CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000700070001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 38
• Document Creation Date: December 16, 2016
• Document Release Date: January 13, 2005
• Sequence Number: 1
• Publication Date: December 29, 1955
• Content Type: SUMMARY

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SEQi' ET
CONIFIDENTM
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO.
OCI NO. 9431/55
29 December 1955
DOCUMENT NO.
NO CHANGE IN CLASS. [
1 i DECLASSIFIED
CLASS. CHANGED TO: TS S
NEXT REVIEW DATE:
OFFICE OF CURRENT INTELLIGENCE
WMIDIENTIAL
A
PATE ? I` 1+EVIEWER:
CENTRAL INTELLIGENCE AGENCY
State Department review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
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THE 1956 SOVIET BUDGET . . . . . . . . . . . . . . . . . Page 1
Preliminary analysis of the 1956 Soviet budget gives
no reason to anticipate substantial economic and defense
policy changes in the coming year. Stated defense ex-
penditures are to decline from 112.1 billion rubles planned
for 1955 to 102.5 billion for 1956. There are several
reasons for believing, however, that military end-item
procurement will not be reduced in proportion to this change
and could even increase slightly in real terms. The high
level of investment, the predominance of heavy over light
industry, and the attack on agricultural stagnation con-
?tinue as before.
FRENCH ELECTION . . . . . . . . . . . . . . . . . . . . Page 3
Latest official French estimates on the outcome of
the 2 January election predict that the Communists may win
130 seats. With'election of 30 Algerian deputies in-
definitely postponed, 596 seats are at stake. The Commu-
nists had 98 seats in the assembly just dissolved. Recent
campaigning by both Premier Faure and Mendes-France has
concentrated on Algeria's relationship to metropolitan
AFTERMATH OF JORDAN RIOTS . . . . . . . . . . . . . . . . . Page
The disorders in Jordan which blocked its adherence
to the Baghdad pact have subsided, but the aftermath of
the rioting poses serious problems for pro-Western Jordanian
leaders. The extent of opposition to Britain and to the
pact will probably result in an antipact majority if the
forthcoming parliamentary elections are free. An attempt to
ensure a victory of pro-Western candidates would lead to new
disorders, probably more serious than those which accompanied
the last election in October 1954, and might permanently
discredit Jordan's present ruling group in the eyes of the
25X1 people.
ARAB-ISRAELI SITUATION . . . . . . . . . . . . . . . . . Page
Minor clashes continued last week along the Arab-
25X1 Israeli dens, mostly in the Gaza strip area. -1131
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continues to oppose the cabinet's policies.
INDONESIA . . . . . . . . . . . . . . . . . . . . . . . . Page 5
The air force crisis has ceased temporarily to be a threat
to the Indonesian cabinet, but disunity on current Dutch-Indonesian
talks may still bring about the government's collapse before the
newly elected parliament convenes next spring. President Sukarno
Greek Elections and the Cyprus Issue: The Greek government is not
likely to take further steps to solve the Cyprus issue or to
normalize relations with Turkey until after Greek national
elections in a few months. Greek foreign policy will probably
be the dominant election issue. Prime Minister Karamanlis
would face almost certain defeat if he appeared willing to
compromise with Britain on Cyprus or to adopt a conciliatory
approach to Turkey on the Istanbul and Izmir riots.
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North Africa: Algerian Moslems who had effectively paralyzed
Algerian government operations by threats to resign from
office: have now decided to retain their government positions
in order to use them in their resistance campaign against
France. They will send a delegation to Paris after the French
elections to confer with the new government.
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. . ,Page 2
New Czech Radar Height Finder: A new height-finder radar, believed
to be the most effective now available to the Communist bloc,
has recently been observed in Czechoslovakia, It employs
an advanced type of electrical scanning. When used in con-
junction with an adequate air search radar, it should perform
in a manner comparable to the majority of American radars
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New Soviet Amphibious Equipment in Germany: The existence of a
new soviet amphibious tan as been confirmed in East Germany.
The development of this tank and other new equipment contrio-
utes toward improving the flexibility and mobility of Soviet
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. . . . . . . . . . . . . . Page 3
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 December 1955
Malaya: The two-day conference between representatives of
the Malayan and Singapore governments and the Malayan
Communist Party which ended on 29 December made
little, if any, progress toward ending hostilities.
Any further talks. must be postponed for at least a
month since Malayan chief minister Rahman leaves for
London on 2 January for discussions on self-govern-
ment. Rahman is expected to cite his firm stand
against the Communists in demanding greater con-
cessions from the British and, in turn, to use any
gains toward self-government as weapons against the
25X1 Communist Party. . . . . . . . . . Page 4
Laos: Voting in the 25 December Laotian parliamentary
elections was heavy despite an intensive Pathet Lao
propaganda campaign calling for a boycott. Present
returns indicate that the two parties which now form
the coalition government will win about 28 of the 39
assembly seats and that Katay will remain as prime
minister. Skirmishing continues in the northern.
provinces. Government leaders intimate that they
have no immediate plans for a full-scale military
25X1 campaign. I . . . . . . . . . . . . . Page 5
Thailand: Tension in Bangkok, which earlier in December
neatened to erupt in armed strife, appears to
have lessened somewhat, but serious friction within
the ruling clique remains unresolved.
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Nehru Publicly Criticizes Communist Line: Three recent
public sTatemenrs made U`y PrimT a Minister Nehru re-
flect his continuing pique over the behavior of
Bulganin and Khrushchev during their visit and will
help to minimize the effects of the visit on the
Indian people.
. Page 6
. . . . . . . . . . . Page 7
Second Afro-Asian Conference Unlikely Before End of 1956:
secondAfro-As an con erence- is unlikely be ogre
late 1956 or early 1957 because of the reluctance
of the Colombo powers--Burma, Ceylon, India, Indonesia,
and Pakistan--to call such a meeting. Page 7
Turkey: After several weeks in office, the new Turkish
government of Prime Minister Menderes is taking
some measures toward solving the country's economic
problems. Turkey's financial difficulties are
acute, however, and the measures Menderes is willing
to support may not go far enough. . . Page 8
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Afghan-Soviet Relations: Afghan prime minister Daud has
provided ur ear evidence that he expects to play the
USSR against the West as long as the West is willing
to keep a door open to him. He is trying to mitigate
the effects of the recent Afghan-Soviet credit agree-
ment by facilitating the operations of the American
Morrison-Knudsen construction company.
with his regime.
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Argentina: Provisional President Aramburu remains in
control of the Argentine government, but minor dis-
orders and extensive arrests of civilian and mili-
tary personnel indicate continuing disaffection
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ruling Colorado Party will continue.
of 21 December. The political crisis within the
. . . . . . . . . . Page 13
Paraguay: Paraguayan president Stroessner has at least
temporarily strengthened his control over the gov-
ernment by removing the principal army and police
officials involved in the brief military rebellion
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Political Crisis in Peru: Peru's present political
crisis-appears f-0-Have resulted more from police
mishandling of a riot in Arequipa, traditional
"cradle of revolutions," than from serious general
discontent or unrest. Popular unrest is deep, how-
ever, and with public confidence in the possibility
of a free electoral campaign decreasing, more
serious trouble may flare up. . . . . Page a~ 25X1
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IRAQ'S POSITION IN THE BAGHDAD PACT . . . . . . . . . . Page 1
Britain's failure to bring Jordan into the Baghdad
pact focuses attention on Iraq as the only Arab state in
the "northern tier." Iraq's membership in the pact has
not brought the benefits for which the Iraqis hoped when
they joined. This, plus a new trend of Iraqi opinion
against any sort of commitment with East or West, may
eventually undermine the whole concept of "northern tier"
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SCANDINAVIAN REACTIONS TO RECENT SOVIET POLICY . . . . . . Page 3
The USSR's conciliatory gestures toward Scandinavia
over the past two years, particularly the decision this
fall to return Porkkala to Finland, have made a deep im-
pression throughout.the area. Government leaders and the
press remain skeptical about Soviet intentions, but there
probably will be increased pressure in Sweden, Norway and
Denmark for a reconsideration of defense requirements,
and in Iceland for evacuation of the American-manned air
base at Keflavik.
THE SOVIET AUTOMOTIVE INDUSTRY . . . . . . . . . . . . . . Page 7
The ambitious targets of the Soviet automotive in-
dustry for 1950 will not have been reached by the end of
1955, either in terms of production or available plant
capacity. With production far short of earlier expecta-
tions, the industry has been able to produce trucks in
sufficient quantities to satisfy most military and some
other major requirements, but has failed to satisfy others,
notably agricultural. During the period of the forth-
coming Sixth Five-Year Plan, the program of heavy invest-
ment in the industry, begun in 1946 and interrupted in
1949, should commence again with the introduction of
newer-model vehicles.
