CURRENT INTELLIGENCE WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000100080001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 15, 2016
• Document Release Date: April 13, 2004
• Sequence Number: 1
• Publication Date: July 24, 1953
• Content Type: REPORT

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8361
24 July 1953
CURRENT
INTELLIGENCE
WEEKLY
DOCUMENT NO.
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CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
RET
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SUMMARY OF CONTENTS
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THE SOVIET WORLD . . . . . . . . . . . . . . . . . . . Page 4
PROBABLE OUTCOME OF TALKS BETWEEN INDIAN AND PAKISTANI
PRIME MINISTERS . . . . . . . . . . . . .. , . . , , . Page 6
The conversations to be held by the prime ministers
of India and Pakistan in Karachi between 25 and 28 July
are unlikely to solve any of the major disputes between
the two countries.
THE 1953 FOOD SUPPLY AND CROP PROSPECTS IN EASTERN
EUROPE . . . . . . . . . . . . . . . . . . . . Page 9
The serious food shortages in several of the Satel-
lite countries are being eased at least temporarily by
government measures and current harvests. It appears
that 1953 grain and vegetable production will be below
average, however, and there may be difficulty during
the year ahead in stretching food supplies.
AUSTRIAN FOREIGN MINISTER'S MANEUVERS UNDERMINE WESTERN
TREATY TACTICS . . . , . . , . . . . . . Page 11
Foreign Minister Gruber's recent maneuvers to
force progress toward a state treaty may have irrepar-
ably compromised Austria's stand on important treaty
issues and seriously complicated the West's position
for future four-power negotiations.
FRANCE APPROACHING REALISTIC DECISIONS ON INDOCHINA Page 13
Despite the pressure of important elements in
the French cabinet for negotiations leading to a
withdrawal from Indochina, no early drastic change in
France's Indochina policy is foreseen.
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IRAQ PROMOTES ARAB UNITY . . . . . . . . . . . . . . Page 15
Efforts to improve relations with its neighbors
and promote Arab cooperation are likely to strengthen
Iraq, in its rivalry with Egypt for Arab leadership and
will help make the Arab states a stronger bloc.
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THE SOVIET WORLD
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The removal of men connected with Beria continues in
the Soviet Union. In Georgia, where Beria's influence was
particularly strong, seven of his followers were castigated
as "strangers to the party and suspicious characters" whom
he had infiltrated into key positions in the MVD because
of their personal loyalty. Two of them, V. G. Dekanozov, who
became Georgian MVD minister in the April 1953 reorganization,
and S. S. Mamulov, who was made a, member of the Georgian
party buro at the same time, were stripped of their positions
and expelled from the party.
To A. Strokach, the Ukrainian MVD minister before Stalin's
death, has replaced P. Y. Meshik, who apparently was appointed
by Beria in April. In Azerbaijan, a plenum of the central
committee deposed M. D. A. Bagirov as chairman of the Council
of Ministers and as member of the party buro< It is probable
that Bagirov, who, like Beria, missed the opera on 27 June,
has also lost his position on the All-Union party presidium.
While neither Meshik nor Bagirov was linked with Beria
in the propaganda explaining their removal, both had had
Beria connections. Their comparatively quiet removal sug-
gests the possibility that instead of public show. trials in-
volving scores of persons, the purges will be limited to a
few high officials and perhaps extend over a long period of
time. Such a technique would be consonant with the other
moderate tactics of the new government.
Speculation that V. A. Malyshev had been purged ended
when he was reported on 17 July as heading the newly estab-
lished Ministry of Medium Machine Building. Although the
activities of this ministry have not yet been specified, a
ministry of the same name existed from 1939 to 1941 and
included the automobile and tractor industry, agricultural
machinery, and transport machinery.
