CURRENT I NTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001100080001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 39
• Document Creation Date: December 16, 2016
• Document Release Date: February 2, 2005
• Sequence Number: 1
• Publication Date: February 7, 1957
• Content Type: SUMMARY

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CONFIDENTIAL
INTELLIGENCE
WEEKLY
SUMMARY
COPY N0. 17
OCI NO. 0057/57
7 February 1957
CURRENT
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CENTRAL INTELLIGENCE AGENCY
CONFIDENTIAL
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
7 February 1957
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
USSR SLOWS RATE? OF ECONOMIC-GROWTH Page 1
At the opening session of the Supreme Soviet on
5 February, planning chief M. G. Pervukhin outlined a
new economic approach involving reduction of plan goals
for 1957 and "corrections" for 1960 targets. Planned
growth of industrial production in 1957 has been cut to
a 7.1-percent increase over 1956, the lowest growth rate
for any peacetime year since 1928. A growth rate of
10.8 percent was achieved in 1956. On the basis of the
incomplete data available, the prospects for success in
achieving the current Five-Year Plan goal are by far the
worst that have faced the Soviet Union since World War II.
The Soviet leaders apparently have accepted at least
temporary delay in the long-term race to "catch up with
and surpass" the West.
MIDDLE EAST DEVELOPMENTS . . . . . . . . . . . . . . . . Page 4
UN secretary general Hammarskjold feels that
Egyptian pressure for further UN action to compel the
Israelis to withdraw jeopardizes his attempts to obtain
Israeli compliance with the UN resolution.' The Suez
Canal issue is coming to the fore rapidly because limited
passage may be possible by mid-February and normal
passage by early March. Nasr's stand on a canal settle-
ment remains fundamentally unchanged, although he may
co-operate on details. Britain and France continue to
seek some device which would put at least some control
of canal finances and shipping priorities in the hands
of an international body.
COWTIAL
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7 February 1957
NOTES AND COMMENTS
RENEWED TERRORISM ON CYPRUS LIKELY TO
COINCIDE WITH UN DEBATE . . . . . . . . . . . . . . . . Page 1
EOKA terrorists have recently stepped up anti-
British violence on Cyprus, and Turkish-Cypriots have
twice attacked Greeks on the island in the past two
weeks. Further outbreaks are likely to coincide with
the opening of the UN debate on the issue, probably
early next week. Athens expects new anti-Greek dis-
turbances in Istanbul and is in a mood to retaliate.
ALGERIA . . . . . . . . . . . . . . . . . . . . . . . . Page
The failure or inability of the Algerian rebels to
precipitate widespread disorders when the UN took up the
Algerian question improves at least the short-term
prospects of averting a major explosion in the area. It
is questionable, however, whether the expected adoption
by the UN of a mild resolution acceptable to France will
induce nationalist leaders to agree to an early cease-
f ire. In France, Premier Mollet is encountering obstacles
in his efforts to solidify National Assembly support for
his 9 January declaration on Algerian policy.
F__ I
ADEN-YEMEN BORDER DEVELOPMENTS . . . . . . . . . . . . . Page 3
The British War Office is alarmed over the deteri-
orating situation in Aden, and the commander of British
land forces in the Mediterranean area has asked for the
return of an infantry battalion recently withdrawn from
Aden. British concern probably is heightened by con-
tinuing Soviet efforts to supply arms and other aid to
Yemen. Yemen and Saudi Arabia have begun to undermine
the authority of Aden Protectorate rulers who maintain
connections with Britain.
INDONESIA . . . . . . . . . . . . . . . . . . . . . . .
The fate of the Indonesian cabinet remains uncertain.
Military and political leaders in Sumatra remain adamant
in their refusal to surrender the authority they seized
from the central government last December. President
Sukarno meanwhile continues to bid for popular support of
his concept of "guided democracy" outside the framework
of the political parties.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
POLAND'S 1957 ECONOMIC PLAN . . . . . . . . . . . . . . Page 5
The sharp reduction in the rate of economic growth
scheduled in Poland's draft economic plan for 1957 re-
flects Gomulka's reappraisal of Poland's economic pros-
pects. The new plan, implying a reduction in the rate of
growth of producer goods output and an increase-in consumer
goods, is more realistic than previous plans. Despite
these readjustments, Poland's economic problem is too
great to be overcome without outside aid beyond what it
has been securing from the USSR. Gomulka is pressing for
economic assistance from Western countries.
REPATRIATION OF POLES FROM THE SOVIET-UNION . . . . . . Page 6
The repatriation of Poles from the Soviet Union,
formally agreed to by the USSR and Poland on 18 November,
is presenting some serious domestic resettlement prob-
lems and has added new difficulties to Polish-Soviet re-
lations. The program will probably heighten rather than
lessen anti-Soviet sentiments in Poland as Poles return
with t
l
a
es of mistreatment in the USSR.
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HUNGARIAN REGIME STEPS UP DOMESTIC POLITICAL PROGRAM .
Page 7
The Hungarian regime, seeking to eliminate all
vestiges of the revolutionary period, last week stepped
up its political program to restore Communist supremacy
over every aspect of Hungarian life. 25X1
EAST GERMANY EXPANDING ARMED WORKERS' GROUPS . . . .
Page 8
The East German regime, apprehensive over the possi-
bility of a popular uprising, is expanding the Kampf-
gruppen (armed workers' militia) as an internal security
fo
rce and is ste ing up their training activities.
F_ 22
PATHET LAO PUSHES TOWARD FINAL AGREEMENT
WITH LAOS GOVERNMENT . . . . . . . . . . . . . . . . .
Page 9
The Pathet Lao has apparently launched a final drive
to participate in a coalition government for Laos under
the terms of Pathet Lao chief Souphannouvong's 28 De-
cember agreement with Prime Minister Souvanna Phouma.
Souphannouvong has returned to Vientiane and will prob-
ably offer some compromise formula to overcome the
cabinet's objections to the agreement. 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
CHOU ENDS ASIAN TOUR . . . . . . . . . . . . . . . . . . Page 9
Chou En-lai's visit to Ceylon ends his tour of eight
Asian nations which began last November. Issuance of a
Sino-Ceylonese communiquJ on 4 February left India the
only country on Chou's itinerary where no joint statement
was issued.
DEMOBILIZATION DIFFICULTIES IN COMMUNIST CHINA . . . . . Page 10
Peiping apparently is encountering considerable
difficulty in absorbing large numbers of veterans in
civilian occupations. The major problem stems from the
fact that most demobilized soldiers have been unwilling
to work on farms and only a small percentage of the dis-
chargees can be given industrial jobs in urban areas
where unemployment already is a problem.
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BRITAIN PLANS INITIATIVE ON EUROPEAN INTEGRATION . . . . Page 12
Britain plans to use the occasion of the Western
European Union foreign ministers' meeting on 26 February
to set forth plans for a new, comprehensive European
body. British officials seem eager to demonstrate their
interest in closer ties with the Continent, and the new
plan may provide for full British membership in such a
body.
FINANCIAL PROBLEMS IN ECUADOR . . . . . . . . . . . . . Page 12
Financial difficulties in Ecuador have reached the
point where the stability of the present regime may
depend on a foreign loan. The Conservative government
of President Ponce met only its most pressing obligations
through 1956, and its cash resources appear to be ex-
hausted. Austerity measures designed to balance the
budget are unlikely to provide adequate funds during the
next few months.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
CONFERENCE OF SCANDINAVIAN COMMUNIST PARTIES . . . . . Page 13
The Communist parties of Denmark. Norway- Smadan-
and Finland are reported lannin 25X1
m n ne an
~wanvvxaxn, cue o he Hungarian revolt.
The Soviet intervention in Hungary had a particularly
unfavorable impact on the Communists in Denmark and
No
rway, where they face parliamentary elections this year.
F_ I
PART III
PATTERNS AND PERSPECTIVES
DEVELOPMENT OF THE SOVIET ECONOMY IN 1956 . . . . . . Page 3
The official report on the Soviet economic plan re-
sults for 1956 shows that while over-all growth of the
economy last year came up to the annual average required
if 1960 goals are to be obtained, progress was uneven
and problems appeared in key interdependent industries
which have almost invariably met plan goals in the past.
The year was the best for agriculture in the histor
y
for an analysis of prosp '.:j -~ - -- ~' j'
acts for 195?
POLISH-SOVIET IDEOLOGICAL CONTROVERSIES . . . . . . . . Page 6
Poland is unique in the Communist bloc in that pop-
ular pressures exert considerable influence in the shap-
ing of state policies. Gomulka's strongly nationalistic
program, which resulted from these pressures, has brought
the Polish leadership deological conflict with the
USSR.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
INDIA'S FIRST NUCLEAR REACTOR . . . . . . . . . . . . . Page 9
India's plan to become the leading Asian nation in
the field of atomic energy took a major step forward on
20 January when Prime Minister Nehru dedicated the first
atomic reactor to be placed in operation in free Asia.
India hopes to make its Atomic Energy Establishment a
regional training and research center which will over-
shadow the American-sponsored center at Manila.