TRADE CONTROLS AND COMMUNIST CHINA'S ECONOMY . . . . . . . Page 10
A modest increase in Peiping's trade with free world
countries would result if these countries would relax con-
trols on trade with Communist China to the level of those
applied to trade with European bloc countries. The prog-
ress of Chinese Communist industrial and military devel-
opment,; however, which has progressed substantially with
Soviet bloc support, would not be significantly speeded
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Preliminary analysis of
the 1956 Soviet budget gives no
reason to anticipate substan-
tial economic and defense pol-
icy changes in the coming year.
The decline in stated defense
expenditures appears to repre-
sent no significant change in
planned procurement of mili-
tary end-items. The high level
of investment, the predominance
of heavy over light industry,
and the attack on agricultural
stagnation continue as before..
Analysis of the budget is
complicated by the introduction
of lower wholesale prices in
mid-1955, making comparison of
1955 and 1956 figures extremely
TABLE I
EXPENDITURES
REVENUES
All olh.r.
35.6
All ath.r,
102.1
D.1 .n,.
108.6
Slat. Borrowing
A2.8 *
Dir.,1 T..
on Population
47.4
D.doclian,
Irom N.M.
58.5
All others
40.5
Pd,, R.do,lion,
43.2
All 0th.,,
105,5
Pri.. Redaction,
43.2
Stal.. Borr wing
28.4* J
Dir.cl Ta.
0n Papolotion
46.1
Deduction,
from Pralil,
complex. Effects of the re-
duction, which probably aver-
aged between 5 and 15 percent,
vary from sector to sector in
the economy. The absence of
any reference this year to
entries of previous years which
are believed to be fictitiou5
creates additional problems..
Stated defense expenditures
are to decline from 112.1 bil-
lion rubles planned for 1955 to
102.5 billion for 1956. There
are several reasons for believ-
ing, however, that military end-
item procurement will not be
reduced in proportion to this
change and could even increase
slightly in real terms.
27.3
Ag. P6,1 loci on6e
Pri,. R.
15.7
Adm' 13,9
Defense
100.3
All others
125.5
State Borrowing
42.5
Direct T..
n P0pul01ian
48.4
Deduction,
Irom Profit,
117.5
T.ran,,, To.
233.2
5.fen,.
102.5
Slate Borrowing
37.2
Direct Tax
0n Population
50.3
D.doctlon,
Pram Prafu,
107.3
1956 (PLAN)
51219 4
All 01h.,,
133.3
Ag. Price Incr on,
23.3
var.
15.J tli
State Borrowing
27.4 *
DireCt Ta.
on Papolotion
45.7
D.ducli0n,
from Profit,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
ANNOUNCED SOVIET DEFENSE EXPENDITURES, 1938-1956
(in billions of current rubles)
TAB
LE II
137.
128.
25
2
112.1
/08.
4
--
F~t
~0
~*l
2.5
e
0a.
39
??
0.9
6.8
._
TU
L
39.
??
??
? P
AN
3.2
lower than those
achieved in recent
years, but a similarly
cautious plan for
1955 has been consid-
erably overfulfilled.
100 The total allo-
cation to agriculture
75 will fall from 65.0
billion rubles planned
50 for 1955 to 55.6 bil-
'56
51219 40
lion for 1956. The
reason for this de-
cline is unknown,
since the major compo-
nents of this allo-
cation--funds for
(1) The defense allocation
for 1955 may not have been
fully spent. This happened in
1951-53.
(2) Demobilization of
6/a0,000 men, if it has been
carried out as claimed, could
account for about half of the
9.6 billion reduction.
(3) The 1955 wholesale
price cuts in industry have in-
creased the purchasing power of
funds allocated to military
procurement.
(4) Unit costs of some
military items, particularly
aircraft, will decline if, as
anticipated, the volume of
series production rises.
Heavy industry retains its
predominant role in 1956, re-
ceiving 86 percent of total
allocations to industry, and 93
percent of investment alloca-
tions to industry. Minister of
Finance Zverev also stated that
output of heavy industry will
continue to rise more rapidly
than that of light industry--
11 percent as opposed to 9.6.
These growth rates are somewhat
Machine Tractor Stations and
State farms--remain approx-
imately at the 1955 level.
Similarly, investment in agri-
culture remains at the high
level established in 1954, when
the "new lands" program was in-
augurated.. Thus the decline
in the total allocation, which
was also affected by price
revisions, suggests a cutback
of minor elements in the agri-
cultural program.
Capital investment in 1956
is planned at 160.0 billion
rubles, 15 percent above 1955
in comparable prices. Heavy in-
dustry's share of the total is
to increase to 60 percent from
56 percent in the 1955 plan.
Light industry's share is to
fall from a high of 8.5 percent
of the planned total in 1954 to
less than 5 percent in 1956, a
smaller share than in any year
of the 1951-1955 period. As in
1954 and 1955, state agriculture
and the transport and communi-
cations sector will each receive
about 13 percent of total in-
vestment outlays.
The scientific research
allocation continues to climb,
reaching 13.6 billion rubles in
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CURRENT INTELLIGENCE WEEKLY SUMMARY:
29 December 1955
1956, 30
percent more than the
planned
1955 level. Expendi-
tures in
1955 were reported to
be about
10 percent higher than
planned.
On
the revenue side, the
turnover
tax is to increase
sharply
in 1956, with
collec-
tions to
exceed those
planned
in 1955
by- 36 billion
rubles,
or about 16 percent.
This move
reverses the trend of
recent
years, in which turnover tax
revenues have been declining.
Although a rise in total sales
The French Ministry of
Interior has increased slightly
its estimate of Communist par-
ty gains in the 2 January elec-
tions.
Reports from departmental
prefects led the ministry on 23
December to predict that there
would be 130 Communist seats,
compared to 98 in the assembly
just dissolved. Two weeks ago,
the ministry foresaw maximum
Communist representation of no
more than 125. Other estimates,
however, concede the Communists
35 to 40 additional seats. With
election of 30 Algerian deputies
indefinitely postponed, 596-
seats are at stake.
Otherwise, the 23 December
estimate sees the Radicals and
Socialists losing some seats;
the Popular Republicans remain-
ing the same; the ex-Gaullists
losing half their seats;-and the
extreme right, including the
Poujade antitax groups, winning
about 10 seats. Foreign Min-
ister Pinay's Independent bloc
is still expected to profit most
from Gaullist losses.
PART I
will provide some increase in
collections, the size of the
announced increase remains
puzzling and suggests that ac-
counting practices may have
been changed.
Taxes on the population are
to remain roughly at last year's
level, as will the population's
subscriptions to the state loan,
which are tantamount to a tax.
Contrary to Western news reports,
the budget contains no reference
to a retail price cut for 1956,
an annual occurrence from 1947
through 1954.1 Pre-
pared by ORR)
The prefects also forecast
a very low number of abstentions
and expect the popular vote of
all parties except the Gaullists
to increase. The total vote,
however, will depend on weather
conditions on elections day.
In a speech at Marseille
on 26 December, Mendes-France
proposed a broader approach to
the Algerian problem, advocat-
ing new free elections for an
Algerian assembly and economic
and social reforms. On the same
day Premier Faure in Paris also
advocated reforms and "consulta-
tion with Algerians." He has
abandoned the idea of integrat-
ing Algeria and France proper,
in favor of an undefined "federal
formula." The premier deplored
the use of the Algerian issue by
some candidates "to gain a few
seats," and continued to play
up the need to stabilize the
government through parliamentary
reform.
Despite Mendes-France's
efforts to set his Republican
Front apart from the government
coalition, the electoral alliances
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29 December 1955
will probably not remain firm
after the new assembly convenes.
The Radicals are unlikely to
maintain the current split in
their ranks, and there are indi-
cations that influential conserv-
atives may be sympathetic to,
Socialist participation in the
government in order to reduce
the possibility of a. Socialist-
AFTERMATH OF JORDAN RIOTS
The disorders in Jordan
which blocked its adherence to
the Baghdad pact have subsided,
but the aftermath of the rioting
poses serious problems for pro-
Western Jordanian leaders.
Dissident groups in Jordan
reportedly exploited the demon-
strations to make demands not
directly related to the pact
issue. In particular, the
shooting of demonstrators by
the Arab Legion has been used
to attack the pro-Western ele-
ment in Jordan, and the opposi-
tion has obtained the release
of all the demonstrators who
were arrested by the previous
cabinet.
.Reports from the West
Jordan area., where the disorders
were most severe, indicate that
members of the administration
and police forces sympathized
with the demonstrators' aims.
The extent of opposition to
Britain and to the pact will
.probably result in an antipact
majority if the forthcoming par-
liamentary elections are free.
