CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001300060001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 37
• Document Creation Date: December 20, 2016
• Document Release Date: August 22, 2005
• Sequence Number: 1
• Publication Date: July 3, 1957
• Content Type: SUMMARY

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CONFIDENTIAL
ge WT
COPY NO.
3 July 1957
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
DOCUMENT NO. ~. _._..._
NO CHANGE IN CLASS. Cl
L7 DECLASSIFIED
CLASS. CHANGED TO: /IS SS g
NEXT REVIEW DATE: I/ ? ' _
AUTH: HR 7i
DATE: REVIEWER: 25X1
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
State Department review completed
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OCR NO- 3953/57
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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
i Cam,., r, -
3 July 1957
On 3 July, Pravda carried
two editorials on party unity
giving stern warnings to poten-
tial and actual dissidents in
the Soviet Communist Party.
Although the articles boast of
the party's unity, they hit out
often at whoever would weaken
that unity "no matter what post
he occupies." Once decisions
are reached, the articles stress,
they must be implemented and
argumentation must end, a basic
Leninist principle. "The stand-
ard of discipline is the same
for all members of the party,
both the leaders and the rank
and file. The party is not a
debating society but is a mili-
tant, tightly organized politi-
cal instrument."
The editorials refer back
to Lenin's suppression of party
factionalism in 1921 and as-
sert that the party has ever
since insisted on "monolithic
unity." They recall that more
recently the central committee
has had to move against con-
sumer goods advocates--a refer-
ence to the heavy versus light
industry issue at the time of
Malenkov's demotion--and against
"muddle in the question of
building socialism"--a point
on which Molotov was censured.
The editorials' down-the-
line defense of the policies
developed by the Khrushchev-
Bulganin government suggests
that continued contention over
some of these policies may have
provoked the demand for tight-
ened intraparty discipline.
Although the so-called Leninist
principle of party democracy, as
opposed to the "cult of the in-
dividual," was encouraged at
and after the 20th party con-
gress, the Soviet leadership
now indicates it does not wel-
come, and is calling for an
abrupt halt to, further "discus-
sion" after a decision is made.
The timing of the article
suggests that discussion of
economic problems faced by the
regime may have brought out
criticism unpalatable to Khru-
shchev. Some aspects of the
economic administrative reorgan-
ization which formally went into
effect on 1 July have apparently
undergone continued criticism,
since the editorial states that
"only a hopeless, politically
blind person can fail to see
the enormous progressive im-
portance of these measures."
The final draft of the
Sixth Five-Year Plan has not
come out by mid-1957, as was
called for by the December 1956
plenum of the central committee.
The editorials' reference to the
primacy of heavy industry sug-
gests there has been continued
discussion of the proportions
to be allotted to light versus
heavy industry.
Generally, this hard line
by the official party newspaper
indicates the regime has decided
to clamp down on the dissidence
and nonconformism which have
appeared in many areas since the
20th party congress. Students
and intellectuals, particularly
writers, have gone much further
then anticipated in testing the
limits of permissible areas of
discussion. Some--several Mos-
cow writers and the editors of
Problems of History--have al-
ready been disciplined.
CONFIDENTIAL
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3 July 1957
The first evidence of
party members per se going too
far came in April 1956, when
several Communists in a Moscow
thermonuclear institute were
severely criticized. Since
then there has been other evi-
dence of dissension among the
party rank and file, but this
has been accompanied recently
by indications of some tolera-
tion of "insignificant mistakes"
by party members. There have
been fewer cases of expulsions,
and those expelled have allegedly
not been subject to discrimina-
tion in employment. The Pravda
editorials suggest that this
tolerance is now to cease and 25X1
party discipline nd unity are
to be paramount.
(Concurred in by ORR
The National People's Con-
gress--Communist China's ver-
sion of the USSR's Supreme So-
viet--in its first week has
heard long reports on government
operations by Premier Chou En-
lai, on the 1957 budg-
et by Finance Min-
ister Li Hsien-nien
and on the 1957 eco-
nomic plan by planning
chief Po I-po.
The principal
economic theme of
these speeches has
been to re-dedicate
China to its drive
toward quick indus-
trialization and the
consequent need for a
relatively long peri-
od of economic aus-
terity. Premier Chou
admitted that the re-
gime in the past
failed to make suf-
ficiently clear that
it would take "tens
of years" before
modernized Chinese
industry and agricul-
ture would enable the
Chinese people to
lead a full and happy
life.
The main speakers 345LY 1957
have all admitted that
SECRET
Peiping has made mistakes, espe-
cially in 1956. They tended,
however, to play down these mis-
takes, and, as the finance min-
ister argued, it is not necessary
to stop eating just because "we
CHINESE COMMUNIST BUDGET
REVENUES AND EXPENDITURES
( IN MILLIONS OF DOLLARS )
1956 1957
(ACTUAL) ( PLAN )
EXPENDITURES
.GENERAL RESERVE
-GRANTS TO BANKING
-OTHER SYSTEM
FOREIGN AID
REPAYMENT OF DEBTS
AGRICULTURE, FORESTRY
& WATER CONSERVANCY
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3 July 1957
have choked on a fishbone."
There has also been a tendency
on the part of the speakers to
overplay the scope and effect
on agricultural production of
the natural disasters of 1956,
which Chou termed the "worst
in several decades," possibly
with the view of ensuring that
the weather rather than the
collectivization program would
bear the blame for the disap-
pointing 1956 harvest.
The value of industrial
production is to rise by only
4.5 percent this year over last,
that of agricultural
production by 4.9 per-
cent. These increases
are considerably less
than had been sug-
gested by earlier re-
ports from Peiping.
The budgetary situa-
tion was described
as "fully sound,"
despite the $750,000,-
000 deficit which was
incurred last year.
Finance Minister Li
said this deficit had
been offset by using
up the surpluses
carried over from
previous years, by
overdrafts on the
state bank and by
issuing additional
currency.
This is the first
time since 1950 that
CHINESE COMMUNIST PRODUCTION
MILLION METRIC TONS UNLESS OTHERWISE SPECIFIED
cent, administrative spending
down 8 percent, and investment
spending down 20 percent. Heavy
industry retains its overwhelm-
ing priority within industrial
spending, and the speeches thus
far fail directly to confirm
earlier official statements that
light industry and agriculture
would get a higher share of
total investment.
Foreign Economic Relations
The loans which China has
extended to neighboring coun-
tries--North Korea, North Vietnam,
Cambodia and Nepal--will cost
the regime $207,000,000 this
COMMODITY
1956 CLAIMED
RESULTS
1957
(PLAN)
CLAIMED ADDRFONS
TO CAPACITY DURING
FIRST FYP (1953-1957)
COAL
106.0
117.27
45.28
ELECTRIC POWER
BILLION K W H
16.2
18.86
10.47
PETROLEUM
(CRUDE)
1.2
1.5
PIG IRON
4.8
5.55
3.09
STEEL
4.4
4.99
2.17
CEMENT
6.4
6.87
2.39
COTTON CLOTH
BILLION METERS
5 86
5.0
1.41
RAW COTTON
1.46
1.5
-
GRAIN
(EXCLUDING SOYBEANS)
182.5
191.0
-
year as against $164,000,000
last year. At the same time,
Soviet loans to China will be
reduced from $47,000,000 to
$9,700,000, which is much less
than the sum China will have to
repay the USSR this year on
earlier loans. The finance min-
ister explained that China is
now in a "better position" than
the regime has found it neces-
sary to print money to cover
current spending, although Li
claimed that a considerable por-
tion of the new issue had al-
ready been retired.