THE VIET MINH ARMED FORCES . . . . . . . . . . . . . . . Page 10
One of the strongest supports of the Viet Minh re-
gime is its 275,000-man army. Since the end of hostil-
ities, the army has been transformed from what was largely
a guerrilla force into a modern military establishment,
supported by large shipments of military materiel from
Communist China.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
OF IMMEDIATE INTEREST
USSR SLOWS RATE OF ECONOMIC GROWTH
At the opening session of
the Supreme Soviet on 5 February,
M. G. Pervukhin, the new chief
of planning, outlined a "new
look" in planning involving
reconsideration of plan goals
for 1957 and "corrections" for
1960 targets. Planned growth
of industrial production in
1957 has been cut back from the
1G.8 percent achieved in 1956
to 7.1 percent, the lowest in
any peacetime year since 1928.
Finance Minister A. G. Zverev
reported that budget alloca-
tions to industry and agricul-
ture would be slightly higher
than last year and that the
defense budget would be reduced
about 5 percent.
State capital investments
are to increase only 6 percent
in 1957 compared with 17 per-
cent the previous year. On the
basis of the incomplete data
available, the prospects for
success in achieving Five-Year
Plan goals are by far the worst
that have faced the Soviet
Union since World War II. (For
analysis of 1956 achievements,
see Part III, p. 3,).
Industry
Growth rates in heavy and
light industry were cut back
about equally as Pervukhin and
his new committee moved to re-
phase the investment program
and concentrate on speeding up
the construction of new produc-
tive capacity in the basic
materials industries, where
construction has lagged badly.
While this lag is made up, how-
ever, production of coal, elec-
tric power, iron, steel, and
cement in 1957 will fall even
further behind the rates of
growth needed to reach 1960
targets..
The machine building in-
dustries apparently will con-
centrate on producing the cap-
ital equipment needed by the
basic materials industries, and
state investment expenditures
on machinery and equipment will
increase from 55 to 65 billion
rubles. Production of agricul-
tural machinery and new rail-
road equipment, however, still
retains a high priority..
Rephasing the 1957 produc-
tion and investment programs
means that production increases
for iron, steel, coal, cement,
and electric power in 1958-60
will have to be at least double
the rates achieved in 1956 and
1957 if the industrial produc-
tion goals for 1960,are to be
met. This means that Pervukhin
must speed up considerably con-
struction for these industries
in the next 12 to 18 months.
If these basic industries fall
short, the whole plan will fail.
Military Allocations
The announced military
allocation of 96,7 billion
rubles for 1957 is slightly
below the 98.7 billion rubles
actually expended in 1956 and
6 percent below the 102.5 bil-
lion originally allocated for
that year. This allocation is
not inconsistent with the an-
nounced Soviet intention to
begin demobilizing 1,200,000
men in 1956. If this demobili-
zation has in fact been com-
pleted as claimed, the 1957
allocation could allow an
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
'USSR 1957 PLAN REVISIONS
GOALS FOR KEY COMMODITIES
MILLION METRIC TONS EXCEPT WHERE NOTED
1956 PRODUCTION INCREASE ACHIEVED
391 L 38
1955 1956
OUTPUT
70.8 1 13"
1957 PLANNED INCREASE (PERVUKHIN COMMITTEE REVISION)
ANNUAL INCREASE REQUIRED IN 1958-'60 TO MEET 1960 GOAL tSABUROV 6th PLAN GOALS)
446
17
1957 1960
GOAL
1955 1956 1957 1960
OUTPUT GOAL
60 PIG IRON 53.0 '60 STEEL
1955 1956
OUTPUT
1957 1960
GOAL
ELECTRIC
POWER
BILLIONS KWH
170.1 21.9
1955 1956
OUTPUT
increase in military procure-
ment of approximately 10 per-
cent. On the other hand, if
military demobilization was
limited to 400,000, the apparent
number of servicemen who joined
the labor force in 1956, 1957
procurement may be held at about
1956 levels.
The budget provides for a
25-percent reduction in the
compulsory state loan, an in-
crease of one third in social
insurance and social security
payments to the population, and
an increase in the tax-free
minimum wage. These measures
are intended primarily for the
State retail trade turnover
is planned to increase 11 per-
cent or 57 billion rubles. If
this is achieved and collective
farm market trade also in-
creases, the purchasing power
created by increased worker
incomes probably can be ab;
sorbed. Peasant incomes will
do well in 1957 to stay at the
level reached in 1956.
Achieving the planned in-
crease in retail trade, how-
ever, may require a greater
supply of goods than is likely
SECRET
1957 1960
GOAL
O TPUT 1956 1957 GOAL
1955 1956 1957 1960
OUTPUT GOAL
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benefit of the lowest income
groups and will add about 32
billion rubles to disposable
incomes.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February, 1957
to be available. The planned
output of industrial consumer
goods is relatively low and
chances of exceeding the bumper
grain crop of 1956 are poor.
The difference could be made
up by withdrawals from inven-
tory or the excess purchasing
power could be absorbed by re-
tail price increases. With-
drawals from inventories took
place in 1953 and 1954 and re-
sort to retail price increases
would reverse the downward
price trend prevail-
ing since 1947.
The 1957 agri- USSR 1957 PLAN REVISIONS
cultural plan calls
for a production in-
crease of 9.5 per-
cent, concentrated
in meat, dairy prod-
ucts, and industrial
crops. Achievement
of this increase de-
pends on a recur-
rence of the extreme-
ly favorable weather
conditions of 1956.
Thus retail trade
propects could be
considerably worse
than planned.
Although planned
investment in housing
is increased from 25
to 30 billion rubles
and state loans to
citizens building
their own houses are
scheduled to increase
six times, no change
in the original
housing goals for
1960 is apparent.
If the Soviet con-
sumer was expecting
dramatic concessions
as a result of the
talk of possible in-
creases in housing
and consumer goods
which appeared in
SUMMARY INDICES 1955=100
PERCENT INCREASE OVER 1955
PERCENT PLANNED INCREASE OVER 1956 (PERVUKHIN COMMITTEE REVISION)
PERCENT ANNUAL INCREASE REQUIRED IN '58'60 TO MEET 1960 GOAL
(SABUROV 6th PLAN GOALS)
NATIONAL ALL
INCOME 160.0 INDUSTRY
HEAVY
INDUSTRY
the Soviet press at the end of
1956, he will be disappointed.
The normal slow improvement of
his living conditions will prob-
ably continue, however, and
adherence to the 1960 housing
goals promises him a substantial
improvement where he needs it
most.
Foreign Trade
Trade with the other coun-
tries of the Sino-Soviet bloc
SECRET
1957
PLAN
1956. 1957
PLAN
1960
PLAN
1960
PLAN
1960
1959
1958
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
will increase 2.5 billion rubles
to 22 billion, three quarters
of all Soviet foreign trade.
Most of this increase comes
from greater shipments of
Soviet industrial raw materials
to the European Satellites and
some rise in imports of in-
dustrial equipment and machinery
from East Germany and Czechoslo-
vakia. The Satellites are also
encountering severe problems,
arising in particular from
shortages of coal and iron ore;
the coal shortage in the Euro-
pean areas of the bloc creates
a special urgency to expansion
of coal production in the USSR.
Prospects
The Soviet leaders are
facing the dilemma of main-
taining Stalinist forced-draft
rates of growth in an economic
system that lacks many of the
coercive controls employed by
Stalin. These controls have
yet to be replaced with an
effective system of incentives
for the labor force. There is
substantial evidence that even
the economic bureaucracy created
by Stalin is offering consider-
able passive opposition to the
continued high tempo demanded
by his successors.
In addition, forced devel-
opment of the economy over the
last 30 years has reduced the
"fat" which was formerly avail-
able to cover up the mistakes
and unreasonable demands of
the top planners. Many of the
most readily exploitable natural
resources are being depleted.
The low war and postwar birth
rates increasingly limit the
growth of the industrial labor
force, and large numbers of
workers can no longer easily
be transferred from agriculture
to industry. Also, political
and economic repercussions of
changed relationships with the
Satellites have recently aggra-
vated Soviet internal economic
difficulties.
The Soviet leaders apparent-
ly have accepted at least a
temporary delay in the long-
term race to "catch up with and
surpass" the West; if recent
trends in the basic industries
are not reversed by Pervukhin's
new committee, the delay may
be more than temporary. Another
Supreme Soviet meeting is
scheduled for sometime before
midyear to consider Pervukhin's
revised version of the Sixth
Five-Year Plan. At that time
the Soviet leaders may have to
admit to having lowered 1960
goals for key heavy industries
r-nd total indtistriAl growl. 25X1
UN secretary general
Hammarskjold is exploring the
possibility of getting Israeli
compliance with the 2 February
UN resolution calling for Is-
raeli troop withdrawal "without
further delay," before going to
Cairo to discuss the problem
of Suez settlement negotiations.
Hammarskjold agrees privately
that the intent of the second
resolution of the same date
is that the UN Emergency Force
should be stationed in Sharm
al-Shaikh,, subject to Egypt's
consent. Egypt and other Arab
states do not necessarily agree
with this interpretation, set
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CURRENT INTELLIGENCE WEEKLY SUMMARY
forth orally by the
sponsors of the res-
olution, including
the United States.
