CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A002200050001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 43
• Document Creation Date: December 16, 2016
• Document Release Date: February 18, 2005
• Sequence Number: 1
• Publication Date: April 9, 1959
• Content Type: SUMMARY

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INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 5
OCR NO.1682/59
9 April 1959
CURRENT
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
CLASS. CHANG1 D T
t ii WiS.
rto CHACS __ ._-
CONFIDENTIAL
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State Department review completed
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w"r
THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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CONFIDENTIAL
9 April 1959
PART I
OF IMMEDIATE INTEREST
EAST-WEST NEGOTIATIONS . . . . . . . . , . . .
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. . Page 3
The Soviet leaders have expressed their satisfaction
with the outcome of the East-West exchange which produced
agreement to convene a foreign minister's conference on
11 May. High Soviet Foreign Ministry officials have been
obviously relieved that a foreign ministers' meeting has
been arranged. Moscow is continuing its efforts to dem-
onstrate its desire for negotiations. Soviet propaganda
reaction to the NATO ministerial meetin was relatively
restrained. 25X1
TIBET SITUATION . . . . . . . . . . . . . . . . . . . Page 5
Although the revolt in Lhasa has been suppressed, rebel
activity elsewhere in Tibet continues to pose a problem
for Peiping. the Chinese Communists are conducting a
major propaganda campaign to suggest wide support among
Tibetans for their actions, Reaction among press and
official circles in India and many other areas remains for
the most part hichly critical of PeinjLng_
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
PART I (continued)
MIDDLE EAST HIGHLIGHTS . . . . . . . . . . . . . . . . . . :Page 8
The Iraqi regime remains tense and alert to possible
new efforts to overthrow it, and the Communists continue to
increase their strength in the country. Baghdad is con-
cerned with the Iraqi-Syrian border area. There apparently
has been some small build-up of UAR ground and air units
in eastern Syria. Cairo is continuing its propaganda war-
fare and has instituted a new "Voice of Free Iraq."
The Baghdad regime meanwhile has accelerated moves
to oust the few remaining Western business enterprises in
Iraq. Since the Mosul uprising, the Iraq Petroleum Com-
pany has been harassed by arrests of Iraqi personnel,
although its operations have not yet been affected. Prime
Minister Qasim also is considering nationalizing the
French share in the company and may grant the Soviet Union
an offshore oil concession in the Persian Gulf. In at
least one instance, a development contract formerly held
by a Western company has been taken over by the USSR.
PART II
CHINA'S PEOPLE'S CONGRESS TO NAME MAO TSE-TUNG'S
SUCCESSOR . . . . . . . . . . . . . . . . . . . . . . . . Page 1
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Mao Tse-tung's successor as chairman of the Chinese. Com-
mu.nis.t~ Government, probably Chu Te, will be "elected" at
the Second National People's Congress opening in Peiping
on 17 April. The agenda for the congress will include a
report on the work of the government, the adoption of the
national economic plan and state budget for 1959, and the
election of leading government personnel. 25X1
CHINESE FOREIGN TRADE SLAWS . . . . . . . . . . . . . . . Page 2
Communist China's foreign trade drive, which reached
record heights in 1958, is apparently slowing down. In-
creased imports from Western Europe to meet the demands
of the "leap forward" in industry have led to a substantial
trade deficit with this area which has not been offset by
the usual large export surplus in trade with Asian
countries. In view of China's limited foreign exchange
reserves, a high export volume must be maintained or
Peiping may be forced to cut back imports of manufactured 25X1
goods and raw materials from Western Europe.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
PART II (continued)
"COMRADES' COURTS" TO AID KHRUSHCHEV'S (DRIVE AGAINST Page 3
HOOLIGANISM . . . . . . . . . . . . . . . . . . . ? .
Khrushchev, in his present drive against hooliganism,
drunkenness, and other types of "social misdemeanors," has
turned to the "comrades' courts" as another device to
promote "collective" responsibility 'for the maintenance
of public order. These courts--informal tribunals of
negligible influence in the past--are to be given broader
powers. They apparently will supplement the work of the
newly organized workers' militia in~reburden lieving
militia and judiciary some
minor offenders.
GUINEA DEVELOPING CONTROLLED ECONOMY Page 4
Recent decrees issued by the Tour4l government in
Guinea are an effort to establish a: controlled economy
and lessen dependence on France. The new republic has
also shown a receptivity to expanded political and eco-
nomic relations with the Soviet bloc. Thoze growing ties
with the bloc, however, probably reflect a desire for a
neutral foreign policy rather than a definite alignment
with the Communists.
SOUTH VIETNAM'S SECURITY PROBLEM . . . . . . . . . . Page 5
Security sweeps being condunted in South Vietnam
highlight the Diem government's persistent campaign
against the numerically small but vgell,-entrenched, Com-
munist military underground. Sizable government forces
are attempting to clean out a strong enemy band north-
east of Saigon, and Vietnemese marines are using commanddoo
tactics against Communist enclaves in the southwest.
over-all security problem continues to divert much of the
government's energy and resources, from the economic field,
where progress has been slow.
JAPANESE COURT DECISION HELPS SOCIALIST ANTI-US CAMPAIGN . Page
Uncertainty in Japan over the legality of the US-
Japanese security treaty will make it difficult for prime
Minister Kishi to effect an early revision of the treaty
in order to strengthen his political pos`ion prior to
the upper-house' elections in June. The government is con-
fident that the Supreme Court ultimately will reverse a
lower court declaration that the presence of foreign
troops In Japan is unconstitutional, but not in time to
prevent the Socialists from exploiting; the issue in the
elections,.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
PART II (continued)
FIDEL CASTRO'S VISIT TO WASHINGTON . . . . . . . . . . . . Page 7
Fidel Castro, who arrives in Washington on 15 April
on an unofficial visit, still seems intent on making
drastic social and economic reforms in Cuba. The prime
minister's methods are increasingly those of a dictator.
Some of his advisers are pro-Communists? and opposition to
his government is steadily rising. In :f=oreign affairs he
has taken an anti-US position. During his visit here, he
will probably attempt to Justify his policies and may also
seek financial aid
COMMUNIST ACTIVITIES IN MEXICAN LABOR . . . . . . . . . . Page 8
Mexico's expulsion on 3 April of two Soviet diplomats
accused of complicity in a crippling nationwide railroad
strike still in progress was evidently an attempt to rally
national feeling behind the government's decision to curb
Communist influence in the labor movement. Dissatisfied
workers may still support Marxist labor leaders accused of
conspiracy. The government's public position will be
strengthened by Argentina's expulsion on 7 and 8 April of
five Soviet bloc diplomats similarly terfering
in internal affairs.
COMMUNIST INFLUENCE IN-BRITISH GUIANA . . . . . . . . . . Page 9
The Communist-led People's Progressive party in
British Guiana, after a year and a hall! in office under
the limited powers afforded by the colonial constitution,
remains the strongest political force. The party, how-
ever, now faces internal difficulties, some popular dis-
illusion, and a potentially more competitive opposition.
Principally because Cheddi and Janet .Tagan are concentrating
on their ministerial duties, the party's membership. has
declined, its funds have dwindled, and the Communists'
efforts to extend their influence in the -arty have
largely failed.
FINNISH .G X MENT DIFFICULTIES . . . . . . . . . Page 10
Finland's minority Agrarian government has been
successful in concluding a 1959 trade agreement with the
Soviet Union, the issue which led to the fall of its pred-
ecessor, but it still faces serious financial difficulties
and a high level of unemployment which the Communists are
seeking to exploit. Remaining in office largely because
the other non-Communist parties fear a new cabinet crisis
might reopen the question of Communist participation, the
Sukselainen government is making tentative moves toward
broadening its parliamentary base.
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9 April 1959
PART II (continued)
NEW LABOR UNREST IN SPAIN LIKELY . . . . . . . . . . . . . Page 10
Labor dissatisfaction over inflationary pressures
and a growing willingness to defy the Franco regime may
lead to strikes in Spain during the next few weeks. The
Communist party may try to force the moderate opposition
groups to participate to some extent in nationwide labor
agitation.
PART III
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PATTERNS AND PERSPECTIVES
STATUS OF THE FRENCH COMMUNIST PARTY .. . . . . . . . Page 1
The French Communist party still retains a mass elec-
toral following and the most extensive political organi-
zation in France despite the virtual elimination of the
party's National Assembly representations in the November
elections and its lesser setbacks in March, when it was
ousted from numerous municipal administrations. These
defeats have caused serious financial problems and
encouraged criticism among the rank and file over the
rigidity of party leadership. The top leaders, however,
have shown little disposition to change party policies
and seem to be counting instead on dissatisfaction with
the government's economic program--such as occurred to
some extent h March elections--to restore Communist
influence.
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UNREST AMONG PALESTINE REFUGEES . . . . . . . . . . . . Page 3
Recent rioting and strikes in Jordan and Lebanon
again emphasize the potentially disruptive influence of
the Arab refugees displaced during the Palestine war of
1948. Their "temporary" status has assumed a degree of
permanency, and there is little prospect of a solution to
the problem of their existence as wards of the United
Nations. The refugees, now totaling over one million,
are still determined to achieve repatriation and compen-
sation for their losses, while Israel is equally adamant
in opposing repatriation. The mandate of the UN Relief
and Works Agenc for Palestine Refugees expires on 30 25X1
June 1960.
GREEK ECONOMY IN 1959 . . . . . . . . . . . ... . . . . . Page 5
The Greek economy will be in a precarious position
throughout 1959. A continuing deterioration of the
country?s foreign exchange position, the major problem
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
PART III (continued)
facing Athens, is not likely to be reversed, and the gov-
ernment will push hard for more American aid. Barring
both a substantial and sustained rise in the level of
investment, which the Greeks alone cannot achieve, there
to the
t
urn
may be a loss of public confidence and a re
chaotic economic conditions which prevailed before the
stabilization program was begun in 1952.
SINO-SOVIET BLOC FOREIGN TRADE PRICING PRACTICES .
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. Page 9
The Sino-Soviet bloc's foreign trade pricing policies
are designed primarily to acquire scarce foreign exchange.
The bloc's aim is to expand existing markets or open new
ones in order to acquire the hard currencies it must have
to purchase the free world goods necessary for its ambi-
tious industrialization programs. In a period of general
economic contraction, as in late 1957 and 1958, the Soviet
effort can occur only at the expense of free world sup-
pliers, whose prices are sometimes undercut severely by
bloc traders in order to gain a foothold in Western mar-
kets.