Expenditures under the 1957
budget have been sliced, with
defense spending down 10 per-
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3 July 1957
in earlier years to rely on its
own resources in carrying out
its economic programs, which
have been increasingly tailored
to this end.
China's total foreign trade
this year will be 9 percent
under last year's figure of
around $4.27 billion. It was
suggested that the pattern of
the nation's trade be altered
to bring about a gradual in-
crease in exports of minerals
and industrial products, de-
emphasizing the export of agri-
cultural products, and to bring
about a gradual increase in the
imports of certain raw materials
and consumer goods and a reduc-
tion in machinery imports.
Isolation of "Rightists"
Chinese Communists comment
on Chou En-lai's report to the
National People's Congress in-
dicates that Peiping sees it,
along with Mao's "secret" speech,
as dealing a "lethal" blow to
the views of "rightists." So
far there has been only frag-
mentary evidence of Peiping's
intentions toward these "right-
ists." Lung Yun, a leading
target of Communist counter-
criticism, has been elected to
the congress presidium, and un-
official press reports state
that Peiping has refused to ac-
cept the resignations of one or
two other non-Communist cabinet
officers.
At the same time, Chang Po-
chun and Lo Lung-chi are being
increasingly singled out as the
cause of all the "rightist"
trouble and may bear the brunt
of Communist retaliation. Pei-
ping probably hopes by moderate
punishment of these critics to
salvage some part of its "hun-
dred flowers" campaign.
(Prepared jointly
with ORR) 25X1
MIDDLE EAST DEVELOPMENTS
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3 July 1957
relations might be expected,
and truck traffic between Syria
and Saudi Arabia has been halted
at the Saudi-Jordanian border.
Syrian Foreign Ministry officials
have given the impression that
a formal Saudi note severing
Saud is probably reluctant
to push the issue to a break,
but Syrian leftists may try to
force him to carry out his threat
or lose face by backing down.
Judging by their propaganda
output, the leftists appear
willing, even eager, to start
an all-out attack on Saud. The
Syrian leftists' desire to main-
tain international tensions may
also be partly responsible for
the continuing alert on the
Israeli-Syrian border. A "final
warning" by Israel to Syria last
week appears to have been ef-
fective, since no serious in-
cidents have been reported since
24 June.
Saudi-Syrian Relations
Relations between Syria
and Saudi Arabia remain near the
breaking point. King Saud told
the American ambassador in Jidda
last week that he has taken
action to weaken Syrian leftists
and that "in a few days" every-
thing would become "clearer."
The Saudi ambassador in Damascus
has remained away from his post,
The movement of Syrians an
Palestinian Arabs into and with-
in Saudi Arabia now is subject
to extraordinary restrictions.
Syrian and Palestinian visa
applicants are being carefully
screened and Syrian pilgrims
without visas are being turned
back at the Saudi border.
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3 July 1957
The security precautions
are all the more necessary be-
cause of the entry of thousands
of foreign Arabs into the king-
dom during the annual month of
the great pilgrimage, which be-
an on 28 June.
The final round in the
Lebanese parliamentary elections
ended on
30
June with the pro-
Western
Solh
government having
captured
at
least 46 of the 66
seats.
The
opposition front
has 9 seats, and there are 11
independents who support the
present cabinet's foreign policy.
Foreign Minister Charles Malik,
a prime target of leftist prop-
aganda, defeated his Communist
opponent by an overwhelming
margin of 10,602 to 276. The
government's victory does not
necessarily mean that the Solh
cabinet will have clear sailing
after the new parliament con-
venes at least a month hence.
Lebanese politics are notori-
ously based on family and reli-
gious ties rather than on sec-
ular ideolowioal ali nments.
SOVIET POSITION ON NUCLEAR TESTS ISSUE
While Soviet delegate Zorin
maneuvered last week to keep
the London talks focused on the
USSR's 14 June proposal for a
two- to three-year suspension
of nuclear tests under inter-
national control, a growing
volume of Soviet propaganda has
elaborated on Foreign Minister
Gromyko's charge of 25 June
that the United States is using
the negotiations "as a screen
for a continuation and intensi-
fication of the arms race." The
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
Soviet leaders apparently con-
sider their proposal for test
suspension their climactic move
in this session of the subcom-
mittee and may be willing to
have the session close without
a decision on this issue.
Gromyko timed his press
conference attack on General
Norstad's testimony before the
Senate Foreign Relations Com-
mittee to coincide with the
beginning of the American dele-
gate's presentation of proposals
for a partial agreement. The
Soviet foreign minister charged
that Norstad's statement was
prompted by the improved pros-
pects for a partial agreement
brought about by the Soviet
test suspension proposal. This
thought was echoed by an in-
creasingly harsh propaganda line
censuring the United States for
"dilatory tactics" and efforts
to prevent agreement "by com-
plicating otherwise simple prop-
ositions."
The Soviet press claimed
that the United Nations' report
on Hungary was intended to dis-
rupt the disarmament negotia-
tions or force Soviet acceptance
of Western conditions for a test
suspension. Moscow cited Pres-
ident Eisenhower's 26 June press
conference statement that Amer-
ican scientists wanted four or
five years to develop a "clean
bomb" as evidence of his op-
position to a test suspension.
A Moscow broadcast in French
on 26 June charged that "this
ignoble farce of washing the
hydrogen bomb is obviously aimed
at undermining the campaign" for
a cessation of nuclear tests.
Soviet delegate Zorin's
main efforts since he introduced
the test suspension proposal
have been aimed at blocking any
Western moves to evade a show-
down on this issue. His objec-
tive apparently is to present
the issue as one of principle
and to avoid prolonged and con-
fused debate on controls and
procedure in the realization
that an impasse on the question
of principle would be much more
effective for propaganda exploi-
tation than a breakoff on the
complex questions of controls
and location of inspection posts.
He told British foreign secre-
tary Lloyd on 19 June that the
international commission which,
under the Soviet plan, is to
enforce the test suspension,
would decide such questions as
the location of inspection posts
and their rights of communica-
tions and movement.
Zorin has repeatedly criti-
cized the Western delegates for
advancing "contrived conditions"
designed to "raise obstacles"
to ending the nuclear arms race.
He has informed the American,
British and French delegates
that, in the Soviet view, the
cessation of the production of
nuclear weapons must be linked to
a prohibition and elimination
of nuclear weapons and that the
Western position making a test
suspension contingent on Soviet
agreement to halt production of
weapons is completely unaccept-
able.
Zorin has also continued
to insist on an unconditional
renunciation of the use of nu-
clear weapons. When the Ameri-
can delegate suggested on 27
June that the question of use
should be omitted from a par-
tial agreement, Zorin replied
that this was undesirable and
impossible. However, he has in-
formed the American and French
delegates that a simple declara-
tion banning use of nuclear
weapons would be preferable to
including such a ban in a formal
treaty on a test suspension.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
The USSR's interest in
keeping the negotiations cen-
tered on the test suspension
issue was also apparent in Zor-
in's refusal to make any defini-
tive response until the Ameri-
can delegate completes his
presentation of his proposals
to the subcommittee. He re-
jected an American suggestion
to establish a working group on
reduction of armed forces on
the ground that it would not
serve any purpose until the
United States had answered the
USSR's various proposals.
Moscow has contrived to
develop a negotiating position
in which it will benefit from
either a modest first-step
agreement or a deadlock on the
test suspension issue.
Unless it can get an agree-
ment with the United States
which will save France the cost
of nuclear research and develop-
ment, the French government
may announce that it will begin
making nuclear weapons. French
public opinion would probably
rally to either course of ac-
tion.