In addition, Hammar-
skjold has asked that
Israel, as a matter
of principle, agree
to accept station-
ing of UN troops on
both sides of the
demarcation line and
to recognize that
complete Israeli
withdrawal includes
the withdrawal of
the civil administra-
tion in Gaza.
On 4 February,
Egyptian foreign
minister Fawzi called
for the "earliest
possible" meeting of
the General Assembly
to consider Israeli
compliance with the
latest withdrawal
resolution. Ham-
marskjold felt this
development was
"ominous and threat-
ening," presumably
because such a meet-
ing at this time
7 February 1957
Israel-Egypt Armistice
line
Approximate area
under Israeli control
c.
Gaz
.Beersheba
1 ISRAEL
El Auja
r`? NEUTRAL
Al Qusay} ah' cr ZONE
N 0?~
r ?~
JP-RDAN
SINAI ~
Kuntillah
An NaI~hI'
PENINSULA Aqaba
Eilat
(P T
a regular basis. General
Wheeler's report on 6 February
gave mid-May as the goal for
unlimited passage, but the UN
estimates have been deliberately
conservative and the canal may
be completely open early in
March. Reported threats by
Nasr that the canal clearance
work would be halted or slowed
have not materialized.
would jeopardize any chance of
reaching even a conditional ar-
rangement with Israel.. and Egypt
and might lead to a UN call for
sanctions against Israel..
Interest in the canal has
been sharpened by the fact that
clearance work is ahead of the
conservative schedule given out
by UN authorities. With the
exception of two obstacles, the
canal has been cleared from Port
Said nearly to its southern
entrance. Vessels with less
than 25 feet draft--about 10,000
tons or less--could move through
the canal now, although not on
The Egyptian position re-
mains essentially unmodified--
Egypt will collect the tolls
and be the sovereign canal
authority--although there have
been some reports that Nasr
might compromise on details.
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7 February 1957
Both France and Britain
are anxious that at least a
temporary agreement on the
canal be "cannhpd before
reopened
French and ri is
are canvassing for support of
a proposal that canal tolls be
collected by the International
Bank for Reconstruction-and
Development. Under this scheme,
part of the proceeds would be
paid by the bank to Egypt,
part retainedfby the bank for
repayment of the loan it has'...
made for clearance operations,
and the remainder held by the
bank for future canal develop-
ment needs.
The British have been
pushing to get the Western-
sponsored Suez Canal Users'
Association into operating
shape. Beyond this, however,
London appears to be resigned,
although not content, to allow
the principal burden of nego-
tiation with Egypt to fall on
the UN and the United States.
The French are continuing to
associate their position closely
with that of the Israelis,
possibly in the belief that
Tel Aviv may again become a
useful instrument should the
canal issue produce a new
crisis in the strained rela-
tions between the West and
Egypt.
Syrian Border Tension
New trouble may be brewing
on Israel's border with Syria.
The Syrian military has become
jittery since a recent rash
of minor incidents in this area.
and heavier-than-normal troop
concentrations have also been
observed on the Syrian side
of the border.
Syria's fears at this time
derive in part from specific
Israeli actions--the gradual
occupation of the demilitarized
zone by the Israeli army since
last November, road-building
activity near the border, and
the ousting from the zone of
bedouin Arab tribesmen, who
sought refuge in Syria.
The Syrians are also mind-
:ul of the possibility that
Israel will resume work on the
Banat Yacov Canal for diverting
Jordan River water into an Is-
raeli power and irrigation proj-
ect. This project, long in
dispute between the two countries,
has led Syria in the past to
threaten to halt Israeli work
by force if necessary, and the
Syrians tend to regard any un-
usual Israeli activity in this
area as preparation either for
an attack on them or for the
resumption of work on the
canal. The Israelis in the
last few months have given
little publicity to the proj-
ect, but in Tel Aviv's pres-
ent mood it seems entirely
possible that Israel might
simply proceed with the work
without giving_advance notice.
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7 February 1957
NOTES AND COMMENTS
RENEWED TERRORISM ON CYPRUS LIKELY TO COINCIDE WITH UN DEBATE
Widespread violence on
Cyprus is likely to coincide
with the opening of the UN de-
bate on the issue, probably
early next week. In addition,
there may be new anti-Greek
outbreaks in Turkey which would
result in a strong Greek reac--
tion.
The Greek-Cypriot under-
ground EOKA has recently
stepped up hit-and-run attacks
against the British on Cyprus
and Turkish-Cypriot policemen
have also been killed. I
Although political
strikes are now forbidden on
Cyprus, Greek-Cypriot labor
organizations recently staged
a strike protesting attacks by
Turkish Cypriots and may strike
again in support of the Greek
UN appeal.
Gangs of Turkish-Cypriot
youshave recently raided
the Greek quarters of Nicosia
and Famagusta and destroyed
Greek-Cypriot property. Some
Greek Cypriots were injured
and a Greek Orthodox church in
Nicosia's Turkish sector was
damaged. Members of the secret
Turkish-Cypriot society VOLKAN
reportedly distributed leaflets
on 31 January threatening re-
taliation against the Greek
majority for attacks on the
British and hinting at full-
scale war.
On instructions from Greek
prime minister Karamanlis, the
acting foreign minister told
American ambassador Allen on 1
February that Athens is "great-
ly worried" over indications
that new anti-Greek disturbances
may break out in Istanbul.
Athens is anxious, according
to the minister, that Ankara
"know in advance such disturb-
ances are expected so that the
Turkish government cannot say
that the police in Istanbul
were taken by surprise."
The Greeks voiced a simi-
lar warning immediately before
the anti-Greek riots in Turkey
in September 1955. Ankara has
since then repeatedly asserted
its determination to prevent
a recurrence. The Istanbul
court's recent acquittal of
those implicated in the 1955
riots might be interpreted,
however, as promising immunity
to any Turks contemplating new
anti-Greek actions. The Turkish
prosecutor had asked for ac-
quittal on the ground that
Cyprus "is a Turkish island
forming part of the motherland"
and the riots were the result
of Greek "provocations."
Prime Minister Karamanlis
is under strong pressure from
his ministers and the Greek
Church to stage a demonstration
in Athens "to manifest Greek
solidarity with the
Such an event would
certainly touch off
Cypriots."
almost
counter-
25X1
demonstrations in Turkey with
unpredictable results.
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7 February 1957
The failure or inability
of the Algerian rebels to pre-
cipitate widespread disorders
when the UN took up the Algerian
question improves at least the
short-term prospects of avert-
ing a major explosion in Al-
geria. It is questionable,
however, whether the expected
adoption by the UN of a mild
resolution acceptable to France
will induce rebel leaders to
agree to an early cease-fire.
In France, Premier Mollet is
encountering obstacles in his
efforts to solidify National
Assembly support for his 9
January declaration on Algerian
policy.
Notwithstanding several
scattered terrorist attacks and
one, ambush of a French military
unit by a 100-member rebel
band in western Algeria, the
last two weeks were unusually
quiet, especially in the Algiers
area. The Moslem general
strike, begun on 28 January at
the instance of the National
Liberation Front (FLN), over-
lapped the start of the UN
debate on 4 February, but its
observance had already declined
sharply and it failed complete-
ly to develop any insurrec-
tionist features.
The delayed start of the
UN discussion may have contrib-
uted to this result, but the
major credit is generally given
to the rigorous security pre-
cautions taken by the French,
who placed all important urban
centers under heavy guard and
employed their troops in an
increasingly successful effort
to neutralize Moslem fear of
FLN reprisals. In rural areas,
terrorism increased slightly
but no major military offensive
by the rebels materialized.
An outbreak of violence
is still possible, however,
as tempers on both sides have
been strained by the strike
and the FLN may feel impelled
to resort to desperate measures
in an effort to restore its
prestige in urban areas.
Chances of such a reaction
occurring will be increased
to the extent that French
officials and employers enforce
sanctions against Moslems who
participated in the strike.
Meanwhile, the local admin-
istration continues to be con-
cerned about the danger from
right-wing settler elements,
who have reportedly stepped
up their activities. Several
members of a counterterrorist
cell were recently arrested
and charged with the 15 January
bazooka attack on French mili-
tary headquarters--an incident
originally blamed on the FLN.
Even if the present
relative calm continues and
serious mob violence is averted,
France's minister residing in
Algeria, Robert Lacoste, does
not share the optimism ex-
pressed last week by other
French officials regarding an
early cease-fire. He recently
told the American consul general
in Algiers that he believes the
nationalist leadership remains
implacable and will not be in-
fluenced by the UN vote and
that he thus has no alternative
but to proceed with the pacifi-
cation program. In this con-
nection, he indicated that a
major French preoccupation now
is with "substantial"--and ap-
parently increasing--clandestine
assistance to the FLN from
Morocco and Tunisia.
The hopes of the Mollet
government for early cease-fire
talks may be endangered by ap-
parently growing opposition
within the National Assembly to
the premier's 9 January declara-
tion on Algerian policy. The
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7 February 1957
replies of political leaders
to Mollet's letter of 24 Janu-
ary.,requ?est.ing confirmation of
their personal and party sup-
port for his policy have dis-
closed a small area of agree-
ment--on the "indissoluble"
ties with Algeria--and wide
differences--particularly over
the proposal for free elections
three months after the cease-
f ire.
