NEAR EAST/AFRICA BRANCH INTELLIGENCE SUMMARY FOR WEEK ENDING 11 MAY 1949

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A004700010052-2
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 27, 2016
• Document Release Date: July 22, 2013
• Sequence Number: 52
• Publication Date: May 11, 1949
• Content Type: REPORT

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Olan.,..t.k-iza
NEAR EAST/AFRICA BRANCH
OFFICE OF REPORTS AND ESTIMATES
CENTRAL INTELLIGENCE AGENCY
014 LIBRARY
WORKING PAPER
NOTICE: This document is a working paper, NOT
an offieral CIA issuance, and has not necessarily
been coordinated with other ORE producing compo-
nents. It represents current thinking by one
group of specialists in CIA, and is designed for
use by others engaged on similar or overlapping
studies. The opinions expressed herein may be
revised before final and official publication.
It is intended solely for the information of the
addressee and not for further dissemination.
fq
Document No.
NO CHANGE in Class. ri
:!!?DECLASSIFIED
}ss. CHANGED TO: TS S C
DDA Memo, 4 Apr 77
Auth: DA N+Thutr77rcs
Date: 1978 By ; CO
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NEAR EAST/AFRICA BRANCH
INTELLIGENCE SUMMARY
For Week Ending
11 May 1949
GREECE
it'srrE
Vol. IV No. 18
Coalition weakened: Although the new Sophoulis Government promptly
secured a 224-47 vote of confidence when Parliament reconvened on 2
May, the vote largely represented an attitude of government-as-usual on
the part of certain political leaders, and the new liberal-Populist
coalition may soon be in for internal troubles. The recent levelling of
smuggling charges against Minister without Portfolio Markezinis, although
resulting directly only in the elimination of Markezinis and two colleagues
from the present cabinet, has also revived old political tensions to a
marked degree. As a result of their role in stirring up the Markezinis
affair, the Populists (who still command the largest Parliamentary
delegation) have not only piqued the Icing and lost a certain amount of
popular support but have also aroused active criticism by their Liberal
co/leagues. The somewhat uncontrollable Minister of Labor, Sophocles
Venizelos, has already threatened to withdraw his wing of the Liberal
Party from support of the coalition, while other Liberal elements not
now represented in the government have attacked the Populists and
registered sympathy for Markezinis. The Liberal-Populist cooperation on
which the coalition is based would probably already have been lost had
It not been for the sobering presence of US aid representatives in Athens
and the Clympian disdain with which Sophovais has generally regarded
routine political disturbances.
The present state of affairs will probably encourage a
temporary alliance between Sophoulis, who feels strongly about the y,
threats to his government, and such exponents of "strong government
as General Papagos and Markezinis himself (who has won his first
court test on the charges against him). Although the Greek leaders
will move cautiously lest they jeopardize the renewal of US aid
appropriations, this unofficial grouping will probably welcome new
tests of strength at the expense of the Populists, and the Liberal
Party will probably come out strongly in favor of early elections, in
the hope of displacing the Populists as the largest single party in Parliament.
gvOlir2SS
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Since it would be difficult to hold national elections within the next few
months, however, the net result may be further political crises in which
the present Liberal-Populist coalition would be displaced by a new
combination of Liberals and exponents of strong government.
Balkan conciliation: While UN General Assembly President Evates
current attempt at conciliation will probably be unsuccessful, it may prove
to be of some propaganda value to the Greeks. The draft agreement
proposed by Evatt?which calls for establishment of border controls
and a joint Frontier Commission to settle disputes, negotiation of new
frontier conventions, and early exchange of diplomatic representatives--
avoids the substantive question of the Greek claims to Northern Epirus
(Southern Albania) which enabled the satellites to reject his similar
plan last falls Although Greece wculd probably be inclined to approve
the plan in its present form, there is no indication that the Soviet-
satellite attitude which blocked agreement last November has changed.
Thus the Greeks might be able to point to their own reasonableness
as opposed to the intransigent attitude taken by Albania.
