CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A002400090001-8
• Release Decision: RIPPUB
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• Document Page Count: 47
• Document Creation Date: December 16, 2016
• Document Release Date: February 24, 2005
• Sequence Number: 1
• Publication Date: October 1, 1959
• Content Type: SUMMARY

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CONFIDENTIAL
SECRET
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO.
OCI NO.. 4969/59
1 October 1959
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CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
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Approvea ror Keiease ai I 27A0i3A4
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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'NFIDENT1AL
CURRENT INTELLIGENCE WEEKLY SUMMARY
1 October 1959
THE WEEK IN BRIEF
PART I
OF IMMEDIATE INTEREST
PEIPING CELEBRATES TENTH ANNIVERSARY Page 1
At the celebration in Peiping of the tenth anniversary
of their regime, China's leaders are placing major empha-
sis on "peaceful construction" while reaffirming their
long-range goal to "liberate" Taiwan. Soviet Premier
Khrushchev at the celebrations attempted to dissociate the
USSR from Peiping's harder foreign policy line and to
encourage Chinese moderation. Continuing differences
between Moscow and Peiping are indicated by the omission
by Khrushchev and Suslov of any mention of the communes.
Moving toward the Soviet line, Premier Chou En-lai "wel-
comed" the Eisenhower-Khrushchev communique and stated
that China and the bloc will "surpass" capitalism in
"peaceful competition." Anniversary developments support
other indications that the recent Defense Ministry changes
reflect policy differences which Peiping hopes to resolve
in most cases without resort to harsh methods.
MIDDLE EAST HIGHLIGHTS
'Cairo's relations with Peiping, which
have been gradually deteriorating for many months, have
been further strained by the Chinese granting permission
to refugee Syrian Communist Khalid Bakdash to severely
criticize the UAR regime in a speech on 28 September.
Some amelioration of Iranian relations with the USSR seems
to be taking place, although it is probably in part a
reflection of the present relaxing r of broader East-West
tensions.
SITUATION IN LAOS
Communist insurgents remain quiet in Sam Neua and
Phong Saly provinces, but appear to have stepped up their
activities in southern Laos. The UN subcommittee will
soon make a brief field inspection at Sam Neua, but will
probably not go to areas accessible only by helicopters.
The British and French feel that the UN presence in Laos
CONFIDENTIAL
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 October 1959
PART I (continued)
should be continued as long as possible. Bad feeling
between the Phoui government and French representatives
in Vientiane is aampering Western efforts to assist Laos.
REACTION TO KHRUSHCHEV VISIT TO THE UNITED STATES . ? ?
Premier Khrushchev on his return to Moscow from Wash-
ington publicly expressed satisfaction with the outcome
of his visit. With warm praise for President Eisenhower,'
he acknowledged the President's desire for an improvement
in Soviet-American relations. He has been careful, how-
ever, to preserve a cardinal Soviet propaganda theme in
repeating that there continue to be forces in the United
States which oppose a relaxation of international tension.
Khrushchev displayed confidence that his agreement with
the President that no time limit should be fixed on re-
newed negotiations on the Berlin problem will clear the
way for an early summit meeting. West European comment
has welcomed assurances that Berlin negotiations will be ,
resumed without a definite time limit but retains some
25X1 skepticism regarding future Soviet actions./
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PART II
NOTES AND COMMENTS
Page 8
ALGERIAN REBELS REPLY TO DE GAULLE Page 1
The moderate rebel response to De Gaulle's proposals
on Algeria appears designed to gain maximum support within
the United Nations, to press France into bilateral nego-
tiations, and to place the onus for continuation of the
war on Paris.
THE BRITISH ELECTION CAMPAIGN Page 2
The Labor party's chances of winning the 8 October
general election in Britain have improved in recent weeks.
Latest indications, however, point to another Conservative
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1 October 1959
PART II (continued)
victory, but with less than the 60-seat majority won in
1955. In the marginal constituencies where the national
result will actually be determined, both parties are con-
centrating on domestic issues.