BULGARIA INTENSIFIES ECONOMIC PACE . . .. . . . . . . . . . Page 11
Bulgaria's political, economic, and cultural life
has been transformed since the seventh party congress last
June. The Bulgarian regime's economic program, mainly an
effort to reflect the new policies of the Soviet 21st
party congress and of Khrushchev's theses for the Soviet
Seven-Year Plan, is also a result of Soviet pressure on
the satellites to coordinate economic planning, and of
internal pressures for reforms. Bulgaria hopes to realize
startling advances through greatly increased pressures on
the people, particularly the peasantry. Growing apprehen-
sion is already reported among the populace, but the impli-
cations of this plan are not yet clear to most Bulgarians.
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9 April 1959
The Soviet leaders are
preparing for the next phase
of the contest over Berlin and
Germany against a background
of apparent satisfaction with
the outcome of the exchange of
notes which produced agreement
to convene a foreign ministers'
conference on 11 May. High
Soviet officials, in talks with
.Ambassador Thompson, have been
obviously relieved that a min-
isterial conference has been
arranged.
Thompson believes the "al-
most pleading" attitude of For-
eign Ministry officials in
stressing the importance of a
summit meeting reflects both
Khrushchev's pressure on them
to arrange a heads-of-govern-
ment meeting and their realiza-
tion of the dangers of the situ-
ation brought about by Khru-
shchev's Berlin move.
Soviet officials are prob-
ing for indications of the West-
ern position in the forthcoming
talks. Deputy Foreign Minister
Zorin attempted to elicit in-
formation from Ambassador Thomp-
son on 3 April by remarking
that Khrushchev knew what Secre-
tary Dulles wanted but is now
uncertain what American policy
objectives are. Gosplan direc-
tor and party presidium candi-
date member Kbsygin asked Thomp-
son on 25 March how the United
States would frame a foreign
ministers' agenda. He professed
fear that Washington will
attempt to load down the con-
ference with so many problems
that the talks would go on for
years, putting off a summit
meeting indefinitely.
The relatively restrained
Soviet propaganda reaction to
the NATO ministerial meeting
in Washington reflects MOs-
cow's continuing efforts to
demonstrate its desire for a
negotiated settlement.
Corridor Incident
MMoscow attempted to ex-
tract further political ad-
vantage from the C-130 incident
in the Berlin air corridor
on 27 March by raising the
question to the diplomatic
level. The Foreign Ministry
note of 4 April to the United
States termed the flights
above 10,000 feet a "gross
violation of existing regula-
tions" and charged the United
States with attempting to
"worsen" conditions for a
foreign ministers' conference,
if not completely to "frustrate
the agreement on East-West
talks." The USSR's decision
to follow up an earlier pro-
test at the Berlin Air Safety
Center with this formal dip-
lomatic note probably was
an effort to capitalize on
British press and official
criticism of the flights.
After recalling recent
statements by Western ambassa-
dors to Gromyko that unilateral
actions by any government would
not promote success of the
forthcoming negotiations, the
Soviet note said the USSR would
not only refrain from any uni-
lateral actions that might ag-
gravate the situation but would
also "go out of its way" to
facilitate negotiations. The
note reaffirmed Moscow's in-
tention to observe "present
regulations and accepted prac-
tice of communications along
the routes linking Berlin with
West 1:ermany" until East-West
talks take place.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
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In addition to reassuring
Western public opinion that
Berlin access controls would
not be turned over to the East
Germans prior to negotiations,
this formulation probably was
also intended as a warning that
the USSR will respond to fur-
ther flights above 10,000 feet
by fighter harassment and pos-
ibly even a staged "accident."
Western Consultations
The NATO foreign ministers'
meeting and the prior discussions
among the French, British, Ger-
man, and American representatives
led to agreement on the broad
lines for the forthcoming ne-
gotiations with Moscow. De-
spite sharp differences of
opinion, the general principles
of positions to be taken on the
German question, European security
disarmament, and Berlin were
agreed on and approved for sub-
mission to the four-power work-
ing group which reconvenes in
Paris on 13 April. The final
substantive positions will be
submitted to the four foreign
ministers on 29 April for ap-
proval prior to the 11 May Ge-
neva conference. The working
group will also work out tactics
for the negotiations.
In four-power discussions
on ,31 March, West German Foreign
Minister Brentano, apparently
on :Last-minute instructions from
Adeiauer, rejected the working
group:'s plan for unification in
stages, which had originally
been presented by Bonn.
In outlining to the North
Atlantic Council the principles
which are to guide the working
group's study of German reuni-
fication, the four foreign min-
isters supported proposing the
establishment of an all-German
committee, during a transitional
period provided the principle
of free elections is accepted.
This committee would, among other
tasks, formulate a draft law
for free elections for an
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
all-German national assembly
which would in turn draft a
constitution and form an all-
German government.
The foreign ministers also
instructed the working group
to study the possibility of se-
curity measures in a special
zone and how such measures, and
general disarmament progress,
should be linked with German
reunification. The working
group is also to prepare a
statement of general principles
to govern a German peace treaty
to be presented in East-West ne-
gotiations and to develop, if
practicable, a Western draft
peace treaty for possible use
at a conference. The group will
study whether the West should
include some proposal on Berlin
as part of a general Western
proposal, as well as possible
separate proposals on Berlin
for readiness if the USSR re-
fuses to discuss a general Ger-
man statement.
In the meetings, discus-
sion of the German situation
showed complete agreement on
negative points such as no
reunification without free
elections, no neutralization
of Germany, no abandonment of
West Berlin, and no US-UK-Ca-
nadian withdrawal from the Con-
tinent.
Aside from a strong desire
to negotiate a peaceful settle-
ment, the approach to posi-
tive formulas lacked focus,
largely because no really sub-
stantive proposals for a West-
ern position on Berlin were
evident in the four foreign min-
isters' report to the North
Atlantic Council. Italy and
the Netherlands in particular
noted the need for more infor-
mation in order to win public
opinion. Canada, Norway, Bel-
gium, and Italy expressed will-
ingness to consider some type
of special security zone ar-
rangement provided it is ac-
companied by efficient inspec-
tion and control. Canada and
Norway also favored exploring
a possible UN role in guarantee-
ing; as Berlin solution.
TIBET SITUATION
Although the revolt in
Lhasa has been suppressed, reb-
el activity elsewhere in Tibet
apparently continues to pose a
problem for the Chinese Commu-
nists.
The Communists appear to
be having serious supply rob-
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that food supplies are dwin-
dling rapidly.
Otherwise the Chinese ap-
pear to.have the situation in
Lhasa well in hand and are rap-
idly restoring order in the city.
Their puppet, the Panchen Lama,
has moved from his traditional
seat at Zhikatse to Lhasa and
has been installed as acting
chairman of the Chinese-spon
sored "Preparatory Committee,"
which has replaced the local
Tibetan government. Maintaining
the ostensibly temporary nature
of his appointment, he will op-
erate from a new palace rather
than from either of the Dalai
Lama's homes. The Panchen Lama
will leave 9 April to attend
the National People's Congress
in Peiping, where he will strongly
endorse Peiping's policy of
suppressing the revolt
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MIDDLE EAST HIGHLIGHTS
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Unrest in Northern Iraq
The Qasim regime in Iraq
remains tense and alert to the
possibility of new efforts to
overthrow it, Its attention is
focused on Iraq's northwestern
frontier with Syria,where Sham-
mar tribesmen armed by the UAR
are carrying out sporadic bor-
der raids.
Although there is no ques-
tion of the activity of Vthe. trib-
al elements on the frontier, no
large-scale build-up of UAR
regular forces on the Syrian
side ofth6, bbrder.hais -been noted.
Cairo propaganda,:. in pub-
licizing the passage through
the Suez Canal this week of a
Soviet ship repatriating 820
Kurdish men, women, and chit-
drep,apparently seeks to play
on a possible Iraqi Arab fear
of the strengthening of the
Kurdish minority. Cairo claimed
the ship was transporting "855
armed Kurdish volunteers" who
were to enlist in a pro-
Communist Iraqi "foreign.le-
gion. -'
Baghdad, howeve;, main
talus; these people are merely
members., of the Barzani tribe
who ha%re been in exile in
the Soviet Union since 1947;
their leader, Mulla Mustafa
Barzaiii, returned to Irate
the USSR last summer.
propaganda,. meanwhile, has main-
tained a steady barrage of
stories that a major uprising
has taken place in
the Kirkuk area of
northeastern Iraq
and that there are
widespread mutinies
in the army. A new
clandestine "Voice
of Free Iraq," ap-
parently located in
Egypt, began broad-
casting on 5 April.
A possibility
of internal dis-
turbances appears
implicit in two
forthcoming major
rallies of the
Communist-front
Peace Partisans--
the first scheduled
on 10 April in
Ramadi:,, the sec-
ond on 14 April in
Baghdad.
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9 April 1959
Foreign Companies in Iraq
Moves to oust the few re-
maining Western companies in
Iraq have been sharply acceler-
ated since the uprisings at
Mosul in March. The Iraq Pe-
troleum Company (IPC), which
had been relatively unhampered
before the revolt, now is being
harassed by arrest of-:its Iraqi
personnel; its operations, how-
ever, have not yet been affect-
ed. More than one third of the
157 Iraqi nationals occupying
high technical and managerial
posts on the IPC staff at Kirkuk
have been arrested.
Baghdad
may nave engineered the arrest
i an effort t
v
ng
a basis
for
or'nationalizing the company.
sequestering.
Prime Minister Qasim had
previously said he was consider-
ing nationalization of the 23.-
75-percent French share of IPC.
He reportedly is also consider-
ing whether to grant the USSR a
concession in the Persian Gulf
in an offshore area recent-
ly relinquished by the Basra
Petroleum Company--another IPC
affiliate.
In a move designed to weak-
en Nasir's control over the 70
percent of Iraq's oil transport
which moves through Syria, the
strongly pro-Communist Iraqi
minister of economy has told
TPC that the government wants
the company to construct a
pipeline from the Kirkuk oil
fields in northern Iraq to the
Persian Gulf.
