CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
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• Document Page Count: 48
• Document Creation Date: December 16, 2016
• Document Release Date: February 25, 2005
• Sequence Number: 1
• Publication Date: December 10, 1959
• Content Type: SUMMARY

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1E0.
CONFIDENTIAL
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
.COPY NO. 56
OCR NO. 5882/59
10 December 1959
No Change In Class. ^
^ Declassjied
Document No.
Class. Chaayed to: TS S n
?xI nanew 0310:
bth.: HR 71L:
CENTRAL INTELLIGENCE AGENCY
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OFFICE OF CURRENT INTELLIGENCE
RETURN TO ARCHIVES & RECORDS CENTER
IMMEDIATELY AFTER USE
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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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~ONf ID-l'V kLL
OF IMMEDIATE INTEREST
REACTION TO PRESIDENT EISENROWER'S TRIP . . . . . . . . . Page 1
Soviet treatment of President Eisenhower's trip has
been limited to factual news coverage and generally mod-
erate and at times favorable commentary. Moscow has
adopted a restrained tone, claiming that the trip is an
effort to resolve Western differences. The European sat-
ellites have only mildly criticized the President's activ-
ities. In sharp contrast to Moscow's treatment, Peiping
has bitterly attacked the President's trip as a "smoke
screen" to cover preparations for war.
SINO-SOVIET RELATIONS . . . . . . . . . . . . . . . . . Page 4
The divergence between Moscow and Peiping in their
t:~aatment of the President's trip reflects the frictions
and policy differences between the two regimes. Khru-
shchev's thinly veiled criticism of Chinese policies in
three recent major speeches reflects his determination to
restore bloc discipline and unity behind Moscow's lead.
F__ 1
MIDDLE EAST HIGHLIGHTS . . . . . . . . . . . . . . . . . . Page 5
Iraqi anti-Communist elements, embittered by what
they regard as another shift of Prime Minister Qasim to-
ward favoring the Communists, may hasten efforts to over-
throw or assassinate him. The anti-Communists still do
not appear well organized, however, and another abortive
attempt would probably redound further to the advantage of
the Communists. The UAR is becoming concerned over Israeli
plans to utilize large amounts of Jordan River water.
Iranian-Soviet discussions continue regarding the preclu-
sion of foreign military bases from Iran,
sr~sT C_ONFI~ENTIAL
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CURRENT INTELLIGENCE WEEKLY SUMMARY
NOTES AND COMMENTS
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NUCLEAR TEST CESSATION TALKS . . . . . . . . . . . . . . . Page 1
Soviet representatives at the Geneva talks are seek-
ing to maintain pressure for an early settlement of out-
standing issues. Soviet delegate Tsarapkin publicly
charged the United States and Britain with "dragging their
feet" and privately stressed the need for "mutual conces-
sions," hinting that the USSR might relax its insistence
on an unconditional cessation of all tests if the technical
experts fail to reach agreement. The Soviet experts in the
technical talks continued to defend the validity of the
control system recommended by the 1958 Geneva experts' con-
ference. Moscow, however, may be willing to accept minor
adjustments in the 1958 report which would not alter the
basic conclusion that a control system is technically
feasible.
HUNGARIAN PARTY LEADERSHIP ENDORSED . . . . . . . . . Page 2
Hungary's first party congress since the 1956 revolt
concluded in Budapest on 5 December and gave the expected
solid endorsement to the leadership of party First Secre-
tary Kadar. This was reinforced by Khrushchev's presence
and his warm praise for Kadar and his policies. A lim-
ited number of personnel changes made in central party
organs by Kadar should make the party more responsive to
his direction, although there continue to be certain
weaknesses.
EAST GERMAN REGIME TROUBLED BY FOOD SHORTAGES .
. Page 4
A number of East German party and government offi-
cials are being made scapegoats for the current shortages
of meat and dairy products. Party First Secretary Ulbricht
may extend the shake-up as a means of getting rid of offi-
cials who have questioned his agricultural policies. De-
spite the loss of prestige, the regime has been forced to
restrict the sale of butter and is taking drastic steps to
control hoarding and smuggling of foodstuffs.
SOVIET AGRICULTURAL OUTPUT IN 1959 . . . . . . . . . . . . Page 5
Unfavorable weather, including a drought this summer,
reduced the yields of most Soviet crops. The grain crop
suffered from a reduction in sown acreage as well and ap-
parently was the smallest in five years, or since the
development of the New Lands. The cotton crop, on the
other hand, grown under irrigation and not affected by
the dry weather, apparently was a record crop. The out-
put of livestock products may rise some 10 to 20 percent
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CURRENT INTELLIGENCE WEEKLY SUMMARY
10 December 1959
PART II (continued)
this year, largely because substantial feed supplies have
been-available from last year's bumper harvest. The grain
shortfall this year will be reflected in next year's out-
put of livestock products.
PEIPING RELEASES WAR CRIMINALS . . . . . . . . . . . . . . Page 7
Thirty former Nationalist officials are among the 33
"war criminals" released by Peiping on 4 December as part
of a continuing effort to undermine the stability of the
Taiwan government by holding out the prospect of pardons
for Kuomintang officials. The restoration to good stand-
ing of a large number of "rightists" criticized during the
"rectification" campaign of 1957-58 at the same time em-
phasizes, for the benefit of critics of the regime, Pei-
ping's policy of rehabilitation and redemption. There has
been no indication that amnesty will be granted to American
prisoners in China.
SINO-INDONESIAN TENSIONS . . . . . . . . . . . . . . . . . Page 8
The Indonesian Government, determined to carry out
its ban on rural alien retailers despite strong Chinese
Communist objections, has reaffirmed its deadline of 1
January for implementation of the decree. Personnel of
the Chinese Communist Embassy in Djakarta are disregard-
ing a ban on their travel to troubled areas and are en-
couraging Chinese resistance to government resettlement
efforts. Despite continuing difficulties, neither Peiping
nor Djakarta seems likely to press the situation to the
point of breaking relations.
CEYLON . . . . . . . . . . . . . . . . . . . . . . . . . . Page 9
The dissolution of Ceylon's Parliament on 4 December
and the scheduling of new national elections for 19 March
have temporarily ended uncertainty over day-to-day polit-
ical developments. Prime Minister Dahanayake will head
a caretaker government until the elections. Preoccupa-
tion with campaign activities may stimulate some unrest
and probably will postpone for another three or four
months any effort to solve pressing economic problems.
It appears that no single party will obtain a majority in
the new 151-member Parliament, although moderate elements
seem confident of winning considerable support.
LAOS . . . . . . . . . . . . . . . . . . . . . . . . . . . Page
A Laotian Government crisis has been temporarily .
averted by a c ompromi.se on immediate political is-
sues reached between conservative and reformist elements
in the cabinet. New general elections have been announced
for next April, but the door has been left open for further
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PART II (continued)
postponement. Basic frictions, however, will continue to
pose a threat to the Phoui government. The military sit-
uation remains generally calm, and the UN team in Laos has
begun drafting its preliminary economic survey.
MALI INDEPENDENCE ARRANGEMENTS . . . . . . . . . . . . . . Page 11
De Gaulle and leaders of the Mali Federation--com-
posed of the autonomous French Community states of Senegal
and Soudan--appear to have agreed in principle that by
June 1960 Mali should be independent, but with special con-
tractual ties to France in such fields as defense, foreign
affairs, education, and economic aid. Serious discord
exists, however, as to when these ties are to become ef-
fective, and differences seem likely to develop over sub-
stantive aspects as well. Concessions by Mali's present
leaders should be exploited by more militant domestic ele-
ments who favor a complete break with the Community.
SAHARAN OIL AND THE COMMON MARKET . . . . . . . . . . . . Page 12
The formal inauguration on 5 December of the pipeline
from central Algeria to the Mediterranean coast coincides
with accelerated French efforts to find a market for Saha-
ran oil in the European Economic Community (EEC or Common
Market). Most of the Common Market countries have serious
misgivings about a French plan to impose an EEC internal
tax on oil products not refined from "Community" crude,
thus giving preference to French supplies. The French can
probably have their way, however, if they offer sufficient
inducements and make the matter an issue for Common Market
"solidarity."
BRITAIN'S RELATIONS WITH WESTERN EUROPE . . . . . . . . . Page 14
The Macmillan government's proposal that the Western
European Union--the one body composed of the six Common
Market countries plus Britain--be used for political con-
sultation is a further effort to discourage extension of
six-nation solidarity, while proclaiming that Britain is
"part of Europe." British support of France on African
issues and the Anglo-German defense production arrangement
recently agreed to also reflect the current drive to im-
prove Britain's relations with major Western European
allies.
THE NATO MEETINGS . . . . . . . . . . . . . . . . . . . . Page 15
East-West relations in the light of summit prepara-
tions will be the main concern of the annual meeting of
the NATO ministerial council on 15-17 December. Other
major topics include NATO economic cooperation and the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
10 December 1959
PART II (continued)
status of the military effort. The council is scheduled
to reconvene on 22 December to hear a report on the "West-
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CONTINUING DIFFICULTIES IN US-PANAMANIAN RELATIONS . . . . Page 15
The Panamanian Government may soon publicize its
disappointment with the results of recent discussions of
US-Panamanian differences and its charges that the United
States has made no substantial concessions regarding the
Canal Zone. In view of the continuing efforts of extrem-
ists to provoke new anti-US disorders, publication of a
strongly worded official statement--as threatened by the
Panamanian foreign minister--would increase the likelihood
of further difficulties in US-Panamanian relations. Nation-
alistic student elements are reported organizing anti-
US demonstration for 12 December.
BRAZIL PRESSES "OPERATIQN PAN AMERICA" . . . . . . . . . . Page 16
Brazil is intensifying its diplomatic campaign to
build support for "Operation Pan America" (OPA), Presi-
dent Kubitschek's proposal for a "dynamic" inter-American
effort to speed economic development. Kubitschek con-
siders such an effort essential to combat increasing Com-
munist agitation as well as to meet the needs of the ex-
panding population in Latin America. OPA has gained inter-
American support this year and is popular in Brazil. In-
fluential opinion in Brazil sees this plan and the current
trade mission to Moscow as the beginning of a policy of
greater independence from the United States and giving
Brazil an opportunity to exert greater influence in world
affairs.
GUATEMALAN CONGRESSIONAL ELECTIONS . . . . . . . . . . . . Page 17
The government of Guatemalan President Miguel
Ydigoras has been temporarily strengthened by the results
of the 6 December congressional election in which half of
the 66 seats were at stake. The President appears assured
of a majority in the new congress, which he lacked during
his first two years in the presidency. The rightist op-
position party suffered serious losses in the election,
and the leftist opposition, although still strong, is
split by factionalism encouraged by the President.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
10 December 1959
PATTERNS AND PERSPECTIVES
COMMUNIST CHINA'S RELATIONS WITH THE NON-COMMUNIST WORLD . Page 1
Communist China's determination to convey an immedi-
ate impression of strength is a major influence in its re-
lations with non-Communist countries and in its reluctance
to go along wholeheartedly with Moscow's recent peace ini-
tiatives. The Chinese apparently believe the Kremlin's
"detente" approach, if followed by the weaker Peiping re-
gime, would tend to freeze the status quo in the Far East,
leaving unfulfilled such paramount Communist aspirations
as the "liberation" of Taiwan. In addition, the Chinese
consider a "struggle" atmosphere as essential to the de-
velopment of their domestic economy to the levels of the
more industrialized countries. Hence their assertion that
Peiping, as a strong nation, is receptive to "peaceful"
solutions but ready to back its claims by power.
FRENCH OVERSEAS AID PROGRAM . . . . . . . . . . . . . . . Page 5
France's ability to maintain strong ties with its
overseas areas, particularly Algeria, will depend to a
large extent on the scope of the French economic and so-
cial aid program. French economic assistance to Algeria
and to members of the French Community may exceed
$400,000,000 in 1960. Even if De Gaulle's five-year Al-
gerian economic development program is successful, Algeria's
continuing economic assistance requirements will be stagger-
ing. The European Economic Community can provide some
capital to fill the gap, but De Gaulle will probably de-
mand--perhaps at a summit meeting--broad international co-
operation to provide the necessary,. funds.
