NEAR EAST/AFRICA BRANCH INTELLIGENCE SUMMARY FOR WEEK ENDING 26 OCTOBER 1949

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A004700010076-6
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 27, 2016
• Document Release Date: July 22, 2013
• Sequence Number: 76
• Publication Date: October 26, 1949
• Content Type: REPORT

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NEAR EAST/AFRICA DIVISION
INTELLIGENCE SUMMARY
For Week Ending
26 October 1949
TABLE OF CONTENTS
General
SECRET
Vol. IV No. 42
Opposition to Syrian-Iraqi union
Plan unlikely to be carried out at this time
creece
Papagos and the premiership 1
Commander in Chief may be prompted by friend to seek office
Tito and Salonika 2
Port assuming significance as potential trade outlet
Turkey
Air Force training program in jeopardy 3
Pilots lack confidence in commanders and maintenance
Jordan
Abdullah and Arab Palestine 3
Jordan expected to proclaim annexation of Arab areas
Afghanistan
Difficult relations with Pakistan 3
Afghans may turn to USSR for economic relief
Union of South Africa
Devaluation only a temporary palliative 4
Basic economic problems remain unsolved
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Noted in Brief
Turkey, Arab League, Arab States-Israel, Saudi Arabia-Syria,
Iraq-Israel, Iran, Italian Colonies, Mozambique 6
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NEAR EAST/AFRICA INTELLIGENCE SUMMARY
GENERAL
Opposition to Syrian-Iraqi union: Increasing opposition from various
quarters to union between Syria and Iraq makes it unlikely that the
scheme will be adopted at this time. Within Syria, the Ikhwan al-
Muslimin (the Moslem Brothers), the Arab Resurrection Party, the
Communists, and the Association of Ulemas (religious leaders) look
upon the proposed union as a threat to Syrian sovereignty. Certain
Syrian Army officers, moreover, have taken it upon themselves to
',dorm the interim government that it does not have the legal right ?
make commitments now. Strong objection is also felt to making Sria
a monarchy or to extending to Syria the Anglo-Iraqi treaty of 1930, and
there even appears to be a serious split within the cabinet on the subject.
If the plan does not founder on the opposition within Syria itself, it still
must contend with the formidable objections of other Arab countries.
Jordan. Saudi Arabia, Egypt, and Lebanon view the proposal as a
threat to their respective ambitions or interests, and all of these states
will attempt to undermine the plan. It thus appears that divisive tendencies
within the Arab world will again prove stronger than centripetal forces and
will necessitate postponement of this step toward unity--even the union of
only two states.
Meanwhile, Shukri Quwatli, former President of Syria, and Jamil
Mardam, Prime Minister, both ousted from office by Zaim, are in Egypt.
Both men were long connected with the Syrian Republic and still command
sizable support in dissident political and even military circles. As
Syrian opposition to union with Iraq grows, these two figures may possibly
attempt to take advantage of the unstable political atmosphere to assume
an active role once more in Syrian affairs.
GREECE
Papagos and the premiership: Greek political circles have recently be-
come increasingly agitated over the possibility that the almost unprece-
dented prestige which Commander in Chief Papagos now enjoys may
serve as a springboard for the ambitions of his friend and political mentor,
Spyros Markezinis, who aspires to a dominant political role. Since he
was ousted from the cabinet last April, Markezinis has taken pains to
strengthen his ties with influential segments of the center and moderate
right and to maintain his close personal relationship with Papagos and
the King. His recent suggestion that Papagos be drafted to head the non-
political "service" government traditionally established prior to national
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2.
elections, and that the constitutional tenure of this government be extended
from forty-five days to nine months, evidently represents his bid for
political power. Although Papagos himself is a man of very high
principles and apparently without political ambitions, his strong sense
of discipline and his tendency to follow Markezinis' political advice
might lead him not only to accept the responsibility of the premiership
but also to join in efforts to strengthen the executive arm at the expense
of the parliament.
The selecticn of Papagos, now elevated to the exalted rank of
marshal, will be difficult to block, in view of the great popularity
his military success has given him. However, a personal feud between
Markezinis and Populist leader Tsaldaris, as well as a general fear in
political circles of Markezinis' pronounced ability and driving ambition,
will prompt some opposition to any move to draft Papagos. The result
may be the selection of a less popular but also less controversial figure,
such as the present non-political Premier, Diomedes. The question of a
service government will probably assume increasing importance during
the winter, inasmuch as the elections are likely to be scheduled for early next
spring.
