CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001800080001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 42
• Document Creation Date: December 20, 2016
• Document Release Date: December 6, 2005
• Sequence Number: 1
• Publication Date: October 27, 1999
• Content Type: SUMMARY

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CONFIDENTIAL
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 50
OCI NO. 1799/58
24 July 1958
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AUTH:ti,70
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
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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,OJT
CONE DENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
OF IMMEDIATE INTEREST
MIDDLE EAST DEVELOPMENTS
Political activity in Leb-
anon is reviving. Speaker of
Parliament Usayran professes
to be confident that a quorum
will be on hand for the presi-
dential election session he
called for 31 July after cancel-
ing the session scheduled for
24 July. Opposition leaders,
although they are still insist-
ing they will not participate
in any election until American
troops have been withdrawn from
the country, are considering
candidates. The leading con-
tender in the opposition's mind
appears to be Yusuf Hitti, a
nonentity who presumably would
be easy for the pro-Nasir ele-
ments to manage. President
Chamoun is putting forward simi-
lar candidates on his side--
Jawad Bulus, a respected Maro-
nite savant who seems to have
a number of supporters but lit-
tle influence, and Alfred Naq-
qash, a 70-year-old former
foreign minister. General Shi-
hab is no longer being seriously
considered by the civilians, al-
though some army officers still
hope for a coup to put him in.
Rebel military activity,
which dropped off sharply when
the American forces arrived,
shows signs of resuming its us-
ual pattern. Kamil Jumblatt's
Druze rebels are again moving
on the Beirut-Damascus road,
courtesy of the army which has
vacated positions opposing them,
and reports of larger scale in-
filtration from Syria are again
being received. There has been
no indication of a rebel inten-
tion to attack the American
forces, although sniping at
American aircraft continues.
As tight a security lid as
King Husayn's government can
forge has been placed on Jordan,
but officials still fear the
outbreak of disorders or a coup
attempt. Disturbances seem par-
ticularly likely to occur in
West Jordan if the Western pow-
ers appear to be becoming rec-
onciled to the new Iraqi regime.
Husayn and Prime Minister Rifai
have stopped pressing for Ameri-
can troops to join the British
forces in Jordan, although they
would still like to have them.
Rifai's latest concern is Jor-
dan's isolation from interna-
tional air traffic, which oc- 25X1
curred when the UAR banned the 25X1
craft over its territory.
Iraq
The new regime in Baghdad
has further consolidated its
position. Reports from the
provinces this week indicate
that there was very little if
any opposition anywhere to the
coup, although the middle class
generally has adopted a "wait-
and-see" attitude. Public serv-
ices and communications have
been restored throughout the
country, the curfew period in
Baghdad has been abbreviated,
and the border with Syria has
been opened, although others
remain closed. Officials of the
regime have continued to pre-
sent an appearance of friendli-
ness toward the West and have
reiterated assurances that they
will respect existing oil agree-
ments, although they do wish
ww"Ver
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
to renegotiate them in due
course.
Behind the facade of calm
and friendly assurances, how-
ever, the Iraqis have clearly
been fearful, of Western inter-
vention against them and have
sought Nasir's full support. On
19 July an Iraqi delegation head-
ed by Colonel Arif, deputy prime
minister and possibly the
"strong man" of the regime,
signed an alliance treaty with
Nasir in Damascus.
It is also clear that the
Iraqi regime intends to follow
Nasir's policy, even if it does
not actually join the UAR. Colo-
nel Arif, who does most of the
speaking for the regime, has of-
ficially defined the new course
MEDITERRANEAN
SEA Kabul
LEBANON/
SEA
SUDAN
i
?sa~a
YEMEN
against the new look
in Baghdad. His trip
to Moscow and a private
UAR propaganda line
that the purpose of this
trip was to persuade
the Kremlin not to in-
tervene in the Middle
East were almost cer-
tainly aimed in part
at frightening the
West. UAR officials
are evidently fearful
nevertheless that they
may find themselves at
war With the West, and
military preparations
have been hastened in
both Egypt and Syria
against such an even-
tuality. Emphasis has
been placed on antiair-
craft defenses ; ships
loaded with cement are
reported in position in
the Suez 'Canal; and
the ports of both
countries have been
closed during the
night. Much of
the defense activ-
ity is ostentatious,
CASPIAN
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OF I MIQEDI ATE INTEREST Page 2 of 8
in Baghdad as "positive neutral-
ity,"'aid the Iraqi statement
welcoming Soviet recognition
"emphasized" the Iraqis' desire
for the further development of
relations with the USSR. One
of the first practical forms
this emphasis is likely to as-
sume is an invitation to bloc
suppliers and contractors to
bid on Iraqi development proj-
ectl3a Invitations were previ-
ously restricted to Western
bidders; the new regime has al-
ready canceled a, contract
awarded an American firm for a
sulfur plant.
Nasir's top priority proj-
ect this week has been to ward
off any Western intervention
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24 July 19 58
and may be designed to reassure
the populace, particularly in
Egypt, of the UAR's ability to
meet hostile attack. At the
same time, however, Nasir and
UAR agents have been active in
seeking to exploit other periph-
eral situations to undermine
the Western position in the
area.
The Ruler of oil-rich Ku-
wait, who has been in Damascus
on vacation, had two interviews
with Nasir this week, and is
reported to have assured the
UAR leader of his good will,
citing the fact that he had re-
sisted efforts to bring him in-
to the Iraqi-Jordanian union.
While there is no confirmation
of Syrian press assertions that
Kuwait may soon join the UAR,
public sentiment in Kuwait fa-
vors such a move, and the Ruler
might do so if only to use
Nasir for protection against
the revolutionary Iraqis.
In the Sudan, pro-Western-
Prime Minister Khalil is facing
discord within his own party
and increased activity by the
opposition, partly at least
Egyptian-inspired. A unanimous
vote by the Sudanese Senate on
23 July condemning American
landings in Lebanon and the
British action in Jordan sug-
gests that Khalil may be losing
his hold over even his own fol-
lowers.
The Saudi Government,
fearful that the revolutionary
surge may engulf it along with 25X6
Iraq, is pursuing an open policy
Israel
The Israeli Government re-
mains alert to possible dangers
to it in the Middle East
situation, but has not yet mo-
bilized reservists other than
those probably needed to plan
more general action. Tel Aviv,
concerned that its acquiescence
in the British airlift to Jordan
will serve to identify it fur-
ther as a tool of imperialism
in the minds Of neutralist Asian
and African nations, is protest-
ing vigorously against the con-
tinuation of the operation.
The Israelis are redoubling their
efforts to obtain promises of
Western support and materiel.
Foreign Minister Meir is now on
a mission to Western Europe for
that purpose.
SINO-SOVIET AND FREE-WORLD REACTIONS TO MIDDLE EAST CRISIS
Soviet Premier Khrushchev's I lomatic and propaganda campaign
ostensibly favorable reply to
American and British proposals
for a UN Security Council ses-
sion at the heads-of -government
level is designed to maintain
the momentum of the bloc's dip-
to exploit Arab-Asian opposition
to Western policies in the Mid-
dle East. The Soviet response
attempts to construe the Western
letters as acceptance of Khru-
shchev's 19 July proposals and
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24 July 1958
is deliberately ambiguous as to
the agenda, participants, and
procedure of such a meeting so
as to maintain maximum freedom
of maneuver. Moscow's aim ap-
parently is to ensure that all
the important discussions will
be conducted in a Security Coun-
cil subcommittee composed of the
Big Four and India plus repre-
sentatives bf "interested Arab
states."
The Soviet summit call
highlights a concerted bloc cam-
paign to extract maximum diplo-
matic and propaganda benefit
from the Western landings in
Lebanon and Jordan and to in
hibit additional Western mili-
tary moves against the "Arab
liberation movement." Moscow
moved promptly to establish dip-
lomatic relations with the new
Iraqi Government and to extend
its diplomatic and propaganda
support. Bloc embassy officials
in various world capitals pri-
vately have pressed the line
that the USSR is not particular-
ly concerned by Western troops
in Lebanon and Jordan, but that
any military move against-Iraq,
either alone or in concert with
Baghdad Pact countries, will
provoke "serious" but unspeci-
fied Soviet counteraction.
the Soviet chargd in Ankara
that Turkey "will refrain from
taking any steps which might in-
crease tension." This appears
to be part of a coordinated ef-
fort to reinforce psychological
pressures on Western and neutral
countries as to dangers inherent
in the Western moves.
Although the Arab press
has yeported Soviet assurances
of "volunteers" in the event of
Western military action against
the UAR or Iraq, Moscow has not
played up this possibility in
the present crisis. Moscow ra-
dio has devoted more attention
to present Middle Eastern de-
velopments than to any other
international matter in the
whole post-Stalin period. Mos-
cow propaganda does not reflect
concern that Soviet security
has been threatened by the land-
ings in Lebanon and Jordan, al-
though frequent reference is
made to the dangers of "world
conflagration" which might arise
from a continuation of Western
aggressive moves in the area.
Massive "popular demonstra-
tions" throughout the bloc and
the Soviet Aviation Day speeches
of Marshals Malinovsky and Ver-
shinin on 20 July were designed
to reinforce the false sense of
crisis contained in the Khru-
shchev summit letters.
Neither Moscow nor Cairo
has released the substance of
the secret Khrushchev-Nasir
consultations held in Moscow
on 16-17 July, but Khrushchev
at the Polish Embassy reception
on 22 July stated that he and
Nasir reached "an identity of
views." Nasir's brief public
account of the talks and press
accounts originating from Da-
mascus and Cairo reinforce the
popular image of close Soviet-
UAR collaboration.
Soviet maneuvers in the UN
have been designed to mobilize
world-wide opposition to recent
American amd British action in
the Middle East and to forestall
additional Western military
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
moves. Soviet UN delegate A. A.
Sobolev on 22 July, following
Security Council rejection of
Soviet amendments, vetoed the
watered-down Japanese resolution
to strengthen the UN Observation
Group in Lebanon, suggesting
Moscow is more interested in
keeping the issue alive before
the UN than in gaining early
withdrawal of American troops
from Lebanon.
On 19 July,Sobolev vetoed
the American proposal for send-
ing a UN emergency force to Leb-
anon in line with Moscow's long-
standing opposition to such UN
forces. The 18 July Soviet pro-
posal for calling a special ses-
sion of the General Assembly
was not voted on
Moscow wou
hold off pressing or an immedi-
ate assembly meeting pending
Western response to Soviet pro-
posals for a summit meeting.
Peiping's Reaction
Since 17 July, the day
after the Western intervention,
Communist China's press and ra-
dio lave devoted almost exclu-
sive attention to the situation,
and Peiping has joined Moscow
in a massive propaganda counter-
attack against the West's "ag-
gression." Mass protest rallies
were held from 17 to 21 July
throughout the mainland surpass-
ing those held during the Suez
crisis; Peiping claimed on 21
July that some 21,000,000 Chi-
nese had participated in demon-
strations.
There are still no signs
that Peiping is considering any
kind of major military diversion
in the Far East. Chinese Com-
munist efforts, like those of
Moscow, have been aimed chiefly
at limiting and containing West-
ern intervention, while whipping
up world opinion in opposition
to the West.
