CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001100110001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 41
• Document Creation Date: December 23, 2016
• Document Release Date: May 29, 2012
• Sequence Number: 1
• Publication Date: February 28, 1957
• Content Type: SUMMARY

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CONFIDENTIAL
tT
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 17
OCI NO. 0060/57
28 February 1957
;41 REVtEWER-~
NEXT REMEW LSAT(::
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CLASS. CHANGED TO:
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NO CHANGE IN CLASS, Q
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
CONFIDENT(gL
mWiffi y 4 6t 25X1 25X1
Ion 7Y_ Box -//' . -..._~. _
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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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CONFIDENTIAL
28 February 1957
OF IMMEDIATE INTEREST
MIDDLE EAST DEVELOPMENTS . . . . . . . . . . . . . . . . Page
Continued postponement of the UN General Assembly's
debate on sanctions against Israel for noncompliance with
UN withdrawal resolutions underscores the divisive effect
this issue has had on the UN as a whole and on its member
governments individually. While most UN members agree
that Israel should comply with the assembly's directives,
there is wide disagreement over the extent to which
Israel's demands for guarantees should be taken into
account before any sanctions move is considered. The
communique' issued on 27 February at the conclusion of
the Arab "summit" meeting in Cairo glossed over differences
between Nasr and King Saud; the king had urged strongly
some expression of Arab r ciation for the American
stand.
INDONESIA . . . . . . . . . . . . . . . . . . . . . . Page 3
Indonesian political leaders are being subjected to
an intimidation campaign by both President Sukarno and
the Communists, and their reluctance to accept Sukarno's
plans for Communist participation in the government may
lead to extensive arrests and a declaration of a state of
siege. The president's vigorous advocacy of his new con-
cept of government is being enthusiastically endorsed by
Indonesian Communists in mass meetings and by mob dem-
onstrations. Indonesian'. army officers are ',. probably divided
on Sukarno's plans, but if the president makes use of a
recently organized association of enlisted men'.and non-
commissioned officers which strongly favors Sukarno and
reportedly-is',heavily Communist-infiltrated_ they may be
forced to go along.
CONFIDENTIAL
THE WEEK IN BRIEF
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L JI/lrtCC 1 %e
28 February 1957
NOTES AND COMMENTS
BRITISH OFFICIALS PESSIMISTIC ABOUT KUWAIT . . . . . . . Page 1
British officials fear a nationalist upheaval may
be approaching in Kuwait, which supplies over 60 percent
of Britain's crude oil requirements. London's present
course apparently is to avoid innovations in policy for
fear of deepening Arab suspicions of British intentions.
Meanwhile, British oil interests are going ahead with
plans to extend their operations.
With the UN General Assembly's adoption of a res-
olution on Cyprus acceptable to Greece, the Karamanlis
government seems likely to weather the crisis over the
island. Britain is willing to let the North Atlantic
Council discuss the problem; Greece has already indicated
qualified approval of such a course, and Turkey will
Page 2
probably go along.
MOROCCAN AND TUNISIAN RELATIONS WITH FRANCE .
Page 2
New frictions have arisen in Moroccan-French re-
lations as a result of Moroccan support in the United
Nations for Algerian independence, Morocco's and Tunisia's
assistance to the Algerian rebels, and failure to resolve
disagreements regarding the c 7 inued nrpsennp n h
troops in the two countries.
THE NEW POLISH GOVERNMENT . . . . . . . . . . . . . . . Page 4
The new government named by Polish premier Cyrankie-
wicz, and approved on 26 February by the Sejm, represents
an important victory for Gomulka in his efforts to stamp
out the Stalinist opposition. Most of the pro-Stalin
Natolin group have been removed from the cabinet and the
Council of State, and greater powers have been vested
in the new liberal parliament.
SOCIALIST REUNIFICATION MANEUVERS IN ITALY . . . . . . . Page 4
The Democratic Socialist Party directorate on
23 February called the Nenni Socialists' Venice congress
"a step forward on the road to integration" of the two
parties, but announced that it would take no official
steps until Nenni's party proved its good faith on
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THE WEEK IN BRIEF
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
25X1
specific issues. Meanwhile, a move against Premier
Segni's coalition by the small left-of-center Republican
Party may intensify pressures align-
ment of the left-center.
for late May.
WEST GERMAN FOREIGN MINISTER TO VISIT WASHINGTON . . Page 5
West German foreign minister Heinrich von Brentano,
who appears to have a better chance than any other
coalition leader eventually to succeed Chancellor
Adenauer, is scheduled to arrive in Washington on 3 March
for a one-week visit. Besides exploring American official
views on European problems, Brentano will probably want
to lay the groundwork for Adenauer's visit, now scheduled
THE NEW SPANISH CABINET . . . . . . . . . . . . . . .. . Page 6
The new Spanish cabinet presents a change in faces
rather than in basic policies, retaining about the same bal-
ance.between the. Falange on . the one hand'ana the'mil.tary,
monarchists:and church interests on the other. The
shifts in the Foreign Affairs and Commerce Ministries,
together with the inclusion of at least one figure known
as a "big spender," seem to foreshadow somewhat less
cordial relations with the United States and continuing
reluctance to reduce the government's deficit financing
ro ram despite t threat of disastrous inflation.
achieve a more independent position.
with the United States, but has indicated Japan must
NOBUSUKE KISHI--JAPAN'S NEW PRIME MINISTER . . . . . . . Page 7
Nobusuke Kishi has succeeded Tanzan Ishibashi as
prime minister of Japan at a time when there is urgent
need for action on the budget and for the consolidation
of conservative ranks. He is expected to co-operate
GOLD COAST INDEPENDENCE . . . . . . . . . . . . . . . . Page 9
On 6 March, the Gold Coast will become independent
and,as Ghanaxtake its place in the British Commonwealth,
Britain's rapid pace in training the Gold Coast nation-
alists in administrative practices has created deep
distrust between traditional chiefs and modern politicians,
but Prime Minister Nkrumah is supported by a large ma-
jority of the Gold Coast people. The participation of
Communist nations in the independence celebrations will
give them an o or u y to press for diplomatic relations.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
BOLIVIAN STABILIZATION PROGRAM STIRS LABOR UNREST
. Page 10
Despite an initial wave of labor unrest in late
December, Bolivia's economic stabilization program appears
to be succeeding. The program,which is backed by the
United States and the International Monetary Fund, faces
the possibility of new labor unrest, however, which may
result in cri ling strikes as early as March.
SOVIET ARMED FORCES DAY . . ,
. . . . Page 11
On the 39th anniversary of the Soviet armed forces
on 23 February, the USSR again emphasized its retaliatory
capability, hinting that it possesses weapons even more
powerful than atomic and hydrogen bombs. The choice of
Marshals Moskalenko and Meretskov to write major articles
for the occasion tends to support other indications that
they m- nu have ,,,,._ a 4. _1 --- - --- .. .
CHINESE COMMUNIST FOREIGN AID PROGRAM IN ASIA . . . . .
Page 12
Peiping's efforts to expand its sphere of influence
in Asia have been marked by offers of economic assistance
by which the Chinese hope to buy good will and prestige
and to advertise their own economic progress to Asians.
Development grants were given last year to Cambodia and
Nepal, in addition to the established aid programs to the
Communist regimes in North Korea, North Vietnam and Outer
Mongolia. Within the last month, the Chinese reportedly
attempted to induce Laos to accept economic aid, but the
Laotian government is apparently unwilling +n enter into
an agreement at thi
s time.
COMMUNIST CHINA'S 1957 ECONOMIC PROGRAM . . . . . . . .
Page 12
Communist China is making certain modifications in
its economic program for 1957. For the first time since
the Communists came to power, agricultural production is
to increase more rapidly than industrial production.
The scheduled increase in industrial output is to be
only 6 percent, considerably below the 17-percent average
annual increase achieved during the first four years of
the current plan. Nevertheless, the original First Five-
Year Plan (7a1;q-r-F7%
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
COMMUNIST LOSSES IN ICELANDIC TRADE UNION ELECTIONS . . Page 13
from the coalition government.
participating in the government--resulted partly from
disillusionment over events in Hungary and partly from
better co-operation among anti-Communist elements in
union politics. The Communists still have firm control
of the Icelandic Federation of Labor, however, as well
as the Unskilled Workers Union--the country's largest
single union--and there are no sons they will be ousted
Recent trade union election losses by the Communists
in Iceland--the only free world country in which they are
PATTERNS AND PERSPECTIVES
THE ARAB SOCIALIST RESURRECTION PARTY . . . . . . . . , Page 1
Nasr to extend Egyptian influence.
the Arab states. It has become a decisive force in
Syrian and Jordanian politics where it has been used by
The Arab Socialist Resurrection Party, a leftist,
nationalistic, anti-Western group, is the principal
vehicle for the spread of pro-Soviet and Communist in-
fluence in Syria, Lebanon, and Jordan, and is extending
its contacts into Iraq, Saudi Arabia and the Persian
Gulf oil areas, The most important of contemporary Arab
political parties, it stresses Arabism and the unity of
morale remains low.
Fundamental to the Kadar regime's attempts to
stabilize Hungary politically is the necessity to restore
the Hungarian economy. In an effort to meet economic
grievances and get the populace back to work, the govern-
ment has made a number of concessions, notably in agri-
cultural administration. Full production in industry will
probably not be restored this year. however, and worker
Page 3
. . . Page 7
The West German government, faced with a national
election this year, is likely to intensify its efforts
to find a solution to the interrelated questions of
German unification and European security. Neither the
Christian Democrats nor the opposition Social Democratic
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1 _tell.! v
-0001,
Party gives any evidence of being willing for the Federal
Republic to withdraw from NATO in order to obtain Soviet
agreement to unification. However, coalition leaders are
showing greater readiness to consider giving up NATO
membership as part of, a general European settlement in-
volving unification.
The Chinese Communists, sensitive to the disorders
in Poland and Hungary, are proceeding cautiously with
the liberalization program started in 1956. In their
political and economic policies, the Chinese have shown
considerable flexibility in relaxing controls, while
firmly defining the limits on nonconformity. The Chinese
intellectuals are reacting timidly to liberalization and
show no disposition to emulate their bolder contem-
poraries elsewhere in the bloc by calling for more
liberties than the authorities wish to concede.
Page 11
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28 February 1957
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
OF IMMEDIATE INTEREST
United Nations
Continued postponement of
the UN General Assembly's de-
bate on sanctions against Is-
rael for noncompliance with
UN withdrawal resolutions under-
scores the divisive effect
this issue has had on the UN
as a whole and on its member
governments individually.
