COMMUNIST ECONOMIC PENETRATION OF WEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP62S00545A000100090055-7
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 9, 2016
• Document Release Date: July 17, 1998
• Sequence Number: 55
• Publication Date: June 26, 1958
• Content Type: REPORT

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Communist Economic Penetration of West
1. New Soviet Policy Tool
.A. Both by word and by deed USSR has forced attention of West in
recent months to increasing Soviet competition in field of
international commerce.
1. Khrushchev's words; arena competition moved from
armaments to trade.
2. Soviet trade with underdeveloped countries of Free World
has increased by over 500 percent since 1954; total
Soviet trade with West has grown by over 100 percent
over same period.
B. Soviet foreign economic program is part of "policy of peaceful
May be interested to learn of our bi-weekly intelligence re-
porting on Soviet economic activities in Free World. Since
ebruary 1956, working group of representatives from State,
CIA, ICA, and the Services report in detail every two weeks,
and in analytic summary every 6 months. Copies of these
bi-weekly and semi-annual publications.
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II. Soviet Capabilities for Trade and Aid
A. New policy tool of USSR potent one; Soviet capabilities for
extending trade and aid formidable.
B. Total output (GNP) of USSR now greater than that of UK,
France and West Germany combined. Second only to US.
C. However, USSR not yet a "trading nation" in Western sense.
Present level of trade still small in relation to total output,
although growing.
D. USSR has extended credit and grant assistance
1. Soviet aid program including that La the European
Satellites has represented small burden to USSR.
Doubling of present level of credits and grants would
be within capabilities.
III. Bloc Economic Relations Free World
Very sharp expansion recent years
1. Since 1954, $2. 2 billion credits and grants extended by
all Bloc countries (Briefing Aid)
a. About $1. 7 billion economic assistance, $500 million
military
b. Under these credits, drawingiamount about $700
million
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(1) Represent deliveries complete plants, industrial
(2)
equipment, such as
(a) Six bridges to Egypt
(b) Equipment steel mill India
(c) Oil refinery, Syria
(d) Flour mill, Afghanistan
Military hardware such as
(a)
Fighter planes, Indonesia
(b) Tanks, self-propelled artillery, Syria, Egypt
(c) Submarines, small naval vessels, Egypt
(3) Some commodities
(a) Wheat, cotton, oil, Yugoslavia
(b) Rice to Indonesia (from China) - during recent
rebellion
(4) Small amount convertible currency
(a) $30 million to Yugoslavia from USSR - 1956
(b) China grant Egypt early 1957, $5 million in
Swiss francs
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2. 1957, nearly 2.500 Bloc technicians working Free World -
half USSR - half Satellites (Briefing Aid)
3. Bloc sent trade missions all parts world - signed trade
agreements Free World countries - more than 150 now
in. force
B. Soviet aid principally to highly susceptible countries
1. Result - 6 countries received over 90 percent of credits -
Yugoslavia, Egypt, Syria, Afghanistan, India, Indonesia
a. Soviet recently postponed for 5 years implementation
of substantial credits Yugoslavia. Even writing off
these credits altogether, Yugoslavia remains major
recipient Bloc credits - about $220 million
2. Trade increasing more rapidly these countries than others
-" 3_ Susceptibility matter of
a, ~ gn policy of non-commitmm f eutralism
b.
Ambitious a
rnic eloprnent plans
c.
Difficulty
rketing imp nt export products
d.
cal differences with neighboring countries
Soviets exploit particular problems of the moment
a. India - exploited ambitious development program -
intense neutralist sentiment
b. Egypt - cotton surplus problem, desire for arms
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C. While devoting major attention most susceptible countries,
Soviets not neglected others; for example,
1. Many Latin American countries have serious economic
problems - industrial development aspirations, marketing
difficulties
a. Brazil accumulating large coffee surpluses
. Chile concerned falling copper prices
c. Uruguay and Argentina have turned to USSR for large
purchases oil - lacked foreign exchange to buy from
Free World - Brazil seriously negotiating for Soviet
oil
d. Receptivity to Bloc offers has increased as economic
problems have become more acute
2. Western Defense Pact Members
a. Many approached by USSR with offers that would
alleviate economic pressures
(1) Iceland, Turkey, Iran and Pakistan major countries
concerned
(2) All these have ambitious development programs,
requiring imports of capital goods, budgetary
difficulties, inflation, balance of payments problems
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b. Substantial minorities advocate acceptance Soviet
offers expand economic relations
3. Attempts to Expand Trade with Western Europe
a. To achieve desired rates of growth, imports of
capital goods necessary
b. Recent large orders placed West Germany, France -
industrial equipment. Feelers
li
i
ne
p
pe
on $350 million oil
c. Soviet exports aluminum, tin expanded recently
probably represent need to earn necessary additional
foreign exchange to pay for machinery imports
D. In summary, Soviet have already assumed important role in
many under ,.developed countries
1. Expansion into other countries largely matter of
receptivity
2. Because of economic problems, growing strength neutralism,
many other countries becoming increasingly susceptible
greater economic relations Bloc
3. Commerce with industrialized countries likely to expand
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