, copper mine development, and water resources management. Early in the year, Bulgaria signed an agricultural agreement with Morocco, but its terms were not revealed. Mozambique The major Communist aid commitment to Mozambique was a $55 million Chinese credit for development projects and $4 million worth of wheat as a gift. East Germany agreed to send technicians to train Mozambicans in agriculture, animal husbandry, industry, education, and health. In December, Bulgaria signed an agreement for cooperation in geology and mining. Nigeria Communist China, under a technical assistance program begun in 1974, completed a three-month survey of small-scale industry in Nigeria. By the end of the year a 22-man team was training Nigerians in metal, wood, and leather fabrication. The terms of Chinese involvement in these enterprises have not been disclosed. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Somalia's strategic Red Sea location and political orientation have made it a focal point of Soviet affairs in Africa. In 1975, Moscow took further steps to tie Somalia's fortunes even closer to its own. The USSR provided Somalia the largest economic aid package it had given sub-Saharan Africa since the late 1960s, and the two countries signed a new arms accord. In return for port facilities and the pervasive Soviet presence in its military establishment, Somalia has received support to build one of the largest military inventories in Africa. The number of Soviet advisers remained at about 1,000 and were spread through all levels of the military. The number is expected to grow with additions to Soviet facilities at Berbera. The USSR in 1975 provided $62 million in economic assistance to Somalia, which included $14 million in grant aid for refugee resettlement. Most of the remaining aid is for developing Somalia's fishing industry. About 1,000 Soviet personnel worked on ongoing aid projects and refugee resettlement in 1975. Construction continued, though far behind schedule, at the USSR's largest project - the Giuba River Dam and associated hydropower and agricultural facilities. China has implemented its somewhat smaller program in Somalia far more rapidly than the USSR. Chinese technicians completed a hospital and began construction of a sports complex in Mogadiscio and continued to work on the Belet Uen-Burao road. China and Romania have the most active Communist aid programs in Sudan. In 1975, work neared completion on China's major aid undertakings - the 145-mile Wad Medani-Gedaref road and a textile plant, which together have absorbed almost half of China's $82 million aid program in Sudan. Romania pushed ahead with construction of an assembly hall under a 1971 line of credit. The USSR concluded two small agreements with Sudan in 1975 as relations slowly recovered from the events of June 1971, when Moscow was suspected of complicity in the attempted Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Communist takeover. A small military agreement negotiated in 1975 still awaited Sudanese ratification at the end of the year. Moscow also agreed to build a military hospital and to extend the activities of a 25-man Soviet team conducting geological surveys in the Red Sea hills. China and Romania are Sudan's major Communist trading partners. This trade accounts for about 10% of Sudan's global trade. Khartoum signed agreements with East Germany, Poland, and Romania in 1975 calling for hard currency settlements instead of previous barter arrangements. The first shipment of Zambian copper transited Tanzania in September over the Chinese-built Tan-Zam Railroad. Although the line is not scheduled for full commercial operations until late 1976, the event marked the successful completion of China's largest construction project in the Third World. China is now turning to developing an iron ore mine and coal deposits, which will be made accessible by a new rail link with the Tan-Zam Railroad. Under a $75 million 1974 credit, Peking will pursue these activities and also expand a clothing mill built originally with Chinese aid. 16 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Despite the military takeover that brought a leftist government to power late in 1974, Communist relations with Ethiopia did not change appreciably during 1975. An Ethiopian delegation that visited East European countries to seek development assistance received only assurances of political support. Soviet initiatives were confined largely to donations of $600,000 for drought relief and $100,000 worth of equipment for the Soviet-built polytechnic institute at Bahr Dar. Gambia received its first economic aid from a Communist country in 1975, a $17 million credit from China. The credit, following establishment of diplomatic relations in late 1974, probably will finance agricultural development. The Soviets made their first major effort to reestablish economic cooperation with