Partly as a consequence of
the recent $137,500,000 Soviet
aid agreement, Baghdad canceled
the contract of the British
firm making plans for a new
steel mill and assigned con-
struction responsibilities to
the Soviet Union. The Iraqi
cabinet also canceled contracts
on ;2 April signed with two
French firms to design a tex-
tile factory and to construct
a natural gas pipeline from
Kirkuk to Baghdad.
The increasing number of
arrests of foreign nationals
is hampering operations of the
foreign companies. By refusing
to grant re-entry visas to
technicians returning from home
leave and by forcing them to
submit to elaborate restric-
tion, and surveillance, Bagh-
dad is rapidly reducing the
number of competent technicians
in the country. Moreover,
these men have not yet been re-
placed by Communist bloc nation-
als. Iraqi Airways has been
unable to replace most of the
British pilots and engineers
hastily dismissed some time
ago. Baghdad has appealed to
Western embassies to aid in
"sajisfying the urgent require-
ments of the Iraqi Airways"
for senior pilots and engineers.
At the American-operated
but government-owned Dura Oil
Refinery at Baghdad, the hiring
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
of many unqualified pro-Commu-
nist personnel has resulted in
a marked deterioration in the
plant's safety. Many Americans
have already left, and the re-
mainder are planning to leave
when their short-term contracts
expire.
Barring a sudden reversal
of the present government's Com-
munist orientation, most West-
ern business interests probably
will have left Iraq by the end
of 1959.
Arab League
After five days of hotel-
room conclaves in Beirut, the
Arab League political committee
on 7 April issued a communique
which clearly indicated that
its efforts to calm the UAR-
Iraq dispute have so far come
to nothing. The committee,
which did not include represent-
atives from Iraq, Jordan, Tu-
nisia, or Libya, urged that all
Arab states adhere to a policy
of "nonalignment and nonsub-
servience," appealed to Iraq
to be "in harmony" with the
other Arab states, and charged
a subcommittee with the task
of "studying" ways to implement
these resolutions. Even this
seemingly innocuous conclusion
was too much for the Sudanese
delegation, which publicly
stated it approved of only
"some" of the points.
Behind the scenes, there
appears to have been resent-
ment on the part of many dele-
gates against the UAR, and par-
ticularly against its fiery
deputy foreign minister, Farid
Zeineddine, for trying to use
the meeting simply as a sound-
ing board for UAR attacks on
Qasim. There is also in the
background a sentiment on the
part of a number of Arab leaders
that however much they dislike
the Iraqi regime, they do not
wish to join in attacking it
in such a way that Nasir will
appear the only beneficiary.
Inside the UAR, the anti-
Communist campaign has continued,
with police raids against the
remaining Egyptian Communist
party members. The purge of
pro-Communist elements from
official positions has been ac-
companied by an independent
drive against corruption, The
latter also has been develop-
ing for some time, and is being
pushed by Nasir to counter a
growing feeling that in some re-
spects his regime has begun to
match the corruption of the
old monarchy.
Nasir may be particularly
sensitive to domestic political
currents at this time because
of reportedly widespread doubts
in Egypt that he can "get away
with? a policy which is hostile
to both the Soviet Union and
the West. UAR officials, pos-
sibly reflecting something of
this concern, have urged the
West to make some move, either
a public gesture or an offer of
private support, which would
indicate that the Nest will
back Nasir if necessary. Nasir
himself, however, does not ap-
pear to desire such gestures
or to want to take the initia-
tive in asking for assurances
of stand-by aid.
Concurred in by ORR)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1951)
CHINA'S PEOPLES' CONGRESS TO NAME MAO TSE-TUNG'S SUCCESSOR
Communist China's Second
National Peoples' Congress (NPC)
will open in Peiping on 17 April.
Its most conspicuous action will
be the "election" of a succes-
sor to Mao Tse-tung as chairman
of the regime. The congress,
elected every four years by
lower level congresses, in theo-
ry is the highest organ of gov-
ernment, corresponding to the
USSR Supreme Soviet. It meets
annually. Like the Supreme
Soviet, however, its actual
legislative functions are largely
ritualistic, but it does pro-
vide Peiping with a forum in
which to disclose the main out-
lines of government policies
and plans.
Peiping has announced that
the agenda for the congress will
include a report on the work of
the government--probably by
Chou En-lai--the adoption of the
national economic plan and state
budget for 1959, and the elec-
tion of leading government per-
sonnel.
Mao has said he does not
want another term as chairman
of the government.. Instead, he
wants to concentrate on national
policy and devote more time to
writing on theory. There seems
little reason to doubt this,
since he is retaining all of his
party posts.
In confirming his decision
a he would not
seek re-election, Mao implied
that his health was also a fac-
tor. hat
it wjaz'y ror~ to re-
linquish his post as chairman
of the regime because his con-
current government and party
responsibilities were "too great"
and he was
getting old."
Mao's successor in the
largely ceremonial government
job will probably be: a popular and
high-ranking but fairly unim-
portant party stalwart like the
present vice chairman, Chu Te.
The congress will also select
a vice chairman, the chairman
of he NPC Standing Committee,
and the premier. There has been
no :indication, however, that
Liu Shao-chi or Chou En-lai will
vacate the latter two posts.
The congress will examine
the draft 1959 economic plan out-
liniLng a "bigger, better, and
more all-around leap forward"
for this year. The draft plan,
which was adopted by the party
central committee last week, re-
tairLs the highly :ambitious . tar-
gets first proposed last Decem-
ber. The central committee said
it "firmly believed" the Chinese
people would continue their "hard,
faithful, and honorable work"
to overfulfill the plan. The
congress may also hear a report
on the "tidying up" operations
in the communes. The central
committee has just concluded
that the work has been carried
out "properly" and that the com-
munes are ""healthy.'"
Foreign policy statements
at the congress will be designed
in part to offset the widespread
view that Communist China is
the most truculent member of the
bloc. During the past year Pei-
ping suffered a decline in prestige
oftwnrr
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9. April 1959
for this reason in Poland, and
many non-Communist countries--
including Indonesia, India, and
Burma--tend to view the Chinese
Communists with increasing sus-
picion. Peiping will attempt
to minimize the effect on Afro-
Asian countries of the Tibetan
revolt by denying that it is
widespread or is continuing,
stressing that the large majori-
ty of Tibetans support and
approve of~ "central leader-
ship" "autonom.,us"
region .
25X1
CHINESE FOREIGN
After reaching record
heights in 1958, Communist Chi-
na's foreign trade drive is
apparently slowing down, and
recent reports indicate that
Peiping is encountering diffi-
culties in meeting its export
commitments.
In 1958, Communist China's
export drive in the free world
was pursued aggressively, par-
ticularly in Asia, from which
Peiping receives a large portion
of its foreign exchange earn-
ings. Toward the end of the
year, however, shortages de-
veloped in the supply of com-
modities normally exported from
China.
reports of export shortages and
complications indicate~,'however,
that these difficulties are
probably widespread and not re-
stricted-to certain localities.
The inefficient use of la-
bor during last year's iron and
steel campaign and the disloca-
tions introduced by the communali-
zaticln drive almost certainly
COMMUNIST CHINA
SELECTED TRADE WITH THE FREE WORLD
(ESTIMATED IN MILLIONS OF DOLLARS)
LI INDUSTRIAL WEST 671
51 ASIA-AFRICA
In the first three months
of 1959, mainland exports to
Hong Kong declined appreciably,
and China began to cancel major
contracts for exports to Brit-
ain, Finland, West Germany, ,'and
France. In almost every in-
stance these cancellations'and
delays involved traditional Chi-
nese export items such as tex-
tiles, cement, animal by-products,
industrial raw materials,.hogs,
rice, eggs, and other foodstuffs.
These difficulties thus
far are believed to have arisen
from temporary, localized trans-
portation deficiencies and great-
er Chinese consumption of cer-
tain raw materials. Persistent
1958
led to a general decline in the
production of those export com-
modities which require large
amounts of labor in processing.
In the long run, the "leap for-
ward" movement may enhance Pei-
ping's export potential, but its
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9 April 1959
immediate effects appear to be
hindering expansion of foreign
trade.
Although the value of can-
celed contracts has not been
large, the unfavorable public-
ity probably has been very em-
barrassing to Chinese trade
officials who have worked hard
to prove China's worth as a
reliable trading partner. In-
demnities have been paid to
injured firms in some cases,
and the Chinese have assured
importers that present diffi-
culties will soon be corrected.
Communist China's trade
with Western Europe in 1958 was
much greater than in 1957, but
a 55-percent increase in imports
was accompanied by only a 25-
percent increase in exports,
leaving an import surplus of
about $240,000,000 with that
area. Previously this deficit
--$130,000,000 in 1957--was
covered by China's large sur-
plus in trade with Asian coun-
tries. Peiping's trade deficit
with its major free world trad-
ing partners grew from only
$30,000,000 in 1957 to more
than $120,000,000 in 1958.
In view of China's limited
foreign exchange reserves, the
present trend probably cannot
continue for long. A high ex-
port volume must be maintained
or Communist China may be forced
to cut back imports of manu-
factured goods and raw ma-
terials from Western Euro e.
I
"COMRADES' COURTS" TO AID KHRUSHCHEV'S DRIVE AGAINST HOOLIGANISM
Khrushchev, in his present
drive against hooliganism,
drunkenness, and other types
of "social misdemeanors',11 has
turned to the comrades' courts
as another device to promote
"collective" responsibility
for the maintenance of public
order. These courts--informal
tribunals. of negligible influ-
ence in the past-are to be
given broader powers.
The courts will apparent-
ly be in the nature of an offi-
cially organized citizens' vig-
ilance committee. In this re-
spect they have much in common
with the neighborhood mass
meetings empowered under the
recently enacted "antiparasite"
laws to exile speculators,
beggars, and others living on
money not gained through "so-
cially useful work." The
courts will probably supplement
the work of the newly organ-
ized workers' militia in re-
lieving the regular militia and
judiciary of some of the burden
of handling minor offenders.
The Soviet press was quick
to follow up Khrushchev's re-
marks at the 21st party congress
that "the time has come to pay
more attention to comrades'
courts..bwhich should examine
not only cases of a production
nature but questions of daily
conduct and morals." A number
of articles have appeared prais-
ing the idea but pointing out
the obvious need for altering
the existing statutes governing
the courts' operation if they
are to function as Khrushchev
has specified.
