CURRENT INTELLIGENCE WEEKL;Y SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001300100001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 52
• Document Creation Date: December 16, 2016
• Document Release Date: November 3, 2004
• Sequence Number: 1
• Publication Date: August 1, 1957
• Content Type: SUMMARY

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CONFIDENTIAL
COPY NO. 1.8
Oc N O.3957/57
1 August 1957
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
DOCUMENT NO. 10
NO CHANGE IN &r t
[] DECLASSIFIED
CLASS. CHANGED
:
NEXT REVIEW DATE:
AuIn: r1n
DATE' REVIEWER:
ENTRAL INTE[ I ENCE AGENCY
~:E 4 SNTELLIGENCE
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State Department review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
THE SITUATION IN GUATEMALA . . . . . . . . . . . . . . . . Page 1
The surface calm in Guatemala since the assassina-
tion of President Carlos Castillo Armas on 26 July may
break in the near future as political factions line up
for a power struggle. Although the army, under the power-
ful defense minister, Col. Juan Francisco Oliva, is in
virtual control of the government and has thus far main-
tained order, reports of plotting and impending violence
are increasing. Prospects for political stability in
the coming months appear slim. 25X1
HOSTILITIES IN OMAN AND YEMEN . . . . . . . . . . . . . . Page 2
Britain has initiated another series of air strikes
against rebel forts and supply lines in interior Oman,
while small-scale movements of British-led native troops
have been undertaken to contain the rebellion. Prime
Minister Macmillan remains determined not to employ
British troops airlifted to the area. Some Persian Gulf
native ground troops under British control will almost
certainly eventually have to be committed to re-estab-
lish the Sultan's influence in the rebel area. Meanwhile,
the Yemenis have in recent weeks again provoked hostili-
ties on the Aden Protectorate frontier, and British air
and ground forces have been in action against them. 25X1
SOVIET HINTS OF FOREIGN POLICY TRENDS FOLLOWING PARTY
SHAKE-UP . . . . . . . . . . . 010 . . . . . . . . . . . . Page 4
Since the party presidium shake-up, a number of So-
viet officials have provided--mostly in private conver-
sations--clues to the direction Moscow's foreign policy
may take. Nearly all these officials have been optimis-
tic about the prospects for an improvement in the inter-
national atmosphere and for increased high-level contacts,
particularly with the United States, but have offered
little indication of a changing Soviet stand on the main
issues that divide East and West. Although no dramatic
change in Soviet foreign policy is anticipated, a reap-
praisal of diplomatic tactics may be under way,,possibly
involving a substantially increased economic aid program
aimed primarily at areas peripheral to the Sino-Soviet
bloc.
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1 August 1957
SOVIET ECONOMIC OFFENSIVE CONTINUES . . . . . . . . . . . Page 7
The Soviet economic offensive in the underdeveloped
countries has continued to expand since the June shake-
up in the presidium. In recent weeks several new large
credit and aid agreements have been signed, and the re-
sponsibility for directing economic relations with for-
eign countries has been assigned to a newly formed state
committee under M. G. Pervukhin. Moscow may consider
the present time propitious for a major campaign to ad-
vertise continuing Soviet readiness to aid underdeveloped
countries.
NOTES AND COMMENTS
MIDDLE EAST DEVELOPMENTS . . . . . . . . . . . . . . . . . Page 1
Reporting on the Syrian mission to Moscow empha-
sizes its economic objective, but official explanations
remain vague. Jordanian authorities remain concerned
over Israeli activity in the "neutral" zone in Jerusa-
lem and a number of minor border incidents have taken
place. Egyptian Defense Minister Amir's acceptance of
an invitation- to visit the USSR sets the stage for a
possible return visit by Zhukov to both Egypt and Syria.
Nasr's 26 July speech was received critically by much
of the Arab press outside Syria; his references to the
failure of the other Arab states to support Egypt in
the first Palestine war seem to have been particularly
resented.
NEW PRESSURE FOR CHANGE IN FRANCE'S ALGERIAN POLICY . . . Page 2
Opposition to the Lacoste pacification policy for
Algeria continues to grow in France. French military
circles are apparently beginning to insist on the neces-
sity for a political move to break the Algerian impasse.
The government still maintains that pacification is its
first objective, but the possibility of a fresh approach
is growing as Paris works out a draft statute and again
extends negotiation feelers to the Algerian nationalists.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
BRITAIN SEEKS TRIPARTITE CYPRUS CONFERENCE . . . . . . . . Page 3
The British cabinet's recent discussions on Cyprus
have resulted in a plan to invite Greece and Turkey to
confer in London on 3 September. London presumably hopes
to gain a political advantage by making such a concilia-
tory gesture before the UN General Assembly meets. Turkey
may accept the invitation. Greece feels its best pros-
pects lie in UN consideration of the problem.
ARGENTINE CONSTITUENT ELECTIONS . . . . . . . . . . . . . Page 4
Parties supporting the Argentine provisional gov-
ernment's call for constitutional revision won a majority
of the 205 constituent assembly seats in the 28 July elec-
tions, but strong opposition was registered, particularly
through the many Peronista-inspired blank ballots. An in-
crease in political jockeying for the important Peronista
vote can be expected in the general elections on 28 Febru-
ary 1958. The Communists won at least two seats, their
first in an Argentine assembly.
POSSIBLE MOVE TO ENLARGE UN DISARMAMENT SUBCOMMITTEE . . Page 5
The USSR may seek to enlarge the five-member United
Nations Disarmament Subcommittee when the 12-member Dis-
armament Commission meets to consider the subcommittee's
report due on 1 August. The often-expressed desire of
such states as India to become party to the subcommittee
discussions, coupled with allegations of pro-NATO bias on
the part of the four Western members of the subcommittee,
may result in General Assembly support for increasing the
subcommittee's membership--to the detriment of the West's
effort to reach a carefully wor with ade-
quate inspection and controls.
INCREASED PROMINENCE OF SOVIET SECRET POLICE . . . . . . . Page 6
There are indications that the Soviet secret police
is being quietly strengthened and that the standing of
KGB chief Serov may have improved. The KGB does not ap-
pear to have played a r "anti-
party" presidium group.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
AGRICULTURE IN THE SATELLITES . . . . . . . . . . . . . . Page 7
Generally fair to good harvests appear to be in
prospect in the Eastern European satellites this year.
Food output is expected to be considerably above the'
poor year of 1956 and in some areas may achieve the
high levels of 1955. The increase will not be suffi-
cient, however, to overcome the dependence of the satel-
lites on imports of grain nor to satisfy the demands
for a higher standard of living.
NATIONALISM PERVADES POLAND'S "LIBERATION DAY"
CEREMONIES . . . . . . . . . . . . . . . . . . . . . . . Page 9
In celebrating National Liberation Day on 22 July,
Poland this year departed from practices which have be-
come customary on such occasions in Communist satellites.
No high-level delegations from other bloc countries at-
tended, and public declarations on the occasion omitted
reference to the Soviet role in the liberation. Two
days later, Poland announced the public commemoration
of the 1944 Warsaw uprising, not heretofore honored in
the Communist world- wo e held in August and Septem-
ber .
CZECHS TO EXPAND AIR,SERV ICE TO MIDDLE EAST . . . . . . Page 9
Czechoslovakia's drive to expand its network of air
services in the Middle East has resulted in the conclu-
sion of air agreements with Syria on 24 July and Lebanon
on 27 July. In addition to the Damascus and Beirut
routes, service to Cairo will be inaugurated sometime
in 1957. Czechoslovakia paved the way for resumption
of flights to Middle East capitals by acquiring land-
ing rights in Greece in September 1956.
CHINESE COMMUNISTS TO CRACK DOWN ON STUDENTS . . . . . . . Page 10
Peiping's current antirightist campaign, original-
ly directed toward a handful of puppet party leaders,
is now aimed at a much larger group. Peiping seems par-
ticularly disturbed at the moment by student involve-
ment in alleged rightist intrigues. Repressive poli-
cies will increase the basic dissatisfaction among the
students. F__ I
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
NAHA ELECTION TO TEST STRENGTH OF PRO-COMMUNIST
OKINAWAN MAYOR . . . . . . . . . . . . . . . . . . . . Page 11
A close contest is expected between the supporters
of pro-Communist Okinawan Mayor Senaga and the opposing
conservatives in the election on 4 August of the Naha
municipal assembly. Senaga's opponents, who must win
at least 20 seats to oust him,-are handicapping them-
selves by remaining aloof from the electorate, while
the leftist candidates are being led by the mayor in a
vigorous campaign.
THE PHILIPPINE POLITICAL SITUATION . . . . . . . . . . . . Page 12
Overwhelming endorsement of President Carlos
Garcia as presidential nominee of the Nacionalista
Party at its convention on 27 July may have averted
a serious split in the administration party. Selec-
tion of Garcia's running mate, as well as of a sena-
torial slate, has been turned over to the Nacional-
ista executive committee, which may delay its deci-
sion until after the opposition Liberal convention
which opens on 3 August. The Liberals are expected
to nominate Jose Yulo and Diosdado Macapagal, but
they will face a strong battle in the November election
if Nacionalista cohesiveness is maintained.
SOUVANNA PHOUMA DESIGNATED TO FORM LAOTIAN GOVERNMENT . . Page 13
Former Laotian prime minister Souvanna Phouma has
been designated to form a government and is confident
he will receive the support of all parties. Ostensibly
committed to the firm policy on the Pathet Lao problem
espoused by his Nationalist Party colleague Katay, he
has revealed that he will nevertheless press for a co-
alition government with the Pathets without prior safe-
guards.
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THREAT OF VIOLENCE IN CEYLON DIMINISHED . . . . . . . . . Page 14
Prime Minister Bandaranaike and Tamil leaders agreed
on 26 July to give official recognition to Tamil as the
language of Ceylon's minority population of Indian descent.
The civil disobedience campaign planned by the Tamils for
20 August has been canceled. The settlement is likely to
be temporary, however, and agitation on the Tamil-Singha-
lese issue will almost certainly continue. 25X1
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THE WEEK IN BRIEF
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
SINO-CEYLONESE TRADE IN RICE AND RUBBER . . . . . . . . . Page 15
The Ceylonese delegation expected in Peiping on 2
August to renegotiate the expiring five-year rice-rubber
agreement seems likely to have some difficulty. Commu-
nist China has less need for Ceylonese rubber and may
drive a harder bargain than in 1952. There are signs
that the USSR may be willing to negotiate an arrange-
ment if China does not renew its commitments to Ceylon.
OPPOSITION TO SUHRAWARDY IN PAKISTAN . . . . . . . . . . . Page 17
Prime Minister Suhrawardy will face threatening
political situations in both East and West Pakistan
when he returns from his six-week tour abroad on 4
August. In addition to an apparent weakening of Suhra-
wardy's support in provincial politics, opposition to
his pro-American foreign policy has been strengthened
as a result of the formation on 25 July of a new na-
tional party uniting pro-Communist elements in both
provinces. r- I
BRITISH GUIANA AND THE WEST INDIES FEDERATION . . . . . . Page 19
The Legislative Council election on 12 August in
British Guiana is expected to result in a popular ma-
jority for the Communist-led faction of the People's
Progressive Party, which London ousted from office in
October 1953. The victors will probably be allowed to
form a government under the safeguards provided by a
new constitution, and a period of internal instability
is likely. There probably will be no early change in
British Guiana's opposition to joining the developing
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1 August 1957
PATTERNS AND PERSPECTIVES
INTELLECTUAL AND CULTURAL FREEDOM IN POLAND . . . . . . . Page 1
Polish intellectual life, which first showed signs
of a revival in 1955 and was encouraged by the Soviet 20th
party congress in February 1956, has received greater scope
for free development since Gomulka's accession to power in
October 1956. Polish intellectuals have been renewing
their traditional cultural, educational, and artistic ties
with the West. This development could in time extend be-
yond the cultural sphere and strongly influence political
thinking in Poland, creating for the Warsaw regime the
problem of containing the reorientation within bounds com-
patible with Communism.
NORTH KOREA' S jSTAT.U IN ?T$E BI,,O Page 4
North Korea remains a "hard-line" Soviet satellite,
untouched by the repercussions in the rest of the Sino-
Soviet bloc of the de-Stalinization "thaw" following the
20th party congress, Mao's "hundred flowers," and the
"separate roads" of Yugoslavia and Poland. The Kim I1-
sung regime continues to suppress any news or commentary
which might inform Korean intellectuals of liberaliza-
tion developments elsewhere in the bloc. The political
orientation of the present leadership is Soviet rather
than Chinese. The Chinese Communists have a voice in
military matters, however, and help formulate Pyongyang's
foreign policy in those fields where Peiping has a special
interest.