An attempt to ensure a victory
Communist rapprochement.. The
anticipated strengthening of the
.right, therefore, does not rule
out a certain degree of flexi-
bility in the new assembly. The
urgency of the Algerian question
seems to have impressed all non-
Communist elements with the need
for the early formation of a
government.
of pro-Western candidates would
lead to new disorders, probably
more serious than those which
accompanied the last election in
October 1954, and might perma-
nently discredit Jordan',s pres-
ent , ruling group in the eyes
of the people.
Egypt, Saudi. Arabia .and
Syria are meanwhile seeking to
take advantage of the discom-
fiture of the British by suggest-
ing that the Arab states offer
Jordan an amount equal to the
$33,000,000 subsidy which London
currently provides. The Amman
government hopes to be able to
avoid accepting this offer, both
because acceptance would place
the Hashemite royal house at the
mercy of its traditional enemy,
the Saudis, and because of well-
founded doubts that the Arab
states would or could keep up
such payments on a continuing
basis. King Hussain, however,
has told the American embassy
that he may be forced by public
opinion into a position where
he would have to accept.
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CUR:IRE T' ', TNTjhL?Id1OCE WEE LY 'SUMMA'RY
29,.December'1955'
THE ARAB-ISRAELI SITUATION
Minor clashes continued
last week along the"Arab-Israeli
borders, mostly in the Gaza,
strip area..
The air force crisis has
ceased temporarily to be a
threat to the,Indone.sian..cabi-
net, but disunity on current
Dutch-Indonesian talks may bring
about the'government's collapse
before the newly elected par-
liament convenes next spring.
President Sukarno, continues
to oppose the cabinet's poli-
cies.
By unanimous agreement' of
the cabinet and other high c`iv-
it and military Officials; air
force problems have been turned
over to the attorney'genera.l
and the joint chiefs of staff'
with orders to draft a' solution
within one month. The attorney
general is to invest'iga.te -and
resolve problems arising from
the 14 December incident in
which air force personnel made
a show of arms to prevent the
installation of a new deputy
air chief of staff.
talk to.Arab leaders at any time.
However, conditions posed by the
Israelis remain unacceptable to
the Arabs.
Qn Foreign Minister Sharett's
return to Tel Aviv, he voiced
concern to Charge White over the
Egyptian arms build-up and indi-
cated pessimism over the local
situation. White commented
that Sharett's reference to
Egyptian controls over the Gulf
of Aqaba, and to the Eric Johns-
ton plan for the Jordan River
may be an oblique warning that
forces within the Israeli gov-
ernment are urging action at
these points.
The joint chiefs are to
suggest organizational changes
in. the air force to alleviate
present factionalism and gen-
eral inefficiency. The plan
has President Sukarno's ap-
proval.and may have been sug-
gested by him.. Prime Minister
Harahap, has said he is "sa.tis-
fied" with the arrangement.
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29 December 1955
A more likely development
is an opposition motion of no
confidence in the Dutch talks
sometime after the Indonesian
parliament reconvenes on 10 Jan-
uary. Such a motion might draw
enough support to bring down the
cabinet. This strategy also
probably depends on the approval
of Sukarno
The moderate Masjumi, which
heads the cabinet, is polling
fourth in returns from the,con-
stituent assembly elections of
15 December. The National Par-
ty--for which Sukarno has shown
a strong preference--is leading
and is followed by the NU and the
Communist Party. Returns from 25X1
outer islands, however, are likely
to raise the Masjumi's position to
second or third place.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 December 1955
PAR1 I I
NOTES AND COMMENTS
Greek Elections
And the Cyprus Issue
The Greek government is
not likely to take further
steps to solve the Cyprus
issue or to normalize relations
with Turkey until after Greek
national elections in a few
months. Greek foreign policy
will probably be the dominant
election issue.
Prime Minister Karamanlis
would face almost certain de-
feat if he appeared willing to
compromise with Britain over
Cyprus or to adopt a concilia-
tory approach to Turkey over
the Istanbul and Izmir riots.
He therefore will probably
continue to avoid any policy
commitment, while hoping for
a reduction of Cypriot vio-
lence and of tensions with
Turkey.
London appears resolved
not to offer a specific time-
table for Cypriot self-determi-
nation and refuses to rephrase
its formula for Cyprus to elim-
inate the implicit recognition
of a Turkish interest in the
island's status. Similarly,
Turkey shows no inclination to
make allowances for the feelings
of the Greek public; it re-
mains unyielding on Cyprus and
continues to press Athens to
resume normal relations.
The Greek foreign minister
told Ambassador Cannon on 22
December that Athens would'not
influence Cypriot archbishop
Makarios to resume discussions
SECRET
with the British governor of
Cyprus. Greece apparently
hopes that Makarios will re-
open negotiations on his own
responsibility. The arch-
bishop, however, under attack
from both the rightists and
the Communists, is not likely
to do so without Athens' overt
support. As a result, con-
tinued Greek and Cypriot tem-
porizing may force the British
to impose increasingly tougher
repressive measures on Cyprus,
with a proportionate rise in
Greek and Cypriot popular feel=
ing against Britain.
New irritations continue
to crop up in Greek relations
with Turkey. There are mutual
recriminations over the indict-
ment of Turkish consular offi-
cials in,Salonika accused of
instigating the local bombing
which touched off the Istanbul
riots. Ankara continues to
reject Greek demands for a
guarantee for the Greek minor-
ity in Istanbul and refuses to
consider Athens' proposal con-
cerning a mixed claims commis-
sion to handle the compensation
due the Greek victims of the
riots. Turkey's foreign minis-
ter recently said his govern-
ment would present a compensa-
tion bill to the Grand National
Assembly within the next few
weeks.
There is at present little
prospect for any genuine lessen-
ing of Greek-Turkish tensions.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 December 1955
North Africa
The "Committee of 61"--
Algerian Moslem legislators
who had effectively paralyzed
Algerian government operations
by threats to resign from
office--has now decided that
its members will retain their
government positions in order
to use them in the resistance
campaign against France. Their
policy of nonco-operation was
a strong factor in convincing.
Paris that the 2 January elec-
tions should be postponed in
Algeria.
The Algerian legislators
now plan to send a delegation
to Paris after the French
elections to confer with the
new government. The committee's
increased stature in Algeria
may give Paris a representative
nationalist body with which to
negotiate Algeria's future
status.
New Czech Radar Height Finder
A new height-finder radar,
nicknamed SKEW FEED by Western
intelligence agencies and be-
lieved to be the most effective
now available to the Communist
bloc, has recently been ob-
served.in Czechoslovakia. It
employs an advanced and very
effective type of electrical
scanning. When used in con-
junction with an adequate air
SECRET
Terrorism in Algeria in-
creased sharply over the week
end and reportedly has account-
ed for at least 159 deaths in
a five-day period. Attacks
on military transport, com-
munications and villages have
brought a renewed demand for
French reinforcements to expand
the 175,000 French air and
ground forces already in Al-
geria.
Nationalist activity is
also reported spreading to
Spanish Morocco, where the re-
cent declarations by General-
issimo Franco that this zone
would not receive early inde-
pendence or a democratic gov-
ernment have accelerated plans
to open a resistance campaign.
Madrid has feared both a spread
of the Rif fighting and a
nationalist campaign similar
to that in French Morocco.
search radar, it could perform
in a manner comparable to the
majority of similar American
radars now in use.
The first SKEW FEED was
seen this past summer in Prague
at Kbely airfield--which has
been previously associated
with n
meats.
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29 December 1955
The SKEW FEED features a
novel arrangement which per-
mits the radar beam to sweep
vertically at almost any speed
so that information can be re-
ceived at a faster rate than
is possible with either V-beam
or nodder-type radars.
Although no information
is available regarding the
technical characteristics or
capabilities of SKEW FEED, its
apparent similarity to an Ameri-
can naval radar suggests that
the SKEW FEED has a virtually
unlimited altitude capability
and may be able to measure the
altitude of jet fighters 80
miles away. By comparison, the
TOKEN, a combined air-search,
height-finder radar now exten-
sively used throughout the So-
viet bloc, is not believed ca-
pableof providing height infor-
mation on fighters above 30,000
feet or at ranges greater
than
40 miles.
New Soviet Amphibious Equipment
in Germany
The existence of a new
Soviet amphibious tank has
been eonf;rmc1 ;? x,"ermany.
This amphibious
tank is the first to
be introduced since the prewar
T-40. It has a flat deck on
which is mounted a small
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CURRENT INTELLIGENCE WEEKLY SUMMARY
dome-shape": turret' housing a
gun of approximately 76mm cali.-
ber. Although complete techni-
cal characteristics are not
available, the tank appears to
be a true amphibian rather than
a vehicle fitted with detach-
able flotation devices.