Apparently confident that
diplomacy and propaganda. can
bring about a disaster for the
West, Peiping has made no direct
mention of "volunteers" nor has
it indicated any intention to
intervene directly under present
circumstances.
Free-world opinion has
rapidly accepted the fact that
the next approach to the Middle
East problem will be through a
summit conference under UN aus-
pices. Many countries neverthe-
less harbor deep misgivings,
fearing that the meeting will
not produce any progress toward
a solution, and several nations
not now members of the Security
Council are pleading their cases
for inclusion in the discussions.
The Asian Baghdad Pact
powers are especially skeptical
of the meeting's ability to
achieve a satisfactory solution.
Other Asian countries, such as
Ceylon and Indonesia, will feel
that they have less opportunity
to be heard than in a General
Assembly session.
Those most directly con-
cerned with the Middle East are
anxiously: awaiting clarification
as to which Arab countries
Khrushchev referred to in
his note of 23 July. Nasir has
indicated a desire to come to
New York, and all other Arab
countries will probably also
wish to be represented. Both
Israel and Turkey feel they
should attend any Middle East
meeting, raising the possibility
that Iran and Pakistan may also
put in their bids. Recrimina-
tions from rejected countries
will be directed toward those
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 19 58
powers responsible for the se-
lection.
North Atlantic Council
discussions have brought out
differences among NATO allies
as to the objectives of a
summit meeting. At a 23 July
meeting, the German repre-
sentative, supported by the
French, Italians, Dutch, Turks,
and Belgians, expressed deep
concern lest the discussions
with the Soviet Union be
broadened to cover long-range
Middle East problems. They
did not appear satisfied
with the British statement
that only the pending immedi-
ate problems of Jordan and
Lebanon would be discussed,
with broader questions neces-
sarily awaiting more extensive
Western consultation.
UN Secretary General Ham-
marskjold takes the posi-
tion that his previous terms
of reference are sufficient
for the time being to enable
him to proceed legally despite
the Soviet veto of the Japa-
nese resolution. He plans to
retain political control of
the enlarged group himself.
Despite his previous reluctance,
the secretary general now ap-
pears willing to set up a force
as large as necessary to con-
trol the situation.
Meanwhile, additional na-
tions are recognizing the new
Iraqi regime. Sino-Soviet bloc
countries have all recognized
Iraq. With India's recognition
on 23 July, the number of Asian
and African nations following
suit is expected to increase
materially. Indonesia, the Su-
dan, and Tunisia took the step
prior to India. Since West Ger-
many also appears to favor rec-
ognition, a general movement in
this direction may develop soon
in Western Europe.
Western Europe
Both France and Germany seem
apprehensive lest too- close a con-
nection with the Anglo-American
intervention hurt their own stand-
ing with the Arabs. Bonn wishes
to maintain its economic interests
and preserve its political neu-
trality in the Middle East. The
De Gaulle government fears the in-
tervention may have harmful reper
cussions in North Africa, and Paris
now seems anxious to avoid joining
in the intervention. Although De
Gaulle appears to agree with a
Foreign Ministry group that has
been urging that the close French-
Israeli diplomatic and military
contacts be played down, a stand-
ing agreement with Tel Aviv for a
French landing in Israel in cer-
tain circumstances may already e,dst.
Among Western European de-
mocracies, the Netherlands Govern-
ment has offered the firmest sup-
port of the intervention. Austria,
while privately approving, has
stated it.will p-erndt no more military
overflights of its territory for
the present. Sweden failed to
persuade Norway and Denmark to
take a joint approach in urging
Western acceptance of Khrushchev's
call for summit talks. Of NATO
members, only Canada called for a
"positive" response.
Latin America
Official reactions to the
Middle Eastern events have ranged
from full support of the US posi-
tion by most of the smaller coun-
tries to only very tentative sup-
port by Mexico.
There is serious concern
among some that the t1UN may
be weakened by what the
Mexican foreign minister re-
ferred to as the threat
of a return to "unilateral
action by the great pow-
ers." Others fear being
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
put into a-position of oppos-
ing what they regard as the
justified aspirations of Arab
unity and nationalism. Public
opinion has been less favorable
to the US position, with left-
ists and Communists strongly
condemning the "brutal and im-
perialistic" US moves in Leba-
non. Communist-inspired anti-
US riots have twice erupted
in the Argentine capital, and 25X1
on 20 : July :at an election
rally, Communists in Chile pro-
tested the US action.
BRITAIN'S MOVES :IN THE ;MIDDLE ;EAST
The gradual but steady con-
centration of British forces in
the Mediterranean, Arabian pen-
insula, and Indian Ocean areas
appears designed to enable Brit-
ain to retain control through-
out the Persian Gulf area and
particularly to safeguard the
vital Kuwait oil supply. The
British will probably not oc-
cupy Kuwait's oil installations
against the wishes of the Ku-
waiti authorities unless trou-
ble develops.
The populace in Kuwait has
welcomed the Iraqi coup, but
authorities have told Brit-Ain
they can maintain order and
would consider occupation of
the airfield premature at this
time. If a quick airdrop be-
comes necessary, a paratroop
battalion is available on Cyprus.
In the event of overflight prob-
lems, infantry units would have
to be sent by sea from Bahrein.
A British official in Kuwait
claims troops could be there
in six hours.
No animosity or discrimination
has been shown to Americans or
the British so far, but the Amer-
ican Consulate expects trouble,
as the reformist nationalists
have been ominously silent.
In contrast to Kuwait, the
Ruler of Bahrein has agreed to
receive British reinforcements,
and a battalion has already ar-
rived. A destroyer en route
to Bahrein will i augment ? the
normal patrol vessels in the
Persian Gulf.
The British were also con-
cerned about possible disturb-
ances in Qatar, where sabotage
occurred during the Suez crisis,
and sent a frigate with a land-
ing party aboard to stand by.
The frigate returned to Bahrein
when the strike of native oil
workers was settled without in-
cident on 21 July.
Libya
In order to protect and if
necessary evacuate the King of
Libya,
The British political agent
appears to have developed a
good working relationship with
Acting Ruler Abdullah Mubarrak.
The British had previously sup-
ported Mubarrak for:the succes-
sion and might try to work out
some deal with him if the Ruler
should move closer to Nasir.
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the British dispatched
a marine commando unit to Tobruk,
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The British in Aden are
preparing for increased Yemeni
agitation. The Anglo-Yemeni
talks in Ethiopia on 14 July
produced reasonably friendly
discussion but no agreements.
Britain has declared it will
extend both economic and mili-
tary aid to the prospective fed-
eration of Aden principalities
and may specify details in talks
planned shortly between the
rulers and the governor of Aden.
Meanwhile, preventive aerial
reconnaissance of Yemeni terri-
tory has increased.
London has indicated it
will increase both its eco-
nomic and military aid to the
Sultan of Muscat beyond that
originally planned
There have been indications
for some time of a prospective
increase in Omani rebel activi-
ty.
Jordan
In an effort to minimize
friction, the 1,700 to 1,800
troops are confined mostly to
the Amman airfield. Forces are
being supplied via overflights
of Israel--high and at night,
at Israeli request--but London
is urgently attempting to or-
ganize shipments through the
Suez Canal. The War Office has
declined to specify London's
next move should Nasir refuse
permission to use the canal.
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CON- IDENTIAL
CURRENT INtELLIGENCE WEEKLY BII MY
24 July 1958
NOTES AND COMMENTS
MIDDLE EAST OIL SITUATION
Iraq
The Iraqi regime's assur-
ances to the West that the flow
of oil will not be interrupted
are probably aimed at discour-
aging Western intervention. As
a result of the confusion, how-
ever, tankers initially were
stopped from proceeding up the
Shatt al Arab River to the Iraqi
ports of Fao and Basra. A few
tanker diversions to other ports
did occur, but the situation
now is normal. Shipments of
Iraqi oil to Jordan, which began
just before the coup, have been
halted, thus stranding in Iraq
about half of Jordan's tank
trucks.
Iraqi cooperation with the
UAR on oil matters has already
begun.
Officials
of the rebel
regime
reportedly
consulted with
Nasir
in Damascus
on
18-19
July
regarding
plans
to
build
Syria.
a new pipea.ine.through
MEDI TERRA NE A N Tripoli
LEBANON;
AAerandRa -
,Fort Said ba y
UVN~4IT
.: dOWAIT
Banryas~
'Aleppo"
S Y R
Oil continues to flow from
Kuwait, the Middle East's larg-
est producer, at a record rate
of nearly 1,600,000 barrels a
day, and there are no indications
that the flow will be halted.
However, riots, strikes, and
sabotage are possible. Over
half the approximately 200,000
inhabitants of Kuwait come from
Arab Palestine, Iraq, Syria, and
Egypt. These elements are pre-
dominantly responsive to Nasir's
brand of revolutionary national-
ism, as are many of the remain-
ing 100,000 Kuwaitis.
Commenting on widespread
reports that Kuwait would soon
join the UAR, an official Syrian
spokesman stated that "no formal
decision has been taken thus far"
but that the UAR welcomes the Ku-
waiti people to "join the caravan
of liberated Arab nationalism."
The Ruler of Kuwait, who was
visiting Damascus when the Iraqi
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24 July 1958
coup occurred, met with Nasir
there this week.
Saudi Arabia's denial of
overflight permission to US air-
craft for an airlift of products
from the Bahrein refinery to
Jordan derives from Crown Prince
Faysal's policy of seeking an
The Saudi Council of Minis-
ters--a body headed by Faysal--
has just issued a decree an-
nouncing that the 44,000-square-
mile "preferential area" west
of the Aramco concession and
encompassing the city of Riyadh
will be broken up and given out
to possibly as many as ten dif-
ferent companies. The Royal
Council apparently does not in-
tend to honor its contractual
agreement with Aramco guarantee-
ing the company what amounts to
a first refusal on this area.
Bahrein is a relatively
large supplier of military POL
requirements for both British
and American military units,
although it is not an important
oil producer by Middle Eastern
standards and accounts for only
about 37,500 barrels a day--
less than 1 percent of produc-
tion in the area. Bahrein has
a major refinery with a capacity
of 211,000 barrels of crude a
day and cracking facilities for
43,320 barrels a day.
American refinery officials
on British-controlled Bahrein
fear there is an even chance of
a strike, since the refinery em-
ploys about 1,000 Iraqi Arabs
plus numerous other pro-Nasir
groups. During the Suez crisis,
acts of sabotage did occur at
the refinery. The Ruler of
Bahrein, the British political
agent, and the American refinery
manager all feel that sabotage
is inevitable without heavy
guard. It is doubtful, however,
whether a heavy guard could pre-
vent violence.
The present crisis has had
no effect on Iranian production
or transportation of oil, and
the Tehran government is unlike-
ly to take any action which
would either halt or reduce the
flow of its oil to the West.
The major oil terminal and re-
finery area of Abadan has been
heavily reinforced by Iranian
troops, and travel in the area
has been restricted. Friction
is said to be developing between
the thousands of Arabs employed
locally and the Iranians, and
Arab- or Communist-directed vio-
lence may develop.
