CURRENT INTELLIGENCE WEEKL;Y SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001800090001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 41
• Document Creation Date: December 20, 2016
• Document Release Date: December 12, 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. 1800/58
AUTH: HR 70-
NEXT REVIEW DATE:
d DECLASSIFIED
CLASS. CHANGED TO. w
31 July 1958
DOCUMENT NO.
NO CHANGE IN CLASS. 0
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
CONF~L
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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CONFIDLN I IRL
CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
PART I
OF IMMEDIATE INTEREST
MIDDLE EAST DEVELOPMENTS
General Shihab's election
on 31 July as the new president
of Lebanon will almost certain-
ly be followed by opposition de-
mands that President Chamoun
retire immediately and that the
American and UN forces be with-
drawn. The opposition clearly
anticipates that Shihab will
be merely a caretaker president
until a new parliament can be
elected and another president
chosen--possibly in six months'
time--who would be even more to
the opposition's liking than
Shihab. If Chamoun remains in
office until the legal expira-
tion of his term on 23 Septem-
ber, and if "loyalist" elements
seek to frustrate the opposi-
tion's efforts::to gain control
of the government quickly, there
may well be a new.crists. An-
other critical issue is likely
to be the choice of an army
commander to succeed Shihab.
While weariness with ter-
rorism and the exhaustion of
the politicians may temporarily
produce a calm internal situa-
tion in Lebanon, the "manifesto"
put out by part of the opposi-
tion this week is indicative of
longer range Moslem demands for
a radical revision or abolition
of the traditional structure of
Lebanese politics. The mani-
festo, attacking the fiction
that the Christian population
of the country constitutes a
majority, demanded that hence-
forth half the offices be given
Moslems and that parliamentary
constituencies be on a geograph-
ical rather than coAfessional
basis. The authors of the mani-
festo originally said they
would insist that Shihab sub-
scribe to the document, but
subsequently backed down and
indicated the statement was
merely to "appease the mob."
Such statements nevertheless
tend under present conditions
to become positions from which
radical Arab nationalist lead-
ers dare not retreat.
Iraq
The Baghdad regime, which
has succeeded in obtaining gen-
eral diplomatic recognition,
has continued to express itself
publicly in moderate terms and
to profess friendship for the
West while pressing for Ameri-
can recognition. The basic be-
lief in Western antagonism to-
ward the new regime found ex-
pression on 30 July, when a fire
which broke out in the tank farm
of a British-owned oil company
in Baghdad was popularly attrib-
uted to "imperialist" sabotage.
The regime, obviously fearing an
outbreak of anti-Western vio-
lence, quickly imposed a curfew
and asked the populace not to
believe rumors regarding :the
origin of the fire.
King Husayn's effort to
make Jordan some kind of pro-
Western "fortress" has been
further undermined by the fa-
tigue of Prime Minister Rifai.
Rifai's disability, added to the
burden': of other problems and to
evidence of increasing disaf-
fection, may lead Husayn to
capitulate to UAR pressure.
At the present time, the King's
only secure safeguard is the
presence of British troops; if
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00 C
OF 'IMMEDIATE INTEREST
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1058
these leave the country, the
King would seem to have little
choice but to go with them or
bow to Nasir. For the present,
the Jordan radio has been in-
structed to take a "softer" line
toward Nasir, and there are some
indications that Nasir, besides
preparing for Husayn's over-
throw, may be making an effort
to persuade him to surrender.
he believes the Arab peop a are
behind Nasir, right or wrong,
and that, even if Nasir intends
eventually to overthrow the
Persian Gulf sheikdoms, one
cannot resist "Kismet." At
present, however, the security
situation in Kuwait appears
fairly good following a strong
stand by the police against
demonstrations.
Prime Minister Khalil has
retained office through the end
of the parliamentary session,
but his pro-Western policy has
been attacked heavily in both
houses, which passed unanimous
resolutions condemning the Amer-
ican and British use of troops
in Lebanon and Jordan. The pro-
Egyptian elements which seek
Khalil's ouster now have turned
to arousing the sentiment of
the "street" against him.
Kuwait
The Ruler of Kuwait re-
t4rned-from Damascus this week
in a "defeatist" mood following
talks with Nasir.
The Israeli military re-
main alert for possible trouble,
especially a deterioration in
the Jordanian situation. Most
Israeli activity at present is
in the diplomatic field, how-
ever, and is concentrated on
trying to ensure that Israel's
interests do not suffer from
any high-level international
discussions on the Middle East.
While French-Israeli col-
laboration appears to remain
close, the Israelis may have
been rebuffed in an attempt to
obtain more formal commitments
from France. Foreign Minister
Meir plans a trip to Paris next
week.
The Israelis are also seek-
ing ways and means of avoiding
being further identified in
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
Afro-Asian circles as handmaid-
ens of imperialism. The, immedi-
ate problem is their acquies-
cence in the overflight of Brit-
ish and American aircraft sup-
porting the British forces in
Jordan. However, they also face
a longer range danger of being
completely isolated in an area
dominated by Nasir, who in turn
would be backed by the USSR.
A shift by Israel to a more
neutralist position in an effort
to diminish Soviet hostility
is one of the long-range tac-
tics reported being discussed.
Moscow on 30 July named
G. T. Zaytsev, head of the Near
East department of the Soviet
Foreign Ministry, as ambassador
to Iraq and continues to move
rapidly to establish close work-
ing relations with the new Iraqi
Government.
Soviet leaders apparently
believe that the possibility of
early Western military action
against Iraq, either alone or
in cooperation with Middle East
allies, has diminished.
Peiping continues to con-
centrate on Asian states in ef-
forts to gain popular support
for the bloc's case against the
Western intervention. Peiping,
like New Delhi, refers in its
statements to the "tense situa-,
tion in Western Asia" rather
than the Middle East. Chinese
Communist ambassadors in Karachi
and Djakarta have called on
Prime Minister Noon and Presi-
dent Sukarno respectively, and
the envoy in New Delhi has con-
tacted Nehru.
Peiping has begun accusing
the Chinese Nationalists of us-
ing the Middle East crisis to
"step up war preparations" and
carry out new "harassment."
Large numbers of military per-
sonnel and civilians in the
coastal provinces have partic-
ipated in mass demonstrations
protesting against Chinese Na-
tionalist activity and pledging
readiness to "liberate" Taiwan
"at any time."
Baghdad Pact Meeting
The Baghdad Pact Ministe-
rial Council meeting in London
on 28-29 July focused primarily
on the altered situation in the
Middle East as a re{ult of the
Iraqi coup and resolved to carry
out the purposes of the pact
despite the probable loss of
Iraq as a member. Turkey, Iran,
Pakistan, and Britain decided
the new Baghdad regime should
be recognized this week.
The question of Iraq's mem-
bership was left to Baghdad's
initiative and it was decided
to avoid any action that might
drive Iraq from the organiza-
tion. This policy will permit
the members to maintain flexi-
bility until Iraq's intentions
are clear. It had been feared
that the new Iraqi regime might
send delegates, especially to
the Military Committee sessions,
in an attempt to learn pact in-
tentions. In view of the in-
tense Arab nationalist opposi-
tion to the Baghdad Pact, Iraq's
continued membership is consid-
ered unlikely. Meanwhile the
headquarters of the pact is
being transferred to Ankara,
and plans are being made to
counter Egypt's exploitation
of alleged pact documents.
The delegations all ex-
pressed concern over Iraq's new
orientation, and Iranian Prime
Minister Egbal especially noted
the added threat to Iran, ex-
pressing fear that his country
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CURRENT INTELLIGENCE'WEEKLY SUMMARY
31 July 1958
might now become a primary ob-
jective of Soviet pressure.
Turkey believes Egypt and the
USSR now will try to achieve a
direct land connection via Iraq
between the two countries, pos-
sibly through the promotion of
a Kurdish republic.
The London conference con-
firmed the intentions of.all
remaining members to strength-
SOVIET TACTICS ON
Khrushchev's latest notes
on 28 July calling for an im-
mediate conference of the Big
Four heads of government,plus
Indian Prime Minister Nehru
and UN Secretary General Ham-
marskjold, reflect Moscow's
hope that it can exploit Premier
de Gaulle's dislike for a sum-
mit conference in New York to
force the United States and
Britain to accept a meeting sub-
stantially on Soviet terms.
Comments of De Gaulle's
foreign policy advisers suggest
that he actually is not eager
for summit talks at this time,
particularly in the UN frame-
work, which he feels would of-
fer the Russians too many prop-
aganda advantages. They also
believe Khrushchev's proposed
inclusion of India would make
difficult an agreement on the
agenda and a list of other par-
ticipafts. Preoccupied with
constitutional reform and Al-
gerian problems, De Gaulle pre-
fers a later, carefully prepared
and discreetly conducted con-
ference.
Although on 23 July Khru-
shchev had ostensibly accepted
en the Baghdad Pact, and the
prospect: of closer' American
affiliation appeared to bolster
the morale of the delegates.
The further consolidation of
Arab nationalism and the in-
creased fear of Soviet actions
will encourage heavier demands
on the United States for mili-
tary equipment and guarantees.
SUMMIT MEETING
American and British suggestions
that the meeting be held within
the context of the UN Security
Council, the latest Soviet notes
back away from this position.
Alleging the United States and
Britain abandoned their earlier
proposals for a special session
of the Security Council at the
heads-of-government level in
favor of an "ordinary session"
of the Security Council, the
Soviet leader, calling this a
step backward on the West's
part,?endorsed Premier de Gaulle's
suggestion for a "private" meet-
ing of the major powers in a
European city.
Moscow has been careful
not to close the door to a com-
promise formula for a summit
meeting within they UN frame-
work.
Khrushchev, in his 28 July
letters, adopted a pose of un-
concern for procedural details
in the face of the overriding
importance of an immediate meet-
ing to ease Middle East tension.
Moscoi continues to insist on
the parti+6ipatioh of India,
but, unlike the 23 July notes,
the latent `Soviet messages-do
not mention the "natural" par-
ticipation of the Arab states.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
Moscow's charges of Western ,
duplicity. and procrastination
in the face of the "extraordi-
narily serious situation" in
the Middle East are designed
to place the West on the defen-
sive regarding time, place,
and composition of the pro-
jected conference and, if no
conference is held, to place
the blame for the failure on
the West.
Khrushchev's letters con-
tinue Soviet efforts to create
a sense of extreme emergency
with charges that "preparations
for armed interference in Iraq
are proceeding at full speed."