CUBA UNDER FIDEL CASTRO . . . . . . . . . . . . . . . . . Page 8
Prime Minister Fidel Castro's frequently stated ob-
jective is the rapid imposition of drastic social and
economic reforms so as to improve the lot of Cuba's low-
est income groups and, by a more efficient organization
of production, to produce more wealth and a greater degree
of economic self-sufficiency. He uses these objectives to
justify the establishment of tight controls over the econ-
omy. Under the land reform program, extensive holdings
have been taken over without formal expropriation or com-
pensation and turned into cooperatives under control of
the National Agrarian Reform Institute. In attempting to
build an authoritarian political machine based on mass
support, Castro is turning more and more to Communist-
oriented advisers, and Communists are benefiting from the
demagogic tirades against the United States that Castro
uses to mobilize his mass following.
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PART III (continued)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
OF IMMEDIATE'INTEREST
REACTION TO PRESIDENT EISENHOWER'S'TRIP
Soviet media are covering
the President's activities by
combining reasonably factual
news coverage with moderate and
at times commendatory commen-
taries. Prior to the President's
departure, Soviet commentators
established the general line
that the tour was the latest
move in a flurry of Western
diplomatic activity aimed at
reconciling Western divergen-
cies before the Western summit
meeting in Paris on 19 Decem-
ber. While comment directed
to both domestic and foreign
audiences during the trip has
taken a favorable view, propa-
gandists have continued to note
"conflicting tendencies" in the
West which make the President's
task of establishing a unified
approach to a summit meeting
"very difficult."
Moscow has published fac-
tual summaries of each communi-
qud issued at the conclusion
of the President's talks. Com-
menting on the visit to Rome,
Izvestia portrays the President
as a man of "good will," who,
together with Khrushchev,
"opened the way at Camp David
to a normalization of the in-
ternational situation." A more
discordant note, however, was
sounded in a 7 December broad-
cast, which objected to the im-
plication in the Rome communi-
qud that the policy of estab-
lishing missile bases in Italy
would be continued. Moscow al-
so alleges a failure to reach
"full unanimity" in the Rome
meeting.
In dealing with the visit
to Ankara, Moscow avoided the
subject of missile bases, and
limited its comments to censur-
ing Turkish leaders for their
efforts to persuade the Presi-
dent "to revert to his former
firm policy." Pravda and
broadcasts for internal audi-
ences suggest that the Ankara
communiqud revealed US-Turkish
differences over full US mem-
bership in CENTO.
Moscow's commentary on
subsequent phases of the trip
has continued to be relatively
amicable in tone, with no di-
rect criticism of the President.
A broadcast on the communiqud
issued in Karachi noted a fail-
ure to mention such problems
as relaxation of tension and
disarmament.
Eastern European propa-
ganda media are making only
brief mention of the President's
arrivals, departures, and meet-
ings, mostly in newscasts on
the home service. Except in
Poland, Satellite newspapers
are giving little attention to
the trip. In general the com-
mentaries are more friendly
toward the United States than
usual, especially those in East
Germany, which used the occa-
sion to intensify propaganda
against West Germany--Adenauer
specifically--as the chief op-
ponent of peace but to place
the United States, Britain, and
France on the side of "good"
with Khrushchev and East Germany.
A Czech commentator, how-
ever, cautioned that the Dulles
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foreign policy may be so en-
trenched that the President's
attempt to turn over a new leaf
may be too late. The Czech
noted that the President's
peaceful intentions and the
spirit of Camp David are at
variance with the inclusion of
Iran and Spain on the itinerary,
continuation of the arms race,
and continued establishment of
bases abroad.
In contrast to overt media,
clandestine broadcasts emanat-
ing from bloc countries, but
not acknowledged by the regimes,
have carried denunciations of
the trip's purpose and of the
President personally. A broad-
cted to Turkey
harged that the visit
ra gave the President
an opportunity to "see his
servile followers and give them
fresh directions." It said
Turkey has been reduced to the
status of a "dependent and en-
slaved country." Some clan-
destine stations, however, con-
trast the President's peaceful
aims with the aggressive pol-
licies of the leaders he is
meeting.
Peiping's Reaction
Moscow's conciliatory cov-
erage of the trip contrasts
sharply with Peiping's bitter
attacks. A broadcast on 2 De-
cember from China charged the
President with employing peace-
ful overtures as a "ruse" in
an effort to "gain time to ex-
pand American military strength"
in furtherance of an aggres-
sive war policy. In a similar
vein three days later, Peiping
dismissed US efforts to reduce
tensions as a "smoke.; screen"
to cover up preparations for
war. A broadcast of 7 Decem-
ber stressed that the US-Turk-
ish communique revealed that
"new plots" were being hatched
to create tensions in the area.
The Chinese Communists,
are apparently concerned that
the President's trip will un-
dercut their contention that
the United States is solely re-
sponsible for maintaining a
state of tension in the Far East.
Chinese leaders have recently
endeavored to convince foreign
visitors that Peiping has
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"peaceful" intentions in the
Taiwan Strait.
Asia-Africa
Pro-Western leaders and
the press in free Asian and
African countries have almost
unanimously approved of the
President's trip and applauded
the popular receptions he has
enjoyed thus far. The few sour
notes derive from wounded pride
--as in the case of Jordan,
whose press attributed to Id-
raeli influence the fact that
the President will not visit
any Near Eastern Arab states--
or from special fears--illus-
trated by Chiang Kai-shek's
praise for the Asian trip but
condemnation of the exchange of
visits between the President
and Khrushchev as a "serious
blow" to freedom-loving people.
Seoul has lamented that the
President's trip does not in-
clude any stanchly anti-Commu-
nist country such as South
Korea, Nationalist China, or
South Vietnam.
The Asian neutralist cho-
rus has echoed Nehru's charac-
terization of the President as
"a messenger of peace in the
world." In general, anti-Amer-
ican left-wing organs, includ-
ing that of the Communist party
of India, profess to hope for
some good from the trip. The
hard-line Iraqi Communists,
however, persist in seeing a
pernicious American design to
draw Turkey, Greece, Spain,
Italy, Tunisia, Morocco, Yugo-
slavia, and the UAR into a
Mediterranean pact as an adjunct
to NATO.
A theme emphasized in
Southeast Asia and the Far East
is that the President's trip
may mark a historic turning
point in Asian-American rela-
tions, especially since, it
is claimed, he comes at a time
when Asians are beginning to
change their views about the
United States. The Japanese
particularly urge that the Pres-
ident "listen rather than
preach" to the Asian and Af-
rican peoples.
Western Europe
Unofficial opinion in West-
ern Europe considers the Presi-
dent's trip a measure of grow-
ing American interest in under"
developed areas, a laudable
move to carry outside Western
Europe the message of the Amer-
ican desire for peace, and above
all an effective Western anti-
dote to Khrushchev's personal
diplomacy.
The press in Italy reacted
enthusiastically and favorably
to the President's visit. The
pro-fascist Borghese, however,
compared the trip to that of
"a murderer who returns to the
scene of his crime." The Com-
munist press, in an about-face,
reported that "the people" feel
a new dawn of peace possible.
Latin America
Sparse initial Latin Ameri-
can reaction has shown special
interest in the scheduled stop
in Spain. In mid-November the
Venezuelan foreign minister
privately stated that the Pres-
ident's visit to Spain was an
error in Latin American eyes,
and predicted an adverse re-
action throughout. the area.
Revolucion, considered the Cas-
tro reg me's mouthpiece, has
attacked the scheduled call on
Franco and in a front-page edi-
torial on 4 December criticized
the entire trip as a "false
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10 December .1959
The divergence between Mos-
cow and Peiping in treating the
President's trip is a further
reflection of the policy differ-
ences apparently straining re-
lations between the two regimes.
Khrushchev's last three major
speeches have contained clear
evidence of his concern over
Peiping's challenge to Soviet
ideological primacy and hegem-
ony in the Communist world. His
thinly veiled criticism of Chi-
nese policies reflects his de-
termination to restore bloc dis-
cipline and unity behind Mos-
cow's lead.
Soviet dissatisfaction with
Peiping now is being more openly
expressed in the Soviet Union.
Ion 2 December a
speaker at a public lecture at
China's reservations about
Khrushchev's foreign policy line
and its obvious resentment of
the Soviet attitude toward Chi-
nesedomestic programs in the
past year are currently expressed
in Peiping's failure to show en-
thusiasm for Khrushchev's policy
toward the United States. They,
are also shown in its failure to
endorse Khrushchev's gestures
toward France concerning an Al-
gerian settlement. The Chinese
probably view his reluctance to
support them on the Sino-Indian
border dispute as a violation
of bloc solidarity. They have
not joined in bloc praise for
Khrushchev's ability as a the-
orist and, by contrast, profess
to see Mao as the "most outstand-
ing contemporary" revolutionist,
statesman, and theoretician, who
has "enriched" Communist theory.
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Moscow University touched on dif-
ficulties in relations between
the USSR and China. Specific
mention was made of the Chinese
action on the Indian border and
the "cold and incorrect" recep-
tion given Khrushchev on his re-
cent visit to China.
This is the most candid ref-
erence to date to Khrushchev's
dissatisfaction with the present
course of Chinese internal and
external policies. Communist
readers could not have failed to
see a reference to the Chinese
in Khrushchev's sharp criticism
in his recent speeches of unnamed
leaders for "conceit," "adventur-
ist policies'of neither peace
nor war," and lack of "proletar-
ian internationalism."
Ambassador Thompson believes
the Chinese will probably ex-
ploit any suitable opportunity
to encourage opposition to Khru.
shchev both in the Soviet Union
and within the Communist bloc.
They would probably prefer to
see Khrushchev replaced, but pre-
sumably recognize that his posi-
tion in the Soviet party is too
strong to make secret appeals to
other Soviet leaders a fruitful
approach. They will try, how-
ever, to influence his policies
and convince other bloc leaders
of the validity of their views.
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10 December-1959
Iraq
Despite the official fes-
tive atmosphere throughout Iraq
on the occasion of Prime Minis-
ter Qasim's departure from the
hospital last week, tension
still seems to be growing. The
most immediate cause is reaction
to a six-hour conference in
which Qasim castigated Iraqi
nationalist elements and ap-
peared to lean heavily toward
the Communists. He contradicted
his previous charges that "an-
archists"--his euphemism for
Communists--had inspired last
July's Kirkuk atrocities; in-
stead he blamed the anti-Com-
munist Baath party and the UAR.
Qasim even lashed out at
an anti-Communist student group
which lost the recent students'
association elections, alleging
that this group was attempting
to "destroy the republic." He
accused Iraq's leading Shia Mos-
lem divine, a strong anti-Commu-
nist, of working for "imperial-
ism and dissension."
Qasim's statements will em-
bitter anti-Communist elements
and may embolden them to take
precipitous attempts to over-
throw him. His attack on the
religious leader is likely to
offend the country's more than
3,000,000 Shias, who constitute
about 60 percent of Iraq's Arab
population. Criticism in army
ranks, already outspoken in pri-
vate, will almost certainly in-
crease.
In contrast to the general
reaction to Qasim's speech, For-
eign Minister Jawwad told the
American ambassador on 7 Decem-
ber that the prime minister
showed "true neutrality" between
right and left, striking "impar-
tially between both extremes."
Qasim in fact has done little or
nothing to rally support from
the middle group, has probably
alienated the extreme right,
and has failed to gain the real
confidence of the left.
Despite the uneasiness pre-
vailing throughout the country,
the curfew imposed on the day of
the assassination attempt against
Qasim has been lifted for all
practical purposes.
Iraqi-Iranian relations
may deteriorate further as the
result of Qasim's declaration
that Iraq will seek the return
of a five-mile strip of the
Shatt al-Arab River, allegedly
ceded under pressure to Iran
in 1937. Diplomatic efforts
to resolve the dispute had beep
under way for.some time, but
Qa.sim's statement undercuts them.