Preparation for Sabotage
Iraq and the UAR have made
preparations for denying oil to
the West. Two old barges have
been towed by the Iraqi regime
to the Iraqi port of Fao at the
mouth of the Shatt al Arab River,
which forms part of the Iraq-
Iran border. These barges if
sunk would block the river
channel, effectively denying
oil tanker transit not only to
the Iraqi ports of Fao and Basra
but to the Iranian oil terminals
of Abadan and Khorramshahr as
well. Cairo is said to have
moved at least two cement-loaded
block ships into position in
the Suez Canal. Explosive
charges have long been in place
along the Iraqi and Saudi pipe-
lines which pass through Syria,
but it is not believed Nasir
will destroy them unless
his position worsens con-
siderably.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
Prospects
With the exception of Iran,
all of the major Middle Eastern
oil-producing countries now
have indicated some degree of
responsiveness to Nasir's influ-
ence. While Iraq has assured
the West that oil will continue
to flow, it has declared its ad-
herence to Nasir's brand of na-
tionalism and has announced its
intention to seek renegotiation
of IPC's concession agreement.
Even the conservative and pro-
Western regime of the late Nurd
Said of Iraq, however, was be-
ginning to pressure the IPC for
substantial changes in the com-
pany's concession area and a
change in the profit split toward
the newly established 75-25
Iranian pattern.
The Rulor of Kuwait, who
is still in Syria, may have come
to some form of working arrange-
ment with Nasir during his two
meetings with him there, although
the Ruler's. main concern is prob-
ably to protect his own income.
Before he went to Damascus, he
had been urging an accommoda-
tion with Cairo as the only
practical course. In Saudi
Arabia, the recent developments
make clear that future oil poli- 25X1
cy will be determined with one
eye directed toward Cairo.
25X1
GENEVA TECHNICAL CONFERENCE ON TEST DETECTION
The Soviet delegation to
the Geneva technical conference
appears to be seeking a wide
enough measure to agreement to
handicap the West in insisting
on more extensive inspection
measures and bring pressure to
bear on Britain and the United
States to halt tests. In pur-
suit of this objective, the
Soviet delegation has conceded
that limited flights by air-
craft to collect samples of nu-
clear debris could be made under
certain circumstances over So-
viet and US territory.
The Soviet delegates aban-
doned their insistence that
surface stations alone be used
to collect nuclear debris and
agreed to the use of aircraft
over oceans and, if a test alert
resulted from other detection
techniques,. over Soviet and
American territory. Soviet
delegates have also hinted at
agreeing to mobile ground in-
spection after a test alert at
the option of an international
control body.
At an informal meeting on
17 July, Soviet delegates made
a strong bid for concluding a
unanimous agreement on a control
system and thereby avoiding an
intergovernmental dispute. They
argued that this was possible
if the West did not make too
extensive demands for inspec-
tion. The Soviet delegates
claimed that an elaborate inspec-
tion system that could guarantee
a high probability of detection
was unnecessary because no coun-
try would undertake nuclear tests
if there were any real likelihood
of detection. They suggested
that a minimal control system
could be established initially
which-could be expanded when
more highly developed detection
techniques were perfected. The
delegation appears interested
in getting agreement on the out-
line of an inspection system
without much consideration of
its details, an approach that
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
could exaggerate the amount of
agreement that had actually been
reached. The Soviet delegation
has not presented as much scien-
tific evidence for its proposals
as have the Western scientists.
The conference has reached
agreement on acoustic and nu-
clear debris sampling methods
of detection, but some differ-
ences still remain on seismic
and electromagnetic methods.
While the scope of inspec-
tion that Moscow might agree to
will not be clear until there
is a comprehensive discussion of
control systems, the scientific
papers thus far presented by
bloc scientists at Geneva are
designed to prove that a suffi-
cient degree of inspection can
be achieved with a modest inspec-
tion system. A remark by one
Soviet delegate that it will be
difficult to complete the con-
ference before 6 August suggests
that the USSR does not plan any
abrupt break in talks after the
30 days it originally specified
for the conference have elapsed.
OSI)
(Concurred in by 25X1
According to present pros-
pects, the USSR will have a bump-
er harvest this fall--possibly
the largest in Soviet history.
Favorable weather, following a
late, cool spring, has prevailed
thus far in most of the new
lands and in the traditional
growing areas. The American
Embassy comments it has become
increasingly apparent in re-
cent weeks that if favorable
weather continues, a record crop
could be harvested this year.
Khrushchev, in his 17 June
report to the central committee
on agricultural procurement, in-
dicated that prospects were
good for most crops, and Minis-
ter of Agriculture Matskevich
said that as of 10 July the con-
dition of grain crops was good
almost everywhere, except for
some districts in the Urals and
western and northern Kazakhstan.
A Gosplan official recently told
an American delegation of agri-
cultural economists that the
grain harvest would exceed that
of 1956, the best year thus far.
In 1956, harvest losses
caused by both rainy weather
during the harvest season and by
inadequate transportation and
storage facilities were high in
the new lands area. Storage
facilities have been substan-
tially expanded since that time.
A bumper grain harvest this
year would enable the USSR to
increase its exports to non-
bloc countries and to the Euro-
pean satellites, especially in
the south, where prospects are
for a small-grain harvest some-
what below average. Although
serious floods may be developing
in China, Peiping will probably
not receive agricultural prod-
ucts from the USSR. The flow
of agricultural products has
been traditionally from China
to the USSR.
A bumper harvest would
also aid in the drive to catch
up with the United States in
meat and milk production. Milk
production may increase suffi-
ciently in 1958 for the USSR to
claim to have caught up with or
even to have surpassed the
United States in total produc-
tion. In 1957 the USSR claimed
to have produced 95 percent as
much milk as the US; a more ac-
curate comparison, however,
would probably put Soviet milk
production closer to 85 percent
of that of the United States.
(Prepared by ORR) 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
Peiping's "rectification"
campaign, which is the regime's
systematic program for refining
Communist cadres to the point
where they are capable of reg-
imenting the populace without
provoking antiregime sentiments,
is "nearing conclusion" in cen-
tral government departments.
Rectification in these depart-
ments has been'the pilot for the
over-all `campaign, and last
week's announcement that 90 per-
cent of them will conclude their
drives by the end of July sug-
gests that Peiping expects to
wind up rectification in all are-
as,by fall. The campaign for
the past several months has been
directed toward drumming up pop-
ular enthusiasm for the regime's
all-out production effort, and
the Chinese Communist party con-
tinues to avoid the crude and
repressive measures used in na-
tional campaigns during 1950-54.
During the present cam-
paign, the regime has attempted
to appear solicitous in redress-
ing popular grievances against
Communist cadres. The People's
Daily on several occasions has
attacked the "phenomenon of in-
equality," which it admits still
exists in the relationship be-
tween leaders and the public.
Public debate and the lodging
of popular protests have been
stressed as the means for pre-
venting discontent arising from
the "mistakes" of cadres.
Posters with large Chinese
characters, which have been
plastered on factory buildings
and agricultural cooperative
headquarters, were declared on
17 July to be the "permanent
method of airing views in the
future." Unlike the free-speech
period during the spring of
1957, however, the criticisms
contained in the posters apply
only to lower level cadres and
administrative personnel--in-
cluding some plant managers--
and for the large part discuss
major production measures before
the measures are put into effect.
The rectification campaign
within the Chinese Communist
party is similar to its prede-
cessor of 1942-44, which was
designed to improve the indoc-
trination of party members and
train them to apply Bolshevism
to Chinese conditions. Thus
far there has been no confirma-
tion of rumors of a Stalinist-
type purge and killing of "old
comrades." Only a handful of
"rightists" have been exposed
in the party, and none of these
is believed to have been punished
severely. The number of Commu-
nist party members expelled
since October 1955 as "counter-
revolutionaries"--well before
the start of the rectification
drive--came to less than one
percent of total party member-
ship, according to the minister
of public security.
Rectification in the Minis-
try of-Public Security points
up the relatively moderate na-
ture of the campaign. Police
boss Lo Jui-ching recently
stated that "only a part" of
the people's police is "liked
by the masses," primarily be-
cause the police "speak rudely
to the masses and do not treat
them as equals." Lo stated
that, during the rectification
drive, inhabitants of such
cities as Peiping and Shanghai
have been criticizing the police
by using posters; he claimed
that "public criticism of the
police is permitted nowhere else
in the world." In exhorting
public security personnel to
improve, he warned that whether
the populace "dares to criticize
us or not" constitutes an im-
portant criterion for judging
whether police-populace rela-
tions are "normal." However,
the people, too, have been
"bound to good behavior" by
publicly signing pacts under
which individuals are to educate
themselves in "socialism" and
become, in effect, part of the
docile labor force of "red" ex-
perts and workers now being
created.
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24 July 1958
PEIPING'S ARMED FORCES ASSUME LARGER ROLE IN CIVILIAN ECONOMY
In support of this year's
all-out drive for rapid econom-
ic development, Peiping has as-
signed more troops to civilian
tasks, evidently hoping that
military personnel, with their
disciplined labor force and rel-
atively,. high technical skill,
will set a beneficial example
to workers and peasants and re-
furbish the image of the armed
forces as a friend of the masses.
This campaign will probably not
be allowed, however, to inter-
fere significantly with the
training and efficiency of com-
bat units.
Members of the armed forces,
from "generals to privates,"
have been ordered to contribute
this year some 30,000,000 man-
days to agricultural work, a
50-percent increase over last
year. By the end of April, how-
ever, the armed forces had al-
ready contributed 15,000,000
man-days to water conservancy
work alone, and the year's tar-
get seems almost certain to be
overfulfilled.
The army's railway con-
struction corps recently doubled
its target for railroad build-
ing in the Second Five-Year
Plan (1956-1962), to a total
of over 6,000 miles of new line.
In the Sinkiang autonomous re-
gion, where the army has been
particularly active in the past,
army units plan to reclaim more
than 600,000 acres of farm land
this year alone, as compared
with a total of only 500,000
acres reclaimed in the past sev-
en years by army labor. These
units will also play a key role
in the regime's plan to turn
Sinkiang into one of the'
nation's top cotton-produc-
ing areas.
Since late last year, mili-
tary factories have been di-
verting part of their produc-
tive capacity to the manufacture
of civilian goods. Thus, an air-
craft plant which formerly pro-
duced for the military is
now making light transports for
China's civilian air line, and
a naval ship repair facility
in Fukien is making steel for
civilian consumption. Numerous
articles have appeared in
the mainland press detailing
how machine shops and re-
pair facilities of the armed
forces are producing small
tractors, irrigation pumps, and
other types of equipment for
China's farms. Military units
have been reported helping
civilian authorities build
the local industrial instal-
lations which are a featured
part of Peiping's new program
for socialist construction.
At least one military
unit, which has retained its
organizational integrity after
discharge from the armed forces,
has been active as a construc-
tion company at the No. 1 Auto
Works in Changchun and later at
Fularki. The majority of this
year's discharged servicemen,
including officers, have "vol-
unteered" for work on state
farms in northern Manchuria.
Others have been assigned to
work on farms and mines in
northwestern China. This di-
version of the military to sup-
port the civilian economy il-
lustrates the importance the
leadership in Peiping attaches
to achieving a measurable de-
gree of success in the present
drive for economic develop-
ment. Prepared 25X1
by ORR)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
PEIPING CONTINUES HARD LINE TOWARD JAPAN
Peiping is giving no sign
of letting up its pressure on
the Kishi government in Japan.