THE SOUTH KOREAN ARMED FORCES . . . . . . . . . . . . . . Page 6
The South Korean armed forces probably could defend
their country unaided against an attack by North Korean
troops for only a short period of time. The army's 20
divisions are lightly outfitted and much of the equip-
ment is obsolete and worn out. Corruption is a serious-
problem. Many South Korean officers recognize the de-
sirability of reducing the size of the army, but Presi-
dent Rhee probably will continue strongly to oppose a re-
duction until convinced that smaller forces--if well
equipped and efficiently or anized--would be more effec-
tive.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
PRO-COMMUNIST TRENDS IN ICELAND . . . . . . . . . . . . . Page 9
In the 12 months the Communists have participated in
Iceland's coalition government, they have been gradually
entrenching themselves in government agencies--particu-
larly in those controlling the economic life of the coun-
try. Iceland's foreign trade continues to shift toward
the Soviet bloc, and the Conservative opposition is be-
ing steadily weakened. Although the Communists have suf-
fered some losses in the trade unions, there are no signs
of an imminent breakup of the coalition cabinet.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
OF IMMEDIATE INTEREST
The surface calm in Guate-
mala since the assassination of
President Carlos Castillo Armas
on 26 July may break in the
near future as political fac-
tions line up for a power strug-
gle. Although the army, under
the powerful defense minister,
Col. Juan Francisco Oliva, is
in virtual control of the gov-
ernment and has thus far main-
tained order, reports of plot-
ting and impending violence
are increasing. Prospects for
political stability in the com-
ing months appear slim.
High government
officials remarked to US Ambas-
sador Sparks on 30 July that
the only solution would be for
Oliva to resign as defense
minister in order to become
constitutionally eligible to
run for president.
Under the constitution,
cabinet ministers must resign
six months prior to elections.
This would necessitate exten-
sion of the state of siege for
60 days after Oliva's resigna-
tion in order to extend to six
months the legal four-month
waiting period before elections.
Oliva reportedly feels that
emergency financial aid from
the United States is necessary
to implement his plans. High
government and army leaders
have indicated their support
for Oliva's candidacy.
Leftist opposition activity
is largely confined to exiles,
principally in Mexico. Poorly
organized and weakened by con-
flicts between Communist and
non-Communist elements, the
exile groups will probably not
become a major threat. The
Mexican, Salvadoran, and
Honduran governments have in-
creased vigilance over exiles
and are taking measures to pre-
COIQFfbfflYIAY
em from crossing the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
borders. Guatemala has ordered
all its consulates to cease is-
suing entry visas.
In the internal struggle
for power, Oliva is maintain-
ing the dominant position he
assumed following the assassi-
nation. His principal rival,
Ambassador to the United States
Col. Jose Luis Cruz Salazar,
is being sent back to Washing-
ton. He had arrived in Guate-
mala unexpectedly on 28 July,
apparently intending to gain
a leading position in the gov-
ernment.
The ease with which Oliva
influenced President Gonzalez
to eliminate Cruz Salazar from
the political scene is a good
measure of the defense min
ister's power. As long as the
pro-Castillo administration
maintains its position, Oliva
will probably retain his key
position in the government.
The army is persisting in
its efforts to assign blame
and define motives for the as-
have been made, and there are
rumors that torture is being
applied in some cases to exact
confessions of collusion with
the assassin in an alleged Com-
munist-inspired plot to seize
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The Rebellion in Oman
Britain has initiated
further air strikes against
rebel forts and supply lines
in interior Oman, while small-
scale movements o British-led
native troops have been under-
taken to contain the rebellion.
The RAF now has the mission of
interdicting rebel "military
movements" during daylight
hours, preceding its attacks
with leaflets calling for sup-
port of Britain's ally, the
Sultan of Muscat.
The Sultan has moved a
British-led force, the 200-man
Sohar Regiment, from the coast
inland to Ibri, north of the
rebellious area. The British-
officered Trucial Oman Scouts
have been concentrated at the
strategic Buraimi Oasis, from
which a detachment has moved
to reinforce the Sultan's force
at Ibri. The British ground
force in the Persian Gulf area,
consisting principally of an
infantry battalion, has head-
quarters on Bahrein. Two
companies of this battalion
have been moved toward the
troubled sector--one to Sharja
and one to Buraimi. British
air operations are being mounted
against the rebels from Sharja
and Bahrein. Transport air-
craft are deploying the Sultan's
troops and tribal forces in
position to press the rebel
area from all sides.
The British have also
established native ground pa-
trols in an effort to prevent
supply of the rebels overland
from Saudi Arabia. A naval
force consisting of three
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1 August 1957
patrol escort vessels is at-
tempting to prevent smuggling
of supplies by sea. The Ameri-
can consul general in Dhahran
reports that two deep-sea
launches and one fast fishing
boat, sold as surplus to native
merchants, are now believed to
- - Indefinite boundary
???.?? Protectorate boundary
Oasis
Sand areas
.Laila
SAUDI ARABIA
EASTERN ADEN
'-r
ALEN
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San. \ PROTECTORATE
YEMEN WESTERN
be in the possession of the
Omani rebels--possibly smuggling
arms. In view of the great dis-
tances involved, limited British
forces available, and the native
skill at smuggling, the blockade
effort should prove difficult.
Recent reports detailing
background on the Omani Libera-
tion Army state that it is com-
posed of 500-600 Omani exiles
who were trained in eastern
Saudi Arabia during 1956 and
the first half of 1957 under
Saudi and Egyptian officers.
The Egyptians are believed to
have departed at the end of
1956. The Omani force, under
Talib ibn All, brother of the
Imam of Oman, returned to Oman
in May and June 1957. Inflam-
matory Cairo broadcasts to the
Persian Gulf have spurred the
Omani insurrection, and are
calling on native troops to
mutiny against the British.
SHEIKDOMS/.""
. l bri
ucsi?1Nizwa
INNER ` 'OMAN. ... ' =i=
SOCOTRA
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British Prime Minister Mac-
millan told Ambassador Whitney
on 26 July that he is determined
not to let the problem get out
of hand and not to employ Brit-
ish troops, which in any case
could not function effectively
in central Oman's 130-degree
summer heat. The Foreign Of-
fice's Arabian peninsula chief
considers that the revolt is
primarily a political rather
than a military problem, in
which the key is the allegiance
to the tribal sheiks. He ex-
pressed a "reasonable hope"
that the RAF action would bring
the disaffected tribal leaders
back to support the Sultan.
Despite a British desire
to avoid a politically unreward-
ing and militarily difficult
ground campaign against the
rebels, the chief British of-
ficial in the gulf area indi-
cated that if air attacks are
not wholly successful, ground
forces would have to be used.
Presumably the Trucial Oman
Scouts, freed for use in the in-
terior by the arrival of British
troops, will be used initially.
The plan evidently is to re-
establish the Sultan's influence
in the rebel area, break up the
trained rebel military force,
and seize or expel its leaders.
The British official also said
that the Sultan would not be
content to restore the status
quo ante in interior Oman, is
determined to crush the rebels
once and for all, and is un-
willing to permit Talib and
the Imam to remain at large.
British Foreign Secretary
Lloyd has conceded that RAF
action alone might take a long
time to achieve results. There
is no indication, moreover, that
the air action so far has in-
flicted losses on the trained
rebel force, which remains
capable of intimidating sheiks
whose support of the revolt
might be waning.
Yemen Provokes New Hostilities
The Yemenis have in re-
cent weeks again provoked hos-
tilities on the Aden Protectorate
frontier, and British air and
ground forces have been in ac-
tion against them. The Yemenis
have occupied several points
within the area claimed by a
local ruler in the remote Beihan
Valley of Western Aden Protec-
torate, and are constructing
a road from interior Yemen in-
to this salient. The road
project suggests that the
Yemenis may plan to bring re-
cently acquired Soviet military
vehicles into this sector, where
the gravel plateau affords the
only extensive area in the pro-
tectorate suitable for armored
movement. Yemeni control of
this area would open the way
for extension of influence in
the Eastern Aden Protectorate.
SOVIET HINTS OF FOREIGN POLICY TRENDS FOLLOWING PARTY SHAKE-UP
Since the party presidium
shake-up, a number of Soviet
officials have provided--mostly
in private conversations--clues
to the direction Moscow's for-
eign policy may take. Nearly
all of these officials have
been optimistic about the pros-
pects for an improvement in
the international atmosphere
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
and for increased high-level
contacts, particularly with the
United States, but have offered
little indication of a changing
Soviet stand on the main issues
that divide East and West. The
return of a large number of So-
viet ambassadors to Moscow has
aroused speculation that some
new diplomatic offensive may
be in the wind.
Relations With US
A number of the Soviet
spokesmen, including Mikoyan,
have stated that as a result
of the shake-up a more flexible
Soviet approach could be ex-
pected, making it possible to
settle some of the outstanding
issues little by little but
that there would be no modifi-
cation of basic Soviet policies.
Mikoyan remarked that the op-
position group had interfered
with these policies, but had
not been successful in blocking
them. Lower-ranking Soviet
spokesmen described the ousted
presidium members as "suspicious
malcontents" and the new mem-
bers as friendlier toward the
United States.
In answer to a question
about a more flexible Soviet
policy toward the West, Khru-
shchev said this depended on
Western, particularly American,
confidence in the sincerity of
Moscow's desire to relax ten-
sions.
t was ex-
tremely important for the less-
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ening of international tensions
that the recent presidium shake-
up and Khrushchev's policies
be received with "understand-
ing and support" by the United
States, implying that if they
were not, Khrushchev's position
would be weakened and he might
be forced to change course.
High-level Meetings
The central committee com-
munique ousting Malenkov, Kag-
anovich, and Molotov accused
the latter of opposing the
.policy of "establishing personal
contacts between the Soviet
leaders and the statesmen of
other countries." Since then,
the contacts theme has been
repeated by a number of Soviet
spokesmen. Premier Bulganin,
in his letter to British Prime
Minister Macmillan on 20 July,
urged such high-level visits.
Soviet propaganda organs
have devoted considerable at-
tention to the second anniversary
of the Geneva summit conference
but have made no specific pro-
posals for a new summit meeting.
Nor have they commented on Pres-
ident Eisenhower's remarks about
a visit by Marshal Zhukov. The
Italian Communist paper L'Unita,
in a dispatch from its os~ cow
correspondent, however, reported
on 23 July that "circles worthy
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of trust close to the Soviet
government" considered the
President's suggestion a "log-
ical and sensible idea and
hence worthy of being received
and examined with maximum at-
tention." It regretted that
the American government had
"backed out" on the idea.
Soviet embassy officials
in Washington in remarks to
the press indicated great in-
terest in the possibility of a
Zhukov visit and curiosity
about whether an invitation
would be issued, as well as in-
terest in an exchange of visits
between President Eisenhower
and Khrushchev.
The USSR has also shown
an interest in expanding lower-
level contacts with the United
States by proposing in a 24
June aide-memoire that the sub-
ject be discussed along with
the exchange of radio and tele-
vision programs proposed by
Washington.
Disarmament-Germany
The few statements by So-
viet spokesmen concerning specif-
ic problems troubling interna-
tional relations have provided
little evidence of any softening
in Moscow's positions. Valerian
Zorin, chief delegate at the
London talks, said that the
presidium shake-up improved
the prospects for a disarmament
agreement if the allies of the
United States did not block
it. Marshal Zhukov
was very pessimistic
about the disarmament negotia-
tions, mainly because the West
appeared to consider it neces-
sary to retain atomic weapons
to counterbalance the greater
Soviet manpower. He said he
was willing to open up the en-
tire Soviet Union to inspec-
tion. t 25X1
he price would be So-
viet inspection of the rest of
the world.
The Bulganin letter to
Macmillan suggested that the
USSR is still insisting on a
suspension of nuclear weapons
tests unconnected to other
disarmament agreements. In
this one substantive field
where negotiations are now
under way, there has been no
change in the Soviet stand.
The public line on Germany
also remains unchanged. Bul-
ganin?s letter to Macmillan
repeated the standard formula
that unification must be nego-
tiated between the two German
states, and the East German
government has just issued a
unification plan based on con-
federation of the two states
rather than on free elections.
