CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A002800090001-3
• Release Decision: RIPPUB
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• Document Page Count: 42
• Document Creation Date: December 20, 2016
• Document Release Date: April 13, 2006
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• Publication Date: October 27, 1999
• Content Type: SUMMARY

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COPY NO. 68
OCI NO.3818/60
11 August 1960
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
LATE` _MEVIEWER: F 25X1
A-A
CENTRAL INTELLIGENCE AGENCY
I I I OFFICE OF CURRENT INTELLIGENCE
1, 7
State Dept. 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
11 August 1960
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
CONGO . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
UN Secretary General Hammarskjold returned to the
Congo on 11 August with his hand strengthened by the UN
Security Council resolution calling on Belgium to withdraw
its troops entirely and by Katanga Premier Tshombe's agree-
ment to the entry of UN forces into his province. Congo
Premier Lumumba continued, with support from other inde-
pendent African states, to breathe threats against Tshomb6
and other advocates of a looser Congo constitutional
structure, but his own position in Leopoldville may be
undermined by local dissidents. Rioting broke out there
on 9 and 10 August and there are rumors that a coup may
be attempted in the capital around mid-August. Brussels
may still hope to avoid a firm commitment to withdraw
from its Congo bases. Soviet officials meanwhile are con-
tinuing their attempts to stimulate further dissatisfac-
tion among African countries with the UN's efforts--al-
ready criticized by Ghana and Guinea--and apparently are
lining up support for a demand that UN forces withdraw.
THE LAOTIAN COUP . . . . . . . . . . . . . . . . . . . . . Page 3
The coup initiated by the 2nd Parachute Battalion on
8 August appears still to be limited to the Vientiane
area. Tiao Somsanith, premier of the legitimate govern-
ment, is in Luang Prabang with part of his cabinet and
claims that his government will function there until the
army can restore order in Vientiane.
d1A
The Somsanith government w i 11. have
culty suppressing the rebellion militarily, and may be-
come inclined to reach some kind of compromise with the
revolutionaries. The "revolutionary committee" in
Vientiane has created a provisional executive committee
composed of a diverse group of politicians and military
men, most of whom have various grievances with the Somsan-
ith regime. The rebels' pronouncements contain a strong
anti-American tone and indicate that, if the coup is sus-
tained, Laos will undergo a decided shift toward neutralism
and accommodation with the Communist Pathet Lao.
F!?ENTIAL
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PART II (continued)
DEVELOPMENTS IN SOVIET FOREIGN RELATIONS . . . . . . . . . Page 5
Khrushchev's broad hint in Pravda on 9 August that he
might participate in the UN General Assembly debate on dis-
armament this fall suggests that he sees a repeat perform-
ance as a means of refurbishing the peaceful image he at-
tempted to create last September, when he unveiled his
scheme for complete disarmament. He also used the Pravda
interview to renew criticism of Western disarmament policy,
and his letter of 4 August to Prime Minister Macmillan con-
tinued to reflect the tougher, more militant line that has
come to dominate the conduct of Soviet policy since the
summit collapse. On the crucial issue of Berlin and a Ger-
man treaty, however, Khrushchev reaffirmed to Macmillan his
early post-summit commitment that unilateral Soviet action
,would be deferred until the issues could be discussed at
CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
cautious position on the Castro regime.
Communist pastoral letter which was read in all Catholic
churches in Cuba on 7 August marks the end of the church's
DEVELOPMENTS IN CUBA . . . . . . . . . . . . . . . . . . . Page 7
Preparations are evidently under way for the delivery
of bloc arms to Cuba. Neither Soviet nor Czech arms are
known to have arrived in Cuba. Fidel Castro reached new
heights of anti-US violence in his 7 August harangue at the
closing session of the Latin American Youth Congress, at
which time he announced the nationalization of most of the
remaining American property in Cuba. The vigorously anti-
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NOTES AND COMMENTS
AMERICAN FOREIGN MINISTERS' MEETINGS . . . . . . . . . . Page 1
The Latin American countries at the first of the two
foreign ministers' meetings in Costa Rica beginning 16
August are.expected to consider economic sanctions against
the Trujillo dictatorship in the Dominican Republic, but
adoption of such-measures is uncertain, since some govern-
ments oppose the establishment of precedents for use
against Cuba. In the meeting to follow, Argentina and
several of the Central American governments are particu-
larly interested in taking a hard line on Cuba and on
the question of Soviet intervention in the hemisphere;
Mexico, with some support from Bolivia and Uruguay, may
lead the opposition to any anti-Castro move.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
PART II (continued)
SITUATION IN THE DOMINICAN REPUBLIC . . . . . . . . . . . Page 2
Generalissimo Rafael Trujillo continues to rule the
Dominican Republic through Joaquin Balaguer, the former
vice president who was elevated to the presidency on 3
August after the dictator's brother resigned. Balaguer
has removed members of the Trujillo family from the mili-
tary high command and has carried out a meaningless re-
shuffle of the cabinet. The dictator apparently is en-
gaged in maneuvers designed to convince the American for-
eign ministers meeting in Costa Rica that he has lost con-
trol.