SITUATION IN CEYLON FOLLOWING PRIME MINISTER BANDARANAIKE'S
DEATH Page 3
Ceylon's new prime minister, 57-year-old Wijayananda
Dahanayake, is in a vulnerable position. He has committed
himself to continue former Prime Minister Bandaranaike's
policies, which have been under attack during the past
year, and has not yet been assured of sufficient outside
support to provide his party with a working majority in
Parliament. A scramble for leadership within the ruling
party and moves by the opposition to oust the government
and force new elections seem likely.
EAST GERMAN HARBOR AND CANAL PROGRAM Page 4
East Germany's Baltic port of Rostock is to be ex-
panded to have a yearly transshipment capacity of about
20,000,000 tons by 1967. The growth of this port will
save foreign currency by diverting Czech and East German
trade from Hamburg in West Germany, will bolster East
German prestige, and will reduce East German vulnerability
to Western countermeasures against bloc harassment of
Allied traffic to West Berlin. The port will also allow
increased use of the Baltic as a petroleum supply line,
thus reducing the need for rail transportation through
25X1 Poland.
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NATIONALITY PROBLEMS IN YUGOSLAVIA Page 7
Despite official Yugoslav declarations that the
nationalities question has been solved by the "united
forces of socialist progress," indications this summer of
national rivalries have been serious enough to evoke
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1 October 1959
PART II (continued)
public warnings from President Tito regarding the neces-
sity of strengthening Yugoslav internal unity. The
most serious rivalries have involved the Serbians--tradi-
tionally the dominant ethnic group--with both the Slovenes
and Croatians.
FOOD SUPPLIES IN COMMUNIST CHINA
Peiping is seeking to ensure at least minimal food
supplies for this fall and winter despite the fact that
the drought--which began last June in important farm areas
and was still afflicting many of the same areas in Septem-
ber--will probably reduce this year's crop below the level
25X1 of last year.
Page 8
THE TIBETAN SITUATION - 14TH UN GENERAL ASSEMBLY Page 9
The reluctance of most UN members to support formal
General Assembly action on the Dalai Lama's appeal, as
requested by Ireland and Malaya on 28 September, has been
strengthened by the feeling, following Khrushchev's visit,
that "cold-war" issues should not be raised at this time.
The two co-sponsors' attempt to win UN support by basing
their request solely on Chinese Communist disregard for the
Tibetan people's human rights and civil liberties is fur-
ther undermined by the Dalai Lama's insistence on making
25X1 the sovereigntyof Tibet the crux of his appeal-1
PROSPECTS FOR SOVIET-JAPANESE TRADE
Announcement that a Soviet trade mission will visit
Tokyo in early October for preliminary negotiations on a
long-term trade agreement coincides with rising optimism
in both government and business circles in Japan that a
moderate but steady growth in trade with the USSR is in
prospect. The USSR hopes to induce Japan to deliver on a
deferred-payment basis heavy industrial equipment for
development of the Soviet Far East. It is likely that the
goal of 835,000,000 each way under the 1959 agreement will
be reached and perhaps exceeded. This volume would still
constitute less than one percent of Japan's total trade
but would be well above previous levels.
Page 10
PRESIDENTIAL NOMINATION FIGHT MAY SPLIT SOUTH KOREAN
OPPOSITION Pagel].
Opposition Democratic party leaders Cho Pyong-ok and
South Korean Vice President Chang Myon will be the princi-
pal candidates for the 1960 presidential nomination at the
Democratic convention slated to start about 15 October.
Should Cho lose the nomination, he may bolt the party and
support an administration-sponsored constitutional amend-
ment providing for the election of the president by the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 October 1959
PART II (continued)
National Assembly in exchange for assurances that he
would be given the post of prime minister. This would
facilitate President Rhee's re-election next year, and
place Cho--a strong leader--in a position to succeed the
84-year-old President. It would, however, be a further
setback to South Korea's emergent two-party political
25X1 system.