One factor which apparent-
ly has attracted Khrushchev to
the courts is that they possess
many of the features of a show
trial, geared to influence the
attending spectators as well as
the defendant. In these terms,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9. April 1959
the comrades' courts are de-
signed to supplement the penal
actions of the regular courts
with a primarily prophylactic
function.
In recent years comrades'
courts have existed only in
factories and enterprises. The
wnrkers elect members of the
court who then elect a chair-
man, usually a member of the
factory management, and a dep-
uty chairman. The court meets
in open session, and the work-
ers in the enterprise are en-
couraged not only to attend but
to take the floor. The most
severe sentences the courts can
recommend to the factory direct-
or are dismissal or demotion,
however, and existing statutes
limit! their jurisdiction to
cases of absenteeism and produc-
tion misdemeanors.
The press has indicated that
comrades' courts are being estab-
lished on collective farms, and
the suggestion has been made to
set up similar ones in apartments
and neighborhoods t handle "so-
'~ infractions, 25X1
GUINEA DEVELOPING CONTROLLED ECONOMY
The Sekou Tours government's'
recent tightening of economic
controls and its expansion of
commercial ties with the Soviet
bloc may presage a major shift
of Guinea's social and govern-
mental philosophy away from free
enterprise and toward state
socialism. Moreover, the ar-
rivals in Conakry in late March
of two shipments of Czech arms--
probably a gift for internal
security needs--and a 30-man
Czech military mission demon-
strate Guinea's receptivity to
close bloc ties. These arrivals,
according to the French charge
in Conakry, are in violation
of the French-Guinean technical
assistance accord of 7 January.
A series of presidential
decrees enabling the government
to exercise broad controls over
labor, domestic commerce, in-
ternational trade, and foreign
firms reflect the government's
desire to establish a controlled
economy. Quotas have been im-
posed on principal agricultural
exports. Newly imposed import
restrictions are directed pri-
marily at the franc zone, which
accounted for about 75 percent
of Guinea's total foreign trade
in 1958.
The government is refusing
to grant import certificates
for articles of French origin
on the grounds that they must
be imported from East European
countries with which Guinea has
barter agreements. France charges
that such actions violate franc
zone regulations. In addition,
African importers in Guinea are
given preference over foreign--
largely French--importers in
handling all goods covered under
the agreements with Czechoslo-
vakia and East Germany.
Recognition of the danger
of bloc operations in Guinea is
reflected in the United Nations
Secretariat's decision to send
a Swedish consultant to Conakry
to investigate Communist pene-
tration efforts there in addition
to examining prospects for ex-
tending technical assistance.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
Paris, stating that these de-
velopments in Guinea are detri-
mental to friendly relations,
has decided to delay sending
an ambassador to Conakry for
at least another two months.
Guinea's increasing ties
with the bloc probably are part
of an attempt to lessen its de-
pendence on France and to pro-
South Vietnam's persistent
security problem posed by the
well-entrenched Vietnamese Com-
munist military underground,
estimated at more than 2,000
men, is highlighted by recent
military-operations northeast
of Bien Hoa and in the Ca Mau
Peninsula in the southwest.
These operations, conducted by
units of the regular armed
forces, which number some 145,-
000, instead of the less effec-
tive paramilitary. forces
mally responsible for
internal security,
are the latest of the
special efforts mount-
ed periodically by
the government against
Communist concentra-
tion points.
The marshy Ca
Mau region, the thick-
ly forested area north
of ' Saigon; and the swampy
Plaine des Joncs near
the Cambodian border
are endemic trouble
spots where the Com-
munists have taken
advantage of the dif-
ficult terrain to set
up semipermanent en-
claves.
In the Bien
Hoa area, slow prog-
ress- has been made
;'site of naW Go . Kampot /Chau ,Dod
SECRET
vide means of expressing a neu-
tralist foreign policy rather
than a decisive move toward
the East. The minister of eco-
nomics and planning stated on
24 March that Guinea "cannot
tie itself to France" but must
seek aid wherever available, in-
cluding the United States or
Eastern Europe.
in extensive security operations
begun in early March against a
stubborn pocket of armed Commu-
nists and remnant sect forces
believed to number as many as
500. The three paratroop. bat-
talions, two infantry regiments,
and miscellaneous units now
committed by the government have
encountered unusually strong
resistance, receiving 60- and
81-mn1. mortar fire and suffer-
ing ]Land-mine casualties. The
embryonic Vietnamese Air Force,
in its first use against Communist
B 0 D\ 1,"A,
Y.laine des,
Jonce V
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dissidents, has flown several
bombing and strafing missions
but apparently has been general-
ly ineffective against poorly
defined targets.
The present security sweep
by a reinforced Vietnamese ma
rine battalion in,two provinces
of the Ca Mau Peninsula is being
conducted by squad and platoon
units using commando-type hit-
and-run tactics. Such factors
have proved effective in this
area of interlacing waterways
and tall marsh grass where the
Communists have achieved vir-
tual control over whole vil-
lages and districts. The ma-
rine forces have killed a num-
ber of Communists, including
several political commissars,
and have concentrated on de-
stroying enemy food sources.
The Bien Hoa and Ca Mau
operations are designed to pre-
vent the growth of dangerous
concentrations of Communist un-
derground strength. Most gov-
ernment efforts, however, are
directed toward combating scat-
tered incidents of Communist
terrorism in the rural areas
and in fighting a continuous
propaganda war for the loyalty
of the Vietnamese people. In
the lace of unrelenting pressure
by the Communist political and
military underground, the Diem
government has been forced to
divert much of its energy and
resources from the economic
field, where the rate of prog-
ress---which has been slow--is
a major factor in determining
South Vietnam's long-range
stability.
25X1
JAPANESE COURT DECISION HELPS SOCIALIST ANTI-US CAMPAIGN
The opinion of the Tokyo
district court that the pres-
ence of foreign troops in Ja-
pan is unconstitutional may
make it more difficult for
Prime Minister Kishi to effect
an early revision of the US-Jap-
anese security treaty. The
Kishi government is appealing
the case directly to the Su-
preme Court, but a decision is
not expected for several months.
In the interim, the Socialists
will be able to exploit the is-
sue for the upper-house elec-
tions in early June.
The district court on 30
March acquitted seven Japanese
nationals who were indicted un-
der a special criminal law for
trespassing on an American air
base in 1957. The court de-
clared the law invalid on the
grounds that it affords protec-
tion to foreign forces in Japan
whose presence is a violation
of the Japanese Constitution.
The court cited Article 9 of
the Constitution which stipu-
lates that "land, sea, and air
forces, as well as other war
potential, will never be main-
tainE!d."
Pending the appeal, the
court's opinion will have no
immediate effect on the legal
status of American forces in
Japan. Kishi's own party al-
ready is divided over the ex-
tent of the revision of the
US-Japanese security treaty,
however, while the opposition
Socialists have formed a united
front, with the Communists and
leftist labor to oppose it.
The Socialists also hope the
court opinion can be used to
offset the damage to their po-
sition which resulted recently
when a Socialist mission to
Peiping identified the party
with. Chinese Communist objec-
tives in Asia.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
The government is confi-
dent that the Supreme Court,
with its more conservative
judges, will reverse the lower
court decision, but the con-
stitutionality of the Japanese
forces themselves could come'
into question. Although the
government has proceeded with
a gradual military build-up
on the premise that every na-
tion has an inherent right to
provide for its own defense,
this interpretation has not been
tested legally.
FIDEL CASTRO'S VISIT TO WASHINGTON
Cuban Prime Minister Fidel
Castro, who arrives in Washing-
ton on an unofficial visit on
15 April, has made very clear
during his three months in power
his desire for radical economic
and social reforms to help
Cuba's lower classes, which
suffering from chron-
ic unemployment and
underemployment. His
methods, however, are
ineffective and are
increasingly those
of a dictator, and
opposition to his
government is steadi-
ly rising.
Castro' s actions,
springing largely
from his extreme
nationalism and ideal-
ism,, may also have
been influenced by
the opinions of his
advisers, some of
whom are pro-Commu-
nist. His programs for agrarian
reform and reducing the cost
of living appear to have been
formulated without concern for
their ultimate economic reper-
cussions and have taken on the
aspects of a campaign against
"vested interests" and the up-
per-or middle-class professional
and business groups.
The court may rule only
on the criminal law, avoiding
an opinion on the status of
the American and Japanese forces.
If the Supreme Court overrules
the lower court decision in
clear-cut terms, however, the
public and legal debate which
has been stimulated may lead
to a clarification of Japan's
right to take adequate steps
for self-defense, and be in
effect a judicial sanction for
US-Japanese defense arrange-
ments.
Castro's policies are man-
ifested in an isolationist or
"neutralist" position in foreign
affairs. His tendency to blame
United States economic and
political influences for all of
Cuba's ills has resulted in
strong anti-US statements, par-
ticularly his answer
to former Costa Rican
President Jose Figueres'
moderate and pro-US
speech in Havana on 22
March. Consequently,
Castro is becoming iso-
jlated from the rest of
LLatin America, includ-
ing the liberal bloc
which supported his rev-
olution,, as well as
from the United States.
Castro continues
to run a "one-man show"
and has made little ef-
fort to relinquish his
-;position as arbiter of
all government policies
and actions. A man of no pre-
vious administrative or govern-
ment experience--he is reported-
ly showing the strain of a
heavy schedule. He tolerates
no criticism of himself or his
government and continues to make
frequent lengthy public speeches
to bolster his popularity, now
fading noticeably except among
the., lower classes.
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CURRENT INTELLIGENCE WEEKLY SU Y
9 April 1959
Convinced that he is the
victim of a biased press in the
United States and elsewhere,
Castro while here will probably
attempt to explain and justify
his actions. He may also, as
he stated in a recent televi-
sion interview, seek financial
aid and a larger sugar quota in
the US market. His aversion to
foreign investment in Cuba is
limited to private investment
which can gain control of Cuban
industries or resources; it
does not extend to foreign loans
on a government-to-government
basis or from international
lendin a encies. 25X1
COMMUNIST ACTIVITIES IN MEXICAN LABOR
Mexico's expulsion on 3
April of two Soviet diplomats
accused of complicity in a na-
tionwide railroad strike was
evidently an attempt to rally
national feeling behind the gov-
ernment's decision to curb Com-
munist influence in the labor
movement. This influence has
been increasing rapidly, but the
government evidently minimized
the threat of Soviet interven-
tion until evidence of it be-
came clear to President Lopez
Mateos.