Premier Bourges-Maunoury
reportedly maintains that France
should make and test its own
bombs, and speculation that
France is having second thoughts
about suspending nuclear tests
increased when French disarma-
ment delegate Jules Moch flew
from London for his first meet-
ine with the new French cabinet
Defense Minister Andre
Morice told General Norstad on
25 June that he was concerned
over the UN Disarmament Subcom-
mittee's actions, "and in par-
ticular the American proposals
for a moratorium on nuclear
tests." He feared they would
"cause particular difficulties
for France, in view of the new
French government's policy of
moving forward rapidly in the
field of nuclear weapons develop-
ment and production." Morice
added that "political and psy-
chological" as well as purely
military considerations were
involved in the development of
a national French nuclear capa-
bility.
The claim that the new
government has adopted a more
forceful policy may be a bar-
gaining move, however. Mollet,
whose Socialist P:.,r ty is a key
element of the present coali-
tion, is reportedly willing to
accept a "negotiated compromise,"
perhaps permitting France to
"participate" in American atomic
developments.
They may now be concentrat-
ing on the possibility of a
preferential status, giving
France complete control over an
American-supplied nuclear arse-
nal.
Opposition to a national
nuclear weapons program is de-
creasing in France. According
to a USIA public opinion survey
taken in May of trends in West-
ern defense issues, nearly a
third of the French public would
approve of French nuclear arma-
ment, and slightly more than a
third would oppose. However,
among the more articulate and
politically influential levels
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
of French society, there now is
a clear preponderance (39 per-
cent) of opinion favoring nu-
clear armaments over that oppos-
ing--29 percent.
Furthermore, results of a
recent survey of the French and
German press by a reputable
25X1
the existence of atomic weapons.
Paris polling group on the ques-
tion of whether atomic weapons
diminish or increase the risk
of war indicate that 57 percent
of the press in both countries
inclines to the view that the
risk of war does not depend on
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I~UtVfiULI' t unL
T
3 July 1957
The pattern of Britain's
new defense setup in the Middle
East should begin to emerge
shortly when Defense Minister
Sandys announces future base
and command plans for that area
The emphasis in British plan-
ning is shifting from the
Mediterranean to the Arabian
peninsula area. The new plans
presumably will take into ac-
count views of other Common-
wealth members as expressed
in the current prime ministers'
conference.
The intention of cutting
land, sea and air forces and
concentrating on small but
highly mobile units for mili-
tary action was outlined in
the defense white paper last
April. Although these cuts
affect British forces all over
the world, speculation has fo-
cused on future plans for the
Middle East. This area con-
tinues vital to Britain's in-
terests, but political uncer-
tainties, particularly in Cyprus,
make long-range decisions
difficult.
London sees its main re-
sponsibilities in the area as
support of the NATO and Baghdad-
pact alliances and defense of
its oil interests. Cyprus is
considered of strategic value
chiefly as a potential nuclear
air base and early warning
location in support of the
right flank of NATO and the
"gravely inadequate" forces
available to the Baghdad pact.
As long as the Cyprus politi-
cal situation permits, the
British would like to retain
the air bases, the useful mili-
tary communications network,
and expensive headquarters in-
stallations, some of which are
still under construction.
Military support of the two
alliances will stress bomber
squadrons with nuclear poten-
tial rather than land forces.
With naval responsibilities
in the Mediterranean now assumed
by the American Sixth Fleet,
Jordanian treaty obligations
ended, and a progressive re-
duction of ground forces in
Libya in prospect, Britain
will shift emphasis to the
Arabian peninsula to defend
Aden Colony and Protectorate
and the territories on the
Persian Gulf for which it is
responsible.
A War Office plan under
consideration for a readjust-
ment in the Middle East com-
mand structure envisages the
Middle East Land Force (MELF)
headquarters remaining on Cyprus,
but would establish a separate
command consisting of ground
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
forces in Aden, the Persian
Gulf and East Africa which
would report directly to the
War Office, with headquarters
either in Kenya or in Aden.
Kenya has better facilities
but Aden is nearer the area
covered by the Baghdad pact.
If earlier plans for stationing
a mobile strategic reserve in
East Africa materialize, this
would also come under the new
command.
Under the announced plan
of reorganizing naval strength
into small carrier task groups,
the Far East and East Indies
stations will be combined in
such a task force to be sta-
tioned in the Indian Ocean, pos-
sibly based at Mombasa. Despite
the lack of mention of naval
plans for the Mediterranean,
there may be some drastic re-
ductions there.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
Official Turkish displeas-
ure with the first moves of
NATO secretary general Spaak
toward mediating the Cyprus
dispute suggests increasing
bitterness between Turkey and
Greece over Cyprus and the in-
evitability of a showdown in
this year's UN General Assembly.
The Turkish government com-
plains that Spaak's views are
"badly conceived and in effect
present only a Greek solution
of the problem." A memo Spaak
wrote and circulated to the in-
terested parties ruled out both
self-determination and parti-
tion and suggested that some
formula for guaranteed inde-
pendence was the most promising
alternative. The Turks con-
tinue to insist that only the
partition of Cyprus is accept-
able to them and state that any
proposal for Cypriot inde-
pendence will be flatly re-
jected.
Turkish prime minister Men-
deres has put off seeing Spaak
in the near future. Menderes'
evident intention of delaying
any further Spaak initiative
may stem from fear that the
probably favorable reception
of Spaak's views elsewhere
would isolate Turkey on the
issue. In view of the likeli-
hood that Turkish national
elections will be held this
fall, such a development could
seriously embarrass Menderes'
Democratic Party.
Relations between France
and Tunisia are likely to im-
prove as a result of a decision
taken in Paris last week to
withdraw a substantial number
of French troops from Tunisia.
The Bourghiba government now
may adopt stronger measures
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3 July 1957
against Algerian activities in
Tunisia, and French credits
to Tunis may be resumed soon.
Paris plans to shift a
division of 10,000 to 15,000
troops to the Algerian side
of the frontier and to regroup
the remainder of its 25,000
ground force and 10,000 naval
and air force personnel at
the Bizerte base and five
other posts. The American
embassy in Tunis believes such
a withdrawal would reduce the
danger of further clashes
between French troops and armed
Tunisians.
The withdrawal falls short
of Premier Bourghiba's demand
that all French forces be
pulled back to the Bizerte
area. Nevertheless, Bourghiba
may feel his position suffi
ciently strengthened to be will-
ing to take some measures a-
gainst undesired activities by
Algerian militants in Tunisia.
He is reported to have assured
the French that he will do
"much more" to preserve Tuni-
sia's neutrality vis-a-vis
Algeria once the "occupation"
ends.
The American embassy in
Tunis cites growing disenchant-
ment in some Tunisian circles
with the Algerian rebels as
a result of the Melouza massa-
cre and the rebels' rebuff of
recent efforts by Bourghiba to
mediate the Algerian conflict.
The Tunisian government can be
expected, however, to reflect
continuing national sympathy
for the "Algerian brothers" in
public utterances and will
almost certainly continue to
facilitate the flow of arms
to the rebels. The government
and populace will oppose any
attempts by the French military
operating in Algeria to pursue
rebel bands in Tunisia. The
French have informed Bourghiba
that such action will be taken
if rebels seeking refuge in
Tunisia are not disarmed.
French ambassador Gorse
in Tunis anticipates that French
credits suspended in late May
because of Tunisian support
of the Algerian rebellion are
likely to be resumed in the
near future. He thinks pre-
liminary talks on this subject
will start soon and credits
will be extended following the
meeting of the franc zone
committee scheduled for mid-
July in Paris.
Gorse further intimates
that if the present detente
continues for four of five
weeks, French arms and equip-
ment sufficient for one or
two battalions of the ill-
equipped Tunisian army would
be forthcoming "very rapidly."