In addition to its contin-
uing concern over Iraq, the UAR
has become disturbed about Is-
raeli intentions to divert large
quantities of water from the
Jordan River in the absence of
an Arab-Israeli agreement on
unified development of the Jor-
dan Valley. In an effort to
thwart such plans, Cairo has
requested an emergency session
of the Arab League Council and
reportedly will ask that body
to approve construction of a
dam in Syria to prevent water
originating there from flowing
into Israel and becoming part
of the Jordan River. According
to press reports, this move
would be preceded by an Arab
complaint to the UN Security
Council against the Israeli
project.
In view of the fact that
some 77 percent of the Jordan
waters originates in the three
Arab countries bordering on Is-
rael, an Arab diversion scheme
might be feasible even if
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10 December 1959
unecdaomieal. Three ).main
streams merge in Israel .to
form the Jordan. The Baniyas
starts in Syria and the Hasbani
in Lebanon; only the Dan is
exclusively an Israeli stream.
An Israeli officer has opined
that Israel's water supply
could be reduced by 25 percent
by this plan.
Jordan and Lebanon are
said to favor the UAR project,
but intra-Arab disagreements on
details of the plan, as well as
technical problems, may prove
obstacles to its realization.
Jordan itself is interested in
downstream utilization of the
waters and is going ahead with
its East Ghor irrigation canal
project which will utilize wa-
ter from the Yarmuk River, the
Jordan River's only major
tributary.
What has aroused the Arabs
is an eight- to ten-year Israeli
project which the Israelis say
is compatible with and could
be integrated into an-eventual
agreement for Jordan Valley de-
velopment such as the Johnston
Plan. "Stage One" of the Is-
raeli scheme, now in progress
and scheduled for completion
within five years, would enable
Israel to pump water out of
Lake Tiberias, which is fed by
the Jordan, and convey it across
the Galilean hills to Israel's
coastal plain. Beyond that, an
eventual diversion of the Jor
dan's waters above Tiberias is
envisioned for irrigation of
the Negev Desert in southern
Israel. There is no real in-
dication yet that the Arabs
contemplate any military action
to block t'le Israeli scheme.
Prime Minister Ben-Gurion
and his Mar ii party, which made
impressive gains in the November
Knesset elections, are continu-
ing their negotiations aimed at
forming a governing coalition.
Following the election, Ben-
Gurion indicated he would favor
partnership with the right-wing
General Zionists, who, along
with Mapai, favor election re-
form. As of early December,
however, the General Zionists
were disinclined to participate
- Armistice Line
Demilitarized Zone
Oil pipeline
Cyprus
kIi Kt
(SYRIA)
nom
LESANL)N,; / -
SAUDI
ARABIA
30823
in a coalition "under conditions
proposed at present." Mapai,
with 47 of the 120 Knesset
seats, apparently seeks part-
nership with at least two other
parties. Only the progressives,
who hold six seats, have in-
dicated their readiness to
associate with Mapai.
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The attitude of the General
Zionists diminishes the likeli-
hood that a right-of-center co-
alition can be formed and has
forced Ben-Gurion to turn-reluc-
tantly toward the left-wing
socialist parties, Achdut Haa-
voda and Mapam, which were par-
ticipants in the previous gov-
ernment but which he considers
intractable. Both these parties
now may raise their price for
an agreement, particularly on
the issue of collective cabinet
responsibility. The negotia-
tions could be prolonged. It
took 11 weeks to organize a
government after the 1955 elec-
tions.
Iran and the USSR continue
their diplomatic exchanges aimed
at finding a formula which would
offer Moscow written assurances
pertaining to foreign bases in
Iran and lead to cessation of
the Soviet-sponsored propaganda
campaign, against the Iranian
Government. Soviet Ambassador
Pegov recently held a series
of talks with Foreign Minister
A'am 25X1
Moscow is still trying to
negotiate an agreement which
would prohibit all foreign bases
in Iran.
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NOTES AND COMMENTS
NUCLEAR TEST CESSATION TALKS
Soviet representatives at
the Geneva talks are seeking
to maintain pressure for an
early settlement of outstand-
ing issues. Soviet delegate
Tsarapkin told reporters in
Geneva, following the 8 Decem-
ber session of the political
conference,. that the United
States and Britain are "drag-
ging their feet" in the con-
current technical talks on the
detection of underground tests.
He complained that the experts
were "still" discussing the
new American data and had not
reached the "important matter"
of the circumstances which
should be prerequisite to send-
ing out an inspection team to
investigate a suspected nuclear
explosion.
In a private discussion
with American delegate Wadsworth
on 1 December, Tsarapkin
stressed the need for "mutual
concessions." He added that
the USSR was "anxious" to con-
clude a treaty even if disagree-
ment at the technical talks
should force "temporary abandon-
ment of the drive toward a com-
prehensive treaty."
Tsarapkin has previously
hinted privately that the USSR
might relax its insistence on
a permanent and unconditional
cessation of all tests. He in-
dicated interest in a phased
approach which would provide
for a permanent ban on atmos-
pheric, high-altitude, and
underwater tests and a temporary
prohibition on underground
tests, pending development of
a trustworthy control system.
He emphasized, however, that
the "crux of the matter" is
the obligation for a full ces-
sation of all tests at the out-
set, regardless of the temporary
nature , of the underground
ban.
The Soviet delegate on-8
December requested the Western
delegations to urge their tech-
nical working groups to speed
up the discussions in order to
reach agreement on the criteria
for initiating on-site inspec-
tion and conclude the group's
report by 11 December.
The Soviet experts at the
technical talks have repeatedly
requested that the Western dele-
gation accompany with specific
treaty language the introduction
of any new data.. These tactics
are apparently intended to
probe the extent of revision
of the 1958 experts' report
the Western delegations intend
to insist on in light of their
new data. Moscow may be willing
to accept minor adjustments
in the 1958 conclusions and
recommendations which would not
alter the basic conclusion
that a control system over the
cessation..,.of all types of test-
ing is technically feasible.
Soviet chief technical ex-
pert Fedorov admitted privately
on 6 December that the 1958 re-
port was,not the "last word" or
"completely accurate," but he
asserted that it was good enough
!!for a start." He acknowledged
for the first time the possibil-
ity..-of "degradation" as well as
improvements in the system rec-
ommended in 1958. He repeated,
however, the Soviet view that
the system could be improved
rapidly after being put into
operation.
On 8 December, Fedorov
criticized American draft con-
clusions based on new data as
merely restating the original
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CURRENT INTELLIGENCE WEEKLY SUMMARY
American position and ignored
Soviet arguments made since the
technical talks began. He indi-
cated, however, there were no
substantive inconsistencies in
the American proposals but al-
leged that they were too de-
tailed. He suggested that the
delegations arrive at "some
briefer middle ground."
On 8 December the Soviet
delegation agreed to informal
meetings of the experts after
Fedorov had asserted that any
such meetings would be for the
Purpose of drafting conclusions
on points on which both sides
agreed, and not for convincing
his delegation of Western views.
On instructions from Prime
Minister Macmillan, Minister of
State Ormsby-Gore has gone to
Geneva, apparently to urge the
United States to avoid taking a
position in the technical talks
which could lead to a breakdown
in the negotiations. Stressing
that Britain's chief delegate
in the technical discussions was
"pessimistic" over the outcome
of the talks, Ormsby-Gore be-
lieves that in the event the ne-
gotiations collapse without a
treaty or if one power resumed
testing, a special session of
the General Assembly would be
convoked to consider the situa-
tion. He also expressed his be-
lief that the political risk of
refusing to agree on a treaty
because of technical difficul-
ties in detecting underground
explosions had increased "100
percent since last year."
(Concurred in 25X1
by 051)
The leadership which has
directed the Hungarian party
since the October 1956 revolt
was endorsed virtually in its
entirety at the first congress
since the revolt, held in Buda-
pest from 30 November to 5 De-
cember. Party First Secretary
Janos Kadar was singled out by
visiting Soviet leader Khru-
shchev as "the true son of the
Tungarian people."
tral committee's agitation and
propaganda department.
Gyula Kallai, who was named
for the job of first deputy pre-
mier, was replaced by Szirmai
as one of the five party secre-
taries. Kallai's governmental
assignment suggests Kadar may
be grooming him rather than First
Deputy Premier Antal Apro, a
Stalinist, to replace reportedly
ailing Premier Ferenc Muennich.
Kadar made a number of per-
sonnel changes in organs of the
central apparatus which appear
designed to make the party more
responsive to his direction. All
members of the old politburo and
central committee were re-elected
and both bodies were increased
in size. The two new figures
in the politburo are closely
associated with Kadar. One of
these, Sandor Gaspar, was recent-
ly elected party first secretary
of the Budapest organization, and
the other, Istvan Szirmai, was
until recently chief of the cen-
The enlarged central commit-
tee includes a number of long-
time party workers who either
fell into disfavor during the
Rakosi regime or have recently
demonstrated their loyalty to
Kadar. Several regional party
secretaries were elected to the
central committee. In the main,
these secretaries were from
those regions of the country
where there were no complaints
of Stalinist abuses during the
collectivization drive of the
winter of 1958-59.
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10 December 1959
25X1
ORGANIZATION OF HUNGARIAN SOCIALIST WORKERS (COMMUNIST) PARTY
SECRETARIAT I POLITBURO
5 MEMBERS 438,000 FULL AND, CANDIDATE MEMBERS 12 MEMBERS
3 ALTERNATES"
KADAR, First Secretary - _ _ - _ - KADAR
I MUENNICH
KALLAI
MAROSAN, Second Secretary - - - - - - -
KISS- ---ice - ---
CURRENT INTELLIGENCE WEEKLY SUMMARY
MAROSAN
KISS
CENTRAL COMMITTEE
71 MEMBERS
23 ALTERNATES
T
DEPARTMENTS
AGITPROP
Istvan Szirmai
EDUCATION
Jeno Lugosi
FOREIGN
RELATIONS
Dezso Szilagyi
FINANCE
Istvao Friss
AGRICULTURE
Lajos Feher
These inclusions appear de-
signed to broaden support for
the central leadership and its
policies among the rank and file.
In addition, Istvan Dobi and Ar-
pad Szakasitz, present and for-
mer figurehead chiefs of state,
who were both leaders of left-
wing minority parties, were e-
lected to the central committee,
a move which underlines the re-
gime's efforts to demonstrate
the party's mass base.
The 674 delegates at the
congress endorsed Kadar's poli-
cies and affirmed the "centrist"
orientation of his economic pro-
gram. The Five-Year Plan (1981
65) directives which were pub-
lished in October were accepted
virtually without change. Kadar
and other speakers indicated
that the party still subscribes
to a dual policy of "consolida-
tion and development" in agri-
culture, and it appears likely
APRO
BISZKU
FE HER
SOMOGY1
RONAI
NE MES
KOMOCSIN
GAS PA R*
- SZIRMAI*
INDUSTRY
Istvan Szurdi
MASS ORGANS
Jozsef Sandor
CADRE
Laszlo Foldes
SCIENTIFIC
Laszlo Orban
MILITARY
Ferenc Laszas
that the socialized sector will
be further expanded this winter.
Kadar's policy is designed to
achieve a "socialist transfor-
mation of agriculture in the
comming years," but there is no
fixed timetable for this devel-
opment. The question of the
rate of socialization--partic-
ularly of agriculture--contin-
ues to threaten the unity of the
party leadership, and the con-
gress did not overcome this.
Statements immediately preceding
the congress pointed up that Apro
and party secretary,Karoly Kiss
both favor a considerably faster
rate of socialization than does
Kadar.
Spokesmen indicated their
continued.distrust of Hungarian
intellectuals. Party cultural
boss Kallai warned thaV, "bourgeois
thinking in the populace and
the prevalence of.revisionist
ideas in the universities"
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CURRENT INTELLIGENCE WEEKLY SUMMARY
despite intensive agitprop work
conducted over the past three
years. Kallai also demonstrated
considerable sensitivity to the
idea that an international de-
tente means ideological or po-
litical compromise.