Military developments: Guerrilla activities in northern and central
Greece belie the "peace" proposals recently bandied about by the
guerrillas. More heavy equipment, including four German tanks, has
reportedly arrived in the Vitsi area, into which reserves have been
brought from Albania so as to maintain guerrilla strength at about
6,000 despite the dispatch of some units to other areas. While sizable
Greek Army forces were engaged in the defensive holding of some 4,000
guerrillas in the I80-odd square miles of the Granamos border salient,
new anti-guerrilla operations were started on 5 May against two
guerrilla divisions in the mountains of central Greece. These operations
represent a further step in the program of restoring public order which
was begun in the 7eloponnesus last winter. Although little has yet been
reported, it is encouraging to find Greek forces able to undertake such
action so soon after the heavy guerrilla attack in the Grammos area,
particularly since the guerrillas are likely to attempt further major
offensives in the frontier zone for the purpose of counteracting the
Greek Army's progress.
TURKEY
Inflation spiral: The cost of living in Turkey has been rising at an
alarming rate during recent months. One of the major causes has been
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the use of a somewhat devious method of finding markets for Turkey's
exports in an effort to obtain sorely needed foreign exchange.
To begin with, high prices in Turkey interfere with the normal
process of selling exports to help pay for indispensable imports, both
capital and consumer goods, on which the Turkish economy is dependent.
The Turks accordingly fall back on compensation trade to keep exports
moving. This, in turn, has the inflationary effect of boosting still
further the price the Turkish consumer must pay for imported products.
The scheme works like this. A barter agreement is privately
concluded with a certain country for the sale of $10 million worth of
Turkish tobacco in exchange for automobile tires, pharmaceutical goods,
and other manufactured products also totaling $10 million. The tobacco,
however, cannot be sold at the price demanded, but the importers in the
country concerned agree to pay $7 million for the tobacco plus $3 million to
be collected from their fellow-nationals who are exporting tires, etc.
to Turkey as part of this deal. In this way, Turkey moves its exports and also
obtains needed manufactured products, but the cost must be borne by
the Darkish consumer, who has to pay greatly increased prices for the
products imported. In effect, he is paying $10 million (plus customs tiuty,
transaction and miscellaneous other taxes, insurance, freight, importer's
profit, etc.) for $7 million worth of goods. Thus the imported article
may cost the user many times what it is wcrth. The scheme, which has
long been used by Turkish traders, has recently been adopted by the
government itself.
No end is in sight to this inflationary spiral unless the government
(which makes a great show of criticizing the practice) follows its own
precept, stops this vicious type of compensation trade, and finds other
ways of selling the high-priced exports. One partial solution, as the long-
range ECA development programs go into effect, might be provided by
a strictly enforced program of nation-wide austerity. The difficulty is
that such stern peacetime measures do not generally increase a govern-
ment's popularity (outside the British Isles, at any rate). And next year
In Turkey is an election year. So it looks as though the harassed Turkish
Government will be in severe trouble over economic conditions and will
be damned for what it does and damned for what it doesn't do.
PALESTINE
Outlook at Lausanne: If, as appears likely, Israel gains admission to the
t1N during the present session of the General Assembly, the Ysraeli
position at Lausanne will be greatly strengthened and the position of
-gEtas Mr!'
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4.
the Arab delegations will be correspondingly weakened. The Israelis will
probably become more unyielding than ever on such issues as territorial
boundaries, the status of Jerusalem, and the Arab refugees. They may be
expected: (1) to insist on retaining the territory which they have conquered
as well as that allotted to them by the UN partition proposal; (2) to accept
an international regime for Jerusalem only if its sole function is to protect
the Holy Places; and (3) to reiterate their refusal to permit the return of
Arab refugees in any substantial numbers. The Arab governments,
particularly of Egypt and Jordan, appear earnestly desirous of a settlement,
but it is problematical whether they would permit their delegations to give
in to Israel on all the controversial points and return home empty-handed.
Thus, unless Israel can be argued into malting concessions in the interests of
Arab face-saving, or unless the Arabs can be persuaded to knuckle under
completely to the Israelis, relations between Israel and the Arab states will
continue to be based on armistice agreements which leave unresolved the
major issue dividing the two peoples.
MAN
? Shah's victory: Following passage by the Majlis on 4 May of a bill to create
a Senate, the Constituent Assembly on 8 May approved two constitutional
amendments proposed by the Shah. One new article authorizes the sovereign
to dissolve the Chamber of Deputies and the Senate, and another article
sets up a new procedure for revision of the constitution. Establishment of
the Senate, provided in the 1906 constitution, has long been urged by the
Shah, who is entitled to appoint half of its sixty members. Until the attempt
on his life, the Shah found little support for his plans to gain greater
power by changing the constitution Following this event, the Majlis
promptly authorized the convocation of the Constituent Assembly (it met
on 21 April) and then passed the Senate bill. The unexpected speed with which
the Constituent Assembly approved the Shan constitutional amendments
may be partly attributable to the great care exercised by the court-army
group in supervising the elections to the Assembly.