Moscow continues to pursue its policy of reconciliation
with countries bordering the Soviet Orbit and has now moved to
resume normal diplomatic relations with Greece. The 20 July
announcement that the USSR and Israel have agreed to resume
diplomatic relations, broken off 12 February after the bombing
of the Soviet legation in Tel Aviv, is in line with Moscow's
reversal of the anti-Zionist campaign which was vigorously
pressed during the last months of Stalin's life. The new
Soviet ambassador to Belgrade arrived 21 July and last week
Hungary, following the lead of Rumania and Bulgaria, agreed
to establish a joint border commission with Yugoslavia.
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The 15 July announcement that the USSR will grant $1,000
and lend the services of Soviet experts to the UN technical
assistance program was followed two days later by a Polish
offer to contribute $75,000 to this program. This sudden re-
versal of the bloc's previous attitude reflects Moscow's cur-
rent interest in expanding its international contacts and
presenting a conciliatory front.
In recent weeks, the USSR signed agreements virtually
tripling trade with France, doubling trade with Denmark, and
greatly expanding trade with Greece and Iran. It is about to
sign a large trade agreement with Argentina, with which there
has been no Soviet trade since 1947. Moreover, the USSR is
arranging to purchase large quantities of food products out-
side of these trade agreements. 'T'hese new arrangements are
primarily the result of the Kremlin's new willingness to
import increased quantities of consumer goods in exchange for
its grain, timber, petroleum, coal, manganese, platinum, and
chrome ores.
The Kremlin's new stress on consumer goods appears to
be continuing. A 23 percent increase in the sale of consumer
goods was reported in the second quarter of 1953 over the
same period last year.
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Additional signs of conciliatory policies in the Satellites
since the announcement of Beria's ouster have been noted only
in Rumania and Hungary. However, Rakosi's speech on 11 July
retreated somewhat from the new program outlined a week earlier
by Premier Nagy, and subsequent editorials clearly suggest
that the government's former policies will be only slightly
moderated.
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PROBABLE OUTCOME OF TALKS BETWEEN INDIAN AND
PAKISTANI PRIM. MINISTERS
In the conversations to be held in Karachi between 25
and 28 July, the prime ministers of India and Pakistan will
seek.solution of a number of outstanding disputes between the
two countries.
Hopes have been raised by the moderate attitudes recently
displayed by both prime ministers in London and by the concili-
atory statements and actions of India and Pakistan during the
past few months. It is unlikely, however, that any real prog-
ress on major issues will be made at this time, though a number
of relatively unimportant matters concerning trade, travel, and
the treatment of minorities may be settled.
Kashmir is the only important political dispute to be dis-
cussed by Prime Ministers Nehru and Mohammad All. This issue
has defied solution by the United Nations for over five years.
It is now open to four possible approaches to bilateral settle-
ment.
The first of these is an over-all plebiscite, to which both
countries have long since agreed but which several UN negotia-
tors have failed to bring about, largely because of India's un-
willingness to accept any terms but its own. At present, there
appears to be no political, economic, or military pressure on
India sufficiently strong to force it to alter its stand.
A second possibility is partition along the present cease-
fire line, giving India three fourths of the state, including
the Vale, and leaving Pakistan the western quarter. To accept
this solution, Pakistan would have to relinquish its entire
legal and moral position in Kashmir and abandon the Moslem ma-
jority of the state's population to India. Mohammad Ali's new,
unproved government cannot now afford this alternative.
A third alternative is independence for all or part of
Kashmir. This would be unacceptable to both India and Pakistan
since each country would lose the territory it now holds, neither
country would trust the independent: government, both countries
probably recognize that they would inevitably compete for su-
premacy over the economically unviable state they had created,
and neither country would desire to relinquish the defense of
borders adjacent to Sinkiang and Tibet.
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The final choice is partition, with a plebiscite in the
Vale of Kashmir, the area most in dispute. To this, Pakistan
has already grudgingly agreed during earlier UN negotiations.