CAMBODIAN - SOUTH VIETNAMESE RELATIONS ....
.. - ?
. Page 12
The Sihanouk government believes that South Vietnam
is continuing active support of Cambodian dissident ele-
ments, and it is gathering evidence to support its case
against the Diem regime. South Vietnamese leaders have not
changed their basic view that Sihanouk's neutralist poli-
cies menace SoutL Vietnam's security. Unless Sihanouk
soon is satisfied that provocations from South Vietnam have
ended, he may .gain turn to the Sino-Soviet bloc for sup-
25X1 port.
SYRIAN DROUGHT AGGRAVATES UAR'S PROBLEMS Page 13
The nearly disastrous 1959 harvest of grain in Syria,
resulting from the second successive year of drought, is
increasing local dissatisfaction with the Nasir regime and
the Syrian-Egyptian union. To combat the situation, Nasir
has sent several high-level delegations to Syria which
have promised rapid economic development within the frame-
work of ambitious five- and ten-year plans. Dissident
elements in Syria may try, however, to exploit dissatisfac-
tion among the public.
ARGENTINE GOVERNMENT WINS ROUND WITH LABOR . . ...... Pagel4
Argentine President Frondizi, who has been under
strong pressure both from the armed forces and from labor
in recent months, has been strengthened at least temporar-
ily as a result of the limited worker participation in the
politically motivated general strike of 23 and 24 Septem-
ber. This was a blow to the prestige of the Peronista and
Communist strike leaders, who control about half of organ-
ized labor and who had signed in August a unity pact to
fight the US-backed stabilization program. Expecting more
labor difficulties, Frondizi has announced steps to out-
law the Communist party and restrict political agitation
through labor unions.
MEXICAN PRESIDENT LOPEZ MATEOS AND HIS ADMINISTRATION . . Page 15
The record of the first ten months of the Lopez
Mateos administration is mainly one of economic accomplish-
ment. The Mexican peso has remained constant in value,
prices have been relatively stable, industrial and agricul-
tural production has increased, and Communist-inspired
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 October 1959
PART II (continued)
labor difficulties threatening the economy have been dealt
with firmly. Mexico's foreign policy under Lopez Mateos--
who is scheduled to begin a five-day visit to the US on 9
October--continues to be independent, while basically
friendly to the United States.
PART III
PATTERNS AND PERSPECTIVES
THE ECONOMY OF COMMUNIST CHINA AFTER TEN YEARS Page 1
Since the Chinese Communists came to power in 1949,
the economy of the country has been reorganized on the
Soviet model and has made rapid and noteworthy advances.
?A vigorous and ambitious program of industrialization has
pushed production to record levels, and further successes
are likely. Progress has been uneven, however, and the
regime has been forced to admit that achievements last
year were far below the levels previously claimed. De-
spite its economic improvements, China is still a newly
developing country with a low standard of living. A num-
ber of serious problems confront the Peiping leaders, not
the least of which is ensuring the cooperation of the
people in the "hurry-up" economic programs.
PROBLEMS OF FRANCE'S NEW-STYLE PARLIAMENT ..... Page 6
When the French Parliament reconvenes on 6 October
for the first session of the new legislative year, some
attempts to reassert its former power will probably develop--
perhaps in the Senate, where opposition forces are stronger
and less pliant than in the National Assembly. However,
no threat to the stability of the Debrd government is in
prospect now, De Gaulle had no occasion during the opening
session to play the role he had envisaged for the president
as arbiter between government and .parliament.. As a result,
he took the initiative in the impasse which developed on
the Algerian and school-aid questions, and his moves will
probably lead to a realignment within the parties which
have so far given Debrd overwhelming support.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 October 1959
PART
OF IMMEDIATE INTEREST
PEIPING CELEBRATES TENTH ANNIVERSARY
At the celebrations un-
der way in Peiping of the regime's
tenth anniversary, the Chinese
Communist leaders have placed
major emphasis on "peaceful
construction" and the "brilliant"
successes of the regime in the
economic field. Comparisons
between the present economic
situation with the "unhappy"
situation ten years ago are
clearly intended to cover up
the recent embarrassing retreat
from overambitious economic
targets, while dramatizing the
considerable achievements of
the ten-year period.