Economic and cultural exchanges
broken off by Peiping in early
May remain in abeyance, and Com-
munist spokesmen have recently
called for further sanctions
to be taken against the Japa-
nese.
The Chinese still insist
that the Kishi government must
take the first step if relations
are to improve. It now appears
that Peiping's minimum price
for a resumption of trade is
Kishi's approval of all provi-
sions of the fourth private
trade agreement. The terms of
this agreement, which permits
the exchange of trade missions
with quasi-diplomatic rights
and the right to fly the nation-
al flag, very nearly caused a
rupture in Japanese - Chinese
Nationalist relations last
spring before it was rejected
by the Japanese.
For a normalization of all
relations, however, Peiping says
it will require full diplomatic
recognition from Kishi, or, at
a minimum, a break in ties be-
tween Tokyo and Taipei.
The latest tactic that Pei-
ping is using to increase the
pressure of Japanese business
interests on Kishi for a resump-
tion of trade is the threat of
a boycott by Overseas Chinese
of Japanese goods in areas of
Southeast Asia. At a recent
meeting in Peiping of an organi-
zation of Overseas Chinese who
have returned to China, two Com-
munist spokesmen called on the
"broad masses of patriotic Over-
seas Chinese" to boycott Japa-
nese goods and thus iaqsist the
"motherland" in the struggle
against Japanese "economic ex-
pansion."
It is doubtful that Pei-
ping could carry off a boycott
CHINESE CLAIM
KISHI BLOCKS TRADE
" A bow to his master "
--from Peiping Review
22 Apr 1958
throughout all of Southeast Asia,
but Japanese goods have been
losing their pre-eminent posi-
tion in markets there for some
time--in large part because com-
petitive Chinese goods are con-
sistently underpriced. The mere
threat of a boycott, however,
has heightened concern in Japan,
particularly among textile in-
terests, that it might lose
Southeast Asian markets to Com-
munist China.
(Concurred in by ORR
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PEIPING'S ECONOMIC OFFENSIVE IN SOUTHEAST ASIA k
24 July 1958
Communist China, already
well established in consumer
goods markets in South and South-
east Asia, is selling increasing
amounts of machinery and indus-
trial raw materials there as
well. Peiping's exports, al-:
though relatively small in the
area, will probably expand rap-
idly since they are tied in with
the Chinese aid program and at-
tractive terms are being offered
Under Peiping's recent
loans and grants worth about
$60,000,000 in Southeast Asia,
Chinese consumer goods are being
sold in local markets to finance
the construction of light indus-
trial plants. Indonesia is re-
ceiving a textile factory, and
Burma is importing Chinese ma-
chinery for soap and textile
plants. Under its grant to Cam-
bodia, China is to construct
sion from that country is in-
vestigating the possibilities
for this venture. Exports of
machinery and consumer manufac-
tures as a form of assistance
have increased the willingness
of underdeveloped areas to ac-
cept Chinese aid programs, and
have established a foundation
for Peiping's expansion of po-
litical relations as well.
China is emphasizing ex-
ports to Southeast Asia, to off-
set its growing trade deficit
in Western Europe. China also
is able to purchase raw materials
from Southeast Asia for its own
use or for re-export to the So-
viet bloc. The growth of Commu-
nist China's sales in the area
has been conspicuous since 1955,
and total exports to Southeast
Asian countries amounted to
$95,000,000 in 1957, double those
of 1955.
PATTERN OF CHINESE COMMUNIST SALES IN
SELECTED SOUTHEAST ASIAN COUNTRIES
(PERCENT OF TOTAL SALES)
CURRENT INTELLIGENCE WEEKLY SUMMARY
(JAN-Mm)
FOODSTUFFS AND OTHER
MACHINERY AND INDUSTRIAL RAW MATERIALS
TEXTILES
four industrial plants to pro-
duce textiles, paper, cement,
and plywood. China has also of-
fered to set up textile mills
in Ceylon, and a technical mis-
Peiping focuses
its trade drive on the
Overseas Chinese com-
munities in these coun-
tries, particularly
in Indonesia and Ma-
laya, where there are
large groups of Chi-
nese. Peiping-con-
trolled-branches of the
Bank of China are
sources of marketing
information and offer
credit facilities for
Chinese merchants. Pei-
ping has made a prac-
tice of granting Asian
importers short-term
letters of credit and
long-term contracts
protecting merchants
from price declines.
Pro-Communist associa-
tions exhort overseas
Chinese consumers and business-
men to buy mainland China goods,
and Peiping sets prices lower
than in the local markets. Pei-
ping now is publicly urging these
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
communities to boycott goods
from Japan, with whom Peiping
has severed economic relations
in a blatant appeal to enter
markets primarily supplied by
Japan.
Although China is not able
at present to supply many manu-
factured goods in large quanti-
ties, its advertising indicates
that further export diversifica-
tion is planned. For the first
time China is offering trucks
and buses for sale in Southeast
Asia. (Prepared 25X1
by ORR)
CAMBODIAN RECOGNITION OF COMMUNIST CHINA
The Sihanouk government's
de jure recognition of Commu-
nist China, to include an ex-
change of ambassadors, follows
several weeks of demagogic
stage-setting by the premier.
Sihanouk has been alluding to
the need for a "new ally close
at hand" to offset alleged West-
ern bias against Cambodia in
its increasingly bitter terri-
torial and other disputes with
South Vietnam. Cambodia here-
tofore has deliberately avoided
any closer ties with Peiping
than the economic and cultural
relations entered into in 1956.
Many influential Cambodians,
apparently including King Sura-
marit and Queen Kossamak, are
deeply concerned over the im-
plications of this step. They
fear this will aggravate the
problem of Communist subversion
and jeopardize the continuation
of American aid. Although Siha-
nouk is still firmly in command,
open defiance of his power may
develop among conservative po-
litical and military elements
who are increasingly critical
of his one-man rule.
Strong reaction can be ex-
pected from South Vietnam, where
officials fear Sihanouk also in-
tends to grant representation
to Communist North Vietnam.
Saigon is convinced that Siha-
nouk--who is likened to a less
intelligent Nasir--harbors gran-
diose plans of restoring, with
the support of Communist China,
the ancient Khmer Empire at
South Vietnam's expense. Presi-
dent Diem has regarded Sihanouk's
past accommodation of the Sino-
Soviet bloc a serious menace to
Vietnam's security. He has dwelt
recently on growing internal op-
position to Sihanouk and can be
expected to support, if not ac-
tually promote, a scheme to re-
move him from power.
Cambodia's recognition of
Communist China constitutes a
significant political victory
for Peiping and will enhance its
prestige throughout Southeast
Asia, particularly among the in-
fluential Overseas Chinese com-
munities. Taipei's already
shaky influence among Cam-
bodia's 250,000 Chinese will
be virtually eliminated, and
chances for accrediting the un-
official Chinese Nationalist
consul now in Phnon Penh appear
nil. 25X1
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24 July 1958
INDONESIA
Army Chief of Staff Nasu=
tion has-ordered lav:.,enforcement
agencies to take steps to pre-
vent strikes and sabotage or any
other threats to public order.
This is an apparent reference
to the recent threat of SARBIJPRI,
the Communist-dominated agricul-
tural workers' union, to take
action against American rubber
interests in Sumatra unless US
troops are withdrawn from Leb-
anon. At least two other Com-
munist-led labor unions and one
Communist-manipulated organiza-
tion have, threatened ':action
against American economic inter-
ests.
The army's ability to pre-
vent extensive damage should the
Communists choose to follow
through on their threat is high-
ly questionable in view of the
troops' present difficulties in
maintaining order in the dissi-
dent Sumatran areas. A concert-
ed sabotage campaign in Sumatra
would also affect American oil
installations, where another
Communist-dominated union,
PERBUM, is strong.
Indonesian Government forces
occupied Tondano, a city near
Menado in the North Celebes, on
17 July, thereby further reduc-
ing the area still:Junder dissi-
dent control.
Indonesian Government lead-
ers believe the dissidents in
Sumatra plan to transfer their
headquarters from Central to
North Sumatra, specifically to
Tapanuli, an area where the dis-
sidents have been most effective.
The army appears to
have abandoned plans for post-
poning the 1959 national elec-
tions, probably as a result of
nonsupport from President Sukarno.
According to Deputy Chief of Staff
Djatikusumo, military leaders are
considering strengthening IPKI--
a small party supported by cer-
tain army elements--as a political25X1
vehicle rather than supporting
one of the larger non-Communist
parties.
B O R N E O ,~,Donggaia* -Tobolir"
864kpapanl Pal,...
,Poso
..~~L'ERES
DOAK?ARTA
AS 110
Surabaya
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NOTES AND COMMENTS
AUSTRALIA
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 June 1958
HONG KONG - CHINESE COMMUNIST RELATIONS
Hong Kong - Chinese Commu-
nist relations, already strained
by British efforts to curb Com-
munist subversion in the local
schools, may be further exacer-
bated by Peiping's order for
"peaceful" demonstrations in
the colony to protest Anglo-
American intervention in the
Middle East. The Hong Kong
authorities also believe Pei
ping may take economic reprisals
against the colony, which re-
ceives about 80 percent of its
foodstuffs from the mainland.
While the local security forces
are believed capable of control-
ling any civil disorder short
of an all-out Communist attempt
to take over the colony, Hong
Kong's dense and volatile popu-
lation poses a latent threat of
mass violence that might be
Ignited by;-any civil crisis.
Both Hong Kong and London
have been concerned for some
time over Peiping's reaction to
the colonial government's re=
fusal to permit Communist-con-
trolled local schools to fly
the Chinese Communist flag.
The ban is aimed at combating
Communist subversive activities
in the schools, although local
British courts may not uphold
the government's action. Commu-
nist propaganda has strongly
condemned the ban, and Peiping
on 10 June officially protested
this "unfriendly act."
One London official has
termed Peiping's attitude in-
creasingly "nagging and trucu-
lent." Despite this, however,
London has authorized the Hong
Kong authorities to take action
against the principal of the
colony's largest Communist-
dominated school for his con-
tinued violation of the prohi-
bition of political activity in
the schools. London's reply to
Peiping's protest of 10 June
will declare that the flag ban
was ordered to prevent possible
civil violence which could arise
if the Communist-controlled
schools continued to fly Pei
ping's flag. Most of Hong Kong's
population, which is 98-percent
Chinese, is believed opposed to
the Peiping regime.
The Hong Kong police re-
cently withdrew permission for
an international trade fair to
be sponsored by local supporters
of the Chinese Nationalists in
mid-August. The police explained
that the fair also would con-
stitute a threat to public safety.
The government's action in this
instance, however, appeared
primarily intended to demon-
strate its impartiality.
Peiping's local machina-
tions in response to the Middle
East crisis appear to have in-
creased the possibility of civil
disorder in Hong Kong. However,
the capabilities of the Hong
Kong security forces have im-
proved since the riots of 1956,
and the British continue to
assert their right to control
Hong Kong affairs without out-
side interference.