FANFANI GOVERNMENT IN ITALY APPROVED . . . . . . . . . . Page 3
Premier Fanfani's minority cabinet, made up entirely
of Christian Democrats, has been confirmed with the broad-
est parliamentary support given any Italian government in
12 years. For the first time during this period, the Nenni
Socialists refrained from opposing a new cabinet. Fanfani's
decision to reconvene the Chamber of Deputies on 5 Septem-
ber emphasizes the need for urgent action on controversial
legislation. Modification of the provincial electoral law
is to be considered in an effort to pave the way for local
elections in the fall.
FINLAND PURCHASES ADDITIONAL ARMS FROM SOVIET UNION .
. . Page 4
Under a new agreement reached in Moscow late last
month Finland will make its second purchase of Soviet
military equipment in little more than a year. The
materiel, which has a total purchase price of some $16,-
000,000, includes helicopters, tanks, automatic rifles,
and machine. guns, and is covered by the long-term
comm9dity credit which; was". extended by the Soviet
Union last December. Finnish President Kekkonen, who
has been influential in seeking to develop closer con-
tacts between military officials of the two countries,
apparently has overcome the objections of Finnish mili-
tary leaders opposed to such contacts as well as to large-
scale purchases of Soviet military equipment.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
PART II (continued)
NORTH VIETNAM'S DEFENSE MINISTER UNREPORTED SINCE EARLY
MAY . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 7
General Vo Nguyen Giap, Hanoi's minister of defense
and one of the top five members of the politburo, is
not known to have made a public appearance since 6 May.
His recent reappointment to several important government
posts seems to rule out the possibility of political
eclipse, at least for the time being. Nevertheless, Giap
may oppose using the army as a labor corps, and he has
been reported at odds with Truong Chinh, the party's tough-
minded theoretician, over the degree of emphasis to be
given political activity in the army. The army's politi-
cal commissar, a protege of Truong Chinh, was last year
given equal rank with Giap, apparently in a move to in-
crease political control over the army.
COMMUNIST CHINA DEVELOPING ALUMINUM INDUSTRY . . . . . . . Page 8
Communist China today possesses a fast-growing, tech-
nically modern aluminum industry. Current plans indicate
continued rapid growth and attainment of self-sufficiency
in aluminum production in the next three or four years.
PEIPING MOVES TO SETTLE BORDER DISPUTES WITH BURMA AND
NEPAL . . . . . . . . . . . . . . . . . . . . . . . . . . Page 9
Peiping has moved to clear up border problems with
Burma and Nepal. The Chinese appear to have compromised
on the main points at issue in the long-standing Sino-
Burmese boundary dispute and to have made a satisfactory
reply to Nepal's recent protest over alleged Chinese
troop incursions. The initiative demonstrated by Pei-
ping in both cases is also intended to place on New Delhi
the responsibility for the continued deadlock in the Sino-
Indian border dispute.
INDIA CURBING CHINESE COMMUNIST ACTIVITIES . . . . . . . . page 11
New Delhi's recent actions in expelling 16 Chinese
Communist nationals and closing down New China News
Agency (NCNA) facilities in India point up the Nehru
government's continuing vexation with Peiping's policies.
Peiping has protested the move against NCNA, but probably
does not want the issue to jeopardize joint "fact-finding"
talks on the Sino-Indian border dispute, which are about
to be reconvened in New Delhi.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
PART II (continued)
INDONESIAN DEVELOPMENTS . , . e . , . . . , . . . . . Page 11
There are numerous reports that President Sukarno
will announce the nationalization of the Dutch share of
the Shell oil company on 17 August, Indonesian independence
day, in retaliation for the recent arrival of Dutch naval
units in Indonesian-claimed Netherlands New Guinea.
The Dutch ships, which reached Hollandia on 2 August, will
tour other West New Guinea ports this month and are to
leave the area on 30 August. Sukarno-is also likely to
announce the formation of his long-planned National Front,
an all-inclusive organization intended to ensure mass
support for "guided democracy."
AFGHAN ARMY EXPANSION .
Afghan Prime Minister Daud has increased the size
of his army since last summer by about 30 percent to a
strength of about 70,000. He relies heavily on the army
for support against tribal and conservative religious
opposition and also to guard against moves by Pakistan
among border tribes. This build-up will place additional
strains on an already inadequate command and support
structure and will probably lead to heavier reliance
on Soviet advisers and arms assistance.
IRAN . . .
. Page 13
. . . . . . . . . . . . . . . . . . . . . . . . Page 13
Open rigging in the elections now in progress for
the Iranian parliament will almost certainly weaken the
regime. The Shah, although publicly promising free-elec-
tions, has not dissociated himself from the irregularities.