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ADEN-YEMEN BORDER DEVELOPMENTS
The British War Office has
become alarmed over the deteri-
orating, situation in Aden. A
battalion of the Durham Light
Infantry, one of the two Brit-
ish infantry battalions sta-
tioned in Aden since hostili-
ties began in Egypt, has virtu-
ally completed its scheduled
redeployment to the United
Kingdom--leaving only a battal-
ion of the Cameron Highlanders.
SAUDIA ARABIA
Protectorate number about 1,300.
At least two companies of the
Cameron Highlanders are be-
lieved already deployed at
critical points on the disputed
Yemen-Aden frontier. A minimum
of 2,400 British-led native
troops are also available in
the protectorate, whose frontier
with Yemen and Saudi Arabia
extends almost 800 miles.
L-5-? . .-'MuWh
`~ Yam
f _.
Efl OP,*~ f'0Mt OMAL,r
Repeated armed
Yemeni incursions in- 25X1
to the Aden Protec-
torate, and continu-
ing Soviet bloc and
Egyptian efforts to
supply arms and ad-
visers to Yemen have
undoubtedly caused
the British to reas-
sess their military
position in Aden.
Yemen is attempting to
undermine the authority of pro-
tectorate rulers who maintain
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7 February 1957
connections with Britain. In
three areas of the Western Pro-
tectorate, movements have been
reported among the tribesmen
to elect new leaders-in place
of those having treaty relations
with Britain. Additionally,
Britain's initial reluctance
to use all available power to
eject Yemeni intruders from
several villages in the pro-
tectorate'state of Beihan have
led to criticism of Britain by
the Emir of Beihan. A long-
deferred counterattack, however,
launched at the end of January
by British forces and RAF air-
craft, had by 3 February forced
Yemeni forces to withdraw
across the frontier from a ten-
mile salient into Beihan.
The fate of Indonesia's
coalition cabinet remains un-
certain. Ali has been engaged
in discussions on a cabinet re-
shuffle to fill seven vacancies
and has had to follow closely
military and political develop-
ments in Sumatra as well as the
activities of President Sukarno.
All reportedly has invited
the National Progressive Fac-
tion, which includes "national
Communists," to participate in
the cabinet. If the Christian
Party withdraws, as it threatens
to do on 15 February, he may
also approach the Reconstruc-
tion Faction, which is composed
of "independents" elected on the
Communist Party ticket and is
considered to be under Communist
direction.
The apparent failure of an
army conference in Palembang in
late January to find a solution
for Sumatran problems appears
to have stimulated more aggres-
sive activity in two Sumatran
provinces. A mass rally in
Central Sumatra on 5 February
demanded the resignation of
the cabinet and the return of
former vice president Hatta to
the government. It was resolved
that the provincial council
"take more radical action"
should Ali refuse to resign.
Military authorities in
South Sumatra have banned
strikes following reports that
the Communist labor federation
planned to promote labor un-
rest, and the Java-born governor
of the province has been granted
"annual leave." The Nahdlatul
Ulama, the large Moslem party
which is the key to cabinet
survival and which has fol-
lowed a vacillating course in
response to Sumatran events,
may again decide to desert All,
and thus bring down the cabinet.
President Sukarno con-
tinues to press for a "guided
democracy" through an "advisory
council" under his personal
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7 February 1957
direction.. He appealed for
popular support outside the
framework of the regular politi-
cal parties in recent speeches
and has sent veterans--many of
whom are extreme leftists--to
all areas of Indonesia to whip
up enthusiasm for his plans.
Sukarno has also arranged
the establishment of a new or-
ganization, the "1945 Genera-
tion," composed largely of
leftists and extreme national-
ists. This organization is
designed to enlist mass sup-
port for Sukarno's "concept"
and is serving as a channel
for his unofficial statements.
A "Generation" spokesman has
announced that Sukarno will
reveal details of his plans
later this month, but that the
exact timing will depend on
"factors that might develop in
the meantime."
POLAND'S 1957 ECONOMIC PLAN
Poland's draft economic
plan for 1957 envisages a sharp
reduction in the rate of econom-
ic growth. The projected 4.2-
percent increase in planned in-
dustrial production contrasts
sharply with the actual 11 per-
cent achieved in 1955 and 11.5
percent in 1956. Implicit in
the announcement is a reduction
in the rate of growth of pro-
ducer goods output and an in-
crease in consumer goods pro-
duction. This contrasts with
earlier plans which had boosted
Polish industrial production
tremendously while almost ne-
glecting the people.
The investment
program announced
earlier also reflects
Gomulka's reapprais-
al of Poland's eco-
nomic prospects. The
investment plan; has
been reduced by 6
billion zlotys ($1.5
billion at the offi-
cial rate of exchange)
from the original
Five-Year-Plan (1956-
60) draft.
as the actual 1956 outlays.
Those industries which produce
for the market, such as light
industry, the foodstuffs in-
dustry, and agriculture, are
to receive a 13-percent in-
crease in investment outlays.
In the field of heavy industry,
the plan provides for a "con-
siderable reduction of outlays
in the engineering, oil and
metallurgical industries." In-
vestments in coal and power
will continue to be high.
A major problem which Po-
land faces is the expected de-
POLISH INDUSTRIAL PRODUCTION
(OFFICIAL PERCENTAGE INCREASES
OVER PRECEDING YEAR)
The investment plan for
1957 falls behind the 1956
plan, which was 92 percent
achieved, but is about the same
(PLAN)
70205 4
cline in the supply of coal--
vital to industry and trade--
the output of which is expected
to fall even below the 1956
production rates. A radical
reduction in coal exports would
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7 February 1957
pose an additional problem by
futher curtailing foreign ex-
change earnings.
In addition, Poland faces
problems in acquiring cotton,
grain, fats and oils, Inade
quate supplies of these raw
materials and cutbacks in the
number of government employees
are causing unemployment. This
situation is further aggravated
by the return of substantial
numbers of Polish repatriates
from the USSR. The regime
hopes that over 50,000 persons
will find employment as artisans
or in other local industries
whibh recently have been al-
lowed to become private enter-
prises.
Despite readjustments in
the plan and the fact that it
is more realistic, some of
these problems are too great for
Poland to overcome with outside
aid beyond what it has been
securing from the USSR. Gomulka
is pressing for economic assist-
ance from Western countries.
REPATRIATION OF POLES FROM THE SOVIET UNION
The repatriation of Poles
from the Soviet Union, formally
agreed to by the USSR and Po-
land on 18 November, is pre-
senting a serious domestic re-
settlement problem and has
added new difficulties to Pol-
ish-Soviet relations. Recent
Polish press comment has re-
flected the bitterness of the
Poles over the unfortunate
circumstances of their compa-
triotsrin the Soviet Union as
well as resentment of the
Kremlin's obstruction of War-
saw's repatriation teams in the
USSR.
The repatriation program
will probably heighten rather
than lessen anti-Soviet senti-
ment in Poland as Poles return
with tales of mistreatment in
the USSR and the growing mass
of repatriates keeps alive the
fires of irredentism.
Estimates of the number of
Poles in the Soviet Union vary
from 300,000 upwards, and Po-
land is determined to repatri-
ate as many of them as possible.
Moreover, the Polish press has
asserted that Poland also has
a "duty" to concern itself
with the fate of the Poles who
remain in the Soviet Union.
The arrival of nearly
35,000 repatriates in Poland
since 1 October 1956 has al-
ready created a serious re-
settlement problem. The regime
is trying to resettle as many
as possible on farms in the
formerly German Western terri-
tories, but this is a long-
range project that does little
to resolve the immediate prob-
lem of taking care of the ar-
rivals during the winter months.
Poland will have difficulty
finding the essential goods and
housing to accommodate addi-
tional large numbers of arrivals
barring receipt of immediate
foreign aid.
Recent Polish press com-
ment asserts that the Kremlin
is frustrating the efforts of
the repatriation commission in
Moscow. Members of the com-
mission "cannot move a step
outside Moscow," according to
the Polish press, which has
demanded that they "be allowed
to travel to Siberia, Central
Asia and to the Far East and
to organize repatriation centers
and aid Poles in these areas."
Demands have also, been voiced
for the establishment of Polish
consulates and information
centers in cities--such as
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7 February 1957
Vil.nyus and Minsk--with large
Polish populations.
The Poles are particularly
agitated over the fate of per-
sons who were resettled from the
Polish eastern territories that
were annexed by the Soviet Union.
Many of these Poles were trans-
ported to Siberia and other
isolated areas, and, according
to Zycie Warszawy of 8 January,
"thousands of-fetters, full of
despair, come from these people
to the repatriation commission
in Moscow."
One of the major problems
confronting the Poles is to
determine how many of their
countrymen are actually in the
Soviet Union. Moscow probably
does not know and is barring the
Polish commission from the re-
mote mines and camps where tens
of thousands of expellees,
former members of the wartime
Polish home army and others are
believed held.
25X1
The Hungarian regime, seek--
ing to eliminate all vestiges
of the revolutionary period,
last week stepped up its politi-
cal program to restore Communist
supremacy over all aspects of
Hungarian life.