Yugoslavia-Arabs
The party central commit-
tee communiqud blamed Molotov
for opposing measures to im-
prove relations with Yugoslavia,
and the USSR has now agreed to
go ahead with major aid projects
in Yugoslavia which it postponed
last winter when relations with
Belgrade were particularly
tense. Khrushchev's statements
in Czechoslovakia, however, were
a curious blend of optimistic
remarks about the good pros-
pects for ending Yugoslav-So-
viet differences, sarcastic
criticismsoi the Yugoslavs,
and demands for unanimity in
the socialist camp--including
Yugoslavia.
Soviet propaganda broad-
casts to the Middle East have
been aimed at reassuring the
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Arabs that Soviet policy in
that area will not change,
despite the departure of Shepi-
lov.
New Approach
The prospect of some new
departure in foreign policy has
arisen from reports that at
least 17 Soviet ambassadors to
free world nations have returned
to Moscow in June and July.
Like the satellite and Western
Communist leaders who have re-
cently visited Moscow, these
ambassadors are presumably be-
ing briefed on the presidium
shake-up and its foreign policy
implications. Although no
dramatic change in Soviet for-
eign policy is anticipated, a
reappraisal of diplomatic tactics
may be under way, possibly in-
volving a substantially increased
economic aid program aimed pri-
marily at areas peripheral to
the Sino-Soviet bloc.
Other speculation about
the nature of any new Soviet
initiative in international
affairs includes some dramatic
bid for high-level talks, re-
designed collective security
proposals for Europe or Asia
or some scheme linking both
areas, and a Soviet bid to sign
up as many nations as possible
in formal support of its nu-
clear test suspension plan.
SOVIET ECONOMIC OFFENSIVE CONTINUES
The Soviet economic of-
fensive in the underdeveloped
countries has continued to ex=
pand since the June shake-up in
the presidium. In recent weeks
several new large credit and
aid agreements have been signed,
and the responsibility for di-
recting economic relations with
foreign countries has been as-
signed to a newly formed state
committee under M. G. Pervukhin
--a move which reflects the in-
creasing importance and broad-
ening responsibilities of the
former Chief Directorate for
Economic Relations,(GUES). .
On 24 July, Khrushchev
suggested to the Ceylonese am-
bassador that the USSR would
assist Ceylon in developing its
rubber industry and would take
all the resulting increase in
production.
The USSR signed an agree-
ment with Syria on 30 July ex-
tending to that country a $112,-
000,000 credit after persistent
Syrian pleas for financial aid,
and during the visit of the
King of Afghanistan to the USSR,
which ended on the same date,
agreed to expand the Soviet
economic assistance program in
that country.
The USSR has also recently
been pressing the implementation
of aid and credit agreements al-
ready signed. A high-level So-
viet team is now in New Delhi
negotiating the details of the
$126,000,000 loan extended last
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November, and after pleading
last winter temporary "in-
ability" to implement a $250,-
000,000 agreement with Yugo-
slavia, Moscow along with East
Germany has now agreed to pro-
ceed with construction of proj-
ects promised Belgrade last
year.
Moscow may consider the
present time propitious for a
major campaign to advertise
continuing Soviet readiness to
aid underdeveloped countries,
SECRET
and further economic assistance
programs may be forthcoming.
Despite some economic difficul-
ties being experienced in meet-
ing the ambitious industrial
goals of its Sixth Five-Year
Plan, the USSR probably would
adjust domestic programs in
favor of additional credits
to underdeveloped nations if
an exceptional opportunity
should arise to increase So-
viet influence or promote
dissension in free-world al-
liances.)
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1 August 1957
PART II
NOTES AND COMMENTS
MIDDLE EAST DEVELOPMENTS
Syria
Reports on the Syrian mis-
sion which arrived in the USSR.
on 24 July indicate that the
main object is to secure a large
loan. An authoritative leftist
newspaper in Damascus has as-
serted that an agreement to
provide Syria with a credit
equal to $112,000,000 will be
signed and a communique issued
from Moscow on 3 August, This
agreement, while ostensibly
to cover future economic proj-
ects,may also be designed to
assist Syria-in meeting current
obligations.
Syria reportedly has de-
faulted on an arms payment due
Czechoslovakia on 15 July, and
there is no chance of its meet-
ing the next two quarterly in-
stallments. Moreover, Syrian
Prime Minister Asali has been
put on notice by Finance Min-
istry officials that unless new
sources of revenue are found,
government employees may go
unpaid after the next three
months. Asali's official public
statements have been equivocal
on the purpose of the Moscow
mission; he has said merely
that the mission was visiting
the USSR, as well as other coun-
tries, to secure cooperation in
"vital" projects, and that
Syria welcomed "unconditional"
assistance from any source.
tries which continues to focus
on the "neutral" zone in Jeru-
salem. In the face of vehement
Jordanian protests, the Israe-
lis have gone ahead with activi-
ties which they claim are prep-
arations for a forestation
project they intend to carry
out in the area around UN truce
headquarters when the weather
becomes suitable, probably at
the end of October. The Jor-
danians remain highly suspicious
that this project is in fact
part of an Israeli attempt to
establish a demarcation line
through the neutral zone and
occupy part of it, particularly
the commanding height southeast
of the Arab-held Old City of
Jerusalem.
At the end of last week
the Jordanians moved some army
units into a blocking position
east of Jerusalem, while the
Saudi units on the eastern side
of the Jordan River were alerted.
Egypt
The Egyptian defense minis-
ter, General Hakim Amir, has
accepted an invitation to visit
the USSR but begged off from
setting a date. The publicized
acceptance by Amir sets the
stage for a possible return visit
by Marshal Zhukov to both Syria
and Egypt; it also supports
other information that Nasr
has once again postponed his
own oft-scheduled visit to the
USSR.
Several minor incidents
along the Israeli-Jordanian
border this week reflect the
tension between the two coun_
Nasr's speech in Alexandria
on 26 July, like his address to
the National Assembly earlier
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last week, contained no sur-
prises and ended on an anti-
climactic note. It had a
fierier tone, however, and, in
contrast to his previous speech,
attacked the other Arab states
except Syria for having "sold
outs" to American imperialism.
Syria was also singled out as
the only state which had as-
sisted Egypt in the Palestine
war of 1948-49, an assertion
which offended press opinion
in the other states.
Even left-wing newspapers
elsewhere in the Arab world
found it hard to find specific
items in Nasr's speeches which
they could praise; they simply
played up his general attack
on American policy since the
creation of the Baghdad Pact.
The relatively moderate words
of his first speech appear to
have encouraged the Jordanian
government to believe Nasr might
be in a mood for reconciliation.
However, the Jordanians were
disillusioned after the Alex-
andria performance, which has
been denounced roundly by the
Amman press. F _1 25X1
NEW PRESSURE FOR CHANGE IN FRANCE'S ALGERIAN POLICY
Opposition to the Lacoste
pacification policy for Algeria
continues to grow in France.
French military circles are ap-
parently beginning to insist
on the necessity for a political
move to break the Algerian im-
passe. The government still
maintains that pacification is
its first objective, but the
possibility of a fresh approach
is growing as Paris works out
a draft statute and again ex-
tends negotiation feelers to
the Algerian nationalists.
High army figures appar-
ently have concluded that ulti-
mate military success in Algeria
is dependent primarily on new
political and diplomatic meas-
ures. Press articles, presum-
ably inspired by a group of
young army officers, insist
that the army will irretrievably
damage its prestige and effec-
tiveness if it continues trying
to play the dual role of soldier
and policeman, hampered by
varied political restrictions
and increasingly entangled in
civil administration. The
articles assert, moreover, that
the army is being too closely
identified in the mind of the
French public with the formula-
tion of over-all policy on Algeria.
Die-hard proponents of
pacification will continue to
favor an all-out military ef-
fort without quarter. The
defense minister optimistically
predicted on 30 July that the
rebellion would be crushed by
the end of September. Despite
this trend, the emphasis on the
necessity for drastic political
moves implies a growing recogni-
tion that the time for a "hard"
policy is passing.
Political opposition to
Lacoste's pacification policy
is also increasing, particularly
within the Socialist Party,
which is the mainstay of Premier
Bourges-Maunoury's support. In
the National Assembly vote of
19 July giving the government
special powers to deal with
Algerian terrorists in France,
29 out of 100 Socialists broke
party discipline and abstained.
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Moreover, four officers of the
party's parliamentary group,
including the chairman, have
resigned their positions in pro-
test over Algerian policy.
In apparent response to
these and other pressures, the
premier is drafting a political
program aimed at giving the
widest possible measure of local
self-government to the Algerians
without weakening France's
sovereignty. This plan is being
examined by the cabinet, and the
National Assembly may be re-
called in early September for
debate on a draft statute be-
fore the Algerian issue is
brought up again in the United
Nations General Assembly.
A plan for the economic
development of Algeria will
reportedly also be ready for
cabinet consideration this
month. A government-sponsored
research group has made con-
siderable headway in planning
for industrial development,
aiming at exploitation of the
resources of the Sahara, which
Paris is separating, in its
political program, from the
northern coastal departments.
Meanwhile, behind-the-
scenes efforts have again been
made to sound out the Algerian
nationalists on their willing-
ness to negotiate. The nation-
alists deny that top leaders
have been contacted, but it ap-
pears that at least one meeting
has been held in Tunisia, and
there are indications that the
rebels may be reconsidering
their demand that France recog-
nize their right to immediate
independence.
The British cabinet's re-
cent discussions on Cyprus have
resulted in a plan to invite
Greece and Turkey to confer in
London on 3 September. Turkey
may accept the invitation.
Athens feels its best prospects
lie in UN consideration of the
problem. Evidently the British
government's minimum hope is
that the initiative of calling
a conference will redound to its
political credit both at home
and abroad before the UN
General Assembly convenes
this fall.
Domestic pressure to "get
Cyprus off our backs" has been
permeating upward in official
circles and has evidently been
reinforced by the new defense
planning, in which Cyprus ap-
parently is required primarily
for air and communications fa-
cilities. The government is
apparently prepared to face new
charges that it is "scuttling"
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1 August 1957
Cyprus from right-wing conserva-
tives as the price of approval
from the party as a whole for
its efforts toward a settlement.
Initial Turkish reaction
is reportedly favorable as long
as the alternative of independ-
ence is not included on the
agenda, and Turkey is unlikely
to boycott the meeting for fear
of losing a tactical advantage.
Turkey's vehement opposition
to independence derives from
the conviction that it would
be only a steppingstone to
union with &xreece. Ankara
remains adamantly committed
to partition.
can.
Because of its dissatisfac-
tion with the outcome of the last
tripartite conference in Septem-
ber 1955, Athens insists it will
not attend another such confer-
ence. The new Greek ambassador
to Turkey favors an unpublicized,
unofficial tripartite conference,
but indicated on 29 July that
the principle of self-determina-
tion would have to be recognized.
Even if Athens does not accept,
London will presumably publicize
its offer to gain what credit it
Parties supporting the
Argentine provisional govern-
ment's call for constitutional
revision won a majority of the
205 constituent assembly seats
in the 28 July elections, but
strong opposition was registered,
particularly through the many
Peronista-inspired blank ballots.
An increase in political jock-
eying for the important Peron-
ista vote can be expected in the
general elections on 28 Febru-
ary 1958.
No single group of the more
than 30 parties received what
could be considered a clear man-
date for the February general
elections. The progovernment
People's Radical Civic Union
led the race with almost one
quarter of the total. Blank
ballots, as urged by the outlawed
Peronista Party, were cast by
nearly a quarter of those voting.
The antigovernment Intransigent
Radicals, led by demagogic
Arturo Frondizi, polled over a
fifth of the votes, but evidently
failed in efforts to attract
widespread Peronista support.
The Communist Party polled a rec-
ord vote of about 228,000--out
of a total of nearly 8,000,000--
and reportedly elected at least
two delegates.
Constitutional revision by
the assembly--which is to meet
before 1 September--will be com-
plicated by the divergence in
view of the various party dele-
gates. The strong representation
of the two Radical Parties, which
have similar platforms, makes it
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likely that the assembly will
continue the present election
law to govern the February
general election. This law
gives the party polling the
largest number of votes two
thirds of the congressional
seats and the second party the
other third.