PRO-COMMUNIST LEADERSHIP OF JAPANESE TEACHERS' UNION CHALLENGED
The pro-Communist leader-
ship of the influential Japan
Teacher's Union (Nikkyoso) is
being challenged by a moderate
left-wing faction and by the
government, which is moving to
eliminate leftist influence in
the educational system. The
internal power struggle is re-
lated to the government's newly
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24 June 1958
established system for evaluat-
ing teachers. If the moderate
wing wins out in the convention
scheduled for 27 July, it prob-
ably would try to make some
compromise with the government
on the teacher rating system,
which appears certain to become
effective throughout most of
Japan in September.
Prime Minister Kishi, to-
gether with conservative leaders
in business and education, re-
gards the teachers' union as the
greatest threat to Japan's demo-
cratic institutions. The gov-
ernment is attempting to re-
strict Nikkyoso's influence by
reimposing some degree of cen-
tral government control of edu-
cation--as well as by direct
measures to restrain the union's
political activities.
Since 1956 local school
boards have been appointed by
governors and mayors instead of
elected despite the opposition
of scholars, educators, and the
press, who charge a revival of
state control of education.
The government has devised
a standardized rating system for
teachers throughout the public
school system. The system, which
has been implemented in two of
Japan's 46 prefectures and is
expected to become effective in
most others in September 1958,
offers incentives to outstand-
ing teachers and is designed to
improve personnel methods and
raise the level of instruction.
A recently passed government
bill gives school principals a
special allowance and is designed
to induce them to leave Nikkyoso.
Prime Minister Kishi also has
intimated that, if necessary,
he would resort to legislation
excluding principals from mem-
bership in the union, and the
government is considering stand-
ardizing textbooks throughout
the country. Texts are now
selected by individual teachers.
The teachers' union is the
country's largest labor organ-
ization, comprising.about 85
percent of Japan's 645,000 pri-
mary and junior high school
teachers. Teachers in senior
high schools.have a separate
union. Japanese -'schoolteachers
are traditionally conservative,
but since World War II have been
dominated by Communists holding
powerful policy-making positions
in the union. Nikkyoso exercises
political power through its
position as the largest union
in the General Council of Trade
Unions (Sohyo), and through its
control of 24 Socialist members
of the Diet.
During Nikkyoso's annual
convention in early June, con-
troversy over policy toward the
government's system of rating
teachers and factional rivalry
over the election of the secre-
tary general revealed a split
in the union between moderate
and leftist factions. Secre-
tary General Miyoshi Hiragaki,
representing the pro-Communist
elements, walked out of the
convention when Vice Chairman
Sadamitsu Miyanohara, leader
of the moderate faction, won
the election, apparently by one
vote. The convention adjourned
without validating the election
requirthg a new convention to
settle the dispute.
The union charges the gov-
ernment with attempting to con-
trol individual teachers by
arbitrary discharges, penalties,
and a return to prewar institu-
tions. The government appears
determined, however, to continue
its attack against Communist
influence in the teachers' union
and to discourage teachers from
using their classroom positions
for political activities. The
government program has not
aroused popular :opposition, and 25X1
Japan's teachers probably will
gradually become more responsive
to central direction.
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24 July 1958
NEPAL'S DETERIORATING FINANCIAL POSITION
Nepal's efforts to develop
its primitive economy are im-
peded by the country's limited
financial resources. The budget
for fiscal 1959, which began on
15 July 1958, indicates that the
government will exhaust its funds
by the end of 1958 unless it
cuts economic development activi-
ties or resorts to printing pa-
per currency. Since either move
would cause political problems
for the government in view of
the elections scheduled for Feb-
ruary 1959, Katmandu is more
likely to attempt to secure addi-
tional foreign aid.
Expenditures budgeted for
the present fiscal year total
$14,950,000. Normal government
expenses account for $11,836,000
of this sum, and the remaining
$3,114,000 is to be used for
economic development, chiefly
in conjunction with foreign-
aided projects. Total antici-
pated revenues are only $10,310,-
000, leaving a deficit of $4,-
640,000. Katmandu can use $2,-
330,000 in unutilized Chinese,
Communist.aid which.was given in
the form of cash, as well as the
remaining $820,000 the govern-
ment has in the Nepal State Bank,,
thus reducing the deficit to
$1,490,000.
While Nepal could increase
taxes enough to eliminate even
this shortfall, no political
leader in the present interim
government is likely to support
such a move or to take responsi-
bility for butting economic de-
velopment expenditures before
the elections. The government,
therefore, probably will attempt
to secure additional foreign aid
to enable it to carry out pres-
ent development plans.
The Soviet-Nepalese com-
muniqud issued at the end of
King Mahendra's recent visit to
the USSR stated that Moscow
agreed to extend economic assist-
ance to Nepal and that discus-
sions on the scope of such aid
would be undertaken after the
King returned to Katmandu. While
the Nepalese Government prob-
ably is willing to receive some
Soviet aid, it is reluctant to
accept Soviet technicians and
may attempt to use the talks
with the USSR to stimulate India
and the United States to expand
their existing aid programs.
India is already supplying $20,-
000,000 in assistance to Ne-
pal's Five-Year Plan.
ORR)
(Concurred in by
MILITARY DISAFFECTION IN CEYLON
The reported deterioration
of morale within Ceylon's mili-
tary and police forces, which
suppressed widespread communal
violence in late May and early
June, creates doubt concerning
their ability or desire to main-
tain internal security in the
event of further disturbances.
Their lowered morale stems
chiefly from apparent disagree-
ments between Prime Minister
Bandaranaike and Governor Gen-
eral Goonetilleke over the role
of the armed forces and who is
to control them under emergency
rule. Bandaranaike's interven-
tion has hamstrung military ef-
forts to execute orders from
Goonetilleke, who took over
primary responsibility for di-
recting the armed forces when
he assumed emergency powers on
27 May. Increased unrest in the
services might eventually cause
key military elements to become
antagonistic toward the govern-
ment.
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24 July 1958
Bandaranaike's directive
to the police on 2 July threat-
ening severe consequences if he
received further reports of po-
lice excesses in their efforts
to maintain order, and his or-
der of 5 July to arrest a high-
ranking Tamil naval officer ac-
cused of abusing Singhalese
agitators substantially damaged
police and military morale. US
Embassy employees who visited
Ceylon's eastern province dur-
ing the last week of June re-
ported that military personnel
stationed there blamed the gov-
ernment--particularly the prime
minister--for the island's
troubles. Military personnel
also stated that it is "high
time" the governor general took
action "to end this administra-
tion," mentioning in this con-
nection "a caretaker govern-
ment" which might include mili-
tary participants.
The increase is Goonetilleke's
personal power as a result of
his firm use of emergency powers
and the corresponding decrease
in Bandaranaike's prestige may
be responsible for at least two
recent indications of friction
between the two men. At a meet-
ing on 28 June which Goonetilleke
and Bandaranaike held with major
newspaper editors to discuss ex-
isting press censorship, Banda-
ranaike granted permission for
free reporting on parliamentary
proceedings, then withdrew it,
apparently at Goonetilleke's re-
quest. An emergency regulation
authorizing arrests without war-
rants, which Bandaranaike revoked
on 5 July, was restored the next
day, probably also at the-:gov-
ernor general's insistence.
DE GAULLE'S ECONOMIC AND CONSTITUTIONAL PROGRESS
Premier de Gaulle hopes
to profit from a postponement
of France's pressing economic
problems to put the finishing
touches on the constitutional
revisions to be submitted to a
referendum either on 28 Septem-
ber or 5 October. Both business
and labor interests will become
increasingly restive over-his
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CURRENT INTELLIGENCE WEEKLY 8UNKARY
24 July 1958
economic program, however, and
he is apprehensive over the re-
percussions Middle East devel-
opments may have on the Algerian
situation.
France's most immediate
economic difficulties have been
temporarily put off. Finance
Minister Pinay's gold-babked
loan, which brought in approx-
imately $785,000,000, including
$169,000,000 in gold, has im-
proved foreign exchange holdings
to the extent that France may
not have to resort to foreign
assistance before the end of
the year. De Gaulle's promise
to review the wage situation in
the nationalized industries be-
fore the end of the year if eco-
nomic circumstances warrant will
not satisfy labor, however, and
Christian and Socialist union
leaders appear seriously con.
cerned over worker reaction.
Nevertheless, a Communist union
official has expressed doubt
that a strike would be called
in the immediate future.
On the international eco-
nomic front, the premier has in-
structed the cabinet to find
some means of reaching agreement
on the proposed free trade area
in the interest of maintaining
unity within the Western world.
Farm and business groups, how-
ever, which had been reluctant
even to enter the Common Market
despite '-its- concessions' to
France, will oppose a too lib-
eral interpretation of this
order.
The cabinet is completing
its review of an initial draft
of constitutional revisions which
will be submitted to an advisory
committee of legislators and
jurists by the end of July. It
has been announced that the over-
seas territories will be asked
after the referendum to decide
whether they prefer (1) contin-
uation of their present status,
(2) full integration with France
as departments, or (3) "associa-
tion" in a framework of federated
territories.
Algerian settler extrem-
ists, who reject any form of
federal relationship and demand
complete integration of Algeria
into France, can be expected to
react sharply to this proposal
in view of De Gaulle's earlier
statement that Algeria would
have a "choice place" in a fu-
ture federal association of
France and its overseas posses-
sions. Their reaction will prob-
ably be intensified by a debate
just published in Paris in which
the prointegration side admitted
a federal relationship was the
only practicable way of associat-
ing Algeria with France. De
Gaulle now seems fearful lest
Middle East events precipitate
developments in North Africa
which would prevent the applica-
tion of a moderate program.
THE ITALIAN GOVERNMENT
The close margin of 295-
287 by which the Italian Chamber
of Deputies approved Amintore
Fanfani's Christian Democratic?
Denocratic Socialist government
on 19 July points to a situation
of inaction or chronic instabil-
ity. The government is pledged
to support active participation
in NATO and to a program of so-
cial legislation but, because
the government coalition is in
a minority in the chamber, it
must depend on the help of other
parties. Moreover, both govern-
ment parties have sharp internal
divergencies on policy that may
prevent much " progress and may
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
even cause the government to
fall.
The coalition has a majori-
ty in the Senate, but it will
continue to be dependent in the
Chamber of Deputies, as it was
in the investiture vote, on sup-
port from one Community Movement
representative and the absten-
tion of six Republicans and
three deputies :representing
the German-speaking portion of
the South Tyrol. Republican
participation will not be de-
cided until the party congress
in October, and support from the
conservative Liberals would
threaten the existence of the
present center-left coalition.
Enactment of the government's
proposed social legislation
might win some eventual Nenni
Socialist support, but Fanfani's
strong endorsement on 19 July
of the American and British
moves in Lebanon and Jordan.
makes unlikely any Nenni Social-
ist backing for the time being.