Recent Mexican administra-
tions have kept-wages very low
in order to help the country's
economic development, depending
on broad social benefits and po-
litical largesse to union lead-
ers to keep the well-organized
labor movement loyal to the dom-
inant Party of Revolutionary In-
stitutions (PRI). Many of the
anti-Communist labor leaders
have been discredited because
of their corruption and polit-
ical subservience at the expense
of union interests. This situa-
tion has given active Marxists
increasing opportunities to gain
influence in many key unions by
demanding legitimate labor bene-
fits, and it is a threat to the
PRI's political power with its
strong labor base. The govern-
ment had, however, hesitated to
challenge the Communist union
leaders directly.
e gov-
ernatent now has accused the rail-
way union head, Demetrio Vallejo,
of involvement with Soviet agents
in a master plan to foster labor
agitation in Mexico. Its case
will. be strengthened in Mexican
public opinion by Argentina's
expulsion on 7 and 8 April of
five Soviet bloc diplomats simi-
larly accused of interfering in
internal affairs.
There have been frequent
demonstrations for Vallejo's
release, and many skilled rail-
road workers refuse to return to
work despite strong government
pressure to end the economically
serious strike. Dissatisfied
workers in the railway and other
Communist-influenced unions are
likely to suspect the govern-
ment's actions as an indication
of its determination to control
labor for its own ends, There
already have been loud complaints
that union heads hastily installed
to replace arrested leaders are
government stooges.
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The Communist-led People's
Progressive party (PPP) in Brit-
ish Guiana, after a year and a
half in office under the limited
powers afforded by the colonial
constitution, remains the strong-
est political force. The party,
however, now faces internal dif-
ficulties, some popular disillu-
sion, and a potential-
ly more competitive
opposition.
Concentration by
party leaders on their
ministerial duties at
81 and E"ducafon ... C1`icirman ._ ....... -_
the expense of party Zdward__eh 'Xy -,-_---Natural Resources ,? -------- Senior Vice Chairman
to a significant re-
duction in dues-pay-
ing membership and in
funds but has not yet
enabled the PPP to
point toward much -eco-
nomic progress or advance to-
ward self-government. The PPP
has therefore lost some popular
support. The party has good
working relations with the colo-
nial governor, however, -.,who
backs its efforts to get foreign
development aid. The British
continue to hope that the re-
sponsibilities of office will.'mod-
erat.e. the views of PPP leaders,
and they expect to hold talks
this summer in London on fur-
ther economic aid and develop-
ment of further self-government.
The governor sees the PPP as more
CAYMAN
ISLANDS
JAMAICA
L~l
?CAICOS ISLANDS
'~. TURKS ISLANDS
HALT
DOMITAIOANS
'OF GOyf Rt iM JET
EkEE UTIVt tf5LJlCIL
~ y........ .....-..Leader
Cheddi Jagan .......= rade anti tndust'r
Janet Jagan.............. ----Labor, Health and Housing ............. secretary
IN BRITISH GUIANA
dangerous if in opposition and
able to devote full time to
party work.
Party leader Cheddi Jagan,
who in effect heads the govern-
men. t, and his wife, Janet, no
longer maintain their formerly
undisputed control over party
policy, their most serious rift
being with the ambitious and ap?..
parently non-Communist Edward
Beharrya Efforts by the Communist
inner core of the PPP to organize
youth and women9s groups, indoctri-
nate party members with Marxist
lecturers, infiltrate the labor
movement, and reduce police ef-
ficiency have been largely un-
successful.
The opposition has made but
little headway. The principal
opposition party, the People's
National Congress, recently
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St. Christopher /Autigua
Caribbean Sea
Montserrat ^??dek>na
QDominis.
Pt. Lucia
St. Vincent,
Grenada/, Barbados
Chagua amos ,Tobago
TRINIDAD
COSTA LnNAL
RICAN oNi: A
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Federation at West Win
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O - ipo
RJTI SH
GUTAN)
SECRET
absorbed another
small group. The ma-
jor obstacle to the
growth of this Negro
group is its inability
to attract much sup-
port from the East
Indian half of the
population. Opposi-
tion leader Burnham's
support of the West
Indies Federation also
clashes with the East
Indian PPP's fear of
Negro predominance in
it. Jagan defers to
this fear, although he
apparently would like
to join" in order to
gain wider influence.
25X1
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9 April 1959
FINNISH GOVERNMENT DIFFICULTIES
Finland's minority Agrarian
government has been successful
in concluding a 1959 trade agree-
ment with the Soviet Union, the
issue which led to the'fall of
its predecessor, but it still
faces serious financial diffi-
culties and a high level of un-
employment which the Communists
are seeking to exploit politi-
cally.
Prime Minister Sukselainen
took office on 13 January after
the USSR refused to conclude a
trade agreement with the majority
coalition of the Social Democrat
Prime Minister Fagerhoim. Under
the agreement obtained by Suk-
selainen in mid-March, Finland
will not have to reduce the level
of its exports--about $140,000,-
000--but remains economically
highly dependent on the USSR,
particularly as a market for
Finland's high-cost metalworking
industry and as a source of some
raw materials such as petroleum.
In contrast to its tough
attitude toward the Fagerholm
government, the Soviet Union
granted certain concessions,
such as carrying over into the
new agreement Finland's export
surplus of $13,000,000, reducing
Finland's quota of Soviet auto-
mobiles, and allowing Finland
to repay the ten-year $10,000,-
000 gold loan made in 1954 with
exports instead of gold or hard
currency.
Domestic financial prob-
lems, however, are causing Suk-
selainen serious difficulties,
principally an anticipated budg-
etary deficit this year of al-
most $70,000,000. The govern-
ment has obtained some loans
from domestic banks, but the
parliament has rejected propos-
als for increasing revenues. As
a result, a "cash crisis" is
in the offing. Furthermore, un-
employment is at a postwar rec-
ord of almost 100,000, and while
it appears to have reached its
peak, it remains a fruitful
topic for Communist agitation
and criticism.
The Sukselainen government
remains in office largely because
the other non-Communist parties
fear a new cabinet crisis might
reopen the question of Communist
participation, There has been
considerable talk about broaden-
ing the cabinet, and informal
discussions may be going on.
Fagerholm apparently is seeking
to prepare the way for future
participation in the government
by reconciling the divergent
elements within his Social Demo-
cratic party and by making it
more acceptable to the USSR.
However, progress in heal-
ing the schisms within the
party and the trade unions
is very slow,
(Concurred in by VKH)
25X1
NEW LABOR UNREST IN SPAIN LIKELY
Labor dissatisfaction over
inflationary pressures and a
growing willingness to defy the
Franco regime may lead to strikes
in Spain during the next few
weeks.
The economic condition of
most Spanish workers is precari-
ous, despite indications that
the cost of living has leveled
off since the first of the year.
Each spring since 1956 sporadic
strikes have broken out, partic-
ularly in the industrial north.
The general lessening of popular
fear Of the regime, which has
recently become more apparent,
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. SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
9:April 1959
may be an important psycholog-
ical factor this year. Strike
activity could be triggered by
the government's program to re-
organize the economy in order
to qualify for aid from the In-
ternational Monetary Fund, or
by layoffs of surplus workers
aimed at lowering production
costs to enable Spain to com-
pete in a free European market.
The illegal Spanish Commu-
nist party--with an estimated
membership of some 5,000--will
probably try to persuade the
moderate opposition groups to
support nationwide strike
action in the next few
weeks. These groups have
heretofore been reluctant to
collaborate with the Communists,
but, if strikes seem likely,
they may feel obligated to co-
operate to some extent with
the Communists, who are the
best organized of all the
clandestine parties.
SECRET
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 CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
PATTERNS AND PERSPECTIVES
STATUS OF THE FRENCH COMMUNIST PARTY
The French Communist party
(PCF) still retains a mass elec-
toral following and the most
extensive political organiza-
tion in France despite the vir-
tual elimination of the party's
National Assembly representa-
tion in the November elections
and its lesser setbacks in
March, when it was ousted from
numerous municipal administra-
tions. These defeats have
caused serious financial prob-
lems and encouraged criticism
among the rank and file over
the rigidity of party leader-
ship.
The top leaders, however,
have shown little disposition
to change party policies and
seem to be counting instead on
dissatisfaction with the gov-
ernment's economic program--
such as occurred to some ex-
tent in the March elections--
to restore Communist influence.
Electoral Decline
The greatest blow to the
PCF has been the marked drop
in its electoral strength. Un-
der the Fourth Republic, it
could count on at least one
quarter of the electorate in
national elections, but in both
the constitutional referendum
last September and the National
Assembly elections
in November, the Com-
munist vote was well
under 20 percent, The
party's loss of po-
litical power is
more apparent in the
reduction of PCF dep-
uties from 144 to
10, and in the large
inroads made in Com-
munist strength on
municipal councils
under the new major-
ity electoral sys-
tem. The result i,,~,
a severe financial
and patronage loss to the
party.
There was a swing back
to Communist candidates in the
municipal elections last month,
largely because of the popular-
ity of some local Communist
personalities and discontent
with the government's austerity
program. On the second round,
moreover, the Communists unex-
pectedly benefited from the ma-
jority system to win some towns
they had not previously con-
trolled. They were eliminated,
however, from many municipal
posts in smaller towns where
they had long been entrenched.
In the elections of 26
April for the Senate, which is
chosen by communal and depart-
mental representatives, the
Communists will probably win
at most one or two seats.
Party Organization
The top leadership and the
hard-core organization of the
PCF have thus far remained vir-
tually unchanged by France's
political upheavals, and mem-
bership is apparently stabi-
lized at about 250,000, as com-
pared. with the 5-6,000,000 votes
the party was able to attract
under the Fourth Republic. The
~1;NATI nN4L ASrE/18L r
1953 19UW lCI PAL
-1956 A TIONAL A"SEHBLY
, 958 A'ATION'1 ; $5 L;Y;
1959 NATICWAL ASSEMBLY
VOTES
RECEIVED
4, 926, 5}
2, 953~ 1&9'
5,532,631
4, 624, 511
3,882,204
3.269.480
PERCENTAGE OF
VOTE RECEIVED
26.5
16.9
25.7
27.8
18.9
18.3
"- otai-neya`tlve vote, which also included
-a the ncn-Communist apposition
CONF IDENTlyVE;
9ftCRET"
97-
_84, 276
145
lr1
2U, 4,~4
25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
delayed effects of recent elec-
toral setbacks on the PCF organ-
ization may, however, prove
serious.