On 30 July, Moscow protested
against the alleged violation
of Soviet air space by an Amer-
ican bomber from Iran, stating
the USSR attaches "especially
serious importance" to this in-
cident because of the tense
situation in the Middle East
created by American and Brit-
ish armed intervention.
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PART I OF IMMEDIATE INTEREST
On 30 July, Moscow also is-
sued a sharply worded TASS
statement accusing the London
meeting of the Baghdad Pact mem-
bers of "evolving new aggres-
sive measures directed toward
further aggravation of the mil-
itary conflict." On 26 July,
Moscow in a note to the Bonn
government protested the use of
air bases in West Germany for
the redeployment of American
forces and called on Bonn to
take effective measures to halt
such operations in accord with
the "vital national interests"
of West Germany.
A Soviet aide-memoire to
Turkey on 24 July reviewed
press reports of Turkish troop
concentrations on the Syrian
and Iraqi borders and warned
Ankara of "grave responsibilr-
ity fbr,possible ' consequences"
of an attack on Iraq.
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tivimUCIV 1 IY1L
31 July 1958
The TASS summary of the
Soviet economic plan fulfill-
ment report for mid-1958 shows
a 10.5-percent increase in in-
dustrial production over the
first half of 1957, indicating
that the economy has not been
disrupted by the industrial re-
organization. Prospects for a
good harvest in 1958 and the
large reported increase in in-
vestment, in light and food in-
dustries promise continuing
steady improvement in the stand-
ard of living for the Soviet
consumer.
The report points out that
all but one sovnarkhoz over-
fulfilled their plans, and
stresses that production suc-
cesses were a result of the
reorganization.
PERCENTAGE ANNUAL RATE
REPORTED PRODUCTION
DURING FIRST HALF 19SS
PLANNED PRODUCTION
FOR FULL YEAR 1958
PLANNED PERCENTAGE
INCREASE 1958 OVER 1957
OF INCREASE NEEDED
1959-1960 TO REACH
ORIGINAL 6TH PLAN GOALS
STEEL
27.0 ?O
53.6
5
0%
10.0%
MILLION TONS
.
M MI IRON
19.3
39.1
5.7%
12.6%
MILLION TONS
ROLLED METAL
21.3
41.7
3.7%
9.4%
MILLION TONS
COAL
245.0
488.9
5.6%
8.7%
MILLION TONS
PETROLEUM
54.0
112.6
14.5%
11.0%
MILLION TONS
CEMENT
15.9
33.9
17.3%
24.0%
MILLION TONS
ELECTRIC POWER
114.0
231.0
10
3%
15.0%
BILLION KWH
.
REPORTED PERCENTAGE INCREASE
FIRST HALF 1958 OVER FIRST HALF 1957
GROSS INDUSTRIAL
10.5%
7.6%
10.7%
OUTPUT
LABOR PRODUCTIVITY
6.0%
5.4%
9.6%
IN INDUSTRY
NOTES AND COMMENTS
Industry
The reported increase in
industrial production of 10.5
percent over that for the first
half of 1957 maintains approxi-
mately the same rate of growth
as that achieved in the past
two years.
The physical output data
included in the report indicated
that 1958 production goals for
the basic branches of industry
will be fulfilled without dif-
ficulty. The 1958 goals, how-
ever, like those for 1957, rep-
resent lower rates of growth
than were attained during the
early postwar years and
than were originally planned
for the Sixth Five-Year
Plan.
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31 July 1958
The reported increase in
industrial labor productivity
of 6 percent is the same as
last year, suggesting that the
steady decline in the rate of
increase of labor productivity
from the 8 percent achieved in
1955 may have been halted.
The volume of capital in-
vestment increased 11 percent.
An increase of 28 percent in
capital investment in ferrous
metallurgy suggests that plans
were implemented for expanding
production capacity in those
critical industrial materials
industries which affect the
growth of dependent economic
sectors. The reported 23-per-
cent increase in investment in
the light and food industries
is striking compared with the
modest increases accorded these
industries in past years.
Agriculture
The report states that the
plan for sowing spring crops
was overfulfilled and that the
total area under crops for the
1958 harvest is 3,700,000 acres,
or about 1 percent greater than
in 1957. This would place the
area under crops slightly above
that during the record harvest
year of 1956. Good growing con-
ditions have prevailed, partic-
ularly in the main grain areas,
thus enhancing the prospect for
a bumper harvest in 1958.
Livestock flocks and herds,
at least in the socialized sec-
tor, were considerably larger
in mid-1958 than in mid-1957,
and the state procurement and
purchase plan for the first
half of 1958 was reported over-
fulfilled for meat, wool, and
eggs. Milk procurements re-
portedly increased 9 percent as
compared to the first half of
1957, but no mention was made of
plan fulfillment. Milk produc-
tion may have increased only
slightly, if any, over last
year, when milk output was fa-
vored by good pasturage from
an early spring and relatively
abundant feed supplies from
the 1956 harvest.
According to the report,
'65 percent of the collective
farms by 1 July had purchased
machinery, and in June the
collective farms conducted 73
percent of the total volume of
tractor work performed on all
collective farms with their
own tractors.
Retail trade, which grew
more rapidly than planned during
1957, is increasing at a slower
pace in 1958, slightly above
the 7-percent rate planned
for the year in contrast
to the 10 percent planned
and 14 percent achieved in
1957. Housing goals achieved
indicate that the state plan
calling for a 19-percent in-
crease for the full year
is being 'fulfilled.
ORR)
KPrepared by
SOVIET WITHDRAWALS FROM EASTERN EUROPE
Three Soviet line divisions
have been withdrawn from Hungary
and Rumania in accordance with
plans announced at the Warsaw
Pact meeting on 27 May. The
units involved are believed to
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CURRENT INTELLIGENCE WEEKLY SUM ARY
have been relocated
in military districts
in the western USSR
where they would be
readily available for
redeployment to the
satellites. There
are 25 combat divi-
sions totaling about
400,000 men still
stationed in East
Germany, Poland, and
Hungary.
With the possi-
ble exception of some
headquarters person-
nel and an advisory
group, all Soviet
personnel in Rumania
have been withdrawn.
31 July 1958
EAST
J GERMANY
-4 4n Diviniens
22 Air Regime
WEST
2 Divisions
14 Air Regiments
3 Divisions
9 Air Regiments
ADNIA TIC
SEA
SOVIET STRENGTH DISPOSITION
Figures are for line divisions only.
31 JULY 1958
an advisory
group w ch existed before the
withdrawal will continue to ex-
ert influence over the Rumanian
armed forces. Two line divi-
sions, an antiaircraft artil-
lery division, and five fight-
er regiments were involved in
this withdrawal.
In Hungary,a division with
headquarters at Esztergom was
withdrawn from the area north
of Budapest. Concurrent with
the departure of this unit,
there was some relocation and
realignment of subordinate units.
At least three combat divisions
totaling 45,000 men supported
by tactical air elements remain
in Hungary, almost twice the
Group
Only
(western USSR only)
55 Divisions
160 Air Reg;rnents
AEGEAN
"a SEA
SLACK
SEA
strength of Soviet units there
before the rebellion.
The USSR has taken pains
to demonstrate the fulfillment
of its announced withdrawal
plans by holding departure cer-
emonies in each of the major
garrison areas. Western mili-
tary observers, however, were
not invited to witness these
ceremonies as they had been in
East Germany. In addition to
these withdrawals, the Warsaw
Pact announcement stated that
satellite armed forces Would
be reduced by 119,000 men.
There has been no positive
evidence that this reduction in
force has been carried out.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
INDONESIA
operation yet undertaken.
The rebels reportedly reached
the center of the,city before
government forces were suffi-
ciently organized to force
their withdrawal. The govern-
ment has regained the initia-
tive, but Djakarta did not
release news of the attack
until 27 July. According to
the Djakarta announcement,
the dissident attacking force
totaled 2,000.
In Sumatra, rebel activity
continues at an increasing
pace. The dissident attack on
Bukittinggi, Central Sumatra,
which began on 23 July is the
largest dissident offensive
yyd ~" I b- jR%181 ongga. Tobolr~'"
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NOTES AND COMMENTS
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
LAOTIAN CABINET CRISIS
Prospects for a revitalized
Laotian Government dominated by
young, anti-Communist civil and
military leaders appear to have
diminished. Premier-designate
Souvanna Phouma has offered the
"Young Turks" 5 seats in a 14-
man cabinet that is otherwise
in character with previous in-
effectual governments.
The Communist-dominated
Neo Lao Hak Zat is report-
ed willing to back this or any,
other cabinet headed by Souvanna.
It apparently regards Souvanna
as tractable and fears that op-
position would ultimately lead
to the closure of the National
Assembly and the imposition of
a strong government by Crown
Prince Savang or the army.
The young reformists--or-
ganized as the Committee for
the Defense of the National In-
terests (CDNI)--have refused
Souvanna's offer and are threat-
ening a coup unless giving a ma-
jority representation in the new
cabinet. The committee, recent-
ly formed and without organized
popular support, has had to rely,
on threats of extra constitu-'
tional action to give weight
to its demands.
fluidity of the situation.
Recent police maneuvers
and the placing of the army on
an alert status demonstrate the
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Cambodian Premier Sihanouk
may accept some form of military
assistance from Communist China
when he visits Peiping about 10
August unless Cambodia's border
disputes with South Vietnam have
been settled. Most Cambodian
officials oppose such a drastic
step, but Sihanouk feels sure
of broad mass support in view
of inflamed public opinion over
the border incursion by Viet-
namese forces in Stung Treng
Province in June. Sihanouk re-
cently has spoken of "dwin-
dling" American military assist-
ance to Cambodia, in contrast
to "ample" amounts given the
"enemy" Vietnamese, and he has
even warned his people that
this aid may soon be terminated
altogether.
Sihanouk's act of according
full diplomatic recognition to
Peiping has already aroused
some internal opposition. Gen-
eral Dap Chhuon, influential
anti-Communist governor of Siem
Reap Province, has sent word to
Ambassador Strom in Phnom Penh
of his "deep distress." The in-
definite postponement of the
National Congress, scheduled to
have opened on 27 July and to
have reviewed this policy, indi-
cates that opinion is also di-
vided in Phnom Penh.
In Saigon, Vietnamese Pres-
ident Diem has described Phnom
Penh's recognition of Peiping
as "a body blow," and he fore-
sees the complete isolation of
Vietnam. He regards Laos-as
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
seriously in danger of being
lost to Communism and feels
Thailand is politically unstable.