The assembly will also
discuss the nationalization of
power resources--which to a
considerable extent are foreign-
owned--and there now seems to
be a clear majority for those
political groups favoring na-
tionalization. F -1 25X1'
POSSIBLE MOVE TO ENLARGE UN DISARMAMENT SUBCOMMITTEE
The USSR may seek to en-
large the five-member United
Nations Disarmament Subcommit-
tee when the 12-member Disarma-
ment Commission meets to con-
sider the subcommittee's report
due on 1 August. The often-
expressed desire of such states
as India to become party to the
subcommittee discussions, cou-
pled with allegations of pro-
NATO bias on the part of the
four Western members of the sub-
committee, may result in General
Assembly support for increasing
the subcommittee's membership--
to the detriment of the West's
effort to reach a carefully
worked out agreement with ade-
quate inspection and controls.
British Foreign Secretary
Selwyn Lloyd on 18 July pointed
out that the subcommittee's
status in the UN would be ad-
versely affected as long as
NATO must consider Western dis-
armament proposals before they
are presented. He commented
that the subcommittee--made up
of representatives of the United
States, Britain, France, Canada,
and the USSR--was the most pro-
NATO group the UN had ever es-
tablished and that if this re-
lationship were over-emphasized,
the General Assembly would be
sure to add India and other
states to the subcommittee.
French Delegate Jules Moch
concurred with Lloyd. On
14 July, during his speaking
tour in Czechoslovakia,
Khrushchev had referred to the
"NATO subcommittee" and remarked,
"You can imagine, therefore, how
difficult it is to debate there
on the question of disarmament."
During the 27 July discus-
sions about the form and sub-
stance of the subcommittee's
1 August report to the UN Dis-
armament Commission--which con-
sists of 11 members of the Se-
curity Council plus Canada--
Soviet Delegate Zorin insisted
that after 1 August, the sub-
committee should meet subject
only to the guidance of the
commission. The American dele-
gate believes this Soviet em-
phasis on the .role of the com-
mission may signal a tactical
move for an early commission
meeting in which an attempt will
be made to expand the subcommit-
tee's membership.
The USSR has actively cham-
pioned India's attempts to pre-
sent its views on disarmament
orally before the subcommittee.
At last year's General Assembly
session, the USSR introduced a
proposal calling for the en-
largement of both the commission
and its subcommittee. India
was to be included in both.
The commission was to have been
increased by four--Egypt, India,
Poland, and a Latin American
country; the subcommittee by
India and Poland. This sugges-
tion, along with all proposals
relating to disarmament, was
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1 August 1957
referred to the subcommittee
for consideration.
The USSR can be expected
to exploit the growing impa-
tience of most of the other
members of the UN with the lack
of substantive progress by at-
tempting to have the General
Assembly enlarge the membership
of the subcommittee--as has been
urged in corridor talk at the UN
in previous years.
INCREASED PROMINENCE OF SOVIET SECRET POLICE
There are indications that
the Soviet secret police is
being quietly strengthened and
that the standing of KGB chief
Serov may have improved.
In mid-May, Serov, although
not a Supreme Soviet deputy,
attended special joint sessions
of the legislative committees
of the Supreme Soviet, together
with Soviet Public Prosecutor
Rudenko and Supreme Court Chair-
man Gorkin. Although sessions
were held to consider draft
legislation, the three officials
attended only those sessions
concerned with "certain other
questions." The presence of
the three men, who respectively
investigate, prosecute, and
preside at the trials of anti-
state crimes, strongly suggests
that the "certain other ques-
tions" included jurisdiction
of the KGB.
The transfer of the border
troops from the Internal Affairs
Ministry to the KGB may also
have been discussed during the
meetings. The transfer seems
to have been completed before
9 June, when the Polish party
paper Tr bona Ludu announced
the rec~f a -congratulatory
telegram from the commander and
political officer of the "Bor-
der Troops of the USSR Commit-
tee of State Security." The
move may have been accompanied
by a similar transfer of the
Soviet internal security troops.
The KGB also seems to have
stepped u its activity in
25X1 Hungary,
25X1
25X1
25X1
they may have or- 25X1
dered the large number of ar-
rests which recently took place
in Budapest and other localities.
In the Krasnaya Zvezda
account of tie 25 June recep-
tion for Chief of the Yugoslav
General Staff Gosnyak, Serov
was identified as "chairman of
the Committee of State Security
and general of the army." Pre-
viously Serov has been referred
to only as an army general and
listed among other officers of
that rank in alphabetical order.
On this occasion, however, he
was listed by full title among
other USSR ministers who at-
tended, and ahead of several
marshals of the Soviet Union
who are first deputy ministers
of defense.
The public identification
of Serov in these terms may mean
that the regime now considers
that its efforts over the past
two years to portray the KGB
as a highly efficient, tightly
controlled, and respectable
servant of the Soviet state have
been successful. Despite the
evidently enhanced status of the
KGB and the coincidence of the
new identification of Serov with
the session of the central com-
mittee, plenum which ousted the
Malenkov-Molotov-Kaganovich
faction, there have been no
indications that the KGB played
a role in the downfall of the
"antiparty" presidium gro
.
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AGRICULTURE IN THE SATELLITES
Generally fair to good
harvests appear to be in pros-
pect in the Eastern European
satellites this year, but im-
ports of grain will still be
necessary. Food output is
expected to be considerably
above the poor year of 1956 in
the southern satellites, and
some areas in the north may
achieve the high levels of
1955. High yields of winter-
sown grains seem assured for
the northern satellites--
Czechoslovakia, East Germany,
Hungary, and Poland. The out-
look is less favorable for
spring-sown crops because of
poor weather. Bulgaria and
Rumania will harvest larger
crops than last year, but are
not likely to achieve their
plans or the high levels of
1955.
To deal with rising de-
mands for a higher standard of
living, most of the regimes are
trying to encourage peasants,
both individual and collectiv-
ized, to increase food produc-
tion. The campaign against
kulaks has ceased, pressure for
collectivization has eased, and
economic concessions of various
kinds have been granted. Ma-
chinery and fertilizer are in
short supply, however, and the
peasant's lot has been only mod-
erately improved as food deficits
persist.
All the satellites are offer-
ing higher prices than usual for
compulsory deliveries as well as
for deliveries under the contract
system, and the peasant is al-
lowed more flexibility in de-
ciding what products he will
raise and how much he will sell.
The compulsory delivery sys-
tem has been abolished in Hungary,
but many of the benefits gained
EAST EUROPEAN SATELLITES:
SOCIALIZATION OF AGRICULTURAL LAND
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by farmers follow-
ing the uprising
have been whittled
away by official
measures such as a
new tax in kind.
In Poland, Gomul-
ka has promised
ultimately to do
away with the com-
pulsory delivery
system. Obliga-
tory milk deliver-
ies have already
been abolished, and
compulsory grain
deliveries from
the 1957 harvest
have been reduced
one third below
those of 1956.
The compulsory de-
livery system re-
mains in force in
the more doctri-
naire satellites--
East Germany,
Czechoslovakia,
and Bulgaria.
EAST EUROPEAN SATELLITE
FOOD CONSUMPTION
C
0
ALORIES PER CAPITA PER DAY
1000 2000
BULGARIA
1933-37 Average
1 July 1956 - 30 Id" I"?
CZECHOSLOVAKIA
EAST GERMANY
1 July 1956 - 30 June 1957
LI
NG
Y
1933-37 Average
HU
AR
1 July 1956 - 38 June 1957
0
POLAND
RUMANIA
1933-37 Average
Before Gomulka's return to
power, 21 percent of Poland's
agricultural land was social-
ized, in one form or another,
but this proportion has been
reduced to 14 or 15 percent,
the smallest, relatively, in
the bloc. By early May this
year the number of collective
farms had declined from about
10,000 to an official 2,200.
In Hungary, the socialized
area constituted about 35 per-
cent of the total just before
the uprising, shrank to 18 per-
cent by the end of 1956, but
has since expanded to 26 per-
cent. In the other satellites,
except Bulgaria, the tempo of
collectivization has been slowed
to avoid risking a drop in food
production which would aggravate
the pressing problem of raising
living standards. Collectivi-
zation is still being pushed
in these countries, but by per-
suasion and propaganda instead
of coercion. In Bulgaria,
swift collectivization continued
and 87 percent of the arable
land had'been socialized by mid-
1957.
levels.
Of all the satellites,
Bulgaria has the lowest per-
capita level of food consump-
tion, measured in calories,
and Poland the highest. Czecho-
slovakia and Hungary follow
Poland, and all three have more
food available per capita than
before the war, but the quality
has decreased. A 2-percent in-
erease in consumption in Hun-
gary over last year resulted
largely from emergency ship-
ments from elsewhere in the
bloc following the uprising.
East Germany is better off than
either Bulgaria or Rumania, al-
though food consumption in all
three is still well below prewar
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1 August 1957
NATIONALISM PERVADES POLAND'S "LIBERATION DAY" CEREMONIES
In celebrating National
Liberation Day on 22 July, Po-
land this year departed from
practices which have become
customary on such occasions in
Communist satellites. No high-
level delegations from other
bloc countries attended, and
public declarations on the oc-
casion omitted reference to
the Soviet role in the libera-
tion.
The official party news-
paper declared that this year's
celebration, "pervaded by the
October events," would differ
from those in previous years,
and stated that no "slogans or
phraseology attempting a doc-
trinaire flight from reality"
were to be in evidence this
year. The Polish press agency
and central radio took the oc-
casion to elaborate the benefits
which will accrue from follow-
ing "an independent and crea-
tive" road to socialism.
Public speeches by Party
First Secretary Gomulka and
Premier Cyrankiewicz failed to
credit the Soviet Union with
aiding in the liberation of
Poland 13 years ago, and both
described the October events
in Poland as marking the begin-
ning of all favorable Polish
developments.
Defense Minister Spychalski,
who expressed Poland's debt
to all Polish forces at home
and abroad who fought the Nazis,
did mention Soviet military
help. He emphasized, however,
that the primary duty of the
Polish army today is the "con-
solidation of independence" and
gave only secondary considera-
tion to the task of aiding in
the building of socialism.
Spychalski justified Poland's
adherence to the Warsaw pact
solely on the grounds of con-
tinued West German militarism
and revanchism.
Other than Ho Chi Minh,
who is on an East European tour,
no satellite leader attended
the Polish ceremonies, in marked
contrast with previous years.
However, Polish embassy parties
in all Communist capitals were
heavily attended by top-ranking
bloc leaders.
Poland's announcement two
days after the ceremonies that
the Warsaw uprising of 1944,
never before honored in the
Communist world, would be marked
by observances in August and
September is a further indica-
tion of Polish emphasis on na-
tionalism. The 63-day uprising
was not Communist in composi-
tion, and the underground forces
were abandoned to destruction
by the Germans despite the pres-
ence of Soviet forces only a
few miles from the city. The
Polish people believe the up-
rising was fomented by Moscow
radio to encourage German troops
to destroy all non-Communist
political forces in Poland prior
to the Soviet occupation.
CZECHS TO EXPAND AIR SERVICE TO MIDDLE EAST
Czechoslovakia's drive to
expand its network of air serv-
ices in the Middle East has re-
sulted in the conclusion of air
agreements with Syria on 24 July
and Lebanon on 27 July. In addi-
tion to the Damascus and Beirut
routes, service to Cairo will
be inaugurated some time in
1957. Czechoslovakia paved the
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way for resumption of flights
to Middle East capitals by ac-
quiring landing rights in
Greece in September 1956.
Although the Czech Nation-
al Airlines (CSA) service was
well established in the Middle
East in 1948, operations in the
free world steadily declined
following the Communist take-
over that year. Czech service
to Tehran, Baghdad, Lydda, Cairo,
Istanbul, Ankara, Algiers, and
Athens, as well as to Western
Europe, was discontinued, and
by 1953, CSA's only flights
outside the bloc were to Copen-
hagen, Stockholm, Helsinki,
and Vienna.
Other bloc countries, in-
cluding the USSR, have moved to
establish passenger service in
the Middle East, but trail the
Czechs with their extensive
prior contacts. Czechoslovakia
has purchased three Soviet TU-
104 jet transports, of which
there are only about 50 avail-
able in the USSR, and will prob-
ably use them for flights to
the Middle East.
The agreement for service
to Beirut, the most active in-
ternational air terminal in
this area, gives Czechoslovakia
access to a major Middle East
air center which can be used
in logistic support of Commu-
nist activities in the area.
Peiping's current anti-
rightist campaign, originally
directed toward a handful of
puppet party leaders, is now
aimed at a much larger group.
Peiping seems particularly dis-
turbed by student involvement
in alleged rightist intrigues.
Peiping's concern probably
stems from the fact that Chi-
nese university students have
played a leading role in spark-
ing major political unrest ever
since the revolution of 1911
and were used extensively by
the Communists themselves in
the civil war which ended in 1949.