Fanfani has tried to create
a "new-broom" impression by im-
posing strict working hours on
ITALIAN PARLIAMENT
MAY 1958
COMMUNITY MOVEMENT 1 REPUBLICANS(PRI)Il RAN JOINT LISTS
I (RADICALS (PR) r
246 ELECTED MEMBERS
( 7 APPOINTED FOR LIFE I
SENATE
253 SEATS
Former Democratic
Socialist party secre-
tary and left-wing
leader Matteotti and
two of his supporters
have reportedly re-
signed from the party's
governing body, al-
though they apparently
24 JULY 1958 intend to remain party
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NOTES AND CO$MENTS Page 16 of 18
government employees and cabinet
members. His program, however,
which was adopted by a joint
meeting of the two coalition
parties on 28 June, closely par-
allels that of the recent inef-
fectual Zoli government. In
general, it calls for intensified
spending An the underdeveloped
south, a variety of housing and
other welfare measures, a plan
for development of educational
facilities, legal and
administrative reforms,
action in favor of
European unification,
and a defense of the
consumer against monop-
olies. The government 25X1
must contend in any
case with foot-dragging
by right-wing Christian
Democrats and pressure
from influential con-
servative church and
industrial groups.
14-POPULAR MONARCHISTS(PMP)
NEO-FASCISTS(MSI)
SOUTH TYROLEANS(SVP)
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24 July 1958
members in order to wrest con-
trol from party secretary Sar-
agat and pull the party out of
the government. Although all
22 of the Democratic Socialist
deputies voted in favor of Fan-
fani's investiture, some six of
these are believed to be sup-
porters of Deputy Matteotti and
could take steps to bring down
the Fanfani government if the
party crisis deepens.
BRAZIL RELATES DULLES'VISIT TO WESTERN SECURITY
During Secretary Dulles'
planned good-will visit to Bra-
zil, scheduled for 3 to 5 Au-
gust, President Kubitschek will
probably emphasize not only
Brazil's serious financial dif-
ficulties but also the pressing
need for "Operation Pan-Ameri-
ca"--his term for a "comprehen-
sive reappraisal" of inter-Amer-
ican relations proposed in a
letter to President Eisenhower
in early June. Kubitschek views
underdevelopment as the weakest
link in hemisphere security,
and he has pointed to the urgent
need to remedy the situation.
While Kubitschek has left
a specific blueprint for "Op-
eration Pan-America" to a later
inter-American meeting, he has
described in recent speeches
some of the Latin American
grievances which he feels
threaten to undermine the in-
ter-American system.
Brazil views itself as the
United States' senior partner
in Latin America, not only be-
cause of its size and strategic
location but also because of
its close political and mili-
tary support of. the ':United
States. Brazil believes this
close cooperation increases its
vulnerability in the East-West
struggle and that it should have
more of a voice in internation-
al affairs--that the Latin
Americans should no longer be
"a simple choral group."
Kubitschek told top govern-
ment and military officials on
18 July that it was of primary
importance to "maintain inde-
structible relations" with the
US and, therefore, Brazil's duty
to express unhesitatingly its
sincere reactions. Kubitschek
described his letter to Presi-
dent Eisenhower, which he sent
shortly after Vice President
Nixon returned from South Ameri-
ca, as a "warning cry against
the cold war that is now begin-
ning to exhibit its first symp-
toms in our continent." In
addressing Latin American dip-
lomats on 20 June, he urged
that the sickness of underdevel-
opment be combated with mod '
ernized international financial
institutions, technical assist-
ance, and measures to protect
primary products from excessive
fluctuation. His views have been
heartily endorsed in '.Latin
America.
Increasing financial dif-
ficulties in Brazil, linked to
lower prices and reduced coffee
exports, which supply 60 percent
of Brazil's foreign exchange,
have limited Brazil's economic
development plans and caused
rising discontent. National-
ists friendly to the United
States, as well as extremists,
are exerting pressure on the
government to seek quicker so-
lutions to pressing economic
problems.
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24 July 1958
The Communists--showing
some recovery from last year's
dissension--are exploiting dis-
content to press for increased
trade and diplomatic relations
with the Soviet bloc. Opposi-
tion campaigning for the 3 Octo-
ber gubernatorial and congres-
sional elections will put addi-
tional pressure on the govern-
ment.
Communist-influenced stu-
dent groups have publicly
threatened a "peaceful" demon-
stration against Secretary
Dulles, hinting at a road block-
ade,
who er trying to anticipate
possible points of difficulty,
claim' to be capable of con-
trolling any violence which
might occur.
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25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
PATTERNS AND PERSPECTIVES
MIDDLE EASTERN MEMBERS REAPPRAISE BAGHDAD PACT
Turkey, Iran, and Pakistan
are engaged in an intensive re-
appraisal of regional security
along the "northern tier" in
preparation for the Baghdad
Pact Ministerial Council meet-
ing in London on 28 July.
Alarmed over the effects of
the Iraqi coup on collective
defense arrangements and on
the stability of governments
in the area, Ankara, Tehran,
and Karachi will strive for
greater regional integration,
full US adherence to the pact,
and increased military assist-
ance. They anticipate that the
British role will be de-empha-
sized in any event.
Impact of the Iraqi Coup
The sudden overthrow of
King Faysal's regime was as much
a psychological blow to the
three other Moslem nations in
the Baghdad Pact as it was a
loss in purely strategic terms.
The shocked reaction of the
Turkish, Iranian, and Pakistani
chiefs of state was quickly
translated into concern over
the future of the collective de-
fense system and also over in-
ternal repercussions in their
own countries. Demoralization
among the pro-Western countries
in the area was recognized as
a real danger.
News of the military coup
in Iraq broke as the leaders
were gathering on 14 July in
Turkey for a meeting of the
Moslem lembers of the pact in
advance of the Ministerial
Council meeting in London. The
conference was hurriedly con-
verted, in the absence of King
Faysal, into a round of inten-
sive consultations among the
Shah of Iran, Turkish President
Bayar, and Pakistani President
Mirza on the fast-developing
Middle Eastern crisis.
The pact leaders adopted a
more confident tone in statements
following the Ankara talks, ob-
serving that recent events in
the area stressed "more than
ever the need for collective
security and for an organization
having a very practical nature."
Officials made clear their deter-
mination to increase the collabo-
ration between Turkey, Iran, and
Pakistan, and thus strengthen
the "Baghdad" Pact. While pub-
lic avowals of closer cooperation
were designed primarily to demon-
strate the solidarity of the
Moslem countries in the pact, it
was evident that all three gov-
ernments did in fact feel the
need to draw together as never
before in the interest of self-
preservation.
Strategic Considerations
The Moslem members had long
regarded Iraq as the weakest
link in the alliance, and had
frequently considered the pos-
sibility of its withdrawal. They
did not anticipate, however,
that King Faysal's government
might be forcibly overthrown
and Iraq transformed into what
they view as a hostile base.
Much of the alarm expressed
in Ankara and Tehran reflected
the greatly increased threat to
each nation's frontier security
posed by the new government in
Iraq. Most-of Iran's western
borderland, as well as its vul-
Ene" T northern border with the
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24 July 1958
USSR, now is open to infiltra-
tion by subversive elements.
Moreover, Iran's access to the
Western world will be curtailed
by Iraqi control over the major
highway between Tehran and
Baghdad. Turkey, which recent-
ly displayed great apprehension
over the danger of subversion
from Syria, now is even more
concerned at the extension of
what it considers to be pro-
Communist influence along the
remainder of its southern flank.
Officials in Ankara and Tehran
probably see the developments
in addition, give the remaining
members greater leverage in
exerting pressure on Washington
to join the pact, since:
they would reaso . that ', the
United States' argument.ss. against
allying,,itself with Baghdad in
opposition to Other Arab States
no longer apply.
The denial of important
bases and lines of communica-
tions located in Iraq would
constitute a more considerable
loss for the pact in strategic
terms than the loss of Iraq's
=Middle East Members
of the Baghdad Pact
24 JULY 1958
in Iraq as a further step in
Moscow's "leapfrog" strategy
of penetrating the Middle East
behind the free world's de-
fense line.
The new Iraqi Government
has not yet indicated its final
attitude toward association
with the Baghdad Pact. Its
withdrawal or expulsion from
the pact would remove the Arab
element in the alliance. While
the influence of the pact
throughout the Middle East would
be considerably lessened as a
result of its dissociation from
the Arab world, it might produce
an alignment with greater unity
of outlook and purpose. Histor-
ical relations and continuing
disputes between Turk and Arab,
and between Persian and Arab,
had tended to inhibit genuinely
close cooperation among the
Turkish, Iranian, and Iraqi lead-
ers. Withdrawal by Iraq would,
65,000 troops. The
take-over of Baghdad
by potentially hos-
tile forces, more-
over, involves far 25X1
more than a blow to
the pact's prestige,
for in addition to
lending its name to
the pact, Baghdad
housed the secretariat
where classified files
of the various po-
litical, military, eco-
nomic, and counter-
subversion organiza-
tions are stored. The
reported seizure of
these documents is likely to be
fully exploited for propaganda
and intelligence purposes.
National Concerns
Turkey will continue to be
a vigorous supporter of regional
security arrangements in the
Middle East. While Prime Min-
ister Menderes and Foreign Min-
ister Zorlu privately may feel
less satisfied with the pact,
largely because of its failure
to provide the mechanism for
Western-backed armed action
against the Iraqi rebels, these
leaders can be expected to work
energetically;,, to increase the
effectiveness of the pact agree-
ments.
Turkey's continued partici-
pation in the pact is not like-
ly to be affected by the dis-
favor with which important seg-
ments of the population view
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CURRENT INTELLIGENCE WEEKLY 3U L RY
24 July 19 58
the whole approach toward rela-
tions with the Arab world which
the pact represents. A number
of influential Turks have shown
considerable suspicion of Arab
leaders in the pact, accusing
them of trying to use Turkey
and the pact apparatus to fur-
ther their own national or
personal interests.
Iran is likely to relate
its commitment to the pact in
the future on the prospects for
US adherence and additional
American arms, and on the will-
ingness of its allies to join
in an effort to restore a pro-
Western government in Iraq.
Should these conditions remain
unfulfilled, the Shah probably
would strive for some alterna-
tive to the pact as presently
organized.
In forthcoming pact con-
ferences, Tehran can be expected
to express its urgent concern
over Iran's increasingly ex-
posed position between the USSR
and Nasir's sphere. Continuing
Soviet maneuvers on the northern
border are likely to intensify
its apprehension over the time-
liness and effectiveness of US
support in the event of an ag-
gressive move by Moscow against
Iran.
The Shah is particularly
worried over possible domestic
repercussions of the events in
Iraq, and fears anti-Western
nationalist elements will be
encouraged to attempt similar
action against his regime. Like
the Turkish authorities, Tehran
officials will be especially
preoccupied with the effects of
Cairo radio's propaganda on
the Kurdish minority as well
as on Arabs in southern Iran.
Pakistan is interested in
the Baghdad Pact primarily as
a counterweight to the influence
of India and other nonaligned
countries. Karachi will want
to repair the damage to the
pact's prestige by strengthen-
ing its cooperation with the
like-minded governments in Teh-
ran and Ankara and adopting a
more aggressive stand against
the encroachments of Nasirism.
Senior Pakistani army of-
ficers have placed themselves
strongly on record as favoring
prompt military action to lib-
erate Iraq. President Mirza
has been particularly outspoken
in his advocacy of forthright
steps to recover the situation
in the Middle East, but he is
unlikely to resort to action
without consulting US officials.