NOTED IN BRIEF
Patriarch Athenagoras has made an excellent impression upon the Turks,
who view most favorably his reiterated statement that Greeks of the
Orthodox Church who are Turkish nationals must regard themselves, first,
sr-
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as citizens of the country in which they live. The patriarch may do much
to dissipate lingering, ancient antipathy between the Ottoman Turks and
this long-established minority group.
The fiXst shipment of ECA-financed products has arrived in Turkey. It
is appropriate, in this agricultural country of primitive farming methods,
that the cargo consisted largely of farm machinery. This should help
increase the production of exportable crop surpluses, one of the principal
aims of the ECA program in Turkey.
Egyptian troops completed their withdrawal from the Bethlehem-Hebron area
on 2 May, and Arab Legion forces took up the former Egyptian positions,
thus removing one nettle in Jordan-Egyptian relations. The irregular
headquarters under which the Egyptians operated in this area is now
disbanded, and its 3,300component troops, including volunteers of
various Arab areas as well as Saudi regulars, are believed to have been
demobilized or retuned home.
C.
A new Jordanian Cabinet was formed on 7 May. The only changes are the
Inclusion of three Palestinian Arabs in the posts of Foreign Affairs,
Agriculture, and Communications. The move presages no change in
government policy. Its math purpose is undoubtedly to lay a groundwork
for the eventual absorption of Arab Palestine into AbdulIan kingdom. A
further indication of the same trend is the recent announcement that the
country would henceforth be known as Jordan.
May Day celebrations in Israeli cities give substance to reports of
increased Communist activity in the new state. Soviet flags and pictures
of Stalin marked the parades, which were well organized in the Communist
fashion., Recently Khalid Eaghdash, head of the Communist Party in
Syria, visited Haifa, and reports indicate that Communists are crossing
from Lebanon into Israel at Rumeish.
oiSjegr-Lwir
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Sert...RET
6.
The existing tensic_cskttamfflaSattl -rael is giving the Arab states a
case of the jitters. They fear that Zaim's impetuosity and Israel's
aggressiveness may plunge them all into new hostilities. Meanwhile,
Prime Minister Riad el Sohl of Lebanon has departed on a tour of the
Arab capitals in an effort to dispel Arab disunity and to find a common
position on which the Arabs can agree. Specifically, he will try to
smooth relations between Syria and the flashimite kingdoms of Iraq and
Jordan.
The Iraqis are fearful that a severe shortage of male date Rowers
will seriously affect this year's date crop. Perversely, the males
bloomed well in advance of the females; moreover, they are small in
size and are now afflicted with an unattractive fungus growth or mold.,
Basra date-growers blame this condition on freakish spring weather.
Some sources fear, however, that disease rather than irresistible
spring caused the males" precocity,
Increased Soviet Naval _activity in the Caspian Sea, including the con-
centration of naval craft at Baku, where units were loading stores and
fueling, and the holding of maneuvers, has been reported by the Iranian
consul at Baku. While such Soviet activity on the Caspian disturbs the
Iranians and might foreshadow new tactics in the Soviet campaign against
Iran, it i2 probable that the Soviet fleet is only carrying on normal
periodic exercises.
Iran is acting warily toward a Soviet ro al to exchange steel and
cement for rice and dried fruit. While oviet trade, once an important
part of Iran's foreign trade, has dwindled to almost nothing, the Iranians
suspect that the Soviet, offer may be designed to disrupt Iranian negotiation
with other customers rather than to restore normal commercial relations.
And they also fear Soviet sharp practice if a deal is made. The Iranian
Cabinet has therefore decided to hold negotiations open no more than a
month and to insist that any agreement reached be on a government to
government basis, with quantities and prices specified.
rIE T
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7.
h Shahsevata_ j_tj_L?ibes ofAzeLI_rn Azerbaijan, which play an important
role in the Iranian Army's frontier defense system, are reportedly
threatened with famine because of drought which is said to have killed
off nine-tenths of the tribesmen's transport animals and three-fourths of
their sheep.
attIFT
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