Mao Tse-tung admitted "un-
healthy tendencies" among col-
lege students in his speech on
contradictions last February
and observed wryly that Marxism
is "not so much in fashion"
with young people. Since then
manifestations of student un-
rest have multiplied. Shouts
of "kill the Communists" were
reported at student meetings
held last spring, and the Chi-
nese Communist press has carried
accounts of a "bomb-throwing"
incident involving a Communist
university official.
At Peiping University,
students formed a "Hundred Flow-
ers Study Society" for the ex-
change of antiregime views, and
there has been a wave of pro-
tests against Chinese Communist
Party interference in education-
al work. College students have
vigorously objected to the arbi-
trary assignment of jobs and
some have refused to accept
their posts.
The students have appar-
ently drawn support from dis-
sident professors, some of whom
have spoken out against the Com-
munist Party. One of these men,
a leading Chinese sociologist,
recently called the mood of the
students today "extremely seri-
ous" and commented that the
situation is similar to previous
periods preceding revolts led
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
by intellectuals. He said the
party was to blame because it
either denied students the
chance to express their views
or ignored what they had to say.
The professor was forced
to confess to his anti-Commu-
nism,buthis views apparently re-
ceived close attention within
the party. Chinese Communist
officials, commenting on the
danger in permitting student
unrest to become a rallying
point for popular discontent,
noted with alarm an increasing
identification of the populace
with the disgruntled students.
Peiping apparently intends
to rely on nonviolent measures,
at least for the time being, in
its efforts to halt student in-
discipline.. Some erring stu-
dents have been forced to forego
their summer holiday in order
to undertake special "ideologi-
cal studies." A State Council
directive issued on 17 July re-
quires stringent political in-
vestigation of all future grad-
uating classes. Students whose
attitudes are not acceptable,
will be placed on probation
for periods of up to three years
during which they will perform
menial tasks while undergoing
"ideological correction."
The display of renewed
firmness toward students, under-
lined by Chou En-lai in a major
address on 16 July, will probably
succeed in suppressing outward
manifestations of hostility to-
ward the regime among intell-
ectuals, Basic dissatisfaction
among students will increase
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as a result of the resumption of
repressive policies.
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The ouster of pro-Commu-
nist Mayor Kamejiro Senaga of
Naha, Okinawa, will depend on
the results of the city assembly
elections on 4 August, made
necessary by Senaga's dissolu-
tion of the assembly following
a no-confidence vote against
him in June. Most estimates
by political observers on Oki-
nawa indicate a close contest
between the anti-Senaga conserva-
tives and the mayor's leftist
supporters. Senaga's opponents
do not appear confident of win-
ning the 20 seats necessary for
a second no-confidence vote.
The election campaign for-
mally opened on 16 July with 46
registered candidates. Of these,
29 are opposed to Senaga, 13
are pro-Senaga, and four are un-
committed.
The conservatives are hand-
icapped by factionalism, al-
though some of the anti-Senaga
forces, supported by local fin-
anciers, have formed a loose-
knit group called the Naha City
Administration Reconstruction
League. The league's candidates
may be endangering their pros-
pects by their tendency to re-
main aloof from the electorate,
talking down to their audiences,
and generally failing to iden-
tify themselves and the issues
with the interests of the in-
dividual voters.
The leftist candidates, on
the other hand, are being led
by Mayor Senaga in a vigorous
campaign. By holding more
rallies and making them color-
ful and interesting, Senaga's
men are reaching twice the total
audience of their opponents.
Senaga seems to have re-
tained popular sympathy as a
champion of Okinawan grievances
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1 August 1957
against the United States. In
addition, the leftist campaign
is emphasizing such popular.
issues as opposition to lump,
sum payments for land used by
the American forces, reversion
of Okinawa to Japan, and corrup-
tion in the previous city ad-
ministration.
The anti-Senaga forces, who
held 24 seats in the last assem-
bly, must win at least 20, since
two thirds of the 30-member as-
sembly must be present for a
vote of confidence.. The vote
itself requires only a simple
majority. The pro-Senaga forces
will have to gain five seats. in
addition to their previous six
to block it.
A second no-confidence vote
would forge Senaga to resign
but would not eliminate him
from the political scene. He
could still run in the subse-
quent mayoral election and has
indicated he will do so if he
is ousted.
THE PHILIPPINE POLITICAL SITUATION
President Garcia's over-
whelming first-ballot nomina-
tion as Nacionalista presiden-
tial candidate at the party con-
vention on 27 July may have
averted a serious split in the
administration party before
the Philippine elections in
November. However, a conven-
tion deadlock developed among
five rival aspirants for the
vice-presidential nomination,
and final selection of Garcia's
running mate, as well as of the
eight-man senatorial slate, has
been entrusted to the party's
executive committee. The com-
mittee may now withhold its
decision until after the nomi-
nating convention of the oppo-
sition Liberals, scheduled to
begin on 3 August, in the hope
of minimizing defections by dis-
appointed office seekers to the
opposition.
One reason for the Nacion-
alista convention vice-presi-
dential maneuver may have been
to prevent the vice-presidential
candidacy of House Speaker Jose
Laurel, Jr., who led the con-
vention balloting but failed to
obtain the required 60 percent
of the vote for nomination.
Despite indications prior to the
convention that Garcia was pre-
pared to run with Laurel, there
have been strong objections to
the speaker on the grounds of
his anti-American bias and high-
pressure political tactics. The
executive committee may there-
fore compromise on a dark-horse
candidate, with such proved vote-
getters as Senators Gil Puyat,
Lorenzo Sumulong, and Cipriano
Primicias, a candidate from the
Liberal stronghold of northern
Luzon, being mentioned in this
connection.
The Liberal convention,
which begins on 3 August,"is ex-
pected to nominate with little
dissension former House Speak-
er Jose Yulo as its presidential
standard bearer and pro-Ameri-
can congressman Diosdado Maca-
pagal as his running mate. The
only candidate openly opposing
Yulo is Antonio Quirino, younger
brother of former president
Elpidio Quirino, who has served
principally as a rallying point
for several old-guard Liberals,
now being sidetracked by the
present leaders as too closely
identified with the corruption
of Quirino's administration.
The Liberals still hope
to persuade some of the younger
politicians closely identified
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with the late president Magsay-
say to run as senatorial candi-
dates on the Liberal ticket.
Many of these men, however, are
placing their hopes in a new
party, the Progressives, whose
presidential candidate is former
customs commissioner Manuel
Manahan. Yulo has apparently
refused to team up with Manahan
as his running mate for fear of
antagonizing the already weak-
ened Liberal Party machine,
while Manahan has so far re-
fused to give up his candidacy
to head the Liberal senatorial
ticket.
Although there are reports
that Manahan, whose political
outlook resembles that of Mag-
saysay,r is meeting increasing
success in provincial campaign-
ing, most observers believe his
party's late start and lack of
provincial organization handicap
his election prospects.
With the Nacionalista Party
still showing signs of cohesive-
ness, the Liberal Party faces a
strong election battle in which
it may need to come to terms
with the Progressive Party.
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Former Laotian prime min-
ister Souvanna Phouma, propo-
nent of a soft policy toward
the Pathet Lao, has been des-
ignated to form a government
following the announcement by
his Nationalist Party colleague,
Sasorith Katay, that he lacked
sufficient support for assembly
confirmation. Souvanna is con-
fident he will be able to form
a government in which all par-
ties will participate. Although
all party leaders have "agreed
in principle" to support Sou-
vanna's government, there are
nevertheless critical conflicts
over the distribution of cab-
inet portfolios and policies
which remain unresolved.
The Nationalist Party in
its caucus on 26 July reported-
ly committed Souvanna to the
firm policy on national unifi-
cation formulated by Katay in
his first bid for investiture.
There also is a reported dis-
position within the party to
circumscribe further Souvanna's
tendency to "freewheel" by stip-
ulating that he should hold no
substantive portfolio in addi-
tion to the prime ministership.
Despite his profession of
support for Katay's firm policy
toward the Pathet Lao, Souvanna
apparently will press for early
implementation of his agree-
ments with the Pathet Lao with-
out making a resolute effort
to obtain the prior safeguards
demanded by Katay for dissolu-
tion of Pathet forces and re-
imposition of royal government
control over the two northern
provinces. He told an American
official on 26 July that the
Pathet Lao must be speedily re-
absorbed into the national com-
munity in order to destroy Viet
Minh control over the movement.
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1 August 1957
The settlement envisioned
by Souvanna would involve giving
the Pathets one or two -port-
folios in a coalition govern-
ment and then holding supple-
mentary elections, in which
the Pathets would participate,,
to expand the National Assembly
from 39 to 60 deputies. Sou-
vanna claimed that both his
brothers--Pathet Chief Souphan-
nouvong and Viceroy Petsarath--
approved of this solution to
the unification issue.
Meanwhile, recent events--
Katay's near-success in forming
a government and the relatively
poor showing of left-wing leader
Bong Souvannavong in his bid for
investiture--may lead to a more
conservative Communist estimate
of the Pathets' political influ-
ence and a greater Pathet will-
ingness to compromise.
THREAT OF VIOLENCE IN CEYLON DIMINISHED
The threat of widespread
violence in Ceylon in connec-
tion with the civil-disobedience
campaign planned by the island's
Tamil-speaking minority'seems
greatly diminished.. Following
several, conversations between
Prime Minister Bandaranaike and
Tamil leaders, an agreement was
reached on 26 July, and the
Ceylonese Basic Linguistic Divisions
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campaign, scheduled
to begin on 20 Au-
gust, was canceled.
The agreement
provides for offi-
cial recognition
of Tamil as the
language of Ceylon's
2,000,000 people of
Indian descent and
for the use of Tamil
in the administra-
tion of the northern
and eastern provinces
of Ceylon, where
this population is
concentrated. It
also provides for
regional councils
to oversee Tamil
affairs in these
provinces.
The widespread
publicity regarding
preparations for
violence, including
the recruitment of
"private armies" by
Tamil and opposing
Singhalese groups,
apparently aroused
sufficient alarm to
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1 August 1957
persuade both sides to seek a
peaceful solution.
Although most political
leaders welcomed the cancella-
tion of the disobedience cam-
paign, the Tamil Federal Party
accepted the agreement merely
as an intermim adjustment and
reiterated its demands for a
federal Tamil state, Tamil-
Singhalese language parity, and
Ceylonese citizenship for per-
sons of Indian descent. To
date, the Ceylonese government
has given citizenship to only
about 10 percent of those ap-
plying, while New Delhi has
consistently refused to accept
as emigrants Tamils disenfran-
chised in Ceylon.
The United National Party
working committee denounced the
language agreement as a viola-
tion of law and the regional-
councils agreement as a betrayal
of the Singhalese. Singhalese
extremists, though bitter about
the concessions made by Ban-
daranaike, will probably confine
their activity mainly to verbal
criticism of the agreement for
the present. Any outbreaks of
violence in the near future seem
likely to be small and sporadic.
The relaxation of tensions
resulting from the settlement
is likely to be temporary, how-
ever. Prime Minister Bandara-
naike will probably continue
to be subject to strong politi-
cal criticism from both right
and left on the basic issues
of citizenship and language
rights for Tamils.
25X1
The Ceylonese delegation
expected in Peiping on 2 August
to renegotiate the expiring
five-year rice-rubber agreement
seems likely to have some dif-
ficulty.
Ceylon shipped its first
rubber to Communist China un-
der private contracts in Octo-
ber 1951, when 5,633 metric
tons were exported. It pur-
chased its first rice from
China in 1952 under an agree-
ment which reportedly specified
cash payment for 80,000 tons
but which was apparently paid
for with rubber. During that
year, Ceylon exported about
24,000 tons of rubber to China.
In 1952, Ceylon faced a
bad slump in world market prices
for rubber and a world short-
ages of rice, of which the is-
land imports about half its
total consumption. The result
was the five-year Sino-Ceylonese
rice-rubber agreement, which
became effective on 1 January
1953. Under its terms, Ceylon
was to export 50,000 tons of
rubber and to import 270,000
tons of Chinese rice annually.
China agreed to pay a premium
above world market prices for
Ceylonese rubber. Prices of
both commodities were to be
renegotiated each year.
The agreement not only
provided Ceylon with a stable
market for rubbber for five
years but also assured it of a
much-needed rice supply. China,
in turn, benefited from Ceylon's
breaking of the tight rubber
embargo then being enforced by
other exporters.