Diem still professes an inter-
est in reaching some agreement
with Phnom Penh but basically
feels the situation in Cambodia
cannot be retrieved as long as
Sihanouk remains in power. He
claims that "thinking" Cambo-
dians are becoming
increasingly aware
that Sihanouk's do-
mestic and foreign
policies are "ruin-
ing the country,"
and seems convinced
they will oust him
from leadership with-
in a year.
Diem has taken
no action as yet to
order the removal of
the massively con-
structed and heavily
defended concrete
border marker erected
by Vietnamese troops
in June more than a
mile inside the old
Cambodian frontier.
A company of Vietnamese marines
has also been sent to the dis-
puted Pirate Islands in the Gulf
of Siam. Some of these small
islands are already occupied by
Cambodian garrisons and, even if
an incident does not occur, Phnom
Penh will consider this move
further evidence of Vietnamese
aggression.
NORTH VIETNAM ACKNOWLEDGES CHINESE MODEL FOR DOMESTIC PROGRAMS
The slogan "We Must Learn
From Chinese Experience" is be-
coming commonplace in North
Vietnam as Hanoi begins its
much-heralded "transition to
socialism." To popularize the
programs which form the "new
phase" of the revolution, the
regime is telling the peasants
how much better off they would
be in cooperatives like their
Chinese colleagues, and the
bourgeoisie is being lectured
on the merits of Peiping's joint
state-private ownership system.
The army has promised to "catch
up" with the Chinese People's
Liberation Army as it carries
out its modernization program.
Although North Vietnam's new
programs are being advertised
as Chinese in origin, the deci-
sion to adopt them was probably
made on Hanoi's initiative rath-
er than Peiping's.
President Ho Chi Minh urged
last month's Congress of Labor
Heroes "to study the experience
of fraternal countries, par-
ticularly China." Practically
no strata of society has been
immune to this admonition.
In July the increased pub-
licity being given to Peiping's
tactics became particularly
noticeable when Nhan Dan, the
official party paper,TEegan a
daily column devoted to Chinese
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31 July 1958
experiences."Rectification" has
received special attention and
praise, perhaps because Hanoi
has declared its intention to
thoroughly house clean the party
apparatus this year. "Coopera-
tivization of agriculture" has
been given wide play, and Chi-
nese movies illustrating
the
joys of the peasant's
new
life
were shown to members
of
the
National
Assembly at
its
last
session.
The
regime hopes
the
prom-
ise of achievements matching
China's will offset the tradi-
tional distaste bordering on
antipathy which Vietnamese feel
for their northern neighbors.
Although the Lao Dong party
statutes enjoin the North Viet-
namese Communists to "follow
the thinking of Mao Tse-tung,"
the regime in the past has
adopted programs such as land
rent reduction, the agricultur-
al tax, and ag-rarian reform
without acknowledging their
Chinese inspiration. The word-
ing of the Vietnamese directives
were virtual translations of
the Chinese prototypes.
Whether Vietnamese cadres
showed less imagination and
adaptability or whether condi-
tions in Vietnam are less like
those in China than it would
appear, these programs were not
nearly so successful in the
smaller country. Agrarian re-
form in particular was bungled
so badly that the regime had
to backtrack on its goals. If
Hanoi should prove inept or in-
competent in carrying out its
present programs, which for the
first time are frankly acknowl-
edged to be Chinese in origin,
it might weaken the appeal of
Peiping's argument that Chinese
Communist methods are applica-
ble to other underdeveloped
countries.
LEFTISTS EMERGING AS DOMINANT POLITICAL FORCE IN SINGAPORE
The Communist-influenced
People's Action party (PAP) ap-
pears likely to become the dom-
inant political party in Singa-
pore when internal self-rule is
achieved next year. The PAP
victory in the recent city-coun-
cil by-election in the Kallang
district, widely regarded as
an important test of strength,
is further evidence of the con-
tinuing left-wing trend in Sin--
gapore. The party is now in a
strong position for the elec-
tions to rural district coun-
cils in September and those to
the Legislative Assembly next
spring which will precede the
institution of self-rule.
The PAP success was
achieved despite a major effort
by the moderate parties. The
Labor Front and the Liberal' So-
cialists combined to support a
single candidate, and Chief
Minister Lim Yew Hock campaigned
strongly for him. The PAP over-
came the further handicap of
running a Malay in a predomi-
nantly Chinese district. This
victory, after the PAP had won
13 of the 14 seats it contested
in last December's city-council
elections, seems likely to have
a bandwagon effect which no mod-
erate coalition can arrest.
Chief Minister Lim's embryonic
United Socialist Front (USF)
seems to have little chance to
stem the leftist tide, especial-
ly since the USF's primary
strength must be drawn from the
Labor Front and the Liberal So-
cialists, which have already
failed in their first coopera-
tive efforts.
The poor showing of former
Chief Minister David Marshall's
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
Worker's party appears to have
nullified its chances of becom-
ing a political force in Singa-
pore. This performance by the
party which won the Kallang
district seat only last Decem-
ber tends to confirm reports
that the Communists have with-
drawn their support from the
Worker's party and are now sup-
NEW CHINESE PROGRAM MAY SOLVE BLOC COPPER SHORTAGE
As part of the present pol-
icy of bending all efforts to
achieve "more, better, faster,
and more economical results,"
Peiping has launched a program
to increase China's copper-
smelting capacity by 150,000
tons within a year. It intends
to get this tenfold increase
by setting up some 3,000 small
copper-smelting furnaces, each
with a capacity of 50 to 100
tons. Built by local capital,
the furnaces will be scattered
throughout the country, in some
instances to take advantage of
minor deposits which might oth-
erwise not be workable.
Copper is in short supply
throughout the Communist world,
which over the past five years
has imported an average of 120,-
000 tons a year from the free
world. If the new program is
successful, China will be pro-
ducing about 165,000 tons of
copper a year, some four times
its annual domestic requirements,
and may have around 120,000 tons
a year for sale to its bloc
partners.
Peiping will doubtless run
into administrative problems
in getting this program under
way. The supply of the neces-
sary raw materials does not ap-
pear to present any special dif-
ficulties, and China has had
centuries of experience in op-
erating small smelters, which
require a minimum of technologi-
cal know-how for construction
and operation. Capital outlay
is minimal; Peiping has cited
one such smelter built out of
local materials at a total cost
of only $60.
On the other hand, wide
employment of smelters of this
type is wasteful and inefficient.
The quality of ore used must in
general be a good deal higher
than is the case with more mod-
ern smelters. Metal losses
will run high. The crude cop-
per produced will contain a'high
percentage of impurities and re-
quire further refining prior to
use.
Peiping's motive in build-
ing such plants doubtless is to
get the largest possible in-
crease in output in the least
time and at the least cost. It
probably looks on the program
as a useful stopgap until the
larger, more modern facilities
now under construction at places
such as Paiyinchang in Kansu
Province and Tungchuan in Yun-
nan Province go into production
in a few years, and replace
the less efficient small plants.
Prepared by ORR) 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
Widespread violence be-
tween the Greek and Turkish com-
munities on Cyprus continues
despite a major security offen-
sive, during which about 1,600
Greek- and 50 Turkish-Cypriots
were placed in detention camps
and the Turkish Resistance Or-
ganization (TMT) 'proscribed.
Over 100 people have been killed
and nearly 200 injured in the
intercommunal fighting since
early June--over half in the
past three weeks.
Although Greek- and Turk-
ish-Cypriot leaders, including
Archbishop Makarios, have joined
Governor Foot in public appeals
for an end to the violence, ex-
tremists refuse to heed the
call. Following the mass ar-
rests, EOKA leader Grivas pro-
claimed in a new leaflet that
he preferred "total destruc-
tion" in Cyprus to continued
British rule. Foot, while aware
that EOKA would probably react
to the security drive by all-
out attacks on the British po-
lice forces, had hoped that the
roundup might cause EOKA to
cease its assaults on the Turks
and thus prevent a continued
drift toward civil war.
In Greece, the arrests have
been denounced as a further in-
dication that Britain favors
the Turkish Cypriots. Athens
has protested the recent securi-
ty measures to London and Wash-
ington, as well as to the secre-
taries general of the UN and
NATO. Within the next two weeks
Greece will probably again ask
the UN General Assembly to place
the Cyprus issue on the agenda
of its forthcoming session.
In Turkey, the press and
radio, inspired by pleas for
help from Turkish-Cypriot lead-
er Fazil Kuchuk, are reiterating
the demand that Turkish troops
be sent to Cyprus to protect the
Turkish Cypriots, a move which
London has been firmly reject-
ing. Ankara has recently in-
structed Kuchuk to cooperate
with the British, but Turkish
Foreign Minister Zorlu has
stated that future Turkish ac-
tion regarding Cyprus will be
determined by the success or
failure of the British drive
against EOKA.
Meanwhile, Prime Minister
Macmillan discussed Cyprus with
Turkish Premier Menderes follow-
ing the Baghdad Pact Council
meetings in London, and is ex-
pected to confer with Greek Pre-
mier Karamanlis at some early
future date. In Paris, NATO Sec-
retary General Spaak is continu-
ing his efforts to secure some
form of compromise agreement re-
garding the new British plan;
among the NATO representatives
of Greece-Britain and Turkey.
TUNISIA FACES DIFFICULTIES WITH ALGERIAN REBELS
The presence in Tunisia of
several thousand well-armed Al-
gerian rebels poses a growing
threat to Tunisia's internal
stability which the small, ill-
equipped security forces are un-
prepared to meet. President
Bourguiba has granted facilities
to the Algerian National Liber-
ation Front (FLN) to carry on
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31 July 1958
its rebellion in Algeria, hop-
ing to influence rebel leaders
toward a more moderate and pro-
Western policy as well as to
limit the extent of Cairo's in-
fluence over them.
The FLN has been cautious
regarding attempts to control
its policies and now assails
Bourguiba for having granted a
pipeline concession to a French
firm. Its leaders complain that
this concession violates the
principle of Maghreb (North
Africap) unity, which Bourguiba
has so assiduously sought, con-
stitutes recognition of French
claims to the Sahara and com-
promises the fight of the Al-
gerian people for independence.
Tunisian officials now fear
the FLN is "ready to cooperate
with the Egyptians and Soviets
to throw Bourguiba out."
Danger from the FLN is made
more formidable by the growth
of anti-Bourguiba sentiment
among officials and students as
well as by the presumed contin-
ued activity of Bourguiba's
principal rival, Salah ben Yous-
sef, who has been granted asy-
lum in Cairo. Last March sever-
al score of Ben Youssef's fol-
NEW FRENCH POLITICAL GROUPINGS
As many as ten new politi-
cal groupings reportedly have
formed in France to participate
in the forthcoming constitution-
al referendum and to take ad-
vantage of the changed politi-
cal framework the revised con-
stitution is expected to pro-
vide. Most of these profess
support for the stronger execu-
tive which Premier de Gaulle's
draft constitution calls for,
lowers were rounded up when a
purported plot to assassinate
Bourguiba was uncovered. Last
week Bourguiba reiterated de-
mands that the United Arab Re-
public expel Ben Youssef.