A retrenchment in expend-
itures has already been forced
by the loss of over 130 par-
liamentary salaries
by lessened
and the party is already making
use of this organization to re-
gain. prestige by exploiting
workers' unhappiness over the
government's austerity program.
Nor does the party seem as fear-
ful as it was last fall of be-
ing outlawed under the new con-
stitutional requirement that 25X1
political parties must "respect
the principles of national sov-
ereignty and democracy."
opportunities to profit from
municipal contracts. Many party
officials, including 13 members
of the politburo, failed to win
parliamentary seats in November
and may have to be given full-
time employment within the party
bureaucracy, despite a general
reduction in force of party per-
sonnel. Several party dailies
Communist control of France&s?
major labor i nign, ; -the Gen-
eral 'Labor ConfederAtion, his
not -been :gtestioned, however,
After each electoral set-
back, the French Communist lead-
ership has maintained that the
party program is still valid,
and it has repeated its familiar
themes in the draft theses pre-
pared for the May party congress.
At a. 3-4 October central com-
mittee "post-mortem" on the con-
stitutional referendum, Secretary
General Maurice Thorez acknowl-
edged the scope of the PCF defeat
but attributed it to outside
forces--police pressure, pro-
Gaullism, the desire for a
change, Algerian terrorism, and
threats of civil war. Follow-
ing the November parliamentary
elections, politburo member
Etienne Fajon told the central
committee there was nothing
wrong with the party line ex-
cept, failure to apply it cor-
rectly.
The PCF's present program
attacks the Debre government
and President de Gaulle on the
grounds that they represent in-
cipient fascism, pursue eco-
nomic policies inimical to the
working classes, andsctritinue the
war in Algeria. It accuses the
government of subservience to
the United States and West Ger-
many. It also continues to
stress the theory--which only
Thorez among modern Communist
leaders plays up prominently
--that the working classes be-
come progressively and absolutely
poorer under capitalism. The
practical application of the
PCF program seems to consist
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
of calling on rank-and-file
Socialists to abandon their own
leaders and join the Communists
in a mass opposition movement.
Dissatisfied Party Supporters
Since 1956, many PCF sup-
porters have been criticizing
the party for being too rigid,
and in recent months they have
expressed dissatisfaction over
the party's "unrealistic" or
"obscure" guidelines. Self-
justification on the part of
the leaders after the electoral
debacles led to a, public airing
of "left-wing" dissidence in
the "Sorbonne cell" of the PCF.
The cell challenged the "blind
optimism" of the party direc-
tors, their conservatism, their
"wrong concept" of political
unity, their servility toward
the Soviet Union, and their
"incapacity to produce a Marx-
ist analysis" of the French sit-
uation. Disciplinary action
against this cell has been fol-
lowed up in party publications
by warnings to other opposition
elements.
Criticism by Communist sym-
pathizers seems to have been
widespread, however, judging
from a poll conducted by the
monthly Realites among French-
men who are not members of the
party but who normally vote for
the PCF. They complained about
the clannish, conservative, self-
perpetuating party bureaucracy,
and indicated that their loyalty
had been reduced to a matter of
feeling their own interests bet-
ter protected by the Communists
tharL by some other alternative,
such as De Gaulle.
Prospects
PCF leaders may indulge in
some "self-criticism'? at the
party congress scheduled for
27-31 May, but it seems unlikely
there will be any major changes
in party organization or policy,
especially in view of the good
reception given by Moscow to the
French delegation which attended
the Soviet 21st party congress.
PCF leaders seem to be count-
ing rather on the growth of mass
dissatisfaction with the De
Gaulle regime to restore the
party's position. Having al-
ready made an electoral come-
back between November and March
as a result of the government's
austerity program and having
maintained their labor union
strength unimpaired, they are
probably confident of profiting
from any marked deterioration
of the French economic situa-
tion. Their propaganda sug-
gests that they also hope to
gain from any decided swing to-
ward a rightist, authoritaria
government.
25X1
UNREST. AMONG PALESTINE REFUGEES
Recent rioting and strikes
in Jordan and Lebanon again em-
phasize the plight and poten-
tially disruptive influence of
the Arabs who were displaced
during the Palestine war of
1948. Their "temporary" sta-
tus by now has assumed a de-
gree of permanency, and there
is little prospect of a solu-
tion to the problem of their
existence as wards of the United
Natioans.
The mandate of the UN Re-
lief and Works Agency For Pal-
estine Refugees (UNRWA), which
administers 'the program
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'CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
1959
30387
ISRAE
Tel Aviv - Jaffa
GAZA
STRIP i
'4,343
- (SYRIA).-
SYRIA LEBANON GAZA STRIP JORDAN
DISTRIBUTION OF ARAB REFUGEES
supporting the refugees, ex-
pires on 30 June 1960. The is-
sue of continuing international
support of the refugees beyond
that date is being considered
by UN officials. Secretary
General Hammarskjold plans to
recommend at the General Assem-
bly meeting in September.. the
continuation of UNRWA with some
minor adjustments.
The Arab refugees now ex-
ceed one million according to
UNRWA, and over half of them
are living in Jordan. The re-
mainder live in Syria, Lebanon,
and the Gaza strip administered
by the UAR. About 70 percent
of those in Jordan live in West
Jordan, the area of mandated
Palestine which did not become
part of Israel.
Jordan's refugee
problem has contr.ib-
uted : si:gnif icantly to
the country's inter-
nal'instability. Fur-
ther complicating the
situation is the fact
that 180,000 frontier
villagers, not tech-'
nically defined as
refugees, are never-
theless "economic
refugees" because
they lost lands which
now lie on the other
side of the truce
line. UNRWA regards
these people as the
most destitute ele-
ments in Jordan. A
total of 270,000 Jor-
danian refugees are
not eligible for
UNRWA aid.
Rioting in Jor-
dan occurred late in
March when Jordanian
supervisors of UNWRA
activities were set-
verely beaten by sev-
eral refugees who had
been caught stealing
and giving short weight
to relief items. Sub-
sequently, a threat-
ened strike and a
walkout'of students
at a UNRWA-operated
commercial training school in
Jordan resulted in closure of
the school. Most of the stu-
dent strikers came from Nablus,
long a center of Communist ac-
tivity among refugees, whose
living conditions make them
easy prey for Communist propa-
ganda and recruitment. Jorda.ni-
an police made several arrests
and confiscated considerable
Communist literature there on 1
April.
Revelation during the riot
that the refugees had weapons
indicates that considerable
blood might be shed if fighting
between Communist and pro-Nasir
refugee elements should break
out as a result of the Iraqi-UAR
dispute. Refugee unrest has also
been evident in Lebanon where, in
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9 April 1959
December and again in late Jan-
uary, a strike, or boycott, of
UNRWA services occurred when
refugees demanded various chang-
es in the agency's activities,
administrative procedures, and
personnel.
The refugees as a whole
remain determined to achieve
their "rights," includingire-
patriation to their former
homes in Palestine and compen-
sation for the losses they have
suffered. Most of them resist
integration where they now re-
side; they continue to equate:
any rehabilitation scheme with
abandonment of their political
rights. They are supported in
this attitude by the Arab
states' official policies..
Israel is equally adamant
in its opposition to repatria-
tion, fearing the dilution of
its predominantly Jewish popu-
lation And . 'tier! deve lapment '.
of~-:.an{..intetpal threat to its,
security. Last November, how-
25X1
ever, the Israelis expressed a
willingness to compensate the
refugees without insisting, as
previously, that such payments
be part of a general Arab-Israeli
peace settlement. The offer was
subject to the conditions that
the displaced Arabs remain out-
side Israel and that inte.rtia-
tional financial assistance
would be made available to help
settle their claims.
The prospect of significant
progress toward reaching a set-
tlement of the ,refugee issue
remains remote. A recent re-
port regarding UNRWA's activ..
ities in Jordan states that the
agency long ago was forced to
abandon its earlier dreams of
accomplishing its mission through
large-scale works programs that
would integrate the refugees in
the Arab world. The report con-
cludes With the 'observation that
ne j. the r a long-range solution of
the Arab refugee problem nor a
successor organization to UNRWA
is yet in sight.
The Greek economy will be
in a precarious position through-
out 1959. A continuing deteri-
oration of the country's for-
eign+exchange':position, the ma-
jor problem facing Athens, is
not likely to be reversed, and
the government will push hard
for more American aid. Barring
both a substantial and sustained
'rise in the level of investment,
which the Greeks alone cannot
achieve, there may be a loss of
popular confidence and a return
to the chaotic economic dondi-
tions which prevailed before
the stabilization program was
begun in 1952.
Basic Instability
Although economic activity
has expanded steadily in the
past few years, Athens has made
little progress in eliminating
the iountry's basic weaknesses.
The gross national product, in
real terms, has risen More than
5 percent annually since 1955.
The increase,however, was dis-
tributed unevenly, causing eco-
nomic discontent and fostering
the growth of the extreme left.
There are still 1,000,000
underemployed in rural areas
and :00,000 unemployed in the
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9 April 1959
cities out of a total popula-
tion of about 8,000,000, Un-
deremployed and unemployed per-
sons now amount to about 25
percent of the labor force.
The archaic landowning sys-
tem also restricts agricultural
output. More than two thirds
of the family farms are less
than 12 acres in-size, usually
of widely separated
strips. Despite the
fact that more than
two thirds of the
population live in
rural
areas,
agricul-
tural
output
consti-
stutes
less
than one
third
of the gross na-
tional
product. Food-
stuffs
are the larger
est single category
of Greek imports.
Industrial pro-
duction in 1958 was
60 percent higher
than in 1953, but ag-
ricultural production
fell in 1958, holding
down the over-all rise
in gross national
product for the year.
Gross national prop=
duct had increased 9
percent in 1957, when
agricultural output
was relatively high,
compared with less
than 5 percent the
previous year.