In 1953 and 1954, prices
of rice and rubber were fixed
at a single figure for the
full year. In mid-1955, how-
ever, changes in world prices
made the agreed Sino-Ceylonese
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prices unrealistic, and the two
countries adopted a sliding-
scale system which is still in
use. China guarantees a floor
price for rubber and pays pre-
miums varying from three to
four cents per pound depending
on the world price for each
grade. Prices of rice were also
brought more into line with
world prices, dropping from the
original figure of $109.20 per
ton to about $98,00..
In 1953 and
1954, shipments of
rice and rubber ap-
proximated the amounts
specified in the
agreement. In 1953,
however, Ceylon, "
still searching for
an assured rice sup-
ply, signed a four-
year agreement with
Burma for 200,000 to
600,000 tons annual-
ly at prices decreas-
ing in each succes-
sive year.
By 1955, this
and the Chinese agree-
ment produced more
than the 400,000 to RUBBER 66 60
500,000 tons of rice QUANTITY 56
Ceylon usually im-
ports annually. As
a result, Ceylon cut
down its rice imports
from China and trans-
ferred some to Japan.
Because it had al-
ready shipped in 1954
much of the rubber
due China under the
1955 contract, Ceylon
sent only slightly
over 30,000 tons to
Peiping in 1955. In
1956 rice-rubber
shipments were back
at levels called for
in the agreement. The
1957 contract also
calls for full quotas
of rice and rubber.
in arvu mei. -.
TONS) 2/I
NET PROFIT
TO CEYLON
(MILLIONS OF DOLLARS)
0
In most calendar years there is an overlap of shipments under contracts of
the preceding or following year.
* Includes extra profits accruing from difference between rice and rubber
prices under agreement and those on world market.
1 AUGUST 1957
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A Ceylonese delegation will
arrive in Peiping on 2 August
to attempt to renew the exist-
ing agreement. China has less
need for Ceylonese rubber than
in the past, however, and may
drive a harder bargain than in
1952. During the past two years,
it has unsuccessfully tried to
pay its trade balance in com-
modities rather than in sterling.
If Ceylon is forced to sign
a less favorable agreement,
CEYLON - COMMUNIST CHINA
RICE AND RUBBER SHIPMENTS
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1 August 1957
either for less rubber or with-
out premium prices, it presum-
ably will seek alternate mar-
kets or aid to recoup its fi-
nancial losses. Should China
seek to lower its commitments
to Ceylon, the USSR might be
willing to assume new respon-
sibilities in view of Khrush-
25X1
chev's remark
to the effect that the USSR is
prepared to assist in increasing
Ceylon's rubber production and
to take whatever additional
rubber Ceylon produces as a
result of such aid. 25X1
(Concurred in by OR
Prime Minister Suhrawardy
will face threatening political
situations in both East and West
Pakistan when he returns from
his six-week tour abroad on 4
August. In addition to an ap-
parent weakening of Suhrawardy's
support in provincial politics,
opposition to his pro-American
foreign policy has been strength-
ened as a result of the forma-
tion on 25 July of a new na-
tional party uniting pro-Commu-
nist elements in both provinces.
The convention of Pakistan's
leftist political groups or-
ganized by Maulana Bhashani,
who recently resigned his mem-
bership in the East Pakistan
Awami League, met in Dacca on
25 and 26 July. Nearly 800
leftist delegates from East
Pakistan joined with some 80
opposition leaders from West
Pakistan to launch a new left-
ist organization known as the
National Awami Party. The key
components in the merger are
the Bhashani supporters from
various political parties in
the eastern province and the
Pakistan National Party of
West Pakistan, led by Mian
Iftikhar-ud-Din and Abdul
Ghaffar Khan. Both groups are
heavily infiltrated by Commu-
nist Party workers and sympa-
thizers.
The heterogeneous elements
which have joined in the new
front have little in common
aside from their opposition to
Pakistan's present leadership.
Two major demands have provided
the group a basis for common
action: a neutralist foreign
policy--"freeing the country
from imperialism"--and provin-
cial autonomy.
The success of the leftist
alliance may be limited to a
considerable degree by the wide
divergence of interests and
objectives of the various groups,
as well as by the personal
rivalries among their leaders.
However, the new organization
will probably maintain a sem-
blance of unity during the peri-
od preceding the general elec-
tions which have been promised
for next March.
The National Awami Party
is likely to attract considerable
mass support if it continues
to play on such popular themes
as anti-imperialism and regional
autonomy and exploits public
discontent over deteriorating
economic conditions. In an
election campaign, the leftist
front, led by such popular
leaders as Bhashani and Ghaffar
Khan, could make serious inroads
into the support now enjoyed by
anti-Communist parties in Paki-
stan.
A number of followers of
Bhashani have defected from the
East Pakistan Awami League to
join the new party. Unless the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
league, now owing loyalty to
Suhrawardy alone, can obtain the
support of other groups in the
provincial assembly, the Awami
League ministry in East Pakistan
may fall. East Pakistan is re-
garded as Suhrawardy's political
base, and the failure of his
party there would be a serious
blow to his prestige as a na-
tional leader.
by President Mirza, at the ex-
pense of the prime minister.
Suhrawardy's future as
leader of the government prob-
ably will hinge on his rela-
tionship with Mirza, who 0
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is ma- 25X1
neuvering to check the prime
minister's ascendancy, possibly
In West Pakistan, the res-
to the extent o
f lending tacit
toration of the Republican Party
support to the
new leftist front
government to office on 15 July
as a means of u
ndermining the
was a further setback to Suhra-
strength of Suhrawardy's Awami
wardy's effort to increase his
League. There
is little likeli-
political support in the western
hood, however,
that Mirza will
province. The effect of the
precipitate a b
reak with Suhra-
recision of President's Rule in
wardy in the immediate future.
West Pakistan apparently has
been to strengthen the position
of the Republicans, sponsored
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
BRITISH GUIANA AND THE WEST INDIES FEDERATION
Most observers expect the
Communist-led faction of the
People's Progressive Party (PPP)
of British Guiana to win a
popular majority in the Legis-
lative Council election on 12
August--the first in the colony,
since London's suspension of
the consti.tution and detention
of the PPP's leaders in the fall
of 1953. The victors will pre-
sumably be allowed to form a
government under the safeguards
provided by a revised constitu-
tion, but a period of instabil-
ity is likely.
Since party leader Cheddi
Jagan was released from detention
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1 August 1957
by British authorities, he and
his wife Janet have extended
their international Communist
connections and strengthened
the organization of their fac-
tion of the PPP. They appeal
to local economic grievances
and seek independence outside
the Commonwealth, opposing any
move to associate British
Guiana with the developing
federation of Britain's West
Indies colonies. The loss of
political and financial support,
entailed by the recent defec-
tion of three PPP leaders could,
however, undercut Jagan's ex-
pected victory.
Those seats not won by the
Jagan group are expected to be
gained by Lyndon Burnham and
his faction of the
PPP, which split with
the Jagans in April
1956 over personal
rivalry and party
policy and has since
publicly attacked the
Jagans as Communists.
The remaining polit-
ical elements dis-
trust Burnham as an
opportunist and have
refused to join forces
with him.
Under the new
constitution granted
by London last year,
the governor may ap-
point up to 11 mem-
and thus neutralize Jagan in
the council.
In any case, an unstable
situation full of risks for in-
ternal security and for British
interests in the Caribbean area
is likely to result. London has
wanted, for example, to persuade
British Guiana, which produces
about a fifth of the free world's
bauxite, to add economic strength
to the developing West Indies
federation by joining it, but no
early change in British Guiana's
opposition seems possible.
Meanwhile, the 16-24 July
conference in London between
representatives of the federation,
the United Kingdom, and the
United States has concluded with
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M~STRINIDAD
COLOMBIA
BRITISH`
-GUIANA
an agreement to survey all as-
pects of the West Indian request
for cession of the US naval base
site at Chaguaramas in Trinidad
for the federal capitol. The
British, who have pushed federa-
tion from the beginning as a
means of making their Caribbean
bers, who together with the 14
elected members and three top
government officials form a
Legislative Council. Unless
Jagan behaves with complete
irresponsibility immediately
after the election, Governor
Renison is expected to follow
the usual practice in British
Caribbean colonies of appoint-
ing sufficient members of the
party winning an elected major-
ity to give that party an abso-
lute working majority. Should
Jagan flagrantly attack British
interests while in office, Beni-
son will presumably exercise
his powers to replace the ap-
pointed PPP representatives
colonies pore self-supporting,
generally supported the West
Indian view that at least part
of Chaguaramas should be released.
West Indian political leaders
privately recognize the US need
for the Chaguaramas base, but
presumably might try to exploit
for personal gains any anti-Ameri-
can sentiment which may develo
over this issue. 25X1
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1 August 1957
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
PATTERNS AND PERSPECTIVES
Polish intellectual life,
which first showed signs of a
revival in 1955 and was encour-
aged by the Soviet 20th party
congress in February 1956, has
received greater scope for free
development since Gomulka's ac-
cession to power in October 1956.
Polish intellectuals, figura.
tively turning their backs on
the East, have been renewing
their traditional cultural,
educational, and artistic
ties with the West. This turn
could in time extend beyond the
cultural sphere and strongly in-
fluence political thinking in
Poland, creating for the Warsaw
regime the problem of containing
the reorientation within bounds
compatible with Communism.
The administra-
tive and scholastic
controls imposed on
the universities by
the old regime have
been almost complete-
ly removed. The uni-
versities have been
granted the authority
to operate independ-
ently within broad
limits and to elect
their own rectors
and deans. The High-
er Education Minis-
try, shorn of its
broad authority, now
is empowered only to
draw up a budget un-
der which the sepa-
rate institutions
can work out their
own plans. Many of
its former functions
have been entrusted
to the Main Council
on Higher Education,
made up of represent-
atives of the insti-
tutions themselves.
George here has settlea this as far as the flowers are concerned,
but whom shall we appoint to do the thinking?
In recent months
$"' i
professors have 1 AUGUST I9CO t
H AL
regained their position of au-
thority in the universities.
In addition, the stern disci-
pline exercised over students
has slackened considerably.
Even before October 1956, at-
tendance at lectures on Marxism-
Leninism had ceased to be en-
forced, and Communist doctrine
was finding an increasingly
apathetic response among uni-
versity students. The Polish
writer Adam Schaff reported in
the leading party daily last
February that Marxist-Leninist
courses had been completely
abolished: "I am deeply con-
vinced," he said, "that this
is no loss for Marxism at all."
Students are being encour-
aged to work independently, par-
ticularly in the scientific
a ft! ? ~. ':
--FROM SZPILKI 7 JULY 1957
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1 August 1957
field. Seminars are favored
over lectures. Rigid planning
and excessive report require-
ments have been eliminated. In
addition, worthy graduate stu-
dents are being given assistant-
ships without regard to their
political beliefs. Fully one
half of them are provided quar-
ters in dormitories, and approx-
imately 70 percent receive schol-
arships or other monetary aid.
Young pro-Western moderate
elements are deliberately turn-
ing Marxist-Leninist revolution-
ary philosophy against the Com-
munist system in its present
form and carefully cloaking
their opposition program in
Marxist-Leninist terminology.
These rebels, banded together
in anti-Communist organizations
such as the Karl Marx Club,
take the attitude that Communism
should be fought with its own
weapons, since these are the
best known to the people today.
Religious Training
Possibly in order to have
teaching staffs able to match
the influence of the priests
now permitted to teach religion
in the schools, the regime is
stressing professional compe-
tence rather than political ac-
ceptability in its newly en-
larged program for training
teachers for the lower schools.
The pro-Gomulka weekly Polityka,
declaring on 4 May that the "lay
character of the school" must
be maintained, complained that
priests were mingling religious
instruction with natural science,
history, and "the theory of
knowledge" and thus giving these
subjects a religious cast. The
party believes that in permit-
ting religious education it has
made a sufficient concession to
Polish Catholics. It aims to
insist on the lay character of
the schools "in the full mean-
ing of the word" and to persuade
the people of the inherent fal-
sity of the religious view.
Though operating within
limitations imposed by the
regime early this year, the
Polish press is enjoying a new
independence and has even
adopted some features of the
Western press in order to break
away from the uniform drabness
that has characterized the Com-
munist papers.
Almost all periodicals,
however, except the illustrated
weeklies and the intellectual
youth periodical Po Prostu are
having serious f inanc-Uif -
ficulties resulting in part
from the withdrawal of govern-
ment subsidies. The daily
papers have raised their prices,
with the result that they have
suffered a total decline in
circulation of nearly 750,000.