Some,-minor violence has been reported from several places
NYASALAND CONSTITUTIONAL CONFERENCE . . . . . . . . . . . Page 14
British officials and representatives of Nyasaland
political factions achieved substantial agreement during
the recent constitutional discussions on the protector-
ate'sc.- political advancement. Nationalist leader Hastings
Banda has obtained a significant increase in the number
of African voters. He failed to gain African legislative
control or a universal franchise, however, and the under-
lying problem of the protectorate?s, relationship with the
white-dominated Federation of Rhodesia and Nyasalanld has
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
PATTERNS AND PERSPECTIVES
SOVIET IMPORTS FROM WESTERN EUROPE ON THE RISE . . . . . . Page 1
The rise in Soviet imports from Western Europe in
1960 has been so great that the USSR's usual export sur-
plus in trade with these countries has been almost elimi-
nated. For the first quarter, Soviet imports from the area
amounted to $160,000,000--double the figure for the cor-
responding period last year. Mounting requirements for
capital equipment from the industrial West will increase
the strain on Soviet foreign exchange reserves. As a
result the Soviet Union probably will intensify its drive
for long-term Western credits, increase gold sales, and
attempt to expand exports--in some cases by selling at
lower than world market prices. 25X1
ECONOMIC OUTLOOK IN SPAIN . . . . . . . . . . . . . . . . Page 2
General Franco, in a mid-July speech, belatedly ex-
pressed support for Spain's year-old economic stabiliza-
tion program. His government, however, has still failed
to provide policy guidance to business or to encourage
increased private investment to overcome the current
economic recession. Labor and business pressure may force
a badly needed general wage raise this fall, but resultant
inflationary forces would probably offset to some extent
the limited progress achieved under the program during
the past year. 25X1
DEVELOPMENTS IN FRENCH-ALGERIAN PROBLEM . . . . . . . . . Page 4
Prospects for an early resumption of cease-fire talks
between French officials and Algerian rebel leaders are
diminishing. Algerian hopes for international support have
risen following UN intervention in the Congo, and there
,has: been an upsurge of terrorism and military activity
in Algeria. While French public opinion appears increasing-
ly ready to support De Gaulle's preferred solution--self-
determination leading to some degree of autonomy including
close ties with France--the rebels now may be less inclined
to accept such an arrangement. The study commissions Paris 25X1
has organized among representative elected Algerian offi-
cials are expected to begin in mid-September to plan non-
political aspects of Algeria's future.
LATIN AMERICAN ATTITUDES TOWARD INTERNATIONAL AFFAIRS . . Page 7
The two forthcoming meetings of American foreign
ministers will probably highlight basic Latin American
attitudes on international affairs. All Latin American
countries profess a strong attachment to the principle
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
PART III (continued)
of nonintervention in the affairs of another country.
These countries also show in varying degree an affinity
for isolationism, a desire to pursue a course in foreign
affairs not wholly identified with that of the United
States, and a belief that the United States overrates
the menace of international Communism.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
OF IMMEDIATE INTEREST
UN Secretary General Hammar-
skjold returned to the Congo on
11 August to follow up on the
Security Council resolution of
9 August, which called for the
immediate withdrawal of Belgian
troops from the entire Congo.
The resolution also, in effect,
sought to assure Katanga Premier
Tshombe and other dissident pro-
vincial leaders that'the UN will
not interfere with their attempts
to negotiate a looser Congo con-
stitutional structure. Tshomb?'s
9 August decision not to oppose
the entry of UN forces into Ka-
tanga has eased only slightly
the impasse concerning the dis-
puted province. He continues
to stress the "independent"
status of his province.
In Leopoldville, Congo Pre-
mier Lumumba on 10 August threat-
ened an "invasion" of Katanga
and hinted at the arrest of
Tshombe as a traitor. Lumumba
continues to make propaganda
capital out of the presence of
Belgian troops in the Congo,
and regarding Katanga has de-
claimed that "if Belgian troops
want to kill us, we will die
for the people." Despite his ef-
forts to reconstitute the Force
Publique, Lumumba probably has
no more than a few hundred troops
loyal to himself and no Congo-
lese aircraft with which to air-
lift them to Katanga.
According to the American
Embassy in Leopoldville,,the en-
dorsement by the Abako party of
a confederation government on
8 August could presage a coup
against the Lumumba regime
around mid-August. The em-
bassy reports that several
tribal groups, political par-
ties, and labor groups are
united in favoring a Congo
confederation and may attempt
to displace Lumumba in favor
of a more moderate figure.
In a possible reaction to
rumors of an anti-Lumumba coup,
Congolese police on 10 August
raided the office of the Abako
party, which had passed a mo-
tion of no confidence against
Lumumba. Several persons, in-
cluding an Abako vice presi-
dent, were reportedly wounded
when firing broke out. Lu-
mumba also has warned that
large numbers of Europeans
would shortly be arrested for
"plotting against the' Congo."
The threat may lead to a new
exodus of Belgians, including
those at Katanga.
Brussels, which has yet
to announce its compliance with
the UN resolution calling for
the "immediate" withdrawal of
Belgian troops in Katanga,
continues critical of the US
for supporting the resolution
and for activity allegedly
prejudicial to Belgian interests.