Some recent personnel chag-
es--both at the congress and
preceding it--suggest a definite
effort by Kadar to tighten con-
trol of the agitprop complex.
Gyorgy Marosan, who was elevated
to the post of party second
secretary one month ago, may
have been given certain respon-
sibilities to strengthen agit-
prop work.
The fact that the stature
of front-line Stalinists was
not reduced suggests that Kadar
believes that the best approach
is to utilize all elements of
the still weak party organiza-
tion without undermining its
strength by purges, while at the
same time emphasizing the need
for party discipline and unity.
EAST GERMAN REGIME TROUBLED BY FOOD SHORTAGES
A number of East German
party and government officials
are being made scapegoats for
the current shortages of meat
and dairy products. Party
First Secretary Ulbricht may
extend the shake-up as a means
of getting rid of officials
who have questioned his agricul-
tural policies.
Minister of Agriculture
Hans Reichelt has been sharply
attacked in the party daily
Neues Deutschland for tolerating
"opportunist and revisionist"
views among officials in his
ministry. Politburo member
Erich Mueckenberger, reportedly
already under fire, may be cen-
sured at the forthcoming sev-
enth SED plenum and may even be
deprived of his responsibility
for agricultural affairs.
A shake-up at the local
level is already in progress
and will probably spread. U1-
bricht recently castigated Ros-
tock District officials for
failing to take steps to secure
fodder supplies--notably their
refusal to enlarge the acreage
planted in corn.
The general failure of the
year's agricultural plan--due
in large part to a serious
drought--has caused shortages
of vegetables, fruit, meat, and
especially dairy products. Re-
strictions on the sale of butter
have become necessary, since the
regime apparently is resolved
not to import it from the West.
Throughout the country, dairy
products have become an active
commodity in the black market,
smuggling of butter to Berlin
continues, and East Berlin
housewives are crossing the
border to purchase more expen-
sive West Berlin butter.
Obviously reluctant to re-
institute rationing only 18
months after its abolition= the
regime is appealing to the peo-
ple for "more discipline when
the shortages become acute in
the winter months" and has
adopted several measures to en-
sure the best possible distribu-
tion without resort to rationing
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cards. Restaurants and hotels
in East.Berlin have been told
to replace butter on the
table with mayonnaise. Custom-
ers are required to register at
stores, and control brigades
have been assigned to ensure
that they register only once.
The regime has also insti-
tuted drastic measures--closely
coordinated with the current
collectivization campaign--to
suppress speculation and force
farmers to deliver dairy prod-
ucts.
jointly with ORR)
SOVIET AGRICULTURAL OUTPUT IN 1959
Although unfavorable weath- I Total sown acreage in the
er, including a drought this
summer, affected most Soviet
crops adversely, output of live-
stock products may increase
some 10 to 20 percent this year,
largely because substantial
feed supplies were available
from last year's bumper harvest.
The grain crop suffered from a
reduction in sown acreage as
well and apparently was.the
smallest in five years, or since
CURRENT INTELLIGENCE WEEKLY SUMMARY
10 December 1959
USSR was 484,000,000 acres in
1959, or roughly the same as
during the past three years.
Grain acreage this year, how-
ever, is believed to be some
15,000,000-20,000,000 acres
less than during the past several
years. The grain harvest will
apparently be in the neighborhood
of 100,000,000 metric tons. This
is sufficient to satisfy basic
domestic requirements, but the
SOVIET AGRICULTURAL PRODUCTION OF SELECTED ITEMS 1954-59
4.63 4.6
4.20
4.
37
SLINFLOW
R SEED
2.so
1.91
FIBER FL
X
8
52
44
44
the development of the New Lands.
The cotton crop, on the other
hand, grown under irrigation and
not affected by the dry weather,
apparently was a record crop.
100
development of the much empha-
sized livestock program will be
impeded, and grain export capa-
bilities will be limited.
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Much of the re-
duction in grain acre-
age apparently was
taken up by an in-
crease in feed crops.
The acreage planted
to sugar beets also
increased, reaching
a total of about 7,-
400,000 acres in 1959,
or one fifth over the
1958 figure. Acre-
ages of the other
crops changed rela-
tively little, if any,
from the 1958 level.
Industrial crops.
suffered less in 1959
from the adverse weath-
fr conditions than
did grain. The cot-
ton crop apparently
is some 5 to 10 per-
cent larger than the
4,200,000- to 4,400,-
000-ton crops picked
in recent years. Sug-
ar beet yields were
adversely affected by
the dry weather but,
because of a 50-per-
cent expansion in
acreage during the
past two years, the
sugar beet crop is
second only to the
record 1958 crop.
Yields of sunflower
seed and flax fiber
were also reduced by
the dry weather. The
production of sun-
flower seed is expect-
140
USSR: GRAIN PRODUCTION
(OFFICIAL USSR STATISTICS, EXCEPT 1959)
85.6
OTHERS
127.6`
52.0
1959
(EST)
Post-harvest losses probably reduced this
figure to about 115.
Post harvest losses probably reduced this
figure to about 130.
ed to be little better than the
poor 1957 crop. Fiber flax
production is expected to be
about 90 percent of the amounts
harvested annually during recent
years.
Production of potatoes and
vegetables in 1959 is expected
to be only about 5 percent less
than in 1958.
Increases in state procure-
ment of livestock products sug-
gest that production increases
will amount to some 10 to 20
percent. Production of live-
stock products during the first
half of 1959 was aided by excel-
lent feed supplies from the good
1958 crop--which resulted in
record numbers of livestock be-
ing carried over into 1959--and
by the arrival of spring pas-
turage several weeks earlier
than normal. Subsequently, the
adverse effect of dry weather
on pastures and feed supplies
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CURRENT'r'INIELLIGBNCE WEEKLY SUMMARY
probably caused some increase
in the rate of slaughtering,
which would further aid meat
output.
Most of the effects of
the relatively small supply
of feed from the 1959 crop
season will become apparent
in next year's output of
livestock products 25X1
ORR) 25X1
PEIPING RELEASES WAR CRIMINALS
Peiping's release of 33
"war criminals"--announced on
4 December in accordance with
a directive promulgated by
Chairman Liu Shao-chi on 17
September--appears to be part
of the regime's continuing ef-
fort to undermine the stabil-
ity of the Taiwan government
by holding out the prospect of
pardon for Kuomintang officials.
Thirty of those pardoned
are former Kuomintang officials
captured during the Communist
seizure of the mainland, one
is an official of the Japanese-
sponsored Inner Mongolia
autonomous government, and two
are former Manchukuo govern-
ment leaders, including Henry
Pu Yi--the last Emperor of
China and Japanese puppet
Emperor in Manchuria. All are
said to have recanted their
crimes and to have "turned
over a new Ieaf," following
ten years of labor and ideo-
logical education:
The Chinese Communist
leaders will exploit these
pardons in their long-term
effort to convince Nationalist
officials that Peiping will be
"lenient" with "compatriots"
who choose to join the Commu-
nist cause. On 5 December,
Peiping beamed a special broad-
cast to Taiwan in Mandarin di-
recting the attention of "Kuo-
mintang military and govern-
ment personnel" to the rally
held for the release. An ear-
lier broadcast had reiterated
the offer made by Premier Chou
En-lai for cooperation between
the Communist party and the
Kuomintang for unification of
the "fatherland" and had stated,
"If you are patriotic Chinese,
I hope you will return to the
mainland and see the situation
for yourselves."
In addition to pardoning
war criminals, Peiping has re-
stored to good standing 142
persons branded as "rightists"
during the 1957-58 rectifica-
tion campaign. This group
comprises mainly second-level
puppet party leaders and intel-
lectuals and does not include
the most prominent "rightists,"
some of whom had already been
partially rehabilitated. A
total of 12,032 have been pardoned
since issuance of the September
amnesty decree, according to a
Peiping announcement.
Peiping's decision to grant
amnesties at this time is prob-
ably intended to demonstrate
the country's stability and
maturity following ten years
of Communist rule. Pardoning
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CURRENT INTELLIGENCE WEEKLY SUMMARY
of the "rightists" seems de-
signed to underscore Peiping's
policy of redemption and re-
habilitation at a time when
critics-of the regime both
within and outside the party
are being urged to re-examine
their positions and whole-
heartedly support the party
center and its programs.
There has been no indica-
tion that amnesty will be granted
to the five Americans being held
in Chinese prisons, whom Peiping
apparently considers valuable
hostages. Their disposition
would seem to be a separate is- 25X1
sue, almost entirely dependent
on some improvement in Sino-
rican relations.
The Indonesian Government,
determined to carry out its ban
on rural alien retailers despite
strong Chinese Communist objec-
tions,has reaffirmed its dead-
line of 1 January for implemen-
tation of the decree. The Indo-
nesian Army has admitted man-
handling some Chinese and mak-
ing numerous arrests in the
course of resettlement and has
acknowledged that city homes
provided for evacuated Chinese
are not "palaces."
Recurrent instances of mal-
tre:ataeutL could set an example
for the Indonesian populace,
which generally dislikes the
Chinese, to carry out vigilante
actions. The West Java army
commander, apparently concerned
over local incidents, publicly
instructed his officers in late
November to exercise tact and
patience in handling the reset-
tlement program because the al-
iens are citizens of a "friend-
ly country."
are disregarding a ban on their
travel to troubled areas and
are encouraging Chinese resist-
ance to government resettlement
efforts. Army authorities charge
that the embassy, in addition,
brands as traitors those Chinese
who have complied with the evac-
uation order and has threatened
retaliation against their fami-
lies in China. Most of this
activity has occurred in West
Java, but Chinese consular per-
sonnel have also toured East
Borneo.
Personnel of the Chinese
Communist Embassy in Djakarta
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CURRENT INTELLIGENCE WEEKLY SUMMARY
CEYLON
Governor General Goonetil-
leke's dissolution of Ceylon's
Parliament on 4December and
his call for new national elec-
tions on 19 March have ended for
the time being the uncertainty
over day-to-day political de-
velopments. Prime Minister
Dahanayake will head an interim
government. On 8 December
Goonetilleke, at Dahanayake's
request, dismissed six of the
prime minister's most vocifer-
ous critics, including five
cabinet ministers, and rein-
stated former Finance Minister
de Zoysa, who was recently
forced to resign because of his
alleged involvement in the Han-
daranaike= assassination. Pub-
lic preoccupation with campaign
activities may stimulate some
unrest and will probably lead
the government to ignore for
several more months the island's
pressing economic problems.
The abrupt dissolution pre-
sumably was prompted by Dahana-
yake's realization that, as the
government's collapse was in-
evitable, his own political
status would suffer less should
he resign voluntarily rather
than remain affiliated with the
discredited ruling party and
govern without a popular man-
date. In a broadcast on 5 De-
cember, Dahanayake implied that
the action was intended to
serve national interests and
took credit for having paved
the way for peaceable elections.
Enumerating his accomplishments,
Dahanayake included achievements
which had been realized before
he took office but for which the
public may henceforth consider
him partly responsible.
No single party seems like-
ly to win a majority in the new
Parliament--the membership of
which will increase from 101 to
151. The leading contenders
will be the moderate United Na-
tional party (UNP), the ruling
party prior to the 1956 elec-
tions, and the Trotskyite Lanka
Sama Samaj party (LSSP), the
leading opposition group since
the elections. The UNP appears
confident of winning substan-
tial support and is credited.
locally with having made a come-
back since its overwhelming de-
feat in 1956.
However, the party still
has to prove its willingness to
replace unpopular "old guard"
elements and demonstrate its
ability to offer a "progressive"
program to a public still some-
what disenchanted with the UNP
and concerned chiefly with eco-
nomic advancement. The party
will also have to reckon with
the LSSP's extensive urban
labor following and the prestige
of LSSP leader N. M. Perera,
one of the most highly regarded
politicians in Ceylon.
