CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A002600010001-3
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• Document Creation Date: December 20, 2016
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• Publication Date: October 27, 1999
• Content Type: SUMMARY

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CONNUIDENTIAI;
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. ifi
OCI NO. 0023/60
14 January 1960
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
NO'CHANGE IN CLASS. ^
D DECLASSIFIED 25X1
CLASS. CHANGED TO: TS S
NEXT REViEv'J DATE: Awl 1990
AUTH: HR 77 0-2
DATE-: lllC 84? R_:`: "d[ i
State Department review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
OF IMMEDIATE INTEREST
Moscow last week carried
forward its attempts on several
fronts to place the USSR in the
most favorable position in
forthcoming East-West negotia-
tions. In his address to the
Supreme Soviet on 14 January,
Khrushchev continued his ef-
forts to focus on disarmament
as the major international is-
sue and sought to reinforce an
impression of Soviet readiness
to take immediate radical steps
to solve the problem.
The cut of one
third
in
Soviet conventional
forces
pro-
posed by Khrushchev
would,
if
carried out, benefit
the
USSR
in the following ways;
1) Reduce defense expen-
ditures and allow proportion-
ately more of Soviet resources
to be put into economic develop-
ment, which continues to'be one
of Khrushchev's major current
objectives.
2) Adjust the armed forces
to Khrushchev's concepts of
Soviet military needs.
3) Add a substantial num-
ber to the labor force at a
time when labor is in short
supply as a result of the low
birth rate during World War II.
4) Appear to lend substance
to the USSR's disarmament cam-
paign.
Khrushchev announced that
the armed forces would be re-
duced by 1,200,000 men in the
next few years, linking this
reduction to the strong Soviet
position in missile develop-
ment. On missiles, he said,
the USSR was several years
ahead of other countries in the
development and assembly-line
production of intercontinental
ballistic missiles of various
types. Khrushchev stated the
USSR had enough nuclear and
atomic weapons to "literally
obliterate" any oppohent and
the means to deliver them any-
where; he also said still more
formidable weapons are under
development.
Khrushchev repeated his
earlier assessment of a general
trend toward an easing of ten-
sions and expressed hope for a
successful meeting at the sum-
mit. For the first time he
specifically listed a ban on
nuclear tests as a topic for
consideration by the heads of
government and attempted to
maintain pressure for an uncon-
ditional ban on all tests. Re-
ferring to Berlin, Khrushchev
again held out his threat of a
separate peace treaty with its
"ensuing consequences" if ef-
forts to solve the problem
fail, but avoided linking this
move to the outcome of the May
summit meeting.
Moscow has also sought in
the past week to support its
public contention of a gradual
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
improvement in East-West rela-
tions with ostentatious public
gestures to Western leaders.
Khrushchev's cordial personal
messages to Presidents Eisen-
hower and De Gaulle were in-
tended as further evidence of
the USSR's desire for fruitful
negotiations. In delivering
the messages, both Soviet am-
bassadors pointedly referred
to the forthcoming personal
contacts during Khrushchev's
visit to France and the Presi-
dent's visit to the USSR.
Soviet Ambassador Menshikov
also struck an optimistic tone
in his remarks to the press on
opening the negotiations on a
settlement of the lend-lease
question. He stressed that a
"just solution" could serve
to improve not only eco-
nomic relations between the
Soviet Union and the United
States but could also pro-
mote better relations "as a
whole."
The pattern of restraint
in challenging US peaceful in-
tentions and the careful exemp-
tion of the President from
direct criticism were continued
in Soviet comments on the Presi-
dent's State of the Union mes-
sage. As in the reporting of
the President's tour, Moscow
restricted its coverage to fac-
tual reporting while resorting
to foreign press comments for
implied criticism.
The US press was extensive-
ly quoted by the Soviet press
as charging that the American
disarmament policy is "confused
and uncertain," thus casting
some doubts on the President's
declaration of his intention
to achieve world peace. In
an effort to contrast this
alleged uncertainty with Soviet
policy, the President's speech
was reported along with articles
stressing the increasing sup-
port throughout the world for
Khrushchev's disarmament pro-
posals.
Moscow's careful avoidance
of direct criticism of the
President contrasts with Pei-
ping's continuing attacks,
charging him with playing only
"lip service" to peace.
These conciliatory gestures
by Moscow, however, were ac-
companied by moves--highlighted
by the announcement of projected
Soviet rocket tests in the
Pacific--designed to sharpen
the impression in world opinion
that the USSR holds a command-
ing lead in the modern weapons
race. The foreign press was
cited in documenting this im-
pression, with particular em-
phasis on quotations which re-
port the test firings as a
further indication of the grow-
ing disparity between Soviet
and American missile develop-
ment.
Moscow probably feels that
demonstrations of missile prow-
ess--reflected in the advance
announcement and precise de-
lineation of a specific zone
of impact--will serve to
strengthen the Soviet positions
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
in current talks on nuclear
testings, at the disarmament
negotiations in March, and at
the summit.
Soviet propaganda media
have also carefully stressed
the exclusively peaceful and
scientific nature as well as
the legal basis of the program.
Soviet scientists have been
extensively quoted in support
of the contention that the
tests are an integral part of
the USSR's space program, and
US legal authorities were cited
as having found no impediment
to such tests under interna-
tional law.
The emphasis on legality
and repetition of the compari-
son of this action to similar
US and British actions in con-
ducting nuclear tests in the
Pacific suggests that Moscow
is attempting to establish a
legal and political precedent
for future Soviet testing in
this area. The care in issuing
a precise warning well in ad-
vance of the tests and the stress
on the fact that the impact
zone is "thousands of miles
from main sea routes" were prob-
ably intended to bolster the
legal basis of the Soviet move.
While Moscow continued to
avoid officially raising con-
troversial problems concerning
the summit conference
the question o ast German
participation might be raised
at the beginning of the meet-
ing. The continuing preten-
sions of East German leaders
to participation in the summit
discussion on Berlin and Ger-
many were publicly supported in
the communique issued after the
visit of an East German dele-
gation to Outer Mongolia.
While the delegation was in
Communist China, the People's
Daily in an editorial also
characterized the East German
position as "fully justified."
Hints of new Soviet proposals
on Berlin are probably intended
to influence current Western
consultations on joint policy
positions at the summit by con-
veying the impression that Mos-
cow is seriously reconsidering
its position, and adopting a
flexible attitude toward work-
ing out a proposal acceptable
to the West.
In a speech to the West
Berlin assembly on 11 January,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
West German Chancellor Adenauer
laid great emphasis on the need
to preserve Allied rights in
Berlin and warned that a sur-
render on Berlin would lead to
a whole series of capitulations.
He said that the positions
taken by the Western powers
last summer at Geneva "went to
the limit bearable" and declared
that it would be a dangerous
mistake to resume negotiations
at the point on which they
broke off. Segments of the
West German press noted that
although Adenauer and West Ber-
lin Mayor Brandt agree on the
need for preserving the legal
basis for Allied presence in
Berlin, Brandt also emphasizes
that West Berlin's economic
and political ties with West
Germany must also be firmly
maintained.
Soviet delegate Tsarapkin's
tactics at the nuclear test ban
talks, which resumed in Geneva
on 12 January, suggest that he
will try to focus the negotia-
tions on the USSR's proposals
for settling outstanding polit-
ical questions and to avoid pro-
longed discussion of the stale-
mated underground detection
problem on which the Soviet
position is most vulnerable.
In his opening statement,
Tsarapkin carefully avoided any
reference to the failure of the
technical experts to agree on
the most important aspects of
this problem and confined his
remarks to expressing hope
that the talks would move for-
ward rapidly. He recalled the
Soviet "compromise proposal"
of 14 December on inspection-
post staffing, composition of
a control commission, and vot-
ing procedures and contended
that the most "crucial" un-
resolved question before the
conference is the Soviet pro-
posal for an agreed annual
quota of on-site inspections
of suspected nuclear explosions.
Tsarapkin emphasized that the
United States still has not
taken a formal position on
this proposal.
In response to the American
delegate's insistence that the
technical problems of under-
ground detection cannot be ig-
nored, however, Tsarapkin re-
newed earlier charges that the
views of the American scien-
tists were politically motivated.
He alleged that the American
experts had been instructed to
"prove" the impossibility of
building a control system on
the basis of the 1958 experts'
report and to demonstrate that
underground tests could not be
detected, thereby justifying
the exclusion of such tests
from a ban for "military reasons."
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14 January 1960
The Soviet delegate con-
cluded by suggesting that such
futile,discussions and recrimi-
nations be ended and that the
conference proceed with construc-
tive work by discussing the
USSR's proposal of 14 December.
He pointedly called on the Brit-
ish delegate to "live up to his
statement" that Britain would
do everything possible to con-
tribute to the work of the con-
ference.
This remark indicates that
the Soviet Union, in its drive
to increase pressure on the
United States to accept a com-
promise formula, still believes
it can exploit Britain's dis-
position to settle for something
less than the American concept
of adequate safeguards against
undetected nuclear tests.
Moscow appears confident,
moreover, that the United States,
with the ten-nation disarmament
conference and the summit meet-
ing in the offing, will neither
resume nuclear tests nor force
a breakoff of the test-ban talks.
Khrushchev probably still hopes
to obtain agreement, at least
in principle, on the main points
of a test.cessation treaty
which can be referred to the
heads of government for final
negotiation and approval.
(Concurred in by ORR
and OSI) 25X1
Iraq
Under the new law on po-
litical parties which came into
effect last week in Iraq, four
parties have applied for recog-
nition by the Ministry of In-
terior--the socialist National
Democratic party, the United
Democratic party of Kurdistan,
and two other groups, each pro-
fessing to be the "true" Iraqi
Communist party. One group, led
by Abd al-Qadir Ismail al-Bustani
and Zaki Khayri,represents the
"orthodox" Communists. Its
journal, Ittihad al-Shaab, is
the recognized ommunis mouth-
piece. The other group is led
by Daud Sayyigh, publisher of
Al-Mabda, who had been a dis-
senter from the Iraqi party
leadership as far back as 1942.
Sayyigh engineered a party
split in 1947 and carried many
younger idealistic members with
him.