Bourguiba, claiming that
the FLN knows his weakness be-
cause they loaned him arms in
May when French forces in south-
ern Tunisia seemed About to at-
tack the Tunisian Army, has again
requested arms from the United
States and Britain. French of-
ficials in Tunisia claim they
have offered him arms from
stocks issued to the French
forces now leaving the country,
but Bourguiba fears acceptance
would incite charges by the FLN
that he had made some kind of
military peace with France
against the Algerians.
Bourguiba, still wary of
any French attempts to maintain
a monopoly over Tunisia's arms
sources, prefers alternate West-
ern sources,so that France would
be unable to maintain an inven-
tory of Tunisia's materiel. The
Tunisians probably are also
aware that France seeks to dis-
rupt North African unity.
25X1
but at least one is ranged with
the Communists in opposition.
Although Premier de Gaulle
disappointed many of his fol-
lowers, particularly in Algeria,
by failing to scrap "the old
system" of political parties,
he sharply curtailed their scope
of action by sending Parlia-
ment "on vacation." Occasional
party conferences have been held,
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31 July 1958
but they have been lethargic and
have left the field open to new
groupings.
Daniel Mayer's "Union of
Democratic Forces," most left-
ist of the new groupings, in-
cludes several left-wing Social-
ist party (SFIO) leaders in ad-
dition to ex-Premier Mendes-
France, the Orthodox Radical
leader, and Francois Mitterrand,
left-wing Democratic Resistance
Union (UDSR) leader. A number
of long-established splinter
Bidault as too rightist-oriented,
and such stalwarts as ex-Premier
Robert Schumann are organizing
a National Committee of Liaison
for Christian Democracy.
A potential rightist throat
to De Gaulle's program is the
recent appearance of Informa-
tion Minister Jacques Soustelle's
Union for the Renovation of
France, stemming from his Union
for the Salvation and Renova-
tion of Algeria (USRAF), which
played a key role in preparing
movements in the
non-Communist
for the 13 May coup there.
left also adhere
to this group.
Soustelle claims it will be non-
Despite
the movement's
refusal
political and not compete with
thus far
to cooperate
with the
his own GRS.
Communists, its opposition to
the revised constitution will
play into Communist hands.
It could permanently breach
the already badly divided SFIO
and may attract left wingers of
other parties as uneasiness over
rightist influence on De Gaulle
mounts. It faces minor competi-
tion on the non-Communist left
in a new grouping of "leftist
Gaullists," mainly a group of
Radicals who followed Mendes-
France during De Gaulle's long
political eclipse and who now
hope to "save" De Gaulle from
extremists on both sides.
In the center, former Pre-
mier George Bidault proposes
to build his new Christian Demo-
cratic Movement into a broad
center and right-center organi-
zation, combining elements of
his own Popular Republican par-
ty (MRP), the Social Republicans
(GRS), various Radical groups,
and the Independents. Most MRP
members, however, now regard
It seems probable, however,
that he felt it unwise to form
a new political party while
still a member of the govern-
ment, particularly in view of
De Gaulle's dislike for a multi-
plicity of parties, and that
he also sees possibilities in
tapping the USRAF apparatus of
Committees of Public Safety,
veterans' organizations, and
other "nonpolitical" rightist
groups as vehicles both for
exercising more influence on
De Gaulle's policy and for en-
hancing his own personal power
position later.
Only a few of the new
groupings are likely to have
much impact on the politi-
cal scene, but their crea-
tion weakens the existing par-
ties, probably facilitates the
growth of extremism, and, in
any case, will complicate the
period of transition to new
political institutions. 25X1
AUSTRIAN CHANCELLOR RAAB'S NEGOTIATIONS IN MOSCOW
As a result of Chancellor
Raab's negotiations in Moscow
from 21 to 28 July, Austria's
relations with the Soviet Union
may become somewhat closer, par-
titularly in the economic and
cultural fields. Raab said
and did things, moreover, 'not
pleasing to the West, but he
nevertheless ;seems to have
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
avoided any dangerous politi-
cal commitments, and Vienna's
pro-Western neutrality is still
intact.
Of the various minor con-
cessions won by Raab, the most
important--expected ultimately
to be worth about $70,000,000
--is the USSR's agreement to
supply free of charge quanti-
ties of oil equivalent to 50
percent of Austria's annual
oil reparations deliveries.
This arrangement, rather than
a straight reduction, was ap-
parently worked out to pre-
serve established trade routes
for Austrian oil, much of
which--under Soviet account--
is taken by the European satel-
lites.
As a graceful gesture to
the Soviet Union, the Austrians
on their own initiative declared
an intent to adhere to the
Eastern Danube Convention.
This Soviet-dictated instrument,
which regulates Danube traffic
east of the Austrian border,
has never been recognized by
the West, and Vienna has here-
tofore limited its recognition
to the sending of observers to
technical meetings. In response
to an Austrian suggestion, more-
over, Bonn is already consider-
ing following Vienna's lead.
Khrushchev claimed on Raab's
departure that a "unanimity of
views on a wide range of inter-
national subjects" had been
reached, but from the content
of the final communique and from
comments by both Soviet and
Austrian officials, it is clear
he did not press the Austrians
for pro-Soviet policy statements
on principal East-West issues.
While it can be expected that
on appropriate occasions Moscow
will claim Austrian "agreement"
with Soviet international policy,
Khrushchev's primary efforts
were directed rather toward the
more realistic objectives of en-
couraging Austria's neutrality
and demonstrating to the smaller
neutral nations continuing Soviet
interest in their welfare.
Nearly all Austrians have
welcomed alleviation of a burden
they considered unjust, but it
is doubtful that their basic
suspicion of the USSR will be
greatly affected. Raab's role
in the agreement has made him
a national hero in some quarters,
but his very friendly attitude
toward the USSR has also provoked
alarm and consternation even
among those sympathetic toward
(Concurred in by ORR)
ITALY'S ECONOMIC OUTLOOK
The prospect of a further
slow decline in the rate of
Italy's economic expansion will
probably enable both left and
right to assail Premier Fan-
fani's weak Christian Democratic
- Democratic Socialist govern-
ment. Foreign exchange re-
serves are close to a postwar
high, but, of ter several years
of relative prosperity, almost
9 percent of the labor force
is still unemployed. Present
government measures to stimu-
late the economy may be insuf-
ficient to prevent a worsening
of this chronic problem.
The rapid economic expan-
sion which took place up to
November 1957 has now fallen
off markedly, and there are no
signs that the slowdown will
be reversed. Projections for
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CURRENT INTELLIGENCE WEEKLY SttY
31 July 1958
1958 fix the rate of: growth of
the GNP at 2-3 percent in con-
trast to a rise in 1957 of 5.6
percent.
The only marked improve-
ment has been in foreign-ex-
change reserves, which reached
a postwar high of $1.215 billion
by March 1958, largely as a re-
sult of a 15-percent
drop in imports and
a 3-percent rise in
exports, along with
continuing US mili-
tary expenditures and
loans. Slackening
world trade, however,
has since retarded
the expansion of
Italian exports, while
imports for industri-
alization have con-
tinued at a high
level, leading to a
foreign payments def-
icit.
The sharp reduc-
tion envisaged in
the 1958-59 budgetary
deficit and the pos-
sibility that foreign
demand will continue
to decline could re-
duce economic activi-
ty. With this in
mind, the government has lowered
the discount rate from 4 to 3.5
percent and boosted state ex-
penditures, even though this
will make more difficult the
reduction in the budget deficit.
Even so, a decline in economic
activity during the second
half of 1958 is now predicted
by many prominent Italian in-
dustrial, commercial, and bank-
ing leaders.
If deteriorating economic
conditions in other European
countries force large numbers
of Italian immigrants to go
home, the unemployment problem
in Italy could be seriously
aggravated. An increase in
the 1,700,000 unemployed would
increase the Communists' popu-
lar appeal and add to the
government's instability. The
Democratic Socialists are al-
ready divided on continued
participation in the Fanfani
coalition. At the same time,
the right would reiterate
recent charges that the
government's public spending 25X1
program will involve economic
and financial ruin.
Iceland's unilateral ex-
tension of its fish conserva-
tion limits to 12 nautical miles
becomes effective on 1 Septem-
ber, and it is unlikely that
any compromise will be reached
before that date with other
nations having fishing in-
terests in Icelandic waters.
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CURRENT INTELLIGENCE WEEKLY S:URY
31 July 1958
In late June the Icelandic
representative to the North
Atlantic Council indicated
that his government was will-
ing to negotiate special rights
for a limited number of years
in the outer zone of the new
belt. Late in July, however,
he still had not made any spe-
cific or practical suggestion.,,
and the British Foreign Office
is extremely pessimistic about
the prospects of negotiations
on any basis. In mid-July,
the West German Government ex-
pressed the hope that Iceland
would enter into negotiations
to achieve agreement before
1 September.
Representatives of the
fishing industries of the
United States, Britain, France,
Spain, Belgium, Holland, and
West Germany met in the The
Hague on 20 July and passed a
resolution condemning Iceland's
action and stating would be
disregarded. Press r~,,ports
hint that the group may recom-
mend joint economic action a-
gainst Iceland if the situation
does not improve.
Iceland's leftist coalition
government is under strong local
Communist pressure to remain
adamant. The Commu-
nists have intimated
that they will with-
draw from the govern-
ment if the Social
Democratic foreign
minister attempts
negotiations permit-
ting foreign trawlers
within the 12-mile
limit. The Progres-
sives and the Social
Democrats will go to
any length to avoid
an election, which
they feel would only
benefit the Communists
and the Conservatives.
The Progressive press
opposes any compro-
mise and hints that
Iceland will ask the
United States for as-
sistance if Britain
gives its trawlers naval pro-
tection.
The USSR has reportedly
suggested a Soviet naval visit
to Iceland around 1 September
and is also urging Iceland to
request any assistance required
to implement the 12-mile limit.