The ruling Sri Lanka Free-
dom party (SLFP) is unlikely to
continue as a significant politi-
cal group. Many members probably
will either attempt to join the
UNP or seek re-election as inde-
pendents. Others may join or
follow the example of Dahanayake,
who has resigned from the SLFP
and formed a new conservative
party. The election strategy of
all parties will become more ap-
parent following the nomination
of candidates on i January.
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A government crisis in Laos
has been at least temporarily
averted by the recent decision
of the cabinet to schedule gen-
eral elections tentatively for
April 1960. Until that time,
the deputies of the present Na-
tional Assembly will stay in
office, although the assembly
as a whole will apparently not
function after 25 December, the
date its mandate will expire
under the constitution. The
possibility that the elections
might be further postponed is
left open by the stipulation in
Premier Phoui's communiqud an-
nouncing the cabinet decision
that they will take place "ex-
cept under circumstances beyond
the government's control."
In a deadlock of some weeks
standing, the conservative ele-
ments in the government, led
by Phoui, had urged that the
assembly's mandate be extended
for one year and that elections
be held in December 1960. The
reformist Committee for Defense
of National Interests (CDNI),
which is represented in the cab-
inet but not in the assembly,
had argued for terminating the
assembly's mandate on schedule
and for earlier elections.
While the compromise reached on
these issues is based on some-
what tenuous legal grounds, its
very imprecision will enable
each side to save face by claim-
ing it represents substantial
concessions to its position.
Phoui now plans to revamp
his cabinet and seek a fresh
vote of confidence in a special
National Assembly session prior
to the expiration of its man-
date on 25 December. He may
run into opposition on the pro-
posed assembly session, however,
in view of the known distaste
for the assembly's membership
harbored by the CDNI and the
King. Another possible source
of trouble is his threat to de-
mote Foreign Minister Khamphan
Panya, a CDNI leader, to a less-
er cabinet position. The CDNI
is already annoyed over remarks
Phoui made to the press follow-
ing the compromise settlement
accusing the CDNI of dictatorial
aims. These developments could
upset the precarious compromise
reached on the assembly's tenure
and the timing of new elections.
The military situation con-
tinues generally calm, with only
minor scattered incidents re-
ported.
Meanwhile, the executive
secretary of the UN Economic
Commission for Asia and the Far
East (ECAFE)--U Nyun of Burma--
reports that the economic study
on Laos now is being drafted by
Hammarskjold's personal repre-
sentative, Sakari Tuomioja of
Finland, with the assistance
of ECAFE and other UN officers.
The report will be of an interim
nature with a more intensive
survey to be conducted by the
group scheduled to succeed Tuo-
mioja's.
U Nyun believes that Laos'
most pressing need is an ele-
mentary transportation system.
He said that the immediate ob-
jective would probably be to
have the various UN specialized
agencies undertake emergency
assistance for Laos. He does
not think there is any danger
of Communist aid to Laos.
U Nyun added that the mere
absence of treaty arrangements
with the West did not consti-
tute as full a measure of neu-
trality as Hammarskjold had in
mind. He implied that the sec-
retary general would like to see
a neutral Laos along the lines
of Cambodia.
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10 December 1959
French President de Gaulle
and leaders of the Mali Federa-
tion--composed of the autono-
mous French Community states
of Senegal and Soudan--appear
to have agreed in principle
during talks in late November
that by June 1960 Mali should
receive sovereign powers and
enter into special cooperation
agreements with France. Seri-
ous discord exists, however, as
to when these ties are to be-
come effective,and differences
seem likely to develop over
substantive aspects as well.
According to Mali Assembly
President Senghor--who partici-
pated in the talks along with
Mali President Keita and Vice
President Dia, respectively the
premiers of Soudan and Senegal
--De Gaulle readily accepted
Mali's plan to achieve independ-
ence through a negotiated
transfer of "common" powers now
actually wielded by Paris. He
insisted, however, that Mali's
continued membership in the
French-subsidized Community de-
pended on the cooperation
agreements.being worked out in
detail beforehand and coming
into force on the date of in-
dependence.
These agreements would cre-
ate special contractual rela-
tionships between France and
Mali in such fields as defense,
foreign affairs, economic aid,
and education. De Gaulle appar-
ently indicated that the only
alternative route to independ-
ence open to Mali would be to
invoke the constitution's ref-
erendum procedure, a step which
would put Mali completely out-
side the Community and almost
certainly mean a cessation of
French economic aid.
Under the new relationship,
Paris hopes to ensure extensive
coordination by Mali of its for-
eign, defense, economic, and
cultural policies. Mali's
leaders, on the other hand, can
be expected to resist French at-
tempts to limit Mali's freedom
of action following independence.
They are already under consider-
able pressure from more militant
domestic elements who wish to
emulate Guinea's complete break-
away from the French sphere.
Keita--leader of the Mali
forces in Soudan, where such
elements are particularly strong
--indicated to the American con-
sul general in Dakar on 5
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 Dakar
; SEE-NEGAL
fow'. x
IVORY
GoASr
Abidjan,
? tilll2H~ /
I.41)NF ~(l!
Mn iic~ia
ATLANTIC OCEAN
0 Federation of Mali
U A R
(EGYPT)
SO FFRENC} 11
MALLL~Nffj
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CURRENT INTELLIGENCE WEEKLY S ARY
December that independent Mali
could not bind itself to a
closely knit politico-economic
complex subordinate to France.
He added that Mali contemplated
only loose ties with organs of
the Community and voluntary at-
tendance at meetings of its Ex-
ecutive Council.
Prio:& to his- departure for
the Council meeting in St,. ".Louis,
Senegal, on 11 and 12 December,
De Gaulle was expected to noti-
fy Mali leaders of his attitude
toward the federation's rela-
tions with France following in-
The formal inauguration on
5 December of the pipeline from
Hassi Messaoud in central Alge-
ria to the Mediterranean coin-
cides with accelerated French
efforts to find a market for
Saharan oil. French officials
have emphasized that finding an
outlet for the new production
is a "world problem," but they
have thus far offered no spe-
10 December 1959
dependence.. The subject will
presumably be discussed during
the French President's subse-
quent visit to Dakar. Formal
negotiations between French and
Mali representatives, which one
high French official has esti-
mated will last about three
months, now are scheduled to
begin in January.
Mali'.s independence, by what-
ever means, is likely to precipi-
tate demands for equal status
from the Malgache Republic (Mada-
gascar) and the remaining West
African states of the Community,
including the Ivory Coast.
SECRET
cific proposals for a world-wide
solution. The burden of absorb-
ing supplies over and above
French requirements seems likely
to fall initially on the Euro-
pean Economic Community (EEC or
Common Market).
Since crude oil under the
EEC treaty is a raw material not
subject to a tariff, Paris has
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CURRENT INTELLIGENCE WEEKLY SUMMARY
sought to achieve a
guaranteed market by
suggesting instead a
uniform EEC internal
tax on oil products
not refined from "Com-
munity" crude. Tax-
free quotas would
take into account EEC
needs for crude in
quantities or types
the French are not
able.to provide--Sa-
haran oil being high
in gasoline content.
EEC refineries would
receive tariff pro-
tection from imported
products, and each
Common Market coun-
try would be free to
distribute its tax-
free quota to the
various world sup-
pliers as it saw fit.
Most of the EEC
countries--and par-
ticularly their eco-
nomic ministers--have
serious misgivings
about the French plan..
Completed pipeline
Pipeline under construction
Proposed pipeline
......???? Projected pipeline
Tanker route
European Economic Community
(Common Market)
,,..1 JtrasbourQ'
nich
FRANCE Aig
5 T Ilan
UN if
L. S u:. .e
Some suspect Paris is merely
increasing pressure on the inter-
national companies to absorb
Saharan production voluntarily.
Others are skeptical of French
OFFICIAL FRENCH ESTIMATES OF CRUDE OIL
PRODUCTION IN THE ALGERIAN SAHARA
(THOUSAND BARRELS PER DAY) 1.020
ESTIMATED RESERVES OF LIGHT CRUDE OIL IN
THE ALGERIAN SAHARA IS 4 BILLION BARRELS
contentions that energy costs
will still remain the same.
Nearly all of the EEC members
have refining industries they
Hassi Messaoud' I
ALGERIA
Ethel
are reluctant to penalize.
Moreover, the low-tariff coun-
tries are loath to start a pro-
tectionist trend.
These considerations are
not likely to prevail, however,
if the French offer sufficient.
concessions or make their plan
an issue for Common Market
"solidarity." Netherlands offi-
cials, theoretically strongly
opposed to the plan, have hinted,
for example, that The Hague
might change its mind if France
offered a larger market for
Dutch agricultural products.
Another inducement might be a
redefinition of "Community"
crude to include production from
certain fields in which AEC com-
panies have a major financial
interest.
The attitude of the smaller
EEC countries seems likely to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
be influenced by the position
of Bonn,. which in turn will be
affected by West German inter-
est in participating in the Sa-
haran development and by Chan-
cellor Adenauer's determination
to maintain friendly relations
with France. Prospects that
London might vigorously oppose
BRITAIN'S RELATIONS WITH WESTERN EUROPE
The first round in imple-
menting the Macmillan govern-
ment's major objective of im-
proving relations with Western
Europe has helped the cross-
channel atmosphere but produced
few specific proposals.
In the past month the
British have talked at the head-
of-government or foreign-minis-
ter level with all Common Mar-
ket (EEC) countries except
Luxembourg in a determined
attempt to allay some European
apprehensions on certain issues.
The British leaders have re-
peatedly denounced disengage-
ment as such--while reiterating
support of a "pilot" plan for
arms limitation and inspection
in Europe that would not dis-
criminate against West Germany
--and proclaimed that Britain
considers itself "part of Eu-
rope."
London's principal sug-
gestion has been to use the
Western European Union (WEU)--
the one body composed of the
six EEC countries plus Britain
--for political consultations.
The further extension of EEC
solidarity by means of the re=
cently agreed quarterly foreign
ministers' consultations dis-
turbs London. Whenever these
consultations venture beyond
economic matters, the British
want to bring in WEU, until
now a near-dormant institution
concerned with controlling
limitations on Bonn's rearmament.
European reaction appears cool,
however, and a high British
Foreign Office official antici-
pates that little will come of
the proposal.
Otherwise, Britain's new
drive is shown in its cultiva-
tion of France, especially on
issues affecting Africa. Lon-
don lobbied for the French on
the Saharan nuclear test resolu-
tion in the UN and is trying to
help them on the Algerian is-
sue. In deference to French
sensibilities, Britain has
ended consultation with the
United States on supplying
arms to Tunisia. Regarding
Bonn, London hopes to build
on growing bilateral trade
ties and on joint arms produc-
tion arrangements, as agreed
last week by Defense Ministers
Watkinson and Strauss.
25X1
Acknowledged differences
remain on such major issues as
a Berlin settlement, summit
talks, and European economic
cooperation and, fundamentally,
on Britain's determination to
retain its special ties with
the United States and the Com-
,monwealth ? As in East-West
relations, Macmillan appears to
believe that regular contacts
can alleviate misunderstandings
that exacerbate these differences.
Further bilateral meetings now
planned are for President de
Gaulle to visit London in early
April and Macmillan to go to
25X1
1
SECRET
the French plan seem to have re-
ceded,in view of the Foreign Of-
fice's desire to avoid any action
which might jeopardize important
British oil investments in France
or aggravate Britain's already
delicate relations with the Conti-
nent in the economic field.
Italy in "early sprin ."
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10 December 1959
THE NATO MEETINGS
East-West relations in the
light of summit preparations
will be the main concern of the
annual meeting of the NATO
ministerial council on 15-17
December. Other major topics
include NATO economic coopera-
tion and the status of the
military effort. The council
is scheduled to reconvene on
22 December to hear a report
on the "Western summit" four-
power talks.
For consideration of the
situation that would prevail in
a period of international de-
tente, Secretary General Spaak
has suggested focusing atten-
tion on how the East and West
interpret the meaning of "peace-
ful coexistence" and what im-'
pact this would have in the
field of NATO political con-
sultation and defense.
Discussion of economic
problems will be directed to-
ward their political aspects.