In addition to this tank,
Soviet forces in Germany have
received since 1953 several
types of amphibious vehicles
of postwar design. The most
significant are a wheeled 6x6
truck and a full-tracked trans-
port, which have been reported
in large numbers in nondivi-
sional engineer units. The
truck is a modified ZIS-151
which can transport about 25
men and their equipment or a
load of about two tons. The
tracked transport, first observ-
Malaya
The two-day conference be-
tween representatives of the
Malayan and Singapore govern-
ments and the Malayan Communist
Party (MCP) which ended on 29
December made little progress
toward ending hostilities. At
the first session, Malayan
chief minister Rahman refused
a Communist request to legalize
TRACKED AMPHIBIAN
ed in a river-crossing exercise 25X1
in East Germany in 1954, is
estimated to have a speed of 25
miles per hour on land and 5 to
10 in shallow water. Intended
primarily for use by engineer
units, it also could be used
by assault troops to support
bridgeheads.
In addition to these
vehicles, the Soviet forces in
Germany have been importing
new bridging and stream-cross-
ing equipment in the last two
years to make up for a previous
deficiency in specialized
river-crossing equipment. The
Soviet army was noted in World
War II for its ability to im-
provise in river-crossing
operations. It probably now
feels, however, that in the
event of a fast-breaking opera-
tion into Western Europe opposed
by forces equipped with modern
weapons, World War II methods
cannot be counted on to main-
tain the necessary speed of its
offensive. These developments
are considered part of the
present trend toward improving
the flexibility and mobility of
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Soviet ground forces
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the party, and before the meet-
ing began, the Communists had
rejected the government amnesty
which, so far as government
representatives are concerned,
is the chief basis for the
talks.
Government spokesmen, how-
ever, profess to see some hope
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for an end to the terrorism in
a commitment apparently made by
the Communists to lay down their
arms when the local government
obtains complete control of the
security forces. Further
talks, if held, must be post-
poned for at least a month,
since Rahman will be in London
during the intervening period
for discussions on self-govern-
ment.
The
week before the
con-
ference
opened, both the
gov-
ernment
and the
Communist
Party
publicly
stated
their posi-
tions.
Rahman
emphasized he
would explain the government
.amnesty and would "listen" to
Communist views, but he would
not negotiate. He charged that
MCP secretary general Chin Peng
was trying to make Malaya a
satellite of Communist China.
The Communist Party mailed
a manifesto to Malayan news-
papers which rejected the am-
nesty, demanded the right to
work openly toward independence
Voting in the 25 December
elections for the Laotian
National Assembly was heavy
despite an intensive Pathet Lao
propaganda campaign for a boy-
cott of the elections. On the
basis of returns from the prin-
cipal towns, Prime Minister
Katay's Progressive Party is
expected to win 18 of the As-
sembly's 39 seats, an increase
of one over its present total,
while Foreign Minister Phoui's
Independent Party, the other
partner in the government coali-
tion, will probably again have
11 seats.
Katay scored a personal
triumph, winning his assembly
seat by a wide margin, and his
position will apparently be
with other political parties,
endorsed elements of the program
of the Alliance, Malaya's lead-
ing political organization, and
flatly stated the Communists
would resume their drive to com-
munize Malaya after independence.
To emphasize its current
pretensions of being a national
party, the MCP--whose membership
is 95 percent Chinese and whose
leadership heretofore has been
entirely Chinese--has elevated
a Malay, Musa bin Ahmad, to the
post of central committee chair-
man. An Indian, Balan, has
been named deputy chairman.
Party leader Chin Peng retains
the post of secretary general.
When Rahman goes to London
on 2 January, he probably will.
cite his firm stand against the
Communists to justify demands
for concessions from the Brit-
ish. In turn, he may be ex-
pected to use any gains to-
ward self-government as weap-
ons against the Communist
Party.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 December 1955
further strengthened by the
probable defeat of some Progres-
sive deputies who have opposed
him and their replacement by
party members loyal to him.
The Pathet Lao are reported
to have attempted to intimidate
the voters of Khammoua.ne and
Savannakhet Provinces of central
Laos during the last week of
the campaign. The presence of
roaming Pathet Lao armed bands
in increasing numbers is report-
ed in the former province.
Skirmishes continued in the
northern Pathet Lao areas during
the election period. Government
troops mounted several small-
scale actions and made a guer-
rilla raid on a Pathet Lao
munitions depot in Sam Neua Prov.-
i n c e. There are some indica-
tions that the Pathet Lao may
be planning further attacks in
the southern area of the prov-
ince, where the 5-12 December
skirmish occurred.
Laotian leaders in recent
conversations with American
officials have played down the
prospect of an early military
campaign by the government to
clean out the Pathet Lao. Both
the crown prince and the defense
minister, formerly strong pro-
ponents of an offensive after
the elections, now appear to
have adopted a more cautious
policy and to be considering
emphasis on guerrilla and art-
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1
1
Thailand
Tension in Bangkok, which
earlier this month threatened
to erupt into armed strife,
appears to have lessened some-
what, but serious friction with-
in the ruling clique remains
unresolved,
Premier Phibun, angered by
the alleged attempts of Police
Director General Phao and his
followers to sabotage the pre-
mier's campaign to bring greater
democracy to Thailand and to
reduce corruption, has threat-
ened to resign or to reshuffle
his cabinet. Such a threat'is
interpreted as a maneuver to
permit the premier to organize
a new cabinet from which Phao
and' his followers would be ex-
cluded or at least further to
reduce Phao's influence. This
would leave Phibun and the army
chief,'General Sarit, in almost
undisputed control.
Meanwhile, the government
is apparently reluctant to
refuse permission for an oppo-
sition member of parliament,
Thep Chotinuchit, to visit
Communist China at the invita-
tion of the Peiping regime.
Both Phibun and Phao have in-
dicated opposition to Thep's
trip, but they have hinted--
with little apparent justifica-
tion--that under certain con-
ditions they might be power-
less to prevent his departure.
The American embassy in Bangkok
believes that the Chinese Com-
munists will have achieved an
important."psychological break-
through" in Thailand should
Thep go to China.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 December 1955
Nehru Publicly Criticizes
Communist Line
Three recent statements
made by Prime Minister Nehru
reflect his continuing pique
over the behavior of Bulganin
and Khrushchev during their
visit and will help to minimize
the effects of the visit on the
Indian people.
on 23 December, Nehru told
parliament that radioactivity
in dust over Bombay had almost
trebled since the recent Soviet
H-bomb explosion. Though Nehru
added that the amount of radio-
activity was not dangerous to
human beings, the criticism of
the USSR is implicit and in-
vites an unfavorable Indian re-
action. Many Indians will
recall that the Soviet leaders
announced upon their departure
from India that the USSR would
continue to manufacture H-bombs.
At the same time they had an-
nounced,the USSR would not dis-
band the Cominform, as India
has several times suggested,
and that progressive Communist
ideas would inexorably triumph
over older, obsolete ones.
On 25 December, Nehru re-
marked in a speech in south
India that Communism and de-
mocracy are incompatible, add-
ing that India did not want to
be hostile to any country and
would try to be friendly to all.
Second Afro-Asian Conference
Unlikely Before End of
A second Afro-Asian con-
ference is unlikely before
late 1956 or early 1957 because
of the reluctance of the Colombo
powers--Burma, Ceylon, India,
Indonesia and Pakistan--to call
such a meeting.
Ceylonese prime minister
Kotelawala told the American
The next day he told a mass
meeting in another south Indian
town that the Indian Communbts
were reactionaries clinging to
outmoded theories.
These statements make it
clear to the Indian public that
the Indian Communist Party has
not acquired any respectability
in the eyes of the government
as a result of the Bulganin-
Khrushchev visit. They di-
rectly contradict Bulganin's
farewell statement to the press
on 14 December in which he said
that "The Communist parties,
which stand guard over the in-
terests of the working class....
follow the most advanced and
humane teaching--of Marxism-
Leninism which has splendidly
justified itself in practice."
The American embassy in
New Delhi reports that a grow-
ing number of Indians privately
admit with "apprehension" that
the USSR has clearly jettisoned
the Geneva spirit in its bid
for influence in India and
Afghanistan by deliberately
promoting "cold war" in these
countries. The embassy es-
timates that the Soviet campaign
in India may have less success
than was originally thought.
change on.19 December.he had
written Egyptian premier Nasr
that the Colombo powers, which
would be responsible for calling
a second Bandung conference, do
not believe the next meeting
should occur in Cairo, as de-
sired by Egypt, because of the
unsettled Arab-Israeli situation.
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The five Colombo nations
also want to reconsider whether
or not another conference
should be held at all.