The Tunisians, however, are
virtually certain to continue
efforts to terminate their
complete dependence on France
for military supplies. The
Tunisian interior minister
recently renewed in more force-
ful terms earlier appeals to
American officials assistance.
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3 July 1957
TENSION EASES IN QUEMOY AREA
Tension has eased in the
Quemoy area since 24 June, when
Chinese Communist guns fired
one of the heaviest barrages in
two years against Chinese Na-
tionalist positions on Little
Quemoy Island. Firing was re-
sumed on 27 June on a much re-
duced scale and since then the
Nationalists have not fired at
all and the Communists have
at fishing boats, merchant ships,
and villages, it was apparently
successful.
About half of the fire on
24 June apparently was di-
rected at the Nationalist com-
mand post on Little Quemoy.
Fire directed at Nationalist
medium artillery positions was
accurate, suggesting
that the Communists
have the locations
well spotted. Casual-
ties reportedly to-
taled 64 military
personnel and 55
civilians.
Maximum Artillery Ranges
Maximum AAi"ery Range of the
Chinese Communists
Maximum Artillery Range of the
Chinese Nationalists
- Motorable roads confirmed
by photography
fired only a few rounds, most
of them leaflet shells.
Taipei comment that if the heavy
Communist firing of 24 June was
intended to discourage indis-
criminate Nationalist firing
The Communists
could take the two
lesser islands--Tatan
and Erhtan--of the
Quemoy group with
little difficulty as
they are garrisoned
by only about 1,100
lightly armed Na-
tionalist troops.
They could also easily
take Wuchiu, a small
island group north
of the Quemoys, gar-
risoned by 550 Na-
tionalist guerrillas. The
military value of these islands
would be practically nil, but
the Communists may reason that
the psychological effect of
their conquest would be worth
the cost. There have been no
reports of Communist prepara-
tions for such a venture, how-
ever.
Additional firing exchanges
can be expected if foreign ship-
ping continues to attempt to
enter Amoy.
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3 July 19 57
SOVIET BLOC ECONOMIC ORGANIZATION MEETS
At the first meeting of
the Council for Mutual Economic
Assistance (CEMA) since the Hun-
garian and Polish uprisings,
the Soviet Union moved to re-
store a measure of balance to
its economic integration schemes
in the Soviet bloc. High-level
representatives from all the
European Satellites and the
USSR, plus observers from Yugo-
slavia, North Korea and Commu-
nist China, stressed the prob-
lems challenging the economic
unity of the Soviet bloc. This
probably was in response to
the Poles' having asserted their
independent, more "realistic"
course and the Hungarian econ-
omy's having become an increas-
ing liability to the bloc.
Although the council, meet-
ing in Warsaw from 18 to 22 June,
considered problems such as the
necessity of co-ordinating na-
tional economic plans and of
expanding fuel and power facil-
ities, the most important re-
sult appears to have been the
signing of a multilateral clear-
ing agreement to promote trade.
The fact that the meeting
was held in Warsaw and was
chaired by a Pole emphasizes
the efforts the Soviet Union
has made to tolerate Poland's
independent position, F_
The last plenary session
of CEMA was held in May 1956,
at which time a program of
specialized production for 1957-
61 was announced, reflecting
the Moscow-directed drive for
economic integration which had
been developing since CEMA was
formed in 1949. But an increas-
ing ferment of national inde-
pendence among the Satellites,
culminating in the Polish and
Hungarian uprisings last fall,
together with economic plans
which were more and more dif-
ficult to fulfill, disrupted
Soviet plans for an economically
integrated and interdependent
Eastern Europe.
Since the uprisings, the
Soviet Union has negotiated
bilateral agreements in its
dealings with the European
Satellites. The bilateral agree-
ments emphasize the orientation
of a Satellite economy toward
Moscow with plans for extended
co-ordination with the USSR on
the granting of technical and
economic aid by Moscow. With
bilateral agreements with all
its Satellites signed, Moscow
apparently believed that it
could again push its plans for
economic integration.
The CEMA session "reaf-
firmed the principles of mul-
tilateral economic co-opera-
tion," and "found it expedient
to co-ordinate longer range
plans covering 10 to 15 years."
It approved recommendations to
work out measures to improve
supplies to the various coun-
tries of such basic commodities
as coal, steel, petroleum and
coke. Reports were given on
steps to improve transportation
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3 July 19 57
facilities. Although it con-
sidered the above points, there
is no indication that the con-
f erence came to any decision on
them. The one agreement which
was announced as signed was a
multilateral financial clearing
agreement which will provide
helpful flexibility in intrabloc
trade and dilute Soviet leverage
in hi 1 negotiations.
(Prepared by ORR)
The Councils of National
Economy, which will direct the
industries of the 105 economic-
administrative areas into which
the Soviet Union has been.
divided, were formed by the
1 July deadline and some have
already begun to work. Staffing
of the councils--which range in
size 770 persons in Estonia to
3,000 for the Moscow region--
was virtually completed by
last week, and some of them
had already begun to func-
tion. Most personnel from
abolished USSR and republic
ministries have been reassigned
to the regional councils.
the chairman is a former USSR
deputy minister, but his two
deputies are local officials.
Six of the ten directorates
are headed by local function-
aries, while personnel from
the center head the remaining
four.
According to N. K. Baiba-
kov, former USSR planning boss,
one major problem of decentrali-
zation is the reluctance of
former USSR ministers to leave
Moscow for the provinces. He
stated, however, that this is
being solved by "increasing
perquisites," the nature of
which he did not divulge.
Former USSR ministers and
deputy ministers have been
earmarked for top positions
in economic councils in the
RSFSR, the Ukraine and Kazakh-
stan, but almost no personnel
from the center have been as-
signed to leading posts in the
smaller republics, each of which
constitutes a single economic-
administrative area.
In the RSFSR, where with
three exceptions each oblast
has its own economic council,
top positions are being care-
fully divided between former
USSR ministerial officials
and local functionaries. In
Khabarovsk Krai, for example,
Manif estations of "localist
tendencies" have been antici-
pated by the regime, which has
warned against practices such
as withholding supplies in
one area which have been desig-
nated for export to another
area. The central press has
described severe punishments
of local bodies which have
reneged on contractual obliga-
tions to deliver materials
in order to create a backlog
for local use. Such practices
may prove more prevalent in the
smaller republics, where few,
if any, officials from Moscow
have been assigned. 25X1
(Prepared Jointly with
)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
SOVIET AVIATION DEVELOPMENTS
Moscow newspapers on
21 June announced the cancel-
lation of the annual Air Force
Day air show which had been
scheduled for 30 June at Tushino
airfield. Although the reason
given was "bad weather at the
present time and unfavorable
forecasts," it seems more likely
that the move was prompted by
operational difficulties.
Prior to cancellation, the
Soviet press had given promi-
nent publicity to planning for
the air show. It was reportedly
to have been more than an hour
longer than previous shows and
the number of events increased
from 19 to 30. Several nonbloc
nations, including Great Brit-
ain, Canada, France, Iran and
India, had been invited to send
delegations to the show.
Excellent weather was re-
ported in Moscow on 30 June.
Bad weather prevented rehear-
sals for the show after 18 June,
however, and long-range weather
forecasts for the area apparent-
ly had been unfavorable. While
bad weather in previous years
has led to postponements rather
than cancellation of the show,
the risk of a poor performance
because of insufficient prac-
tice may have influenced the
25X1
25X1
(Concurred in by OSI)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
HUNGARIAN PARTY CONFERENCE ENDORSES HARD LINE
At its first national con-
ference held on 27-29 June, the
Hungarian Socialist Workers
(Communist) Party endorsed the
hard political line followed
by party leader Janos Kadar and
re-elected the members of his
clique on the politburo and
secretariat. Although the
final resolution of the con-
ference underwrote a centrist
position, its general tenor
presages stern measures against
Nagy-oriented "revisionists"
and tacit support for neo-
Stalinists.