If no compromise is reached,
the Communists will have created
dissension between Iceland and
its NATO allies; if the NATO
countries recognize the new
limit, the Communists will claim
the victory. 25X1
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CURRENT INTELLIGENCE WEEKLY:SUMMARY
31 July 1958
ARGENTINE PETROLEUM POLICY ANNOUNCED
President Frondizi's out-
line of his petroleum policy on
24 July emphasizes private par-
ticipation in Argentine oil de-
velopment under contract with
the State Oil Fields (YPF). He
said that foreign private firms
had agreed in general terms to
invest approximately one billion
dollars on this basis and men-
tioned a last-minute Soviet of-
fer to supply $100,000,000 worth
of oil equipment payable in Ar-
gentine products over a long
period.
Frondizi declared the main
obstacle to Argentina's economic
progress was its dependence on
fuel and steel imports at a cost
which forced Argentina to remain
a producer of primary materials.
He plans to triple oil produc-
tion by 1962. Argentina pro-
duced only 34,000,000 barrels
in 1957--about 37 percent of
domestic needs.
Frondizi specifically men-
tioned eight final or prelim-
inary contracts with private
firms, six of which are Ameri-
can, one Argentine, and one Bel-
gian. He made no detailed com-
ment on the offer delivered by
the Soviet ambassador shortly
before his broadcast. He did
refer, however, to the favorable
terms of Argentina's purchase
last June of 7,266,000 metric
tons of Soviet crude.
The principal agreement,
"signed in general terms," is
with a "US group" which includes
one German firm. This calls for
an estimated investment of
$700,000,000 to: 1) drill about
4,000 wells; 2) establish a
factory to produce oil-field
equipment; 3) furnish at least
18,000,000 barrels of crude oil
and derivatives on two to three
years' credit; 4) construct a
new gas line; 5) loan $30,000,-
000 to the 'Central Bank for five
years; and 6) supply $50,000,-
000 worth of machinery and
equipment on credit.
Frondizi plans to submit to
Congress a proposed petroleum
law affirming national control
over oil resources and assuring
the provinces of participation
in the profits. No new conces-
sions will be granted, but the
situation existing prior to 1
May 1958 will be respected.
Frondizi's party controls Con-
gress, but the bill will prob-
ably be attacked by the minority
party as well as by some of his
own followers. At the same time,
his new policy may serve to
offset criticism that he has
concentrated on pacifying the
Peronistas and has neglected
Argentina's pressing economic
problems.
(Concurred in by ORR
VENEZUELAN MILITARY'S ANTILEFTIST MOVE DEFEATED
Venezuela's military lead-
ers appear to have been decisive-
ly defeated recently when their
ultimatum calling for action a-
gainst members of the Communist
and Democratic Action parties
proved ineffective in the face
of united civilian resistance
to the threatened coup. The
military move seems likely to
result in continuing tensions,
increased Communist prestige,
and possibly more anti-American
feeling.
The junta government headed
by Admiral Larrazabal is said
to. have imprisoned about 200
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31 July 1958
supporters of Defense Minister
General Castro Leon, who spear-
headed the movement, and is ex-
iling others. Castro resigned
and left the country on a for-'
eign assignment on 24 July. Lt.
Colonel Martin Parada, chief of
staff of the air force, was also
sent into exile. Meanwhile,
conservative 33-year-old civil-
ian junta member Arturo Sosa
publicly admitted that armed
forces officers had offered him
the presidency of a new junta
some two weeks before the ulti-
matum. Although Sosa claims
he refused the offer, his in-
volvement with the military
leaders will probably necessi-
tate his resignation and the
politically delicate choice of
a new junta member.
Venezuela's civilian-mili-
tary tensions may lead to in-
creased feeling against the
United States.
Communist leader Mach- 25X1
ado has called for the depar-
ture of foreign military mis-
sions, charging that they have
been intervening in Venezuelan
Venezuela.
The military's association
of the Democratic Action party--
which is probably supported by
about half of the electorate--
with the Communists as a tar-
get for repression seems likely
to reinforce the "united we
stand" feeling which has been
prevalent in Venezuelan politi-
cal groups since the Perez dic-
tatorship was overthrown last
January. This feeling has been
one of the key factors in the
recent growth of Communism in
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 19 58
PATTERNS AND PERSPECTIVES
MOSCOW'S POLITICAL PROBLEMS WITH EASTERN EUROPE
Campaign Against Revisionism
Moscow's present campaign
to achieve bloc unity, of which
the execution of Nagy and the
ideological break with Yugo-
slavia are but parts, began in
mid-1956. At that time the
Soviet Union was attempting to
restore its prestige and au-
thority over the Communist move-
ment, after both were shaken
as a result of the de-Stalin-
ization campaign and Moscow's
encouragement in 1955 and 1956
of the "separate roads" theme
and more local initiative by
satellite leaders.
Moscow realized the dangers
of this course when the riots
occurred at Poznan in June 1956,
but its indecisive attempts
prior to the Hungarian revolu-
tion to close its Pandora's box
were ineffectual. Even after
Gomulka returned to power in
October, Moscow was reluctant
entirely to abandon its "liberal"
course, and its admission of
past mistakes in handling the
satellites in its declaration of
30 October was made even more
emphatic by the Chinese state-
ments at the time criticizing
"great-power chauvinism."
The uprising in Hungary
was the last straw for the Com-
munist leaders, however, and,
from November on, the preoc-
cupation was not with the evils
caused by past arbitrary prac-
tices toward the satellites
but with the dangers posed by
separatist trends and the prac-
tice of ignoring the experience
of the Soviet Union in building
"socialism." At the same time,
bloc leaders began to speak
more and more of the "basic
principles" of socialist
Revisionism can be defined as the attempt to revise fundamental Marxist-Leninist principles as
accepted by Moscow. The main fundamental principles were listed in the 12-nation Moscow declara-
tion of November 1957 and included:
a) establishment of a dictatorship of the proletariat by
means of a proletarian revolution in one form or an-
other and leadership by a Marxist-Leninist party;
c) abolition of capitalist ownership and establishment of
public ownership of the basic means of production;
d) the gradual socialist reconstruction of agriculture;
e) planned development of the national economy aimed
at building socialism and communism;
f) proletarian internationalism (i.e., Soviet leadership);
g) the defense of achievements of socialism against at-
tacks by, external and internal enemies.
One of these principles, (d), was vaguely worded in the November declaration in deference to Go-
mulka, to whom gradualism in agriculture is a cardinal element of his "Polish road to Socialism:'
Many of the other bloc leaders would have preferred to omit the term "gradual:' Similarly, although
Gomulka subscribed to "proletarian internationalism" in the declaration, his subsequent interpretation
of this principle differed considerably from that of, say, the Chinese leaders. In any case revisionism
could easily be expanded by Moscow, if it suited the needs of the moment, to cover opposition in various
forms--e.g., the "right-nationalist deviation" of Gomulka.
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31 July 1958
construction derived from So-
viet experience--an approach
which had been de-emphasized
after Stalin's death.
Clearly, both Moscow and
Peiping were apprehensive after
Hungary over the trend toward
"national Communism." Only two
countries at the time posed
any immediate danger--Poland
and Yugoslavia--the latter be-
ing outside the bloc and thus
less accessible to pressure to
conform. Therefore, the first
goal had to be to ensure that
the "national Communism" of
Poland would be kept within
bounds--that it would be pre-
vented from heading toward
another Hungary. Both Chinese
and Soviet leaders made state-
ments in November and December
1956 about the "basic princi
ples," and in January 1957
Chou En-lai went to Warsaw and,
acting on behalf of Moscow, ap-
parently made some progress
selling these principles to Go-
mulka.
Shortly afterward, Gomulka
made a gesture toward accepting
the Soviet lead in intrabloc af-
fairs--by altering his position
on the Hungarian rebellion and
subscribing at the central com-
mittee plenum in May to the
"basic principles." Gomulka
still hedged on the question
of recognizing unqualified So-
viet leadership of the bloc
parties and insisted that the
principles which might affect
the most important aspects, e.g.,
agriculture, of his "Polish road
to socialism" be vaguely worded.
Nevertheless, his agreement pro-
vided some assurance to Moscow
and Peiping that his "road" would
not go in the same direction as
Nagy's and thus the immediate
danger posed by Poland was re,-
moved.
Yugoslav Revisionist Threat
Yugoslavia remained a men-
ace, however, since it continued
to exert great influence in all
the Communist countries, the
more so since it was outside
the bloc. The polemics between
Moscow and Belgrade between No-
vember 1956 and April 1957 clear-
ly reflected Moscow's considered
view that Yugoslav influence,
which the satellites had been
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 19 58
warned about in September 1956,
had' played, a major role in the
events leading up to the Hun-
garian revolution. Relations
improved, however, following
the purge of Molotov and com-
pany in June, and, after some
uncertain preliminaries, Khru-
shchev met Tito in Bucharest
at the beginning of August
1957, where some of the former
rapport was restored. They
agreed that although they had
opposing viewpoints, there was
no point in stressing them in
public.
Turning Point--November 1957
The November meeting of
bloc leaders in Moscow had
great significance for the sub-
sequent dispute with Belgrade.
From Khrushchev's speeches to
Moscow had reason to feel in the
fall of 1957 that Tito might re-
join the bloc by signing this
declaration, it would certainly
explain why so much importance
was attached to the declaration,
as well as to Tito's failure to
sign it.
Tito's attitude toward
Khrushchev apparently altered
suddenly in late October, how-
ever, following Marshal Zhukov's
visit and subsequent removal, and
Belgrade announced on 29 Octo-
ber that Tito would not attend
the Moscow meeting in November.
These developments probably
led to the decision in Moscow
that since Tito could not be en-
ticed into the bloc, other tac-
tics were necessary to counter-
act the serious influence of
The Communist party of the Soviet Union will continue to dress down the attacks of opportunists and revision-
ists quite decisively. We shall do this not by interfering in the internal affairs of this or that party, but through
comradely criticism and influence on the part of the revolutionary world movement and Marxist-Leninist parties
on mistaken positions which may appear in one party or another.
We do not want the interference of parties in the internal affairs of other parties, or even the interference
of states in the home affairs of other states, but comradely criticism, which also brings comradely aid, of those
who make mistakes, but are capable of appreciating them, of understanding how they arose and of correcting them.
As for the leadership of this or that party and the leadership of this or that country, they are a matter for the party
and the government of the people in question to decide for themselves.
--from speech at East German party congress, 11 July 1958
the Bulgarian and East German
party congresses ion 3 .June ;and
11 July 1958., it appears that
Moscow had hoped to secure Tito's
signature to the bloc declara-
tion. Khrushchev argued in Ber-
lin that it was not Moscow but
the "other fraternal parties"
which made alterations in the
draft declaration--which Tito
had been shown before November
--to include mention of "Soviet
leadership of the socialist
camp and of the socialist par-
ties."