Operating on a broad front,
the Hungarian Workers' Party
has issued a call for a "large-
scale propaganda and enlighten-
ment offensive in order to win
over the masses." The party
daily, Nepszabadsag, on 3
February virtua y admitted
that the regime's efforts here-
tofore had depended primarily
on force, Although the "rein-
forcement of the armed forces
must be continued," the paper
stated, "the consolidation of
socialism is not primarily a
problem of armed force."
Claiming a present party member-
ship of 150,000--an increase of
50 percent since late December--
Nepszabadsag declared, "We now
Have the necessary strength,,.
to rescue our workers from the
influence of hostile Western
propaganda."
The leadership's about-face
on Stalinism may be responsible
for any increase in the numerical
strength of the party. The
preseiit line toward Stalinists
--although it assails the crimes
of Rakosi, Gero, Parkas, and a
few other former top aen--is
conciliatory and probably in-
dicative of a recruitment
campaign among second-level and
provincial functionaries who
had been faithful Rakosi fol-
lowers. Three such Communists
have recently been named to
posts at the ministerial or
deputy ministerial level. At
the same time, Soltan Vas, who
had sought temporary refuge in
the Yugoslav legation with Nagy
during the fighting, has been
ousted from a high-level agricul-
tural position.
In statements condemning the
activities of the "temporarily"
dissolved Writers' Union, certain
workers' councils and allegedly
reactionary students, the regime
has consistently stressed its
determination to reimpose strong
Communist controls over all
organizations.
The trade unions have been
revamped and have been ordered
to resume their traditional role
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7 February 1957
as party fronts, probably to
the detriment of the individual
workers' councils.
Students returning to the
reopened universities on 4
February were forewarned by
police raids on student dorms
and homes and the arrest of
those accused of hiding arms.
The regime also Cautioned the
students that any violations
of "discipline'" might result
in the closing of the schools
and the loss of a full academic
year, and has also reneged on
its earlier promise to allow
religious instruction in the
schools on a voluntary basis.
A stepped-up press campaign
against the West, accompanied
by a marked increase in cover-
age of the Soviet Union, has
also revealed the over-all trend
toward Satellite orthodoxy.
The relative success of the
police forces in keeping down
signs of active resistance,
coupled with partial economic
recovery, has apparently enabled
the regime to operate in virtual
disregard of the undiminished
hostility of the population at
large. While aware that the
popular attitude could still
lead to violence, the regime
and the USSR have become in-
creasingly confident of their
ability to handle any new out-
bursts. The USSR may already
be'preparing to reduce the
size of its occupation forces
in Hungary.
EAST GERMANY EXPANDING ARMED WORKERS' GROUPS
The Communist East German
regime, apprehensive over the
possibility of internal dis-
orders, is expanding the
Kampfgruppen (C armed,'
militia groups).',despite.their
questionable reliability, and
is stepping up their training
activities.. Politburo candi-
date Erich Honecker, who re-
cently returned to East Germany
after a year in the Soviet
Union, is playing a leading
role in developing the Kampf-
gruppen.
Training in street fight-
ing will be intensified, ac-
cording to Honecker. Maneuvers
and tactical training exercises
have already been held in
several East German cities,
In these exercises, which had
the objective of "suppressing
enemies of the state,"Police
and military forces are be-
lieved to have been used large-
ly in supervisory, logistical
support and umpiring roles.
Created by the Socialist
Unity (Communist) Party follow-
ing the June 1953 riots and now
numbering some 95,000 men and
women over 25, Kampfgruppen
are found in all industrial,
government, and party installa-
tions. In rural areas, Kampf=
gruppen have been organized
at collective farms and machine
tractor stations. Weapons and
equipment, consisting largely
of pistols, carbines, sub-
machine guns and light machine
guns, are stored at central
points and are to be issued only
for parades, training and
emergency purposes.
The Kampfgruppen are di-
rectly subordinate to the
department for security affairs
of the party central committee.
Training consists of a minimum
of four hours weekly outside of
working hours, and is the joint
responsibility of the army,
civil police, and the various
security forces of the Ministry
for State Security.
Although most Kampf gruppen
members belong to the party,
a majority probably are ,apathetic
toward their duties and politic-
ally unreliable. Whether they
would go into combat against
their countrymen is question-
able. A remark made by
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one Kampfgruppen member during
the tense days of October 1956
is believed to be typical:
"Things are getting hot now.
It's time for me to play sick.
I certainly will never point
a gun at a fellow-German."
PATHET LAO PUSHES TOWARD FINAL AGREEMENT. WITH LAOS GOVERNMENT
With the return of Pathet
Lao chief Souphannouvong to
Vientiane on 4 February, the
Pathets apparently launched a
final drive to form a coalition
government under the terms of
their 28 December agreement
with Prime Minister Souvanna
Phouma. The situation in
Vientiane has Somewhat altered
since Souphannouvong's depar-
ture on 31 December, however,
because of the opposition to
the agreement by Deputy Prime
Minister Katay which has led
to cabinet demands for addi-
tional safeguards against the
Pathets.
Souphannouvong's return
suggests that the Communists
feel he will be able to head
off further opposition and
gain enough support for a favor-
able vote on the agreement in
the National Assembly.
Despite the stiffening
attitude of the cabinet,
Prime Minister Souvanna Phouma
still claims agreement will be
reached quickly and assembly
approval will be forthcoming.
The American ambassador comments
that the present strength of
the opponents of the deal may
be only temporary because of
the widespread desire for uni-
fication and the absence of any
clear alternative program.
The key factor to a settle-
ment will be the degree to
which the Pathets are willing
to meet cabinet demands for the
dissolution of the Pathet move-
ment and immediate restoration
of effective government control
over the two northern provinces.
Since participation in a coali-
tion government prior to the
supplementary elections is a
primary Pathet objective, Sou-
phannouvong will probably offer
some formula which will satisfy
the form, if not the substance,
of the cabinett's. demands.
CHOU ENDS ASIAN TOUR
Chou En-lai has ended his
tour of eight Asian nations,
which began last November,
with a visit to Ceylon. In
Colombo he repeated most of
the themes he had used earlier
in an effort to carry on the
Chinese Communist campaign
for "friendly" co-operation
with the neutral nations which
began at Bandung in 1955. Is-
suance of a Sino-Ceylonese
communique on 4 February left
India the only country on
Chou's itinerary where no
joint statement was issued.
Chou stopped in New Delhi but
could not reach agreement with
Prime Minister Nehru on even an
innocuous statement.
In a major statement in
Colombo on 4 February, Chou,
the first Communist leader to
visit Ceylon, returned to a
theme which he had avoided
since his trip to Moscow. He
declared that Peiping would
eschew "big-nation chauvinism,"
which he said the Chinese have
been trying to eliminate from
their own policy "resolutely,
thoroughly,. conclusively and
completely" sl.nc.e last year.
This line appears designed to
reassure Communist China's
neighbors regarding Peiping's
intentions and to dissociate
the Chinese from Russian harsh-
ness in Eastern Europe.
The communique signed by
Chou and Bandaranaike on 5
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February reflects the Communist
view on several key issues and
contains an indirect slap at
American policies. The state-
ment decried "imperialist" ef-
forts to thwart "freedom and
progress," called for another
Asian-African conference at
the earliest opportune moment,
and expressed disapproval of
"antagonistic military blocs."
The two premiers stressed the
need for the prohibition of
nuclear weapons and an end to
the testing of nuclear weapons.
In a comment on the Middle
East situation, the communiqud
stated that "substitution of
one power for some other" in
order to fill a "so-called
vacuum" would not help solve
the problems in the area. In
this statement, the communiqud
resembled the Arab and Communist
propaganda line ridiculing the
concept of a power vacuum and
charging the United States with
trying to take over the positions
formerly occupied by Britain
and France.
Many of these ideas are
current among non-Communist
Asians and Bandaranaike's agree-
ment to include them in the
communiqud probably indicates
little more than a desire to
avoid argument with an honored
guest. The communiqud will,
however, tend to identify Pei-
ping more closely with Asian
African aspirations.
25X1
DEMOBILIZATION DIFFICULTIES IN COMMUNIST CHINA
Peiping apparently is en-
countering considerable diffi-
culty in absorbing large num-
bers of veterans in civilian
occupations.
The major problem facing
the regime in its demobiliza-
tion program arises from the
fact that only a small per-
centage of the dischargees
can be given industrial jobs
in urban areas, where unemploy-
ment already exists. Over 80
percent of the veterans demo-
bilized in 1956 have been
assigned to work in drab agri-
cultural pursuits, but, as
politburo member Tung Pi-wu
acknowledged, "demobilized
soldiers have been unwilling
to lead the life of a peasant."
Defense Minister Peng Te-
huai implied in a speech to
veterans in September that
they were demanding too much
from the party and government
without Contributing their
full share to "peaceful pro-
duction." He criticized the
veterans' attitude toward the
government and admonished them
not to consider city work
superior to work in the vil-
lages. This is a theme
frequently voiced by the Chi-
nese press and in instructions
to cadres responsible for the
integration of servicemen into
civilian life.