The powerful neo-Stalinist
group in the faction-ridden
party greatly improved their
position by the election of
several former high-level
Stalinists--including onetime
ideological czar Jozsef Revai--
to the central committee, which
now numbers 53 full members
and ten alternates. Middle-of-
the road elements will inter-
pret his election as a victory
for dogmatism and a threat to
their position.
With two exceptions--Antal
Apro and Karoly Kies--the'polit-
buro and secretariat are staffed
by Kadar's close associates.
His henchman Miklos Somogyi
will head the new central con-
trol commission which has final
jurisdiction over the discipline
of party members. Kadar's con-
trol of the politburo may also
be strengthened by the election
of Jeno Fock as full member and,
as alternates, two new men--
Rezso Nemes, chairman of the
official party newspaper's
editorial board, and youth
leader Zoltan Komocsin.
In his major addresses to
the conference, Kadar showed
his awareness of the party's
total lack of popular support
when he appealed for an end to
"dogmatic procedures" and for
closer contact with the populace,
particularly with industrial
workers. Only his recognition
of economic realities--for ex-
ample, his pledge that agri-
cultural collectivization will
be soft-pedaled for the next
two or three years--is likely
to win any degree of popular
approval. This, however, may
be largely nullified by his
appeal for support for the hated
State Security Authority and
his rejection of the workers'
councils as counterrevolutionary
in origin.
The final resolution rep-
resented an uneasy compromise
between the party factions. It
endorsed an unyielding line to-
ward "counterrevolutionaries,"
condemned Imre Nagy and his
adherents in language closer to
Revai's position than Kadar's,
and underwrote the current harsh
line in cultural matters. It
stated that the proportion of
intellectuals among the party's
345,000 members has fallen to
6.9 percent--possibly an all-
time low.
The resolution made a
strong demand for party unity
and empowered the central com-
mittee to dissolve any party
organizations that turn against
the party's policy. But it
sustained Kadar's moderate eco-
nomic policies--including the
deferment of collectivization,
although without a specific
time limitation--and supported
Kadar in sharply condemning
"dogmatic"--i.e., Stalinist--
procedures toward the people.
Finally, it adopted an ambiguous
position on the issue of work-
ers' councils in an effort to
avoid unfavorable repercussions
from industrial workers.
Neo-Stalinists will prob-
ably be encouraged by their ap-
parent victory to maneuver for
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3 July 1957
a greater voice in the polit-
buro and secretariat and prob-
ably will prepare for an even-
tual assault on Kadar's soft-
line agricultural policies.
The final determination of
policies in Hungary will be
made, however,by the Kremlin,
which to date has not found an
alternative to Kadar as party
leader.
Kadar disclosed the hos-
tile attitude toward the So-
viet Union held even by party
members when he declared that
the party's policy of "brother-
ly friendship" with the USSR
"must be represented cou-
rageously and without shame."
RUSSIANS CONTINUE HARASSMENT OF ALLIED BERLIN TRAVEL
Since last November, the
USSR has been resorting to a
new type of harassment of Al-
lied surface travel to Berlin
designed to establish greater
Soviet control over highway
and rail traffic to the city.
In an attempt to eliminate leave
travel to Berlin by Allied per-
sonnel not stationed there,
Soviet authorities have spo-
radically delayed or refused
to clear individuals for travel
to Berlin, using charges of
improper documentation. Since
few British or French nationals
take leave in Berlin, Soviet
interference has affected Ameri-
can travelers primarily.
Soviet officials deny that
they are challenging the Allies'
right of access to Berlin but
insist that Allied officials
have the right to issue Berlin
travel orders only to persons
going there on temporary duty
or on permanent change of sta-
tion. They also demand that
persons have documentary evi-
dence of the nature of their
travel, including the traveler's
occupation and the purpose of
the trip, information which
has never been included in Rus-
sian versions of Berlin travel
orders.
The chances of Moscow's
backing down in the matter of
leave travel to Berlin appear
slight. Allied officials in
Germany believe that before long
the Russians may notify the Al-
lies that they have been given
sufficient time to revise their
documentation practices and
that unless acceptable proce-
dures are instituted by a cer-
tain date, travelers will not
be permitted to proceed to
Berlin by rail or autobahn.
Thus far, the Russians have
never removed a passenger from
an Allied military train and
only once have they turned back
a train, although they have
several times refused clearance
for autobahn users and have de-
layed trains.
The Russians ascribe most
of the incidents which have oc-
curred since last November to
improper, incomplete and con-
fusing documentation procedures.
They maintain that much confu-
sion and difficulty could be
eliminated if the Allies adopted
uniform documents and procedures
along the lines recently sug-
gested by the Russians.
At a meeting in Berlin on
1 June, Allied officials dis-
cussed some proposed revisions
in documentation with Colonel
Kotsiuba, Soviet deputy comman-
dant in Berlin, and reached
superficial agreement on a few
minor points at issue. Kotsiuba
Proposed some additional changes
and indicated that any new
forms should be sent to him
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
for study before being put into
effect. If they were acceptable
in principle, he said, he would
then issue the necessary orders
to checkpoint officers. Allied
officials made it clear that
the samples had been presented
for Kotsiuba's information, not
his approval.
British authorities in
Germany believe there is a pos-
sibility the Russians are now
seeking a face-saving formula
which would enable them to with-
draw gracefully from their ex-
treme postion taken last No-
vember that only they could
decide who has the right to
travel to Berlin.
Earlier Soviet suggestions
that travelers accept East Ger-
man documentation, and their
demands that travel orders ap-
pear in German as well as Rus-
sian indicate an intention even-
tually to transfer to the East
German authority over rail and
autobahn checkpoints and re-
sponsibility for processing Al-
lied travel documents. The Ameri-
can mission in Berlin believes
that a desire to satisfy German
pressure is the principal motive
for the Soviet harassment. The
Germans may be impatient for
further Soviet compliance with
past agreements to give East
Germany greater control over
travelers in its territory.
Dissension among the 50,-
000-60,000 members of the Bra-
zilian Communist Party (PCB)--
the most important in Latin
America despite its illegal
status--threatens the party's
role as Moscow's chief inter-
preter in South America.
Brazil's intraparty strife,
developing over the past year,
caused party treasurer Agildo
Barata to defect publicly in
May and set up a "national"
Communist movement. Agitation
within the party over the So-
viet party's 20th congress
forced the Brazilian leadership
to invite free discussion in
the party press, but so be-
latedly that the first "person-
ality cult" attacks on the
PCB's authoritarian first secre-
tary, Luiz Carlos Prestes,
roughly coincided with the
bitter party attacks on the
Soviet action in Hungary.
In this controversial at-
mosphere, the example of Com-
munist China--which impressed
many of the Latin American
delegates to the Chinese Com-
munist 8th party congress in
September as providing a better
model for agrarian Latin America
than does the more industrial-
ized USSR--apparently fed the
growing "liberal" agitation in
the PCB instead of providing
a useful distraction from Hun-
gary and other divisive issues,
as it did in other Latin Ameri-
can parties.
In late November, Prestes,
apparently fearful of losing
control, forced the central
committee to reimpose censor-
ship and publicly endorse the
basic infallibility of Moscow.