There are rumors that Say-
yigh has Qasim's blessing, and
Sayyigh's application may be a
manuever by Qasim to cause dis-
sension among the Communists in
accordance with his policy of
balancing contending political
factions. Qasim's favoring of
the Sayyigh faction, by grant-
ing its application for legal
status, would fit in well with
his idea that Iraqi Communists
are true Iraqi nationalists. It
would appear more likely, how-
ever, that Qasim, faced with
the choice of deciding which of
the two contending factions to
license, will allow both to
operate.
Taking advantage of Nasir's
mounting troubles in Syria,
Qasim has seized the initiative
in the UAR-Iraqi propaganda war.
Following up his revival last
November of Nuri Said's Fertile
Crescent plan--envisioning the
union of Iraq, Syria, Jordan,
and Palestine--Qasim has publicly
denounced Egyptian domination of
Syria and openly appealed to the
Syrians to break away, saying
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14 January 1960
Iraq "will not stand idly by
in the face of injustices done
the Syrian people."
Accompanying Qasim's at-
tempts to promote himself as
the principal Arab nationalist
leader have been charges that
Egypt and Jordan joined Israel
in annexing parts of Palestine.
Qasim has appropriated about
$1,500,000 for the establish-
ment of a "Palestine govern-
ment," and is calling for in-
corporation of the Gaza Strip
(now under Egyptian administra-
tion) and the Palestinian sec-
tion of Jordan, plus Israel,
into a Palestine republic.
Qasim has intimated that he
will support the notorious for-
mer Mufti of Jerusalem, Haj
Amin al-Husayni,in this effort.
Baghdad's propaganda is
also focusing on the Arabs in
southwestern Iran, charging
oppressive Iranian rule and
making demands for territorial
changes. In the Persian Gulf
area, the Omani rebels have
been feted and given propaganda
assistance in competition with
that of Cairo. Qasim is also
loudly supporting the Algerian
rebels. Another facet of Qasim's
propaganda war has been an ap-
peal to the Kurdish minorities
of Syria and Iran to look to
Iraq for realization of their
aspirations for autonomy.
Syrian reaction to the res-
ignation of five Baathist UAR
cabinet ministers has subsided,
with the general feeling one
of relief at the apparent end
of the party's widely resented
influence in Syrian politics.
Nasir's break with the party
involves an element of risk to
the regime, however, including
the UAR's possible loss of
Baathist support throughout the
rest of the Arab world and a
move by Communist elements to
ally themselves with the dissi-
dent Baathists.
The regime has been care-
ful to present its differences
with the Syrian Baathists as
individual disagreements rather
than a split with the Baath as
a whole. Cairo probably is es-
pecially concerned over the
possible effect of Syrian de-
velopments on its relations
with the Iraqi Baathists, who
have hitherto been the UAR's
closest allies against Qasim.
Nasir also promised the Baath-
ist leadership in Beirut last
month to continue UAR subsi-
dization of the party's efforts
in other Arab states. An area-
wide break with the Baathists
could be a setback for his
prestige and influence in the
Arab nationalist movement.
Cotton Boom
Egypt and the Sudan are
experiencing a rather surprising
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14 January 1960
sales boom in long-staple cot-
ton. The steady decline in
long-staple cotton prices
which has characterized the
situation since the Korean war
now has been reversed. In the
important Liverpool market,
long-staple prices continue to
strengthen, with Egyptian cot-
tons leading the advance.
Sudanese cottons are experienc-
ing a similar heavy demand. Al-
though the long-term prospects
for long-staple cottons continue
quite gloomy, some experts feel
that the present demand for fine
yarns will be sustained for at
least the next year.
Despite only negligible
sales to Communist bloc coun-
tries, Cairo probably has dis-
posed of about half of its 1959-
60 long-staple cotton crop
since the marketing season be-
gan on 1 September. The cur-
rent crop is about 2,074,000
bales--up about one percent
from last year. During the
last marketing year (1 Septem-
ber 1958 to 31 August 1959),
the Communist world took about
1,330,000 bales--65 percent of
Egypt's cotton exports. In
this marketing year, however,
the USSR had purchased only 20,-
000 bales by mid-December, and
Egyptian trade sources believe
the bloc will buy substantially
less than half of the current
crop.
Although purchases from
all bloc countries may still
be important, Western demand
for Egyptian cottons paid for
in Western currency will cause
Cairo to prefer to market most
of its cotton in nonbloc coun-
tries.
The Sudan has solved, at
least temporarily, the cotton
crisis which threatened the
economy in 1958 and early 1959
and promised to lead Khartoum
into closer economic relations
with the Communist world. With
substantial surplus long-staple
cotton and a near record 1958-
1959 crop, the country abandoned
its "administered" cotton prices
and returned to the free market
system which prevailed before
1958. Although prices fell
substantially, Khartoum had
sold all of its cotton stocks
by August 1959.
Harvesting of the 1959-60
crop began in December and will
continue through March. This
crop--estimated to be about
625,000 bales--is up 9 percent
from last year and will be the
largest in history. Advance
sales, which began on 17 De-
cember, were very successful,
and all cotton offered for
March-June delivery was sold.
With higher prices, Khartoum
may have the most successful
cotton year ever.
Reflecting the cotton boom--
and hence general economic improve-
ment--the Sudan has decided to
abandon all barter deals and to
rely entirely on the free market
system. The Communist bloc, which25X1
has never been important in the
Sudanese cotton market, will thus
be even less so this year.
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14 January 1960
Aleksey Kirichenko, who un-
til a few months ago was func-
tioning as Khrushchev's second-
in-command in the party secre-
tariat, has been demoted to
the job of party chief in
Rostov Oblast, according to a
Soviet press announcement of
13 January. The assignment
represents a serious reversal
in his political fortunes. He
replaces Nikolay Kiselev,
Rostov Oblast party chief since
1952, who was "transferred to
other work." Kirichenko's
status as a full member of the
party presidium, a post he has
held since July 1955, was not
mentioned. While Kirichenko
has not been reported involved
in policy disputes, in recent
months he no longer seemed to
enjoy Khrushchev's full con-
fidence.
Kirichenko, now 52, was a
Khrushchev protege and asso-
ciate for many years. Khru-
shchev was apparently responsi-
ble for Kirichenko's rapid
rise in top party circles since
1953. In June 1959, however,
Khrushchev told Governor Har-
riman that Kozlov had been
picked as his successor. Since
then Kirichenko has not engaged
in the kind of substantive party
activity which had previously
marked him as one of the four
top Soviet leaders.
Factional infighting in the
highest circles of the party
is most often observed in the
areas of personnel appoint-
ments and policy decisions.
There has been a rash of per-
sonnel changes recently: up-
heavals in the leadership of
several republics, extensive
changes in the secret police
(KGB), shifts in the central
party apparatus, and, more re-
cently, the return of Presidium
member Nikolay Ignatov to full-
time work in the party secre-
tariat after several months in
disfavor. Some of these changes
probably reflected maneuvering
involving Kirichenko.
The decision to reassign
Kirichenko was probably made
last month at a special secret
session of the party central
committee which was held im-
mediately following an open
meeting devoted to agricultural
problems. No announcement has
been made concerning the special
session, but reports from Moscow
indicate that it also considered
the decision to abolish the
Ministry of Internal Affairs 25X1
and the program of the Supreme
Soviet meeting which began on
14 January.
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The USSR Supreme Soviet
has abolished the USSR Ministry
of Internal Affairs (MVD) and
assigned its functions to the
republic internal affairs min-
istries. The demise of the
MVD, long a symbol of police
terror under Stalin and Beria,
will enable Khrushchev to
make extravagant propaganda
claims about the growth of
"socialist democracy" under
his leadership.
The decision to formally
do away with the central MVD
was apparently reached by the
party central committee during
the last week in December, per-
haps at a two-day closed meet-
ing following the plenum on
agriculture.
Elimination of the MVD is
but the final step in Khru-
shchev's deliberate decimation
of the vast police empire built
up by Stalin and Beria. Since
1953, the MVD had been systemat-
ically stripped of its powers,
having lost control of the se-
cret police, the forced labor
complex, various construction
enterprises, and the border
'troops. Nikolay Dudorov, a
party careerist who had headed
the MVD since 1956, had decen-
tralized the ministry's remain-
ing functions and reduced its
personnel to an extent which
suggests that he was assigned
to preside over the final liq-
uidation of the MVD.
Disposition of the central
MVD's responsibilities is not
likely to be a problem. Ad-
ministration of the civil police
(militia) probably will be left
to the republic internal affairs
ministries and local governments
which have shared this function
with the central ministry since
late 1956. Since the border
troops of the MVD were assigned
to the State Security Committee
(KGB) in 1958, it seems probable
that the MVD internal security
troops will also be assigned to
that organization, thus strengthen-
ing the secret police organiza-
tion created by Khrushchev in
1954.
Almost simultaneous with
a step which will be represented
as an expression of confidence
in the maturity and reliability
of the Soviet people, however,
the party central committee
has expressed deep dissatisfac-
tion with the work of its prop-
aganda apparatus in molding
popular attitudes. In a long
resolution, bristling with
criticisms and stipulating im-
provements, the party has de-
manded a sharp reorientation
and expansion of propaganda
functions. The regime, the
resolution suggests, is intent
on innoculating the population
against ideological infection
from expanded East-West contacts
and "peaceful coexistence."
The resolution also ac-
centuates the party's concern
over the failure of the propa-
ganda machine to gear itself
closely to the regime's most
pressing and immediate politi-
cal and economic goals. Con-
demning the abstract or jargon-
ridden content of much of Soviet
propaganda, the resolution
again and again stresses
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CURRENT INTELLIGENCE WEEKLY SUMy
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practical, concrete goals.
"The efficacy of party propa-
ganda shows intself first in
concrete production results,"
it asserts. "There must be
less political blather and
more concrete struggle for an
acceleration of the pace of
Communist construction. Oral
and printed propaganda must
serve the mobilization of the
masses for successful imple-
mentation of the Seven-Year
Plan and the entire program
of the construction of Commu-
nism in the USSR."