Even the rela-
tively small and ad-
mittedly inadequate
investment program is
out of balance, In
1958 about half of
the investment in
fixed assets consist-
ed of nonproductive
housing and commer-'
cial construction. In
contrast, investment
in manufacturing
amounted to only about
2 percent of the to-
tal. This year the
government plans to
supply about 30 per-
cent of investment funds. Un-
der the proposed one-billion-
dollar, five-year development
plan, its share of the total will
increase. Projects under this
plan will be partially financed
by a $47,600,000 loan from West
Germany as well as by American
aid. Some of the German loan,
however, will be- spent for con-
sumer goods.
GREEK FOREIGN TRADE
MILLION DOLLARS
Rid figurers indicate percentage
CHEMICAL AND PHARMACEUTICAL PRODUCT,'!--
MOTOR CARS AND OTHER
MEANS. OF TRANSPORTATION
COTTON ---
OLIVE OIL AND OLIVES ---
OTHER
204.6 -
33
1956
ALCOHOLIC BEVERAGES -------------
SECRET
203.1
25X1
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9 April 1959
Foreign Exchange
Problem
Greek gold
and foreign-exchange
holdings have con-
tinued to decline
since 1956, dropping
by $23,000,000 in
1958. While exports
are expected to in-
crease in 1959,16wer
remittances from ship-
ping and a higher
level of imports prob-
ably will produce a
further loss of $10,-
000,000 to $15,000,-
000 by the end of the
year. Reserves now
are barely adequate
to cover imports for
three or four months
and are below the
$180,000,000 considered "safe"
by officials of the Interna-
tional Monetary Fund.
GREECE: GOLD AND HARD-CURRENCY ASSETS
198.8
MILLION DOLLARS
9 APRIL 1959
a m rce increase in savings de-
posits--from about $19,000,000
in 19153 to over $180,000,000 by
the end of 1958.
These officials have been
concerned that even a modest
reduction below the "safe"
level might underminerconfi-
dence in the national currency.
Thus far, however, there has
been no loss of confidence,
partially because the Greek
Government has been making
overoptimistic statements to
the press which, according to
Prime Minister Karamanlis, are
inconsistent with the facts of
the economic situation.
The confidence of the
Greek public in the currency
is a relatively new develop-
ment. Greece has been subject
to violent economic and politi-
cal fluctuations,especially
since World War II. Such fluc-
tuations have conditioned the
public to hoard gold and other
"real assets" and to accept
periodic flights of capital as
a reality of economic life.
The drastic currency devalua-
tion of 1953 and the resultant
surface stability, however, en-
gendered confidence and caused
In the interests of retain-
ing this new public confidence
in the Greek drachma, Athens is
reluctant to take measures, such
as sharply restricting imports,
which could precipitate a rtish to
withdraw funds. Thus a portion
of the loss in the gold and for-
eign exchange reserves is ac-
counted for by payments for im-
ports of consumer goods. A move
to restrict imports drastically
is not considered' economically
and politically feasible by the
government.
Balance of Payments
Even under favorable con-
ditions, Greek exports rarely
cover half of the costs of the
country's imports. Last year's
imports were $300,000,000 more
than exports.. Athens must rely
largely on earnings from ship-
ping and,more recently, on the
tourist trade, and remittances
from emigrants. .,These funds,
however, were less than in 1957,
partly because of the world-
SECRET
1957 1958 1959
IrSTIMATL)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 April 1959
AMERICAN AID TO GREECE
MILLION DOLLARS
100.8
.__ -< 0.8
121.4
0.9
1958 1959 1960
FISCAL YEARS (PROPOSED)
wide shipping depression. In
late 1958, 10,000 Greek seamen
and about 480 Greek-owned ships
were idle.
This year imports are
likely to rise by at least 8
percent, and, although exports
should rise, the gap will widen
substantially. Even with an
appreciable increase in the
amount of American aid utilized
this year, Athens will find it
necessary to use its dwindling
foreign exchange reserves to
pay for imports. The tighter
import controls inaugurated in
August 1958 have, however, re-
duced new credit granted to
Greek importers by foreign firms.
Prospects
Measures taken by the gov-
ernmebt,`to conserve the coun-
try's foreign exchange holdings
are inadequate, and Athens bar-
ring increased Western aid, may
face a crisis by midsummer;.
The government probably fears
further limitation on imports
of consumer goods would be ex-
ploited by the opposition and
by the growing extreme left
wing. Even if imp its are cut
back sharply, the anger of a
sudden economic crisis would
persist, since the Greek economy
is dependent on a high-level of
economic activity in Europe and
the world generally.
Greek Government officials
claim their country can do noth-
ing more on its own to avoid a
possible economic crisis; they
point out that Athens has al-
ready adopted sound monetary
and fiscal policies and liberal-
ized' its trade and payments ar-
rangements in accordance with
American wishes. These officials
note that a crisis might tempo-
rarily be averted if certain do-
mestic economic measures were
taken. Such moves, they assert,
would result in a serious loss
of confidence in the country's
economy and would cause dis-
astrous results. In the short
run, Greece will seek increased
American aid--$30,000,000 more
in defense aid alone in fiscal
1960 thab in 1959.
Over the long run, Greek
economic development in pro-
ductive areas will have to
be speeded up and increased
consumption postponed. Any
move, to hold down the
rising Greek standard of
living--still the lowest in
Western Europe--probably
would diminish further the
popular support fo r -
i, overnment.
SECRET
TECHNICAL COOPERATION
DEFENSE SUPPORT
MILITARY ASSISTANCE
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SINO-SOVIET BLOC FOREIGN TRADE PRICING PRACTICES
The Sino-Soviet bloc's
foreign trade pricing practices
are designed primarily to ac-
quire scarce foreign exchange
rather than to disrupt the
free world's economic stability.
The bloc's aim is to expand
existing markets or open new
ones: in order to pay in hard
currencies for stepped-up pur-
chases of free world goods re-
quired for its ambitious in-
dustrialization programs. In
a period of general economic
contraction, as in late 1957
and 1958, this can occur. only
at the expense of free world
suppliers, whose prices are
sometimes undercut severely
by bloc traders.in order to
gain a foothold in Western
markets.
The bloc probably would
not sacrifice export earnings
for any extended period by un-
loading large quantities of
goods at bargain prices in order
to disrupt Western economic
life. Such large-scale price-
cutting would mean a large re-
duction in bloc foreign exchange
receipts. This does not mean,
however, that a bloc country
would not cut its price over a
considerable period in order
to oust a free world supplier
permanently from a given com-
modity market in a particularly
important target country.
There is abundant evidence
that bloc firms have engaged
in vigorous price-cutting, oc-
casionally offering discounts
of. 20 percent or more under
prevailing prices, in order to
overcome various obstacles in
expanding sales or marketing
their goods abroad. This action
on occasion has reduced the
earnings of certain free world
producers and temporarily dis-
rupted some free world com-
modity markets. Allegations
PART III
that bloc countries are engaged
in dumping--selling goods abroad
below domept.le;.pri ces ror costs--
are:.-virt Tally,unprovable; because
the -blocd's' foreign prices are pur-
posely !,isolated, from: internal
places`or',production costs.
Most, if not all, of the
commodities which the USSR has
recently offered the West in
exceptionally large quantities
have at least two features in
common. First, they are in
easy supply, relative to present
bloc needs; second, the Western
commodities affected by Soviet
sales have been characterized
by limited competition among
sellers and artificially high
prices, even in depressed mar-
kets, Thus it appears that
Soviet sales are not being used
as a means of disrupting the
economic stability of the free
world, but as a more efficient
means of acquiring necessary
foreign exchange.
Soviet Sales in Western Europe
Exceptionally large sup-
plies of tin, aluminum, asbes-
tos, and other commodities were.
offered in 1957 and 1958 by the
USSR for sale in Western
Europe--in:-.some cases at prices
considerably below those pre-
vailing on the world markets.
The Soviet justification
for the more extreme examples
of price-cutting is that the
inability of the USSR to guar-
antes long-term continuity of
supply makes Western buyers
unwilling to transfer purchases
from their normal sources of
supply to the USSR except at
bargain prices. The commodi-
ties offered by the USSR are
most often those whose prices
have been maintained artifi-
cially despite the recession
and thus afford the :best
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9 April 1959
opportunity for acquiring for-
eign exchange.
The unprecedented quantity
of tin offered by the USSR in
1957-58 for sale in the West
seriously disrupted the already
depressed Western market. Be-
fore its tin was accepted for
trading in organized markets,
the USSR priced this commodity
below that of free world pro-
ducers. With the acceptance
of Soviet tin on the London
Metals Exchange, however, its
sale to the free world at pre-
vailing market prices was guar-
anteed, thus raising the price.
In 1955 the USSR for the
first time became a net ex-
porter of aluminum, and since
that time its sales have of-
fered increasing competition
to the major Western producers.
In 1958 the leading Canadian
producer cut its price for the
first time in ten years; the
USSR responded by offering to
undersell all bidders by 10
percent. In contrast to this
practice of cutting prices in
the face of a declining market,
the USSR charged premium prices
when aluminum was in short
supply in 1955. In both sit-
uations the prime Soviet ob-
jective was to maximize foreign
exchange earnings.
Western producers of as-
bestos and flax also have felt
the impact of large Soviet ex-
ports since 1956. Asbestos
sales, made at reported dis-
counts of 20 to 25 percent,
cut deeply into the Western
European markets of Canada's
several large producers.
Chinese Sales in South Asia
Over the past several
years, increasing quantities
of mainland Chinese goods have
appeared on South Asian markets
in direct competition with tradi-
tional suppliers. To gain mar-
kets for their textiles and
light manufactures, Communist
China's trade companies have
offered low prices which permit
local merchants to profit from
sizable mark-ups. Attractive
credit terms have been arranged
through local offices of-
"Com-munist-owned branches of the
Bank of China.
Through such inducements,
South Asian imports from Commu-
nist China in 1958 increased
11 percent above those in 1957.
Although such purchases continue
to be less than 3 percent of
the area's total imports, Pei-
ping's trade balance there pro-
vides it with foreign exchange
to be used to pay for its rapidly
expanding purchases from Western
Europe.
The difficulties encoun-
tered by the traditional sup-
pliers in South Asian markets,
however, cannot be attributed
in any great degree to Chinese
competition. Their problems
result largely from the general
deterioration in economic con-
ditions in the area, which is
an outgrowth of the general
decline in world commodity
prices and the'mounting inter-
nal economic problems in in-
dividiual countries.