Ghana since the overthrow of the Nkrumah regime in 1966. Soviet. specialists resumed work on several Soviet-aided plants whose construction was suspended in 1966, including a concrete panel factory. China pledged $17 million to Guinea-Bissau for agricultural equipment and rice cultivation. Peking also donated 2,000 tons of rice to the new government. The USSR provided a $500,000 refrigerated fishing trawler as a gift in June and reportedly will deliver four additional trawlers. China stepped up aid to Malagasy in 1975 with $55 million in new credits, which bring China's total aid to $66 million. They will go for roads, agricultural development, and light industrial plants. The USSR promised technical assistance for a merchant marine academy, mining surveys, and a cement plant study. Moscow continued its assistance to Mali for exploitation of gold at Kalana under $12 million in credits previously extended. Peking continued work on rice projects and an $8 million expansion of a textile complex at Segou. China reinforced its position as the most active aid donor in Mauritania outside the Arab world. Work on a health center, a sports stadium, a powerplant in Nouakchott, and preliminary studies on a deepwater port project were part of Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 the Chinese $85 million aid initiative. The USSR continued a small fisheries program under a 1973 agreement and was preparing to build a fisheries research center. No substantive commitments emerged from aid discussions with Bulgaria, Romania, and Poland during the year. Togo received a $500,000 gift of agricultural equipment from Peking. China also sent survey teams to study a sugar plantation and refinery and political party center to be financed under a $45 million 1972 credit. In November, Romania announced that it will provide assistance for mining, agriculture, and industry, but terms were not revealed. Tunisia received its first aid from Hungary in November 1975 - $10 million for agricultural development and food processing facilities. Negotiations with China continued for implementing the largely unused $40 million credit extended in 1972. Soviet Premier Kosygin's good-will visit to Tunisia in May produced a Soviet agreement to study Tunisian requests for aid for its new five-year plan. Some new Soviet projects may be financed under the $34 million in aid already extended to Tunisia. China began work on several agricultural projects and a conference hall in Zaire under a $100 million 1973 credit agreement. Plans for road construction and agricultural projects went ahead under Peking's $51 million 1974 credit to Zambia. Some Chinese personnel working on the Tan-Zam Railroad probably were transferred to the road construction effort. China, anxious to restore closer relations with Burma, tried to expedite use of economic credits reextended in 1971. During the visit of Burma's president to Peking - his first since 1971 - China may have reallocated some outstanding industrial credits for commodity assistance. Indonesia still has not normalized relations with Peking, but it continued its two-year-old policy of improving economic relations with the USSR and Eastern Europe. Project negotiations continued under a 1974 agreement with the USSR. Moscow and Indonesia have agreed in principle to proceed with two power projects and the Soviets are studying Indonesian requests for aid to the aluminum industry. Jakarta signed economic agreements with Bulgaria, Czechoslovakia, and Romania early in the year. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Malaysia's economic relations with China cooled somewhat in 1975 as the rapid growth expected for its exports to China failed to materialize. Exports instead fell, and Malaysia's trade deficit probably exceeded the $200 million annual level of recent years. The Philippines' relations with Communist countries expanded markedly in 1975. Diplomatic relations were established with China and restored with Cuba, and trade contacts were expanded with East European countries. Romania became the first Communist country to extend economic development credits to Manila - $31 million for a thermal powerplant. Thailand established trade and diplomatic relations with China in 1975. In August, the two countries signed a $100 million agreement to barter 200,000 tons of Thai rice for Chinese crude oil and petroleum products. Argentina Communist countries continued to deliver modest amounts of economic aid to Argentina under agreements valued at more than $535 million. Moscow signed new contracts in 1975 to provide generators for the Lujan de Cuya and San Nicolas thermal powerplants now under construction. Although several contracts were signed, activity under Eastern Europe's $283 million in 1974 credits was limited. Almost all Communist aid to Brazil is incorporated in trade agreements encouraging larger equipment sales. The $150 million trade credit extended by Romania in 197 5 was the largest Communist credit to Brazil. The credit will finance Brazil's steel plant purchases from Romania, including rolling mills, sinter plants, plate heating furnaces, and steel structures. Bucharest also agreed to $30 million in additional commercial financing for a petrochemical plant. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Communist countries have continued to run large trade deficits with Brazil that must be settled in hard currency. To help correct this imbalance, Poland signed a $1 billion contract to exchange coal for Brazilian iron ore over a 10-year period. Soviet oil sales to Brazil are helping to reduce the USSR's deficit. Late in 1975, Colombia announced plans to promote new economic and commercial ties with Communist countries. The Soviets offered Colombia 10-year credits at 5% interest to buy Soviet equipment. Previously, Moscow had extended credits for trolley bus purchases. At year's end, Moscow was still studying Bogota's request for Soviet participation in electrification, oil and gas exploration, and transportation projects. Hungary will sell Colombia $9 million worth of buses under a 1975 commercial agreement, and Czechoslovakia signed contracts for two powerplants. At the end of the year, Romanian technicians were studying joint ventures involving a gas pipeline, coking coal, petroleum, and agriculture. Peru is still drawing on $229 million in economic aid extended by Communist countries in the early 1970s. The aid is heavily concentrated in hydropower development. Moscow signed contracts for studies on a power project in northeastern Peru and for the installation of oil storage tanks for Peru's Andean pipeline project. At the end of the year Lima was considering a Soviet offer of further equipment credits. There were unconfirmed rumors at midyear that East Germany had agreed to provide $200 million in industrial equipment credits. Other Latin America The People's Republic of China agreed to renew the line of credit pledged to the Allende regime, under which some $50 million is still available. China wants to ensure continued supplies of copper and nitrates from Chile, the value of which fell in 1975 to $12.5 million compared with $117 million in 1974. Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 In March China provided Guyana with $10 million in economic credits, in addition to the $26 million it extended in 1972. Romania signed its first economic agreement with Guyana to participate in mineral exploration, hydropower development, agriculture, and wood processing. The terms of the agreement are not known. China - the only Communist country to offer development assistance to Jamaica -- sent a team to Kingston in mid-July to study several textile projects discussed in March 1974 when diplomatic relations were established. Mexico signed a general agreement with CEMA in August, establishing a joint commission to promote cooperation. The terms of the agreement were not announced. The USSR also signed scientific cooperation agreements on joint research in energy, geology, and oceanography. In a continuing effort to expand relations with Communist countries, Trinidad and Tobago's prime minister led a delegation to the USSR and Romania during July. Moscow agreed to study proposals for project assistance, and the Bucharest visit yielded agreements for Romanian assistance for geological studies, onshore petroleum drilling and production equipment, refineries, and a petrochemical complex. Afghanistan Moscow reaffirmed its deep aid commitment to Afghanistan in 1975 by providing the largest amount of economic assistance it has yet extended in a single year to this border state. New Soviet economic credits to Afghanistan totaled $437 million in 1975. The aid was allocated to 20 major projects in agriculture, irrigation, electric power, mineral and metal processing, and transportation. The credits will assure Moscow a major role in the Afghani Fifth Plan. About half of Moscow's $1.3 billion in aid to Kabul has been disbursed. Soviet aid is responsible for construction of about two-thirds of the roads completed since Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 1956, half of the electric power capacity, and the addition of at least 100,000 acres of cultivated land. The USSR developed Afghanistan's natural gas production facilities and constructed pipelines to transport gas to the USSR. In 1975, natural gas accounted for a third of Kabul's total exports to the USSR, covering the debt service due the USSR under revised payment schedules. Peking's irrigation project in the Parwan Valley is the largest Chinese project under way. The gift hospital being built in Kandahar is more than half completed, and work proceeds on the expansion of the Chinese-built textile mill at Bagram. Moscow continues as Afghanistan's most important trading partner, accounting