The problem is serious: a
Warsaw monthly recently com-
plained, "Some newspapers...
are being reproached for turn-
ing to unhealthy sensationalism
and pornography in order to
save their circulation." Some
correspondents have had to be
dismissed, but, many purged
journalists are being reha-
bilitated and rehired by the
press.
While some censorship
still exists, polish journalists
have much greater freedom to
write as they please than be-
fore Gomulka. The weeklies,
if not the daily press, have
gained in popularity. Po
Prostu, Nowa Kultura, anWPrze-
gladKulturalny are well-known
libeera weeklies read regularly
today by people concerned with
political, social, and cultural
developments.
Po Prostu has a circula-
tion oa 153( 000, and each of
the others 70,300. Particular-
ly good guides to the current
political line are Nowe Drogi,
th party's theoretical journal;
Zeszyty Teoretyczno-Politiczne,
a 'monthly political magaz ne;
and Polityka, recently estab-
lished Goka-oriented weekly.
The illustrated weeklies Swiat
and Dookola Swiat, directed to
the man in the street, circulate
300,000 copies each. The Gromada
Roknik Rolski, a thrice-weekly -
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1 August 1957
Mr. Director, are you going to the Council of
State or to the workers' council ?
paper for rural readers, has a
circulation of 939,000. Szpilki
is a popular satirical ann --
humorous weekly with a circula-
tion of 100,000, which criti-
cizes regime policies and pokes
fun at life in Poland. Among
new publications, a monthly
statistical review has become
available--in a country in which
statistics have been closely
guarded secrets.
New radio-programing poli-
cies--in sharp contrast to those
applied in other Communist coun-
tries--have resulted in more
objective and timely news re-
porting and more popular broad-
casts. People now willingly
listen to official broadcasts,
which do not conceal even the
most bitter truths. This trend,
which began after the Geneva
summit meeting in 1955, can be
attributed in part to the fact
that since foreign broadcasts
are no longer Jammed ,the Polish
radio has been forced to provide
immediate replies to foreign
opinions and commentaries.
Cultural Exchanges
Many opportunities are now
available to Poles for study
abroad and other cultural ex-
changes, especially with the
West. Young or unorthodox (in
Communist terms) writers are
frequently permitted to travel,
a privilege until recently re-
served mainly for loyal party
members. Scientific personnel,
including architects, physicians,
meteorologists, economists,
archaeologists, and nuclear
physicists, are going to the
West, as well as to Soviet bloc
countries, in increasing numbers.
In contrast to a total of three
Polish Academy of Science members
who went to nonbloc countries in
1952, some 360 visited the West
in 1956.
Cultural groups such as the
Polish Jewish Theater are going
to the West. In addition, pure-
ly private trips to the West
for tourism or visits to rela-
tives have greatly increased.
At the same time increasing
numbers of foreigners are coming
to Poland.
The enthusiasm recently
shown in Poland for the Ameri-
can participation in the Poznan
fair and for the Cleveland Sym-
phony performances reflects a
basic friendliness for the West.
This friendliness, while in
part a reaction to the deep-
seated Polish antagonism toward
Russia, also reflects the strong
traditional attraction of the
West, especially of the French,
for Poland.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
NORTH KOREA'S STATUS IN THE BLOC
North Korea remains a
"hard-line" Soviet satellite,
untouched by the repercussions
in the rest of the Sino-Soviet
bloc of the de-Stalinization
"thaw" following the 20th party
congress, Mao's "hundred flow-
ers," and the "separate roads"
of Yugoslavia and Poland. The
Kim Il-sung regime continues to
suppress any news or commentary
which might inform Korean intel-
lectuals of liberalization de-
velopments elsewhere in the bloc.
The political orientation
of the present leadership is
Soviet rather than Chinese.
The Chinese Communists have a
voice in military matters, how-
ever, and help formulate Pyong-
yang's foreign policy in those
fields where Peiping has a
special interest.
Geographically,North Korea
acts as a buffer state protect-
ing both Soviet and Chinese
Communist borders and provides
a valuable base from which sub-
versive activities can be con-
ducted in the Far East. The
large Korean minority in Japan,
most of which is sympathetic to
Pyongyang g has been well or-
ganized to spread Communist
progaganda. It is a constant
irritant to the Japanese govern-
ment, particularly in Tokyo's
efforts to improve relations
with Seoul. In support of the
Communist objective to dominate
all of Korea, Pyongyang's prop-
aganda stresses appeals to
Korean nationalism, with the
northern regime posed as the
legitimate government of the
whole peninsula and the govern-
ment of President Rhee continu-
ally vilified as "fascist."
Political Orientation
Unlike Tito Mao or Ho Chi
Minh, Premier Kim 11-sung, who
is also party leader, was origi-
nally installed in power by the
Soviet army. Kim and the other
top leaders in Pyongyang--many
of whom have dual Soviet-Korean
citizenship--are all "hard-line"
Communists. They have never
displayed any sympathies for
"national Communism" nor ques-
tioned orthodox measures for
effecting the transition to
socialism. The regime's major
programs--land reform, concentra-
tion on heavy industrial develop-
ment, five-year planning--have
been copied from either Soviet
.~ C H I A
NORT~H~~?o
'
5M KOREA
n F'
5NG wam.n
_
ooritpY." cwM n
i` SE UL
o SO
UTH
KO
RIIIE A o .a
KWONGJU
~C? ,~.
I
34M
JAPAN
or Chinese models and undoubted-
ly were arrived at after consul-
tation with bloc advisers.
In foreign affairs, Pyong-
yang seems wholly dependent on
initiatives taken by Moscow and
Peiping. North Korea, for ex-
ample, gave prompt approval to
the Soviet proposal last Janu-
ary that both parts of Vietnam
and Korea be admitted to the
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1 August 1957
United Nations. In contrast,
Hanoi was silent on this point.
Although Pyongyang has
never openly disagreed with
Moscow, it feels free to ignore
bloc ideological issues which
might prove damaging to Korean
Worker (Communist) Party con-
trol. The cult of the individ-
ual has been referred to only
occasionally in the press, and
Stalin's personal guilt has
never been expounded, presumably
to forestall any analogies be-
tween Stalin and Kim. Unlike
Hanoi, Pyongyang did not re-
print the Chinese Communist
Party statement of 4 April 1956
which dealt with Stalin's mis-
takes, and Pyongyang never al-
luded to Khrushchev's secret
speech at the 20th party con-
gress.
Chinese Communist pro-
nouncements with a liberal
tinge, such as the official
text of Mao's "secret" February
speech, were not published in
the North Korean press. To
avoid opening a Pandora's box,
Kim I1-sung has refused to al-
low the discussion of liberal=ization measures elsewhere.
The Hungarian crisis last fall
was reported, but only after
the rest of the bloc had al-
ready commented on it. Pyong-
yang then joined the chorus de-
nouncing "Western imperialist
interference" in Hungarian in-
ternal affairs. Polish develop-
ments have been largely ignored.
Kim Il-sung probably hopes
that such censorship will dis-
courage a repetition of the
factional strife which divided
the party from the close of
World War II through 1953.
During those years, three
groups fought for control of
the party--a domestic faction
which had operated the Korean
underground, a Chinese Yenan-
trained faction, and a Soviet-
sponsored faction, which was
the most willing to subordinate
national interests to those of
the Kremlin. Kim 11-sung, lead-
er of the Soviet faction, elim-
inated his rivals in a series
of purges and since 1953 has
succeeded in tightening his con-
trol over the party apparatus.
Implicit in the party's
large membership--over 1,000,000
in a population estimated at
8,000,000--is the continuing
danger that nationalism may
reinfect the apparatus. A party
shake-up last August suggests
the presence of a more liberal
group within the party which
might in time gain considerable
support. In any event, the emer-
gence of native Korean cadres
who do not have dual Soviet
citizenship will in all likeli-
hood increase the tensions with-
in the party over the next few
years.
Economic Ties to Bloc
Although endowed with a
fair variety of natural re-
sources and geographically well
located to complement the econ-
omies of Machuria and the So-
viet Far East, North Korea has
been a doubtful economic asset
to the Communist bloc. Wartime
devastation has necessitated
major bloc aid, and the economy
is not yet completely rehabili-
tated. Never a food-surplus
region, North Korea since the
Korean war has suffered from
large grain deficits as a result
of adverse weather and an acute
manpower shortage and remains
a net importer of food.
The three-year rehabilita-
tion program, completed in 1956,
was made possible by extensive
Sino-Soviet bloc aid. Shortly
after the armistice in 1953, the
USSR extended $25,000,000 in aid
for the program, and in November
1953 Communist China agreed to
grant North Korea credits of
$325,000,000 for the years 1954-
57. Other bloc countries con-
tributed lesser amounts.
Soviet advisers supervised
the program and the USSR supplied
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1 August 1957
large amounts of industrial
equipment. The Eastern Euro-
pean satellites sent technicians
and a smaller quantity of equip-
ment. China furnished large
quantities of consumer goods
and raw materials, and the Chi-
nese army supplied a consider-
able amount of labor, particular-
ly in the reconstruction of the
transportation system. In spite
of the large Chinese contribu-
tion, Pyongyang's propaganda
has given the USSR the great
majority of the credit for its
economic rehabilitation.
The First Five-Year Plan
(1957-61) is an ambitious pro-
gram for restoring over-all in-
dustrial production to at
least the levels reached under
the Japanese and for achieving
self-sufficiency in agriculture.
After 1957, only about 10 per-
cent of the original bloc
grant-in-aid will remain to be
spent on the rehabilitation
program and no new large credits
have been announced for the
Five-Year Plan. If North Korea
is forced to underwrite its
economic development after this
year,the success of the plan
will be in doubt, particularly
since the country is deficient
in resources suitable for ex-
port.
A decline in Sino-Soviet
aid, however, is unlikely to
loosen North Korean economic
ties to the bloc. Pyongyang,
which has no diplomatic rela-
tions with free-world countries,
will continue to rely on the
bloc for technical assistance
and advice and for the bulk of
its imports.
The South Korean armed
forces constitute the largest
anti-Communist military force
in Asia. The army, with a to-
tal strength of approximately
610,000 men, is the third larg-
est in the free world. It
demonstrated physical rugged-
ness and determination to fight
during the Korean war and is
now entrenched in strong def en-
sive positions along the moun-
tainous demilitarized zone.
All combat elements are reported
combat-ready.
The army's 20 divisions
are lightly outfitted by Ameri-
can standards, however, and
much of the equipment is obso-
lete and worn out. The air force
is greatly inferior in numbers
to its North Korean counterpart,
and the navy's ships and equip-
ment are of World War II vin-
tage. Corruption is a serious
problem, especially for the
army.
Capabilities
The South Korean forces,
unaided, are capable of main-
taining internal security and
defending South Korea's bound-
aries against minor intrusions,
but they could conduct a suc-
cessful defense against a North
Korean attack for only a short
time. Obsolescent equipment
and the lack of logistical sup-
port would prevent a sustained
defense without outside assist-
ance. If Communist China joined
an assault, immediate assistance
would be needed.
Ammunition and gasoline
stocks are limited, and the
South Korean forces are depend-
ent bn the United States.. for ad-
ditional supplies. ' Threats. by
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1 August 1957
President Syngman Rhee to launch
a "march north" for the unifica-
tion of Korea are principally
propagandistic and are not sup-
ported by most South Korean
military leaders.
Despite these weaknesses,
the South Koreans at any time
could provoke a local incident
designed to reopen hostilities,
the success of which would de-
pend on the enemy reaction.
If the Communists remained on
the defensive, the fighting
If not destroyed on the ground
in the first hours of combat,
the South Korean air force
could be expected to exist as
an effective force in only the
initial phases of fighting.
The navy, with 22 patrol
vessels, including six destroyer
escorts, can do little more
than patrol its own waters.
Mine-sweeping, antiaircraft,
and antisubmarine capabilities
are limited by the obsolescence
of the equipment. Amphibious
capability is restricted to sup-
port of regimental-size opera-
tions against light to moderate
resistance. Gunfire support is
limited to three-inch guns on
patrol vessels.