Nehru probably cannot accept this choice at present because
of growing uncertainty regarding his ability to control polit-
ical conditions in Kashmir and to withstand the expected re-
action from opposition elements in both Kashmir and India if
he makes a basic concession of this nature.
Serious consideration of the canal waters dispute, which in
early 1953 was alleged to be more likely than Kashmir to lead to
war, will probably be deferred to a later date pending submission
of a report by an International flank mission which has recently
made a field study of the problem. This quarrel involves Indian
diversion of waters rising in Indian territory but flowing into
Pakistani irrigation canals.
Other major items on the agenda will be mainly financial.
They deal with problems which arose in 1947 when India was
partitioned, and concern the division of the debts and assets
of British India. Like Kashmir, they have defied solution for
over five years.
Chief among these problems is Pakistan's share of the
national debt of British India. At the time of partition, it
was agreed that the new India would undertake payment of Paki-
stan's share of the debt for five years. In 1952, Pakistan
was to start repaying India in 50 annual installments which
would total about $1,000,000,000 when completed. 'akista.n budg-
eted about $17,000,000 for this purpose in fiscal year 1952-53
but failed to make payment because of the economic crisis then
facing it. Ance Pakistan is still in the tdvvc:s of a serious
financial situation, Mohammad All probably cannot afford to
promise payment at this time.
Another difficult problem is agreement on the value of
refugee property left in each country by the 10,000,000 persons
who abandoned their homes during the migrations, massacres,
and riots following partition. India maintains that Moslem
property in India is worth about $200,')00,000, and that Hindu
property left in Pakistan is worth .coLghly i,0O0,OO0,0OU. Paki-
r~ .,arn questions the validity of these figures, and it is highly un-
likely that the prime minister, .:an reach agreement on the
basic statistics involved.
A third typical disagreement concerns Reserve Bank of
India note issue held by the ;tato ;:ink of lakistt:an. In 1948,
India. agreed to. reimburse Pakistani upon return of these notes
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and did so until early 1949. At that time India ceased pay-
ment, leaving, according to Pakistan, an unpaid debt of about
$100,000,000. India insists the notes now held by Pakistan
were issued subsequent to the date of the agreement and are
a foreign exchange issue rather than one of division of assets
of the Reserve Bank as Pakistan insists. Nehru and Mohammad
All are unlikely to resolve the fundamental disagreement as
to the nature of the notes.
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In view of the advance publicity given to the forthcoming
talks, however, the two prime ministers will probably feel obli-
gated to make certain concessions to each other to avoid the
onus for a complete breakdown of the conversations. These will
almost certainly be in the fields of trade, travel and treat-
ment of minorities, subjects subsidiary to the major issues
under discussion.
The probable nature of the concessions has already been
indicated by India, which in mid.-July belatedly ratified a
passport agreement signed in February 1953 and ratified shortly
thereafter by Pakistan. India also announced on 17 July the
reopening of three land routes into West Pakistan, which it
had closed during a temporary war scare in mid-1951.
Such concessions cannot eliminate the animosity caused by
more important disputes. It therefore appears that an agree-.
ment to continue conversations in New Delhi at a later date
may be the most significant result of the meeting. .
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THE 1953 FOOD SUPPLY AND CROP PROSPECTS IN
EASTERN EUROPE
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The serious food shortages in several of the Satellite
countries are being eased at least temporarily by govern-
ment measures and current harvests. The 1953 preliminary
estimate for grains and vegetable production is larger than
1952; however, it is short of average postwar production.
Consequently, there will be dif:Piculty during the year ahead
in stretching food supplies to cover increased internal re-
quirements.and important export and stockpiling programs.
All of Eastern Europe except Bulgaria and Poland has been
suffering from a tight food supply during the past year. In
Rumania, Hungary and Albania, people in some rural areas
probably have been on near-starvation diets this spring and
summer. In most areas, such items as wheat flour, dairy pro-
ducts, sugar and edible fats and oils have been difficult to
find and high-priced when available. Recently,meat has be-
come scarce in some regions.