The calling even of a pre-
liminary Colombo powers'confer-
ence also seems unlikely for
the next few months. Prime
Minister Nehru has expressed
opposition to a meeting in Jan-
uary, and spring parliamentary
elections in Burma and Ceylon
would prevent the five countries
Turkey
After several weeks in
office, the new Turkish govern-
ment of Prime Minister Menderes
is taking some steps to solve
the country's economic prob-
lems. Turkey's financial dif-
ficulties are acute, however,
and the measures Menderes is
willing to support may not go
far enough.
The new ministers of fi-
nance, economy and commerce,
and foreign affairs are sympa-
thetic toward some reforms.
They have taken steps to es-
tablish machinery to co-ordinate
and control the government's
economic activities, including
an internal finance bureau. The
ministers appear to be assuming
greater responsibility for
over-all direction of Turkey's
economic efforts.
Nevertheless, despite new
efforts to reduce expenditures,
SECRET
from meeting at least until the
end of April.
South Asian concern over
Soviet exploitation of Middle
East problems, as well as a
general lack of enthusiasm for
an early Bandung meeting, may
have prompted a statement by
Kotelawala to the effect that
another meeting of the Afro-
Asian countries will probably
be delayed until December after
the 1956 UN General Assembly
or even some time late in 1957.
a cash crisis of major propor-
tions is in prospect for the
next few months, resulting
largely from failure to realize
the estimated revenues from
tobacco for December.
The government's gold re-
serve is pledged to the limit
and its dollar holdings are
less than $500,000. Meanwhile,
payments will be due shortly
on an American loan and on the
Turkish public debt. The gov-
ernment is relying on tobacco
sales to cover these obliga-
tions, but the American com-
panies which normally are the
largest buyers are reportedly
resisting the high prices asked
by Turkey.
The Turks can be expected
to continue their efforts to
obtain a loan from the United
States.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 December 1955
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Afghan-Soviet Relations
Prime Minister Daud has
provided further evidence that
he expects to play the USSR
against the West as long as
the West is willing to keep a
door open to him. His govern-
ment has rescinded its informal
ban on shipments through Paki-
stan of supplies for the Ameri-
can Morrison-Knudsen Company
which is doing economic devel-
opment work in the Helmand
valley. Daud stated to the
press that the new Soviet
credit agreement would not
affect Morrison-Knudsen's
position in Afghanistan. For-
eign Minister Naim has reit-
erated Afghanistan's desire
for a settlement with Pakistan
Selected railroad
-------- All-weather road
r AFCHANI$TAIJ_ s
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29 December 1955
Argentina
Provisional President
Aramburu remains in control of
the Argentine government, but
minor disorders and extensive
arrests of civilian and mili-
tary personnel indicate con-
tinuing disaffection within
his regime.
Perhaps the biggest source
of disunity within the govern-
ment is the continued bicker-
ing between the army and navy,
which all opposition elements
are trying to exploit. In
addition, Vice President Adm.
Rojas` policy of removing
officers in both services who
had co-operated with the Peron
regime has incurred the enmity
of many of his fellow officers
in the revolutionary movement.
At the same time, the largest
anti-Peronista party, the
Radical Civic Union, has been
miserly in its support of the
government.
Evidences of disunity
within the regime have en-
couraged rumors that Aramburu
may be replaced by various
leaders, such as the commander
in chief of the army, Lt. Gen.
Julio Lagos, who headed the
rebel movement in Mendoza
during the September revolt
against Peron and was a strong
supporter of ousted President
Lonardi. Continued tension
and minor disturbances can be
expected until the armed forces
can reach some measure of
agreement among themselves.
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CURRENT INTELLIGENCE WEEKLY SUN ARY
Paraguay
Paraguayan president
Stroessner has at least tempo-
rarily strengthened his control
over the government by removing
the principal army and police
officials involved in the brief
military rebellion of 21 Decem-
ber. However, the political
crisis within the ruling Colo-
rado Party will continue.
Further changes in top
government posts are expected,
partly because of Argentine
pressure for the removal cf
pro-Peron officials.
Stroessner has already
taken steps along this line in
an effort to end the virtual
Peru's present political
crisis appears to have resulted
more from police mishandling of
a riot in Arequipa, traditional
"cradle of revolutions," than
from serious general discon-
tent or unrest. Popular indig-
nation is still strong, how-
ever, and with political pas-
sions aroused and public con-
fidence in the possibility of
a free electoral campaign de-
creasing, more serious trouble
may flare up.
In an effort to regain
lost ground, the Odria regime
ostensibly "sacrificed" its
minister of government, a for-
mer widely disliked secret
police chief and main target
standstill in trade with Argen-
tina, which is vitally impor-
tant to Paraguay. Officials
objectionable to Argentina were
among those removed after the
rebellion, and the administra-
tion is reported to have de-
cided to relax internal polit-
ical restrictions after the
Colorado Party congress, which
is scheduled to convene in
March 1956.
Meanwhile, the government
faces the politically delicate
problem of disposing of Epifanio
Mendez Fleitas, the Central
Bank president and Colorado
Party leader, reports of whose
arrest are believed to have
precipitated the rebellion.
Although Mendez "resigned" from
office on 23 December, his con-
tinued presence in Paraguay
may still threaten'the regime.
It is not clear how much
support he has among the armed
forces or among the various
rival Colorado leaders.
of public indignation. Odria
then appointed an interim all-
military cabinet, meanwhile
boosting armed forces salaries
by 20 porcent.
The Arequipa disturbances
on 21 December grew out of a
raid by the pro-Odria Restora-
tion Party on a National Coali-
tion rally called to prepare
for the 3 June presidential
elections. A general strike
which paralyzed Arequipa was
called the next day by groups
of workers, white-collar em-
ployees and students calling
themselves "The United Front."
Strikes and student meetings
subsequently occurred at a
number of points throughout Peru.
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29 December 1955
Although the strikes have
now been suspended, the "united
front" organizations have not
been disbanded, and peaceful
demonstrations were staged in
Lima on 27 December despite
a government warning. Political
opposition elements still are
pressing three demands: re-
peal of the Law of Internal
Security, which gives the gov-
ernment virtually unlimited
power to suppress opposition;
modification of the electoral
law, which gives the regime
increased power to control the
machinery of elections; and a
blanket pardon for all political
offenders.
Political developments in
recent months have all pointed
to a well-directed plan by Odria
to ensure the continuation of
his regime in power by installing
a hand-picked civilian successor
through rigged elections next
June. Military elements, how-
ever, have feared that their
privileged position might be
endangered under a civilian
president and felt that their
interests would be better pro-
tected by one of their own
leaders.
Odria's moves to con-
ciliate the armed forces fol-
lowing the Arequipa outbreaks
appear to have failed despite
a 20-percent military pay
increase, which is regarded
by the military as an attempt
to buy their loyalty. They
do not seem sufficiently or-
ganized to oust Odria now, but
his chances of having his way
in the June elections appear
much diminished.
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29 December 1955
PATTERNS AND PERSPECTIVES
IRAQ'S POSITION IN THE BAGHDAD PACT
Britain's failure to bring
Jordan into the Baghdad pact
focuses attention on Iraq's
position as the only Arab state
in the "northern tier." Iraq
joined the pact for a variety
of reasons: prestige, the pros-
pect of economic and military
aid, and the opportunity to
revise the Anglo-Iraqi treaty.
The implied Western security
guarantee against the eventual-
ity of a Soviet thrust into the
Middle East was an important,
but not a determining, consid-
eration.
Egypt's "victory" over
the West in obtaining arms
from the Soviet bloc has also
frustrated Iraq. The Egyptian
arms deal has met with general
Arab approval, and elements in
Iraq see it as an example of
"throwing out the West" and a
significant step toward Arab
"independence." The Egyptians
have called the attention
of the Iraqis to the Soviet
equipment being delivered to
Egypt as compared with the
"driblets" Iraq has received
from the West.
Iraq's Aspirations
The most important strate-
gic attraction the pact had
for Iraq was that it offered a
means whereby Iraq might seize
the leadership of the Arab
world from its principal rival,
Egypt. Iraqi leaders, partic-
ularly Prime Minister Nuri
Said, presumably felt that the
material and psychological
gains.which would accrue from
membership in the pact would
act as lodestones attracting
Syria, Lebanon, and Jordan in-
to an Iraqi sphere of influence.
So far, however, Iraq's member-
ship in the pact has not
brought these benefits.
It now appears that Iraq
will be the only Arab member
of the Baghdad pact for an in-
definite time. Despite the
concerted efforts of Britain
and Turkey to induce Jordan to
become the second Arab member,
Jordan is not likely to join in
the foreseeable future. Syria,
tied to Egypt by a new joint
defense arrangement and under
financial obligation to Saudi
Arabia, is a more unlikely
prospect than ever. Lebanon
will probably be unable to
commit itself while Syria
stands in the Egyptian-Saudi
camp.