Brussels may hope to avoid a
Commitment concerning a date
for the evacuation of its Congo
bases.
The Belgian cabinet met on
9 August, reportedly to es-
tablish a timetable for a
Belgian withdrawal from Katanga.
It remains unclear whether
Belgium will also evacuate
its base at Kamina; Brussels
may avoid any explicit statement
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the inclusion of their troops
in a UN task force sent into
Katanga. Their exclusion--
virtually certain, in view of
Nkrumah's and Toure's publicly
expressed support for Lumumba
and violent condemnation of
Tshombe--may lead to new criti-
cism of the UN operation by the
two states and perhaps to new
assurances to Lumumba. These
could include pledges of direct
military assistance against
Tshomb6 if he remains in power
in Katanga after the Belgians
withdraw.
CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
concerning the status of this
base in the hope that the Lu-
mumba government will fall
and be succeeded by a more
moderate regime.
African Reactions
Although threats issued
by Ghana and Guinea to assist
Lumumba militarily outside of
the UN framework were probably
aimed at inducing the UN to
step up pressure on Belgium,
Presidents Nkrumah and Toure
were probably both prepared
to follow through as a last
resort. Prior to the Security
Council meeting on 8 August,
Nkrumah had appealed individual-
ly to all members of the inde-
pendent African-states bloc to
support such independent action
by Ghana in the event the UN
could not arrange the withdrawal
of Belgian troops. At the same
time, Nkrumah was
planning to replace British of-
ficers attached to the,approxi-
mately 2,000 Ghanaian troops
now in the Congo with Ghanaian
officers in preparation for pos-
sible offensive action against
Katanga by Lumumba's regime with
the help of Ghana and Guinea.
our s government went
into the UN operation with the
idea that Guinea might later
"secede" if the UN force did
not display "positive action"
in support of Lumumba.
Ghana and especially
Guinea will probably press for
Lumumba is also looking
to the special conference of in-
dependent African states, which
he has announced is to meet in
Leopoldville from 25 to 30 Au-
gust, to strengthen his position
vis-a-vis Tshomb6 and other do-
mestic opponents.
So''iet Moves
The Soviet UN delegation
supported the Tunisian-Ceylonese
resolution of 9 August calling
on Belgium to withdraw its
troops from Katanga "immediate-
ly," despite the USSR's draft
resolution ordering Hammar-
skjold to use "all necessary
means of enforcement" to bring
about the immediate withdrawal.
Chief Soviet delegate Kuznetsov
explained that' ' the USSR had
voted for the Tunisian-Ceylon-
ese~ resolution, since it "con-
forms to the basic goal pursued
by the Security Council--to en-
sure the immediate and uncondition-
al,withdrawal of Belgian troops
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
from the territory of the Congo,
including Katanga Province."
Moscow's pronouncements on
the Congo continue to avoid
committing the USSR to any uni-
lateral action, but at the same
time attempt to sustain the im-
pression that Communist bloc
countries stand ready to send
forces if the present US con-
tingents are unable to enforce
the Security Council's resolu-
tions. The Soviet statement
of 5 August did not repeat Mos-
cow's earlier threat to "take
resolute measures to rebuff
the aggressors," but according
to TASS, Kuznetsov told the
Security Council on 8 August
that the USSR was ready to
"pool its efforts with the
other UN members to cut short
the aggression."
Soviet leaders apparently
hope that implied threats of
unilateral intervention will
increase pressure for the early
withdrawal of Belgian troops,
enabling Moscow to claim cred-
it for having protected Congo-
lese independence and unity.
Soviet propaganda continues
to denounce the efforts of
Hammarskjold and Under Secretary
Bunche, accusing them of "be-
hind-the-scenes intrigues and
unworthy tricks" in support of
"new adventures" of the co-
lonialists. In the 8 August
Security Council meeting, Soviet
delegate Kuznetsov charged that
the UN force was authorized to
overcome any resistance it might
encounter and stated that if 25X1
the "UN Command" was not able
to carry out its instructions,
it should be replaced.
THE LAOTIAN COUP
There is as yet no sign
that the coup in Laos carried
out by the 2nd Parachute Bat-
talion and allied elements on
the night of 8-9 August has re-
ceived support beyond the
Vientiane area. A nucleus of
the legitimate government, in-
cluding Premier Somsanith and
Foreign Minister Khamphan Panya,
is in Luang Prabang with the
King.
While Captain Kong Le, the
26-year-old commander of the
2nd Parachute Battalion, re-
mains the ostensible leader of
the Vietiane "revolutionary
committee," there are strong
indications that he is being
manipulated by more experienced
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
hands. Prominent among his
probable backers is Bong Sou-
vannavong, a neutralist poli-
tician who long has served as
an apologist for the Pathet
Lao. Two of Bong's sons, both
of whom are considered extreme
leftists, appear to have played
a particularly important role
in the coup. Quinim Pholsena,
leader of the left-wing San-
tiphab party, also may have
some influence on Kong Le. Two
army generals, both of whom had
reason to fear that the rapidly
rising General Phoumi intended
to shunt them aside, also seem
to be associated with the coup
group, but their commitment to
the revolution seems open to
question.