A recent Defense Ministry
directive calls on all military
units to perfect "demobiliza-
tion education" in 1957 in
order to facilitate the vet-
eran's transition. It takes
special note of steps to be
taken to make agricultural
work more attractive to the de-
mobilized troops. Suggesting
that the regime is concerned
lest large numbers of dissat-
isfied veterans pose problems
for the state, the directive
urges veterans to abide by the
laws of the state, respect the
leadership of the party and
government, and "unite with the
masses."
Peiping-'s heavy demobili-
zation rate (about 800,000
troops per year in 1955 and
1956 and a like number scheduled
for 1957) is consistent with
its announced objective of cut-
ting armed force strength and
paring defense expenditures.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
In calling a meeting of
the Western European Union (WEU)
foreign ministers for 26 Febru-
ary, Britain is fulfilling its
obligation to consult on its
plans for reducing forces in
Germany, but its main intent
is apparently to set forth
plans for a new, comprehensive
European political body.
In 1954 at the signing of
the Brussels treaty, which
bound Britain to France, West
Germany, Italy and the Benelux
countries in the WEU, Britain
promised not to reduce the
strength of its forces in
Germany below four divisions
and a tactical air force
against the wishes. of a WEU
majority. London evidently
plans to claim that present
financial burdens require it to
reduce these forces from about
80,000 to 50,000 men. Britain
at present seems to be planning
to make the move more palatable
politically by. reducing each
of its four divisions in size
rather than withdrawing any of
them completely, although this
decision is still pending.
London evidently also in-
tends to counteract the effect
of the reduction by making a
dramatic move on European in-
tegration, probably by propos-
ing some manner of linking the
various European economic,
military, and political organi-
zations. Most likely to emerge
is a clarification from Foreign
Secretary Lloyd of the "grand
design" he alluded tout the
NATO ministerial meeting in
December. Then he spoke of
developing a single NATO-wide
assembly along parliamentary
lines. The limited response
to this trial balloon was favor-
able.
Now, according to the
Foreign Office, the Macmillan
government intends to propose
dealing with future WEU develop-
ment--for which several other
members have plans--within the
"grand design."
Lloyd envisages forming a
single assembly to replace the
existing assemblies of the
Council of Europe, Coal-Steel
Community (CSC), and WEU. The
new assembly would then meet
in subgroups corresponding to
the problem,; such as six coun-?
tries for the CSC. National
parliaments would designate the
new assembly's members. Should
Britain propose full membership
for itself in such a body, it
would be a radical departure
from its past aloofness from
European unity plans.
Even if such a detailed
proposal fails to emerge,
British officials appear eager
to demonstrate their interest
in closer ties with the Conti-
nent and seem genuinely con-
cerned lest neutralist ele-
ments in France and Germany
increase in the absence of
progress toward integration.
Since the "grand design" was
first offered in a NATO context,
presumably the prospect of
North American link would re-
main open.
FINANCIAL PROBLEMS IN ECUADOR
The serious financial
problems which have confronted
President Ponce Enriquez since
his inauguration last September
have apparently developed into
an immediate threat to the
stability of his administra-
tion. Ponce and his advisers
now seem convinced that only
outside financial aid can en-
sure the government.'s survival
and are seeking an emergency
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7 February 1957
loan
of
at least
$10,000,000
The reforms are
also
from
the
United
States.
politically dangerous
of the adverse effect
because
on
Assuming office after a
disputed election, an abor-
tive military revolt, and
other opposition efforts to
prevent his inauguration,
Ponce survived the immediate
situation by a series of as-
tute political moves. But he
faced a budgetary deficit of
$20,000,000 to $25,000,000 in
1956. Promptly publicizing the
need for sacrifice and reform,
the new administration announced
austerity measures to reduce
spending and attempted to
balance the 1957 budget by
increasing taxes and removing
various tariff exemptions and
other privileges. Neverthe-
less the congress passed,
over presidential protest,
a $100,000,000 budget requiring
$9,000,000 to $13,000,000
deficit financing.
The economic reforms
apparently won a substantial
measure of public sympathy
but, even if fully implemented,
they may not provide adequate
resources for such immediate
commitments as civil and mili-
tary payrolls, subsidies to
local governments, and main-
tenance of the public works
program at an economically
desirable level.
CONFERENCE OF SCANDINAVIAN COMMUNIST PARTIES
The Communist parties of
Denmark, Norway, Sweden, and
Finland are reported planning
counter-
common ne an try
act the repercussions of the
Hungarian revolt. Defections
from the party on the Hungarian
issue have been particularly
serious in Denmark and Norway,
where the Communists face par-
liamentary elections this pear.
influential groups. The tariff
rises have ..elicited strong
reactions among the commercial
community concentrated in the
coastal region--the center of
Ponce's political opposition.
The military is believed to
be disgruntled by the removal
of some of its free import
privileges. Arrears in salary
payments to public employees
have also provoked unrest, in-
cluding the threatened revolt
of a military garrison last
October and a more recent
strike threat of state railway
workers. There is evidence
that opposition elements be-
lieve the financial crisis has
finally given them an issue
which they can exploit to oust
Ponce, possibly by violence.
The government managed
to meet its most pressing
obligations through 1956, in-
cluding a politically expedient
year-end bonus to public
employees. Its cash resources,
however, are reportedly close
to exhaustion and its ability
to meet urgent obligations
without recourse to inflationary
borrowing appears questionable.
25X1
The Danish party is esti-
mated by some infdrmed.'*observ
ers; to have lost about one
third of its members as a result
of the Soviet action in Hungary,
defections reportedly being
heaviest among intellectuals.
At an extraordinary party congress
in January, the old-guard
leadership managed to retain
control of the party, and Soviet
intervention in Hungary was
approved as "a necessary evil."
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7 February 1957
Communist Vote in Most Recent
Scandinavian Parliamentary Elections
Nevertheless indications are
that conflicts within the
leadership itself have not
been resolved. With parlia-
mentary elections likely in
April of May, the party--
which in 1953 polled 4.3 per-
cent of the vote--now appears
certain to lose several of its
eight seats in parliament.
The Norwegian party ap-
pears to have been similarly
shaken by these recent events.
Members of the central commit-
tee and representatives of
the district organizations,
meeting in November, unanimous-
ly endorsed the party chair-
man's earlier statement in
the Norwegian parliament that
ie could not defend the Soviet
intervention in Hungary. These
early indications of confusion
;nave more recently given way
to faithful adherence to Mos-
cow's interpretation of the
Hungarian revolt, but the
party's loss in popular strength
is estimated at about 20 per-
cent. The American embassy
in Oslo believes the Communists
may lose two of their three
seats in the October parliamen-
tary elections.
Although there have been
some rumblings in the Swedish
and Finnish parties, these two
parties appear to have been
less affected by events in
Hungary, and both have expressed
their solidarity with the So-
viet Communist Party in forth-
right terms. The Swedish party,
however, was already so small
as to have no more than a
nuisance role in Swedish politi-
cal life.
In Finland, where the
Communist-front party normally
polls about a fifth of the vote,
the party has apparently been
shielded from the full impact
of Hungarian developments by a
combination of political and
economic circumstances. The
party runs under the label of
the Finnish Peoples' Democratic
League, and is a coalition of
Communists and left-wing So-
cialists. The efforts of the
government and the non-Communist
parties to discredit it are
complicated by Finland's
delicate political relations
with the Soviet Union. The
Communists are also a strong
.tinority in the trade union
and co-operative movements,
where Finland's growing in-
flationary difficulties have
given them a powerful diver-
sionary issue during recent
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1937
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The official report on the
Soviet economic plan results
for 1956 shows that while over-
all growth of the economy last
year was consistent with the
goals to be attained by 1960,
there were lags in a few key
industries. The exceptionally
good agricultural year contrib-
uted to a 12-percent increase
in national income. Total in-
dustrial output increased al-
most 11 percent, heavy industry
11.4 percent, light industry
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7 February 1957
9.4 percent. Growth of all
industry and of producer goods
was about 0.5 percent above,
and light industry the same
amount below, the annual aver-
ages required to meet the 1960
goals, The transportation
record was generally good.
Producer Goods
.-Progress in heavy industry
was uneven and problems appeared
1950 '51 '52 '53 '54 '55 '56 '
PLAN 57 P ON
in certain interdependent, key'
industries which have almost
invariably met the plan in the
past. Total coal production
was less than h percent short.
Crude steel, rolled steel, and
pig iron were about 2 percent
short, owing to a combination
of tight ore supplies and fail-
ure to complete new blast fur-
naces and rolling mills. Cement
constituted the most serious
failure: about 8 percent or
2,000,000 tons below plan.
Petroleum, natural gas and
electric power production were
on schedule, but energy sup-
plies on the whole continued
very tight. Progress ranging
from satisfactory to poor was
reported in a number of im-
portant nonferrous metals, but
production of copper and some
of the newer light metals ap-
parently was less than required.
Progress in machine build-
ing industries continued gener-
ally good, but also with some
important exceptions, The
automation program and pro-
duction of metallurgical, pe-
troleum drilling and refining,
and chemical equipment seem to
be lagging.
Capital Investment
The plan for capital in.-
vestment was fulfilled by 94
percent, with failures in con-
struction for the coal industry,
construction materials industry,
and housing maihly responsible
for the underfulfillment.
A change in coverage of
investment statistics makes
analysis difficult. The an-
nounced 17-percent increase in
the volume of investments is
considerable and is in accord
with Five-Year Plan targets.