Premier Chou En-lai told
an anniversary eve banquet that
China has "paved the way for a
great leap forward," indicat-
ing that the Chinese leaders
will continue to demand hard
work and austerity from the
people. Chou referred to the
communes briefly as "new-type
organizations beneficial to the
development of productivity,"
but avoided claims made by Chi-
nese theorists that they con-
tain the "young buds of Commu-
nism."
Chou's speech was pri-
marily directed toward China's
most important guest, Soviet
Premier Khrushchev, and con-
tained passages reflecting the
Soviet foreign policy line.
Chou "welcomed" the Eisenhower-
Khrushchev communiqu?congratu-
lated Khrushchev as a "peace
envoy," and asserted that China,
along with the bloc, will "sur-
pass capitalism in peaceful
competition."
In his speech which fol-
lowed Chou's, Khrushchev con-
centrated on foreign policy and
the line of peaceful coexist-
ence. His remarks that "we
must do everything possible to
preclude war" and that "we
should not attempt to test the
stability of the capitalist
system by force" vary markedly
in tone from recent Chinese
pronouncements. Khrushchev ap-
peared anxious to convey the
impression to the West that he
intends to maintain the atmos-
phere of detente and sought to
dissociate the USSR from Pei-
ping's harder foreign policy
line.
Khrushchev may seek to con-
vince the Chinese leaders in
private talks of the need to
moderate their propaganda. The
Chinese will probably tell Khru-
shchev that they must continue
to highlight American "provoca-
tions" against China until there
is a "basic" change in American
policy toward the Nationalist
position on the offshore islands
and Taiwan. They will probably
point out that the pledge to
"liberate" Taiwan is a useful
domestic slogan to push the
populace toward greater efforts.
Khrushchev himself seemed
appreciative Of the propaganda
importance to Peiping of the
"liberate Taiwan" slogan, and
in his 30 September remarks
expressing sentiments against
wars in general, he excepted
"liberating" wars. The pledge
to "liberate" Taiwan made by
Liu Shao-chi and Defense Minis-
ter Lin Piao during the cele-
brations was in a long-term
context and did not carry a
sense of urgency. The Chinese
Communists announced they would
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 October 1959
not shell the Chinmen complex
on 29 September and 1 October
in order to enable "compatriots"
to celebrate the anniversary
"happily."
Khrushchev appeared reluc-
tant to endorse Communist Chi-
na's economic policies, al-
though he and Soviet presidium
member Suslov--who spoke on 28
September--made the usual af-
firmations of Soviet support
and friendship. Khrushchev de-
clined comment on China's a-
chievements, asserting it is
"not for me" but for "you, my
friends, to speak of your suc-
cesses." He avoided any ref-
erence to the commune program
and to the "leap forward," but
referred to Soviet experience
as an "object lesson in eco-
nomic construction." Like Sus-
by, Khrushchev apparently was
suggesting to the Chinese that
they would profit by adhering
more closely to the USSR's
methods in industrial and agri-
cultural technology.
The continuing Soviet ef-
fort to influence the Chinese
to change the term "commune"
back to cooperative was indi-
cated in a Georgian Republic
newspaper on 10 September,
which stated the "cooperatives
formed in 1959 were called the
people's communes by our Chi-
nese comrades." For Moscow,
the term apparently implies a
highly advanced stage of social
development--an implication the
Soviet leaders hope to elimi-
nate from Chinese ideological
claims.