Unless Baghdad receives
military aid of a kind and in
an amount which it can point
to as proving the benefits of
association with the West,
Iraq's sense of its own pres-
tige is likely to suffer seri-
ously. Reports from Baghdad
indicate that the Iraqis are
already restive on this score.
Arab-Israeli Conflict
To counter the activities
of Egypt and Saudi Arabia and
their charges that Iraq has
sold out to the West, Baghdad
is trying to prove that it re-
mains hostile to Israel and
that it is second to none in
its concern for other "Arab"
problems. At the recent Bagh-
dad pact organizational meet-
ings, Iraqi officials stressed
the necessity of a settlement
of the Arab-Israeli differences
as a precondition to effective
working of the pact.
To ward off criticism of
Iraqi ties with Turkey, the
old overlord of the Arabs, and
of possible ties with Israel
through Turkey, Iraq has in-
duced Turkey to issue pro-Arab
statements on a settlement of
the Arab-Israeli problem.
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29 December 1955
Nuri Said has repeatedly
stressed that Iraq will not
esitate to use its resources
to assist any Arab state sub-
jected to Israeli aggression.
Iraq has several times offered
Iraqi troops to Egypt, Jordan,
and Syria to defend themselves
against Israel. The Iraqi am-
bassador in Washington has vied
with the Syrians for the honor
of acting as the Arab spokes-
man in joint demarches, and
the Iraqi minister to Syria has
warned that if the US sells
arms to Israel, the "northern
tier" would be destroyed.
To counter Egyptian and
Saudi Arabian charges that by
joining the pact Iraq has bro-
ken "Arab unity," Iraq has in-
sisted that the pact has not
changed its obligations to its
sister states, and has frequent-
ly talked of strengthening the
Arab League security pact.
Iraq has also tried to be
more Arab than the Arabs in
supporting North African na-
tionalism. Baghdad has been a.
particularly vocal critic of
French actions in North Africa
and continues to try to take
the lead in financial and dip-
lomatic support of the national-
ists. Recent examples are the
reported Iraqi attempt to
arrange a marriage between the
royal families of Morocco and
Iraq, and Baghdad's attempt to
send a Red Crescent (Red Cross)
unit to succor Moslem victims
of disorders in Algeria.
Internal Pressures
Internal Iraqi pressures
are also working against Iraq's
continued active participation
in the Baghdad pact. Local na-
tionalist opposition to the
pact has existed from the be-
ginning of Iraq's association
with Turkey. Nationalist
groups, though suppressed under
Nuri's "heavy hand," are criti-
cal of his government by decree,
the banning of political par-
ties, and are pressing for
economic and social reforms,
along with a reorientation of
Iraq away from ties with the
West.
A high Iraqi official has
said recently that while the
pact has been heartily sup-
ported and favored by the cab-
inet and by governmental and
parliamentary leaders, it is
not popular among the people
at large, nor among many
educated "intelligentsia." The
official said there is a new
trend of Iraqi opinion against
any sort of commitment with
East or West.
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29 December 1955
The growth of such an es-
entially neutralist trend in
Iraq would not only be a seri-
ous blow to the British, who
have sought in the Baghdad pact
a means of placing British in-
terests in the Middle East on
a firmer footing; such a trend
would also threaten the whole
SCANDINAVIAN REACTIONS
The USSR's conciliatory
gestures toward Scandinavia
over the past two years, partic-
ularly the decision this fall
to return Porkkala to Finland,
have made a deep impression on
public opinion throughout the
area. Government leaders and
the press remain skeptical about
Soviet intentions, but there
probably will be increased
pressure in Sweden, Norway, and
Denmark for a reconsideration
of defense requirements, and
in Iceland for evacuation of
the US-manned air base at
Keflavik.
Since 1953 the USSR has
been waging a campaign to en-
courage neutralism in Scandi-
navia and thus weaken NATO's
northern flank. Except for
the return of Porkkala, there
have been no startling moves
in the campaign. The USSR
seems to have relied instead
on: the cumulative effect of
a persistent attempt to expand
contacts; general propaganda
emphasizing a desire to reduce
international tensions; sporadic
trade moves; and on the avoid-
ance of previous obstructive
behavior in negotiations on
various nonpolitical questions.
In September 1954, for example,
the USSR suddenly concluded an
agreement with a private Swed-
ish organization concerned with
Baltic Sea rescue work.
psychology of resistance to
Communism in the Middle East,
for if Iraq should eventually
feel compelled to choose
between giving priority to anti-
Communism or to Arab unity,
its present condition is such
that it would probably choose
the latter. 25X1
TC RECENT SOVIET POLICY
Soviet-Scandinavian Contacts
The USSR's most sustained
effort seems to have been de-
voted to promoting increased
contact of Scandinavians with
the Soviet bloc. All five
Scandinavian governments have
been induced in recent months
to arrange visits to the USSR
by parliamentary delegations
or officials of cabinet rank,
and exchanges of scientific,
technical, artistic and sports
delegations between the bloc
and Scandinavia have shown a
steady rise over the past two
years.
The visit of Finnish
president Paasikivi to Moscow
in mid-September provided the
occasion for announcing the de-
cision to return Porkkala. In
the same month, the Danish min-
ister of agriculture and an
entourage of experts visited
the USSR. Norwegian prime min-
ister Gerhardsen's visit to
the USSR in November, made in
response to persistent invita-
tions, resulted in an agree-
ment to foster increased "cul-
tural" exchanges between the
two countries, as proposed by
Gerhardsen, with particular
emphasis on youth groups.
Gerhardsen evaded Khrushchev's
counterproposal for increased
contacts between the trade
unions of the two countries and
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between the Norwegian Labor
Party and the USSR's Communist
Party.
The Swedish and Danish
prime ministers have accepted
Soviet invitations for visits,
probably next March. Swedish
and Finnish members of parlia-
ment visited the USSR in 1955
and 1954, respectively; and
the parliaments of Denmark and
Iceland have recently accepted
invitations for members to
visit Moscow. Norway has re-
ciprocated the Soviet overtures
by inviting Bulganin and Khru-
shchev to stop off in Oslo en
route home from their projected
visit to London next spring;
and on 2 December the Swedish
parliament formally invited
the Supreme Soviet to send a
delegation to Stockholm next
spring.
In addition to the travels
of diplomatic personnel and
journalists, Scandinavian Com-
munist Party officials and
Scandinavian technicians work-
ing in Communist countries,
124 delegations from Scandina-
via, most of them from Sweden
and Finland, visited the Soviet
bloc during the first half of
1955. In the same period, 83
bloc delegations entered Scan-
dinavia. The size of the
Scandinavian delegations ranged
from one to nearly 100 persons
each. As compared with pre-
vious periods, the Scandinavian
delegations comprised a higher
proportion of engineers, tech-
nicians, scholars and artists,
including some with a known
antipathy for Communism.
Though local Communist
parties have apparently not
benefited appreciably from the
exchange program, the USSR
seems to have gained considera-
ble good will throughout Scan-
dinavia.
Despite the stalemate at
the recent Geneva conference,
the Scandinavians seem to be
persuaded that one way to reduce
international tensions and
.create better understanding
among nations is through per-
sonal contact. The caliber
of Soviet artistic and cul-
tural representatives sent to
Scandinavia has been generally
high and their visits have
stimulated a genuine interest
in the Russian people.
The Return of Porkkala
The Soviet move with the
greatest impact throughout
Scandinavia has been the with-
drawal from Porkkala. The
evacuation of this base, now
virtually completed, is inter-
preted by the Finns as proof
of the correctness of their
careful neutral foreign policy.
The extension of the Soviet-
Finnish mutual assistance pact
for 20 years, while distasteful
to many Finns, was accepted as
the price for Porkkala.
The concessions on Porkkala
also encouraged speculation in
Finland that other territorial
adjustments might be forth-
coming in the border areas
lost to the USSR after World
War II. There is some optimism
that, just as the Soviet Union
recognized that the Porkkala
base had become strategically
superfluous,it may eventually
draw a similar conclusion about
parts of Soviet-held Karelia.
In Sweden, Norway and
Denmark, the Soviet decision
on Porkkala was popularly hailed
as a move reducing the danger
of war. But government lead-
ers and informed opinion alike
remained skeptical regarding
the Soviet move, seeing it as
a tactical maneuver to strength-
en Moscow's demands that the
United States abandon its bases
in Europe.
In Iceland, the Soviet
move stimulated the long-
standing resentment over the
American-manned NATO air base
at Keflavik.
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key Ravi government has made
no real effort to explain to
the public the base's role in
NATO planning or the country's
need of American troops in the
absence of any Icelandic armed
forces.