Britain, Canada, and West Ger-
many favor a general approach
without going exhaustively into
intra-European questions--main-
ly the rival Common Market and
Outer Seven groupings--and the
question of underdeveloped
areas, which the :Belgians would
like to consider. The Greeks,
perhaps jointly with the Turks,
may push their claim that the
richer allies should help the
poorer ones on economic matters.
The present status of the
NATO military effort, charac-
terized by a persistent gap be-
tween military requirements and
CONTINUING DIFFICULTIES
Panamanian disappointment
with the results of recent con-
versations with US officials
probably presages a continued
period of difficulty in US-
Panamanian relations. Foreign
Minister Moreno told the US
ambassador on 4 December that
their realization, has led the
military authorities to declare
that the current and prospective
defense posture of the alliance
gives cause for "grave concern"
over NATO's continued deteriora-
tion in relation to Soviet
strength. Under present cir-
cumstances, they hold it un-
likely that the NATO strategic
concept of forward defense
could be fully implemented.
Differing opinions on the
effect of the so-called East-
West thaw on the Soviet threat
can be expected to provoke more
than routine consideration of
the West's proper defense pos-
ture and procedures for achiev-
ing it. Special military .
items for discussion are the
nuclear capability of NATO
shield forces and progress in
air defense, which would prob-
ably bring up the problem of
De Gaulle's obstructive tac-
tics. Norway may receive at-
tention for its proposal to
study whether the procedure
for reviewing the military pro-
gram should be changed.
IN US-PANAMANIAN RELATIONS
the Panamanian Government would
soon publish a statement declar-
ing that, in spite of recent
discussions, the United States
has made no substantial conces-
sions regarding the Canal Zone,
and "no progress whatsoever"
has been made in the settlement
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CURRENT INTELLIGENCE WEEKLY SUMMARY
of long-standing US-Panamanian
differences.
The ambassador also was
told that the Panamanian Govern-
ment felt obliged to inform its
citizens, whose hopes of great-
er canal benefits have been
raised by recent events, that
the administration regarded the
latest US offers of economic
concessions to Panama as being
too vague and "entirely unsatis-
factory." Public hostility to-
ward the United States has ap-
peared somewhat reduced since
the 20-24 November discussions
between Panamanian officials
and Deputy Under Secretary of
State Merchant, but publication
at this time of a strongly
worded official statement criti-
cizing the recent negotiations
would increase the likelihood
of new anti-American outbursts.
Panamanian extremists are
planning further anti-US dis-
turbances. Nationalistic stu-
dent elements are reported or-
ganizing a "grandiose manifesta-
tion" for 12 December, in order
to celebrate the anniversary of
the Panamanian rejection of an
agreement on US military bases
in 1947. First Vice President
Temistocles Diaz, a possible
opposition candidate for presi-
dent in next May's presidential
election, is reported backing
plans for the 12 December demon-
stration.
BRAZIL, PRESSES ' OPPRAfl N' PAN',AMERICA't
Brazil is intensifying its
diplomatic campaign to build
support for "Operation Pan-Amer-
ica" (OPA), President Kubi-
tschek's proposal for a "dynam-
ic" inter-American effort to
speed economic development.
Kubitschek considers such an ef-
fort essential to combat in-
creasing Communist agitation as
well as to meet the needs of the
expanding population. OPA will
continue as a major Brazilian
policy and will be pushed at
the 11th Inter-American Confer-
ence scheduled for 1 February
in Quito.
Kubitschek first suggested
the idea in a letter to Presi-
dent Eisenhower on 28 May 1958,
following the attacks on Vice
President Nixon in Peru and
Venezuela. He called for a
"plan to reassess hemispheric
policy in order to place Latin
America in a more effective role
in the defense of the West,"
particularly by economic devel-
opment.
Kubitschek's suggestion re-
sulted in several meetings, in-
cluding that of the American
foreign ministers in September
1958 and two meetings,6f the Com-
mittee of 21--made up of presi-
dential representatives. The
main results, besides an exchange
of ideas, were the approval of
an inter-American bank and in-
clusion of OPA on the agenda
for the Quito conference.
To line up more active sup-
port for OPA 'and: dissipate
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CURRENT INTELLIGENCE WEEKLY SUMMARY
10 December 1959
resentment of Brazil's domi..--
nating role, Rio de Janeiro has
been actively consulting other
governments, and supporting the
candidates of other Latin Amer-
ican governments for posts in
international organizations.
Some success is evident from
the numerous statements of of-
ficial support for OPA,,
This cultivation applies
especially to Mexico, which was
the most recalcitrant toward
OPA last year. President Lo-
pez Mateos will probably visit
Brazil in January. Argentina
gave OPA new support following
Brazilian Foreign Minister
Lafer's November visit t9
Buenos Aires and recommended
that each country "clean its
own house" economically.
Ecuadoran.. Foreign Minis-
ter Tobar, visiting Rio de
Janeiro, joined President
Kubitschek on 7 December in
calling for revision of the
charter of the Organization of
American States (OAS) to permit
the creation of a permanent
council for economic develop-
ment. Tobar also called for
permanent retention of the
Committee of 21, thus implying
criticism of the OAS, which
Brazil would like to bypass in
matters concerning OPA.
Within Brazil, OPA has been
of political value to Kubitschek.
This proposal has been one of
his most popular policy moves.
Some see in OPA, along with Bra-
zil's trade mission in Moscow,
the beginning of a policy more
independent of the United States
and giving Brazil an opportunity
to exert greater influence in
world affairs. 25X1
GUATEMALAN CONGRESSIONAL ELECTIONS
The government of Guate-
malan President Miguel Ydigoras
has"been temporarily streutlh-
ened by the results of the
congressional elections on 6
December, in which half of the
66 seats were at stake. Unof-
ficial returns indicate sub-
stantial victories for the
President's partisans.
could develop into a serious
issue for the regime. Leaders
of the largest leftist group,
the moderate Revolutionary party
(PR), on 9 December publicized a
detailed list of irregularities
committed by the government and
stated that the. PR would not ac-
cept this fraudulent election,
"come what may."
Fraud and other methods of
influencing the vote were em-
ployed extensively, especially
in rural Indian areas, on be-
half of pro-Ydigoras candidates
and were probably decisive in
a number of constituencies.
Leftist parties showed consid-
erable strength where the vot-
ers were free and not intiai-
dated. In the capital, for
example, the combined leftist
vote, split four ways, was
over 50 percent of the total.
Opposition protests over
government electoral fraud
Ydigoras appears assured
of 'a majority in the new Con-
gress when it convenes for a two-
year term in March--an advan-
tage he lacked during his first
two years in the presidency.
The major rightist opposition
party, the Nationalist Demo-
cratic Movement (MDN), suffered
serious and perhaps irreparable
losses in the voting. Its 23
seats in the present congress
may be reduced to as few as
seven in the new legislature.
The MDN, remnant of the
political machine of the late
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President Castillo Armas, had
its chances of a comeback 'now
have become very slim. iidigo-
ras, by a series of maneuvers
and bribes to MDN officials
shortly before election day,
caused the party to split into
mutually hostile factions and
again demonstrated his skill as
a political manipulator. At
the same time, the failure of
leftist parties to sweep the
elections has eliminated the
rightists' main issue against
the President.
Leftists are still strong
among the Guatemalan voters,
but Ydigoras' efforts to weaken
the large Revolutionary party
by fostering rival leftist splin-
ter parties, have evidently had
some success. Last July the PR
received 84 percent of the total
leftist vote in the Guatemala
City municipal election. On 6
December, with the leftists
split four ways, the PR was
supported by only 64 percent of
these voters. The Communist-
front Party of Revolutionary
Unification won the bulk of the
votes lost by the anti-Communist
PR.
Ydigoras' denunciation on 5
December to the Council of the
Organization of American States
of an alleged Communist-Cuban
plot against his regime was prob- 25X1
ably merely a pre-election gam-
bit designed to influence the
voting in his favor.
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COMMUNIST CHINA'S RELATIONS WITH THE NON-COMMUNIST WORLD
In contrast to Moscow's
peace initiatives, Peiping has
tended toward crude displays
of strength in its relations
with free world countries. The
Chinese leaders probably be-
lieve that the Kremlin's more
moderate approach, if pursued
by the weaker Peiping regime,
would encourage rather than
abate US opposition to Chinese
Communist aspirations in the
Far East, e.g., the "liberation"
of Taiwan. In addition, the
Chinese value a "struggle" at-
mosphere as essential to the
development of their economy
to the levels of the more in-
dustrialized countries. "Face
to face with the American ag-
gressor," as Peiping puts it,
"the Chinese people are forced
to intensify their work and
build economically backward
China into an advanced, indus-
trialized, and socialist pow-
The preference of the
Chinese for hard taCtlCs
is reinforced by the knowledge
that their conciliatory ap-
proach in the years immediately
following the 1955 Bandung con-
ference did not particularly
succeed in enlarging their in-
fluence in Asia.
On the contrary, they see
a "rightist" trend in the non-
Communist countries of Asia,
following the rise to power of
military leaders. Peiping be-
lieves its efforts should be
directed toward projecting the
image of a strong, assertive
power that is still receptive
to "peaceful" solutions but is
ready to back up its claims by
diplomatic, economic, or mil-
itary pressures.
The inclination to tougher
tactics is illustrated in re-
cent dealings with Djakarta.
During his trip to Peiping last
October, Indonesia's Foreign
Minister Subandrio found Pre-
mier Chou En-lai--who waved a
threatening finger at him--a
"changed man" from the Chou of
1955. Subandrio was awakened
in the middle of the night for
the only interview granted him
by Mao Tse-tung and was treated
like a"schoolboy" by the Chinese
leader. Mao made clear Peiping's
displeasure over the discrimina-
tory legislation against Over-
seas Chinese in Indonesia.
It is improbable that Pei-
ping misjudged the resentment
its tactics engendered, but
Indonesian good will in this
case was deemed clearly subordi-
nate to the preservation of Com-
munist China's repute as a pow-
er capable of effective inter-
cession on behalf of its nation-
als abroad.
Policy Toward the US
The Chinese leaders are at
particular pains to maintain
the appearance of confident
strength in their policy toward
the United States. They are
vehement in their opposition to
any "two Chinas" solution for
Taiwan and publicly stress their
"right" and determination to use
"whatever means necessary" to
seize the offshore islands and
Taiwan. After backing down
from preparations to take the
offshore islands in 1958, the
Chinese have continued inter-
mittent shelling in order to
demonstrate that they retain
the military initiative.
China's hesitancy to en-
gage the United States militar-
ily at this time is evident in
Laos. Peiping's public role
has been largely restricted to
propaganda charges of illegal
US activities in Laos and to
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representations designed to
convince India, Britain, and
France of the need to reactivate
the International Control Com-
mission there.
The Chinese leaders justi-
fy their hostility to the United
States in terms at variance
with Khrushchev's recent state-
ments on the possibility of
avoiding war. An article in
the 5 June issue of World
Knowledge--Peiping's journal
on current international af-
fairs--states that "imperial-
ism remains imperialism for-
ever" and that'-"as long as
imperialism exists, the people
of the world cannot avoid the
threat of war." The line is
not an appeal for immediate
war with the United States;
it is an attempt to support
the Chinese view that world
opinion must be turned full
blast against the United States,
and that tension and threats to
use force are necessary for
Peiping's effort to reduce US
influence in the Far East.
More recently, politburo
member Peng Chen stated that
although the United States still
refuses to give up the "policy
of war and aggression," people
of the world "render it more
difficult for the United States
to start a war." This appears
to be an effort to bring the
Chinese line somewhat closer to
Moscow's on the concept that
war is not inevitable, while
still expressing Peiping's res-
ervations about American sin-
cerity.
Border Issues
The Chinese attitude on
border issues is strongly con-
ditioned by the need to oppose
the legality of claims which
are heritages of "British im-
perialism." To mollify New
Delhi and Rangoon, Peiping has
resorted to the expedient of
professing a willingness to
negotiate but has in fact stalled
on a settlement of frontier
claims.