The Czech minister of bulk buying complained in mid-July
that a grave food situation is arising from the failure of
Slovak peasants to meet delivery quotas in meat, milk, eggs,
vegetables and fruits. Although bad weather was to blame for
the short 1952 crop, the Communists' harsh and poorly managed
agricultural programs aggravated the present shortages and
increased discontent, particularly in Rumania, Hungary and
East Germany.
During the past month, these three countries reached into
stockpiles to put larger quantities of scarce food items on
sale in the cities, in some cases at reduced prices. There
is as yet no indication whether food has been distributed to
rural areas where the shortages have been most serious. At
the same time all three governments, as well as Albania,
have relaxed their harsh treatment of independent and col-
lectivized peasants and promised further concessions in a
move designed to encourage increased agricultural production.
Because of last year's short crops the Satellite regimes
are especially anxious to get maximum agricultural produc-
tion in 1953. Preliminary analysis of weather information
available as of 1 July, however, indicates that despite some
propaganda claims, this will not be a bumper year for
Satellite agriculture, Compared to average postwar production,
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winter-sown wheat and rye are expected to fall slightly short,
and the spring-sown wheat, rye, barley and possibly corn
production appears certain to be below normal. Both un-
favorable weather and peasant apathy are responsible. Vege-
table crop yields, particularly potatoes, may be down con-
siderably in the northern Satellites.
Granted a near average production of bread grains and
vegetables, the Satellite governments would be able to alleviate
food shortages temporarily, even to the extent of supplying
increased internal demands brought about by their own relaxa-
tion measures. On the other hand,, the grain production will
not be large enough to cover annual export requirements as
well if the Orbit continues to place importance on expanding
trade with Western Europe during the year ahead, and at the
same time replenishing stockpiles. Unless meat, fats and oils
are imported, those commodities will continue to be scarce
during 1953-54.
There is a possible source of relief for the food
problems which may confront Satellite leaders during 19540
The 1952 crop in the USSR was the largest since the war, and
the 1953 harvest is expected to equal it. Soviet grain and
other foodstuffs might be lent to some of the Satellites to
be used either for internal consumption or to cover high-
priority export requirements.
This past year, the USSR supplied additional grain to
East Germany and Czechoslovakia for internal consumption, but
supplied Rumania and Hungary only with grain for use as seed
and for meeting small trade commitments to Austria. On 21
July, the East German government announced that the USSR had
promised to supply an additional $57,000,000 worth of food
in exchange for manufactured goods. The arrangement clearly
was prompted by American gift offers of food.
If Soviet assistance to Rumania and Hungary is not forth-
coming, they may have to make adjustments in one or more of
the plans to increase internal food supplies at lower prices,
to expand food exports to the West in exchange for industrial
equipment and raw materials, and to stockpile,
For the coming year, it is expected, Poland?s chronic
but not severe shortages in some foodstuffs will continue.
Bulgaria will continue to be relatively self-sufficient in
basic foodstuffs and capable of exporting' some .sur.pluso
The USSR will probably continue to make up Czechoslovakia's
and East Germany's grain deficits in exchange for manufactured
goods, and to supply grain to Albania at a loss.
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AUSTRIAN FOREIGN MINISTER'S MANEUVERS UNDERMINE WESTERN
TREATY TACTICS
Foreign Minister Gruber's recent maneuvers to force prog-
ress toward a state treaty may have irreparably compromised
Austria's stand on important treaty issues and seriously
complicated the West's position for future four-power nego-
tiations. His independent approach, evident particularly
since the failure of the West's attempt on 27 May to resume
Allied-Soviet treaty talks, has been encouraged by recent
Soviet maneuvers,
Shortly after the Allies' 12 June notes asking the Soviet
Union to submit the text of a treaty it would sign, Gruber
independently attempted to obtain a "clarification" of Soviet
views. Without consulting the Western powers, he instructed
the Austrian charge in Moscow to approach Foreign Minister
Molotov. These instructions exposed Austria's willingness,
contrary to the Western position, to make a deal for release
of Soviet-held properties.