In a burst of buying ac-
tivity, the USSR signed con-
tracts for at least $200,000,-
000 worth of complete Western
plants at the end of 1959. The
deals for British, French, West
German, Swedish, and American
equipment were concluded by a
special Soviet purchasing team
which set up headquarters in
London in mid-October and has
just recently returned to Mos-
cow. The sets of equipment
involved had, in many cases,
been the object of negotiations
throughout 1959. The terms of
the deals are not yet known.
The USSR is known to have
purchased in 1959 at least an-
other $100,000,000 worth of
Western plants, some of them
on credit terms guaranteed by
Western European governments.
The purchases of all complete
sets of equipment and plants
are for future delivery and
will be largely reflected in
trade from 1960-63.
The year-end purchases
reflect stepped-up activity
inspired by Soviet policy,
inaugurated by Khrushchev in
1958, to speed economic growth
through purchases of techno-
logically advanced Western
equipment. About one third
of the purchases apparently are
linked to expansion of the
Soviet chemical industry--syn-
thetic rubber and plastics--
while the remainder include
sugar refineries, textile equip-
ment, printing machinery, and
wood-processing plants.
Soviet trade with the en-
tire free world increased from
$2.4 billion to about $3 billion
in 1959, according to Deputy
Premier Mikoyan; trade with West
European industrial countries
apparently accounts for the
largest part of the expansion.
Despite the apparent failure of
Soviet sales in Western Europe
to keep pace with the increased
purchasing activity--a fact
which seems to have led to some
Soviet payment difficulties
recently--the buying activity
suggests that Moscow considers
these difficulties only tempo-
rary. (Pre- 25X1
pared by ORR
New bonus regulations for
the Soviet Union's industrial
managers, supervisors, and
technicians became effective
on 1 January 1960 for most
branches of heavy industry and
state agriculture. They had
been introduced in construc-
tion, transportation, communica-
tion, and other industries on
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
1 October 1959. The regula-
tions, which affect
about three
million .people, replace
a
similar set of national
stand-
ards developed with
many
varia-
tions since 1946.
The
new
rules, an integral
part
of the
over-all wage and salary re-
form to be completed by 1962,
are intended to give managers
and technicians a more direct
personal incentive for re-
ducing production costs.
The most important provi-
sions of the new system call
for bonuses for reducing pro-
duction costs and, in certain
industries, for improving
product quality. All bonuses
for cost reduction are contin-
gent on simultaneous fulfill-
ment of the production plan,
the labor productivity plan,
and the plans for deliveries.
Bonuses previously paid solely
for fulfillment and overful-
fillment of the production
plan are to be discontinued,
except in modified form in
"certain industries where a
growth in production is of ex-
ceptional importance in the de-
velopment of the national econ-
omy."
The new bonus arrangements
are likely to reduce the earn-
ings of many of the highest
paid managerial personnel and
also will result in smaller
earnings differentials among
industries and among individ-
uals within an industry.
In industries where the
wage and salary reform now is
largely complete, basic sala-
ries for most managerial-tech-
nical employees have been
raised considerably, although
some of the highest salaries
have been cut. It appears,
however, that even with these
higher basic salaries, the
managerial personnel in general
will be hard pressed to main-
tain their accustomed earnings
under the new bonus regulation.
In industries not yet under the
new wage and salary system,
managers will be under severe
pressure to keep their incomes
from falling sharply.
Whatever the effect of
these changes on morale, the
substantial narrowing of wage
differentials implicit in the
changes is in line with the re-
gime's policy of "narrowing
the gap between the earnings
of low-paid and high-paid work-
ers." Moscow seems to feel
that it can safely do this with-
out adversely affecting the sup-
ply of managerial-technical
talent, since the rewards to
such persons still are suffi-
ciently high to attract new
recruits, and those already
in the group cannot better
their lot by moving elsewhere
in the economy.
The new system probably will
succeed in making Soviet managers
and supervisors more cost-con-
scious and thereby should also en-
courage a more receptive attitude
toward new production techniques,
one of the objectives emphasized
by the June plenum on automation.
This is in contrast to the old
system,which primarily rewarded
gross output. The improvement of
the production process was resist-
ed if it meant a reduction,however
temporary,in the volume of output.
(Prepared by ORR)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
CHINESE COMMUNIST - SOUTH KOREAN INCIDENTS
The clash on 10 January
between a South Korean patrol
boat and ten armed Chinese
Communist fishing vessels re-
flects Peiping's determination
to resist Korean attempts to
enforce the unilaterally pro-
claimed "Rhee line."
Neither Peiping nor
Tokyo recognizes the
line, which demar-
cates fishing grounds
and extends as far
as 175 nautical miles
from the South Ko-
rean coast. Korean
officials claim that
Chinese fishing boats
are becoming more ac-
tive within the Rhee
line area, and more
incidents can be ex-
pected.
Violations of
the line have result-
ed in frequent inci-
dents between South
Korean coast guard
patrols and Chinese
and Japanese fishing
boats. Seoul's light-
ly armed and poorly
maintained coast
guard, which is not
under the UN Command's
operational control,
is largely used to
enforce the line. Two
encounters with Chi-
nese fishing boats'
Occurred in December,
and in both cases the armed
Chinese vessels forced the Ko-
rean patrol boat to withdraw.
The 10 January encounter
came at night about 50 miles
off the southwest Korean coast,
well within the Rhee line. The
Koreans, who have stepped up
attempts to seize Japanese
fishermen in retaliation for
the repatriation of Koreans in
Japan to North Korea, probably
thought they were in pursuit
of unarmed Japanese boats.
The Korean boat was immobilized
apparently will continue to
disregard the'Rhee line. The
extent of the damage to the Ko-
rean boat suggests that the Chi-
nese junks were heavily armed.
Despite its objections to
Seoul's restrictions on fishing
in the Yellow Sea, Peiping it-
self bans foreign fishing in
a wide band off its own coast.
SECRET
CHINA
NOTES AND COMMENTS Page 4 of 17
and one crew member killed. A
Korean request for US air sup-
port was refused.
Although it is unlikely
the Chinese deliberately pro-
voked the recent incidents, they
Demarcation line fob
fishing operations
according to the 1955
Sino-Japanese apceemaot
Extension of line
16 August 1957
aF 1,
vc _ l
1?1 It a~_
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14 January 1960
In private negotiations in
1955 with Japanese fishing in-
terests, Peiping established a
line some 40 to 70 miles off
the China coast running from
Manchuria to the 29th parallel,
later extending it to the 27th
parallel. The Chinese Commu-
nists have occasionally seized
Japanese boats operating with-
in this proscribed area,
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CURRENT INTELLIGENCE WEEKLY SUliliAR.Y
14 January 1960
The government of Field
Marshal Sarit, after one year
in office, remains firmly en-
trenched and has laid the foun-
dations for favorable political
and economic' development in Thailand.
Sarit's generally able cabinet includes
several competent economic special-
ists who, together with various
advisory committees set up by
the premier, have largely estab-
lished the legal and administrative
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
framework necessary for the
substantial expansion of for-
eign investment in Thailand's
economic development. Con-
servative fiscal management
has led to a stable currency
and comfortable gold and for-
eign exchange reserves.
Premier Sarit has taken
a personal interest in elimi-
nating what he considers ana-
chronistic social ills, such
as opium smoking, prostitution,
and the thousands of pedicabs
which in the past contributed
to serious traffic congestion
in Bangkok. While these so-
cial reforms have clearly
bolstered Sarit's popularity,
their permanence is open to
question, and government ad-
ministrative efficiency has
suffered as the result of
Sarit's personal preoccupa-
tion with social reform.
The Sarit regime's accord"
plishments in the political
realm have not kept pace with
its achievements in other
fields. Almost 15 months have
elapsed since Sarit's October
"revolution," but the country
still lacks the new constitu-
tion he promised at the time.
Meanwhile, political parties
are still suppressed and the
country remains under martial
law, These delays are less
serious in Thailand than they
would be in a more politically
sophisticated country; never-
theless, continued lack of prog-
ress in returning to more nor-
mal forms of political conduct
might lead to increased restive-
ness among civilian elements
of Thailand's small ruling
class.
Internationally, the re-
gime has maintained Thailand's
strongly pro-Western orientation
and has taken tentative steps
toward the formation of a loose
regional grouping of the South-
east Asian states. Thai re-
lations with Burma have con-
tinued to improve, and Sarit
and his colleagues have taken
a concerned but realistic view
of developments in Laos. Re-
lations with South Vietnam have
been clouded by Thailand's de-
termined effort to resolve the
problem of the Vietnamese refu-
gees in the northeast, largely
through their gradual repatri-
ation to North Vietnam. Re-
lations with Cambodia continue
to be cool, with both countries
from time to time engaging in
acrimonious polemical exchanges.
Rumors of discontent with-
in the ruling military clique
continue to crop up periodical-
ly, but as long as Sarit's
health holds up, he will prob-
ably be able to keep his fol-
lowers in line through the judi-
cious dispensation of funds
and other favors, an activity
at which he is unusually adept.
Sarit's illness--cirrhosis of
the liver--appears for the mo-
ment to have been arrested;
however, Sarit maintains a
hard working pace and could
have a serious relapse at any
time.
PREPARATIONS FOR CEYLON'S NATIONAL ELECTION CAMPAIGN COMPLETED
Preparations for national
elections in Ceylon have pro-
ceeded smoothly despite the
abrupt dissolutionof Parlia-
ment in December and the imme-
diate scheduling of elections
for 19 March, one year before
they were due. Nominations were
filed and the official roster
of contesting parties completed
on 4 January.
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14 January 1960
The island's voters face
a complex pre-election scene,
however, as 899 candidates have
been nominated for 151 elected
parliamentary seats on behalf
of 18 recognized parties and
four others which will contest
unofficially. Only six of these
parties are well established.
Moderate elements are repre-
sented by the United National
party (UNP) and the Sri Lanka
Freedom party (SLFP), the left-
ists by the Trotskyite Lanka
Sama Samaj (LSSP), the Commu-
nist party (CCP), and the re-
constituted Mahajana Eksath
Peramuna (MEP). The Federal
party represents the Tamil-
speaking minority.