When the Tibetan revolt
broke out in 1959, Peiping moved
to seal off Tibet's borders. In
attempting this along a vast un-
demarcated border, clashes with
Indian patrols moving up to the
frontier occurred. The harden-
ing of New Delhi's attitude in
the wake of the clashes in-
creased Peiping's apprehension
that Nehru was "drifting into
the Western camp" and, together
with resentment at New Delhi's
sympathy for Tibet and at the
asylum granted the Dalai Lama,
contributed to the tougher Chi-
nese political policy toward
India.
Peiping has indicated will-
ingness to accept a temporary
solution pending an over-all set-
tlement, but it has made clear
that such an understanding must
not involve a unilateral Chinese
retreat from the frontier or any
other such imputation of Chinese
weakness.
In the case of Burma, ex-
asperation with Peiping's stall-
ing tactics led Prime Minister
Ne Win last June to send a "take
it or leave it" package proposal
for settling the border dispute.
The Chinese reply was moderate,
characterizing the Burmese pro-
posal as "very near the mark"
but something which Peiping
could not accept or reject as
a whole. Peiping urged the Bur-
mese to be "patient" and to
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"negotiate further." The Chi-
nese leaders are unlikely to
agree to a settlement with the
present government in Rangoon
which might be interpreted as
a "victory" for anti-Communist
Ne Win.
Overseas Chinese
The growth of Communist
China as a great power is a
concept carefully cultivated
by Peiping among Chinese out-
side the country. The Chinese
Communist leaders view the
great-power image as a major
political asset in their com-
petition with Nationalist China
for the loyalty of "overseas
brothers" who look at times to the
intercession of a strong Chi-
nese government to protect them
against discrimination by local
authorities.
Despite the high value it
places on Indonesian neutralism,
Peiping considers its standing
in the eyes of the Overseas
Chinese so vital that it is try-
ing to coerce Djakarta to mod-
if y its ban on alien merchants
in rural areas. The Chinese
Communist Embassy in Djakarta
referred to resettlement areas
for Chinese merchants as "con-
centration camps," and Premier
Chou En-lai threatened Indonesia
with economic sanctions. Pei-
ping seems to be seeking an out-
come that at the very least will
make it clear to Overseas Chi-
nese that their lot would have
been worse without Chinese Com-
munist intercession.
Peiping's approach to the
Middle Eastern and African coun-
tries is conciliatory on the
whole, although even here Chi-
na's espousal of Communist
viewpoints has occasionally
stepped on the toes of Nasir
and other nationalists. Chi-
nese propaganda stresses that
the countries of this area, like
China, have "thrown off the im-
perialist yoke," and it implies
that the experience of underdevel-
oped China is particularly rel-
evant to their conditions.
Peiping probably calculates
it has a fair chance of impress-
ing the Middle East and Africa
with China's economic and social
transformation and that it may
thereby achieve considerable in-
fluence in the area. While en-
couraging nationalist movements,
the Chinese seem eager at the
same time to promote Communist
capabilities to take over the
"bourgeois" revolutions, and they
are giving support to local Com-
munists.
With very limited capabil-
ities, the Chinese have chosen
to devote their main aid effort
to small, primitive Yemen, which
has had little contact with
Western technology, and where
the Chinese program will have
the maximum impact. Looking to
the future, the Chinese may re-
gard their aid program there as
a pilot project for similar ac-
tivity in newly independent
countries of Africa where gov-
ernments are favorably disposed
toward Peiping.
China's public support of
the Algerian rebels contrasts
with Moscow's more circumspect
position. Peiping, which has
no diplomatic relations with
France, has formally recognized
the Algerian provisional govern-
ment, whereas the Soviet Union
has not. Following Khrushchev's
31 October speech to the Supreme
Soviet in which he hinted at sup-
porting De Gaulle's Algerian pro-
posal, however, Peiping has
seemed hesitant to contradict
flatly the Soviet line.
Western Europe
The failure of Western
European powers, including those
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which have formally recognized
Communist China, to support
Peiping on international is-
sues has apparently persuaded
the Chinese that Europe does
not offer particularly fer-
tile ground for their polit-
ical activity.
The Chinese leaders ap-
pear to realize that diplomat-
ic recognition by West Euro-
pean powers such as France and
Italy is not an immediate
prospect, and this realiza-
tion was probably a factor in
Peiping's decision to offend
the French and recognize the
Algerian rebels. The almost
complete isolation of the
British and Dutch embassies
in Peiping reflects the bit-
terness of the Chinese lead-
ers, who have referred to the
China policies of both govern-
ments as "two-faced."
Latin America
The Chinese Communists
draw a parallel between Latin
American unrest and China's
emergence from "foreign dom-
ination." There is a note of
optimism in Chinese propaganda
on the "mounting struggle a-
gainst US imperialism," de-
spite the Western orientation
of most governments in Latin
America and the fact that no
government there has accorded
Peiping formal recognition.
As steppingstones to full
diplomatic relations, Pei-
ping has been pressing for
governmental and nongovern-
mental cultural and trade ex-
changes.
The Chinese leaders seem
hopeful that a loose grouping
of anti-US states will evolve
around Cuba, and they there-
fore have made that island
the focus for their ef-
forts to increase Commu-
nist China's influence in
the area.
Prospects
The Chinese are probably
under pressure from Moscow to
moderate tactics which have im-
paired bloc. prestige. Moreover,
the Indian Communists have told
them that the Sino-Indian bor-
der dispute has damaged the in-
ternal position of the Indian
party. Peiping's tough tactics
in Indonesia are likewise em-
barrassing the Indonesian Commu-
nists. The Chinese leaders are
willing to take steps to appear
more "reasonable" in'these two
disputes, but the need'to avoid
at all costs any show of weak-
ness will continue to limit
Peiping in the concessions it
can offer.
The Chinese probably do not
intend soon to alter the pres-
ent course of their policy to-
ward strongly pro-Western gov-
ernments. The necessity of
meeting American hostility to
Peiping with "tough talk"
rather than any display of
"weakness" will continue to be
a cardinal principle of the Chi-
nese leaders. The "imperialist
aggressor" theme will also con-
tinue to be used to spur domes-
tic production.
The Chinese, however, are
not altogether unresponsive to
Soviet wishes and want to min-
imize public displays of differ-
ences. Peiping is therefore
likely to give lip service at
least to the possibility of a
"thaw" in international rela-
tions. On 6 November the Chi-
nese stated that they would
"work for the complete realiza-
tion" of Soviet peace moves and
that they "need" peace to build
up China's economy. This mod-
erate tone does not mean an end
to the attacks on American ac-
tivities in the Far East, how-
ever, or any alteration of such
basic policy positions as the
necessity and inevitability of
Taiwan's "liberation."
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France's ability to main-
tain strong ties with its over-
seas areas, particularly Algeria,
will depend to a large extent
on the scope of the French eco-
nomic and social aid program.
At his press conference on 10
November, President de Gaulle
recognized the aspirations of
the underdeveloped countries
and underscored the responsi-
bility of the highly industri-
alized nations to help them.
Reproving those who fail to see
the change taking place in such
regions,as well as those who
think continued association with
underdeveloped areas is too ex-
pensive, De Gaulle offered "to
provide as much aid as France
can to those people who want
our help."
De Gaulle's broad promise
of aid is bound to generate ad-
ditional requirements for French
capital expenditures, especially
in Algeria, where economic as-
sistance needs are already out-
stripping funds available under
the Constantine Plan. Finance
Minister Pinay, charged with
holding down the budget deficit
FRENCH AFRICA
[J Department
Autonomous Republic
(French Community)
Overseas territory
Q Trust territory
and maintaining,France's newly
won economic and financial sta-
bility, cannot hope to satisfy
these additional demands while
continuing such expensive pro-
grams as the creation of an in-
dependent nuclear striking force
and providing some wage raises
in the increasingly restless
public sector. Major French ef-
forts to secure international
sources of capital to fill the
gap can be expected.
M
(Ma
Algeria will
probably furnish the
severest test of the
French program. De
Gaulle set the goals
in a speech at Con-
stantine in October
1958, when he com-
mitted France over
a five-year period
to create 400,000
new jobs, distribute
620,000 acres of land
to Moslem farmers,
equalize Algerian and
metropolitan wage
levels, and provide
housing for one mil-
lion people. He also
envisaged schooling
for two thirds of
school-age Algerian
children within five
years and for all chil-
dren within eight years.
During the first
year of the plan, ac-
cording to Delegate
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General for Algeria Paul Delou-
vrier, school attendance was
upped by 100,000 to cover a
quarter of the school-age pop-
ulation. It is estimated that,
by the end of 1959, 20,000 ur-
ban dwellings and 160 ,iew vil-
lages will have been completed
and 2,500 families will have
participated in land redistri-
bution. The Algerian wage
level has risen, largely be-
cause of the increasing number
of workers employed in the oil
and natural-gas industries.
Present Capital Sources
To finance the Algerian
program, the 1959 French budget
included $200,000,000 in di-
rect grants, to be increased
gradually to approximately
$400,000,000 by 1963. Largely
to finance specific projects,
the government has provided
another source of capital in
the form of loans from public
financial institutions and
privately subscribed bond is-
sues.
It is becoming increas-
ingly clear, however, that gov-
ernment financing is inadequate
and that private investment,
originally counted on to fill
the gap between program costs
and public expenditures, has
not responded as much as had
been hoped. Except to develop
oil, private French capital
has been reluctant to move to
an area so remote from markets,
with few readily accessible
raw materials and little skilled
labor. The uncertain political
climate and the requirement
that Algerian industry be French
controlled have discouraged
foreign private capital.
Moreover, the Finance Min-
istry has interpreted very cau-
tiously the legislation to en-
courage capital movement through
large-scale government aid.
For example, its inability to
agree with private steel com-
panies on the amount of gov-
ernment subsidy needed to cover
expected operating deficits at
the proposed steel-producing
complex near Bone has meant
delay 'and_:possible cancellation
of part of the project.
The political need of con-
vincing the Algerian Moslems
that their best future lies in
association with France seems
likely to dictate increased gov-
ernment aid to Algeria over the
remaining four years of the Con-
stantine Plan and stepped-up
government pressures and incen-
tives to encourage the movement
of private capital. An end to
the rebellion might enlarge
available resources by freeing
for economic and social projects
part of the funds now devoted to
military operations.
Even full achievement of
the Constantine Plan, however,
is unlikely to result in more
than limited improvement in the
over-all Algerian economic posi-
tion as it appears likely to de-
velop over the next few years.
The rapid rate of population in-
crease is certain to outstrip
plans for new housing and new
jobs and to complicate the school
situation. Large-scale land re-
distribution will probably meet
resistance from French landown-
ers., 'Raising.wages would weaken
one of the big incentives for
private industry to move to Al-
geria.
French Community Program
Economic and social aid pro-
grams in the French Community
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states of Africa have lower
priorities and more moderate
budgets than those devoted to
Algeria. The problem of the
gap between the costs of polit-
ically desirable projects and
available capital is the same,
however. The amount of eco-
nomic aid France can provide
these areas is likely to be a
major factor in their willing-
ness to maintain some degree of
association with France. The
Mali Federation, for example,
has ahknowledged that it seeks
independence within the French
Community in order to keep
getting French economic aid.
From 1946 to 1958 France
spent approximately $2 billion
in economic aid within the
French Union. Minister of Eco-
nomic Cooperation Robert Le-
court envisages 1960 grants
totaling $200,000,000 for
personnel, technical aid, de-
velopment projects, and in-
vestments.
New oCa.pital
Paris has expressed willing-
ness to use part of the antici-
pated income from Saharan oil
to finance its aid programs. To
date this has largely been lim-
ited to higher wages for Al-
gerians working in the oil in-
dustry. As France becomes a
net exporter of oil, however,
Paris may find it possible to
channel an' increasing part of
these new revenues into an ex-
panded Algerian aid program.