The position of Prince
Souvanna Phouma, the neutralist
former premier and one of Laos'
leading national figures, seems
somewhat anomalous. He is in-
cluded in the "provisional ex-
ecutive committee" announced
by the "revolutionary commit-
tee," but does not seem to have
been one of the instigators
of the coup. He is probably
maneuvering to keep his foot
in both camps in the not
unlikely event that he should
be called upon to serve as
a unifying agent if a mili-
tary stalemate develops between
the two contending regimes.
However diverse the ele-
ments embracing the "revolution-
ary committee," they seem fair-
ly united in their desire for
a disengagement from Laos' close
association with the United States.
There also appears to be strong
sentiment for contacts with the
Sino-Soviet bloc and an end to
the "civil war" with the Com-
munist Pathet Lao. One of the
first actions of the group, if
it were to gain control over
all of the country, would almost
certainly be the expulsion of
American military training
teams now working with the
Laotian Army in cooperation
with the French.
The Spmsanith.government
has clearly indicated that it
will try to mount a counter
offensive against the Vientiane
group. Planning to this end
is still probably in the pre-
liminary stage, but it may in-
clude an overland march by
loyalist troops at Luang Pra-
bang. Such a venture would
be difficult during the current
rainy season, however. In addi-
tion to terrain problems, over-
land operations might also be
interdicted by pockets of Pathet
Lao insurgents, who are able to
operate with considerable free-
dom of action.
The two contending regimes
may try to work out some kind
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11 August 1960
of compromise. Armed Forces Com-
mander General Ouane has al-
ready gone to Vientiane in an
effort to find out the rebels'
terms.
Any compromise would in
all likelihood lead to some
loosening of Laos' ties with
the United States, a friendlier
policy toward the Sino-Soviet
bloc, and an effort to reach a
negotiated settlement with the
Pathet Lao. Such a solution
might involve the installation
of Souvanna Phouma as the premier
of a broad coalition government.
Communist China so far has
not reported the coup; North
Vietnamese broadcasts indicate
sympathy for the rebels. Al-
though Ham6i has not specif-
ically endorsed the revolution-
ary committee, it has rebroad-
cast rebel communiques and
criticized the Somsanith govern-
ment.
Khrushchev used a Pravda
interview on 9 August to convey
a broad hint that he might lead
the Soviet delegation to the
UN General Assembly this fall.
His remarks elaborating on Mos-
cow's proposal that the heads
of government attend the ses-
sion were apparently timed to
strengthen the hand of the
Soviet UN delegation in pre-
venting a meeting of the UN
Disarmament Commission request-
ed by the United States. Khru-
shchev hinted, as has the So-
viet delegation, that the USSR
would boycott any such meeting
and sought to minimize its
value by describing it as a
US election maneuver to de-
ceive world opinion.
Although even a brief ap-
pearance in New York to address
the UN would carry the risk of
an adverse reaction in the
United States, Khrushchev may
see distinct advantages in
such a move, possibly in con-
junction with visits to Cuba
and Mexico. Raul Castro re-
cently stated that Khrushchev
had set a definite date for a
trip to Havana, but Mexican
officials continue to deny
that he will attend independence
celebrations in their country
in mid-September.
Khrushchev's advisers have
probably oversold him on the
success he scored last September
when he unveiled his complete
and general disarmament scheme.
A second appearance would pro-
vide an opportunity to refurbish
the peaceful image which he
sought to create at that time.
The UN
would also be a suitable forum
to review the Soviet disarma-
ment plans and the failure of
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
negotiations, and possibly cli-
max a speech with some dramatic
gesture, such as a call for a
world disarmament conference.
Khrushchev also used the
Pravda interview to renew his
criticism of Western disarma-
ment policies, and his letter
of 4 August to Prime Minister
Macmillan continued to reflect
the more militant line that
has come to dominate the con-
duct of Soviet policy since the
breakdown of the summit. In
the letter Khrushchev dropped
the deferential treatment pre-
viously accorded the prime min-
ister and sharply attacked Brit
ish foreign and colonial policies.
The Soviet leader made no
serious effort to allay Mac-
millan's expression of "deep
concern" over the future course
of Soviet policy. Instead, he
attempted to embarrass Macmillan
and to advance the broader ob-
jective of weakening Allied con-
fidence in US leadership. Be-
ginning with a broad criticism
of the prime minister for "de-
liberately misinterpreting" the
causes behind the current de-
terioration in international
relations, "in order to accom-
modate your allies," Khrushchev
also accused Macmillan of
"covering up" for the US,
assuming a hostile position to-
ward the Soviet Union, and feign-
ing perplexity over Moscow's
aims.