However, the 1956 target results
indicate that the 1956-60 in-
vestment program is so scheduled
thay any miscalculations in
specific industrial construction
requirements will jeopardize
fulfillment of production tar-
gets.
The modest housing goal
for 1956 was underfulfilled by
about 10 percent; only 13 per-
cent of the state housing
planned for 1956-60 was built
in 1956. The shortage of build-
ing materials in the economy
will be a serious obstacle to a
significant increase in housing
construction in 1957.
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SOVIET ECONOMIC
GROWTH
NATIONAL INCOME /
TOTAL INDUSTRY
/
HEAVY INDUSTRY
_-_- LIGHT INDUSTRY / ~'
0_~
06,
7
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
OUTPUT TRENDS-
SELECTED BASIC
INDUSTRIES
(MILLION METRIC TONS
EXCEPT WHERE NOTED)
COAL
391 q.
ELECTRIC POWER
(BILLION KWH)
170.1 192
1950 '55 '56 1960
GOAL
1950 '55 '56 1960
GOAL
CRUDE OIL
1950 '55 56 1960
GOAL
IR
68.3
ROLLED STEEL
CEMENT
ON
PIG
53
CRUDE STEEL
52.7
55
45.3 48.6
35.8
33.3
35.3 37.8
27.3
24.9
22
5
19.2
20.9
.
Ll
10.2
F-1
1950 '55 '56 1960
1950 '55 '56
1960
1950 '55 '56 1960
1950 55 56 1960
GOAL
GOAL
GOAL
GOAL
Productivity
Productivity in the con-
struction industry in 1956
maintained the high rate of
increase of 10 percent shown
in 1955. At the same time the
7-percent rate of increase in
industrial labor productivity
was below the 1955 rate of 8
percent and failed to.attain
the average annual increase of
8.4 required to reach
the 1960 goal. Im-
provement in the rate
of increase in in-
dustrial productivity
may be expected as
the reorganization
dustrial co-operative members
such as shoemakers and tailors
accounts for part of this in-
crease. The remainder of 400,-
000 probably are servicemen
demobilized in 1956.
Agriculture
The fulfillment announce-
ment points up 1956 as the best
agricultural year of the Soviet
INDUSTRIAL LABOR PRODUCTIVITY
(PERCENT ANNUAL INCREASE)
of the wage structure, 8.4
begun late in 1956,
widens to include
more of the indus-
trial sector.
7.4.r
8.4
1951 1952 1953 1954 1955, 1956
Workers and em-
1 ST YEAR
FIFTH PLAN SIXTH PLAN
lo
ees increased b
FTH AND SIXTH FIVE-YEAR PLAN GOALS
p
y
y
FI
2,100,000, or 1,000,-
(Average annual increase)
000 more than 1955.
--- FIVE-YEAR PLAN ACHIEVEMENT
The bookkeeping
trans-
(Average annual increase)
fer of 600
000
in-
.
I
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
era. Nevertheless, agriculture
remains a major deterrent to
future long-run economic growth.
Last year's achievements are
attributable to the new lands
program, changes in crop pat-
tern, higher delivery prices--
all "Khrushchevian" policies--
and good weather. Primarily
because of extensive use of
virgin lands--over 74,009,000
acres put under cultivation
since 1953--the grain harvest
reportedly increased by 20 per-
cent over 1955. Intensifica-
tion of corn cultivation in
established regions stepped up
the number of cattle, meat
production, and especially milk
production. Output of indus-
trial crops, including cotton,
continued to rise.
Consumer Welfare
The report claims substan-
tial improvements with the ex-
ception of housing, in the
material well-being of individ-
uals of all groups in Soviet
society. The average Soviet
citizen probably noted improve-
ments in 1956 in his material
well-being exceeding those noted
in 1955. Generally, the urban
dweller has been the recipient
of "fringe" benefits while in-
creases in income have gone to
the rural population. Rural
improvement in 1956, as in 1955, 25X1
probably exceeded that of the
urban dweller.
(Prepared by ORR)
POLISH-SOVIET LDEOLOGNAL _.:CONTROVERSIES
Poland is unique in the
Communist bloc in that popular
pressure exerts considerable
influence on the shaping of
state policies. Polish leaders
are being forced to continue
measures to do away with the
vestiges of the Stalinist her-
itage of terror and depriva-
tion.
Gomulka's program of
"humane socialism" resulted from
recognition of the need for re-
forms more radical than the
palliatives adopted by the
seventh plenum of the Polish
party last July. The program
is fundamentally a reaction to
the Stalinist system of perva-
sive bureaucracy and police
terror. It is predicated on
the belief that popular griev-
ances expressed by the Poznan
disorders are legitimate ones
which must be recognized by
the party if it is to lead the
masses. This, together with
the strongly nationalistic
overtones of Gomulka's pro-
gram, have brought the Polish
leadership into ideological
conflict with the USSR on
three basic issues.
Anti-Stalinism
Like Tito, Gomulka is
contemptuous :of ';the. Soviet
bureaucratic system, believing
that it has divorced itself
from the working masses. He
claims that true Marxism-
Leninism requires that Commu-
nists fight the tendency to-
ward excessive bureaucracy
which, by its red tape and its
omnipotent elite of party and
police, hampers individual
liberty, constructive effort
and criticism. To Gomulka,
this is "Stalinism." His firm
rejection of such a system
constitutes a fundamental
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difference between Poland and
the USSR.
The USSR resents and re-
jects the term "Stalinism" as
a description of the Soviet
system and insists instead on
speaking of "the cult of person-
ality"--a harmful, although
temporary, aberration in a
system the basic features of
which are beyond question.
Moscow regards the term "Stalin-
ism" as a Western attempt to
discredit the Soviet system and
weaken the Kremlin leadership
of the Soviet bloc. Post-
Stalin changes, to Moscow, are
nothing more than "adjustments"
to do away with "the harmful
consequences of the cult of
his personality." This is not
an academic difference. Gomul-
ka's radical programs for
democratization, decentraliza-
tion and "national Communism"
stein primarily from his rejec-
tion of what he considers to
be a Stalinist system.
The issue was brought into
the open late last year in the
polemics between the Polish
liberal writer Edda Werfel and
East German ideologist Hermann
Axen. The former asked: "What
is the real issue? Is it the
maintenance of power or is it
socialism, for if it is social-
ism, then Stalinism must be
ended." Axen replied that
there is no such thing as
Stalinism, and asserted that
"worker and peasant power" and
socialism are identical. To
assert otherwise is anti-Marx-
ist--there "ref ormism, "
Counterrevolution
The second basic ideologi-
cal difference came to light
as early as the Poznan riots
in June, which to the Soviet
view constituted a Western-led
attempt at counterrevolution.
To the Poles, however, they
amounted to a genuine popular
protest against the Stalinist
regime.
These differing views of
the significance of post-Stalin
changes in Poland have persisted.
Poland has not conceded, even
under the recent pressures
from Chou En-lai, that events
in Hungary were the work of
counterrevolutionaries inspired
by capitalist imperialism; and
Poland has been supported in
this view,_knot only by Yugo-
slavia but by several Western
Communist parties, particularly
the Italian and American parties.
It is clear from the
Kremlin's behavior in mid-Oc-
tober--and from its subsequent
reaction to the Hungarian up-
rising--that Moscow had mis-
understood the origins and
full significance of the changes
in Poland. Apparently believ-
ing the situation simply to be
an internal party revolt of
the Titoist sort, the Russians
used the crudest forms of
intimidation to maintain the
status quo. But when confronted
with the alternative of open
war, they gave in, and the So-
viet leaders themselves suc-
cumbed for the first time to
popular pressures.
Many Polish Communists,
recognizing the strength and
character of these pressures,
were disturbed by the failure
of the party to seize the
initiative in the post-Stalin
period and to lead the forces
pressing for revision. Coin-
plaints were voiced that the
party was not capable of act-
ing, that "the nation rose like
a field of corn after a storm,
b,it the party remained behind."
Armchairs," it was said, "drained
the Communism out of the party.
Their red blood had turned
blue."
The basic. dispute has
thus been obscured by the fact
that the Polish party has felt
it politically necessary to
claim that the changes in Po-
land were brought about under
its leadership. Gomulka is
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
taking credit for something
which the USSR considers
counterrevolution.
Bloc Unity
A third basic argument
with the USSR concerns the
proper relationship between
Communist parties and Poland's
refusal to acknowledge the
dominant role of the Soviet
party. In insisting on
sovereignty and equality, the
Poles demand that blind ad-
herence to Soviet socialist
forms should no longer be
considered the test of a Com-
munist's sincerity. Contend-
ing that a "lopsided study of
Soviet experiences as the only
pattern must be overcome," the
Polish journal Nowi Drogi
argued late last -year for a
fair hearing for Poland's
"creative quest for new ways
of building socialism."
The article charged that
those who warn against using
Yugoslav experiences are in
effect defending Stalinism,
and it insisted that the
"Stalinist scum be purged from
internationalism" in order that
the idea of internationalism
in the workers' movement will
"never again become the smoke-
screen of servility."