Gruber's effort was apparently stimulated bythe 10 June
Soviet offer to relinquish the large, unfinished Ybbs-Persen-
beug hydroelectric project to Austrian control and to furnish
part of the capital for its completion. An agreement signed
on 17 June stipulates that Austrian payment for this property
be included under the controversial Article 35 of the long
draft treaty, covering the disposition of former German
assets Western officials had feared that any implication of
Austrian agreement to this article could seriously impede
their efforts to negotiate better terms.
Gruber's meeting with Indian Prime Minister Nehru on the
week end of 21 June was also undertaken without prior con-
sultation with the Western powers. Apparently without the
knowledge of his own ministry and with only the vaguest gen-
eral concurrence of Chancellor Raab, he asked Nehru to mediate
the Austrian treaty question.
Although well aware of the West's opposition to "buying" a
treaty with Austrian neutrality, Gruber admittedly discussed
this question with Nehru. Molotov subsequently told the Indian
ambassador in Moscow that the USSR would not be satisfied with
a mere declaration of Austrian neutrality prior to the signing
of a treaty.
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Gruber's activities have been strongly criticized by the
Socialists in the Vienna coalition, government and have been a
source of embarrassment to Chancellor Raab. They have had the
effect of undermining agreed Western treaty tactics, and may
have convinced the Kremlin that the Austrians themselves will
eventually press the West to accept most or all of the Soviet
terms.
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FRANCE APPROACHING REALISTIC DECISIONS ON INDOCHINA
Despite the pressure of important elements in the
cabinet for negotiations leading to a withdrawal from Indo-
china, French policy in the ensuing months will probably be
based on broad political concessions to the Associated States,
coupled with efforts to implement General Navarre's plan for
stepped-up military operations.
Deputy Premier Reynaud's plan for broad concessions in
the spirit of the 3 July notes to the Associated States has
received the support of Premier Laniel and other government
leaders, as well as of French authorities in Indochina.
Negotiations with the Viet Minh are unfeasible as long as
the French military position is too weak to give France
bargaining power or the Communists reason to want a truce.
Although both Reynaud and Defense Minister Pleven oppose
Navarre?s request for two new French divisions, political
agitation over sending conscripts -to an active theater probably
can be avoided by drawing on regular army personnel now stationed
outside Metropolitan France. In North Africa there are three
times the forces the French military considers necessary for
internal security, and a considerable part of Navarre?s re-
quirements could be drawn from units there which are now ear-
marked for NATO. Although this would further hamper the French
training program and delay NATO plans, the desire to keep ahead
of Germany?s prospective military build-up now appears less,
pressing than the desire to solve the problem of Indochina.
Reynaud, however, has been reluctant to ask for any greater
exertion on the part of France, insisting that the Associated
States accept more responsibility. He considers Navarre?s
military plan "unrealistic" because it calls for additional
French troops to supplement an increased effort by the native
states, particularly Vietnam.
Continued popular and parliamentary support for the war
depends on maintenance of the French Union concept. The
French people, generally unaware that the functionaries in
Indochina have lagged in carrying out concessions accepted
by Paris, are bewildered by the recent demands of the Associ-
ated States for complete independence. These demands, added
to the financial strain on the French economy, have intensified
pressure for a solution, and there may be a formal demand-in
the assembly this fall for early withdrawal.
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In any event, the demand for negotiations with Ho Chi
Minh or the Chinese Communists will probably be appreciably
greater following a truce in Korea. The fall of the Laniel
government, increasing the chances of a shift to a left-
center government, would strengthen the influence of those
willing to withdraw from Indochina at any cost. Additional
spectacular military successes like the Lang Son raid would
tend temporarily to check this trend.