The three main competitors
for the moderate vote are the
UNP, the SLFP, and Prime Minis-
ter Dahanayake's new Ceylon
Democratic party. The UNP's
127 candidates make up the
largest group nominated by a
single party. UNP-backed in-
dependents probably are con-
testing in most of the 24 other
constituencies, although in
some cases the party probably
will not oppose certain SLFP
or Democratic party candidates.
At this time neither of the
latter two parties seems to
constitute by itself a seri-
ous threat to the UNP, although
the extent of these parties'
popular backing is uncertain.
Dahanayake, however, has
managed to enlist enough sup-
port since forming his party
in early December to nominate
99 candidates, and some SLFP
members may have retained con-
siderable popularity in their
own constituencies despite
their party's loss of country-
wide support. The UNP there-
fore will have to wage an all-
out campaign to prevent other
moderate candidates from split-
ting the moderate vote and
destroying the UNP's chance of
winning a majority.
None of the three leftist
parties appears able independ-
ently to win either a majority
or a plurality. The LSSP, the
leading opposition party in the
former government, does not
seem likely to increase its
parliamentary representation
substantially over the 14 per-
cent it won in 1956. The par-
ty will have to resolve the
growing conflict between its
radical and relatively moderate
factions before it can campaign
successfully, and it will have
to modify its unpopular language
policy before it can count on
extensive popular support. The
MEP may capture a good share
of the leftist vote, although
it is not likely to establish
a broad-based organization with-
in the next two months.
so.
A united front would be
the most successful leftist
strategy against the moderates,
but the policy and personality
differences which have pre-
vented such an alliance in the
past apparently continue to do
LONDON CONFERENCE ON CYPRUS
British, Turkish, Greek,
and Cypriot leaders meeting in
London on 16-18 January will
seek agreement on the still-
unresolved issue of the size
of British bases on Cyprus in
order to permit independence
to go into effect on 19 Feb-
ruary as scheduled. To enable
legislation to be passed in
time, a bill should be ready
by the time the British Parlia-
ment reconvenes on 26 January.
All major constitutional issues
have already been resolved.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
Both the Turks and the
Turkish Cypriots support the
latest British offer, and Greece
also considers it reasonable.
President-elect Makarios has
insisted on further concessions,
however, and is under heavy
pressure from the Communist-
led AKEL, which opposes any
bases whatever, and from the
Grivas forces, who favor
greater limitations on area
and rights than Britain is
prepared to accept.
Under the terms of the
agreements of last February,
Britain retains sovereignty
over two military bases--
Dhekelia and Akrotiri--plus
other rights, including full
control over other small mili-
tary sites (primarily radar
and communications facilities),
use of connecting roads,
and the use of areas for troop
training. London has success-
ively reduced its proposals
for the base enclaves to an
area of about 113 square miles,
including less than 1,000
Cypriots.
on Cyprus arrived.
elections 25X1
for the House of Representatives
and the Greek and Turkish com-
munal chambers are still sched-
uled for 7 and 10 February
respectively. On 12 January
the last British battalion not
scheduled to remain in the base
area after independence left
Cyprus, and advance parties of
the Greek and Turkish military
contingents to be stationed
IMPLICATIONS OF PINAY'S OUSTER FROM FRENCH CABINET
French Finance Minister
Pinay's ouster over his clash
with Premier Debre will probably
hasten the adoption of a more
expansionist economic policy
and be accompanied by increas-
ing criticism of De Gaulle's
efforts to build up national
prestige at the expense of the
Western alliance and by dissat-
isfaction with the mounting cost
of such efforts. Pinay's identi-
fication in the public mind
with France's newly won eco-
nomic stability increases the
risk of a loss of investor
confidence if his "hard-money"
policy is relaxed and additional
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14 January 1960
government involvement in eco-
nomic planning is permitted.
In any event, increasingly
vocal opposition to De Gaulle's
over-all program can be expect-
ed, both from Pinay's Independ-
ent party and other groups.
Premier Debrd, seconded
by Minister of Industry Jean-
neney and others representing
the "Gaullist" Union for the
New Republic (UNR) in the cabi-
net, has been subjected to
growing pressures to loosen
the Pinay economic restrictions
on consumption and expansion
and to push programs stressing
social benefits. The UNR group
favors a selective rise in
wages and farm prices and is
working on plans for creating
a new national bank to aid in
the reconversion of depressed
areas and industries, for or-
ganizing a government-con-
trolled company for marketing
Saharan oil, and for implement-
ing decrees embodying De
Gaulle's proposals to give la-
bor a voice in corporate manage-
ment.
Even though the publicized
aspects of the Pinay-Debrd
quarrel deal almost exclusively
with economic problems, politi-
cal considerations are probably
even more important. Pinay had
been viewed by the UNR group
as a holdover from the dis-
credited Fourth Republic, an
opponent of accelerated eco-
nomic expansion, and a threat
to the UNR's attempts to build
a new political base for the
present regime.
On the other hand, Pinay
has an established political
following based on his promi-
nence as a leader under the
Fourth Republic and is still
nominal head of the Independent
party, which in terms of par-
liamentary representation is
the most important group sur-
viving from the Fourth Republic
era. The Independents have
been showing increasing signs
of serious disagreement with
De Gaulle's "liberal" offer of
self-determination to Algeria,
his highhanded treatment of
Parliament, and his apparent
downgrading of NATO and the
Western alliance.
Pinay has been reported as
having presidential ambitions
and now may seek to further these
by exploiting the opposition of
certain pro-NATO elements to
some aspects of De Gaulle's
policies. In any event, he has
probably increased his political
stature by leaving the govern-
ment when his economic policies
seem At the height of their suc-
cess.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
AUSTRIA'S TIES WITH AN INTEGRATED EUROPE
Austrian Vice Chancellor
Pettermann's increasingly vio-
lent attacks on the European
Economic Community (EEC or Com-
mon Market) reflect the growing
confusion in Vienna
over Austria's role
in an integrated Eu-
rope. Contrary to
up with the EEC. Protection of
those interests is complicated,
however, by domestic politics,
by the political struggle be-
tween the EEC and EFTA, and by
PERCENT OF COUNTRY'S IMPORTS
FROM EFTA FROM EEC
PERCENT OF COUNTRY'S EXPORTS
TO EFTA TO EEC
tho Snrinlict 1nnd_
spite the government's
BRITAIN
9.7
39
14.1
10.1
4
13.1
decision to
si an on 2
DENMARK
.6
36.1
0. 3
31.7
creating the
Euro-
PORTUGAL
21.6
39.2
1
17.5
24.7
pean Free Trade As-
SWEDEN
24.5
41.8
34.9
31.0
sociation (EFTA or
SWITZERLAND
10.8
58.8
15.5
39.2
Outer Seven), most
Austrians know that
the country's inter-
ests are closely tied
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14 January 1960
Vienna's fear of offending the
USSR.
These political consider-
ations--rather than economic
interests--largely account for
the decision, after lengthy de-
bate, to join the EFTA. Of all
the EFTA countries, Austria is
economically most dependent on
the EEC: West Germany and Italy
are its two best customers,
and the Common Market area
accounts for more than half of
its total trade. By contrast,
among the EFTA, only Britain's
trade is less oriented toward
its EFTA partners than Austria's,
and geographical remoteness and
other factors will be major
obstacles to Austrian exploita-
tion of the markets the EFTA
may open up.
Business elements in Chan-
cellor Raab's People's party,
as well as some trade union
leaders, have tended to favor
Austria's direct association
with the EEC, but Socialist
leaders in particular have
argued against such a course.
Foreign Minister Kreisky has
contended at various times
that tiny Austria cannot ef-
fectively bargain with the"pow-
erful" EEC and that EEC member-
ship is ruled out by Austria's
military neutrality law, by
the State Treaty restrictions
against an "Anschluss" with
Germany, and by Vienna's bi-
lateral commitment in the Mos-
cow Memorandum of 1955 to fol-
low a neutral policy modeled
after Switzerland's.
Many observers regard this
interpretation of Vienna's
neutrality commitments as dan-
gerously restrictive on Austria's
freedom of action. If the
hoped-for merger of the EEC and
the EFTA fails to materialize,
as seems increasingly likely,
the economic facts will prob-
ably compel the government to
consider whit bilateral arrange-
ments it can make with the EEC.
The influential Austrian League
of Industrialists is reported
recently to have sounded out
EEC President Halistein along
these lines.
Such a solution, however,
has probably been made doubly
difficult by the Socialists,
who have in effect given Moscow
useful arguments for actively
opposing it. Thus far, the
USSR is not known to have ob-
jected to Austrian participa-
tion in the EFTA, but Soviet
officials have made it clear
that direct Austrian associa-
tion with the EEC would be con-
sidered "unneutral."
The Danish political sit-
uation is uncertain in view of
the serious illness of H. C.
Hansen, prime minister of the
coalition since May 1957. Han-
sen, who commands widespread
respect among other parties as
well as among his own Social
Democrats, has been one of the
main forces preventing a fur-
ther curtailment of Denmark's
defense effort, already the
lowest among the NATO coun-
tries other than Iceland.
Hansen's retirement would
be a seriously unsettling event
in the normally placid Danish
political scene. The coalition
government would not be affected
immediately, since none of the
parties--the Social Democrats,
the Radical Liberals, and the
Justice party--is at present
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
anxious to have early new elec-
tions. There probably would
be, however, increased disagree-
ment among the divergent coali-
tion partners, a growth of
factionalism within the Social
Democratic party, and an even
DANISH PARLIAMENT
MAY 1957 ELECTION
more cautious approach on the
part of the government to con-
troversial questions relating
to defense.
Antidefense elements might
attempt to further curtail the
modest defense effort. On sev-
eral occasions, the North At=
lantic Council has voiced con-
cern over the generally low
level of Danish preparedness,
particularly the size of the
defense budget, which now con-
stitutes about one fifth of the
annual budget and about 3.2 per-
cent of the GNP. A new com-
promise defense bill, largely
the work of Hansen and now un-
der consideration by parlia-
ment, provides for a 10- to 15-
percent increase in the defense
budget but also authorizes a
gradual reduction of the con-
scription period from 16 to 12
months.