While most UN members agree
that Israel should comply
with the assembly's directives,
there is wide disagreement over
the extent to which Israel's
demands for guarantees should
be taken into account before
any sanctions move is under-
taken.
Ath Thamad-
. Even the legality of a
General Assembly call for
sanctions has been questioned
by some members, who point out
that under the terms of the
charter, only the Security
Council has the authority to
impose sanctions. There is
also a growing concern that
a General Assembly recommenda-
tion for sanctions might be
ignored by many prominent and
influential members,. thereby
further weakening the UN's ef-
fectiveness. Therefore, most
UN members have gone along with
continued postponements in the
hope that private negotiations
with Israel by the US and the
UN secretary general. would lead
to some agreement which could
be used to.avoid a showdown.
Cairo Meeting
The Israeli withdrawal
issue, and the American atti-
tude toward it, were the domi-
nant themes of the Arab "summit"
meeting in Cairo. Nasr re-
portedly pressed Saud hard on
these questions, and a bitter
debate took place over Saud's
desire that the conferees in-
dicate their appreciation of
the American policy stand on
Arab problems. At one point
Saud is said to have threatened
to walk out of the conference.
Saud apparently gave way
in the end, however, since the
communique issued on 27 February
gives first place to his report
on his American talks,. but
leaves approval of the American
position to be inferred. More-
over, this portion of the com
munique is balanced by a clear,
CONFIDENTIAL
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
strong reaffirmation of the
Arab leaders' determination to
adhere to a policy of "construc-
tive neutrality." Nasr thus
obtained his immediate objec-
tive--a unanimous communique
formally blessing the policy
associated with his name and
one which serves to dispel the
impression that he is being
isolated in the Arab world.
Syria
There were a few indica-
tions last week that Saud's
antileftist attitude might
also be having some effect in
Syria. The American embassy
in Damascus noted reports that
President Quwatli was co-operat-
ing with Khalid al-Azm, formerly
a leading proponent of leftist
influence, and an able con-
servative, Mahmud Kuzbari, with
a view to replacing the Asali
cabinet with a more pro-Western
one.
However, Syrian army G-2
chief Colonel Sarraj, who still
appears to be the dominant
figure in Syrian politics, re-
vealed himself to be more bit-
terly anti-Western than pre-
viously in a talk with the
American army attache during
a Soviet embassy reception.
Sarraj said that since the
Western press was accusing him
of being a Communist, he might
as well become one, and cited
the Soviet Union as Syria's
friend. When the presence of
over 40 Soviet bloc nondiplo-
matic personnel--probably mili-
tary officers in civilian
clothes--was pointed out to
him, Sarraj remarked, "They
are nothing; I can use them
but they cannot use me."
Meanwhile, new Soviet
equipment continues to arrive
in Syria. Trucks, ambulances
and cranes of Soviet origin
were observed entering the
Damascus area on 24 February,
and the American military at-
tache there believes additional
shipments have arrived at
Latakia.
Syrian-Lebanese relations,
which had been strained even
more than usual following the
assassination in Beirut on 19
February of Ghassan Jadid, a
leader of the rightist Syrian
Social National Party, have
eased slightly. However, the
death sentences pronounced by
the Syrian army court last
week against persons accused
last fall of conspiring with
Iraq to overthrow the govern-
ment may lead to new tensions,
since several of the accused
had sought refuge in Lebanon
and the Lebanese authorities
have previously refused to
extradite them.
In Jordan, the struggle
between King Hussain and the
left-wing cabinet of Prime
Minister Nabulsi abated some-
what pending the outcome of the
Arab leaders' conference 'in
Cairo, in which Hussain hoped
to have his position supported
by King Saud. Meanwhile, the
factions appear to be crystal-
lining.
25X1
25X1
security a artment, 25X1
by the kings order 25X1
are rapidly recruiting additional
men for the purpose of strength-
ening the king's hand against
the menace of pro-Egyptian street
mobs and possibly the army.
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The police and
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
Termination of Britain's
obligation to defend Jordan,
and Israel's long-standing
interest in establishing its
frontier on the militarily
defensible line of the Jordan
River, have revived rumors of
schemes for an impending
partition of Jordan.
President Sukarno, con-
fronted with mixed reactions
from political leaders to his
plan for Communist participa-
tion in a reorganized Indone-
sian government, must now de-
cide whether to ignore the
views of the opposition or at-
tempt some compromise. He
told a mass rally on 28 Febru-
ary that the "fate" of his plan
will be decided in the "not-
too-distant future" after he
had considered various view-
points.
At the rally,. organized by
the Communists outside the
presidential palace on 28
February, Communist Party
spokesmen enthusiastically en-
dorsed Sukarno's plan, and the
National Party has indicated
its views are close to those
of Sukarno. Moslem and Chris-
tian parties are, in varying
degrees, opposed. The Masjumi
party chairman was shouted off
the speakers' platform when
he asked for "another way out"
of the republic's pressing
political problems.
Sukarno has spent the past
week urging the acceptance of
his maximum demands--the estab-
lishment of an appointed "ad-
visory council" and the partici-
pation of Communists in both
the council and a new cabinet.
In his determination to force
his concept on the nation, he
reportedly is considering ar-
resting political leaders who
remain adamant in their op-
position. He also may declare
martial law throughout the
country.
In stimulating mass sup-
port and intimidating his op-
position, Sukarno has had the
assistance of a massive Com-
munist campaign which has all
the signs of careful organiza-
tion and ample financing.
Sukarno has welcomed this Com-
munist support, and has re-
garded Communist-organized
demonstrations as evidence of
popular acceptance of his con-
cept. He has not intervened
to discourage Communist ex-
cesses, which include defacing
of American property, and only
a few official efforts to con-
trol the campaign have been
reported.
The Indonesian army, for-
merly a strong anti-Communist
force, is probably divided on
Sukarno's plans. As the re-
sult of a thorough reorganiza-
tion, a significant percentage
of the officer corps is amen-
able to the policies of Sukarno
and the National Party. There
are strong indications that
Sukarno will attempt to bypass
the officers and coerce them,
if necessary, with an organiza-
tion established in 1956, the
"Noncoms' and Privates' Associa-
tion." The association strong-
ly favors Sukarno and reported-
ly is heavily infiltrated by
Communists.
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28 February 1957
Sukarno's insistence on
Communist participation in a
new government stems in part
from his admiration of the ef-
ficiency of the Communist sys-
tem of government he observed
on recent tours of the USSR
and Communist China. Sukarno
sees in autocratic aspects of
SECRET
those Communist regimes a pos-
sible solution to the political
and economic disintegration
facing his country. His pro-
posed advisory council would
be in a sense a "Communist
politburo" sunerimnosed on the
cabinet.
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CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
NOTES AND COMMENTS
BRITISH OFFICIALS PESSIMISTIC ABOUT KUWAIT
British officials fear a
nationalist upheaval may be ap-
proaching in Kuwait, which nor-
mally supplies over 60 percent
of Britain's crude oil require-
ments. Pending more study of
the situation, London's course
apparently is to avoid innova-
tions in policy for fear of
deepening Arab suspicions of
British intentions.
British planning for fur-
ther development of Kuwait's
oil industry is going ahead.
Work is proceeding to complete
a 160,000-barrel--per-day re-
finery this year. British and
American oil interests are al-
so considering a pipeline from
Iraq's southern fields into
Kuwait, or, as an alternative,
piping Kuwaiti oil to the
Mediterranean by connecting
Kuwait to existing lines across
Iraq and Syria.
Alexandria
iAA0MAN
fusalem
?Aleevo'
S Y R I A .
At the same time, British
officials display concern that
the political situation at Kuwait
is increasingly unfavorable to
Western oil interests. The
British ambassador to Iran vis-
ited the Persian Gulf area in
January and was particularly
impressed by growing Arab na-
tionalism at Kuwait. One of
his staff told the American em-
bassy in Tehran that it is ob-
vious the present "rather com-
fortable" status cannot last
much longer. The British am-
bassador himself feels it is
only a question of time before
the present paternalistic polit-
ical system in Kuwait "blows up."
Presumably as a result of dis-
turbing signs of unrest in the
Persian Gulf, the head of the
Eastern Department of the Foreign
Office is presently touring the
area.
I R A Q
_nlxr( Said... Gaza,:
Suez SINAI
y PENINSULA
SAUDI ARABIA
Oil pipeline
MILls
CONFjpF_9T1AL
PART TI NOTES AND COWENTS Page 1 of 14
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
officials in Kuwait have lost
their influence with national-
ist groups and are now forced
to rely exclusively on the
UN CYPRUS RESOLUTION EASES TENSIONS
With the UN General As-
sembly's adoption of a sub-
stantive resolution on Cyprus
acceptable to Greece, the Kara-
manlis government seems likely
to weather the crisis over the
island. The prime minister
expects to win a parliamentary
vote of confidence when the
Chamber of Deputies reconvenes
on 5 March.
The General Assembly res-
olution, adopted on 26 Febru-
ary, expresses the hope that
negotiations will be resumed
toward "a peaceful, democratic
and just" solution of the
Cyprus issue in accordance
with the principles of the UN
charter. Mention of the char-
ter, which specifically en-
dorses the principle of self-
determination, was particular-
ly important to Greece. The
Greeks have interpreted the
resolution as calling for re-
newed negotiations between the
British and Archbishop Makarios.
However, the British and the
Turks claim the resolution
ruler and his tributary sheiks 25X11
in charge of government adminis-
tration. The ruler has dismissed
many of his British advisers in
the past three months and
recently became less accessible
to those remaining.
envisages tripartite negotia-
tions, and the British will not
consider negotiating again with
Makarios.
Britain will not modify
its Cyprus policy but is will-
ing to have the Cyprus dispute
discussed by the North Atlantic
Council, provided the terms of
reference do not "permit NATO
to move too far into substance."
Greece has already indicated
qualified approval of recourse
to NATO, and Turkey is not
likely to object if British
conditions are met.
EOKA, the Greek-Cypriot
underground, apparently has
been severely weakened in:the
past few weeks. It announced
through leaflets on 25 February
that it would continue to fight
"until our aim is achieved,"
but its activities are likely
to be increasingly circumscribed
by British security forces and
a probable gradual lessening of
local support for its violent
methods.