On specific issues raised
by Macmillan, Khrushchev pulled
no punches in criticizing Brit-
ish colonial policy and actions
in the Congo crisis. He de-
scribed British policy as merci-
lessly exploiting and subjugat-
ing many millions of people for
hundreds of years, and he ac-
cused London of conniving with
and approving of Belgian "ag-
gression" in the Congo.
Khrushchev's heaviest fire,
however, was directed toward
American overseas bases. Re-
viewing the U-2 and RB-47 inci-
dents, Khrushchev reaffirmed that
Defense Minister Malinovsky's
warning of rocket retaliation
against bases "remains valid,"
and that as long as such bases
exist, the USSR will undertake
"all necessary measures against
them." He declared that con-
tinuation of the "cold war" is
tied to the issue of US bases,
and maintained that such a sit-
uation could not be liquidated
by "any agreement" as long as
he bases remained.
On the crucial issue of
Berlin, however, Khrushchev re-
affirmed his early post-summit
commitment that unilateral ac-
tion on a separate peace treaty
would be deferred until the is-
sue could be discussed at another
summit meeting. He acknowledged
that no meeting was probable
until after the US elections,
and he implied that the next
conference could take up dis-
armament, a nuclear weapons
ban, and the German and Berlin
questions. He warned, however,
that if the West refused a
meeting or prevented agreement,
the USSR "would embark on the
conclusion of a peace treaty
with East Germany."
Khrushchev's renewal of
his pledge to maintain the
status quo in Berlin, an issue
which was not raised by Mac-
millan, probably was prompted
by the widespread speculation in
the West that some drastic ac-
tion is being planned for the
US election period.
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11 August 1960
Nuclear Test Ban Talks
While awaiting Western re-
action to Moscow's rejection of
a US plan for research tests
employing nuclear devices, the
Soviet delegation raised the
issue of Chinese participation
in a test ban treaty. The Soviet
representative rejected an
article calling for accession
of states and "authorities" and
allowing the control commission
to decide which states would be
permitted to request admission
and which would be invited to
sign. He submitted a counter-
proposal providing that adherence
to the treaty be open to all
states which assume the treaty's
obligations.
The Soviet delegate cited
China as an example of a state
which, under the US proposal,
would lead to a dispute, since
the Soviet member of the control
commission would maintain that
Communist China should be in-
vited to adhere, while the US
would request that Nationalist
China be invited. He repeated
the standard formula of only
"one China" and urged acceptance
of the Soviet formula in order
to avoid questions arising out 25X1
of differing views as to status
of "certain existing regimes."
DEVELOPMENTS IN CUBA
Evidence continues to accu-
mulate that advanced prepara-
tions are under way for future
deliveries of bloc arms to
Cuba. A group of Cuban military
trainees now may be in Prague
for instructions, probably as
the initial phase of implement-
ing a bloc-Cuban arms agreement.
Neither Soviet nor Czech arms
are known to have arrived in
Cuba.
On 7 August, Fidel Castro
launched the regime's sharpest
anti-US attack to date in a
speech announcing confiscation
of further American properties.
The tirade, delivered at the
closing session of the Communist-
dominated Latin American Youth
Congress, constituted a frank
appeal to the Latin American
people over the heads of their
governments. Castro boasted that
neither the US, which he called
"militarily second best," nor
the "lackey foreign ministers"
of the Organization of American
States could halt Cuba's revo-
lution and a hemisphere-wide
"revolution against the Yankee
colonial yoke."
The decree of 7 August un-
der which most of the remaining
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
US-owned property in Cuba was
nationalized was the regime's
most provocative anti-US act
yet. Properties expropriated
include the electric company,
the telephone company, the oil
refineries which already had
been taken over, and all remain-
ing sugar mills and lands. The
total value of these properties
is estimated at $700,000,000.
Physical seizure of the nation-
alized plants clearly was pre-
arranged and was carried out
immediately, often by elements
of the "people's militia."
The promulgation on 9 Au-
gust of a decree creating a "Na-
tional Institute of Mining,"
which is to operate under the
National Institute of Agrarian
Reform (INRA) and control Cuban
mineral production, may presage
the seizure of US-owned mining
interests, which were unaf-
fected by the 7 August decree.
These extreme provocations
suggest that the regime may
even be trying to provoke US
military intervention, in the
belief this would enhance pros-
pects for a Latin American
revolution against "US imperial-
ism.'
The pastoral letter which
was read in all Cuban Catholic
churches on 7 August marks the
end of the church's cautious
position toward the regime. The
letter vigorously attacked Com-
munism and declared that the
church is "profoundly disturbed
by the fact that newspapermen,
labor leaders, and even some
government officials have re-
peatedly and enthusiastically
eulogized the system of life"
in Communist countries.
Response to the letter was
received by a majority of con-
gregations in the Havana area,
although a number of pro-Castro
Catholics allegedly left their
churches when the letter was
read, and fighting between pro-
and anti-Castro elements is
reported to have taken place in
several areas following the
services. The government-con-
trolled press attacked the
clergy for not having denounced
the brutalities of the Batista
regime and declared that if the
church were to pit itself against
the revolution, "the one who
will lose will be the church."