Tito was apparently will-
ing at the time of the Bucharest
meeting in August to associate
himself formally with the "so-
cialist camp" provided the com-
mitment would not involve sub-
servience to Moscow. If indeed
Yugoslav ideas within the Com-
munist movement. As Khrushchev
said on 11 July in East Berlin,
he drew the "necessary conclu-
sions."
"Antiitbvisionist't Campaign
Accordingly, the November
meeting was followed by a full-
scale ideological campaign
against "revisionism" directed
against such well-known Western
European "revisionists" as
Kolakowski (Polish), Lukacs
(Hungarian), Djilas (Yugoslav),
and Harich (East German). The
similarity between their ideas
and those of the Yugoslav party
leaders was obvious, but Yugo-
slavia was not explicitly linked
during this period to the re-
visionist heresy.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
Tito had meanwhile drawn
his own conclusions, as seen in
the draft Yugoslav party pro-
gram published on 13 March,
which codified his heresies.
His defiance, at a time when
Moscow and Peiping both attached
great importance to re-estab-
lishing discipline under Soviet
authority, had to be answered
and vigorously condemned. With
the mid-April Kommunist article
on the Yugoslav program, an-
swered by defiant replies at
the Yugoslav party congress,
the polemical exchange. between
the bloc and Belgrade was re-
newed. Moscow's and Peiping's
efforts, however, could never
be successful if something were
not done to negate the influence
of the major revisionists, and
thus Moscow could not ignore
the man who of all others trans-
lated revisionism into ac"
tion--who actually restored
a multiparty system and
called for the severance
of his country from the
Communist camp--Imre Nagy,
Necessity for Nagy's Execution
Nagy had long ago been de-
clared a traitor and a detailed
case built up against him. A
severe sentence at some time
was to be expected, but there
was no pressing internal need
to execute him. Externally,
the move had many serious dis-
advantages. Moscow doubtless
appreciated that Nagy would be-
come a martyr in the West and
that his execution would shock
world opinion. Many relatively
minor counterrevolutionaries
had already been executed in
Hungary, but Nagy's secret trial
and execution were viewed by
many Communists in Eastern
Europe to signify a return to
methods which had been dis-
credited and disavowed only a
year or two before.
Thus it would appear that
the Nagy execution was decided
on by Moscow as a symbolic step
in the antirevisionist campaign,
the necessity for which far out-
weighed the damage it
would do abroad. The
necessity arose from
the fact that the
paramount task of neu-
tralizing Yugoslav
ideological influence
had not been accom-
plished by the polem-
ics waged against Bel-
grade up to that point.
The Problem of Gomulka
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Gomulka presents
a problem to Moscow,
not so much because
of his internal pro-
gram, but because of
his refusal to accept
unconditional Soviet
leadership. and to as-
sociate himself un-
reservedly with the
line set by Moscow.
This has obstructed
bloc unity and exerts
a dangerous influence
on the other satel-
lites.
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Unlike Tito, however, Go-
mulka has not been accused of
harboring revisionist views
himself. Since October 1956,
moreover, the Polish leader has
demonstrated that by conviction
he is strongly opposed to re-
visionism and has dealt firmly
with Polish revisionists. He
has committed Poland to the
basic principles of socialist
development based on Soviet ex-
perience, which provides a safe-
guard for Moscow against re-
visionist influence in his in-
ternal program. Gomulka still
refuses, however, to submit to
Soviet control over his inter-
nal program, and, by doing this,
runs the risk of one day being
tagged a revisionist who re-
fused to subscribe fully to
Moscow's interpretation of the
letter and spirit of "proletar-
ian internationalism;" i.e.,
Soviet leadership.
In mid-June, however, Mos-
cow's main concern was with Go-
mulka's obstruction of the bloc
line toward Yugoslavia, and the
Nagy execution was doubtless a
warning to him, and possibly to
Kadar as well, not to cause dif-
ficulty for Moscow in this most
important sphere.
Moscow is caught up in the
same dilemma it faced when it
first attempted to change its
methods of dealing with the
satellites--loosening the reins
has the effect of undermining
basic discipline with disastrous
possibilities, while, on the
other hand, direct exploitative
methods, as practiced under
Stalin, only antagonize the
satellite peoples and build
up anti-Soviet feeling.
The Soviet leaders, by
altering their relationships
with these countries after the
death of Stalin, themselves
contributed in large measure
to the very undermining of bloc
unity and discipline, not to
mention the authority and pres-
tige of the USSR, which they
now desire so strongly to re-
store. If they use the neces-
sary measures to restore dis-
cipline, then they will be re-
turning to the practices which
they discredited in 1955 and
1956, and, moreover, will run
the risk of building up the
same resentments and animosities
which contributed so much to the
upheavals of 1956.
One of the most curious
aspects of recent developments
has been the frequent changes
in the Soviet position, first
of all during the anti-Tito cam-
paign and later concerning the
execution of Nagy. Thus, the
original relatively mild lan-
guage of the Kommunist article
was soon followed y increas-
ingly insulting attacks on the
Yugoslavs. Later, the emphasis
changed to maintaining correct
"state" relations, as if the
previous articles had gone too
far.
There were also variations
between the tone of the attacks
on Yugoslavia by some of the
bloc countries and the less un-
relenting line of Moscow. In
the case of Nagy, there was the
shift in position between the
indictment itself, which stressed
the connection between "revision-
ist ideas" and Nagy's fate, and
later reassurances from Moscow
(as well as from Kadar) that the
execution resulted solely from
his treason. The threatening
attitude of Peiping toward the
Yugoslav leaders also contrasted
with Moscow's more moderate ap-
proach.
These contrasts and incon-
sistencies suggest indecision,
perhaps reflecting disagreement
in Moscow on these issues, or
at the very least indicate that
bloc Communist leaders have not
received clear directives on
the proper line to follow.
Moscow's Present Policy
Recent speeches by Khru-
shchev provide some indication
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
of Moscow's present approach to
this problem. In his speech
in mid-July at the Czech re-
ception in Moscow, Khrushchev
referred to a "brotherly com-
monwealth of states with equal
rights," the establishment of
which, he said, was the major
task at the moment. This same
commonwealth was mentioned ear-
lier in the 12-nation Moscow
declaration of November
1957,
although at the time it
was
not clear how the various par-
ticipants would deal with one
another.
in his 11 July speech in
Berlin, as in an earlier speech
in Bulgaria, Khrushchev ap-
parently attempted to reassure
Gomulka that his "equality" and
"national sovereignty" need not
be affected if he were to as-
sociate himself fully and un-
reservedly with such a common-
wealth under Moscow's leader-
ship. At the same time, how-
ever, Khrushchev made it clear
that all satellite leaders, in-
cluding Gomulka, are expected
to consider not just their own
country but the interests of
the socialist camp as a whole.
To do otherwise would "harm
the lives and interests of their
own people, and the interests
of socialism."
The Cominform, it might
be recalled, was organized in
1947 ostensibly as a "voluntary"
association of countries partic-
ipating on an equal basis.
The present approach is not dis-
similar, although the conditions
have drastically changed. Khru-
shchev referred in his 11 July
Berlin speech to the socialist
camp as a "voluntary alliance
of equal sovereign states in
which no one aspires to special
rights or seeks privileges and
advantages."
Moscow is apparently at-
tempting to attain its goal of
restoring control and discip-
line through the medium of this
ostensibly free and voluntary
"commonwealth." In this way
the satellite leaders receive
assurances that their positions
and internal programs will not
be interfered with by Moscow
as long as they subscribe in
essentials to Moscow's leader-
ship. This cautious approach
is influenced by the necessity
of not antagonizing Gomulka, the
chief problem child, into tak-
ing a hostile stand in the be-
lief that his internal independ-
ence is threatened.
Moscow probably hopes that
by persuasion and indirect pres-
sures Gomulka can be slowly
pushed to a point where his in-
dependence and control over in-
ternal policy will be different
only in degree from that of the
other satellites. Moscow, more-
over, has apparently already
achieved considerable success
in talking Gomulka into going
along with this scheme. As early
as last November, on his return
from the 40th anniversary cele-
brations in Moscow,Gomulka ap-
peared pleased with the pros-
pects for this new commonwealth.
In discussing the proposed
"practical ties" between the
Communist parties--bilateral and
multilateral meetings--he still
cautioned that:
...the question of the internal
policy of each party cannot
be determined by inter-
party conferences. We must
hold to the principle that
each party should decide the
best line of policy for it-
self and its country.
Since that time, however,
the Poles have committed them-
selves to participate in the
new international Communist
journal, a sign that Gomulka's
initial objections to this
publication have been overcome.
Indeed, Gomulka would seem
to present no obstacle at the
moment to Moscow's plan for in-
trabloc relations. Khrushchev,
in his Moscow speech on 12 July,
even gave Gomulka an "out" on
the question of Western aid, al-
though he warned that its accept-
ance was permissible only if the
country concerned "marches in
step with all socialist coun-
tries."
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CURRENT INTELLIGENCE WEEKLY SUU&RY
31 July 1958
POLITICAL CONDITIONS IN IRAN
The Shah,:who has always
been unusually suspicious of
subordinates, seems to be con-
cerned that ambitious men in
his entourage will nor associate
with dissatisfied groups to
force either his removal or a
serious limitation of his pow-
ers. The recent placing of
tanks, antitank weapons, artil-
lery, and additional troops
around Saadabad Palace in Teh-
ran is regarded by Iranian mili-
tary men as a sign of f ear and
weakness on the part of the
Shah. Indications that he is
primarily concerned about his
own safety will probably have
an adverse effect on the morale
of the army, on which he relies
heavily to preserve his regime.
The Shah has consolidated
his power until he is a virtual
dictator, but has created op-
position which, under certain
conditions, could overthrow him.
Having observed ex-Premier Mos-
sadeq arouse nationalism and
having witnessed the fates of
other Middle Eastern monarchs,
he realizes he must push through
political and economic reforms
or eventually face revolution
from urban leftists. At the
same time, his ref orms must
not antagonize large landowners
and other wealthy groups into
organizing a rightist coup. In
addition, he is trying to hold
the loyalty of the peasants,
who constitute 80 percent of
the population, and who could
become a decisive political
force. He is doing this through
the distribution of crown lands.
Although Iran's moderniza-
'tion program and preservation
of the delicate political bal-
ance demand the most effective
use of all available talent,
the Shah refuses to delegate au-
thority for fear that persons of
ability may usurp power. He
wants to surpass the achieve-
ments of his father, Reza Shah,
but lacks the will and desire
to use similar ruthless methods.