MOROCCAN AND TUNISIAN RELATIONS WITH FRANCE
New frictions in Moroccan
-French relations overshadow
recent progress in resolving
some of France's minor prob-
lems in Morocco and Tunisia.
The two major problems--the
support by Morocco and Tunisia
of the Algerian rebels and the
presence of French troops in
both countries--are unlikely
to be,resolved soon.
Friction between Morocco
and France lessened after French
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PART II NOTES AND COMMENTS
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.CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
credits of more than $20,000,-
000 were released to Morocco
last December. Moroccan sup-
port in the United Nations for
Algerian independence drew a
sharp French protest and threat
to cut off further financial
aid. Tangible support for the
Algerian rebels--aid in the
procurement of arms and logis-
tics and rehabilitation facil-
ities--continues.
Paris is irritated by a
provision of the Moroccan dip-
lomatic convention with Spain
of 11 February permitting Spain
to represent Morocco in Latin
America where Rabat does not
maintain diplomatic representa-
tives. This provision is not
technically in conflict with
the Moroccan-French diplomatic
convention of last June, but
Paris considers that France
should perform such services
for the Moroccans in all areas
where Rabat does not have its
own missions. The Rabat govern-
ment flatly rejected on 23 Feb-
ruary a French protest against
Morocco's use of Spanish dip-
lomatic services.
Demands by the principal
Moroccan political party,
Istiglal, for the incorpora-
tion of Mauritania into Moroc-
co and Moroccan help to Mauri-
tanian exiles have also in-
creased friction. Moreover,
recent engagements between
French West African military
units and alleged bands of
the former Moroccan army of
liberation--considered as di-
versionary operations to re-
lieve the hard-pressed Alge-
ria.n. rebels--caused a second
French protest on 23 February
accompanied by a hint that
the French army might "inter-
vene." Morocco in reply de-
manded early negotiation of
border problems and the status
of French forces in Morocco.
The American embassy in
Rabat considers that a poten-
tially dangerous situation exists
which could lead to an open
clash between the French army
on the one hand and the Moroc-
can sultan, government, and
people on the other.
Despite some progress made
in resolving minor French-Tuni-
Sian problems during the.recent
visit to Tunis of French under
secretary of state Maurice
Faure, Tunisian premier Bour
ghiba was said to be in "his
most unreasonable and emotional"
mood regarding the continued
presence of French troops in
The Tunisians also continue
to expedite the transit of
materiel for the Algerian reb-
els, and in recent weeks sev-
eral engagements between the
rebels and French military
units have occurred on Tunisian
soil.
25X1
25X1
In view of their continu-
ing difficulties with France,
Rabat and Tunis will continue to
press for increased American
economic assistance as well as
to seek financial aid else-
where in order to relieve them- 25X1
selves of their present depend-
ence on France for vital finan-
cial assistance.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
THE NEW POLISH GOVERNMENT
The new government named
by Polish premier Cyrankiewicz,
and approved on 26 February by
the Sejm (parliament), r pre-
sents an important victory for
Gomulka in his efforts to stamp
out his Stalinist opposition.
Most of the pro-Stalin Natolin
group have now been removed
from the cabinet and the Coun-
cil of State, and greater
powers have been vested in the
new liberal Sejm.
The number of ministries
has been reduced from 31 to 25,
in line with the program of
streamlining the government ap-
paratus which Gomulka has pur-
sued since he came to power in
October. The merging and abo-
lition of various ministries
made possible the removal of
several members of the cabinet,
including communal economy
minister Mijal, and chemical
industry minister Ruminski,
both members of the Natolin
group. The only important
Stalinist remaining in the cabi-
net is Deputy Premier Zenon
Nowak, who has been retained
as one of three deputy premiers,
a position of little real au-
thority, probably as a sop to
the Stalinist factions.
The new Council of State
is composed of a group of per-
sons who are mostly liberal
minded supporters of Gomulka,
who himself, is a member. The
retention of Aleksander Zawadzki
as chairman of the council,
thus titular chief of state
of Poland, is probably in ex-
change for his support of
Gomulka's liberal program.
While formerly chairman of
the Polish trade unions,
Zawadzki was known as a per-
son completely loyal to Moscow.
The personnel changes
strengthen Gomulka's in-
ternal political position,
and he will probably attempt
to consolidate his gains
by making the government
more independent of the party,
which still contains many
Stalinist elements opposed
to his program.
Gomulka will permit the
Sejm to exercise increased
authority through greater
participation in governmental
affairs, thus broadening the
base of political support
in the fulfillment of his
liberal aims.
The meeting of the Demo-
cratic Socialist Party direc-
torate on 23 February adopted
a wait-and-see policy on So-
cialist reunification, making
it conditional on the future
performance of the Nenni So-
cialists with regard to foreign
policy and relations with the
Communists. The meeting did,
however, interpret the recent
Venice congress of the Nenni
party as a further move toward
eventual reunification, and took
no steps to block the growing
co-operation between the two
parties at the local level.
Democratic Socialist Party
officials are apprehensive lest
Nenni's failure to win a major-
ity of the votes for his party's
central committee means that,
in spite of the nearly unanimous
endorsement of reunification
and independence from the Com-
munists he received at the
Venice meeting, he will have
difficulties pulling a united
party away from Communist
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SECRET 1%.
CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
influence. While they passed
a motion characterizing the
Venice congress as "a step for-
ward on the road to integra-
tion," they apparently intend
to watch the parliamentary vot-
ing of Nenni's party on spe-
cific issues. In the Italian
Senate on 20 February, the Nen-
ni Socialists abstained on a
government motion favoring
EURATOM, thus leaving the Com-
munists isolated in opposition,
Democratic Socialist chief
Saragat complained to American
embassy officials before the
directorate meeting that he
was under strong pressure from
those in his own party and with-
in the Socialist International
who favor reunification. Such
pressure is likely to continue
in view of the critical line
against the Communists and the
objective tone on Western Euro-
pean integration being taken by
Nenni and his party organ Avanti
The American embassy also re
ports a tendency on the part of
reunion protagonists to believe
that Nenni can control his op-
position in the Socialist Party.
The Democratic Socialist
decision to move slowly on re-
unification appeared to have re-
moved the immediate threat that
the party might withdraw from
the government coalition. A
subsequent parliamentary move
against the coalition by an-
other party, however, has
created a new pressure for a
political realignment which may
give a further push to Socialist
reunification, On 25 February
the small Republican Party--
which is not represented in
the cabinet but has formed part
of the government's 16-vote
majority--announced that Premier
Segni can no longer count on
its support. One faction
of the party is already urg-
ing an alliance with the two
Socialist parties, and if the
Republican Party as a whole
should force a showdown with
Premier Segni, this would prob-
ably accelerate moves for a
realignment of the left-center.
Heinrich von Brentano,
West Germany's foreign minister
and the cabinet member who ap-
pears most likely to become
Chancellor Adenauer's eventual
successor, is to arrive in
Washington on 3 March for a
one-week official visit.
Brentano was originally to
have accompanied the Federal
Republic's president, Theodor
Heuss, but the 73-year-old
Heuss has had to postpone his
visit, citing illness.
Besides exploring views
of American officials on Euro-
pean problems and helping lay
the groundwork for the chan-
cellor's expected visit in
late May, Brentano will probably
use his trip as another op-
portunity to remind the German
public of the coalition govern-
ment's good ties with the
United States, especially in the
wake of the early February visit
of Erich Ollenhauer, leader of
the opposition Social Democrats
(SPD), Following his American
stay, Brentano will leave from
San Francisco for official
visits to Australia and then
India.
The 52-year-old native of
Hesse and a bachelor of a well-
to-do family and conservative
background, Brentano is a long-
time member of the Christian
Democratic Party (CDU). He
came to his present post after
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
25X1
25X1
a legal career and postwar
service as his party's Bundes-
tag: faction leader. Not a
forceful speaker, he relies on
his judgment of politicians
and situations. He is general-
ly recognized as skillful in
winning the Bundestag's ap-
proval for the coalition's
policies.
Brentano's standing in
West German politics has risen
steadily since he took over
the Foreign Ministry from
Adenauer in June 1955, par-
ticularly because Adenauer has
given him an increasingly free
Brentano has been much more
flexible than the chancellor
on some issues and at times
has even discussed publicly
changes in German policy
which might facilitate reuni-
ficationd
As foreign minister, he
has been somewhat hampered by
the activities of more ag-
gressive cabinet members, such
as Defense Minister Strauss,
as well as by other coalition
members such as press chief
Eckhardt, who sometimes use
their close relationships with
the chancellor to meddle in
foreign affairs. On the other
hand, Brentano's standing with
the opposition SPD is relatively
good; he has been receptive to
a "grand coalition" of the CDU
and SPD, if election results
should make such a solution nec-
essary, a concept Adenauer has
always flatly rejected. If SPD
gains in the upcoming Bundestag
elections make such a coalition
practical, the SPD is likely to
consider Brentano the most ac-
ceptable of CDU candidates for
chancellor.
THE NEW SPANISH CABINET
The new Spanish cabinet,
announced on 25 February, pre-
sents a change in faces rather
than in basic policies, with
about the same balance between
the Falange on the one hand
and the military, monarchists,
and church interests on the
other. The"changes in the
Foreign Affairs and Commerce
Ministries, together with the
inclusion of at least one fig-
ure known as a "big spender,"
seem to foreshadow somewhat
less cordial relations with the
United States and a continuing
reluctance to reduce the govern-
ment's deficit financing pro-
gram despite the threat of dis-
astrous inflation.
In all, Franco replaced
12 of his 16 ministers and added
two new posts, a Ministry for
economic Planning and one for
Housing. This is about as
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?..? SECRET
.'CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
sweeping as the last reshuffle
in July 1951, which was like-
wise preceded by a period of
intensified criticism of the
regime expressed in part through
extensive transportation boy-
cotts in major cities.
The Falange continues
strongly represented, despite
the shift to a less important
post of Jose-Luis Arrese, the
sponsor of the controversial
laws which would have greatly
strengthened the organization's
constitutional position. The
new labor minister is again a
Falangist with a strong labor
following, thus indicating
Franco's continued backing of
the Falange's campaign to win
broad support among the workers.
By way of compensation to
the military, Franco has not
only left them the three serv-
ice ministries but given them
the Interior and Public Works
Ministries as well. This army
control over the police also
suggests a concern for public
security in the event of fur-
ther student and worker unrest.
Since the military are almost
entirely monarchist in sympathy,
the monarchists--who retain the
Justice and Industry Ministries--
are probably reasonably well
satisfied also.