Tito and Salonika: Restoration of Salonika as a trade outlet for Yugoslavia
Is likely to be an important by-product of the limited rapprochement with
Greece toward which Tito has been inching. Yugoslavia's rail connection
with Salonika, which might be of major strategic importance in the event
of war, lacks only a single bridge (on the Yugoslav side of the border) to
be restored to operation, and the Greeks are prepared to facilitate any
efforts to reopen the Yugoslav Free Zone in Salonika. Before World War II,
the free zone was of only limited importance to Yugoslavia, reportedly
accounting for less than 200,000 tons of exports a year. With Yugoslavia's
Danubian trade outlets now cut cff and its trade reoriented toward the
West, however, Tito will doubtless find it expedient, sooner or later, to
make use of Salonika?and, incidentally, to permit resumption of trans-
European rail service to Greece. Such a move would not only provide
direct economic benefits but would also give the Yugoslav people further
reassurance that the Soviet blockade has not succeeded in isolating them.
On the Greek side, restoration of rail traffic with the rest of the Continent
might stimulate exports, particularly after the last 30-mile gap in the
Salonika-Athens line has been repaired.
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3.
TURKEY
Air Force training program in jeopardy: Turkish Air Force pilots are
grounding themselves in such numbers as to cause considerable alarm to
theUS Air Mission. Serious deficiencies in aircraft maintenance appear
to be the principal cause, together with a lack of confidence in unit
commanders. Apart from taking the obvious step of improving both
maintenance and leadership, the Turkish Air Force could probably im-
prove morale by: (1) increasing flying allowances for pilots; and (2)
providing adequate pensions for dependents of Air Force personnel killed
in accidents. If the present situation is allowed to continue, the success
of the US Air Mission in Turkey might be very seriously jeopardized.
JORDAN
Abdullah and Arab Palestine: The formal incorporation of Arab Palestine
into Jordan will probably be proclaimed during the next few months. King
Abdullah's natural keenness for formal annexation has been whetted by
rumors of Syrian-Iraqi union, and he recently made a good-will tour among
his subjects-to-be. For all practical administrative purposes, Arab
Palestine is already as much a part of Jordan as the areas of Palestine
occupied by the Israelis are a part of Israel. Until annexation becomes
official, however, various anti -Hashimite groups in Palestine will continue
to agitate against the scheme although their inability to work together and
their weakness before Jordan's Arab Legion make local opposition a
negligible factor. The other Arab states now appear resigned to annexa-
tion. Israel, however, will undoubtedly protest vociferously but probably
will not resort to military action to prevent it. The UK is believed to
approve the plan and will probably include the new territory in its mili-
tary guarantee to Jordan. Annexation under such circumstances would
enhance Abdullah's prestige and would greatly increase the security of
the Palestinian Arabs.
AFGHANISTAN
Difficult relations with Pakistan: The Government of Pakistan is
adopting a hard attitude toward Afghanistan, having concluded that any
conciliatory or cooperative gestures are ineffective and are viewed as
evidence of weakness by the Afghans. Pakistan's recent curtailment of
freight rebates on petroleum products bound for Afghanistan may be
only the first manifestation of this attitude. The GOP apparently intends
to fulfill strictly all treaty obligations with regard to the passage of goods
through Pakistan and otherwise to maintain a severely correct position
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4.
in its relations with Afghanistan. It is believed, however, that the GOP
also intends to refuse any favors the Afghan Government may now ask
of it and to discontinue any concessions not legally required as in the
case of transportation rebates. This attitude is reportedly based on the
conviction that only thus can the Afghan Government be made to realize
the desirability of moderation and collaboralion with respect to the
tribal dispute and other matters of disagreement.
Afghanistan's land-locked position, its dependence on Pakistan
fcr normal trade channels, and the current Afghan financial crisis are
such that Pakistan may be able to impose economic pressures of a sort
to force Afghanistan to adopt a more conciliatory attitude. A recent offer
by the Afghan Foreign Minister of "unconditional negotiation" of Afghan-
Pakistan disagreements may be evidence that abolition of the railway con-
cession rates has already had a sobering effect upon the Afghans. However,
as the Afghans have failed to define their meaning of "unconditional" and
as the GOP, though willing to negotiate on matters pertaining to the economic
development of the tribal area and on matters of internal tribal administra-
tion, will not negotiate on the status of the tribal area, the offer may come
to nothing. Furthermore, the danger exists that an intensification of
economic pressures, if due in part to actions by Pakistan, may result in
further intransigence toward Pakistan on the Afghans' part, with increased
retaliation by the Pakistanis resulting in a serious curtailment of
Afghanistan's outlets through Pakistan.