The Shah, moreover, while sin-
cere in his intention to elimi-
nate corruption in general, has
not taken measures to prevent
members of ,the .. royal fam-
ily from using -. their posi-
tions :._m tou , inctBaSe their
fortunes.
Typical of the Shah's un-
willingness to delegate author-
ity is his treatment of Prime
Minister Eqbal. Eqbal, a force-
ful and popular personality when
he took office in April 1957,
has now become completely sub-
servient to the Shah and thus
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31 July 1958
has lost his political prestige. 1 merous opposition members. Al-
As the public has become aware
that the Shah has taken full re-
sponsibility for directing af-
fairs, public criticism of gov-
ernment failures has been in-
creasingly directed at the mon-
arch. Veiled threats by the
Shah to ensure prompt passage
of desired legislation have in-
creased parliamentary dissatis-
faction with his methods.
The Shah's apprehension
that his power will be usurped
precludes the development of
political parties in the West-
ern sense. To ensure that no
political groups acquire real
strength, the Iranian intelli-
gence agency is charged with
overseeing the membership of
the two existing "parties."
In an effort to give the
impression that Iran is a de-
veloping democracy, the Shah
has artificially created the
Nationalist party and the Mar-
dom (people's) party. The Na-
tionalist party is designed to
be "progovernment" and was re-
luctantly formed by Prime Min-
ister Eqbal at the Shah's in-
sistence in February. Eqbal
has shown little enthusiasm to
organize its membership and,
as a result, the party has re-
cently lost some important com-
mittee chairmanships in the
Majlis to the "opposition" Mar-
dom party headed by Assadollah
Alam.
Alam formed his party in
May 19 57 and has moved ener-
getically to enlarge its mem-
bership. The Shah may be groom-
ing Alam for the prime minister-
ship; however, if Alam is too
successful in enlarging his
party, the Shah will probably
undermine his position.
Non-Communist Opposition
If political groups were
permitted to develop naturally
in Iran, nationalists who for-
merly were followers of Mossadeq
would probably be the most nu-
though the government uses
various repressive tactics on
them, they continue to meet and
plan. They are plagued by dis-
putes as to the tactics they
should adopt to oppose the re-
gime. The arrest of over 70
nationalists last year may have
inclined them toward planning
extremist measures. The Shah's
recent success in gaining favor-
able oil agreements with Ameri-
can companies temporarily raised
his prestige, removing some of
the nationalists' appeal.
The Shah apparently has no
program to obtain the support
of the growing urban middle class,
which admired Mossadeq and is
either actually or potentially
the enemy of the regime. The
Shah's hatred of all-who were
associated with the Mossadeq
movement keeps him from utiliz-
ing the talents of even the
conservative leaders of these
groups. The discontent of the
middle class is a grave politi-
cal danger in Iran, and should
this group ever seize the gov-
ernment, moderates might soon
be replaced by Nasir-type dema-
gogues.
The Shah still has something
to fear from the Communist Tudeh
party. Declared illegal in 1949,
the party continues to operate,
particularly in Tehran and the
oil center of Abadan, despite
the best efforts of the Iranian
security forces to eliminate it.
Although Khosrow Ruzbah, the
Tudeh leader, was executed in
May, his death seems to have had
little effect on the organization.
The present size of the Tudeh is
unknown, but in 1953 it had about
35,000 members before the Iranian
Government sought to annihilate
it.
The party continues to de-
velop by recruiting Iranian
youths and students abroad and
receiving assistance from for-
eign Communist parties. In an
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CURRENT INTELLIGENCE WJEKLY SUMMARY
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effort to ease some of the bit-
terness left over from the Mos-
sadeq period, the Shah in March
ordered the release from prison
of certain Tudeh members for-
merly in the army and reduced
the sentences of others.
Tribal Loyalties
Many tribal leaders are
dissatisfied with the regime's
policies, but the tribes are
unlikely again to play a large
political role in Iran without
foreign assistance. Develop-
ment of the Iranian military
forces, rapid communication,
higher educational levels, and
increasing prosperity among the
tribes have reduced tribal in-
clinations to struggle against
the central government.
The powerful Bakhtiari .;
tribe in west-central Iran has
been closely allied with the
regime, and a number of its mem-
bers hold important positions
in the government. Since Sor-
aya, a Bakhtiari, was divorced
by the Shah in March, however,
there have been rumors that
the tribe has been losing in-
f luence.
The 500,000-strong Kurdish
tribe in northwestern Iran of-
fers a potential threat to.Irani-
an security, since members could,
along with some of the 800,000
Kurds in Iraq, 250,000 in Syria,
and 1,500,000 in Turkey, agitate
for an independent Kurdish state.
Kurdish-language broadcasts from
the UAR, aimed at arousing Kurd-
ish nationalism, began in June.
These, together with the influ-
ence of a pro-Nasir government
in Iraq, could cause widespread
unrest in northwestern Iran.
Iran is counterattacking by us-
ing propaganda and agents to
convince Kurds in Iran and Iraq
that they are an Aryan people
having nothing in common with
Arabs, who are using them to
advance Arab imperialism.
Iran is especially sensi-
tive to Kurdish nationalism be-
cause Mullah Mustafa Barzani,
former leader of the Barzani
Kurdish tribe of Iraq, helped
organize a Soviet-sponsored
Kurdish republic in Iran in
1945-46. When the incipient re-
public was overthrown by Irani-
an troops, Barzani and some
of his followers fled to the
USSR.
The Army
The Shah relies heavily on
his 143,000-man army to pre-
serve his power, and he devotes
considerable time to ensure the
personal loyalty of its command-
ers. To prevent conspiracies,
he plays one leader against the
other. In spite of the Shah's
precautions, General Valiollah
Gharani, former G-2, was able
to form a group, uncovered by
the Shah early this year, which
had been plotting for almost a
year to reduce the Shah to a
figurehead. While the army is
the most dependable of the Shah's
supports, it contains weaknesses
which, in a period of severe po-
litical pressure on the monarch,
might cause elements to support
opposing political forces.
A major weakness is the
growing rivalry between the old
officers and the young. The
older commanders are disturbed
by. the threat to their positions
which arises from young officers
who are returning from the United
States after being exposed to
the latest military doctrine and
advanced equipment. These young
officers in turn,i who now see
their senior officers in a new
light, are dissatisfied with
the army's inefficiency and with
promotions based on family con-
nections rather than on merit.
The Shah has assured Ameri-
can officials he intends to pro-
mote trained officers into high
positions. If he does so rapid-
ly, however, the older officers
may attempt to limit his powers
or remove him. On the other
hand, if opportunities for ad-
vancement occur too slowly, the
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CURRENT INTELLIGENCE WEEKLY SUMKARY
31 July 1958
impatient younger
officers may
organize to force
their
will
on the Shah.
These present
and
potential
factors of unrest
could
bring
about a rapid deterioration of
stability in Iran if the right
spark were applied. Dissident
elements have probably been en-
couraged by events in Iraq.
USSR PUBLISHES NEW DRAFT CRIMINAL STATUTES
After years of delay, draft
"basic principles" of both So-
viet criminal law and criminal
procedure were published in June
1958 to set the guidelines with-
in which the 15 union republics
will draw up their own detailed
criminal codes. The drafts are
still open to discussion and
change before they are ratified
by the USSR Supreme Soviet,prob-
ably toward the end of the year.
While major overhauls are un-
likely, there have been signs
of continuing disagreement among
legal experts which might re-
sult in minor revisions.
The draft statutes, which
to a considerable degree merely
update the old codes first f or-
mulated in the 1920's and em-
body recent legislative enact-
ments, contain no surprises and
envisage no drastic revision
of present legislation. They
contain some innovations for
protecting the rights of the
accused, suggested during a
period of public discussion,
over the past several years,
but fail to incorporate several
of the more liberal proposals.
This failure and evidence of
compromises can be traced not
so much to opposition of the
leadership to adopting moderate
legal reforms, but rather to
conflicts of interests among
the various branches of the
legal profession--jurists, the
procuracy, collegia of lawyers
--and also the police and se-
curity organs.
Most of the changes intro-
duced by the draft statutes are
apparently designed to give the
Soviet citizen a fuller expecta-
tion of a fair trial and, in
this, they supplement earlier
measures--the abolition in 1953
of the MVD's summary trial
boards and the abrogation in
1956 of legislation which pre-
scribed special trial procedures
for political crimes. While
the draft codes still assign
the Soviet legal system the
prime political function of pre-
serving the present political
and social structure, they also
acknowledge for the first time
the "personal, political, prop-
erty, and other rights of citi-
zens."
Thus, without seriously
weakening its coercive power,
the party leadership has sought
to adjust the code to the rela-
tively more stable conditions
of Soviet society, and, at the
same time, garner whatever pop-
ularity is to be gained from
a relaxation of criminal penal-
ties.
Many questions about crimi-
nal legislation are left unan-
swered by the draft statutes,
and a final appraisal of the
criminal law and procedure must
await the appearance of the re-
public codes. This is particular-
ly true in the case of criminal
law, as opposed to the code of
criminal procedure, because the
draft statute provides only a
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
frequently advocated in the
public debate. Its literal
adoption was opposed by the
procuracy and investigative or-
gans on the grounds that it
would inhibit the prosecution
of a case--the prosecutor must
be convinced that the data from
the pretrial investigation
supports the charge against the
defendant or else he must re-
fuse to prosecute.
As a compromise, Article
13 states that "the obligation
to prove the guilt of the ac-
cused lies with the prosecutor.
A verdict of guilty may not be
based on assumptions and may
only be passed if guilt of the
accused for the commission of
the crime is proved."
Trial: During the public
discussions, it was recommended
that the number of "people's
assessors" participating in a
criminal trial be increased
over the present two, and there
were even suggestions that the
assessors be organized into a
kind of jury which would de-
liberate without participation
of the judge. These proposals
were categorically rejected as
repudiating time-proven Soviet
court procedure and as marking
a return to Tsarist court prac-
tices. Soviet legal authorities
would be wary of relying on a
group of citizens to make a
decision without benefit of a
trained jurist.
Trials are to be held in
open court except where state
secrets or information about
the intimate life of the par-
ticipants are involved or where
a minor is concerned. The court
is obliged to base its decision
on a review of all of the infor-
mation presented, not just one
type of evidence, to preclude,
Baranov states, the "overevalua-
tion" of a confession. How-
ever, suggestions that a con-
fession be given a secondary
status were rejected.