The replacement of the mod-
erate Catholic and pro-American
foreign minister, Martin Artajo,
by Fernando Maria Castiella
would not seem encouraging, ac-
cording to Ambassador Lodge in
Madrid. Castiella, a Falangist
who served in the Blue Division
on Germany's eastern front in
World War II, became ambassador
to the Vatican in 1951 when
Britain refused to accept him
as ambassador because of his
extreme anti-British and general-
ly anti-Western attitude.
The replacement of Commerce
Minister Arburua by Alberto Ul-
lastres raises doubts as to the
new cabinet's economic policies,
The previous cabinet had strong-
ly objected to Arburua's pro-
posals for an austerity program
to meet the inflationary threat,
and Ullastres, despite his rep-
utation as an orthodox economist,
is likely to be similarly blocked
by strong Falangist pressure for
increased welfare benefits and
by the retention in the cabinet
of Industry Minister Planell,
who is reputed to be a "big
spender." The appointee to the
new post for economic planning--
which is to have no staff--is 71
years old and politically in-
experienced. He seems unlikely
to be able to exercise any real
restraint on deficit soending
NOBUSUKE KISHI--JAPAN'S NEW PRIME MINISTER
Nobusuke Kishi, elected
by the Diet on 25 February to
succeed Tanzan Ishibashi as
prime minister of Japan, as-
sumes control of the govern-
ment at a time when there is
urgent need for consolidation
of conservative ranks and for
action on the budget. Kishi,
foreign minister and acting
prime minister under Ishibashi,
was closely identified with and
supported his predecessor's
policies, and he has strong sup-
port within the Liberal-Demo-
cratic Party, manifested in his
narrow defeat for the party pres-
idency last December.
Kishi recently stated to
the Diet that Japan's foreign
policy must "move on two wheels"
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
--respect for the United Na-
tions and co-operation with
the free world. He stressed
that it was in Japan's "ulti-
mate" interest to co-operate
with the United States in in-
ternational relations, thereby
reaffirming the assurances he
has frequently given American
officials of his friendliness
toward American interests. At
the same time, however, Kishi
feels that Japan must achieve
a more independent position
within the relationship.
Kishi may seek a revision
of the security treaty to lim-
it American bases and rights
in Japan, as well as agree-
ment on a specific date for
the withdrawal of all American
ground forces. In recent Diet
debate, the new prime minister
appears to have committed the
government to oppose any
American request to introduce
nuclear weapons or atomic task
forces into Japan. An advo-
cate of rearmament, however,
he favors strengthening Japan's
defenses before American forces
are withdrawn.
Kishi.has.what most.Japa-
nese regard as a realistic
attitude toward relations with
the Communist bloc. He would
limit them, however, so that
they do not jeopardize relations
with the free world. He ad-
mittedly favors the "two
Chinas" solution for relations
with Peiping. For the time
being, he advocates an expan-
sion of economic relations with
Communist China by what he
calls a "rationalization" of
the embargo on strategic trade,
and has predicated Japanese
recognition of Peiping on the
regime's acceptance by the UN.
Kishi is aware of the develop-
ing internal Communist threat
and is likely to take measures
to cope with it.
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
GOLD COAST INDEPENDENCE
On 6 March the Gold Coast
will become independent and,
as Ghana, take its place in the
British Commonwealth. Britain's
rapid progress in training the
Gold Coast nationalists in ad-
ministrative practices has
created deep distrust between
traditional chiefs and modern
politicians, but Prime Minister
Nkrumah is supported by a large
majority of the Gold Coast
people. The participation of
Communist nations in the in-
dependence celebrations will
give them an opportunity to
press for diplomatic relations
Britain is leav-
ing the Gold Coast
after more than 100
years of rule. Since
the exit has not been
forced, the national-
ists are friendly
toward London and
have decided to join
the Commonwealth.
The Accra government
still lacks many of
the qualities of
Western democracy,
but London hopes it
has taught the people
sufficient respect
for democratic pro-
cedures to ensure
that they will avoid
the graft and cor-
ruption found else-
where in Africa.
The traditional
chiefs of the hinter-
land have demanded
that the socialist
Convention People's
Party of Prime Minis-
ter Nkrumah give
them constitutional
guarantees of federalism to pro-
tect their regional powers and
tribal institutions. When their
appeals to London were unsympa-
thetically received in 1956,
the leaders resorted to threat
of secession and civil war.
In January, discussions be-
tween Gold Coast leaders and
British officials resulted in
a compromise Whereby the new
Ghana constitution will provide
for regional assemblies with
important powers. The consent
of these assemblies is necessary
for a constitutional revision
and any change in the authority
of the chiefs. While the Gold
Coast government accepted these
terms and the tension eased, an
independent Ghana government
may not observe them for long.
The Accra government, act-
ing largely through British
diplomatic contacts, has invited
almost all nations to the inde-
pendence celebrations. Among
the Communist nations, the So-
viet Union is to be represented
by Minister of State Farms I. A.
Benediktov, a top aide of Khru-
shchev, and Communist China by
Marshal Nieh Jung-chen, a deputy
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SECRET vffawwwow
CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
premier of the state council.
Czech, Polish and Rumanian rep-
resentatives will also attend
the celebrations.
Moscow is making large-
scale cocoa purchases in the
Gold Coast at a time when the
price of cocoa is dropping on
the world markets. Such pur-
chases impress the financially
pressed Accra government, which
depends heavily on cocoa for
foreign exchange earnings. While
in Accra, the Communist repre-
sentatives are expected to offer
q diplomatic exchange as they
did last year at Liberia's presi-
dential inauguration. The Ghana
government would probably not
accept such an offer now, but
some within the government may 25X1
agitate for such relations with-
in a short time,
BOLIVIAN STABILIZATION PROGRAM STIRS LABOR UNREST
Bolivia's spiraling infla-
tion appears to have been halted
by the sweeping economic sta-
bilization program begun in mid-
December. Resulting labor un-
rest, which at one point brought
BoliVia's president to the verge
of resigning, again threatens
the whole program with crippling
strikes and riots--possibly as
early as: March.
The stabilization program,
begun with a $25,000,000 fund
put up by the United States and
the International Monetary Fund,
has made a good showing in its
first two months. The initially
high prices resulting from the
abolition of controls have begun
to recede slowly. The govern-
ment's cumulative dollar losses
from the beginning of the pro-
gram to 23 February were only
$1,161,000 as compared to the
high of $2,100,000 reached on
29 January. A second American
investment in Bolivian petroleum
development and nearly completed
negotiations for new foreign in-
vestment in zinc mining indicate
foreign business confidence in
the stabilization program.
Progress in stabilization
thus far can be attributed in
large part to the government's
success in controlling labor
unrest, particularly at the
mines, which produce over 90 per-
cent of Bolivia's exports. On
17 February, however, Juan
Lechin, leader of the mineworkers
and long noted as one of the
two or three most powerful men
in Bolivia, stated that unless
prolabor adjustments were made
in the stabilization program,
miners and other wage earners,
spurred on by Communists, would
probably engage in crippling
strikes and riots, possibly
in March but not later than
May.
Both Lechin and his chief
lieutenant, the minister of
mines, who has also predicted
serious trouble in the next
several months, may be moti-
vated in part by a desire to
maintain their own prestige
prior to the mineworkers' con-
gress scheduled for April and
the May congress of the power-
ful national labor confedera-
tion--which Lechin heads.
Lechin does, however, ap-
pear to face a serious rivalry
for leadership of the miners
from Communists and pro-Com-
munists who oppose the stabili-
zation program and who have al-
ready successfully provoked
strikes of short duration.
Since most of the miners' wages
have reportedly been spent in
advance through commissary pur-
chases, the majority of the
miners will receive no pay at
the end of February. Conse-
quently, early March may be a
critical period for the govern-
ment. 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
On the 39th anniversary
of the Soviet armed forces on
23 February, the USSR again
emphasized its retaliatory
capability, hinting that it
possesses weapons more powerful
than atomic and hydrogen bombs.
Defense Minister Zhukov
called for increased vigilance
and stated that the Soviet
military, together with the
Soviet people, "wholeheartedly"
support the foreign policy of
the Soviet state.
Various articles emphasized
that while the USSR seeks peace,
it is more than capable of
defending itself. Marshal K.
S. Moskalenko, commander of
the Moscow military district
and of the Moscow garrison,
wrote in Red Star that "if a
new world war__Breaks out,
atomic, hydrogen, or even more
powerful bombs could fall on
the American continent." He
further noted that the army,
air force and navy have been
rearmed with atomic and ther-
monuclear weapons. This is
the first statement specifying
that all three services have
been so equipped.
Marshal R. Ya. Malinovsky,
commander of the Soviet ground
troops, referred to the
"splendid aviation units, diver-
sified atomic and thermonuclear
weapons, powerful rocket arma-
ments, including long-range
missiles," in Soviet hands.
Marshal K. K. Meretskov, writ-
ing in Izvestia, alluded to the
ability -f'FiI USSR to deliver
atomic and hydrogen bombs "to
any spot on the planet."
The choice of Marshals
Moskalenko and Meretskov to
write major articles on this
occasion suggests their rising
prestige, and tends to support
other indications that the
two have positions equal in
status to that of a deputy
defense minister. Moskalenko
had close ties with Khrushchev
during and after the war. They
both came to Moscow from the
Ukraine in 1949, Khrushchev to
become first secretary of the
Moscow Oblast organization,
Moskalenko to be appointed
air defense commander of the
Moscow Military District,
At the time of Beria's
arrest, Moskalenko was appointed
commander of the Moscow Military
District and sat on the court
which sentenced Beria.. He
had been active in Moscow
party affairs and was elected
a full member of the party
central committee in Februar
1956.
Meretskov's position since
his return to Moscow from the
White Sea Military District in
late 1954 has not been deter-
mined. He has served briefly
as chief of the general staff,
commander of various fronts in
the war, and military district
commander in the postwar period.
In the Far East he was closely
associated with Malinovsky,
who was appointed chief of
ground troops in early 1956.
Meretskov was the only officer
with the rank of marshal of the
Soviet Union who was not elected
to the central committee at
the last congress in February
1956. This suggests that his
position and prestige at that
time had not warranted it,
but his recent prominence
indicates a rise in his status,
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28 February 1957
Peiping's efforts to ex-
pand its sphere of influence
in Asia has been marked by
offers of economic assistance
by which the Chinese hope to
buy good will and prestige and
to advertise their own econom-
ic progress to Asians. Develop-
ment grants were given last
year to Cambodia and Nepal, in
addition to the established aid
programs to the Communist re-
gimes in North Korea, North
Vietnam and Outer Mongolia.