Danish officials. insist,
however, that internal polit-
ical factors do not permit a
substantial increase in defense
spending; this could be achieved
only by an increase in taxes or
at the expense of the popular
and extensive social welfare
program,
GERMAN MINORITY 1
FAROE ISLANDS 2
GREENLAND 2
Possible successors to
Hansen as prime minister are
Acting Prime Minister Kampmann,
who has displayed considerable
vigor as minister of finance,
and Foreign Minister Krag.
Neither Kampmann nor Krag, how-
ever, possesses Hansen's pres-
tige or influence, either to
hold the coalition cabinet to-
gether or to lead the Social
Democratic party in early elec-
tions. Elections are likely
in the fall, and it is possi- 25X1
ble that interparty strains
among the coalition could
precipitate them earlier.
The recent escape of ten
imprisoned Portuguese Communist
leaders is causing concern to
the Salazar regime over the
reliability of certain sectors
of the security forces as much
as over the threat of intensi-
fied opposition. The clandes-
tine Portuguese Communist party
is small--membership is estimated
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
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at 9,000--but well organized,
and it probably hopes to exploit.
the subsurface discontent with
the Salazar dictatorship which
broke out on several occasions
during the 1958 presidential
campaign.
Alvaro Cunhal, former sec-
retary general of the Portuguese
Communist party, and nine other
"hard-core" party leaders escaped
for Peniche prison north of
Lisbon on 3 Januar .
taped from a military prison
est possible participation in
the national elections of 1961,
Communist leaders are re-
portedly well financed, and they
may attempt to cooperate with
other militant oppositionists.
In that event, their highly dis-
ciplined party would probably
seek to exploit any efforts
that these opponents of the re-
gime might make to turn present
latent popular discontent into
overt manifestations of unrest.
Various opposition groups in the
north, representing the most di-
verse idiological views, are con-
certing plans to ensure the wid-
Concern over Cunhal's es-
cape is especially high because
the government believed his im-
prisonment in 1949 had broken
the back of the Portuguese Com-
munist movement. Moreover, his
break came only five weeks after
two army officers, who had been
convicted of complicity in the
attempted coup of March 1959, es-
In view of this develop-
ment and the escape of the ten
Communists, the security authori-
ties have already imposed in-
creased surveillance on all
public gatherings.
The Castro government's
efforts to organize a confer-
ence of "hungry nations" is a
bid for a position of leader-
ship among the neutralist,
underdeveloped countries with
which Cuba now identifies it-
self. Cuba insists that the
conference, to be held in Ha-
vana in the summer of 1960, is
not political but economic and
technical, and that its main
objective should be "the draft-
ing of a charter of the econom-
ic rights of people."
Castro officials seek in
their public statements to imply
that the conference will have
formal UN cooperation. Secre-
tary General Hammarskjold, how-
ever, has in the past been care-
ful to prevent his organization
from being involved in conferences
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NOTES AND COMMENTS
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of an obviously political or
propagandist nature.
mats and economists, one led
by Foreign Minister Raul Roa,
are now visiting over 30 Afri-
can, Asian, Mediterranean, and
Latin American countries to
discuss a proposed agenda. The
other governments are being in-
vited to co-sponsor the meeting,
and expenses are offered by Cu-
ba for five delegates from each
country. Roa probably made a
particularly strong approach
to Nasir during their recent
talks, since Cairo is already
cooperating to establish closer
Cuban-UAR ties. The foreign
minister will also visit Tuni-
sia, Morocco, Libya, Yugoslavia,
and Greece.
Another team led by the
Cuban ambassador to India has
left for Jordan, Lebanon, Iraq,
Pakistan, Ceylon, Iran, Indo-
nesia, Thailand, and the Phil-
ippines. Still others are
visiting Liberia, Ghana, Cam-
eroun, Guinea, Yemen, Sudan,
Saudi Arabia, and most Latin
American countries.
tion is a "humanistic" middle
path between capitalism and com-
munism. However, Cuba's poli-
cies in the UN,OFS, and elsewhere
seem designed primarily to assert
defiance of the United States.
Brazilian Foreign Minister
Lafer says he feels the confer-
ence would benefit only the Com-
munists and hopes that Latin
American countries will not
attend. Brazil considers its
own Operation Pan America
Latin America's best hope
for obtaining US economic aid
and evidently fears that Castro's
activities threaten its success.
Other countries have as yet
evinced no decided reaction,
but if sufficient official sup-
port is not forthcoming, a con-
ference of "leaders" of special
interest groups would probably
be substituted to help propa-
gandize the moral and economic
"responsibilities" of richer
countries, particularly the
United States.
Rioting by several hundred
unemployed persons in Caracas
on 11 January occurred against
a background of economic diffi-
culties and followed a series
of terrorist bombings earlier
this month. The government for
the present commands the loyal-
ty of the majority of the armed
forces and is in full control
The rioting, which was soon
checked by police and national
guard action, began as a protest
against the government's reduc-
tion in its emergency public
works program and followed a
peaceful demonstration of unem-
ployed on 8 January. Communist
and radical elements of the Dem-
ocratic tepublican Union party
of the situation, but a resump- (URD), a dissatisfied component
tion of public violence could { of President Betancourt's non-
serve as a pretext for an at- Communist three-party coalition,
tempted takeover by discontented may have been the principal in-
military groups. stigators of the labor unrest.
SECRET
Castro's determination to
follow a "third-position" for-
eign policy is consistent with
Four teams of Cuban diplo- 1 his claim that the Cuban revolu-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
Violent demonstrations
last August by unemployed were
the only other cases of serious
rioting which have occurred
since President Betancourt took
office in February 1959. How-
ever, frequent rumors of dis-
content and plotting, especial-
ly in the army and national
guard, and of subversive activ-
ities of exileshave created an
atmosphere of public tension.
A wave of terrorist acts
last October, like those early
this year, resulted in a number
of arrests and the reassignment
of several suspect officers.
Communists, particularly through
their strong influence in the
press, have magnified these in-
cidents, apparently in part to
discredit the armed forces and
to emphasize their call for
unity among all civilian groups
to prevent the return of a
military dictatorship.
weak.
Betancourt has also been'
confronted by other economic
and political problems, includ
ing potential strife in the key
oil industry, friction within
the governing coalition, and a
sharp decline in foreign ex-
change last fall which adversely
affected business confidence.
Although the URD professes its
adherence to the regime, its
radical elements often collabo-
rate with the Communists, who
are excluded from the coalition,
and at times appear to stand
with other dissatisfied civil-
ian groups. An extension of
such opposition might pose a
threat to the stability of the
Betancourt regime and also in-
crease the possibility of a coup
attempt by the military, which
have now been placed in command
of the Caracas police force.
The Communist and URD parties
have their strength concentrated
in the capital, where Betan-
court's support is relatively
The economic and social
tensions of France's overpopu-
lated West Indian islands have
long given the extreme left a
dominant position there and
have recently been aggravated
by the arrival of colonial-
minded French refugees from
North Africa. The rioting in
late December on Martinique
sparked new interest in Paris,
and there are reports that on
his way home from the United
States in April De Gaulle will
visit the islands and the under-
developed department of French
Guiana. There is no indication
however, that Paris plans to
increase its economic aid to
the extent necessary to solve
the basic problems of the area.
Major problems in the two
island departments--Martinique
and Guadeloupe--arise from the
rapid expansion of the racially
mixed population and the exist-
ence of a narrow economic base.
More than 50 percent of the
population of Martinique is
under 20 years of age. Sugar
cane and banana production pro-
vides seasonal employment bare-
ly reaching subsistence level
for the majority of the island-
ers.
Metropolitan social benefits
are only partially available,
and government investment funds
amount to only $4,000,000 for
1960. Reports of De Gaulle's
prospective visit may presage
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14 January 1960
FRENCH CARIBBEAN DEPARTMENTS
Haiti
{ British
.Honduras
Guat m la , Honduras
1 J
El Salvador 'Nicaragua
Panama
Costa Rica
Estimated estimated area
population Square Miles
Martinique 270,000 385
Guadeloupe 255,000 680
French Guiana 30,000 35,000
Dominican
Republic
.I Venezuela
Y (ritish
Colombia ) Sgrina
Ecuador
1
-.M . :
_1
Peru
more assistance, but any expan-
sion of the present aid program
for social and economic proj-
ects is unlikely to broaden
the islands' economic base suf-
ficiently to provide the foun-
dation for a viable economy.
France's monopoly of the
islands' economy and finances
is a major point of friction,
and both departments have long
chafed at the control of policy
by Paris. This issue is stressed
by the largest political group
on Martinique, ex-Communist
poet-politician Aime Cesaire's
Progressive party, and by the
Communist party, which now con-
trols the most important local
administrations on Guadeloupe.
Local politicians stir up
racial conflict inherent in a
situation where some 5,000 metro-
politan Frenchmen hold most of
the important economic positions
and head the political adminis-
tration. An influx of French
settlers emigrating from the
former French areas of Tunisia
and Morocco--some of whom re-
portedly have displayed arro-
gant behavior toward the native
population--and several recent
incidents of race discrimina-
tion in Paris involving West
Indian students have added to
the tension. The Republic Se-
curity Companies from the metro-
pole,whose police actions may
have sparked the recent rioting,
also cause local resentment.
Sparsely populated French
Guiana presents different prob-
lems. Although undeveloped
bauxite deposits and a variety
of tropical timber offer possi-
bilities for economic growth,
there is apparently neither a
coordinated plan for French
economic aid nor government en- 25X1
couragement of extensive migration
to French Guiana from the over-
populated islands.
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LEL,~
4
Saint Barthelemyd
Guadeloupe u'
m
Marie Galante 2
Dominica
Martinique
7 a
Barbados
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
PATTERNS AND PERSPECTIVES
Tn the spring of 1958,
Peiping felt the need for a
far-reaching foreign policy
review, Relatively concilia-
tory policies pursued since
1955 had not succeeded in gain-
ing recognition for the regime;
neither had they eroded US sup-
port for the Chinese National-
ists nor softened the resolve
of the Nationalists to resist
"peaceful liberation." These
were some of the matters up-
permost in the thinking of Mao
Tse-tung and leading members
of the party politburo when
they brought their ambassadors
to many bloc and Asian coun-
tries home for consultations
in April. The ensuing devel-
opments provide a case study
in Chinese Communist foreign
policy formulation.