Immediately following the
September announcement on Pork-
kala, leftist and anti-American
groups in Iceland compared that
Soviet base with the "American
base" at Keflavik and urged
American withdrawal. On 10
October the opposition Social
Democratic Party introduced in
parliament, as it had in 1953
and 1954, a resolution that the
government ask NATO to review
the need for the Keflavik base
in light of the improved inter-
national situation. Similar
resolutions have been intro-
duced by the Communist and
the National Defense Parties.
Meanwhile, the Communist-
dominated Icelandic Federation
of Labor has been promoting the
idea of a new government coali-
tion comprising all leftist
parties--Communist, Social
Democratic, National Defense,
and Progressive. This effort,
while extremely unlikely to
succeed at present, could con-
ceivably lead to the formation
of a government hostile to
NATO and Iceland's present
defense policy.
Economic inducements seem
thus far to have played no con-
sistent part in the Soviet
campaign despite some rises in
Soviet purchasing and the gen-
eral desire on the part of
Scandinavian countries for in-
creased East-West trade. The
volume of Soviet trade with
Denmark had been on a sharply
reduced, barter basis since
July 1954, when negotiations
for a formal trade agreement
were broken off over the Danish
refusal to include tankers.
The USSR took over a fifth of
Finland's exports in 1954, but
it is expected to reduce its
purchases of a number of high-
cost Finnish products like
ships and machinery during the
coming year.
In Iceland, on the other
hand, the USSR has in the
course of 1955 replaced the
United States as the country's
leading market. During the
first nine months of the year,
it absorbed $5,521,000 or
15.4:percent of Iceland's
exports, compared to $5,000,-
000 or 13.6 percent purchased
by the United States. Since
August 1953, when Iceland and
the USSR renewed formal trade
relations after a lapse of
several years, the USSR has
become Iceland's chief source
of petroleum and cement, as
well as an important supplier
of iron goods.
During the course of Prime
Minister Gerhardsen's Moscow
visit, Norway and the USSR
concluded a three-year trade
agreement--something the Nor-
wegians eagerly desired--
calling for a considerable
expansion of Norwegian fish
exports.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The over-all effect in
Scandinavia of the Soviet
"charm" campaign has been to
foster the belief that defense
efforts need not be intensified
although the stiff Soviet at-
titude at the Geneva foreign
ministers` conference has thus
far counteracted pressure for
any relaxation of the defense
effort. However, practically
all Scandinavians are wary of
antagonizing the USSR.
When pressed for a dec-
laration against foreign bases
during his recent Moscow Visit,
Prime Minister Gerhardsen felt
obliged to reiterate Norway's
statement to the USSR in 1949
that it is his government's
policy to bar foreign troops
or bases in Norway unless the
country is threatened with
attack, No such formal declara-
tion has ever been issued by
Denmark, but both the govern-
ment and public opinion oppose
the peacetime stationing of
foreign troops in Denmark.
Prime Minister Hansen may make
a statement like Gerhardsen's
in order to reach a trade agree-
ment with the USSR that will
not include tanker construction
in the deal.
In Denmark, moreover,
there is a segment of strong
neutralist sentiment which
the USSR is assiduously en-
couraging. In an unprecedented
appearance before the influen-
tial Foreign Policy Association
on 1 December, the Soviet'am-
bassador emphahized'the virtues
of neutrality and-held up Fin-
land and Sweden as examples for
Denmark to follow. The gov-
ernment so far has succeeded
in avoiding cuts in its defense
budget for fiscal 1956-57, but
the minority pressing for such
reductions is still active.
In Norway, the defense
budget for 1955-56 was reduced
in June 1955, primarily in
the construction field, in
part because of domestic eco-
nomic difficulties; and the
government decided in mid-
November to eliminate the
winter refresher training
maneuvers in West Norway.
Important Norwegian leaders
have admitted that anti-NATO
sentiment is much more ex-
tensive than is generally
assumed and that the Soviet
"charm" campaign had a "re-
laxing effect on the public"
during the summer and early
fall. However, the Russians'
reversion to their presummit
behavior has since tended to
strengthen popular support
for defense.
The prime ministers of
both Norway and Denmark have
in speeches this fall stressed
the importance of NATO for the
preservation of peace. They
have also emphasized that the
NATO countries should not act
unilaterally in defense ques-
tions, a possible reference to
some pressure in both countries
for a reduction in the con-
scription period from 16 to 12
months. No immediate action is
anticipated on this issue, but
if other NATO countries relax
any phase of their defense
effort, Denmark and Norway will
be under strong pressure to
follow suit.
In Sweden, both the govern-
ment and the press have taken
an extremely skeptical attitude
toward the Soviet declarations
of good will and relaxed ten-
sion. However, although the
defense minister recently
warned that the present inter-
national situation gives no
cause to reduce preparedness,
it has asked parliamentary
approval to suspend all mili-
tary refresher training during
the 1956-57 training year, for
budgetary reasons.
Another Soviet move likely
to lend some encouragement to
neutralist tendencies in
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Scandinavia is the USSR's with-
drawal of its opposition to
Finland's joining the Nordic
Council, an event which occurred
in late October.
The Nordic Council, an
advisory body composed of par-
liamentary delegations from
each of the Scandinavian coun-
tries, meets periodically with
a view to co-ordinating national
legislation short of defense
elift Auto producing plant
Truck producing plant
The ambitious targets of
the Soviet automotive industry
for 1950 will not have been
reached by the end of 1955,
either in terms of
production or availa-
ble plant capacity.
With production far
short of early ex-
pectations, the in-
dustry has been able
to produce trucks in
sufficient quantities
to meet most mili-
tary and some other
major requirements,
but has failed to
satisfy others, no-
tably agricultural.
During the period of
the forthcoming Sixth
Five-Year Plan, the
program of heavy in-
vestment in the in-
dustry, begun in
1946 and interrupted
in 1949, should com-
mence again with the
introduction of
newer-model vehicles.
In the Soviet
economy, the funda-
mental purpose of
the motor vehicle
industry is to pro-
duce trucks for
short-haul transport.
Only slight emphasis
is given to producing
and foreign policy matters.
These activities will not be
much influenced by Finland's
adherence, but the presence
of a Finnish delegation--which
will automatically include sev-
eral Communists--will strengthen
neutrality in the council, and
probably inhibit the future de-
velopment of closer political
and military co-operation
among the Scandinavian coun-
tries.
passenger cars, and even less to
manufacturing long-haul freight-
carrying vehicles of the type
familiar in the United States.
THE MOTOR VEHICLE INDUSTRY OF THE USSR - 1955
- excluding plants limited to final assembly
All auto and approximately
80% of current truck produc-
tion here
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The Fourth Five-Year Plan
The goal for 1950 an-
nounced in 1946 was the annual
production of 500,000 motor
vehicles, including 428,000
trucks--a sizable increase over
the previous production peak
of 200,000 vehicles in 1938.
In order to achieve that
production level and to attain
a capacity to produce 750,000
vehicles per year at the close
of the fourth Five-Year Plan
in 1950, heavy emphasis was
placed on investing in new
facilities. The industry's
three prewar plants were to be
expanded, three truck plants
under construction were to be
completed, and three more were
to be started and nearly com-
pleted by the end of the plan.
In addition, a small passenger-
car plant and several plants
limited to final assembly
were to be built and put into
operation.
The industry fell far
short of meeting these goals,
producing only about 350,000
vehicles in 1950,-of which
about 290,000 were trucks. Of
six new truck factories author-
ized in the original plan, one
was partially successful, one
was abandoned altogether, and
the other four were far behind
original construction or equip-
ping schedules, failing to de-
velop even a fraction of the
hoped-for production capacity.
A primary reason for this
failure to meet planned goals
was the high investment pri-
ority, beginning in 1948, given
development of energy sources
and basic metallurgy at the
expense of machine-building
industries. Additionally, the
Western nations' embargo on
machine tools prevented the
USSR from importing automotive
production equipment.
The Fifth Five-Year Plan
When finally announced in
1952, the fifth Five-Year Plan
directives to the industry ap-
peared extremely modest, call-
ing for only a 20-percent pro-
duction increase by 1955 over
the 1950 level. Because pro-
duction had dropped in 1951,
however, the new goals actually
represented an approximate 50-
percent increase over 1951.
It was apparent that heavy in-
vestment was not contemplated.
No new factories were to be
built, and principal increases
in production were to be achieved
by more intensive use of
existing capacity.
It now appears that the
industry's goals for 1955 will
be met or slightly exceeded
with a production of approxi-
mately 425,000 vehicles, in-
cluding 335,000 trucks. By
the end of this year, however,
output will have nearly reached
the practical peacetime capaci-
ty of existing vehicle plants
in their- present condition.