In the last month, the Chinese
reportedly attempted to induce
Laos to accept economic aid.
Under a program inaugu-
rated in June 1956, Peiping
is supplying Cambodia with
materials worth $22,400,000
over a two-year period to help
Cambodia develop its economy.
The Chinese have emphasized
that this aid is "without
strings" in deference to Cam-
bodian neutrality. The pro-
gram is administered with the
assistance of a small technical
mission from Peiping, however,
which gives the Chinese Commu-
nists de facto representation
in a state which does not rec-
ognize Peiping. Leaders of
the Chinese mission have been
granted diplomatic privileges
by Phnom Penh.
Nepal has been favorably
impressed by Communist China's
promptness in meeting its com-
mitments under an aid agreement
signed last October. Peiping
has paid the first installment
of a grant which will supply
Nepal with approximately $12,-
600,000 in cash and materials
over a three-year period, No
Chinese technicians have gone
to Katmandu, perhaps to avoid
further arousing Indian fears
of active penetration. Peiping
instead seems to be attempting
to build good will through dis-
interested "friendship."
It seems likely that the
proposed assistance program for
Laos, following the pattern es-
tablished by the agreement with
Cambodia, would include an aid
mission for administration and
technicians to assist the Lao-
tians at the working level
economic development and for
support of the Laotian army.
,Prime user
25X1
25X1
25X1
ouvanna houma has indicated
that he believes his government
would react negatively to such
a proposal prior to a final
settlement of the Pathet Lao
issue . (Concurred in 25X1
by ORR
Communist China is appar-
ently ordering certain modifi-
cations in its economic pro-
gram for 1957. The relatively
rapid rate of economic growth
achieved over the past few years
created problems, and these,
plus rebellion in Hungary and
unrest elsewhere in the bloc,
have led Peiping to go as far as
to question the past policy of
sacrificing living standards to
push heavy industrial development.
Perhaps in recognition of
this trend, Peiping has decreed
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maw SECRET NftWA0PF
CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
25X1
CHINESE COMMUNIST PRODUCTION
1956 17-7-1 ORIGINAL 1957 TARGET
O 1957 (PLAN) (FIRST 5-YEAR PLAN)
MACHINE TOOLS GRAIN (MMT)
(THOUSAND UNITS) Incl.Soybeans
1957 to be a year of adjust-
ment prior to undertaking the
Second Five-Year Plan. Ac-
cording to Vice Premier Po
I-po, who is one of Communist
China's top economic planners,
the value of industrial pro-
duction this year is to top
last year's by only 6 percent,
as compared with a 27-percent
increase last year and an av-
erage of 17 percent over the
first four years of the cur-
rent five-year plan.
In 1957 the output of the
means of production is to in-
crease 8.5 percent, that of
consumer goods by 3.5 percent.
Po stated that the value of
agricultural production, in-
cluding subsidiary rural out-
ELECTRIC POWER
(BILLION KWH )
1.50 1I 1.65
put, would increase
by 8 percent. Thus,
for the first time,
Communist China is
scheduling a more
rapid increase in
agricultural than
industrial produc-
tion,
The vice premier
stated that an attempt
would be made, on the
basis of the state's
financial and material
resources, to keep
total investment in
industrial projects
at the same'level as
last year. This
would require, he
implied, that appro-
priations in other
fields be suitably
reduced. For example, only
375 miles of new rail lines
are to be added this year com-
pared with about 1,000 miles
last year. A higher propor-
tion of what the Ministry of
Railways has left to spend will
be used to improve track and
yard facilities on existing
lines where congestion has be-
come a real problem to orderly
rail movement. The military
is also being asked to sustain
a cut in spending in order to
provide funds for economic con-
struction.
Nevertheless, original Five-
Year Plan (1953-1957) targets
will almost certainly be overful-
filled, (Pre- 25X1
pared by
COMMUNIST LOSSES IN ICELANDIC TRADE UNION ELECTIONS
Recent trade union elec-
tion losses by the Communists
in Iceland--the only free world
country in which they are
participating in the govern-
ment--resulted partly from dis-
illusionment over events in
Hungary and partly from better
co-operation among anti-Com-
munist elements in union
politics. The Communists
still have firm control of the
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PART II
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
Icelandic Federation of Labor,
however, as well as the coun-
try's largest single union,
and there are no signs that
they will be ousted from the
coalition government.
The Communists suffered
their heaviest blow to date on
24 February, when a Conservative-
Social Democratic coalition
gained control--by a vote of
525 to 498--of the Reykjavik
Factory Workers Union, the
third largest in the country.
Loss of this long-time bastion
of Communist labor strength
climaxes a recent downward
trend in other union elections,
in some of which the Communist
vote fell off as much as 25
percent.
The decline in the Communist
vote reflects in part the strong
reaction of many workers to the
Hungarian events. The most
significant factor, however,
is better co-operation among
democratic trade union elements--
chiefly the , Conservatives and
the Social Democrats. The de-
cline of the.Communist vote
has in some instances been in
unions which traditionally
have been strongly Social
Democratic and only within the
past year or so have registered
any significant Communist vote.
Communist defeats do not neces-
sarily mean a corresponding
rise in popular support for the
Social Democrats.
There has been some intra-
party dissension between the
"Moscow':" wing and the "national
Communists," who apparently
want to cloak the party even
more closely with the mantle
of the Labor Alliance, which
enabled the Communists and left-
wing Socialists to win consider-
able worker support in the June
1956 parliamentary election.
Despite some defections, how-
ever, no serious party split
appears likely.
Communist domination of the
Icelandic Federation of Labor,
made secure for another two
years at the biannual congress
in November 1956, gives the party
an unimpaired base from which
to counteract the Social Demo-
cratic-Conservative elements in
the local unions. The Communists
also retain absolute control of
the country's largest union,
ICELANDIC PARLIAMENT
u 4 E 1956 , TIONS
the Unskilled Workers Union in
Reykjavik.
Despite some rumors to the
contrary, the Communists also
seem bent on remaining in the
Social Democratic-Progressive-
Labor Alliance coalition govern-
ment, having recently conceded
on a tactical point when threat-
ened by the Progressive prime
minister with dissolution of
the coalition.: In the six months
the coalition has been in power,
the Communists have succeeded 25X1
in getting a number of their
adherents appointed to,kev
government positions.
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10TIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY-
28 February 1957
PATTERNS AND PERSPECTIVES
THE ARAB SOCIALIST RESURRECTION PARTY
The Arab Socialist Resur-
rection Party (ASRP), a leftist,
ultranationalistic anti-Western
group, has become the principal
vehicle for spreading pro-Soviet
and pro-Communist influence in
Syria, Lebanon, Jordan, and to
a lesser extent, in Iraq, Saudi
Arabia, Bahrein, and Kuwait.
It is a decisive factor in
Syrian and Jordanian politics,
where it has been used by Nasr
to extend Egyptian influence.
History and ideology
The ASRP, often called the
t3aath, was formed in 1953 by
the merger of two groups of
Syrian origin--the Arab Resur-
rection Party and the Arab
Socialist Party. The Resurrec-
tion, sometimes referred to as
the Renaissance Party, was
founded in the late 1940's by
Michel Aflaq, a Christian, who
had been a leader in the Syrian
Communist Party up to 1943, and
Salih Bitar, the present Syrian
foreign minister. The Arab
Socialist Party was founded by
Akram Hawrani, a radical, anti-
Western politician, for the
purpose of countering the right-
ist Syrian Populist Party.
Ideologically, the ASRP
is secularist and Marxist,
claiming that Marxian socialism
is the ideal system for the
Arab world. It links itself to
Arab nationalism by stressing
that it is not a Syrian but an
Arab party. It advocates worker
participation in the management
of industry, distribution of
large agricultural holdings to
the peasants, and strict neu-
trality in world affairs. Aflaq
is the theoretician, while
Hawrani is the practical poli-
tician and organizer.
Personalities
Aflaq now rejects Communism
on philosophical grounds. He
maintains that its dialectical
materialism is incompatible with
the spiritual elements of Islam
and that Arab nationalism cannot
be reconciled with international
Communism. However, he believes
Communist support can be safely
exploited to reach Arab nation-
alistic aims. He has a con-
siderable intellectual hold on
students and graduates of the
Syrian University, whom he re-
ceives at his apartment in the
manner of a master imparting
truth to his disciples. Aflaq
is deeply convinced of his role
and his mission. He and Hawrani
have differed on party policy
but never enough to cause seri-
ous
seusion.
I~~
r1'
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
Hawrani is a practiced and
practical politician and a
brilliant speaker. He believes
violence will ultimately have
to be used to carry out his pro-
gram and he was influential in
bringing about three of the
military coups which have taken
place in Syria since 1949. He
was minister of defense in
Colonel Shishakli's regime and
was considered the "brains" be-
hind the dictator. He broke
with Shishakli in 1953 and fled
to Lebanon, where he carried on
political activities aimed at
the overthrow of Shishakli.
Hawrani, appreciating the
crucial position of the army
in Syrian politics, has followed
a policy of actively infiltrat-
ing the officer corps, especial-
ly those officers in key posi-
tions in intelligence and ar-
mored units. Younger officers,
dissatisfied with Syria's po-
litical conditions, and univer-
sity students, who are easily
inflamed, are the party's
stanchest supporters.
Communist Support
The turning point in the
ASRP's fortunes came in 1954,
when the party agreed to accept
Communist support and gained 17
of the 142 seats in the new
Syrian parliament. In 1955, it
supported the Asali cabinet
because of the latter's opposi-
tion to any alliance or agree-
ment with the United States,
Turkey, or Iraq.
Hawrani has been the lead-
er in promoting co-operation
with the Communists, but Aflaq
also freely admits to co-opera-
tion and is confident that the
ASRP is by far the stronger of
the two allies. He claims the
public knows that the party has
consistently been ahead of the
Communists in its demands for
social reform. Aflaq is con-
fident that Arabism will win
out over Communism.
Co-operation with the So-
viet Union is based on the old
Arab adage "my enemy's enemy
is my friend", in this case the
enemy is Western "imperialism."
If the ASRP attained power, it
might fall prey to the Com-
munists within its ranks.