In line with an apparently con-
certed effort by Moscow and
the Prestes old guard to intimi-
date the dissidents, 18 PCB of-
ficials who had been studying
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3 July 1957
in the USSR were ordered in
December to return to Brazil
immediately in order to support
Barata's defection has
reportedly frightened a major-
ity of the central committee
into greater unity behind the
Prestes old guard but has re-
vealed unexpectedly strong
heresies in other segments of
the party. This continuing
dissension in the intermediate
and lower levels is probably
regarded as particularly serious
since morale problems of the past
year are believed to have al-
ready reduced PCB membership
by 10 to 15 percent.
While the Soviet party
has avoided in Latin America
the kind of direct intervention
in foreign party affairs re-
portedly now intended in Brazil,
it may feel the Brazilian situ-
ation calls for special atten-
tion and possibly for a reas- 25X1
key role in South America.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
CUBAN GOVERNMENT'S POSITION CONTINUES TO DETERIORATE
Cuban president Fulgencio
Batista's regime continues to
lose prestige and support, not
only in the opposition strong-
hold of Oriente Province, but
also in Havana and throughout
the island. Opposition activity
and terrorism have increased
during the past few weeks, and
numerous reports of future
planned activities suggest that
the situation will continue to
deteriorate.
The government, cognizant
of its shaky position, is at-
tempting to neutralize opposi-
tion gains by establishing mili-
tary administrative control over
areas of antigovernment activity
and by propaganda designed to
minimize the seriousness of the
situation. The offensive has
met with little success, how-
ever, and has even contributed
to rising resentment against
the government and an accom-
panying loss of prestige.
The government's trump
card was to have been a mass
rally in Santiago de Cuba on
30 June. Members of the pro-
government coalition, led by
Rolando Masferrer of the Radi-
cal Union i-arty, organized a
demonstration designed to
attract support from the largely
anti-Batista population of
Oriente Province, stronghold
of rebel leader Fidel Castro
Ruz. Impressive advance public-
ity, importing of paid demon-
strators and government support-
ers, and strong military control
over the city failed to pro-
duce the desired "spontaneous
support" for the rally, and
residents made good their
threat to boycott the meeting.
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3 July 1957
Only some 5,000 of the antic-
ipated 70,000 to 100,000 dem-
onstrators attended, and re-
sponse to pro-Batista orators
was apathetic. Subsequent in-
creased terrorism throughout
the island and a clash between
government troops and Castro's
rebels underscored the govern-
ment's failure to gain from its
grandiose project.
The government's failure
on 30 June primarily resulted
from an unfortunate choice in
location since the percentage
of anti-Batista elements in
Oriente has been estimated as
high as 85 to 95 percent. Con-
trol over communications media,
continued support from the armed
forces, and prosperous economic
conditions augur well for Ba-
tista's continuance in office.
Continued loss of prestige and
increased revolutionary and
terroristic activities such as
those sparked by the 30 June
demonstration, however, suggest
that disaffection with the pres-
ent regime is on the increase.
The initially cool Japa-
nese press reaction to Prime
Minister Kishi's talks in Wash-
ington, which one leading news-
paper even characterized as
"bungling diplomacy," has given
way to a more favorable response
and a belief that the talks have
opened the way for the improve-
ment of Japanese-American rela-
tions.
The Japanese have been en-
couraged by the announcement of
the early withdrawal of Amer-
ican ground forces and by the
agreement to establish a joint
committee to study problems
arising from the security treaty.
They are, however, suspicious
about the possibility of secret
agreements on the entry of nu-
clear weapons into Japan, an
accelerated build-up of Japan's
defense forces, and continued
observance of the China trade
embargo. The Socialists have
seized on these issues, as well
as on Kishi's inability to ob-
tain modification of the US
position on the Ryukyu and Bonin
Islands, to attack him for the
"failure" of his mission.
Kishi, on his return to
Tokyo, sought to allay Japanese
suspicions about a secret agree-
ment on nuclear weapons. He has
implied that he received at
least tacit American approval
for increasing Japanese trade
with Communist China, short of
militarily strategic materials.
The Japanese are coming to
believe that Kishi achieved more
than the joint communiqud'con-
veyed, but they do not regard
anything as settled. Japan
probably now will seek specific
results from the broad under-
standings, and indications are
that, as a first step, the Japa-
nese will endeavor to have the
projected joint committee deter-
mine the disposition of American
troops and equipment in Japan
and discuss a time limit for
the security treaty itself.
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3 July 1957
Non-Communist Indonesian
political leaders are greatly
disturbed over the Communist
Party's 40-percent gain in
votes in the Djakarta munici-
pal elections of 22 June. The
National Party, which won a
plurality in the 1955 national
elections, is particularly
anxious over the effect on its
own political future of Presi-
dent Sukarno's open encourage-
ment of the Communists. Na-
tional Party. leaders have ex-
pressed hope that Sukarno is
similarly worried by Communist
gains and that his 4 July
speech at the National Party's
30th anniversary celebration
will reflect an awareness of
the Communist threat and re-
newed support for the National-
ists.
Sukarno, however, has an-
anounced that despite earlier
plans to the contrary, he will
install his predominantly left-
ist national advisory council
on 12 July whether or not all
45 seats are filled. At pres-
ent six seats are vacant, and
two appointees have not
decided whether to accept
council seats.
The declaration of an au-
tonomous province in North
Celebes by Lt. Col. Sumual, the
former army commander for East
Indonesia, has been confirmed
by Minister of Interior Sanusi
in Djakarta. Sanusi hastily
explained, however, that the
central government had planned
to take similar action anyway
and that the local move is
merely a premature development
which will be formalized at a
later date. During his second
visit to East Indonesia in the
current crisis, Chief of Staff
Nasution did not visit Sumual
or travel to North Celebes.
He did, however, install as
commander over another of the
four reorganized military com-
mands in the area the officer
who was already in charge.
This leaves two regional com-
mands to be activated.
Former vice president Hat-
ta, during a visit to Sumatra,
publicly insisted on 25 July
that the greatest possible au-
tonomy should be granted at the
local level. He reiterated his
belief, however, that the au-
tonomous movements are not
eviden e of separatist tenden-
cies.
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NOTES AND COMMENTS
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3 July 1957
SOVIET POPULATION TRENDS
war years means smaller addi-
tions to the working-age group
and hence to the total labor
force during the Sixth and
Seventh Five-Year Plans (1956-
1965). The average annual in-
crease in the labor forces is
expected to drop from 1,600,-
000 workers per year during
the 1951-1955 period
to 1,-
300,000 between 1956
and 1960,
and to only 900,000 new work-
ers per year during the 1961-
1965 period. The pinch will
be especially tight between
1958 and 1963. After 1965 the
situation will improve signif-
icantly.
These limitations on man-
power and the relatively low
increase in industrial labor
productivity in 1956--falling
far short of the annual average
Rural Population Density Per Square Mile
Soarse
Urban Centers
? 500,000 to 1,000,000 901ver 1,000,000
SECRET
Demographic data released
in the last year by the Soviet
government place the total pop-
ulation of the USSR at 200,200,-
000--considerably lower than
previous Western estimates.
Calculations based on these
figures show that the gap be-
tween the size of the Soviet
population and that of the
United States will increase
over the next 20 years. How-
ever, the composition of the
Soviet population is such that
the growth in the working-age
group and the levels of the
prime male military-age group
will be less satisfactory from
the Soviet standpoint than for-
merly. The next Soviet census
is scheduled for 1959.
The low birth rate during
World War II and the early post-
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3 July 1957
needed to fulfill
five-year plan goals
--are undoubtedly
important factors in
the reorganization 240
of industrial manage-
ment now under way.