The Polish party supports
Togliatti's view of the need
for "polycentrism" of the
workers' movement, believing
that unity of the international
workers' movement can come only
through recognition that specif
ic, national characteristics
give rise to valid differences
in the approach to socialism.
It argues that "many varieties
of the socialist system may be
formed, just as in the bour-
geois system there exists also
a whole range from dictatorship
to multiparty parliamentarian-
ism." It:points out that the
"Soviet system is different from
the Chinese or the Yugoslav
system, and now the Polish sys-
tem becomes different." Under
these circumstances, it.;says,,
the principles of coexistence
and equality should govern
relations between Communist
parties.
Moscow challenges this
view as "nothing more than in-
citement to undermine the unity
of the socialist camp." Said
the Soviet theoretical journal
Kommunist in December: "Under
the sguise of a struggle
against so-called 'Stalinism,'
an offensive of imperialist
reaction is being conducted
against the most sacred pos-
sessions of the working class. "
These "sacred possessions" were
identified by Kommunist in Jan-
uary as the "great experience
gained by the Soviet people
and its Communist Party? on the
road of socialist construction."
While claiming that this
is the point of view of true
Communists, the article except-
ed "certain comrades" in Yu-
goslavia "who are trying, under
the slogan of the 'creative
development of Marxism,' to do
away with the historical experi-
ence of the Soviet party, an
experience tested and confirmed
by the whole process of social
development in recent decades."
The articles were broadcast by
Radio Moscow to Poland. On
31 January a Polish youth news-
paper rebutted the Kommunist
arguments, telling the Soviets
that "epithets and instructions"
were not necessary in discus-
sions among Communist parties.
Moscow's ideological of-
fensive to reassert the primacy
c lf, the "Soviet road" is intended
as a warning to liberal elements
in Satellite parties that the
separate Yugoslav and Polish
forms of socialism and their
pretensions to ideological par-
ity with the Soviet party can-
not be condoned. The Kommunist
article is another Soviet move
toward the ideological quaran-
tine of Yugoslavia; such moves
have long been.f eaxed by the
Polish leadership as a maneuver
to deprive Poland of support
and force it back into ideoa.og-
acal conformity.
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7 February 1957
INDIA'S FIRST NUCLEAR REACTOR
India's plan to become the
leading Asian nation in the
field of atomic energy took a
major step forward on 20 January
when Prime Minister Nehru dedi-
cated the first atomic reactor
to be placed in operation in
free Asia. In his dedicatory
speech, Nehru departed from
his custom of ignoring the role
of foreign assistance by public-
ly thanking the United States,
Britain, France, and Canada
for their aid. While the USSR
has offered to assist India in
its atomic development program,
no definite agreements are
known to have been reached.
The first Indian reactor,
located at Trombay, a suburb
of Bombay, is a 1,000-kilowatt
swimming-pool type, designed
and constructed in India. It
is fueled with enriched uranium
supplied by Britain. A second
reactor, being constructed with
Canadian financial and techni-
cal assistance under the Colombo
plan, is expected to go into
operation in mid-1958. Heavy
water for this reactor has been
purchased from the United
States. This reactor will add
greatly to India's capabilities
for training, research and
isotope production.
Plans for the construction
of a third reactor to be in
operation by mid-1958 and for
the construction of a power
reactor to be constructed in
the next five years have been
announced,. but no definite
information on either is avail-
able.
India's program aims pri-
marily at developing atomic
energy for power and industrial
uses. It is also concerned
with radioisotopes for agricul-
ture, biology, medicine and re-
lated fields, and the industrial
exploitation of India's indige-
nous atomic energy materials,
principally thorium and beryl-
lium.
Atomic Mineral Resources
India has the world's
largest thorium reserves,esti-
mated at about 200,000 tons in
monazite sands, and ranks third
or fourth in the world in pro-
duction and reserves of beryl-
lium. Only minor uranium de-
posits are known to exist, but
small amounts of uranium are
found with thorium in monazite
sands and can be recovered.
The Department of Atomic Energy
is sponsoring an extensive
uranium exploration program.
As a first step in India's
atomic program, a monazite
processing plant was set up in
Alwaye Kerala State in 1952.
At Trombay, where India's atomic
energy facilities are being
concentrated, a uranium-thorium
extraction plant has been built
to separate the uranium and
thorium concentrates from the
Alwaye plant residues. Plans
for a plant to reduce the
uranium concentrates to metal
were recently announced. To
date there is no facility in
operation in India to produce
uranium in suitable form for
use in an atomic reactor.
A plant which will produce
heavy water for use in the
Indian atomic energy program,
and possibly for export sale,
is expected to be completed by
1960. Indian announcements of
estimated annual output vary
from 5 to 14 tons a year.
Studies on the production of
pure beryllium oxide and metal
and their use in reactors are
being conducted in France for
India.
Scientists
The development of the
Indian program has been hampered
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.CURRENT INTELLIGENCE
7 February 1957
by the small number of quali-
fied scientists available. The
Department of Atomic Energy has
a program for the recruitment
and training of nuclear scien-
tists and technicians under way
in Indian institutions, and
students have been sent abroad
for advanced training in the
United States, Britain, Canada,
and France. Through these
training programs, India is
successfully building a nucleus
of well-trained scientists.
THE VIET MINH ARMED FORCES
One of the strongest sup-
ports of the Viet Minh regime
is its 275,000-man army. Since
the end of hostilities, the
army has been transformed from
what was largely a guerrilla
force into a modern military
establishment, supported by
large shipments of military
materiel from Communist China.
In addition to the army,
there are about 36,000 full-
time regional troops, many with
previous combat experience. By
comparison, South Vietnam has
only 138,000 regular troops
supplemented by some 54,000
auxiliaries.
Modernization of the Viet
Minh armed forces has entailed
the integration of many inde-
pendent regiments into division-
level units. There are now 16
infaiitry, two artillery divi-
sions, and one engineer divi-
sion as opposed to six infantry
and one artillery division in
1954. At present, the division
is the army's largest tactical
India hopes to make its
atomic energy establishment at
Trombay a regional training
and research center which will
overshadow the American-spon-
sored center at Manila. Invi-
tations have been extended to
students of neighboring coun-
tries to avail themselves of
the opportunity to make use of
the new facilities.::
(Prepared
jointly with OSI)
unit, but corps-level commands
will probably be developed
eventually. Following Soviet
and Chinese Communist practice,
the Viet Minh established sepa-
rate operational and territorial
commands in mid-1956, both under
the over-all direction of De-
fense Minister Vo Nguyen Giap,
the Communist commander at Dien
Bien Phu in 1954,
The expansion of the Viet
Minh army has been made possible
by large shipments of military
materiel and economic aid from
Communist China. X,mmediately
after the armistice, the Chinese
Communists supplied the Viet
Minh with over 300 artillery
pieces, numerous mortars, re-
coilless guns and bazookas,
automatic weapons, several hun-
dred trucks and prime movers,
and up to 100 armored vehicles.
Since the armistice, Chinese
Communist aid has enabled the
Viet Minh to accumulate sub-
stantial stocks of many types
of military equipment, including
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CURRENT INTELLIGENCE WEEKLY SUMMARY
7 February 1957
artillery pieces
ranging in size from
70-mm, howitzers to
122-mm._ pieces. The
Viet Minh also has
an unknown number of
155-mme pieces cap-
tured from the French.
New 90-mm. rocket
launchers and 57-mm.
recoilless rifles
have been added at
battalion and company
levels. A joint
Chinese Communist-
Viet Minh military
headquarters has re-
portedly been estab-
lished.
The delivery of
military and economic
aid to the Viet Minh
has been facilitated
by the restoration
of the railroad from
the Chinese border
at Lang Son to Hanoi.
-- '554
LAOS " vArmietice Demarcation Line
,
egu
ars
54,000 Auxiliaries
ARMY STRENGTH
138
000 R
l
Completion of the rail line
from Hanoi south to the 17th
parallel, which is now completed
to Thanh Hoa, will substantial-
ly increase Viet Minh logistic
capability.
In addition to the regular
and regional forces, the Viet
Minh can call on an estimated
75,000 armed local irregulars
to reinforce the full-time
troops, as well as provide man-
power for maintaining internal
security. An additional esti-
mated 6,000 paramilitary cadres
in South Vietnam constitute a
continuing threat to the in-
ternal security of the Diem
government.
The Viet Minh has no mili-
tary air arm. The General
Z ',?loam Dinh
{e"'r ~Thaanh Ho,
'` NOR H VIETNAM
SECRET
VIET MINH ARMY STRENGTH
257,000 264^000 2x75'
SOUTH VIETNAM
?~~ .Binh Dinh
S
Directorate of Coastal Security
maintains a small marine element
equipped with patrol craft
which could provide the nucleus
for a small naval force at
some future time.
The Viet Minh forces have
several advantages over South
Vietnam's in addition to sub-
stantially greater numerical
strength: wider experience in
both guerrilla and conventional
operations; dedicated, battle-
seasoned leaders; and high es-
prit de corps resulting from a
long record of successful com-
bat, The Viet Minh is still,
however, weak in heavy equip-
ment, short of trained techni-
cians and experienced in
matters of logistics.
Artillery Divisions
Antiaircraft Artillery
Light Brigade
Engineer Division
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