SOUTH KOREAN
ARMED FORCES
ARMY
610,000 MEN
2 ARMIES
5 CORPS
20 DIVISIONS
10 RESERVE DIVISIONS
NAVY
15,000 MEN AND
26,500 MARINES (1 DIVISION)
22 PATROL VESSELS
10 MINE VESSELS -
24 AMPHIBIOUS VESSELS
14 AUXILIARIES
AIR FORCE
15,750 MEN
176 AIRCRAFT
80 F-86F JET FIGHTERS
18 C-46 PISTON TRANSPORT
16 T-33 JET TRAINERS
62 OTHER AIRCRAFT
would probably subside with
little change of position by
either side.
The offensive and defen-
sive capabilities of the air
force and navy are extremely
limited. The air force has
only a single wing of 80 F-
86F fighter-bomber jet air-
craft to oppose the 400-odd
jet fighters and 20-odd jet
bombers based in North Korea.
South Korea's only marine
division is stationed in a front-
line position along the Han
River estuary. It is believed
incapable of advancing along
the army's seaward flank during
a reconquest of all Communist-
held territory south of the 38th
parallel--a project for which
President Rhee has ordered an
operational plan made.
The South Korean army has
many shortcomings, one of the
most serious of which is in-
creasing corruption. The army
reportedly received in 1956
only 84 percent of its needed
supplies because pilferage of
railroad car parts had reduced
the number of freight cars in
service. In addition, sale of
gasoline drums on the black
market produced a critical fuel
shortage by December.
estimated in October a only
50 percent of the gasoline
shipped in Korea was reaching
its destination.
the South Korean
army could not fight a success-
ful defensive action unless
transportation and gasoline.
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CURRENT INTELLIGENCE WEEKLY SUUWARY
1 August .195.7
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shortages were overcome,
in
April that 25 percent of all
American military aid goods
was being sold illegally be-
fore reaching its destination,
The deficiency of rail-
road transportation has been
alleviated, but new problems
have arisen. The lack of funds
in the military budget has re-
sulted in the possibility that
the troops will go hungry un-
less more funds are made avail-
able. Some reports have indi-
cated that black-marketeering
of food by officers is at least
partly responsible for the prob-
lem, and that a food shortage
has prevented one reserve divi-
sion from completing its an-
nual training program. Army
headquarters is reported con-
sidering plans to furlough
large numbers of troops in or-
der to reduce food requirements.
Another problem, ,a man-
power shortage, was. eased con-
siderably last year. In the
past, draft-dodging has been
relatively easy in Korea. The
police, responsible for the
apprehension of draft dodgers,
have been prone to accept bribes.
This has made it necessary to
keep conscriptees in service
for a period considerably, longer
than the legal three-year term.
In the fall of 1956 a
full-scale program to apprehend
draft dodgers was instituted
and thousands have been induct-
ed. Conscription of students
also began this spring. As a
result, army leaders now hope
to discharge by the end of this
year 100,000 of'the 240,000 en-
listed men who have served for
more than three years. It is
questionable, however, whether
or not South Korea has the man-
power to support the existing
establishment with only a
three-year term of service.
Considerable progress was
made during,the past year in
implementing the reserve pro-
gram. The ten reserve divisions,
each of which has a nucleus of
20600. regular personnel assigned
to its training site, have be-
gun to train their assigned
reservists in regular 30-day
training programs. These re-
serve divisions are expected
to.be fully equipped with small
arms and, as funds'become avail-
able, with mortars and recoil-
less rifles, The training is
reportedly being conducted ef-
ficiently, despite the fact
that the families of many re-
servists inevitably suffer con-
siderable hardship while the
breadwinner is away.
The navy and air force
have been less. affected by cor-
ruption than the army, probably
because these services are re-
garded as elite corps, In 1956,
however, the four escort ves-
sels making the annual midship-
men's cruise hurried home ahead
of schedule loaded with luxury
goods purchased in Hong Kong
for sale on the black market.
The South Korean. services
suffer from materiel shortages.
Artillery ammunition for train-
ing purposes is in short sup-
ply, and the air force still
needs more T-33 jet trainers.
In addition, World War II-type
vehicles and signal equipment
are wearing out and replacement
parts are unavailable.
A number of South Korean
officers believe the best solu-
tion for many of the problems
of the armed forces would be to
reduce the size of the standing
military establishment and in-
crease the reserve. In this
way, the remaining troops could
be better equipped and fed, the
military budget reduced, and
striking power augmented. In
addition, such a step would per-
mit a pay increase, thereby
eliminating one of the basic
causes of corruption within the
armed forces.
President Rhee, however,
intent on maintaining the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
maximum possible combat strength
in preparation for a "march
north," has so far refused to
listen to proposals for a re-
duction in the size of the
services. He will probably
maintain this view unless con-
vinced that combat efficiency
would be increased rather than
decreased by a personnel cut.
Morale and Leadership
The morale and leadership
of the South Korean armed forces
have shown some improvement
during the past year. A sharp
increase in the number of de-
fections to North Korea, which
caused considerable alarm a
year ago, has been reversed.
Nevertheless, basic discontent
with the Rhee administration
remains strong at many levels
within the services. Morale
may suffer if high-ranking of-
ficers attempt to repeat the
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practice during last year's
presidential election and swing
the army vote to the Liberal
Party during next year's Na-
tional Assembly elections.
Factionalism within the
services has declined for the
time being following the recent
transfer from key positions of
Generals Chong Il-kwon and Yi
Hyong-kun, the two principal
rivals for power. The other
full general on active duty,
Paek Son-yop, is now army chief
of staff. So far, he has not
attempted a major reshuffle of
the army high command. The re-
cently announced appointment
of the former air force chief
of staff, Lt. Gen. Kim Chung-
yul, as minister of defense
may also inhibit the develop-
ment of factionalism in view
of Kim's relative freedom from
such associations.
In the 12 months the Com-
munists have held office in
Iceland's coalition government,
they have been gradually en-
trenching themselves in govern-
ment agencies--particularly in
those controlling the economic
life of the country. Iceland's
foreign trade continues to shift
toward the Soviet bloc, and the
Conservative opposition is being
steadily weakened. Although
the Communists have suffered
some losses in the trade unions,
there are no signs of an immi-
nent breakup of the Progressive-
Social Democratic-Labor Alliance
coalition cabinet.
The Communist-dominated
Labor Alliance entered the gov-
ernment in late July 1956 fol-
lowing the general election of
24 June which left it holding
the parliamentary balance be-
tween the Progressive-Social
Democratic electoral alliance
and the Conservative Party.
Protracted bargaining gave the
Labor Alliance two cabinet
posts--the Ministry of Social
Affairs and the Ministry of
Fisheries and Trade--in a coali-
tion headed by Prime Minister
Hermann Jonasson, the leader of
the largely agrarian Progressive
Party, and including the So-
cial Democrats.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
The coalition has endured,
despite some strains and fre-
quent rumors of impending rup-
ture, because each party has
been primarily intent on enjoy-
ing the, fruits of office. The
Communists have been content
to concentrate for the time
being on entrenching themselves
in the government, leaving
foreign policy as such to the
other parties. In December,
for example, they tacitly ac-
cepted a revised agreement with
the United States discontinuing
discussions on the withdrawal
of American forces from the
NATO air base at Keflavik,
though the party had for years
demanded the total expulsion
of American forces from Iceland.
Communist Gains
This tactic of the Com-
munists has paid off in a con-
siderable extension of influ-
ence within the government and
over the economy of the coun-
try. Through the allocation
of patronage among the parties,
they have obtained directorates
on the boards of the three gov-
ernment banks.
The Communists have ex-
ploited their control of the
Fisheries Ministry, which has
extensive powers over the is-
land's chief industry and, by
Icelandic practice, is semi-
autonomous. The Communist
minister has indirectly in-
jected himself into foreign
policy by calling for an ex-
tension of territorial waters,
a popular cause'among the high-
ly nationalistic Icelanders
and the subject of a long-
standing dispute with Britain,
The success of the coa-
lition government in obtain-
ing, foreign assistance for
its economic' development
schemes has augmented its
prestige and consequently that
of the Communists. In the
last year, Iceland obtained
three loans from the United
States totaling $11,000,000.
The Soviet government recently
offered a general loan amount-
ing to $25,000,000 for 20 years
at 2 percent, as well as a 15-
year loan of $1,000,000 for
refinancing the purchase of 15
fishing vessels from East Ger-
many. If these loans material-
ize, the position of the Com-
munists will be still further
enhanced.
As a result of continuing
internal differences on the
advisability of the coalition
with the Communists, the So-
cial Democrats are weak. The
more formidable Conservative
Party, despite efforts to re-
verse the trend, has been re-
duced in influence by a number
of the same developments which
ICELANDIC PARLIAMENT
24 PJW 1956
have strengthened the Commu-
nists. The new fiscal and
banking legislation. reduces
the economic power of the busi-
nessman-entrepreneur element,
and various members of the
Conservative Party are being
gradually squeezed out of their
government posts. Foreign
loans have undercut the Con-
servatives' argument that a
government with Communist mem-
bers cannot expect economic
assistance from non-Communist
sources.
Communist Difficulties
Communist leaders have at
the same time had some trouble
in holding their rank and file
in line. The Hungarian revolt
made a strong impact on the
normally isolationist Icelander
and resulted in some party dis-
content with the dominant Mos-
cow faction.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
A more serious difficulty
is the unpopularity in trade
union circles of the wage re-
straint policy adopted by the
coalition government in its
effort to arrest Iceland's in-
flationary spiral. Since Com-
munist leaders in the unions
have been obliged to forego
their usual practice of spear-
heading the drive for higher
wages, they have suffered seri-
ous losses to Conservative-
Social Democratic coalitions
in a number of union elections
during the first half of 1957.
The Conservatives have sought
to alienate labor from the gov-
ernment by prolonging the
shipping strike, now in its
seventh week, in the hope that
the government would be obliged
.to resort to compulsory arbi-
tration.
Communist control of the
Labor Alliance is being chal-
lenged by Hannibal Valdimarsson,
the renegade Social Democrat
who holds one of the
Labor Alliance's
two cabinet posts
and heads the Com-
munist-dominated
Icelandic Federation
of Labor. Fearing
his ouster from the
latter post as a re-
sult of Communist
losses in the union
elections, Valdi-
marsson--so-far with-
out success--is rej-
portedly trying to
convert the Labor
Alliance into a new
left-wing party,
consisting of nob-
Moscow Communists
and splinter groups
from the Social
landic Labor Party." This new
organization would replace both
the Labor Alliance and the ex-
isting Communist party and
would aim at retaining the
backing of the non-Communist
voters in the Labor Alliance-
and ultimately becoming the
country's sole left-wing party.
With increasing influence
over Iceland's national policy,
the Communists'. first objective
would probably be to orient
the country's economy even
further toward the Soviet bloc.
Growing trade with the bloc
and financial assistance from
the USSR would greatly reduce
the economic importance of the
dollar earnings of the Keflavik
base, which will be approxi-
mately $11,000,000 in 1957.
This in turn would put the Com-
munists in a much stronger
position to press for execution
of their demand for American
troop withdrawal in line with
0L
1951
(JAN -APRIL
70725
Democratic and Progressive
Parties, under his leadership.
Communist Plans
To checkmate Valdimarsson
and to offset their losses in
the unions, the Communists are
reported preparing to found a
new political party, the "Ice-
the parliamentary resolution
of 28 March 1956.
Under the agreement of
December 1956, there is some
doubt as to whether Iceland
is still legally bound to con-
sult NATO before calling for
resumption of the "discontin-
ued" negotiations for withdrawal.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 August 1957
It can be argued that the re-
sponsibility for evaluating
the international situation and
the defense needs of Iceland
has been transferred primarily
from the North Atlantic Council
to an American-Icelandic joint
defense board. This board has
not yet been convoked.
Iceland's foreign trade
continues to shift toward the
Soviet bloc. By 1956 the coun-
try was obtaining 26.4 percent
of its imports from the bloc
and sending 30 percent of its
exports there. In the first
four months of 1957, with a
slightly lower volume of trade,
these proportions rose to 34
and 35 percent respectively.
Iceland now obtains most of its
petroleum, much lumber, and a
wide variety of metal goods
and manufactured products from
the bloc, and sends about 70
percent of its frozen fish and
about half its salted herring
to bloc markets. Icelandic
fish are being priced out of
nonorbit markets.
Iceland's economic depend-
ence on the Soviet bloc is al-
ready of sizable proportions.
Extensive loans from the USSR,
now under consideration, would
still more firmly tie the Ice-
landic economy to the bloc and
enable the USSR to exercise
considerable influence, direct
or indirect, on the Icelandic
economy and the policies of
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[concurred in by ORR)
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