Production of motor vehicles
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.thus cannot continue to increase
at the 1952-1955 rates of 10 to
12 percent per year unless rela-
tively heavy investment is made
in the extension or moderniza-
tion of production facilities.
Trucks for the Military
The Soviet military forces
have maintained a relatively
constant inventory of approxi-
mately 350,000 motor vehicles
during the postwar period. Be-
ginning in 1951, the Soviet
motor vehicle industry began
to increase its output of all-
axle-drive trucks, principally
to meet increased military re-
quirements, not only for heavy-
duty cargo vehicles but also
for chassis on which to mount a
wide variety of mobile equip-
ment such as newly developed
armored personnel carriers,
rocket launchers, mobile radar,
communications equipment, re-
pair shops, and other equipment
increasingly essential to
modern land warfare.
Current levels of produc-
tion should meet the needs of
the military forces for
replacement and modernization
purposes in the immediate fu-
ture. All-out conversion to
specifically military trucks
could be effected relatively
quickly (within two or three
months), if necessary.
Trucks for Agriculture
The agricultural sector of
the economy appears to have been
hardest hit by the automotive
industry's inability to achieve
its earlier goals. When truck
production fell during the 1951-
1953 period, allocation of
trucks to agriculture fell even
more sharply, representing only
20 percent of total truck pro-
duction, compared with an ear-
lier share of about 30 percent.
By 1954, with agriculture re-
ceiving sweeping new priorities,
allocations of trucks to agri- .
culture reached an unprecedented
40 percent of total truck pro-
duction, highlighting the
implied paucity of earlier
allocations.
Contrasts With US Production
The production and use of
motor vehicles in the
MOTOR VEHICLE PRODUCTION IN THE USSR
Thousand 1945-1955
500
/
FOURTH /
IVE.YEAR PLAN / /
*
PR
P`
/
FIF~~
F1VE~
~
E
3s0;
TO
TAL
29,
TRU
CKS
iso
i
110
CAR
S
1945 '46 '47 '48 '49 '50 '51 '52 '53
ACTUAL PRODUCTION
-- ESTIMATED PLANNED PRODUCTION
* announced planned increase
USSR has a substan-
tially different.
focus, and is con-
siderably smaller as
a percentage of total
national economic
activity, than in
the United States.
For example, at the
end of 1954 the USSR
had approximately
2,000,000 vehicles,
of which more than
90 percent were gen-
eral-purpose, short-
haul trucks, suitable
for employment on the
limited road networks
of the USSR. At the
same time, the US
possessed 56,000,000
vehicles, of which
more than 80 percent
were passenger
cars. Of the almost
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 December 1955
10,000,000 trucks in the United
States, a large portion are en-
gaged in long-haul rather than
short-haul transport.
The Sixth Five-Year Plan
Almost-all of the trucks
currently being produced in the
USSR are basically models in-
troduced immediately after
World War II. The Soviet view
of these motor vehicles was
described by Deputy Premier
Mikoyan in a December 1954 con-
versation with Finnish minister
of interior Leskinen. Mikoyan,
replying to a criticism of
Soviet trucks, said he was per-
fectly aware that the present
Russian cars and trucks cor-
responded roughly to General
Motors products of 1939, but
the 1939 models were, never-
theless, excellent and fully
capable of performing the
tasks for which they were de-
signed. He added that "Soviet
trucks are something like my
wife--she is still very good
indeed, but you would hardly
call her modern."
As for the appearance of
newer model trucks, a leading
Soviet automotive official de-
scribed the schedules which
govern the production of new
Soviet vehicle designs as fol-
lows:
"The development of a new
motor vehicle is a long process.
From three to five years are
needed for design work, for
building and testing experi-
mental models, for finishing
the design, and for production
preparations. New motor ve-
hicle models are produced for
a period of from 10 to 12 years.
After these models have ceased
to be produced, it is from five
to eight years before they are
completely worn out. Thus,
when a new motor vehicle design
is contemplated, the operations
of the motor vehicle industry,
the motor transport organiza-
tions, and branches of the
national economy associated with
them have to be projected 15
to 20 years into the future,"
Judging from this statement
it appears likely that produc-
tion of current models will con-
tinue probably until 1958 or
1960, at which time trucks of
newer types will be phased into
production. Thus, during the
Sixth Five-Year Plan, invest-
ment in the industry should be
much higher than during the
Fifth Five-Year Plan, and the
increased production capacity
of the industry resulting,from 25X1
new tooling should begin to
approach the goals established
originally for 1950.
(Prepared by ORR)
TRADE CONTROLS AND COMMUNIST CHINA'S ECONOMY
A modest increase in Pei-
ping's trade with free world
countries would result if these
countries would relax controls
on trade with Communist China
to the level of those applied
to trade with European bloc
countries. The progress of
Chinese Communist industrial
and military development,
however, which has progressed
substantially with Soviet bloc
support, would not be signifi-
cantly speeded up.
The British decision to
take the initiative in pressing
for a major relaxation of the
multilateral controls on trade
with Communist China promises
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CURRENT INTELLIGENCE WEEKLY SUMMARY
to bring this long-standing
issue to a head early in 1956.
While a serious deterioration
in the international situation
could again delay revision and
perhaps mitigate its severity,
present indications are that
London has almost unanimous
support in the China Committee
(CHINCOM) for lowering the
China controls to the level of
those applied to the rest of
the bloc by no later than the
end of next year.
If this should occur, a
modest increase in trade with
free world countries would
probably result as China in-
creased purchases of presently
embargoed transport equipment
and machinery, and expanded
exports to Japan. However,
this increase would probably
be far less than implied in
Chinese Communist propaganda.
A more significant increase
would result if the United
States, which maintains a uni-
lateral total embargo, were to
permit resumption of remit-
tances to, and trade and ship-
ping with,. Communist China.
The rise in trade would
be most marked with Japan,
which is a nearby, cheap source
of metals and machinery. Commu-
nist China has refused to ex-
port coking coal, iron ore and
other industrial raw materials
in large quantities so long as
Japan maintains present con-
trols. Soon after the special
controls are dropped, Sino-
Japanese trade probably would
reach $100,000,000 annually
each way, or 5 to 6 percent of
the total trade of each coun-
try. China's exports to Japan
during 1955 are estimated at
$70,000,000 and imports at
$30,000,000.
Foreign Exchange Savings
The actual rise in Chinese
trade with Western,Europe prob-
ably would be less than commonly
anticipated, because Peiping al-
ready obtains embargoed items
from these countries by means of
transshipments through bloc
countries. This trade could
move openly and directly to
China after controls are re-
laxed, however, with a reduc-
tion in costs to China of possi-
bly $2,000,000 in foreign ex-
change, which could then be
applied to the purchase of addi-
tional strategic goods. Pei-
ping probably would turn to
Western Europe for some items
presently supplied by bloc in-
dustries, but not to an extent
which would appreciably affect
China's trade orientation to-
ward the bloc.
Communist China presumably
would continue to buy steel
products, which comprise the
bulk of Western-origin embar-
goed commodities currently
being obtained through trans-
shipment. It would also empha-
size purchases of transport
equipment and other badly needed
machinery but could be expected
to continue buying, primarily
from the USSR and European
Satellites, complete factory
installations, which involve
the hiring of foreign techni-
cians.
The termination of the
differential trade controls
against Communist China would
also save Peiping the money it
expends in premiums paid for
embargoed items. For example,
in 1955 Peiping paid Ceylon
about $8,000,000 more for rubber
than it would have had to pay
on the Singapore. market.
Restrictions which current-
ly deny the use of most of the
free world's shipping for carry-
ing strategic goods to Communist
China would presumably be modi-
fied with any change in the
level of trade controls. The
availability of Western ship-
ping for moving those bloc
goods which presently move over-
land might save Communist China
$10,000,000 annually.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 December 1955
Internal Savings
In addition to potential
foreign exchange gains by China,
internal savings by the entire
Sino-Soviet bloc resulting from
the relaxation of trade and
shipping controls imposed on
China might reach nearly
$90,000,000 annually. Soviet
bloc savings, mostly benefiting
the USSR, are estimated at
$65,000,000, much of which
represents the cost of trans-
porting petroleum products
overland by rail to China. In-
ternal savings of transport
costs to China would approxi-
mate $22,000,000.
The termination of the
special trade sanctions against
SECRET
China would not significantly
affect the progress of Chinese
Communist industrial and mili-
tary development, which has
progressed substantially with
Soviet bloc support. These
special controls have not denied
China goods;*if not available
from bloc suppliers, items have
been purchased and transshipped
by bloc countries. With a re-
laxation, China's foreign?ex-
change costs attributable to
controls--which have been only
one percent of the value of its
total imports--could be saved
and an additional 2-percent in-
crease in imports could well
result from the growth of trade
with Japan.
(Prepared by ORR)
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