In
the case of
180
males
tary
of
age
prime mili-
(20-29),
the level will rise
until 1960, drop from 120
TO
TAL PO
PULAT
ION
268
040
40
(IN M
ILLIONS)
00
US
SR
40
000010
223
00i
00
00 40 40
?40
100'
us
-
?-
19,100(, 000 in 1960 1940 1945 1951 1956 1961 1966 1971 1976
to 16,900, OOV in 3 JULY 1957 706273
1970, then climb back
up to 20,100,000 in 1975. By this age. group, however, ex-
comparison, the American poten- ceedsthe peacetime armed forces
tial during this period shows to such an extent that fluctua-
a. steady increase. Hence, tions become important only
whereas the USSR exceeded the with full mobilization.
United States by 7,400,000 mili-
tary-age males in 1955, by 1975
it will exceed the United States The present Soviet forced
by only 1,500,000. The size of labor population, on the basis
USSR: POPULATION BY AGE AND SEX
( I N MILLIONS )
1939 AGES 1955 AGES
70+ 70+
65-69 65-69
60 - 64 60 - 64
55 -59 55 - 59
50-54 50-54
45 -49 45 - 49
40 -44 40 - 44
35-39 35 - 39
30 -34 30-34
25 - 29 . 25 - 29
"vt
20-24
20 - 24
15-19 15-19
r 10-14 10-14
5-9 5-9
1 0-4 0-4
12 8 4 0 4 8 12 12 8 4 0 4 8 12 12 8 4 0 4 8 12
MALES FEMALES MALES FEMALES MALES FEMALES
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
USSR WORKING-AGE POPULATION
& LABOR FORCE
IN MILLIONS
144
WORKING-AGE POPULATION
(15 TO 69 YEARS)
of the Soviet population fig-
ure of 200,200,000 in April
1956, is evidently consider-
ably less than 3,000,000. A
figure higher than this would
be inconsistent with the rather
close correlation between the
estimated population over 18
years of age and the figure
on voters (18 years and over)
which has been published by
the USSR from 1950-1955. Most
of the difference between the
total population over 18 and
the voter population is be-
lieved to consist of forced
1965
laborers, A figure
lower than 3,000,000
would be consistent
with the statement
of USSR Deputy Proc-
urator General Ku-
dryavtsev in May
that the Soviet pris-
on population is
only 30 percent as
large as it was prior
to Stalin's death in
1953.
Soviet war loss-
es, including the
war-induced birth
deficit, were evi-
dently much higher
than previously
estimated, totaling
19,1 119.0, 1&9 20.1
111111
USSR MILITARY-AGE MANPOWER
MALES TWENTY TO TWENTY-NINE YEARS
1950 '55 '60 '65 '70 '75
ANNUAL AVERAGE IN MILLIONS
? WAR
?? YEARS
BIRTH RATE (PUBLISHED)
(ESTIMATE)
DEATH RATE (PUBLISHED)
(ESTIMATE) - -
%
NATUR
AL ItTCR
EASE
NATU
RAL IN
CREASE
r
1
7,
almost 40,000,000.
After 1940 and prob-
ably until as late
as 1947, the USSR
experienced a natu-
ral decrease in pop-
ulation--more deaths
than births per 1,-
000 population. The
immediate prewar
rate of natural in-
crease was not ap-
proached before
1949.
SECRET
INCREASE
IN MILLIONS
,18.5 18.9
(Prepared by
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
SOVIET UNION INTENSIFIES ORIENTAL AND AFRICAN STUDIES
The USSR has reorganized
its oriental studies. research
faculties and redirected the ef-
forts of its orientologists to-
ward more effective immediate
support for the current Soviet
diplomatic offensive in Asia
and Africa.
In May 19 56, "Doctor of
Historical Sciences" B. G.
Gafurov, full member of the
party central committee, for-
merly first secretary of the
central committee of the Tadzhik
SSR, was selected to head the
Oriental Institute of the Acad-
emy of Sciences, the summit of
Soviet oriental studies. In
September, the institute was
reorganized and expanded.
Twelve new units, among them
sections on India, the coun-
tries of the Near and Middle
East, and Arab East Africa,
were created and plans drafted
for intensified study of Chi-
nese history and culture. A
special printing press section
for oriental languages is be-
ing organized at the institute.
Scholars from Asian and
African countries are to be in-
vited to work at the institute
for lengthy periods, and in turn
Soviet orientologists will be
sent into the field to improve
their qualifications. Eastern
studies library collections are
concentrated in Moscow and in
Leningrad. Attempts are being
made to improve the acquisition
of research materials and make
them more easily available to
scholars. Contacts with bloc
orientologists have increased.
Major tasks of the Oriental
Institute, as outlined by its
director, include study of the
birth, formation, and develop-
ment of the new democratic states
in the East; the peculiarities
of economic developments in the
peoples democracies in Asia;
the crisis and deterioration of
the colonial system; and the
publication of monographs on
the newly independent states of
Africa and Asia and of studies
on the history of Egyptian,
Persian, Afghan and Indian lit-
erature.
On 1 March, Komsomolskaya
Pravda announced that a new
"scholarly and sociopolitical
magazine" to be called Sov-
remenny Vostok (The Orient To-
ay wouTa-Te issued by the
institute to supplement its
scholarly journal Sovetskoye
Vostokovedeniye (Soviet Eas ern
Studies) which first appeared
in April 1955. The new magazine
"will report achievements in
Soviet and non-Soviet orien -
tology and systematically review
works appearing in the Soviet
Union and abroad."
This magazine will be is-
sued first in Russian in an
edition of 50,000 directed to
"scholars, propagandists, the
party and Soviet activists, and
students and graduate students"
concerned with the Orient. Later
it is to be published also in
Arabic, Indonesian, Hindi and
other Eastern languages. The
first issue was devoted to the
second anniversary of the Ban-
dung conference. Several other
new journals in the fields of
history, world economics, and
international relations are
scheduled to appear this summer.
Ideological Content
Soviet oriental studies
have been criticized by the
party as having been too apo-
litical and for lagging behind
the needs of policy. The most
thorough criticism appeared in
the party journal Kommunist in
May 1955, a few weeks after the
Bandung conference. As an in-
terested observer of the Ban-
dung proceedings, the USSR prob-
ably noted that its views of
the national liberation move-
ments as represented in Soviet
literature reflected the Stalin-
ist era and were outdated and
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SECRET
3 July 1957
out of harmony with the Soviet
friendliness campaign in Asia
and Africa.
Following Bandung, treat-
ment of Indian leaders and of
the Indian national movement
was the first to be de-Stalin-
ized. Soviet literature on
India had been ill-informed and
bookish, as the party itself af-
firmed. Indian art and litera-
ture have received much atten-
tion, especially since the visit
of Nehru to the USSR in June
1955. The roles of Gandhi,
Nehru and the Indian national
liberation movement in general
have been thoroughly revised.
African studies especially
lagged behind the needs of di-
plomacy; African specialists
were few and dispersed. Kom-
munist charged that as late as
May X55 only the Institute of
Ethnography studied African
countries, and that the Insti-
tute of Oriental Studies con-
cerned itself only with Egypt.
of the African countries. The
USSR has since made important
efforts to make up for lost
time, publishing monographs and
journal articles on all parts of
Africa and studies on many of
the African languages.
Special party criticism has
been leveled at Soviet orien-
tologists for failing.to give
proper attention to the implica-
tions of the foundation and de-
velopment of the Chinese Peoples
Republic and for improperly
evaluating the role of the na-
tional bourgeoisie in anti-
imperialist movements.