The Common Organization of
Saharan Regions (OCRS)--headed
by Deputy Premier Jacques Sous-
telle, whose jurisdiction exa
tends into the Saharan areas of
the neighboring Community states
of Chad, Niger, Mauritania, and
Soudan--may serve as an instru-
ment for distributing Saharan
oil revenues and administering
the aid programs. The OCRS
has already entered into finan-
cial agreements with these Sa-
haran states.
The European Economic Commu-
nity (EEC) may become an im-
portant new source of capital.
The EEC Development Fund,planned
to finance economic and social
aid projects in overseas terri-
tories associated with EEC mem-
bers, has scheduled $581,000,000
to be spent from 1958 to 1962.
Although France will contribute
only $200,000,000 of that total,
$511,000,000 is earmarked for
areas linked to France.
Although French reluctance
to permit the Development Fund
to deal directly with the Com-
munity states has delayed fund
planning and held up expendi-
ture of most of the amount pro-
gramed for 1958, recently re-
vised Development Fund proce-
dures and a growing French will-
ingness to tap this source of
capital will probably lead to
its increasing use. The EEC
Commission has already approved
such diverse projects as im-
proved railways and roads, new
hospitals and schools, and im-
proved drinking-water sour.-des-
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in almost every state of the
French Community and in the
French-administered trust terri-
tories of Togo and Cameroun. Re-
cently France also reversed its
stand and decided to ask for
EEC financing for social proj-
ects- in Algeria.
De Gaulle's often reiter-
ated position that aid to under-
developed nations offers an im-
portant area for fruitful East-
West cooperation, while cone-
ceived partially as a political
gambit designed to embarrass the
Soviet Union with the Africans,
may also presage a major French
effort to have international
capital channeled into the Com-
munity through French economic
and social aid programs. Dis-
cussion of such international
cooperation, whether on an East-
West basis, or only using West-
ern and primarily American capi-
tal, may play an important part 25X1
in the scheduled Western meetings
pre ceding: the East-West summit
conference.
Prime Minister Fidel Castro
frequently stated objective is
the rapid imposition of drastic
social and economic reforms so
as to improve the lot of Cuba's
state'rdOntrols over the economy.
In attempting to build an au-
thoritatian political machine
based on mass support, Castro
is turning more and more to Com-
munist-oriented advisers, and
Communists are benefiting from
the demagogic tirades against
the rich and against the United
States that Castro uses to mo-
bilize his mass following.
lgWe?rt income groups and, by a
more efficient organization of
production, to produce more
wealth and a greater degree of
economic self-sufficiency. He
uses these objectives to justi-
fy the establishment of tight
The Popular Socialist (Com-
munist) party (PSP) of Cuba,
which has some 17,000 members
including its youth section,
has made steady gains since
Castro came to power last Jan-
uary. The party has benefited
directly from the actions of
such highly placed sympathizers
as armed forces chief Raul Cas-
tro, economic and foreign policy
adviser "Che" Guevara, and a-
grarian reform chief Antonio
Nunez Jimenez, all Of whom have
been instrumental 'in-
secur-ing important.! government po-
sitions-for knowd. Commu-
nists.
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10 December 1959
The armed forces and the
agrarian reform machinery have
been penetrated by Communists
whose potential for infiltrat-
ing the economic organizations
of the state was greatly en-
hanced by the appointment on
26 November of "Che" Guevara
to head the National Bank. Os-
mani Cienfuegos, named minister
of public works the same day,
is the first probable Communist
to secure a post in the cabi-
net
In contrast to Communist
policy in Guatemala during the
Arbenz regime, when an attempt
was made rapidly to build a
mass party, the PSP in Cuba ap-
pears to be concentrating on
quality rather than quantity.
The slow recruitment and empha-
sis on indoctrination suggest
considerable care in the selec-
tion of new members, particular-
ly in view of the extremely
favorable conditions existing
for the party's growth.
Cuban Communists appear to
realize that the freedom they
now enjoy is still dependent on
the toleration of Fidel Castro
and that overstepping the
bounds would cause Castro to
react against them. Only in
organized labor have the Commu-
nists gone to the extent of an-
tagonizing pro-Castro elements in
an c e~ ;f ,gbi~;4O:.. Oxtsfld ' ,:tlie+3a ?, ;,,
influence.
. Castro has publicly de-
clared that he will never per-
mit the revolution to be stolen
from him or from his 26 of July
Movement. What the Communists
evidently hope to achieve in the
near future is acceptance into
the government with control over
economic sources of power and
such potent groups as the armed
forces and organized labor.
Their pose as the stanchest de-
fenders of the revolution tends
to further these objectives.
Formal seizure of power is
probably not an immediate Com-
munist objective. It is already
evident that the present regime,
partially because it is nominal-
ly non-Communist, may be serving
world Communist objectives as
effectively as would an outright
Communist government--through
its bitter anti-US propaganda
throughout Latin America, its
disruption of private US invest-
ments, and the implicit threat
to US security interests in the
Caribbean area.
On the other hand, a grow-
ing number of observers, includ-
ing former Costa Rican President
Jose Figueres, maintain that the
real Communist objective in Cuba
is to create a situation that
would force the United States to
intervene militarily. Such a
"Hungary in reverse" would be a
potent propaganda weapon for Moscow.
Although Castro is fast
losing the support of the middle
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class, which is larger and
more influential in Cuba than
in most Latin American coun-
tries, several important fac-
tors remain strongly in his
favor. The bulk of the Cuban
people, especially those in
the lowest economic strata,
continue their strong emotion-
al attachment to him. The
core of military and admin-
istrative officials is also
dedicated to him. His virtual
monopoly of plans for social
and economic reform, which the
majority of Cubans regard as
desirable and necessary, also
enhances his position. The
opposition, divided and lack-
ing effective leadership, of-
fers the public little in the
way of a desirable alternative
to Castro.
The course of the regime
in the near future is likely
to be further to the left and
increasingly authoritarian.
Castro has firmly stated that
there will be no national elec-
tions until the objectives of
the revolution are realized--
at best many years from now.
He considers the politi-
cal processes associated with
elections as serving merely to
confuse and divide the people
--a view that has not led to
strong opposition to him,since
most Cuba ns, f rom gears ' of ex-
perience with corrupt politi-
cians, take a cynical view of
elections. The gigantic mass
rallies organized periodically
to endorse Castro's policies
enable him to claim overwhelm-
ing popular support. Meanwhile,
he is resorting to many of the
same tactics he violently at-
tacked during his war on the
Batista dictatorship.
The effects of the drastic
and hastily implemented reforms
could eventually be so disrup-
tive as to bring economic col-
lapse. Such a collapse is not
believed imminent, however. The
expanded economic functions
being assumed by the State will
partially compensate for the
drying up of foreign and do-
mestic private investment. The
state, by such measures as a
unified tax program, public
bond issues, and the "patriotic
contributions" from organized
labor and other groups, has
more thoroughly mobilized the
sources of domestic revenue
than had its predecessors. If
necessary, it is likely to re-
sort to more drastic measures,
even to the forced transfer of
private savings to government
bonds.
Agrarian reform has pro-
gressed rapidly and is revolu-
tionizing rural Cuba. The re-
form law passed in May has been
stringently and often arbitrar-
ily interpreted, particularly
against extensive cattle hold-
ings. Apparently these have
been taken over without formal
expropriation or compensation,
and much of the land has already
been turned into cooperatives
under control of the National
Agrarian Reform Institute (INRA),
rather than distributed--as
promised--among the peasants
who work it.
INRA Director Nunez said
on 4 December that 485 produc-
tion cooperatives and 440 con-
,sumer cooperatives, probably
"peoples' stores," were operat-
ling. The effects on food pro-
\\duction have not as yet caused
severe shortages or, at least
in rural areas, substantial
price increases, since the "peo-
~pples' stores" are restricted
/to a 10-percent profit. Food
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CURRENT INTELLIGENCE WEEKLY SUMMARY
prices are rising, however.
The government has levied a
three-cent-per-pound tax on
rice and one-cent-per-pound
tax on potatoes to help pur-
chase agricultural machinery.
Controls on imports have re-
duced supplies of foodstuffs
and other goods.
Sugar, which constitutes
about 80 percent of Cuban ex-
ports, will be affected by
INRA's land expropriations af-
ter next spring's harvest. The
immediate effect is unlikely
to reduce production substan-
tially. There are persistent
rumors that Cuba may abandon
the International Sugar Agree-
ment and seek to increase its
exports above its assigned
quota. If all restrictions
were lifted, Cuba could prob-
ably double its sugar produc-
tion. Some Cubans maintain
that by Concentrating on volume
of sales, Cuba could afford to
consider price a secondary fac-
tor. Others believe it doubt-
ful whether Cuba could find suf-
ficient markets to dispose of
greatly expanded sugar exports,
even at very low prices.
Cuba's foreign exchange re-
serves, already at an abnormal-
ly low level, will go even low-
er before the proceeds of the
coming sugar harvest begin to
arrive in January. On taking
over as National Bank head,
Guevara admitted that a petiod
of austerity may be required.
Guevara, now in a position to
determine the allocation of
foreign exchange, will attempt
to shift the pattern of Cuban
trade away from dependence on
the United States--an objective
he considers a requisite to
real Cuban independence. He is
likely also to promote barter
trade in an attempt to conserve
exchange.
Foreign Affairs
Castro's basic suspicion
of US motives, which he ex-
ploits in his demagogic attempts
to mobilize his mass following,
strongly suggests that Cuban-
US relations are unlikely to
improve appreciably as long as
he remains in power. It is
notable, however, that private
American property has not yet
been subjected to discriminatory
treatment, and agrarian reform
appears thus far to have been
implemented impartially as re-
gards holdings of foreigners.
On the broader internation-
al scene, Cuba served notice at
the opening of the UN General
Assembly last September that it
intends to follow a neutralist
policy in the "cold war." By
abstaining on the UN moratorium
on Chinese representation, Cuba
broke the solid Latin American
front against admitting Commu-
nist China to the UN. There is
evidence that "'Che" Guevara has
become an important influence
in the formulation of this "neu-
tralist" foreign policy since
his return from a three-month
trip last summer to nine Afro-
Asian countries and Yugoslavia.
Cuba's efforts to convince
other Latin American nations
that their interests would be
served by joining the Afro-Asian
countries in a neutralist bloc
have not yet been effective.
Other Latin American govern-
ments--even that of Venezuela,
which materially supported Cas-
tro's war on Batista--are alarmed
at the course of events. Cuba
appears to be seeking its ob-
jectives by appealing over the
heads of the governments to
disaffected elements in several
Latin American countries.
The new Cuban-subsidized
Latin American news agency,
Prensa Latina, has played an
active propaganda role in this
effort, and the several offi-
cially inspired Cuban "revolu-
tionary" missions sent to var-
ious Latin American countries
have had a frankly propagan-
distic purpose. The resolu-
tion passed at the congress of
the Cuban Workers' Confederation
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to found a "revolutionary"
Latin American confederation,
to name labor attaches to Cu-
ban diplomatic missions abroad,
and to send special labor emis-
saries throughout Latin America
to spread the word of the Cu-
ban revolution is a further
indication of a stepped-up ef-
fort to reach disaffected and
extremist labor elements else-
where in the hemisphere.
In some instances the Cu-
bans have resorted to direct
subversion. The revolutionary
incursions into Nicaragua and
the Dominican Republic last
summer were clearly mounted by
Cuban officials. The incur-
sions into Panama and Haiti may
also have been. More subtle
methods were evident in Panama,
where Cuban "newsmen" were
prominent in organizing and
leading the nationalist anti-
US demonstrations against the
Canal Zone on 28 Novem-
ber.
The Sino-Soviet bloc, par-
ticularly Communist China, has
shown considerable interest in
Cuban developments. Moscow
views Castro's advent in Cuba
as a "turning point" marking
"a new stage in the national
liberation struggle in Latin
America" and has welcomed the
opportunities for Soviet exploi-
tation. Several bloc economic
missions have visited Cuba, bid
on projects, and reportedly of- 25X1
fered credits. Cuban economic
delegations have been welcomed
to bloc countries.
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