Role in Various Countries
The party believes its po-
litical fortunes benefited from
the Anglo-French intervention
in Egypt, which it feels gave
the Arabs a stronger sense of
unity. Federation with Egypt
is one of the party's immediate
goals.
Syria: The ASRP's policies
have nominated the Syrian polit-
ical scene since the invasion
of Egypt and have been hardly
distinguishable from those of
the Communists. The Syrian
press and radio feature Soviet-
inspired items, conservative
influence has been greatly
undermined, and the flow of
Soviet bloc military equipment
and technicians has increased.
A factor which has contributed
to the momentum of Syrian orien-
tation toward the Soviet Orbit
is the influence and encourage-
ment of Egypt, which is, itself,
following much the same course.
The ASRP has been a prime mover
behind the pressure for Syrian-
Egyptian political and economic
union and for the purging of
government officials who are
considered unreliable, i.e.,
pro-Western.
Jordan: In Jordan, the
ASRP operates quite openly and
appears to have captured the
imagination, if not the loyalty,
of General Nuwar, the ambitious
army chief of staff. The govern-
ment has become infiltrated by
its members. Minister of State
for Foreign Affairs Abdullah
al-Rimawi is, like the Syrian
foreign minister, a member of
the party. Its greatest
strength in Jordan lies with
the refugees.
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SECRET -Wawr
CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
Iraq: Since all political
parties are banned in Iraq, the
activities of the ASRP are nec-
essarily clandestine. The party
is the most active nationalist
organization in Iraq and, as
in Syria and Jordan, it co-
operates with the Communists.
The ASRP's major strength is
found in the schools and among
the professional classes,
especially in the higher insti-
tutions of learning--Baghdad
Law College, the College of
Medicine, and the teachers
college. It aims at the rover-
throw of Nuri Said and the
palace regime. A center of its
activities is the Arab Renais-
sance Club, which was organized
under the auspices of pro-West-
ern Fadhal Jamali, but which
has fallen under ASRP control.
The Iraqi government has con-
tinually tried to repress the
party, and numerous members
have been sentenced to prison.
Saudi Arabia: Penetration
by the ASRP into Saudi Arabia
is still minor and has been con-
fined to Palestinian Arabs who
are employed by Aramco. How-
ever, the party has a strong,
following among Palestinian
employees, and several handbills
have been distributed attacking
the "greedy colonialism" of
Aramco and urging strikes in
support of Arab solidarity and
against the "shameful attitude
of the Saudi government and the
Saudi royal family." Nasr is
hailed as the "sincere hero of
the Arabs."
In Kuwait and Bahrein, the
extent of ASRP influence is un-
known, but agitators are Arab
Palestinians. The party's in-
fluence has spread to Egypt,
particularly among students,
via Syrian youths sent to study
at Egyptian universities and
military schools.
The ASRP appears to be a
much more active vehicle for
Communists and fellow travelers
in the area than are the Com-
munist parties themselves. Arab
Communists are aware of this
situation and appear indeed to
HUNGARIAN ECONOMIC PROBLEMS AND PROSPECTS
Fundamental to the Kadar
regime's attempts to stabilize
Hungary politically is the
necessity to restore the Hungar-
ian economy. In an effort to
meet economic grievances and get
the populace back to work, the
government has made a number of
concessions, notably in agri-
cultural administration. The
damage to the economy will not
be fully repaired until well
after the end of 1957, necessi-
tating a reduction of planned
investment and a major realloca-
tion of labor and materials to
overcome economic dislocations.
Scarcities are beginning
to raise the threat of inflation;
and unemployment, while less
severe than had been anticipated,
is a serious problem which may
worsen if badly needed raw
materials are not obtained from
the Soviet Union or elsewhere
to keep production going.
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
During the last two months
of 1956, according to the Hun
garian press, production was
virtually at a standstill, re-
ducing the national income for
1956 to about 10 percent below
the planned figure. Industrial
production,which in December
was equal to about one quarter
of the September rate, had
risen to 50 percent in January,
according to regime statements.
Coal and Power
The coal shortage, one of
the foremost problems during
the three months following the
revolt, has been somewhat alle-
viated through imports and in-
creased production. The mines
now supply between 55,000 and
60,000 tons per day compared
to a normal output of 70,000
tons before the revolt. The
number of miners presently ex-
ceeds 80,000, according to
official sources, whereas some
94,000 workers were employed in
the industry prior to 23 October.
Coal now is available to furnish
power for a1l'.industries except
the . largest'consumers, such as
the key aluminum and`. steel in-
dustries, which are being.re
stored to p:roductaon .gradually'.
In an effort to get miners
to resume work, the regime
raised wages, abolished the
norm system, and announced that
the traditional wage system
based on professional skill in
the mining industry was being
restored,
Industrial Limitations
Raw material shortages and
labor slowdowns are preventing
many factories from resuming
full production. According to
official announcements, the out-
put of some factories is only
50 to 70 percent of average,
with reductions up to 20 percent
in number of workers employed.
Production at the Csepel iron
and steel works was said by the
regime to be 60 to 70 percent
of normal, but plan targets
are now 15 to 20 percent lower
than before 23 October. The
aluminum-processing industry
has been almost completely at
a standstill but is scheduled
to resume operations in March.
Directors of the Hungarian
oil industry claim that work in
the:oil fields has continued dur-
ing the entire period since 23
October despite power and trans-
port difficulties. Production
is said to be about 70 percent
of normal.
With the exception of some
plants in Budapest and on Csepel
Island, there was apparently
little damage to industria,'~
25X1
stallat:.
workers at the 25X1
an j
an .ee plant at Ozd in
northeastern Hungary, which pro-
duces about 30 percent of the
country's crude steel, deliber-
ately let the steel solidify in
the open-hearth furnaces during
the revolt. As a result the
smelt equipment must be com-
pletely replaced.
Although no statement has
been made that heavy industry
would lose its priority in
Hungarian planning, concern has
been expressed about the suit-
ability of some of the long-
term industrial projects which
have been undertaken.
For example, Minister of
Industry Apro said on 4 January
that the country did not need
the Dunapentele (Sztalinvaros)
metallurgical combine, which is
only half completed: "Much
money and labor went into the
erection of this center of
heavy industry in the Hungarian
plains at Stalin's behest. It
was believed that this was the
way to improve and secure the
country, but time has proved
this an erroneous idea. Hungary
is poor in raw materials and
electric energy, so it should
not have developed heavy industry
on the scale it did but should
have concentrated its energies
and resources to produce goods
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PART III PATTERNS AND PERSPECTIVES
Page 4 of 1e.
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%MNWI SECRET lftftwe
CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
requiring less materials but
more craftmanship."
A temporary wave of hoard-
ing in the wake of the revolu-
tion, combined with the stoppage
of light industrial production,
seriously reduced stocks of in-
dustrial consumer goods. The
value of these stocks is es-
timated to have fallen from 14
to 5 billion forints ($1.19 bil-
lion to $425,000,000) as of the
end of the year. At present
the principal shortages are in
clothing and shoes.
The regime claims that a
rapid increase in the coal sup-
ply has made it possible to re-
sume production in many facto-
riesand avoid widespread unem-
ployment. The regime puts the
unemployed at about 100,000.
The outflow of refugees to the
West eased unemployment but
aggravated production problems
because of losses of skilled
workers and high-caliber per-
sonnel. Present dismissals of
government employees as part
of an economy drive add to un-
employment. In some factories
a shorter workweek has been
temporarily instituted to
prevent dismissals.
In an important concession
designed to reduce unemployment,
the Kadar regime plans to grant
loans to assist people in set-
ting up their own businesses,
especially workers who lose
their jobs as a result of
"rationalization measures."
Of further encouragement to
private industry is a decree
effective 1 January abolishing
the income tax payable by in-
dependent small shopkeepers and
craftsmen for their employees.
The government is faced
with the difficulty of trying
to persuade workers to co-oper-
ate despite their disapproval
of the regime. Pressure is
being brought to include party
members in workers' councils
to assure adherence to regime
policies, while the importance
of the party-controlled trade
union organization is also
being emphasized.
Budget
To forestall inflation,
the regime plans to cut the
1957 budget, especially in gov-
ernment administrative expenses,
national defense and capital
investments, completing only
those capital projects which
require "very little expense"
and which help increase stocks
of consumer goods.
A budget has been prepared
to cover the first quarter of
1957, and the Planning Office
has been instructed to submit
proposals by 31 March for a
plan to cover the remainder of
the year. Capital investments
in 1957 will be reduced to ti
billion forints instead of 11.6
billion as planned before the
revolution. The government
has also announced that since
it would be impossible to
carry out the old five-year
plan, a special three-year plan
for 1958-60 is being prepared.
Foreign Exchange and Trade
The foreign economic loans
which Hungary has received
since October 1956 provide only
temporary support for an economy
which even prior to the revolu-
tion was in serious difficulties.
The country's normally high-
cost obsolescent industry, which
is based almost entirely on im-
ported materials, has been un-
able to compete successfully in
foreign markets. The fact that
imports exceed exports in trade
with the West has necessitated
curtailment of needed imports
and the arrangement of short-
term credits often on a precar-
ious day-to-day basis. Hungary
has a substantial foreign debt
and is negotiating for postpone-
ment of certain payments due al-
most immediately.
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
At least half of the for-
eign assistance to Hungary in
the past three months has con-
sisted of relief supplies. The
remainder, primarily from Com-
munist countries, is composed
of commodity and rehabilitation
loans, including foreign ex-
change loans of more than $50,-
000,000 each granted by the
USSR and Communist China, which
may meet some of Hungary's
.longer-range needs. Additional
Soviet assistance valued at
$200,000,000 is now being nego-
tiated.
The Hungarian Central
Office of Statistics,reported
on 15 January that the produc-
tion level of the food industry
had reached that of September.
Basic foods are available and
a semblance of normalcy has
been restored in the distribu-
tion system, in part because of
the relief and economic aid
received from both the bloc and
Western countries. The longer-
range outlook for the urban
food supply is unfavorable,
with much depending on whether
sufficient imports can be
obtained during the second
quarter of the year.
Agriculture
The disintegration of co-
operative farms in Hungary was
extensive and rapid. According
to Agriculture Minister Dogei,
only half of the country's co-
operatives still function, and
land, stock and machinery be-
longing to the co-operatives
have been distributed among the
peasants. The Central Office
of Statistics stated on 15
January that about 1,720 co-
operatives were functioning,
in contrast to 3,930 reported
at the end of September. In a
broadcast on 6 January, the
regime made plain that the
agricultural collectives and
state farms would continue to
be supported by the government
and that "the government will
treat with great severity at-
tempts to deprive the state
and co-operative farms of their
property."