The Soviets also are conduct-
ing a broad campaign to flatter
each nationality with the high
quality and peculiar brilliance
of its culture. They have pub-
lished collected works of
Iranian and Pushtu poets, il-
lustrated works on the national
art of India, and dictionaries
of minor dialects. A report of
the Foreign Languages Publishing
House in Moscow on Soviet books
for export to be published in
1957 shows a marked increase
in the languages of the Indian
subcontinent with 76 titles in
Bengali, Hindi and Urdu repre-
senting one eighth of the 592
books to be published.
To reinforce its program
in these fields, the USSR has
recruited nationals from the
oriental countries to teach in
the USSR and has encouraged
others to come there to conduct
research in their specialties.
In February a Kabul University
professor joined the faculty
of the Lenin Central Asian State
University at Tashkent, and
this spring four Tamil profes-
sors went to Moscow under Indian
government sponsorship.
Needs of Foreign Policy
The opening of new Soviet
diplomatic and consular posts
as well as the increased number
of economic survey, technical
assistance and cultural dele-
gations and missions has ex-
panded Soviet requirements for
Asian-African area specialists.
The USSR is seeking to overcome
a handicap of three decades when
few Soviet nationals were allowed
to travel or reside abroad. So-
viet orientologists now are per-
mitted contacts with "progressive"
orientologists of other countries,
and delegates have attended in-
ternational conferences on east-
ern studies.
The Soviet press has re-
ported that since January a
number of secondary schools have
been offering Arabic, Hindustani
and Chinese along with related
cultural subjects. It previously
had reported that the teaching
of oriental languages was being
emphasized in Soviet graduate
schools.
The USSR reportedly has
placed an order with a British
firm for printing machines
equipped to cast and compose in
various Asian languages, in-
cluding Thai, Burmese, Vietnamese
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 19 57
and seven Indian tongues. In
January the establishment of a
new Moscow publishing house for
oriental studies was announced.
From 4 to 11 June the first
All-Union Conference of Orien-
tologists was held in Tashkent
with specialists from various
parts of the USSR and from both
European and Asian Sino-Soviet
bloc countries participating.
N. A. Mukhitdinov, first secre-
tary of the central committee
of the Communist Party of
Uzbekistan, in a closing speech
outlined "the great importance
of the conference for the further
elaboration of problems of the
national liberation struggle"
of the eastern countries and for
the "exposing of imperialist in-
trigues in connection with the
disintegration of the colonial
system." (Concurred
in by OS
PROSPECTS FOR CHILE'S ECONOMIC STABILIZATION PROGRAM
Chile's economic stabiliza-
tion program faces serious dif-
ficulties this year and its
continued success is in doubt.
The austerity aspects of the
program are causing considerable
political difficulties at a time
when falling copper prices are
saddling the government with a
large fiscal deficit.
The present effort to cope
with Chile's long-standing
economic instability dates from
mid-1955 when President Ibanez,
who had been elected on an anti-
inflation program in 1952, con-
tracted the services of the
American firm of economic and
financial consultants, Klein-
Saks. On the recommendation
of the Klein-Saks mission, the
Chilean government embarked on
the present economic stabiliza-
tion program, which calls for
credit restrictions, strict
price and wage controls, foreign
exchange reform, extensive cut-
backs in Chile's costly social
security system, and new tax
and antimonopoly legislation.
A number of these measures,
particularly the wage and price
controls, provoked intense po-
litical controversy and even an
outbreak of rioting last April.
In spite of the running feud
between Ibanez and Congress
since his assumption of office,
however, the government obtained
the needed congressional ap-
proval and the program was under
way by early 1956.
By early this year the rate
of inflation had been greatly
slowed and Chile appeared to be
well on the way to achieving
economic stability. The peso,
which had dropped from 318 to 630
to the dollar in 1955, came up
from 647 to 590 in 1956. Further
evidence of success was seen in
the loans and economic assistance
granted by the International Bank
for Reconstruction and Develop-
ment (IBRD) for such long-term
measures to strengthen the Chilean
economy as modernization of the
railroad system and expansion of
the steel mills.
Recent Difficulties
The reversal of this promis-
ing outlook early this year stems
principally from the steep fall
in the price of copper, which
normally accounts for more than
half of Chile's exports and about
half of the government's revenue.
Copper's decline from its 1956
high of 46 cents per pound to its
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1957
present 29-cent price hit the
anti-inflation program at two
of its most sensitive points
by seriously reducing both for-
eign exchange and peso revenues.
The expected foreign exchange
shortfall in June alone amounted
to $12,000,000.
Loss of government reve-
nues from copper sales has in
addition created a fiscal defi-
cit which, despite maximum ef-
forts to trim the budget, will
still amount to the equivalent
of some $33,000,000 this year.
In the view of the Klein-Saks
mission, the failure to reduce
this budget deficit will in-
crease costs which will break
the line on wages and credit
controls, thus jeopardizing
and ultimately breaking down
the free exchange system.
Another unexpected reversal
is a great reduction in this
year's agricultural output be-
cause of the worst drought in
70 years. The result will be
higher prices to the consumer,
and further foreign exchange
losses because of additional
food imports. In addition,
fanners are seeking
special credits for
the next planting.
Such credits would be
inflationary, but if
they are not granted,
the resultant drop in
food production would
also be inflationary.
Still another
recent misfortune are
the damages sustained
from the torrential
storms of 17-21 May,
said to be the worst
in at least 50 years.
The $500,000 already
granted as government
relief will make cuts
in the public works
budget even more dif-
ficult, while the
private loans granted
for the same purpose
will increase infla-
SECRET
tionary pressures through
credit expansion.
There have also been a
number of signs that a potential-
ly serious reduction in economic
activity and increase in un-
employment has been under way
for some months past, particular-
ly in the construction industry.
The situation is not unusual
for this stage of a rigorous
anti-inflation program, but
coupled with other economic dif-
ficulties, it has had a de-
pressing effect on the popula-
tion.
Popular Discontent
Over the past few months,
there has been a general weari-
ness with the semiausterity of
the program. The lower classes
in particular are increasingly
restive over their loss of
purchasing power. The April
riots against the increases in
urban bus fares, which resulted
in the decreeing of a temporary
state of siege, were not a pro-
test against the stabilization
program as a whole, but did
point up the general atmosphere
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 19 57
of discontent and forced a
temporary abandonment of sched-
uled measures.
Ibanez has since chosen a
course of greater caution in
carrying out the anti-inflation
program. For example, price in-
creases in sugar, which were
necessary in order for the gov-
ernment to shake off costly sub-
sidy payments, were delayed un-
til congressional approval of
a bill raising the family al-
lowances of white-collar workers
was certain.
Current Outlook
Despite constant antagonism
between Ibanez and the political
parties in Congress, which are
already maneuvering for posi-
tions in the 1958 presidential
elections, the president has a
congressional majority committed
to the program. This commitment
improved the chances for passage
of the remaining legislative
items on the stabilization
agenda. A tax codificationmeas-
ure, one reforming the social
security program, an antimonopoly
law and a low cost housing bill
SECRET
are all now before Congress
or ready for submission.
The sweeping tax codifica-
tion measure, drawn up with the
assistance of United Nations tax
experts, is expected to result
in increased revenues, while
the proposed social security
bill would significantly diminish
the mandatory welfare benefits
which now eat up 25 percent of
Chile's budget. The antimonopoly
law is expected to induce price
leveling through free competi-
tion, while the low cost hous-
ing bill is intended in part
as a boost to the construction
industry, hardest hit by the
austerity program.
Even with the success of
these domestic measures, how-
ever, the government would still
be faced with a continuing budget
deficit and a severe shortage
of foreign exchange which it con-
siders itself unable to remedy
so long as the present low cop-
per prices continue. It there-
fore sees a foreign loan as the
only sure means of extricating
the stabilization program from
its nresAnt diffi -7 lties.
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