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IRAQ PROMOTES ARAB UNITY
Iraq is currently trying to improve relations with Saudi
Arabia, Jordan and Syria and to promote closer Arab cooperation
on military, political, economic and social problems. These
efforts are likely to strengthen Iraq in its rivalry with Egypt
for area leadership and, by advancing common aspirations, prom-
ise to make the Arab states a stronger bloc.
In the triangular pattern of Arab politics, Egypt is the
recognized leader and Iraq an untiring contender; the balance
of power is held by Saudi Arabia, which traditionally opposes
Iraqi expansionism. The other Arab states group themselves on
the basis of the personalities in power and current maneuvers
for Arab unification. Syria and Jordan are now tied to Saudi
Arabia; Lebanon, seeking friendship with all, enjoys cordial
relations with Iraq.
Iraq's isolation, particularly marked since mid-1951,
arose from opposition to its plans for the re-establishment.
of an "Arab nation," specifically the unification of all or
part of the Fertile Crescent--Syria, Lebanon, Jordan, Arab
Palestine and Iraq. Prior to King Faisal II's accession to
the Iraqi throne on 2 May 1953, there were strong suspicions
that Iraq was planning federation with Jordan, the absorption
of Kuwait, and the subversion of the Syrian government. None
of these events materialized, probably because Iraq recognized
the strength of Arab and Western opposition. Instead it turned
its efforts to making friends of its neighbors.
Iraq and Jordan apparently initiated an era of good feel-
ing on 2 May when their 18-year old kings, Faisal in Iraq
and Hussain in Jordan, assumed royal powers. In June these
kings and their advisers held detailed discussions in Baghdad
on Iraqi-Jordanian economic collaboration and reportedly
reached agreement on specific projects.
Iraq, having concluded unprecedented discussions with
Saudi Arabia on oil prices, is also reported ready to consult
the Saudis on joint financing of Jordanian developments. As
a further sign of an Iraqi-Saudi Arabian rapprochement, the
former regent of Iraq has allegedly accepted an invitation
to visit Saudi Arabia.
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Iraqi opposition to Syrian dictator Shishakli, who form-
ally seized power in 1951 to forestall a Syrian-Iraqi union,
was officially ended on 3 December 1952, when an Iraqi dele-
gation attended the celebration of Shishakli's first year in
power. Iraq has since publicly made several conciliatory ges-
tures, and official relations have improved, but privately
many Iraqi leaders continue to dislike the Shishakli regime.
Because of long-standing Saudi suspicions, Syrian coldness,
and personal ill-will between top Jordanians and Iraqis, this
improvement in Iraq's foreign relations is by no means complete.
Nevertheless, the beginning of the change receives added sig-
nificance from the fact that it occurs at a time when Egypt's
popularity is diminished because of its breach of the Arab-
proposed boycott of West Germany, its abolition of the monarchy,
its suspected willingness to make a separate peace with Israel,
and the delay in area defense planning for which Egypt is blamed.
The likelihood that Iraq will be successful in its efforts
is increased by the fact that it is promoting schemes leading
to cooperation without the violation of sovereignty. Success
would give Iraq a stronger position in a more cohesive Fertile
Crescent, which in turn would be strengthened in its relations
with other parts of the Arab world.
The Arab area is affected by the memory of medieval great-
ness, but is frustrated b y its present weaknesses and is re-
sentful of the existence. of Israel, and Western interference.
It is laboriously seeking closer unity and strength through
multitudinous schemes for such objectives as an Arab army and
development bank, a pan-Arab highway and Arab pharmaceutical
standards. Eventually these efforts may bear fruit, develop-
ing in the Arab states a new internal solidarity.
This solidarity--on which Iraq is very vocal--is important
for Israel, which is fearful of any increase in Arab strength.
It is particularly significant for the West, whose strategic
and economic interests in the Middle East depend largely on
Arab cooperation.
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