On the other hand, there
is considerable evidence that
the regime realizes the need
for improvement in the ad-
ministration of its agricultural
policy in order to raise pro-
duction. Some measures re-
stricting trade in real estate
are being abolished. It will
be possible for producer co-
operatives and state farms to
purchase land, and even in-
dependent farmers may purchase
or lease land up to the legal
maximum of 35 acres. Any in-
dividual will be able to lease
his land,or the property may
be share-farmed.
The regime is also seek-
ing to enlist the support of
noncollectivized farmers whose
produce is essential to supply
adequate food for the populace
as well as important export
products. The compulsory pro-
duce delivery quota system, so
disliked by the peasantry, was
abolished by the Nagy govern-
ment late in October--a con-
cession which the Kadar govern-
ment has continued. Although
"full freedom of peasant produc-
tion and marketing" has been
promised by the regime, a new
system of state contractual
bulk-buying at "free state
prices" is being instituted
which limits this freedom some-
what. Nevertheless, the regime
has promised the peasants they
will get higher prices for their
produce.
Future Prospects
The chaotic situation in
the Hungarian economy will pre-
vent a return to full production
during 1957 and perhaps for a
longer period. Manpower--skilled
technical, and professional--
lost through emigration cannot
be replaced in a short time,
Full production in the aluminum,
steel and other vital, industries
will not be restored for many
months, and worker morale and
consequently worker productivity
will ec)ntinue to be low.
(Prepared by ORR)
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
GERMAN UNIFICATION AND EUROPEAN SECURITY
In this election year, the
government of Chancellor
Adenauer is under strong com-
pulsion, as it was before the
Bundestag elections of Septem-
ber 1953, to satisfy the public
that it is doing its utmost for
German unification. Realizing
that unification can be achieved
only within the framework of
great-power interests, the
government has since 1953 made
particular efforts to find some
way of reassuring Moscow that a
unified Germany would not threat
on the security of the Soviet
bloc. Arms limitations, buffer
zones, collective security
pacts, modifications in the
Atlantic alliance or German
withdrawal from the alliance
have all been suggested by pol-
iticians and commentators.
Bonn's Major Considerations
The government's attitude
is colored by a number of con-
siderations. Chancellor Ade-
nauer and his advisers doubt
that Moscow is ready to permit
German unification on any terms
except the totally unacceptable
one of assured Communist con-
trol. At the same time, the
chancellor still seems to be-
lieve in his policy of unified
The Eden Plan, 1955
Included a great-power nonaggression pact
NATO nations
E] Warsaw pact nations
SECRET
Pacts and Buffer Zones
In the many Eu-
,ropean security;propos-
als made by both So-
viet and Western lead-
ers since mid-1953,
the two common ele-
ments have usually
been formal guarantees
by both sides, and a
buffer zone or area of
reduced armaments
which would lessen the
possibility of border
clashes and, perhaps,
provide a testing
ground for internation-
al arms inspection.
The proposals have
differed on the
PATTERNS AND PERSPECTIVES Page 7 of 14
Western strength. These views
would suggest that the govern-
ment need make no extraordinary
effort to reach agreement.
On the other hand, in a
year when control of the Bun-
destag is at stake, Adenauer
must not allow any doubt to
arise in the voters' minds
that he is doing his best to
reunite the country, and
according to opinion polls,
the public considers unifica-
tion more important than the
Western alliance. Adenauer
would probably like to crown
his career by uniting Germany.
Moreover, he is seriously
worried about the possibility
of the tensions in central
Europe resulting in war.
The government's approach
to the problem is likely to be
one of steady formula-seeking,
restrained by a basic caution
regarding Germany's security.
Bonn has no intention of find-
ing itself friendless in the
maelstrom of European politics,
even for the sake of unifica-
tion, and is therefore unlikely
to make any move that would
seriously threaten its good
relations with the West, es-
pecially the United States.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
NATO nations
Warsaw pact nations
The Mende Plan, 1956
Included a 5- or 15-power nonaggression pact
Ireland
West German pol-
iticians have also
considered the in-
clusion of all or
part of the Federal
Republic in the buf-
fer zone, although
the danger is obvious
that such an arrange-
ment might remove
Germany as a positive
contributor to West-
ern defense and as a
base for other West-
ern forces. The op-
position Free Demo-cratic Party general-
ly backs the plan of
its defense expert,
Erich Mende, calling
for a united Germany
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question of a unified or a still
divided Germany, as to the
nations which would participate
in the guarantees and the loca-
tion of the buffer zone.
also indicated inter-
est in buffer zones
as a way of demon-
strating to Moscow
that a United Ger-
many in a Western al-
liance would not nec-
essarily advance the
position of NATO
forces to the east.
In 1953, for example,
he proposed that as
Germany is unified,
all of the present
East Germany, and an
equal area east of
the Oder-Neisse line,
be demilitarized.
Moscow rejected this
plan as weakening
only the East, not
the West.
As early as the election
campaign of 1953, Adenauer
attempted to undercut an ex-
pected Soviet proposal of Ger-
man neutrality by suggesting
a mutual East-West security
guarantee--a suggestion which,
although repeated the next
year, drew no expression of So-
viet interest. Adenauer has
outside NATO, with
NATO forces remaining in the
Ruhr and on the west bank of
the Rhine, and Soviet forces
withdrawing to the Oder-Neisse
line.
At a press conference on
11 January this year, Adenauer
talked of a militarily "thinned
zone" extending beyond the
Federal Republic both to the
east and the west. This plan
was not conditioned on German
unification, but was offered
only to improve the "inter-
national climate." He said
The Adenauer Proposal, 1953,
Proposed members of the European
Defense Community (EDC)
Ireland
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United
Germany Poland
(One Ned bnt
medI
g sw 1: Austria Hungary
Rumania
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
it was "perhaps almost certain"
that Bonn would discuss such an
arrangement with its allies
this year. Apparently as a re-
sult of vigorous objections
from his Christian Democratic
Party, Adenauer practically
withdrew this proposal in anoth-
er press conference on 25 Jan-
uary, when he stated that it
was useful only to control con-
ventional forces and should be
considered after the great pow-
ers had agreed to ban thermo-
nuclear weapons.
It seems unlikely that
West Germany would, in fact,
accept any limitations on its
armed forces going beyond the
restrictions in the Paris trea-
ties, except in conjunction
with German unification.
Affiliation of United Germany
Neither the Christian
Democrats nor the opposition
Social Democratic Party (SPD)
gives any evidence of wanting
the Federal Republic to with-
draw from NATO as an opening
move.to lure the USSR into an
agreement on unification. More-
over, there is little tendency
to accept a position of complete
military isolation for a united
Germany. The issue of what
military ties a united Germany
should have is, however, hotly
disputed.
Under an SPD plan, unifi-
cation would coincide with re-
placement of NATO and the War-
saw alliance by a collective
security pact involving both
the US and the USSR. While the
SPD has not fully explained how
its pact would operate, it prob-
ably envisages something like
the "Eastern Locarno," suggested
by Churchill in 1953, by which
each side would be pledged to
assist the victim of aggression.
Under a pact of this kind, how-
ever, Germany would not partic-
ipate in NATO peacetime milri-
tary planning.
Most coalition politicians
do not like the SPD plan, partly
because they doubt that it would
offer as much security as NATO.
A West German general recently
told American officials that
peacetime planning was indis-
pensable. Coalition leaders
are also loath to accept the
restrictions on German sover-
eignty which would be involved
in giving up freedom to make
alliances.
Both Foreign Minister
Brentano and Bundestag presi-
dent Gerstenmaier, however,
have recently demanded simply
an effective security guarantee
for a united Germany. Gersten
ma ier said on 12 February that
when such a guarantee was forth-
coming, German membership in
NATO could be "put up for debate."
Brentano remarked on 18 January
that Bonn was willing to find
new forms of living side by
side with the Soviet bloc, and
that this could be done within
existing pact systems or with-
in systems still to be created.
It is possible the coali-
tion leaders will try to counter
the SPD plan with a proposal that
a collective security system be
superimposed on NATO, with the
purpose of guaranteeing assist-
ance to the Soviet Union in
the event of German aggression,
an arrangement Adenauer had in
mind two years ago.
Defense Minister Strauss,
who frequently makes proposals
without the coalition's backing,
was reported in the press on
19 February as reiterating that
a unified Germany would not
automatically be bound by the
Federal Republic's ties with
the West. He stated that "though
the wish and desire of security
of a reunited Germany would
point to membership in a Western
military alliance, the hard
political realities" might call
for a neutral position like
Austria's.
Adenauer seems to be de-
veloping an entirely new thesis
which may relieve him of the
necessity of debating the re-
spective merits of freedom of
alliance and the SPD security
pact. On 13 February, he
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
declared that he was not op-
posed to a European security
system, but said the importance
of such a system had dimin-
ished because of the develop-
ment in the past year of re-
mote-controlled rockets with
nuclear warheads. He believed
the best efforts should go in-
to the elimination of such
LEADING PROPOSALS FOR A EUROPEAN SECURITY AGREEMENT
1953
May - Churchill suggests an "eastern Locarno" by which "Germany" and the
Soviet Union would be guaranteed against aggression by each other, but
without indicating whether he meant a united Germany.
July - Adenauer suggests a mutual guarantee between the proposed European
Defense Community and the USSR.
Sept. - Adenauer suggests a demilitarized zone covering all of East Germany
and an equal area east of the Oder-Neisse.
Sept. - Belgian foreign minister van Zeeland proposes withdrawal of US,
British, and Soviet forces to the Rhine and Vistula, demilitarization
of East Germany, and a 20-year guarantee of the Oder-Neisse line.
Sept. - French deputy foreign minister Schumann proposes Western-Soviet pact
1954 guaranteeing frontiers against forceful change.
Feb. - At Berlin conference, Molotov offers European security treaty, with
mutual ass stance provision, to replace NATO. US would not be a party;
Germany wod remain divided.
Oct. - Adenauer suggests nonaggression pact between Western Europe and So-
viet bloc.
1955
May - Social Democrats call for a united Germany's membership in a new se-
curity pact with all the major powers instead of in a purely Western
pact.
July - At summit meeting, Prime Minister Eden proposes a demilitarized zone
between East and West, and heads of state direct their foreign minis-
ters to consider a European security pact, including arms limits and
inspection and a zone of agreed force levels.