In 1957 and 1958 there was
a decline in the world market
prices of major exports and con-
sequently foreign exchange earn-
ings of the South Asian countries.
there.
:[n order to maintain sales,
exporters to South Asia, were
forced to lower prices--. Espe
cially affected were export or-
ganizations of Communist China,
which had been trying to enter and
establish themselves in markets
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9 April 1959
BULGARIA INTENSIFIES ECONOMIC PACE
Since early October 1958,
Bulgaria has made tortuous ef-
forts to launch a program in
the spirit of the USSR's Seven-
Year Plan. Whereas the old ad-
ministrative structure and
tempos of development were "cor-
rect" for a country making the
"transition from a capitalist
to a socialist society," new
ones now are required which will
reflect the "victory of social-
ism" in Bulgaria. .
With this ideological jus-
tification and patterns provid-
ed by the Seven-Year Plan, Bul-
garia has embarked on a cam-
paign to fulfill its new Five-
Year Plan in three to four years.
Its "great leap forward" has
astronomical production targets
in many fields and calls for a
sweeping administrative reorgan-
ization, ostensibly designed to
decentralize economic and polit-
ical controls,
ers, however, did not feel this
drive was sufficient either to
cope with pressing internal prob-
lems or to fulfill the country's
share in the new economic surge
called for by the Soviet Seven-
Year Plan. Party First Secre-
tary Todor Zhivkov on 11 Novem-
ber told another plenum of the
central committee that a Bul-
garian "great leap forward" was
necessary.
Concerned with creating the
"material and spiritual precon-
ditions" for beginning the gradu-
al transition to Communism in
five or six years, the "leap"
involves all aspects of politi-
cal, economic, and cultural life.
It calls for drastically in-
creased production goals and
seeks to enroll all the people
through such measures as the
obligatory donation of 30 days'
free manual or "production" la-
bor a year and through the in-
troduction of continuous work
shifts in industry.
The collective-farm amal-
gamation program having been
virtually completed by mid-De-
cember, Zhivkov addressed a set
of theses to the central commit-
tee at yet another plenum on 15-
17 January 1959, which called
for broad administrative and
economic reorganization of Bul-
garia along the lines of the
decentralization Khrushchev or-
dered in the USSR. Bulgaria's
program contains many Bulgarian
innovations. The new "adminis-
trative-economic" region, with
its general competence over most
facets of life within its ter-
ritory, is an expansion of So-
viet efforts at decentralization
embodied in the sovnarkhoz.
Bulgaria's "Leap Forward"
A special plenum of the
party central committee, meet-
ing from 2 to 4 October, called
for a gradual amalgamation of
the country's approximately 3,400
oollective'farms in a :drive to
fulfill ahead of schedule the
Third Five-Year Plan presented
in June 1958, Bulgaria's lead-
The program finally enacted
by the National Assembly in Febru-
ary and March, however, does not
have the radical exuberance of
the speeches and press comments
of November and December.
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9 April 1959
lovdiv
Boundaries of new
"administrative-economic" regir ns
The affinity of the party
hierarchy for the hard-line
spirit of the Chinese program
apparently resulted in the for-
mat.ion. of '.least one
commune ."in .the mage.
Chinese counterparts.
commune, the result
of excessive local
zeal, was disbanded
soon after its forma-
tion. Zhivkov's ef-
forts at restraining
such enthusiasm are
evident in his 10
March report to the
assembly, in which
he admitted that "ex-
aggerations" had oc-
curred in the amal-
gamation of collec--
tives, resulting in
a "mechanical" crea-
tion of a few "very
large" collective
farms.
How It Came About
The Bulgarian
programs were the re-
sult of both inter-
al and external stim-
uli. One of the most
important external
b.f". ~ its
This
stimuli was the bloc's
pressure to bring Bul-
garia's planning cycle
into accord with those
of the other European
satellites, which are
scheduled to begin new
plans around 1961.
Mere fulfillment
ahead of schedule,
however, would not of
itself eliminate the
serious weaknesses
which both Soviet and
Bulgarian officials
have frequently cited
in the Bulgarian ad-
ministrative structure,
mainly the almost strangling
growth of red tape and bureauc-
racy. Popular dissatisfaction,
spreading gradually into the
lower party echelons, has also
centered on the problem of un-
employment and on the disparity
between living conditions and
salaries of party or government
officials and those of common
peasants or laborers..
BULGARIA
ORGANIZATION OF"ADMINISTRATIVE?ECONOMIC"REGION
COUNCIL OF MINISTERS
r------1-------------------------------' ---------------i
r-
MINISTRIES COMMISSIONS
DEPARTMENTS OF
REGIONAL PEOPLE'S
COUNCIL
FINANCE & ACCOUNTING
DEPT.
HEALTH PROTECTION DEPT.
EDUCATION-CULTURE DEPT.
AGRICULTURE DEPT.
INULSTRY & CONSTT.DEPT.
TE
TRADE SUPPLY- UNI Fi[D PLANNING UNIFIED STAON
JNASINI. CONSTRUCTI
1 1 AS'' ORGAN T-I ZAT'OII ORGANIZATION
I
ALMINISTRATIVE SUBORDINATION
---------'- DIRECT DEALING
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REGIONAL
PEOPLE'S COUNCIL
IiU ''IC I PA L
PEOPLE`
COU.. r,I L';
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with the party and its program,
which obviously has not been
able to fulfill the many prom-
ises of a better future. This
disillusion has crystallized
in demands for reform, which
caused the Bulgarian leaders,
acting on the Chinese example,
to introduce such "leveling"
features as the "voluntary" la-
bor schemes. Talk about a raise
in the minimum wage, a cut in
the salaries of top officials,
and a guaranteed monthly and
yearly income reflect a similar
stimulus.
Factionalism Not an Issue
Vulko Chervenkov, who in
the past had been mentioned prom-
inently as leading a faction in
the party, now is reported to
be gradually losing his influ-
ence. The long-standing mutual
dislike of Khrushchev and Cher-
venkov, which is credited with
blocking Chervenkov's attempts
to replace Zhivkov as first
secretary, has become common
knowledge in the middle and
lower party ranks. These func-
tionaries now feel less compul-
sion to cater to Chervenkov's
wishes, realizing that he can
never resume the first secretary-
ship as long as Khrushchev is
in power.
Although Zhivkov has the
firm support of Khrushchev,
he 'may, not be confident:
of the loyalty of those func-
tionaries who once were firm
supporters of Chervenkov, and
the likelihood of a gradual
easing of these people from po-
sitions of power should not be
discounted.
The extent in the rank and
file of "liberal" opposition to
the leadership is unclear. While
the reversion to more demand-
ing policies over the last six
months would indicate at best
the temporary eclipse of those
who might favor a more liberal
policy if given the opportunity
os. ov sm" continues to have
some support from the party
ranks.
Kostovism, described as a
vague feeling rather than an
organized movement, takes its
name from Traicho Kostov, second-
.ranking Bulgarian Communist be-
fore his execution in 1949 for
advocating more independence
from Moscow. It is doubtful
that "Kostovism" will in the
foreseeable future crystallize
into a movement, however, if
only because there is no practi-
cal alternative to continued
subservience to Moscow.
How It Affects the People
Although it is partly an
answer to the popular clamor for
reform and for improvement in
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the standard of living, the pro-
gram 'actually negates these
effects by placing intense pres-
sures on all the people. While
the regime has decreed the grad-
ual abolition of the labor-day
system of payments for the col-
lective farmers in favor of a
guaranteed minimum monthly and
annual wage,'and the increased
production demanded is supposed
to result in higher incomes,
the "leap" will require the farm-
ers to work more diligently than
in the past during the winter
months on local improvement
projects and, where possible,
in local industry.
There is little evidence
of active opposition during the
past winter to the increased de-
mands on the farmers, although
the press revealed that many
of the scheduled mass labor pxtoj-
ects were not completed by the
beginning of the planting sea-
son. Whether because of poor
preparation or because the goals
were completely unrealistic, the
targeted doubling of agricultur-
al production in 1959 has been
cut back to a "mere" 74-percent
increase over the 1958 figure.
While this may be more realis-
tic goal, its achievement is
probably impossible.
The regime has stated that
in the future the minimum month-
ly wage for industrial workers
will be raised from 400 to 600
leva (about $88), and that in
most industries the workweek
will be reduced gradually from
six to five days. On the other
hand, the regime apparently in-
tends immediately to force the
workers to produce more and
better. The anticipated wage
reform will undoubtedly be ac-
companied by higher production
quotas.
Intelligentsia and Youths
The two potentially most
dissident groups, the intelli-
gentsia and the youths, are
also to be enrolled in the
"leap." Having stamped out the
last surviving dissidence in
the Writers' Union early last
year, the regime now can call
for an advancement in cultural
work in' all fields to reflect
the "popular upsurge." Fre-
quent critical press attacks
suggest that these two groups
are not cooperating fully.^
Bulgaria's youths continue
to be the primary object of re-
gime dissatisfaction. The Dimi-
trov Union of Communist Youth
was revamped at its ninth con-
gress and now ruling bodies were
set up. In the period from
October to January, Zhivkov told
the union it was necessary to
recruit all youths into the
"leap;" implying that they must
play the major role in stamping
out "bourgeois" tendencies among
the young people. That this
goal has not been achieved is
indicated by Zhivkov's remarks
to the National Assembly on 10
March. Speaking of the necessity
to maintain the powers of in-
ternal security organs, he said
the punitive measures must be
increased--"particularly con-
cerning the youths-.-"
Lack of enthusiasm among
youths for the "leap forward"
and for Communism in general--
as evidenced by the popularity
of Western culture--worries the
regime, which therefore intends
to combat these "manifestations"
not only by the youth union, but
also by the schools and by the
state. The proposed reorganiza-
tion of Bulgaria's educational
system along the lines of the
proposed Soviet reorganization,
designed to create a "love of
labor" among youths, will mean
that students will be educated
for assuming specific jobs and
will be required to spend part
of the educational year in "on-
the-job training."
Students' leisure time will
be taken up in union activities
and "voluntary" labor projects.
Many of the projects will be
assigned to the Youth Brigades,
which were ordered in March to
expand so as to include consid-
erably more than the 100,000
youths who participated in 1958.
(Concurred in
by O1 R)
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