for about one-third of its total trade. Although data for 1975 are not available, the value of trade probably increased over 1974 because of higher prices for Afghanistan's natural gas and raw cotton. As in 1974, the balance was likely in Afghanistan's favor. Egypt The deterioration of Soviet-Egyptian relations in 1975 was reflected in Moscow's cessation of arms deliveries and refusal to ease debt repayment terms. East European countries apparently were not affected by the chill in Egypt's Soviet relations, and they concluded a number of new economic accords. Debt talks reached a stalemate over conditions for rescheduling Egypt's $5 billion military and economic debt. Although they were put off until August 1976, an interim arrangement is in effect through the annual trade protocol that provides for $180 million of repayments through an Egyptian export surplus in 1976. Strains in Soviet-Egyptian political and military relations have not directly affected ongoing Soviet development assistance to Egypt but may have influenced future prospects. Although cautious in supporting new aid efforts, Moscow wants to maintain a role in Egypt. Accordingly, in 1975 the USSR continued all projects under way and agreed to go ahead with two new projects, a cement plant at Asyut and an addition to capacity at the Naja Hamadi aluminum plant, both to be financed under existing credits. Until the 1973 war Moscow was Cairo's major aid source. Since 1973 Arab aid has accounted for more than two-thirds of all external financing available to Egypt, dwarfing the Soviet assistance program. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 In 1975 the largest Soviet project still under way was the expansion of the steel mill at Hulwan, Egypt's only integrated steel plant. Scheduled for completion in 1976, annual capacity will climb to 1.5 million tons, about three times the current domestic requirement for steel in Egypt. Production began in 1975 at the 100,000- ton Naja Hamadi aluminum plant. Other ongoing projects include Soviet assistance to Egypt's fishing industry and irrigation and rural electrification programs. Undertaken in the late 1960s and early 1970s, these projects have proceeded slowly and have been overshadowed in recent years by Western sponsored efforts in the same area. The only new Communist economic aid to Egypt was a $25 million Hungarian credit for machinery and equipment. Other East European countries continued work on projects under old credits. A new protocol with Romania called for further implementation of sulfuric acid plants, the Hamrawein phosphate complex, and a petrochemical plant under credits still outstanding. In contrast with Egyptian-Soviet long-term debt problems, Cairo settled its outstanding commercial debt questions with Hungary and Poland. Although Hungary and Poland insisted on future settlements in convertible currency, both agreed to accept Egyptian goods to settle past trade imbalances. The static pattern of Communist aid to India, which has characterized the relationship since 1966, continued throughout 1975. No new assistance was Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 provided, work was initi- ated only on a couple of Czech projects, and draw- ings on project aid remain at the low level reached several years ago. Work continued on the Bokharo steel plant, the largest Soviet project under construction in In- dia, and on the expansion of Bhilai, scheduled even- tually to reach a 4-mil- lion-ton capacity from the present 2.5 million tons. A 2,000-ton rolling mill at Bhilai is also under con- struction. Moscow agreed to undertake studies for new coal mines under a 1966 trade credit, and signed a $20 million contract for equipment installation at the Mathura refinery, for which designs have been completed. East European projects also moved slowly. Czechoslovakia initiated work on a foundry forge and a fertilizer plant under its $105 million 1973 credits. It also provided components for plants built under earlier Czech credits. Poland continued its decade-long effort in coal mine development work. Soviet-Indian trade continued its upward trend. Helped by higher prices and volume, Indian exports rose sharply, while imports rose even faster because of increased receipts of fertilizer and petroleum. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 A February Soviet-Iranian accord calls for Iran and the USSR to undertake projects in both countries whose eventual cost could reach $3 billion. Moscow will continue work under its current program and will expand the Soviet-built machine tool plant at Arak and build new powerplants and grain silos. Iran offered credits to the USSR to finance a paper plant. Repayment will be made from the plant's output. Soviet aid to Iran continued to focus on the Isfahan steel mill. The plant's current annual capacity is planned to reach 1.9 million tons by 1978. About $500 million in Soviet credits has been provided for the plant thus far. Plans to expand Isfahan to 8 million tons over the next decade probably will be executed under commercial contracts. To accommodate growing Soviet-Iranian trade, Iran is improving its rail links with Soviet assistance. Under a series of 1975 protocols Moscow will electrify a 90-mile line from Tabriz in Iran to Julfa on the Soviet border and has begun studies on a 100-mile railroad from Mashad in Iran to Tadjhen in the USSR. In a mutually profitable arrangement, the two sides entered a trilateral agreement for the sale of Iranian natural gas to Western Europe. Delivery will be made through a second pipeline to Iran's border with the USSR. For 20 years beginning in 1981, Iran will deliver 36.8 million cubic meters of gas per day to the Soviet border, to be consumed in the USSR. In turn, the USSR will deliver 31.1 million cubic meters of gas per day to Western Europe, the difference representing a transit fee paid to the USSR. West European consumers will pay Iran for the gas in hard currency. All East European countries signed accords with Iran calling for large increases in trade and faster implementation of aid programs. Romania and Iran signed protocols under the $1.5 billion of reciprocal accords concluded in December 1974. New projects include engineering work on the Saveh dam, construction of powerplants and food processing plants, expansion of a chemical plant at Shiraz, and studies for petrochemical and other plants. Iraq Despite its vastly increased ability to buy Western goods and services, Baghdad continued to depend on the USSR and East European countries for most of its Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 development assistance. At the end of the year Iraq signed economic protocols with the USSR for new project studies. In July, Iraq became the first Third World country to sign a cooperation agreement with the Council for Mutual Economic Assistance (CEMA). Economic Activity Expands Although petroleum development remains the USSR's largest and most important program in Iraq, Moscow signed contracts in 1975 to expand its support to other major sectors. The Petroleum De- velopment Program Soviet technicians during 1975 completed the third-stage develop- ment at the North Ru- maila oilfield and the be- ginning of oil production at the Nahr Umar field. North Rumaila's capacity was raised to more than 800,000 b/d, but Soviet technicians still are grap- pling with pressurization problems that have lim- ited output. The USSR and Iraq also signed a contract in 1975 for exploitation of the Luhais oilfield in southern Iraq, expected to produce 50,000 b/d. Although financing for the estimated $50 million program was not announced, Moscow probably sought repayment in oil, which it has received for other assistance to the oil sector. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Large New Contracts in Other Sectors Under Moscow's $220 million 1971 line of credit, assistance is being provided for two thermal powerplants, which, when completed, will double Iraq's electric power capacity. Moscow contracted to install four 120,000-kw turbines for the plant, continued to build the powerplant at Nasiriyah in 1975, and conducted surveys for the Mosul plant. In addition, under a Soviet contract whose terms are not known, work accelerated on the ath-Tharthar irrigation and flood control project. Protocols were signed with virtually all East European countries and China to speed work under outstanding credits. Baghdad signed a $17 million agreement with an East German firm to install signal equipment on the Baghdad-Umm Qasr railroad. China began construction of a bridge over the Mosul River, its first aid project in Iraq under a $45 million 1971 credit. Late in 1975 Mos- cow began construction of Pakistan's largest indus- trial undertaking, a 1.1-million-ton steel mill at Karachi; Moscow has extended $435 million of credits for the project. The steel complex, on the books since 1970, is scheduled for completion in 1980-81. The USSR also agreed in 1975 to increase petroleum explo- ration activity at several locations. Moscow contin- ued work on a thermal powerplant at Guddu and transmission lines and sent a team to discuss mineral development as- sistance in November. China mounted no new aid initiatives in Paki- stan, its largest aid recipi- ent. Work continued at a Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 cotton-spinning mill at Tarbela, a textile mill at Kotri, and the expansion of the heavy machinery plant at Taxila. China also plans to construct a small iron and steel plant at Chilgazi to complement the heavy machinery plant and the foundry forge at Taxila. A $57 million Soviet economic credit to Sri Lanka, Moscow's first major aid commitment to Colombo since 1958, highlighted Communist relations with Sri Lanka in 1975. The February