The Indian subcontinent has long been what might be termed the
front door to Afghanistan, and thus Afghanistan's back has been to Russia.
If the Afghans feel that the front door is closed, they may turn more and
more toward the USSR for the sake of economic relief, accepting as a
calculated risk the possibility of drastic political developments resulting
therefrom. In the meantime, a much-needed loan from the Export-Import
Bank remains unauthorized, despite the importance of that loan to Afghan-
US relations.
UNION OF SOUTH AFRICA
DevalmatioLolv a temporary palliative: Currency devaluation has not
alleviated South Africa's basic economic problems, which stem from a
chronic trade deficit, although it has improved the financial position of
the Union within the sterling area. In 1948 the fixed world price of gold,
the major South African export, together with the increased quantity and
cost of imports resulted in a trade deficit of one-half of a billion dollars.
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5.
In addition, the normal heavy inflow of foreign capital was sharply
reduced. To meet this unusual situation, the Reserve Bank was obliged
to ship large quantities of its monetary gold to the US and to reduce the
legal ratio of gold to the Union currency. In July 1949 the Malan Govern-
ment lightened import restrictions with the primary aim of curtailing
the deficit with the dollar area; the import of non-essential consumer
goods was prohibited. and the import value of raw materials and neces-
sary capital equipment was limited to about 50% of 1948 imports. The
rush of buying to beat the import ban resulted in a sterling area deficit
also, and by August the over-all trade deficit approached one-third of a
billion dollars. The July import restrictions have not eliminated the trade
deficit, and further controls, especially in relation to the dollar area, have
been announced for 1950. Increased production of base minerals and
development of secondary industries, which could improve the foreign
exchange position, will in each case be checked by the need for labor, raw
materials, and machinery.
Within the sterling area, however, currency devaluation places
the Union temporarily in a stronger position by virtue of its gold pro-
duction. Although the cost of sterling area goods will rise because of
internal inflation and increased raw material costs, the price of dollar
area goods will rise to a greater extent. The result should tend to
strengthen the import control program and force trade out of the dollar
into the sterling area. The Union would, therefore; be able to sell more
of its gold in the UK for British goods, provided that the UK production
could satisfy Union needs. Gold mining, the keystone of the economy, will
therefore become more profitable in terms of sterling. Approximately
55% of the increased gold-mining profits will be absorbed by the government
through taxation. This windfall, added to the recent foreign loans, would
enable the government to continue for the time being its costly internal
development projects, and should a substantial capital influx develop,
restrictions on raw material imports might be somewhat relaxed to aid
local secondary industry.
Generally, however, a more basic readjustment than import
controls, capital influx, or devaluation is needed before the economic
situation can be permanently corrected. Unless the shortage of labor
and the high cost of production are eased by a different approach to the
native problem, and unless the nation is willing to lower its standard of
living to match its resources and production ability, there is little hope
of achieving an economy not supported by imports of capital from abroad.
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6.
NOTED IN BRIEF
An analysis of last week's electoral victorj uvn by the Turkish government party
is now possible, although on the somewhat shaky basis of figures issued
by the government-operated press agency. These figures tend to confirm
the impression that, had the opposition participated in these by-elections,
it would have won easily in the more urbanized provinces but would have
lost to the government party elsewhere. On balance, the government
appears still to command a sizable majority although it is highly probable
that, in fair elections contested by the opposition, such an opposition party
as the Democratic would be given much greater support than statistics
seem to indicate.
More detailed reports on the recent Turkish maneuvers indicate that
officers who have received courses of training under supervision of the
US Mission show greater capabilities than those who have not.
The possibility of wholesale indictment of opposition Nation Party leaders
in Turkey is now under consideration by the government. Under the
flexible Turkish laws concerned with criticism of the government,
accusations of insulting the "moral personality" of both government and
president could easily be followed by sentences of imprisonment and fine.
Leaders of the major opposition group, the Democrats, must be wonder-
ing gleefully if the government will dare to commit this political blunder,
which would certainly enhance the electoral prospects of both opposition
parties in future elections.
The Arab Lea.zue Political Committee finally convened in Cairo on
17 October after several false starts during the summer. Although the
delegations have attempted to present an outward appearance of peace
and light to the world, strong tension has arisen between the Syrian-Iraqi
bloc and Egypt over: (1) the proposed union of Syria and Iraq; and (2)
Iraqi's suggestion that the Egyptian head of the Arab League, Azzam
Pasha, be replaced. A bitter discussion of these two issues could split
the already-shaky structure of the League, but neither side apparently
has either the backing or the inclination to force a majority decision on
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7.
these main points of disagreement. As a result, the current session
will probably follow the precedent established by previous meetings- -no
decisive action on any major issue.