Oct. - At Geneva foreign ministers' meeting, West offers the Eden plan--a
collective security pact in stages, providing for mutual assistance,
to be fully effective when a united Germany enters NATO and WEU. There
would be a zone of controlled arms along united Germany's eastern bor-
der.
Oct. - At Geneva meeting, the USSR suggests a security pact including the
US and WEU states with the Warsaw pact states and involving mutual as-
sistance and a consultative body, all conditioned on a divided Germany
1956 anb dissolution of the Western and Warsaw alliances.
Mar. - Free Democrat Erich Mende proposes that both parts of Germany leave
alliances, that foreign forces withdraw to the Rhine and the Oder-
Neisse line, with German forces in the area between, and that acol-
lective security pact be concluded, all prior to German unification.
Mar. - At London conference of UN Disarmament Subcommittee, the USSR pro-
poses a European zone, to include both Germanies, in which atomic
weapons would be banned. Progressive disarmament program would limit
German forces to 200,000.
Sept. - Bonn, in its first note to Moscow on unification, expresses interest
in re-examining collective security proposals involving mutual assist-
ance and demilitarized zones.
Oct. - Soviet reply to Bonn's note urges participation of two German states
1957
Jan. 11 - Adenauer suggests a militarily "thinned zone" extending east and west
beyond the Federal Republic.
Jan. 16 - Social Democrat Fritz Erler calls for consideration of a "thinned
zone" and treaty system guaranteed by the US and USSR, as a means of at-
taining German unity and East European freedom.
Jan. 25 - Adenauer declares "thinned zone" is useful only after international
ban on thermonuclear weapons.
Feb. 13 - Adenauer says he is not opposed to a European security system, but
that the main effort should be directed toward banning nuclear guided
missiles.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
weapons through international
control.
Whether Adenauer intends
to make a ban on nuclear guided
missiles a precondition to a
security pact will perhaps
emerge in the US-British-German-
French talks scheduled to open
in Washington on 6 March in an
effort to find a common policy
on the interrelated questions
of German unification and
European security.
LIBERALIZATION IN COMMUNIST CHINA
In the aftermath of the
disorders in Poland and Hungary,
the Chinese Communists are pro-
ceeding cautiously, with the lib-
eralization program started in
1956. Heretofore proscribed
courses of study have been re-
introduced into university cur-
ricula; the forms, if not the
substance, of political democ-
ratization have been extended;
and free markets, under careful
state scrutiny, have been estab-
lished for many commodities.
Cowed by recent repression, the
Chinese intelligentsia is react-
ing timidly to liberalization
and shows no disposition to
emulate its bolder contemporar=
ies elsewhere in the bloc by
calling for more liberties than
the authorities wish to concede.
The first intimations of a
liberalization policy in China
appeared at a party conference
in January 1956, when Chou En-
lai called for more conciliatory
treatment of intellectuals,
"the most precious property of
the state." The program, which
emerged from the Soviet 20th
party congress in February 1956,
provided Soviet sanction for a
swing toward moderation in
China. In May, Mao Tse-tung
gave his blessings to a "new
course" for China with the ex-
hortation to "let all flowers
bloom together and all schools
of thought contend."
Promises
In succeeding weeks, the
Communists provided some guide-
lines for the liberalization.
The intellectuals were to be
conceded freedom of thought
"inside the camp of the people."
They were encouraged to examine
divergent schools of thought
and even to publicize in "free"
debates the heresy of idealism.
The conclusions of these debates
were foreordained, however, by
the reminder that "debates are
intended to find out the truth.
Only dialectical materialism
is the truth."
In the arts, members of
the intelligentsia were assured
they need no longer restrict
themselves to heroic portraits
of the worker in overalls but
were free to select themes out-
side the confines of "socialist
realism." As Communist Party
leader Lu Ting-i rationalized,
"taboos and commandments about
choice of subject matter can
only hamstring art and litera-
ture and result in writing to
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CURRENT INTELLIGENCE WEEKLY. SUMMARY
2.8 February 1957
formula and bad taste." But
nonproletarian themes, Lu ob-
served, should be used to crit-
icize rather than romanticize
the old society.
In regard to the natural
sciences, Peiping seemed less
inclined to preserve the hedges
around freedom of expression
and research. Particularly
significant was the announce-
ment--as yet not echoed by
orthodox Marxists elsewhere in
the bloc--that these sciences
had no class character and that
theoretical formulations in
these sciences could not proper-
ly be labeled with the epithets
feudal and capitalist.
Peiping may be convinced
it must allow scientists to
broaden their horizons beyond
the confines permitted in the
Soviet Union under Stalin.
Chinese scientists were appar-
ently not to be subjected to
the sort of vilification suf-
fered by Russians who disagreed
with the party-supported
theories of Lysenko. The study
of English in China was en-
couraged, and scientists were
told to borrow freely from West-
ern as well as Soviet studies.
Party Congress
While intellectuals were
apparently the chief benefici-
aries of the new course, the
people at large were also to
feel the relaxation of state
pressures. Speaking at the
eighth party congress in Septem-
ber, Director of Public Security
Lo Jui-ching promised a con-
tinuing fight against unyield-
ing counterrevolutionaries but
declared that the stage of
fierce class struggle had passed.
Earlier in the year, the re-
gime had announced a policy of
leniency toward surrendering
counterrevolutionaries and re-
ductions in the sentences of
those already convicted who
were properly repentant. Agri-
cultural collectives were no
longer to refuse membership to
reformed counterrevolutionaries.
Speakers at the party
congress also promised the
creation of "free markets."
Goods worth some 12 billion
yuan--out of a total annual
retail trade of 46 billion--
were to be freed in varying
degrees from state control.
The ruling applied to minor
local products, handicraft
goods and general consumer
goods.
In support of its lip serv-
ice to democratic practices
in political affairs, Peiping
about this time began to em-
phasize the functional role
of the puppet parties as the
representatives of the non-
proletarian classes. At the
National People's Congress in
June, Communist Party members
were chided for belittling the
function of the "democratic"
parties, and "mutual super-
vision and criticism" between
these parties and the Chinese
Communists were called for.
Response
The Chinese intelligent-
sia--thoroughly cowed by the
campaign against intellectual
nonconformity in 1955, and
familiar with the Communists'
record of alternating periods
of moderation with periods of
repression--were not emboldened
by Mao's call to "let all
schools of thought contend."
Furthermore, Peiping.'s repeated
warnings that liberalization
constituted no sanction for
the propagation of counter-
revolutionary views discouraged
intellectual flirtations with
the heterodoxy.
The absence of post-l.iber-
alization unrest in China prob-
ably reflects in part the lack
of serious factionalism within
the Chinese party. In the
Eastern European Satellites
last year, intellectuals were
able to draw support from
"liberal" elements within the
Communist parties,,and the
call for more freedom resulted
as much in an intraparty
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
struggle as one between the
party and non-Communists. With
no known faction to challenge
Mao Tse-tung's supremacy, in-
tellectuals in China could draw
no such support.
In any case, inclinations
toward intellectual independence
were probably dampened by
Peiping's second look at liber-
alization, following the East
European disorders last fall.
The regime thereafter made
clear its determination to keep
its liberalization program
within bounds. Propaganda em-
phasis shifted from the promise
of democratization to a need
for disciplined unity. Sensing
a developing cynicism among the
nation's students, Peiping
called for further indoctrina-
tion "so that in this complex
international situation, they
will be able to distinguish
between right and wrong."
Implementation
Current curricula in the
universities show that the
authorities now are allowing
students a limited exposure to
Western thought. Lectures have
been introduced on the philos-
ophies of Hegal and Bertrand
Russell. Anglo-American law
and the economic theories of
Keynes are also being studied,
although presented in an un-
flattering light and with the
declared purpose of proving the
superiority of Marxist doctrine.
"Student ideas and democratic
life," notes the official
People's Daily, have taken "a
new lease on ife, and an at-
mosphere where the students
speak unreservedly and think
independently has presented
itself." Under the circum-
stances, the schools are adjured
to remember their continuing
obligation of positive leader-
ship along the approved ideo-
logical paths.
In the political arena,
the Chinese are trying to show
that democratization is being
honored in practice as well as
principle. The national and
local congresses serve mainly
as forums for authoritative
pronouncements from the top
leadership, but delegates now
may offer suggestions on minor
points. The puppet parties--
the ostensible representatives
of the nonproletarian classes
in China's multiclassstate--
have been encouraged to expand
their membership. These par-
ties had an 80-percent increase
in their membership rolls over
the year.
The free markets promised
in September have been estab-
lished, and fully a third of
all marketed agricultural pro-
duce is now sold in these
markets. The appointment of
politburo member Chen Yun as
minister of commerce, with
responsibility for administer-
ing the markets, indicates the
importance Peiping attaches to
the experiment. In recent
months, however, the authori-
ties have issued a series of
directives redefining the role
of the free markets. Producers
and consumers will still be per-
mitted to make direct trans-
actions, but under closer state
supervision.
Prospects
Despite their present
toleration of free markets, the
Chinese Communists have never
considered that liberalization
marked a retreat from Socialism.
Liberalization may provide a
more peaceful transition to
socialism but it is not to delay
the process. When Peiping
started its liberalization pro-
gram last spring, about 50 per-
cent of China's peasant house-
holds were enrolled in the fully
socialist collective-type co-
operatives. Before the year's
end, the figure was 80 percent.
The current policy of mod-
eration, Peiping frankly ac
knowledges, is?.possible because
the nonproletarian classes were
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CURRENT INTELLIGENCE WEEKLY SUMMARY
28 February 1957
sufficiently "educated" during
earlier repressive stages. The
Chinese, moreover, probably con-
sider a periodic return to the
more ruthless accents essential
if the socialization drive is
to avoid loss of momentum.
It is nevertheless likely
that some features of the cur-
rent liberalization will sur-
vive the next few shifts in
party line, particularly as
regards the natural sciences.
Such innovations as the en-
larged freedom to examine West-
ern sources must necessarily
be sustained if they are to
have the effect Peiping desires
in raising China's scientific
standards. The oft-repeated
warnings against "counter-
revolutionary" views should in
the coming years prove least
inhibitory to China's physi-
cists, chemists, biologists
and others who have been as-
sured their disciplines have no
class character. In no case,
however, do Communist China's
leaders envisage any freedom
to question the fundamental
policies of tL r regime.
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