25X1
25X1
Additional gatherings of
Communists and Communist-front
groups are scheduled, now that
the youth congress is over.
"Volunteers" from a number of
countries, including most Sino-
Soviet bloc nations, are arriv-
ing to participate--with many
delegates to the congress who
have remained in Cuba--in build-
ing a "school city" in the
Sierra Maestra. Cuba's Popular
Socialist (Communist) party is
inviting foreign delegates to
its eighth congress, which
previously was planned for
July but now apparently is
to begin on 16 August. A
congress of Communist par-
ties of underdeveloped coun- 25X1
tries reportedly will be
held in Cuba later this
year.
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11 August 1960
NOTES AND COMMENTS
AMERICAN FOREIGN MINISTERS' MEETINGS
Venezuelan charges of ag-
gression by the Dominican Re-
public and a Peruvian request
for consideration of threats to
the hemisphere system will be
discgssed at two consecutive
meetings of American foreign
ministers, opening 16 August in
San Jose, Costa Rica. At both
meetings those who propose some
kind of joint action as well as
those in opposition are likely
to formulate their positions as
defense of the principle of non-
intervention in the affairs of
other countries.
Venezuela's attention is
centered on the first meeting,
which many of the governments
consider a kind of practice
run. The Dominican Republic,
which is charged with complicity
in the attempt on 24 June to
assassinate Venezuelan President
Betancourt, is expected to ap-
peal to the principle of non-
intervention as a shield against
joint inter-American action de-
signed to force the eventual
ouster of the Trujillo regime.
It may also use the recent,
purely formal, changes in person-
nel to claim that the regime has
changed and that any charges
against its "predecessor" are
now irrelevant. While the
Trujillo dictatorship is intense-
ly disliked throughout the hemi-
sphere, and the foreign ministers
are likely to consider economic
sanctions against it, adoption
of such measures is uncertain,
since some governments oppose
establishing precedents for
subsequent use against Castro's
Cuba.
The Colombian Government,
whose President, Lleras Camargo,
was for seven years the secre-
tary general of the Organization
of American States (OAS), is
placing major emphasis on the
preservation of the OAS, which
Lleras feels has replaced the
Monroe Doctrine as a defense of
the hemisphere. Until last
month Colombia had supported
Venezuela's position--that con-
sideration of Trujillo's regime
took precedence over that of
Castro's--but a Cuban complaint
to the United Nations against
the United States at that time
convinced Colombian officials
that Havana threatened the role
of the OAS as the adjudicator
of complaints within the hemi-
sphere.
Argentina and several of
the Central American govern-
ments are particularly interested
in taking a hard line on Cuba
and on the question of Soviet
intervention in the hemisphere.
Their awareness of the menace
of international Communism was
heightened by the intervention
of pro-Communist Cubans in their
countries.
Mexico, with some support
from Bolivia and Uruguay, may
lead the opposition to any anti-
Castro move. Mexico is said to
be planning a unilateral break
in relations with the Dominican
Republic prior to 16 August to
avoid complying with any OAS
resolution recommending such
action. In that way it would
not be bound by precedent in
approaching the Cuban question
at the subsequent meeting.
Brazil is giving major em-
phasis to the popular theme of
Latin America's economic develop-
ment. President Kubitschek's
desire to pry "massive support"
from the United States for his
development plan--Operation
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
Pan America (OPA)--is result-
ing in a cautious and neutral-
ist approach to the Cuban prob-
lem. Brazil is expected to
withhold full cooperation on
the Cuban issue at the meet-
ing of foreign ministers unless
SITUATION IN THE
it receives from Washington a
quid pro quo on OPA or unless
other Latin American nations
provide substantial unrese ved
support for US viewpoints.
DOMINICAN REPUBLIC
Generalissimo Rafael Tru-
jillo has followed up the res-
ignation of President Hector
Trujillo, his brother, and the
elevation of Vice President
Joaquin Balaguer to the presi-
dency on 3 August by making
several more government changes
in an attempt to clothe his
dictatorship with a "new look"
prior to the Organization of
American States (OAS) foreign
ministers' meeting on 16 August
in San Jose, Costa Rica. Vene-
zuela's charges that Trujillo's
regime is guilty of aggression
and of an assassination attempt
against President Betancourt
will be considered then, but
Trujillo apparently believes he
can avoid OAS sanctions if he
creates an impression that he
has relinquished or lost control.
President Balaguer removed
two of the dictator's relatives
from the military high command
immediately after his inaugura-
tion and reshuffled the cabinet
on 7 August. Four new persons
were appointed to the cabinet,
but the US Embassy at Ciudad
Trujillo has commented that none
of them is connected with the
opposition. Balaguer, who has
been a writer, diplomat, uni-
versity professor, and, since
1957 vice president, has given
no indication that he is acting
contrary to Trujillo's desires.
In his inaugural speech he said
his main job would be to con-
tinue Trujillo's "process of
democratization."