The feasibility of holding direct Arab-Israeli peace talks through the
medium of the Mixed Armistice Commission is under consideration by
General Riley, who is concerned over the impermanence of current
armistice terms. He believes that de facto agreements on a wide range
of relatively minor subjects might well lead to permanent settlement of
the basic issues. Moreover, there are indications that Egypt and Jordan
may be giving ear to Israel's overtures for direct negotiations. Israel's
adamant stand on such matters as refugees and territorial boundaries,
however, suggests that Jordan and Egypt would gain little from participat-
ing in Israeli-sponsored direct negotiations.
Saudi Arabia's proposed S6 million loan to Syria, for the purpose of
cementing relations with "the blood brother country," will not be con-
cluded. The Saudi Government apparently believes charity begins at
home and has dipped into the allocated funds to the extent of $5 million
in order to meet its own obligations. By improving its immediate
financial position to the detriment of Syria's,Saudi Arabia has as usual
spent in advance an important source of income. The $6 million,
borrowed from the Banque de L'Indo-Chine, was guaranteed by an
off-shore oil rental of $2 million per year. This source of income will
now be lost to Saudi Arabia until the end of 1951.
Iraqi Jews have been discriminated against for centuries, but there
appears to be little evidence to support the Israeli claim that some
2,000 Jews in Iraq have recently been arrested or placed in concentra-
tion camps. During the Palestine troubles, the Iraqi Government has
dealt harshly with certain Jewish individuals accused of Communist or
Zionist activity, but in general it has exerted itself to protect Iraq's Jews
from mob action. Israel's allegations, which may be officially submitted
to the UN in the near future, are probably motivated by a desire to becloud
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8.
the Arab refugee issue, which will come before the UN when the
Economic Survey Mission submits a preliminary report about 10 November.
Elections for the new (XVI) Mails have been marked by some scattered
disorders and demonstrations against alleged government interference.
A contest between Sunni and Shiah factions erupted into violence in the
south, and in Tehran a small oppositionist group conducted a determined
but unsuccessful protest against "rigged elections" before the Shah.
Nevertheless, reports indicate that the government is interfering lets
in the elections than ever before. Indeed, the very fact that demonstrations
are being permitted suggests a certain willingness on the part of the
governrn nt to accept "free" elections and their trappings.
The first shipmentnas arrived in the northern border
area at Julia. on 20 October, according to the Iranian press. As additional
shipments are received, the preservation of internal security in Azerbaijan,
which was beginning to be threatened in the frontier areas by acute food
shortages, should become less of a problem for the Iranian authorities.
The UN political subcommittee's plan for Libya, providing for ultimate
independence and membership in the UN after a period of administration
under a UN high commissioner assisted by a multi-nation advisory council,
pleases the Arabs and appeases the Italians. British authorities in
Tripolitania, however, have not taken kindly to the plan, charging that it
would make for cumbersome administration and expressing doubt as to
Libya's readiness for independence in 1952, the date specified in the plan.
Nevertheless, this scheme appears to be the only compromise solution
assuring continuance of UK-US strategic bases in Libya which is capable
of winning a two-thirds vote in the General Assembly.
The Cvrenaicans are having trouble establishing their new government
because Premier-designate Fathi Keichia is missing and cannot be found.
It is rumored that Kekhia, a successful attorney in Alexandria, and his
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9.
wife, who enjoys Alexandria's social activity, are not enthusiastic
about the somewhat dubious rewards of political service in Cyrenaica.
faxgricsE ed conditions tw port of Beira in Mozambique, at present
the most important outlet for Southern Rhodesian chrome required by
the US stockpiling program, may be alleviated somewhat as mechanical
improvements projected by the Portuguese Government get under way.
Increased imports into the Ethodesias together with wartime deteriora-
tion of facilities at Beira have limited the annual export of chrome.
Although Southern Rhodesia normally supplies only about 10% (50,000
tons) of US chrome imports, US firms have contracted for 300,000 tons
of the backlog which cannot be moved from the mines because of the
Beira bottleneck. The short-term improvements, which include mechanical
ore-handling facilities, should be completed in eighteen months and will
increase port and railway facilities to the extent necessary to meet
minimum US strategic materials requirements from this area.
t