This reconstruction of the
machinery and procedures em-
ployed in working out new pol-
icy lines is derived for the
most part from information re-
leased by the Chinese them-
selves.
For four months preceding
the recall of the ambassadors,
Mao had been touring various
provinces with several polit-
buro members and provincial
party first secretaries, re-
viewing domestic policy and
approving the dismissals of
local "rightist" party officers.
Mao has insisted for years that
on-the-spot investigations were
indispensable for any policy-
maker. As he put it, "If you
have done no investigating, you
have no right to speak"; opin-
ions not based on such investi-
gations, he said, are "nothing
more than groundless fantasies."
With this predisposition for
first-hand examination of prob-
lems, he felt the need for
briefings on foreign policy
matters from experts who had
been in personal contact with
problems in posts abroad.
Following preliminary
briefings from the envoys, the
politburo informed the ambas-
sadors through Foreign Minister
Chen Yi of its decision to take
a new look at the government's
foreign policy. At small, in-
formal meetings with officials
in the Ministry of Foreign Af-
fairs, the ambassadors outlined
what they considered the best
tactics for the immediate future..
Policy Toward Neutralists
Future policy toward neu-
tralist countries was discussed
The recommended pol-
icy toward Cambodia was concil-
iatory; the policy toward Thai-
land would be less cordial, but
not threatening; the posture
toward Laos, where the "ruling
circles" were seen as moving
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
closer to the United States,
would be watchful and--when
necessary to inhibit measures
against the Pathet Lao--threat-
ening.
Policy toward these coun-
tries, as well as toward India,
Indonesia, and the Middle East-
ern and African countries, was
discussed by all present. Af-
ter a few days, the debates--
the Chinese insist that every
official must speak out frankly
in policy discussions--were
halted and the participants
told by Foreign Minister Chen
Yi that they should take time
off for a rest. He invited
the ambassadors to accompany
him to the Ming Tomb Reservoir--
ostensibly to observe the prog-
ress there, but primarily to
give them an opportunity to
relax and clear their heads.
The discussion was re-
sumed after a few days, and
for the next two weeks the pol-
icy toward the neutral coun-
tries was debated further, The
question of the level of eco-
nomic aid became a center of
contention as each country in
the underdeveloped areas of
the Middle East, Africa, and
Asia was discussed.
The participants finally
submitted a report to the cen-
tral committee secretariat rec-
ommending economic-aid levels
for each country and detailing
the political and diplomatic
effort to be carried out in
the future. The secretariat
was asked to submit the report
to the full central committee
later in the month for a deci-
sion. In practice this meant
that it would be submitted
first to the politburo, and
that the politburo's decision
would be ratified by the cen-
tral committee.
Policy Toward Pro-US Countries
Foreign Minister Chen Yi
was joined by several other
members of the party's polit-
buro when the meetings with the
ambassadors and Foreign Minis-
try officials turned to consider
the question of Peiping's policy
toward pro-US governments.
The politburo members of-
fered the view that it was time
for China to take a harder line
against these governments; there
had been few diplomatic successes
under the soft line, which had
sought to use low-level economic
and cultural contacts as prelim-
inary moves toward the establish-
ment of diplomatic relations.
They suggested "struggle"--po-
litical warfare--over the long
haul to compel these governments
to change their alignment with
the United States and eventually
to accept the necessity for for-
mal recognition of the Peiping
regime.
The ambassadors and other
Foreign Ministry personnel added
their comments, all of which
concurred with the views ad-
vanced by the politburo members.
These comments were reported to
a session of the full politburo
at which Mao and his top lieu-
tenants put the final stamp of
approval on the "hard line."
A politburo report detail-
ing the hard line was one of
several general policy reports
read to the central committee
plenum which met in late April
prior to the convening of the
larger body, the national con-
gress of the Chinese Communist
party. Discussion of the for-
eign policy report resulted in
minor changes in the text, and
the report was then expanded for
presentation to the National
Congress.
The presiding officer of
the central committee secre-
tariat, Secretary General Teng
1-Liao-ping, read the draft re-
port on foreign policy to the
party's national congress at its
first meeting on 4 May. He stated
that an embargo might have to be
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14 January 1960
imposed on trade with Japan if
the strongly pro-US government
were returned to power as a
result of parliamentary elec-
tions; urged that an "uncom-
promising" diplomatic and
propaganda attack be waged
against the Yugoslavs, who had
criticized the Soviet Communist
party at their April congress;
and declared that all "imperi-
alist" states should be sub-
jected to bitter criticism in
China's propaganda.
Officials on lower party
and government levels were in-
structed to adhere "strictly
without variation" to the new
concept, which totally modi-
fied the "reasonable" approach
of the 1955-58 period.
During the following two
weeks, delegates to the con-
gress commented on the draft
report, in compliance with the
suggestion of the presidium
(presiding committee) of the
congress. "Reasonable" amend-
ments and alternative sugges-
tions were taken into account
when the draft was finally re-
vised and "unanimously" ap-
proved by the delegates in
late May.
Chinese propagandists--
following a briefing from their
superiors, who had discussed
the new line with members of
the central committee's propa-
ganda department--began to
stress the need for the Commu-
nist bloc to "struggle" against
the major capitalist states,
"headed by the United States."
Peace must not be "begged," and
if war comes, the "peoples of
the world" should not doubt the
outcome--a victory of the bloc
over the "imperialist" states.
Foreign missions in Pei-
ping were subjected to petty
harassment. Chinese employees
in the missions went on tempo-
rary strikes, and food became
difficult to obtain. The situ-
ation became even worse for the
British mission following the
American and British landings
in the Middle East in July.
Policy Toward Offshore Islands
In consonance with its
policy shift toward a harder
line in foreign affairs, the
politburo considered the ad-
visability of a new initiative
in the Taiwan Strait. It called
on Peiping's military leaders
to begin a series of round-
robin policy discussions on
"national defense in the light
of the current international
situation" and the future de-
velopment of the armed forces.
The military committee of the
party's central committee met
in an enlarged conference be-
tween 27 May and 22 July.
Outside the conference,
those politburo leaders con-
cerned with formulating mil-
itary policy met to decide on
a tactical course. The US and
UK landings in the Middle East
were viewed by politburo mem-
bers as providing the Chinese
with an opportunity for a new
initiative to probe American
determination to help the
Nationalists defend the off-
shore islands, particularly
since the United States was
"committed" in Lebanon. De-
fense Minister Peng Te-huai
"summed up the discussion,"
which led to a decision calling
for preparations for shelling
of the Chinmen complex, naval
harassment of this complex and
the Matsus, and attacks against
any Nationalist aircraft pene-
trating mainland air space. The
military committee "approved"
the politburo's decision.
China's major military
ally--the USSR--was probably
informed of the decision at
the top-level meeting in Pei-
ping with Khrushchev and his
military advisers. Mao and
Khrushchev engaged in a series
of meetings which lasted from
31 July to 3 August, during
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
which decisions presumably were
made on how to coordinate the
Chinese probe with Soviet dip-
lomatic efforts against the
West. The USSR was to lend its
support to the Chinese move in-
directly by suggesting to for-
eign diplomats that the Nation-
alists were becoming "provoca-
tive" in the Taiwan Strait and
were being encouraged by the
United States. Moscow was to
direct other Communist regimes
to follow a similar line.
As Chinese Communist air
activity began to increase in
the strait, Peiping's propa-
ganda machine stated that the
"liberation" of the offshore
islands and Taiwan was an "ur-
gent" matter. A belligerent
article in the Chinese theo-
retical journal Red Flag in
mid-August boastecTthat the
Communists were not afraid of
American A-bombs, while a
Communist newspaper in Hong
Kong warned that the South
China Fleet was prepared to
attack the Chinese Nationalist
Navy.
On 23 August, the day of
the first major barrage against
Chinmen, Foreign Minister Chen
Yi assured foreign diplomats in
Peiping, "We will take those
offshore islands!" Chou En-
lai in September deliberately
attempted to create the impres-
sion that unless the United
States forced Chiang Kai-shek
to withdraw his troops from
Chinmen, the Chinese Communists
would attack the islands and
any American military forces
seeking to support the Nation-
alists. Chen Yi's statement
and Chou's effort were clearly
intended to carry out the po-
litburo decision to probe
American willingness to stand
firm in defending the National-
ists.
The precise timing of the
first major shelling may have
reflected another decision prob-
ably made at the late August
session of the politburo, namely
the push ahead in the program
to form communes. By 6 Septem-
ber the slogan "Liberate Taiwan"
was being used by local Commu-
nist party members to convince
the people they should enter
military-type communes and work
for the coming war effort. The
slogan was a key theme at the
Supreme State Conference, con-
vened on 6 September, which
called for nationwide "mobili-
zation."
A series of statements by
top American officials and the
"beefing-up" of the Seventh
Fleet made it clear to the po-
litburo that if an attack was
ordered against the offshore
islands, the United States
would commit its forces. Pei-
ping therefore decided to back-
track. Premier Chou En-lai was
designated by the politburo to
state in his 6 September reply
to Secretary of State Dulles'
4 September statement at New-
port (which implied that the
United States would regard an
attack on Chinmen as prepara-
tory to an attack on Taiwan
and therefore a reason for war)
that Peiping was ready to re-
sume ambassadorial talks with
the United States.
The decision to agree to
reopening talks was made by the
politburo after consultation on
the night of 4 September and at
resumed consultations and dis-
cussions on 5 September. The
politburo itself acted in the
fast-developing situation; it
did not convene a plenum to in-
form central committee members
formally of the decision to
avoid a military clash with
American air and naval units.
There was simply not sufficient
time for round-robin discus-
sions, the hearing of various
views, and the drafting of
lengthy reports.
The peaceful overtures
were combined with warnings
designed to head off a military
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
clash with the United States.