agreement, which more than doubles Moscow's previous aid to Sri Lanka, will be used to construct the Samanawala 120-MW hydropowerplant and to build an irrigation network. China completed the Pugoda textile mill, under construction with Chinese aid since 1970. Meanwhile, survey work began on flood control and irrigation projects, a sheet glass plant, and fisheries development under a $44 million 1972 line of credit. Late in the year, China and Sri Lanka also signed their annual rice-rubber barter agreement for 1976. Syria No new aid agreements were signed between Moscow and Damascus in 1975. The USSR and Syria signed a protocol under an old credit agreement for large-scale oil prospecting under Moscow's comprehensive 1976-80 oil development program for Syria. Syria is Eastern Europe's largest Third World credit recipient with commitments of $778 million. Romania, the largest East European donor, agreed to allocate part of its outstanding credits to heavy industry and for oil development-areas where Bucharest already is active. Romania also agreed to go ahead with a superphosphate plant at Horns, and construction was begun on the 120,000 b/d refinery at Banias, which will be Syria's largest refinery when completed in the late 1970s. Turkey In July the USSR and Turkey signed a "framework" agreement that may eventually provide $650 million in new Soviet credits for Turkey's industry. Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Separate agreements will be signed to allocate the proceeds and to specify terms for individual projects. Expansion of the Iskenderun steel complex to 4 million tons, additional facilities at the Seydesehir aluminum complex, and two 400-MW thermal powerplants will be financed under the new agreement. Turkey, with half a billion dollars of earlier Soviet pledges, has become a major Soviet aid recipient. In December, Soviet Premier Kosygin participated in the opening of the 1-million-ton Iskenderun steel plant, one of Moscow's largest aid projects in the Third World. Other Soviet projects include a refinery at Aliaga, a sulfuric acid plant, a plywood factory, and an aluminum plant. A $46 million Soviet credit and $10 million from Hungary, extended before the August coup, highlighted Communist economic aid to Bangladesh in 1975. Moscow also allowed Dacca to defer the first of five annual installments on its 1973 $35 million loan of 200,000 tons of wheat, although repayments continued on other credits. Negotiations with Moscow were begun in July for more military aircraft, but were not resumed after the coup. The Soviets did provide new economic credits (repayable at 2% interest over 15 years, after a three-year grace period) for a cotton-spinning mill, a gas liquefaction unit, and an experimental cotton farm. The new agreement also provided $7.5 million for commodities to help finance local project costs. Hungary signed an agreement in June to furnish railway passenger cars; payments would be made over a 12-year period in jute products and other agricultural goods. President Ceausescu's April visit to Jordan produced new economic accords under which Bucharest will explore for oil and build an oil refinery on a joint venture basis. Romania also agreed to expand the Az-Zarqa oil refinery and to participate in agricultural projects. Financial details are not known. China gave Nepal $80 million in grant aid for a major addition to its road construction program. Peking will build a 250-mile road from Pokharo to Surkhet. Chinese aid to Nepal now stands at $179 million, mostly for roads and light industrial plants. Declassified and Approved For Release 2012/04/10: CIA-RDP08S01350R000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 APPENDIX B STATISTICAL TABLES Table 7 Military Personnel from the Less Developed Countries Trained in Communist Countries,' 1955-75 Total USSR Eastern Europe China Total 44,200 37,225 3,975 3,000 Africa 12,925 9,575 650 2,700 Algeria 2,200 1,975 200 25 Burundi 75 75 .... .... Cameroon 75 Congo 800 325 50 425 Equatorial Guinea 200 .... 200 Ghana 175 175 Guinea 1,250 850 50 350 Guinea-Bissau 100 .100 .... .... Libya 925 900 25 .... Mali 250 200 Negl. 50 Morocco 150 75 75 .... Mozambique 250 200 .... 50 Nigeria 500 475 25 .... Sierra Leone 150 .... .... 150 Somalia 2,475 2,375 75 25 Sudan 525 300 25 200 Tanzania 1,900 875 Negl. 1,025 Togo 25 .... .... 25 Uganda 775 650 125 .... Zaire 75 .... .... 75 Zambia 50 25 .... 25 East Asia 9,275 7,575 1,700 .... Cambodia 25 25 .... .... Indonesia 9,250 7,550 1,700 ???. Latin America 250 250 .... .... Peru 250 250 .... .... Near East and South Asia 21,750 19,825 1,625 300 Afghanistan 3,550 3,300 250 .... Bangladesh 400 400 .... .... Egypt 6,225 5,675 550 .... Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Military Personnel from the Less Developed Countries Trained in Communist Countries,' 1955-75 (Continued) Eastern Total USSR Europe China India 2,125 2,075 50 Iran 275 275 .... Iraq 3,200 2,950 250 North Yemen 1,050 1,050 .... Pakistan 350 50 .... South Yemen 750 725 25 Sri Lanka Negl. Negl. Syria 3,825 3,325 500 Negl. 1. Rounded to the nearest five persons. Data refer to the number of persons departing for or in training but not necessarily completing training. Communist Economic Credits and Grants Extended to Less Developed Countries, 195475 and Years 1974 and 1975 Eastern Eastern Eastern Total USSR Europe China Total USSR Europe China Total USSR Europe China Total 20,529 10,859 5,830 3,840 1,610 575 764 271 1,852 1,264 319 269 Africa 4,609 1,435 1,063 2,111 334 17 80 237 313 73 90 150 Algeria 931 425 414 92 .... .... .... .... 70 .... 70 .... Burundi 20 .... .... 20 .... .... .... .... .... .... .... .... Cameroon 79 8 71 .... .... .... .... .... .... .... .... Central African Republic 6 2 4 .... .... .... .... .... .... .... .... Chad 60 10 50 .... .... .... .... 9 9 .... Congo 49 14 10 25 .... .... .... .... 10 .... 10 .... Dahomey 44 .... 44 .... .... .... .... .... .... .... .... Equatorial Guinea I I .... .... .... .... .... .... .... .... .... Ethiopia 205 104 17 84 1 1 .... .... I 1 .... Gambia 17 .... .... 17 .... .... .... .... 17 .... 17 Ghana 237 93 102 42 .... .... .... .... .... .... .... .... Guinea 382 200 105 77 83 2 80 1 .... .... .... .... Guinea-Bissau 18 1 17 .... .... 18 1 .... 17 Kenya 66 48 .... 18 .... .... .... .... .... .... .... Malagasy Republic 66 .... .... 66 .... .... .... .... 55 .... 55 Mali 177 86 23 68 12 12 2 .... 2 Mauritania 89 4 .... 85 57 .... .... 57 .... .... .... .... Mauritius 35 .... 35 .... .... .... .... Morocco 148 98 50 .... .... .... .... .... .... .... .... .... Mozambique 59 .... 59 .... .... .... .... 59 .... 59 Niger 53 2 51 51 1 50 .... .... .... .... Nigeria 45 7 38 .... .... .... .... .... .... .... .... .... Rwanda 23 1 22 .... .... .... .... .... .... .... .... Senegal 58 9 49 1 1 .... .... .... .... .... .... Sierra Leone 58 28 30 .... .... .... .... .... .... .... .... Somalia 291 153 5 133 1 1 62 62 .... .... Sudan 299 64 153 82 .... .... .... .... .... .... .... .... Tanzania 364 20 13 331 75 75 .... .... .... .... Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7 Communist Economic Credits and Grants Extended to Less Developed Countries, 1954-75 and Years 1974 and 1975 (Continued) Eastern Eastern Eastern Total USSR Europe China Total USSR Europe China Total USSR Europe China Togo 45 .... .... 45 .... .... .... .... .... .... .... .... Tunisia 157 34 83 40 .... .... .... .... 10 10 Uganda 31 16 15 .... .... .... .... .... .... .... .... Upper Volta 61 1 .... 60 2 .... .... 2 .... .... .... .... Zaire 100 .... 100 .... .... .... .... .... .... .... .... Zambia 335 6 50 279 51 .... .... 51 .... .... .... .... Europe 45 .... .... 45 .... .... .... .... .... .... .... .... Malta 45 .... 45 .... .... .... .... .... .... .... .... East Asia 841 156 341 344 34 .... 34 65 1 35 29 Burma 126 16 26 84 .... .... .... .... .... .... .... .... Cambodia 134 25 17 92 .... .... .... .... .... .... .... .... Indonesia 482 114 263 105 .... .... .... .... .... .... .... .... Laos 31 1 4 26 25 .... 25 6 1 4 1 Philippines 68 .... 31 37 9 .... 9 59 31 28 Latin America 1,787 602 1,042 143 494 209 285 .... 166 156 10 Argentina 537 245 292 .... 483 200 283 .... .... .... .... .... Bolivia 64 31 33 1 1 .... .... 2 2 Brazil 407 30 377 .... .... .... .... .... 150 150 .... Chile 423 238 120 65 .... .... .... .... .... .... .... .... Colombia 15 10 5 .... 8 8 .... .... .... .... .... .... Costa Rica 2 .... 2 .... 2 2 .... .... .... .... .... Ecuador 19 .... 19 .... .... .... .... .... 4 4 Guyana 36 .... 36 .... .... .... .... 10 .... 10 Peru 229 28 159 42 .... .... .... .... .... .... .... .... Uruguay 45 20 25 .... .... .... .... .... .... .... .... .... Venezuela 10 .... 10 .... .... .... .... .... .... .... .... .... Near East and South Asia 13,247 8,666 3,384 1,197 748 349 399 .... 1,308 1,190 38 80 Afghanistan 1,376 1,263 40 73 .... .... .... .... 437 437 .... .... Bangladesh 413 300 102 11 54 28 26 .... 56 46 10 .... Egypt 2,230 1,300 796 134 .... .... .... .... 25 .... 25 .... Greece 84 84 .... .... .... .... .... .... .... .... .... India 2,430 1,943 487 .... .... .... .... .... .... .... .... .... Iran 1,288 750 538 .... .... .... .... .... .... .... .... .... Iraq 1,013 549 419 45 .... .... .... .... .... .... .... .... Lebanon 9 .... 9 .... 9 9 .... .... .... .... .... Nepal 199 20 179 80 .... 80 Pakistan 1,131 652 74 405 216 216 .... .... .... .... .... .... Sri Lanka 323 95 73 155 11 .... 11 57 57 .... .... Syria 1,256 417 778 61 453 100 353 .... .... .... .... .... Turkey 1,210 1,180 30 .... .... .... .... .... 653 650 3 Yemen (Aden) 91 15 21 55 .... .... .... .... .... .... .... .... Yemen (San's) 194 98 17 79 5 5 .... .... .... .... .... .... Declassified and Approved For Release 2012/04/10: CIA-RDP08SO135OR000602020001-7