Mao and Khrushchev will
probably issue a joint commu-
niqu?o remind the West that
Moscow is an ally of China "for-
ever" and to reassure Asian na-
tions that the Chinese regime
has "peaceful" intentions. It
would appear to be in Peiping's
interest to adopt more fully
the Soviet line on "peaceful
competition"--a move which may
well be reflected in any joint
communiqu?
The USSR's delegation is
a high-level, businesslike group
and includes the deputy chair-
man of the State Committee for
Foreign Economic Relations. The
occasion might be marked by the
announcement of some modifica-
tion of or small addition to
Soviet aid in the industrializa-
tion of China. The delegations
from the three Asian satellites,
which are headed by their re-
spective party chiefs, also in-
clude the defense ministers from
North Korea and North Vietnam,
suggesting discussions will be
held on Far East military mat-
ters.
The absence of almost all
the top Eastern European lead-
ers probably indicates that no
key matters specifically af-
fecting their countries will be
discussed in Peiping. In addi-
tion, the USSR probably would
not welcome the symbolic signif-
icance at this time of a meet-
ing of all bloc leaders in the
Chinese capital. Protocol jus-
tification for the character
of the East European delegations
was perhaps based on the fact
that no important Chinese lead-
er, except Chou En-lai in 1957,
has visited Eastern Europe, de-
spite the fact that most East
European satellite leaders have
visited China.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 October 1959
The presence of several
prominent Latin American Com-
munist party leaders in Peiping
provides an opportunity for
them to discuss with top Chi-
nese officials new tactical
plans in furtherance of Chinese
objectives in Latin America.
Top officials of the Brazilian,
Argentine, and Venezuelan par-
ties spoke at the opening cere-
mony, praising Chinese achieve-
ments. Peiping has thus far
been most successful in exploit-
ing anti-US sentiment in Cuba.
None of the 20 Latin American
nations has diplomatic rela-
tions with Communist China, but
Cuba recently became the first
country in the area since 1952
to abstain in a United Nations
General Assembly vote on the
question of Chinese UN repre-
sentation.
The growing Chinese Commu-
nist armed forces received con-
siderable emphasis in the large
military review held in Peiping.
Modern military equipment of
Chinese manufacture including
52 jet fighters, probably MIG-
17s, 72 large field artillery
pieces, and 99 recently built
tanks were prominently displayed.
In all 155 cannon, 99 tanks,
and 150 jet aircraft partici-
pated.
The appearance of almost
all leading party, government,
and military leaders at the
ceremonies has provided some
new insight into the government
changes announced by Peiping
two weeks ago. Two important
military figures, who lost their
posts in the Ministry of De-
fense, remain unaccounted for
so far in reports of the cele-
brations. The continued absence
of former defense minister Peng
Te-huai and his former chief of
staff when all other senior mil-
itary leaders appeared in Pei-
ping supports other indications
that they were removed for po-
litical reasons.
This note is echoed in a
long article by the new defense
minister, Lin Piao, which out-
lines a number of policy dif-
ferences within the services
over the general question of
party "leadership" of the armed
forces, including the party's
massive employment of troops in
the "leap forward" and the com-
mune program. Throughout his
article Lin refers to those at
odds with the party center as
"comrades," thus suggesting that
Peiping hopes to reform most of
them through "study and educa-
tion." Peiping is apparently
satisfied with the military per-
formance of the army, which Lin
described as "triumphant."
A somewhat jarring note to
the general mood of harmony and
progress is contained in an ar-
ticle by Chinese head'of state
Liu Shao-chi which appeared in
conjunction with the National
Day holidays. Liu repeated the
party's earlier concern that
"right opportunism"--that is, op-
position to the regime's domestic
program--poses the greatest threat
to Chinese development at pres-
ent. Although Liu also described
the critics as "comrades," his
emphasis on the continuing threat
suggests that action against some
of these critics will be resumed 25X1
after the National Day cere-
monies are over.