The Chinese leaders probably
sent a communication to Mos-
cow through Ambassador Liu
Hsiao. Pravda stated on 5 Sep-
tember that title Soviet Union
would not quietly watch Amer-
ican military operations in the
Pacific, "whose waters also
wash Soviet shores." Soviet
Premier Khrushchev wrote Pres-
ident Eisenhower on 7 Septem-
ber that an attack on China
"is an attack on the Soviet
Union."
on 19 September
in the strongest official So-
viet statement ever directed
against the US Government:
Khrushchev wrote Eisenhower
that "may no one doubt that we
will completely honor our com-
mitments" to China as stipu-
lated in the 1950 Sino-Soviet
treaty of alliance; if China
falls victim to nuclear attack,
"the aggressor will at once
get a rebuff by the same means."
In addition to invoking
the Sino-Soviet alliance as a
deterrent to attack by the
United States, the Chinese on
4 September proclaimed a 12-
mile territorial limit, placing
the offshore islands clearly
within Chinese Communist juris-
diction. On 8 September the
Foreign Ministry was directed
to start its numbered "serious
warnings" of US "intrusions"
into claimed waters. The po-
litburo was convinced that one
way to avoid the risk of en-
gagement with American forces
was to discourage the United
States from allowing its naval
vessels to escort Chinese Na-
tionalist resupply ships to the
offshore islands.
The party leaders, at
politburo meetings in late
September and early October,
delineated in some detail a
policy of political rather than
military struggle against the
United States without agreeing
to a cease-fire. They failed
in their attempt to interdict
the resupply effort for the
Chinmens and were unwilling to
risk greater US involvement.
Odd-day shelling, they decided,
permitted them to use artillery
as a political weapon--to pre-
vent the status quo from appear-
ing "frozen" while keeping hos-
tilities at a minimum.
Above all, it was to be
made clear to the United States
that Peiping had no intentions
of starting a major ware For-
eign Minister Chen Yi was di-
rected to communicate this at-
titude to the United States
through a visiting Canadian
journalist. At a five-hour
interview on 30 October, Chen
told the journalist that "peace-
ful means" of approaching the
Nationalists would prove effec-
tive.
The effect on local party
members of this backdown in the
Taiwan Strait situation became
a matter of concern to the po-
litburo, which had operated
without keeping the central com-
mittee fully informed. It was
agreed that Chou En-lai should
present a rationalization de-
signed to make the retreat look
more like a rebuff to the United
States. Members and alternate
members of the party central
committee and heads of national
governmental and party organiza-
tions, as well as provincial and
municipal propaganda chiefs,
rushed to Peiping to attend the
hastily convened meeting of the
party's propaganda department.
To help party members to a
"correct understanding of the
present struggle in the Taiwan
Strait," Chou discussed Mao's
new book, "All Imperialists and
Reactionaries Are Paper Tigers."
Chou cited a series of events
going back to World War II "to
prove" Mao's thesis that im-
perialist nations are really
hollow shells which will
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CURRENT INTELLIGENCE WEEKLY SUMMARY
r.`
14 January 1960
"eventually" collapse. Follow-
up commentary in People's Daily
--the daily organ of th a propa-
ganda department--carried the
key statement that, as Mao has
put it, "Strategically we
should despise all enemies;
tactically we should take them
seriously." In other words,
the United States is a "paper
tiger" that "can still bite."
When the central commit-
tee was called together in late
November, the politburo in-
formed the members that China
needed at least "ten years of
peace" in order to develop its
economy. The central committee
The long-dormant dispute
over use of the Jordan River
waters has become a pressing is-
sue in Arab-Israeli relations.
Israel, for economic reasons,
is proceeding unilaterally with
a development project which will
eventually divert large quanti-
ties of water from the river to
the Negev desert for irrigation.
This has awakened the Arabs to
the need for considering now any
long-range countermeasures, par-
ticularly any large-scale con-
struction for diversion projects
of their own. Bellicose Arab
statements in the face of
Israel's determination to car-
ry out its plans have increased
tension and the likelihood of
incidents.
Receut'Political.Background
The problem of developing
and equitably distributing water
from the Jordan River has been,
until recently, a relatively
quiescent issue, Eric Johnston's
mission on behalf of President
Eisenhower, beginning in 1953,
plenum then considered the re-
ports read by politburo mem-
bers, which stated that with
the first phase of the "rush
to communes" completed, the
serious work of modifying com-
mune procedures and commune
organization must now be under-
taken--together with the work.
of relieving food shortages
and transportation difficulties.
This concentration of the eco-
nomic situation in the country
facilitated the politburo's
effort to minimize the Taiwan
Strait backdown. Despite this
reversal, the "hard line" for-
eign policy was continued into
1959.
resulted in a plan for unified
development of the river valley,
but although technical agree-
ment on the plan was virtually
achieved, the Arab League
Political Committee late in
1955 refused to approve it on
political grounds. Israel,
which had accepted the plan,
subsequently discontinued river
diversion work it had started
on its own, in the face of
threatened Arab military action.
Other water resources in
Israel, however, now are al-
most fully exploited. Accord-
ingly, Israeli Finance Minister
Eshkol announced last November
that diversion, with or with-
out Arab agreement, of water
from the Jordan River for irri-
gation purposes had become a
top-priority project for his
government. Work on "stage one"
of the project had ,already begun.
The Arab states reacted im-
mediately. Their press spoke
of possible military action to
avert a "fait accompli," and the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
United Arab Republic
formed a committee
to make a technical
study of means of
diverting waters
from the river's
source streams be-
fore they leave Arab
territory, in order
to deprive Israel of
access to them, At
Cairo's initiative,
a tripartite study
committee was also
formed, with repre-
sentatives from Leb-
anon, Jordan, and the
UAR--the Arab ripari-
an states.
These commit-
tees now have con-
cluded their studies,
and the UAR Foreign
Ministry has re-
quested that the
Arab League Council
be convened to dis-
cuss the matter pre-
paratory to taking
whatever measures it
determines necessary
to thwart Israel's
plans. If a special
session is not called
earlier, the subject
has been included on
the agenda of a for-
eign ministers' coun-
cil meeting planned
for early February at
which the over-all
NEGEV
DESERT
Palestine problem is to be dis-
cussed. Among courses of po-
litical action to be considered
are submission of the question
to the UN Security Council, to
the General Assembly, or possi-
bly to the International Court
of Justice.
Israeli Foreign Minister
Golda Meir, in a December speech
in the Israeli parliament, re-
sponded to this Arab activity
by asserting that development
of her country's resources was
an elementary right which Israel
would execute "with all means
at our disposal." She added
PROPOSED JORDAN RIVER
DEVELOPMENT PROJECT
Canal or conduit,
proposed or under construction
\W\ Demilitarized Zone
UAR
EGYPT:
Tel Aviv - Jaffa lll~
that "what we do within our
borders is our business" and
not dependent on "the whims of
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LEBANON
Eshed Kinnerot
(Proposed pumping station
JORDAN
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
Israel's Plans
The Israeli plan involves
moving 320 million cubic meters
(mcm) of water annually from
the Jordan Valley in northern
Israel, an area with a net sur-
plus of water, to thecoastal
plain and arid southern half
of the country--the Negev de-
sert, When it is finally com-
pleted in eight to ten years,
the project--comprising a
series of diversion canals,
tunnels, pumps, regulating
reservoirs, and pipelines--
will extend from a point on
the north end of Lake Tiberias
at Eshed Kinnerot to a distri-
bution point at Pelugot, about
125 miles to the south. Amer-
ican experts have estimated
that the entire ten-year proj-
ect could be finished within
two years if adequate funds
were available.
Together with other devel-
opment schemes, the project is
expected to provide living area
for a large part of the rapidly
increasing population; the
country's irrigated acreage
would be enlarged by about
270,000 acres to a total of
close to 600,000. Half of the
increased population is ex-
pected to result from immigra-
tion. The Arabs fear that con-
tinued Israeli immigration will
result in overcrowding and,
eventually, aggressive terri-
torial expansion. Jordan in
particular is also alarmed at
what it claims would be the
greater salinity of the water
downstream which it would want
to utilize.
According to Israeli engi-
neers, water could best be di-
verted from the Jordan River at
the Banat Yacov bridge, about
two miles downstream from the
drained Lake Hula. However,
that point is within the con-
troversial demilitarized zone
along the Israeli-syrian bor-
der, and in the past when the
Israelis have tried to proceed
with diversion work there, Syria
threatened war and complained to
the UN Security Council.
In 1953, the chief of staff
of the UN Truce Supervision Or-
ganization ruled that Israel
would have to stop this activ-
ity in the absence of a specific
agreement with Syria on the
problem; Israel thereafter said
it had deferred work at Banat
Yacov. Instead, it will pump
the water from Lake Tiberias,
which is fed by the Jordan and
which is outside the demilita-
rized zone. An eventual pumping
station was later to be situated
there anyway as part of the
over-all project.
"Stage one" of the project,
upon, cpimpletion.,in 1903,. ,.will
pump 150 to 180 mcm of Lake
Tiberias water annually to a
"central conduit" system which
will link at its southern end
with another pipeline system
extending to the Negev. The
78-mile conduit will be nine
feet in diameter and is being
financed in part by Israeli
bonds, which are purchased
widely in the United States.
Israel has applied for a $14,-
000,000 loan from the US Devel-
opment Loan Fund for additional
financing. The Israelis argue
that, although this conduit
would eventually be tied into
the Jordan River system, the
conduit could be supported with-
out arousing Arab criticism be-
cause initially, beginning early
in 1962, it would carry only
water originating wholly within
Israel.
The Israelis also have un-
dertaken a smaller project in-
volving construction of a spe-
cial conduit for conveying water
from the southern end of Lake
Tiberias to the Beit Shean area
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14 January 1960
on the western side of the
lower Jordan Valley. They
claim this is necessary in or-
der to "replace" water which
so far has been drawn from the
Yarmuk and Jordan rivers but
which will be siphoned off
when Jordan completes its East
Ghor Canal project.
Israel claims that its
over-all plans regarding the
Jordan River are compatible
with the Johnston Plan and
could be integrated with that
scheme if it should be imple-
mented. However, the govern-
ment's director general for
water planning has admitted
that the capacity of the in-
stallations planned by Israel
would permit it to withdraw
much more water than had been
envisioned in the Johnston ne-
gotiations. He said Israel
would give the necessary as-
surances that it would not
overdraw its quota. The Is-
raeli concept of the Johnston
Plan, moreover, differs some-
what from that of the United
States. In essence, the US
concept gives Jordan approx-
imately 30 mcm more usable
water annually than Israel's
would allow.