The procuracy is charged.
with the general responsibility
of ensuring that persons sus-
pected of a crime are appre-
hended, detained, and charged
only in accord with legal pro-
cedures. According to Article
17, an arrest may be made only
by decision of the court or by
sanction of the procurator, and
detention of suspects must be
duly reported to the procuracy.
Until the new republic codes
are drafted, it will not be
clear what, if any, exceptions
to the procuracy's supervisory
functions exist. All of these
prerogatives were granted in
the 1955 Statute on the Proc-
uracy, and, yet, in the 1956
edition of the RSFSR Criminal
Code, it was stated in a foot-
note that the method of sanc-
tioning arrests by the MVD is
provided for "in special rules."
Certain features of the
draft statute on criminal law
apparently have been operative
for some time but have not ap-
peared in the official code un-
til now. According to Article
4, only "the courts, in accord-
ance with the law," may sentence
persons for criminal offenses.
D. S. Karev, dean of the Law
Faculty at Moscow University,
indicated in a recent article
that this clause was included
in the draft statute to ac-
knowledge that the Special Board
of the MVD, which was authorized
to sentence administratively,
had been abolished. The lan-
guage of the statute confirms
that corrective labor camps
have been reorganized into cor-
rective labor colonies. Special
colonies have been established
for juvenile offenders.
According to Article 3,
criminal proceedings are not to
be brought against anyone ex-
cept for "crimes provided for in
the criminal code." This elimi-
nates the "analogy article" which
permitted a court to prosecute
an action "constituting a so-
cial danger," even if not direct-
ly specified by the codes, by
means of applying sections of
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CURRENT INTELLIGENCE WEEKLY S'UM &RY
31. July 19 58
the code "that deal with crimes
of the most nearly similar na-
ture." The republic codes
could circumvent Article 3
through loose and vague defini-
tions of crimes, particularly
Section 58 on counterrevolu-
tionary crimes and sections on
economic and administrative
crimes.
The severity of the terms
of confinement have been temp-
ered.. According to the RSFSR
Criminal Code now in force,
persons may be sentenced for
imprisonment up to 25 years for
very serious crimes. The upper !
limit has been reduced in the
new draft to 15 years. In addi-
tion, the maximum term of exile
has been reduced from 10 to 5
years; the terms of parole have
been liberalized so that a con-
vict may be released after com-
pleting one half of his term
instead of two thirds, and the
conditions under which an indi-
vidual can have his criminal
record expunged have been eased.
The death penalty has been
retained for treason, espionage,
sabotage, terrorist acts, pre-
meditated murder under aggra-
vated circumstances, and, in
time of war, especially serious
military crimes.
Recent Negative Developments
by groups of citizens, and the
decision is reviewed not by the
judiciary but by the local soviets.
Several distinguished ju
tiSts, including a deputy chairman
of the RSFSR Supreme Soviet,
have objected to the "parasite
laws" on the grounds that they
are unconstitutional and usurp
the judicial function. It is
apparent that the regime, in
order to correct what it con-
siders a serious domestic prob-
lem, has chosen a rather arbi-
trary procedure open to manipu-
lation by police and party of-
ficials and outside existing
criminal codes and the new
basic principles.
In addition, the regime
has recently taken a Step back-
ward from the recent trend to-
ward rescinding criminal sanc-
tions in the economic field. A
decree of 24 April provided that
economic administrators repeat-
edly violating contractual ob-
ligations for interregional
deliveries are to be held "crimi-
nally" responsible. In cases
involving repeated violations,
personal criminal responsibility
is to be established rather than
mere enterprise responsibility
as heretofore.
Thus the regime, faced
with what it apparently con-
siders serious problems of "lo-
While the revisions in calism" in connection with the
the criminal codes have moved industrial reorganization, has
in the general direction of not hesitated to use criminal
protecting the rights of the
individual and removing the
more blatantly arbitrary fea-
tures, the regime does not con-
sider the criminal law sacro-
sanct or beyond politics, The,
"parasite laws," approved or
under discussion in all of the
union republics since 1957,
provide for exile and.compul-
sory labor for "antisocial and
parasitic elements" in a manner
falling outside the normal le-
gal framework. Offenders are
sentenced not by the courts but
legislation for assistance, and
it may draft new laws of a simi-
lar nature to cope with other
problems of its reorganized in-
dustrial management--such as
mishandling of investment funds.
meat of its programs.
All this is to say that
criminal codes in the USSR do
not have an independent juridi-
cal basis but are viewed by 25X1
the regime as a political
instrument for the achieve-
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CURRENT INTELLIGENCE WEEKLY SUMIARY
31 July 19 58
Colombia--Latin America's
fourth most populous country
and the world's second largest
coffee producer--is faced with
serious economic problems, de-
spite substantial real gains in
output, new record highs for
commerce and industry, in-
creased employment, and other
indications that the domestic
economy is operating at a high
level. The drop in coffee
prices and the poor prospect
for any reversal of this trend,
inflation, and the burden of a
large commercial debt are
threats to the stability of
the democratic government of
Lleras Camargo which takes of-
fice on 7 August.
Background
The financial mismanage-
ment of the Rojas dictatorship
from 1953 to May 1957 left
Colombia with a rapidly grow-
ing inflation, a critical defi-
cit in the balance of payments,
and an annual budget deficit
of 10 percent. The gross na-
tional product grew at an aver-
age annual rate of 6 percent
during this period, but money
in circulation rose at a rate
of 18 percent. Dollar earn-
ings increased rapidly, but
imports expanded at an even
faster rate, leaving a foreign
commercial debt recently esti-
mated at $470,000,000. Since
the downfall of the Rojas re-
gime, the military junta and
civilian cabinet have taken
steps to free the exchange rate
and settle the backlog of com-
mercial debt. They have also
restricted credit and imports.
and conducted a limited eco-
nomic austerity program.
A deepening of the eco-
nomic crisis could threaten
Colombia's attempt to achieve
social and political stability
after some ten years of auto-
cratic government, bitter po-
litical warfare, and rural
violence which have resulted
in an estimated 100,000 deaths.
While the scheduled inaugura-
tion on 7 August of Lleras
Camargo as the joint Liberal-
Conservative president will give
Colombia for the first time in
many years a leader elected by
a majority of the people, the
long-standing political and so-
cial conditions which have re-
sulted in instability and vio-
lence still remain.
Neither of the parties
comprising the government has
pressed for a program of basic
social or economic reforms to
better the position of the low-
er classes. Both parties repre-
sent the landed upper classes
and will probably do little to
make the needed changes in the
agricultural sector of the
economy, except to rehabilitate
the peasants driven off their
farms by partisan guerrilla
warfare.
In spite of credit and
import restrictions, the econ-
DOLLARS
900
EXCHANGE
UTILIZATION
EXCNANOE
INCOME
omy on the whole continues
prosperous under the momentum
generated by the inflationary
growth of previous years. The
reduction in imports of capital
goods, however, is likely to
have an adverse effect on the
long-range productive capacity
of Colombian industry.
The present inflation is
a source of great bitterness
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 19 58
among the lower classes, whose
real wages continue to decline.
The rising cost of living could
lead to social unrest and
strikes which would threaten
the delicate balance of the
bipartisan political accords.
Government attempts to control
prices have had limited suc-
cess.
COLUMBIA : COST OF LIVING INDEX
( JULY 1954 ? JUNE 1955 = 100 )
40
30
10
00
J F M A M J J A S O N D J F M A
1 1957 I L- 1958 J
The burden of the huge
commercial debt left by the
Rojas regime, coupled with the
drop in exchange revenues from
coffee, is a further obstacle
to the government's attempts
to restore the country's eco-
nomic position. The backlog
has been settled by drawing on
reserves and current income
from coffee sales, by funding
arrangements with US banks, and
by borrowing from the Export-
Import Bank and private banks.
As a result, Colombia must de-
vote 15 percent of its future
dollar income to servicing its
foreign governmental and com-
mercial debt, a burden further
compounded by falling foreign
exchange revenue from coffee
sales. The prospect that such
revenue would be inadequate to
cover minimum essential imports
led Colombia to obtain a $103,-
000,000 credit line from the
Export-Import Bank and pri-
vate US banks in June.
The world overproduction of
coffee has forced prices down
from 72 to 52 cents per pound
in New York during the past year,
and has drastically reduced Colom-
bia's dollar exchange earnings,
85 percent of which are obtained
from coffee exports. Since last
October, when it signed the Mexi-
co City Agreement, in which the
members agreed to withhold a
percentage of their crops from
export, Colombia has accumulated
a surplus of over 3,000,000 bags
of coffee, and exports have de-
clined steadily during recent
months. Unless exports increase
substantially in the second half
of the year, the annual level
will be the lowest since 1942.
The government has been
forced to print money to pay
producers for coffee held off
the market. With the amount
COLUMBIA : FOREIGN EXCHANGE RATE
( IN DOLLARS )
4
-
000
000
A M
J
J
A
S 0
N D J
F
M A M
J
1 1957 1 1958 1
of money in circulation at an
all-time high, the further is-
suance of money will accelerate
the inflationary spiral if, as
it now appears, the retention
of surplus coffee stocks has
to be continued over an extended
period.
A return to free marketing
is opposed by the Colombian semi-
official National Coffee Federa-
tion, which fears that the price
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000
0000
000
0
000
0000
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CURRENT INTELLIGENCE WEEKLY SUMMARY
31 July 1958
of coffee would drop sharply
if the Latin American coffee
surplus were put on the market.
This drop would not be offset
by an increase in sales, since
the demand for coffee is fair-
ly constant regardless of price
variations. Opponents of
Colombia's coffee policy feel
the market for Colombian cof-
fee would not drop as much as
that for other stronger varie-
ties, such as Brazilian and
African.
Nevertheless, the policy
of the National Coffee Federa-
tion is supported by many in-
fluential government officials
and is not likely to change in
the near future. Meanwhile,
the United States may expect
continued pressure for an in-
ternational pact to stabilize
coffee prices.
Economic Prospects
The government can be
expected to maintain its tight
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money policies under the lead-
ership of Lleras Camargo,
who has promised to direct
major efforts to the solu-
tion of the country's eco-
nomic problems, and this
will also have some arrest-
ing influence on the pres-
ent high level of activity.
Inflationary pressures
show no signs of abating,
and, unless a new coffee
arrangement is reached,
the government may be forced
to print more money to pay
for the coffee retention
program. The $103,000,000
loan from the United States
will ease the austerity of
import restrictions, but will
not provide sufficient im-
ports to eliminate the ex-
cess demand for imported
goods and services. These
inflationary pressures and
the foreign trade deficit
will continue to threaten
political stability.
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