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MIDDLE EAST HIGHLIGHTS
UAR
Nasir is now in another
dispute with Communist China.
On 28 September Khalid Bakdash,
refugee Syrian Communist, se-
verely criticized UAR policies
in a speech delivered at the
tenth anniversary celebrations
in Peiping. Bakdash's remarks
were harsh enough to compel the
UAR charg?ttending the cele-
brations to leave the meeting.
The UAR press has taken up
the incident, caustically repri-
manding the Peiping government
for allowing Bakdash to speak,
and on 30 September the UAR
Foreign Ministry delivered a
formal protest to the Chinese
Communist ambassador in Cairo.
It is not expected that the
immediate result will be more
than a UAR protest to Peiping,
but it will contribute to
the general deterioration in
Cairo-Peiping relations that
has developed since Nasir
began his anti-Communist cam-
paign early this year. Since
that time, the Chinese have re-
peatedly shown their irritation
with Nasir's campaign and with
UAR criticism of their action
in Tibet.
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1 October 1959
Iran
The Shah of Iran has held
his first interview with Soviet
Ambassador Pegov since the am-
bassador returned from Moscow
on 16 September following a
six-month absence. Pegov left
Tehran in March following the
breakdown of high-level discus-
sions regarding a possible So-
viet-Iranian nonaggression pact.
On balance, it now appears that
some amelioration in Iran's re-
lations with the USSR is taking
place. The eased Soviet-Irani-
An tension may also reflect
the current period of calm in
the broader aspects of East-
West relations.
While the Shah has given
no indication to American Em-
bassy representatives that
Soviet-Iranian treaty talks may
be forthcoming, he may intend
to use the absence of his two
foremost and Western-oriented
advisers, Prime Minister Eqbal
and Foreign Minister Aram, to
hold exploratory talks on a
possible rapprochement with the
Russians. Aram is attending
the UN General Assembly and
will later represent Iran at
the CENTO Council meeting in
Washington from 7 to 9 October.
Eqbalis due in the United States
on 1 October to attend the UN
General Assembly and the CENTO
meeting. Under somewhat simi-
lar circumstances in January,
the Shah became embroiled in
hard bargaining with the USSR
which led to strained Soviet-
Iranian relations.
The Shah told a press con-
ference on 26 September that
Iran would welcome a Soviet of-
fer of commodities which are
"better and cheaper than any
where else." He also noted
that he was hopeful Soviet-
Iranian relations will return
to normal--and become "even
friendly so we may live with
peace of mind"--when the Soviet
radio terminates its propaganda
campaign. Radio Moscow has
halted its criticism of the
Shah as such but has maintained
its attacks on Iranian "rulers,"
attacks which the Shah apparent-
ly has decided to ignore at
least for the present.
Meanwhile, the Soviet-
sponsored clandestine "National
Voice of Iran" and the East Ger-
man station which acts as the
mouthpiece of the Iranian Commu-
nist Tudeh party continue their
propaganda pressure on the so-
called "coup d'etat regime" and
invite the overthrow of the Shah.
SITUATION IN LAOS
Communist insurgents re-
main quiescent in Sam Neua and
Phong Saly provinces but appear
to have stepped up their ac-
tivities imsouthernLaos. New
small-scale skirmishing has
also been reported in Luang
Prabang and Vientiane provinces.
SECRET
Approved For Release 2005/03/29 : CIA-RDP79-00927A002400090001-8
PART I OF IMMEDIATE INTEREST Page 5 of 11
Approved ForP4pase 2005/8ENEIt-RDP79-00927PV400090001-8
CURRENT INTELLIGENCE WEEKLY SUMMARY
1 October 1959
NORTH
ETNAM
BURMA
NAMTHA
SAYABOURY
XIENG
KHOUANG
VIENTIANE
VI ENTIAN
KHAMMOUANE
CHINA
THAILAND
C,\