Arab Plans
Israel feels it is justi-
fied in proceeding with its
development plans and in re-
questing United States support
for them because Jordan has
received American financial as-
sistance for the first phase
of its East Ghor project. The
Jordanian project in its initial
stage, now under way, includes
a tunnel and a 12-mile canal
which by mid-1961 will permit
irrigation of some 30,000 acres
along the eastern side of the
Jordan Valley--the East Ghor.
Water will be drawn from-the
Yarmuk tributary of the Jordan
River.
Other Arab plans are es-
sentially negative. The scheme
formulated by the UAR for di-
verting the Jordan's tributaries
before they enter Israel envis-
ages, according to press reports,
two stages: first, the tribu-
tary originating in Lebanon,
the Hasbani River, would be
diverted by tunnel through the
Lebanon Mountains into the
Litani River and thence to the
Mediterranean; second, a special
fund financed by Arab govern-
ments and citizens would fi-
nance diversion of the Baniyas
and Yarmuk rivers around Israel.
The Dan River, the largest
of the three source streams
above the Yarmuk, however,
originates at springs on the
Israeli-Syrian border and could
not readily be denied Israel.
The Israelis believe the Arabs
could cut off up to 25 percent
of the Jordan's water if their
plans were carried out.
The cost of these tributary
diversion schemes, in view of
the geographical obstacles which
would have to be surmounted,
would appear to be prohibitive.
The mandate of the UAR's tech-
nical committee which surveyed
the problem specified that ex-
pense was not to be a deterrent,
however, because of the over-
riding political objective. Ful-
fillment of the plan neverthe-
less appears to be an extremely
remote possibility.
Both Israel and the Arabs
have indicated that diversion
by either side would be re-
garded as an act of war. In
the meantime, there is danger
that border tensions, particu-
larly along the Israeli-Syrian
border, will become so acute
as a result of the dispute that
clashes may well increase both
in number and in seriousness.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
Latin America's toughest
and most durable dictator--Gen-
eralissimo Rafael Trujillo of
the Dominican Republic--now
faces what may be the greatest
challenge from opposition move-
ments since he consolidated his
control some 30 years ago. Even
his tightly organized police
state has not been immune to
the revolutionary ferment which
has developed over the last few
years in the Caribbean. Should
the 68-year-old Generalissimo
be removed from the scene in
the near future, moreover, the
other members of his regime
probably could not long con-
trol the situation, and a strug-
gle for power would result,
with pro-Communist exiles and
other radicals playing a prom-
inent role.
Growing Disaffection
Over the years, Trujillo's
oppressive regime has driven
hundreds into exile and built
up explosive forces of resent-
ment among the close to 3,000,-
000 Dominicans at home, but
this dissidence has been par-
ticularly marked during the
past six months--a period also
marked by reports of Trujillo's
declining health. His armed
forces--with the reported
help of local peasants--
crushed a 225-man attack made
last June by insurgents from
Cuba, but the heavy military
spending he has undertaken to
counter such attacks has added
to his economic and political
difficulties.
Sinee.the invasion attempt
in June, there have been re-
ports of sabotage in the armed
forces and bombings in Ciudad
Trujillo, the capital. A series
of diplomatic and military de-
fections abroad are added indi-
cations of the Generalissimo's
falling prestige. In July, the
ambassador to Ecuador and the
first secretary of the Dominican
UN delegation resigned and asked
for political asylum. A month
later, the vice consul at Curacao
asked Venezuela for asylum, and
his brother, an officer in the
Dominican armed services, also
defected when sent to persuade
him to reverse his decision.
Within the Dominican Re-
public, fear of the secret po-
lice is so strong that opposi-
tion seems to be still largel
unorganized.
Military expenditures of
about $50,000,000 during 1959
--equaling about one third of
the regular budget--were a heavy
drain on an economy already
suffering from depressed world
prices for most of the country's
exports. Economic deteriora-
tion has encouraged discontent,
particularly among professional
classes and businessmen, many
of whom were already conscious
of Trujillo's unpopularity in
other Latin American countries.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
Dominican Exiles
Substantial numbers of Do-
minican exiles have taken ref-
uge in the United States, Vene-
zuela, and Puerto Rico. Smaller
groups have collected in Cuba
and other Caribbean countries.
Plotting among the exiles has
been continuous but, until this
year, divisions among them were
so extensive that their efforts
were ineffective. Since the
ry
DOMINICAN
CU6O ? REPUBLIC
Son Juan
Puerto. Rico
T,
~ 1.
0 Principal concenlratio is of exiles
from the Dominican Repjblic,
ouster of Batista in Cuba last
January, the numerous exile
groups have stepped up their
activities and made some prog-
ress toward unity, but they
are still divided into two main
camps over the question of co-
operating with the Communists.
Aside from the Communists
themselves, who are organized
as the Popular Socialist party
(PSP), the most important exile
organizations are the Communist-
infiltrated Dominican Libera-
tion Movement (MLD)--which has
had Cuban support--and the anti-
Communist Unity Bloc of Domini-
can Liberation (BULD) organized
in Venezuela.
The Dominican Communist
party is small in membership,
but it has exercised consider-
able influence in Dominican rev-
olutionary activities during
the past year. It is the only
opposition party to have had
legal status during a portion
of the "Era of Trujillo." The
Generalissimo invited the PSP
:members to return from exile
in 1946, apparently hoping to
create an impression that the
Dominican Republic was a liberal
democracy. Until he suppressed
the party and imprisoned its
leaders nine months later, the
Communists worked hard to in-
filtrate labor and to organize
strikes. They were supported
at the time by many Dominicans
simply because the PSP was the
only organized opposition in
the country.
After being released from
prison in 1950, most of the
PSP's survivors lived in Gua-
temala until the pro-Communist
Arbenz regime was overthrown
in 1954. The nucleus of the
PSP then fled to Mexico, where
it remained until Fidel Castro
came to power in Cuba, at which
time its headquarters reportedly
moved to Havana. There it has
capitalized on Cuban demands
that all Dominican opposition
movements be represented in a
common front in order to receive
Cuban support, The other two
exile groups are divided over
whether Communists should be
included in anti-Trujillo
plans.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 January 1960
Dominican Liberation Movement
The Dominican Liberation
Movement was formed early in
1959; an MLD commander led the
June invasion force of Domini-
cans, Venezuelans, Puerto Ricans,
and Cubans. The leading ele-
ment in the MLD is the Commu-
nist-infiltrated Dominican
a
cise disproportionate influence,
especially if it should again
receive backing from leftist
Cuban officials and military
leaders, as it did prior to
the June invasion.
Since the failure of the
June invasion, the MLD has di-
rected its efforts toward a-
chieving the diplomatic isola-
tion of Trujillo's government
and to explaining the program
it hopes to put into effect
after Trujillo is overthrown.
Its representatives have traveled
to Peru, Colombia, Ecuador,
Chile, Uruguay, and Argentina--
as well as the United States--
to arouse public opinion against
Trujillo. In some of these
countries, especially Colombia,
attempts are being made to
recruit men for future invasion
attempts.
Patriotic Union (UPD), which is
probably the strongest of the
exile organizations, and has
branches in New York, Caracas,
and Havana. After refusing an
invitation extended last May
by a bloc of non-Communist
exiles to join in an anti-Tru-
jillo front, the UPD and the
Communists formed an alliance
through their affiliation in
the MLD. Other MLD affiliates
are a group in Venezuela (the
FIDDV) and the United Dominican
Democratic Front (FUDD), which
has a Mexican and a New York
branch.
The MLD's seven-member
executive council includes one
man suspected of Communist par-
ty membership, and the council's
president, Francisco Castellanos,
has repeatedly been termed a
fellow traveler. The non-Commu-
nist leaders in the MLD cooper-
ate with the Communists because
they believe that no attempt
to oust Trujillo is likely to
succeed without the combined
efforts of all exiles. Some
of the non-Communists are ac-
tively trying to prevent the
Communists from dominating the
MLD, but the Communist minority
is experienced and energetic and
will probably continue to exer-
Spokesmen for the MLD
assert that their program has
no quarrel with the Catholic
Church and will recover property
stolen by the Trujillo family,
start a program for land' reform,
sponsor a free labor movement,
promote representative democracy,
and reform the school system
so that it will build up a "na-
tional conscience." There is
evidence that the MLD is in
communication with anti-Trujillo
elements in the Dominican Re-
public.
The Unity Bloc of Domini-
can Liberation was formed at
Caracas in March 1959 purported-
ly to achieve unity among
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14 January 1960
anti-Trujillo forces. However,
the backbone of the BULD--the
old Dominican Revolutionary
party (PRD)--opposes giving
the Communists a voice in rev-
olutionary affairs. The PRD
or some of BULD's smaller af-
filiates have branches in New
York, Caracas, Havana, and
Puerto Rico.
The leadership of BULD,
although it contains colorful
old revolutionaries such as
PRD members General Miguel
Angel Ramirez and Juan $O8ch,
is somewhat tarnished as a
result of its long record of
failure in ousting Trujillo.
The dominant PRD's political
orientation is left of center
and has been likened to Presi-
dent Romulo Betancouxt's Demo-
cratic Action party in Venezuela
and ex-President Jose Figueres'
National Liberation party in
Costa Rica. The PRD has friend-
ly relations with the Interna-
tional Confederation of Free
Trade Unions and the Inter-Amer-
ican Regional Organization of
Workers. It is likely that
Betancourt and Figueres would
support BULD if they believed
it had some chance of success.
ican Republic.
However, General Ramirez
and other anti-Communist exiles
in Cuba have been denied Cuban
aid and frequently are harassed
by the authorities there in their
thus-far-unsuccessful atteiipts
to organize an invasion force.
For the time being, it appears
that the main possibility open
to the non-Communist exiles is
to use their influence in the
free world labor movement to
press for a world-wide trans- 25X1
portation and communication boy-
cott of firms serving the Domin-
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