While the Pakistani Army
appears united in its support
of the.,,country's present leader-
ship, there is considerable sym-
pathy among lower and middle-
class elements for the Moslem
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
nationalism of which Nasir is
a symbol. Opposition parties.:
are likely to achieve consider-
able success, especially in East
Pakistan, in stimulating popular
protests against the govern-
ment's pro-Western foreign pol-
icy on the basis of recent Mid-
dle Eastern developments.
Future Alignment
The Middle Eastern members
of the pact will concentrate
immediately on tightening the
working relationship between
Ankara, Tehran, and Karachi.. The
increased danger to all of ex-
panding nationalism on the one
hand and Soviet threats on the
other is likely to impel the
three countries toward closer
integration of their political,
economic, and military ac-
tivities.
Uppermost in the minds of
government leaders will be the
objective of committing the
United States to a more active
association with the pact.
Turkish, Iranian, and Pakistani
officials will argue that the
latest developments in the Mid-
dle East demand a thorough re-
thinking of regional security
needs. Requests for substantial
increases in military force
goals and for stepped-up eco-
nomic assistance, calculated on
the basis of new estimates of
each country's security posi-
tion, are likely to be forwarded
to Washington within the near
future.
British association with
the Baghdad Pact, on the other
hand, may be de-emphasized as
a result of the new situation,
since London's participation in
the .alliance stemmo&latge'rly, fr- m
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its special relationship with
Iraq. A growing sensitivity
to identification with colonial
powers has been evident in the
pact capitals since the erup-
tion of nationalism in Baghdad.
The Moslem allies can be ex-
pected to exert strenuous ef-
forts to increase American in-
fluence in the pact.
As pact members reassess
the security of the "northern
tier," renewed interest in pro-
posals for a regional federation
of some kind is likely to be
stimulated. The Shah of Iran,
concerned over the weakness of
Iraq as an ally, has for some
months urged President Mirza to
consider some form of federation
between Iran and Pakistan. The
Shah's interest in sharing Paki-
stan's more advanced military
force is certain to be enhanced
by the presence of forces viewed
as unfriendly on his western
f lank.
gree.
The three Moslem nations
also are likely to pay greater
attention in the future to the
position of Afghanistan. Tehran
may attempt to iron out long-
standing differences which have
strained its relations with
Kabul in the past. Similarly,
Karachi and Ankara can be ex-
pected to renew efforts to es-
tablish closer ties with Afghani-
stan. When Turkey's President
Bayar visits Kabul in September,
he may broaden his discussions
of the status of the Turkish
military mission there to in-
clude proposals for Afghan as-
sociation in a new regional
grouping. However, while the
royal Afghan Government has
been shaken by the fall of the
Iraqi monarchy, it is not likely
to modify its policy of neu-
trality to any significant de-
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CURRENT INTELLIGENCE WEEKLY SUNNARY
24 July 1958
Science in Communist China
figures prominently in state
policy and planning considera-
tions, as is reflected in nu-
merous public statements by
leading personalities. The call
to "storm the fortress of science"
was made by Premier. Chou-En?-
lai to the National People's
Congress in July last year.,.
Vice Premier Li Fu-chun at the
Eighth All-China Congress of
Trade Unions in December said
that China had to fulfill its
scientific goals if.it is expected
to carry through its over-all
plans for future development.
Government support of
science in 1957 was marked by
a budget increase of 25 percent
over 1956, granted in the face
of a general hold-the-line budg-
et policy. Estimates for 1958
show a 30-percent increase over
1957. The percentage of the
total budget is 1 percent and
better, a fairly high figure
considering the modest size of
Communist China's research es-
tablishment.
China has undertaken to
attain or approach in the next
12 years world-power status in
those scientific fields deter-
mined to be most important in
strengthening national power,
including nuclear energy, elec-
tronics, jet propulsion, mineral
exploration, metallurgy, heavy
chemicals, agricultural chemis-
try, flood control, power de-
velopment, and fundamental re-
search.
The amount of research
done so far has been slight.
The scientists have been busy
organizing, planning, and train-
ing, and research work has been
devoted largely to low-level
industrial testing, trouble-
shooting, assimilating foreign
technology, and overcoming in-
dustry's inability to provide
equipment and material needed
in research and development.
Scientists' time has also been
absorbed by various political
campaigns, such as land reform,
the 3- and 5-anti programs, and
the antirightist and rectifica-
tion program now drawing to a
close. The effect on science
of the present government's wide
program to reduce overstaffing
and improve contact with the
people is not yet clear. Its
application to scientific es-
tablishments has been mentioned,
but with few details.
China is beginning to pro-
duce its own laboratory equip-
ment and materials, including
some for meteorological and geo-
physical exploration. Because
of the minimal support.given
science by industry in China,
the scientists have taken on
the job themselves. Scientists
have successfully engaged in re-
fining germanium crystals for
their budding transistor "in-
dustry," actually still in the
trial-production state in the
laboratories. Production of
chemical reagents is moving
along slowly, and the Communists
report success in some metallur-
gical projects and some advances
in the technology of synthetic
fuel production.
Expansion in the organiza-
tion of research probably now
is tapering off. The Academy
of Sciences has 55 research in-
stitutes and some 20 subordi-
nate research bodies. The gen-
eral fields of medicine and
agriculture are both organized
under central academies under
the Ministries of Public Health
and Agriculture respectively.
The various technical ministries
have under their jurisdiction
a total of about 100 research
institutes, not including local
industrial laboratories or pro-
vincial agricultural experi-
ment stations.
Science is controlled at
State Council level through the
Scientific Planning Commission,
set up in 1956 with 35 members
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
and enlarged to 106 in 1957, at
which time it was made a per-
manent working body of the State
Council, with Vice Premier Nieh
Jung-chen as chairman. Although
the commission is concerned
mainly with natural science-
and technology, less than half
the members are scientists or
engineers, and, of those, less
than one third are party members.
Among the economists,
politicians, and mil-
itary men making up
the majority, on the
other hand, over half
are party members,
including 11 central
committee members.
During the '
height of the "bloom-
ing and contending"
episode in the spring
of 1957, some brave
statements were made
doubting that the
"laymen" could lead
the "experts," but
this idea was soon
submerged and the ar-
ticulate scientists
were suppressed as
rightists. One con-
sequence of the anti-
rightist campaign was
the expulsion of five
natural scientists
from the commission,
further reducing the
scientific represents
tation.
ophy level. Since Chinese uni-
versities offer no doctorates
except in medicine, these men
were all educated abroad, main-
ly in the United States.
The regime, clearly in need
of its trained scientists, has
put up with their lukewarm at-
titude toward Communism. After
six years of pressure to "re-
CHAIRMAN, CHINESE PEOPLE'S REPUBLIC
CHINESE COMMUNIST PARTY
CENTRAL COMMITTEE,
PROPAGANDA DEPARTMENT,
SCIENCE SECTION
Defense Ministry
(principally medical
research at present)
H
Education Ministry
(usi,erstttes and colleges)
Various Technical
Ministries
(93 research iustttutesl
Central Meteorological
Bureau
(research institute)
Scientific Apparatus
Centers
National Central
Library
( library system
Academic Council
of the
Departments
Physics, Chemistry,
and Mathematics
Department
(10 research institutes,
7 branches)
Earth Sciences
Department
(5 research institutes,
7 branches)
Technical Sciences
Department
(ft research institutes,
3 branches)
Manpower and Training
Nearly 20,000
persons are engaged
in research in Com-
munist China's re-
search establishments and-uni-
versities. According to offi-
cial reports, this figure in-
cludes apprentices and labora-
tory assistants. About 1,000
are of a quality to plan and
carry out research comparable
to that commonly carried out
in the West. Among. Communist
China's scientists some 600
hold scientific and engineering
degrees of the doctor of philos-
Biology Department
(15 research institutes,
7 branches)
L Social science
Department
(11 research institutes)
Branch
Administrative
Offices
Central China
East China
Noribeast China
Northwest China
South China
Southwest China
H 9cienific
hdormatlon
Institute
Publication
and
Translatian
Bureau
Central
Library
and Branches
educate and reform," interlaced
with a few periods of relaxa-
tion and even coddling, the ef-
fort still goes on to make the
scientists both "red" and "ex-
pert." The effectiveness of
the scientists is probably re-
duced by the deadening aspects
of these political campaigns.
This is the case in the recent
"antirightist" campaign which
was turned on following a rash
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
of criticism of the party fol-
lowing the invitation to "let
all flowers bloom" and to help
"rectify" the party.
The Overseas Chinese scien-
tists are viewed by the regime
as a potentially rich source
of new badly needed talent. In
the United States alone there
are about as many Chinese na-
tionals with doctor of philos-
ophy degrees as there are in
Communist China, and the regime
has been trying to entice them
to return to the mainland.
Some 100 have returned since
the Communist take-over.
There has been little in-
crease in the number of quali-
fied researchers under the Com-
munist regime. Examination of
candidates for the advanced-
degree program of the Academy
of Sciences revealed surpris-
ingly poor preparation. In
technician and engineer train-
ing, shortcomings have also
been disclosed when graduates
with very narrow fields of
specialization could not be
fitted into changing personnel
requirements. Policies are
changing, with more emphasis
on quality and fundamentals
which are more broadly appli-
cable.
An intensified effort to
train advanced scientists in
China got under way in the
Academy of Sciences- in 1956,
with some 200 scientists being
named as graduate tutors. In
the fall of 1957 a similar pro-
gram was started in the uni-
versities with about 130 tutors.
About one half of these 330
have doctor of philosophy de-
grees. Each tutor apparently
takes on one or two trainees
each year for training up to
four or five years.
The training program in
the Academy of Sciences calls
for producing 10,500 scientists
of the doctor of philosophy
level by 1967, a goal that
could conceivably be met if the
number of tutors is expanded
and if training is the princi-
pal activity of the few good
scientists. A hitch in the
program may have already de-
veloped inasmuch as no announce-
ment of the enrollment of new
graduate students in the acad-
emy has been made for the 1957-
58 academic year. Instead,
according to an announcement
of 17 June, the academy is set-
ting up a new "university of
science and technology" to en-
roll 950 undergraduate students
this summer. These students are
to work in or in very close
association with the academy's
research institutes. This plan
may be the academy's answer to
the problem of getting quali-
fied men for its advanced pro-
gram.
The Academy of Sciences
sent 129 men to the USSR in 1956
for advanced study, and the Min-
istry of Higher Education sent
about 500 postgraduates, some
of whom will be trained as re-
searchers. The number sent is
limited by the shortage of quali-
fied men and by the need to
keep the older men in China to
carry on research and teaching.
Returnees with "associated doc-
torate" degrees numbered 62 in
1956; two received doctorates
in 1956. An estimated one hun-
dred such trainees will return
each year during the early years
of the 12-year plan, and the
number will increase in the
latter years.
A Soviet adviser is regu-
larly assigned to the Chinese
Academy of Sciences and Soviet
scientists have lectured in
China, but on the whole the
USSR has not shown an enthusi-
astic interest in promoting re-
search and development in Com-
munist China. Until this year
there has been no known over-
all research and development
agreement with the Soviet Union.
Formal relations in the scien-
tific field are believed to
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24 July 1958
have been limited to statements
of intention and ad hod rela-
tions. Sixteen Soviet scien-
tists arrived in China in the
spring of 1956 to help work out
the 12-year plan, and in March
1956 Communist China joined
with the Soviet Union and the
satellite countries in estab-
lishing the Joint Nuclear Re-
search Institute at Dubna near
Moscow. China, -which contributes
20 percent of the operation
costs of the institute, is per-
mitted to use its research and
training facilities.
The Chinese probably in-
stigated the three-month-long
negotiations in Moscow which
led to an agreement in January
1958 providing Soviet assist-
ance to China on its 12-year
plan. Details of the agree-
ment are lacking, but apparent-
ly an attempt was made to tie
it down to specific goals of
the 12-year plan. The agree-
ment probably also clarifies
and extends arrangements for
giving Chinese scientists ad-
vanced training in the USSR.
Another agreement was
signed in December 1957 between
the science academies of the
two countries aimed at facili-
tating cooperation. This agree-
ment appears to be a belated
effort to implement the Chi-
nese and Soviet resolutions
agreed on when the Soviet acad-
emy mission visited Communist
China in June 1955.
Relations with other bloc
countries are nominal. There
has been some exchange of lec-
turers, and research students
have received some advanced
training in satellite countries.
Peiping is on record that
it will seek knowledge wherever
possible including the free
world. Mao Tse-tung is report-
ed to have said to the Supreme
State conference: in February
1957 that "it is even necessary
to learn from the United States,
especially in the field of
science and technology."
Communist China's scien-
tists are beginning to make con-
tact with free-world scientists
--particularly Japanese--by at-
tending scientific congresses.
The Japanese Science Council
and the Chinese Academy of
Sciences exchanged delegations
in 1955 and a group of Japanese
physicists spent a month in
China in the spring of 1957.
There is some indication that
Peiping would like to have Jap-
anese scientists come to China
for extended periods for re-
search and teaching.
The Chinese Communists
withdrew officially from the
International Geophysical Year
because that body recognized Na-
tionalist China as an official
participant. They continued
in an observer capacity, however.
Nuclear Energy Developments
With a very limited number
of nuclear physicists, few
training facilities, and limited
industrial capacity for the pro-
duction of nuclear facilities,
Communist China is heavily de-
pendent on the USSR for its
progress in the field of nuclear
energy.
As a country in a position
to contribute uranium resources
to the Soviet nuclear energy pro-
gram, Communist China was desig-
nated in 1955 as one of the bloc
countries that would receive
Soviet aid in nuclear research.
On 1 July, China announced that
the 6.5-10 megawatt thermal re-
search reactor and 25,000,000-
electron-volt cyclotron built
with Soviet assistance began
operating on 13 June. These
facilities, largest in the bloc
outside the USSR, are believed
to be located in Peiping.
Some alleged details of
the agreement connected with nu-
clear energy development have
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CURRENT INTELLIGENCE WEEKLY j4UARY
24 July 1958
been received and are considered
possibly true. The Soviet Un-
ion reportedly is to train 50
Chinese scientists in the So-
viet Union and furnish 20 nu-
clear scientists to supervise
Chinese nuclear research. Dur-
ing the Chinese Second Five-
Year Plan (1958-62), the Soviet
Union will aid in the construc-
tion of two nuclear power plants,
another research reactor, and a
50,000,000-electron-volt cyclo-
tron, and will keep China cur-
rent on the results of Soviet
nuclear research. Pre-25X1
pared by OSI)
Six months after the ouster
of dictator Perez Jimenez, Ven-
ezuela's caretaker junta is
still attempting to balance
antagonistic military and civil-
ian elements, and faces serious
difficulties in carrying out
its plan for a peaceful trans-
fer of power to a coalition
government expected to be elected
on 30 November. The conditions
essential to a peaceful transi-
tion--survival of the junta and
election arrangements acceptable
not only to the disparate par-
ties but also to the tradition-
ally dominant military--may be
difficult to meet.
Governing Junta
The governing junta, with
three military and two civil-
ian members, appears to have
the backing of civilian groups,
the press, and public opinion
generally, and to retain the
majority, but diminishing, sup-
port of the military. Junta
President Larrazabal, key per-
sonality in the government at
present, is a high-ranking naval
officer whose brother is com-
mander of the navy--an associa-
tion which has seemed to carry
a special guarantee of naval
support for the regime.
Although theoretically
apolitical, the junta is in a
position to influence the out-
come of the elections for a con-
stitutional government. Through
the policies it adopts and the
use of its appointive powers,
it is able to promote the in-
terests of one or more of the
political parties. Larrazabal
himself has been considered a
coalition presidential candidate.
The Military
The traditionally dominant
military has the power to take
over the present government or pre-
vent an elected government from as-
suming office. Factors promoting
such a move include the military's
strong hostility to Venezuela's
largest party, the leftist but non-
Communist Democratic Action (AD),
and concern over the growing in-
fluence of the Communist party.
Serious checks on the free-
dom of the military to intervene,
however, include the continuing
reorganization of the armed
forces following the ouster of
senior officers who served under
the former dictatorship; the
minority of the military which
might oppose a coup at the pres-
ent time; and the pronounced
public opposition to a return
of strong military rule. Civil-
ian groups also might unite to
oppose a coup, with resultant
widespread violence. Moreover,
the military are probably re-
luctant to act without some
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
advance indications that US rec-
ognition of a new military-
sponsored regime would be forth-
coming at an early date.
Political Parties
Four of Venezuela's five
major political parties have
reorganized rapidly since the
fall of the dictatorship, and
one new party has been founded.
The voting strength of these
groups-can only be estimated
because of the lapse of time
since the last free nationAl
elections were held.
AD, although probably the
majority party, is limited by
the attitude of the military,
who tend to consider
it Communist. Its
leader, Romulo Betan-
court, is virtually
eliminated from the.
presidential race as
a consequence. AD,
however, apparently
has substantial in-
fluence in the pres-
ent government and
the support of the
great majority of or-
ganized labor.
The Venezuelan
have the advantage of being na-
tional parties somewhat more ac-
ceptable to the military than
either AD or PCV. COPEI also
has the endorsement of the
Catholic Church.
The influence of the moder-
ate Republican Integration (IR)
cannot be measured accurately,
but it has been accorded favor-
able treatment by the govern-
ment, and its membership includes
a number of respected individ..
uals. Unlike the other four
parties, however, it has no known
labor following or youth auxil-
iary. Other minor parties
do. not appear to have any
pbrcelbtible influence at pres-
ent.
VENEZUELAN POLITICAL PARTY STRENGTHS
ESTIMATED PERCENT OF POPULAR VOTE IN A GENERAL ELECTION )
OF CENTER
~EFZ
wields political in- v M(PcMMHNIST
fluence out of pro- 807213
portion to its esti-
mated strength through
OTHER: s S %
its reported penetration of the I Other Civilian Power Elements
government at all levels; its
prominent position in student,
teacher, intellectual, and jour-
nalistic circles; its influence
over the non-Communist press;
its position in organized labor,
probably second only to AD among
the major parties; and its re-
spectability and security through
association with united labor
and political organizations.
The PCV may also have penetrated
the other parties in some degree
as the latter reorganized rapidly.
Both the Democratic Repub-
lican Union (URD) and especially
the Christian Democratic COPEI
Union labor is so organized
as to be in large degree a po-
litical arm of each of the major
parties except IR. All four
parties have labor organizations
with membership on the United
Syndical Committee, a .labor
unity group which in theory is
supervising the reorganization
of Venezuelan labor and main-
taining a labor truce among the
parties. The strength of or-
ganized labor, which could prob-
ably launch a partially effec-
tive general strike, has not
yet been tested but is believed
to be increasing. At present,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 July 1958
the great majority of labor is
reportedly affiliated with AD.
Under the present uncertain
political conditions, the grow-
ing number of unemployed--esti-
mated at 70,000, primarily in
Caracas--lend themselves to po-
litical manipulation and could
serve as a significant element
of force for political parties.
Avowedly apolitical, the
Roman Catholic Church in Vene-
zuela exercises some influence
on government and politics, al-
though less than in some other
Latin American countries. It
is associated with the COPEI
party and COPEI's labor affili-
ate, for which it acts as coun-
selor. The Catholic paper La
Religion, which has an esti=
mated c rculation of 28,000 and
is the only periodical which is
anti-Communist at present, prob-
ably has some political influ-
ence over moderate and conserva-
tive readers. Moreover, clerics
are active on political bodies
such as the Patriotic Front.
The press has become in-
creasingly influential under
the present government, which
seems highly sensitive to pub-
lic opinion, with the number of
papers and their circulation
increasing since the ouster of
dictator Perez. The press,
which tends to be antimilitary,
is largely leftist-owned and
-managed, and most of the staffs
of the principal newspaper are
penetrated by Communists or
sympathizers. Virtually no
anti-Communist material is
printed in the non-Communist
press, which also serves as an
outlet for Communist Propaganda.
Thus the press has considerably
enhanced the position of the
PCV as a power element.
Student groups, which took
the initiative in the overt ci-
vilian phase of the movement
which ousted Perez, have become
one of the leading forces in
Venezuelan politics. The major
political parties except IR also
have youth auxiliaries. The
principal independent organiza-
tions in the Caracas area are
penetrated and, in large meas-
ure, dominated by Communists.
Politically oriented, the stu-
dents are readily manipulated
by political agitators. Since
the public in Venezuela is gen-
erally hostile to forceful ac-
tion against student demonstra-
tions--a situation which often
embarrasses an incumbent regime
--students are a power in na-
tional affairs beyond their
strength in numbers.
The principal business or-
ganizations are in part designed
to influence national economic
policies to favor Venezuelan
industry and commerce over for-
eign competition, but they are
also a potential stabilizing
force. The financial resources
of the members, the majority
of whom tend to be conservative,
could be applied to influence
the military or the political
parties.
Outlook
Much of the present uncer-
tainty derives from the fluid
relationships among Venezuela's
power elements. The junta has
alienated some military support
recently by complacency toward
the growing Communist influence
and by its quick response to
civilian pressures. The prin-
cipal check on a military coup
apparently is the likelihood of
widespread civilian violence
against such a move, as was dem-
onstrated on 22-23 July when
Defense Minister Castro Leon
was forced to resign.
The strength of parties
vis-a-vis the military depends
in large degree on the mainte-
nance of their proclaimed truce
and unity program. All major
groupings are members of the
Patriotic Front, which played a
key role in the ouster of Perez
and whose present objectives
are to ensure an elected con-
stitutional government and to
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CURRENT' _INTELLIGENCE WEEKLY SUMNARY
24 July 1958
guard against the return of mil-
itary dictatorship. Any break-
down of unity among the parties
would be likely to enhance the
position of the military as the
dominant element in Venezuela.
The parties have not yet agreed,
however, on the nature of the
elections and on their respec-
tive positions in a future coa-
lition regime.
long-range instability.
In the event a peaceful
transfer of power takes place
next April, the doubtful ability
of civilian groups to cooperate
in the actual exercise of gov-
ernmental power while retaining
essential military support fore-
shadows at least a measure of
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PART III PATTERNS AND PERSPECTIVES Page 12 of 12
__ Approved For Release 2007/10/23: CIA-RDP79-00927AO01800080001-5
 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01800080001-5
Approved For Release 2007/10/23: CIA-RDP79-00927AO01800080001-5