Trujillo had Balaguer ap-
point him head of the Dominican
delegation to the United Nations
session to begin in September..
No date for his departure has
been announced. Trujillo's
appointment does not necessarily
mean his loss of control. He
has gone abroad before,and on
one occasion' his departure was
followed by a particularly
bloody period of repression.
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11 August 1960
the Castro regime in Cuba be-
cause it was brought about by a
popular revolution.. This prop-
aganda line apparently is an
expression of Trujillo's extreme
bitterness toward the US;
however, he may hope his attack
will win support for him from
anti-US circles in Latin America
and leave a heritage of anti-US
feeling in the Dominican Repub-
lic if he is forced out.
There are recent indica-
tions that the dictator, de-
spite his wily tactics, is be-
ginning to realize that his time
may be running out. He has.al-
ready given some members of his
family permission to leave the 25X1
The government-controlled
press and radio have recently
made vicious condemnations of
"US espionage activities" in
the Dominican Republic and
throughout the world and have
accused Washington of combating
country and he could leave .
promptly if the situation war-
ranted.
FANFANI GOVERNMENT IN ITALY APPROVED
Premier Fanfani's minority
cabinet, made up entirely of
Christian Democrats, has been
confirmed with the broadest
parliamentary support given any
Italian government in 12 years.
For the first time during this
period, the Nenni Socialists
refrained from opposing a new
cabinet. Fanfani's decision
to reconvene the Chamber of
Deputies on 5 September empha+
sizes the need for urgent action
COMMUNITY MOVEMENT 1-
DEMOCR
A
IC SOCIALISTS 17
A
T
INDEPENDENT LEFT I
on controversial legislation.
Modification of the provincial
electoral law is to be consid-
ered in an effort to pave the
way for local elections in the
fall.
Fanfani was confirmed on
5 August by a vote of 310 to 156
with the support of the Chris-
tian Democrats, Democratic'So-
cialists, Republicans, Liber-
als, and three independents.
VOTE CONFIRMING
FANFANI GOVERNMENT
5 AUGUST 1960
SUPPORT
ABSTAIN
OPPOSITION
5-INDEPEND'T. MONARCHISTS
-NEO-FASCISTS(MSI)
MONARCHIST
SECRET
In opposition were
the two extremist par
ties: Communists and
neo-Fascists. Abstain-
ing were the monarch-
ists and the Nenni
Socialists, who--for
the first time since
1947--did not join
the Communists in the
opposition. Although
they remain linked
with the Communists
in cooperatives and
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11 August 1960
labor unions,, the Socialists
have achieved substantial po-
litical autonomy from their for-
mer allies--with whom they dif-
fer on such basic issues as the
merits of the Soviet system and
the responsbility for the fail-
ure of the recent summit con-
ference--and are seeking rap-
prochement with the ruling Chris-
tian Democrats.
In presenting his program
to parliament,Famfani said his
government favors the develop-
ment and extension of NATO con-
sultations "on the basis of
parity" and will act in agree-
ment with Italy's Western allies
for a resumption of the ten-
power disarmament negotiations.
Domestic goals include: anti-
monopoly legislation which would
at the same time allow freedom
for private enterprise; imple-
mentation of a controversial
plan for agriculture; school
reform, a source of some con-
tention; development of nuclear
energy for peaceful purposes;
and the holding of local elec-
tions in the fall.
These elections will almost
certainly not be held in Octo-
ber as originally scheduled.
There is increasing support for
changing the provincial elec-
toral law from a majority to a
modified proportional system.
The Nenni Socialists have urged
such a change because it would
allow them to present tickets
free from electoral alliance
with the Communists. Such a
change is favored by several
smaller parties.
While the electoral law is
scheduled for discussion at the
opening session of parliament on 5
September, technicalities in
connection with it will probably
delay the local elections until
the end of November. There is
strong sentiment for putting
them off until spring, but most
parties are reluctant to accept
responsibility for postponing
them a full year beyond the
original date. Democratic So-
cialist leader Saragat has
stated that further delay would
expose the government to criti-
FINLAND PURSHASES ADDITIONAL ARMS FROM SOVIET UNION
Under the terms of an agree-
ment signed in Moscow late last
month, Finland will make its
second purchase of Soviet mili-
tary equipment in a period of
little more than a year. The
materiel, which includes 7
helicopters, 31 additional T-54
tanks, 21,000 automatic rifles,
1,000 machine guns, an additional
IL-28 aircraft, and ammunition
and spare parts, has a total
purchase price of some $16,000,-
000.
The negotiations have been
under way since last spring, and
in mid-July the Finnish nego-
tiators returned to Moscow with
cabinet authorization to spend
up to $25,000,000--the amount
reportedly earmarked by the
Finns for military purchases
under the long-term ruble com-
modity credit--for the equiva-
lent of $125,000,000--signed
in Moscow last December.
Little if any of this
credit has been drawn upon
either for industrial or mili-
tary purposes, except for
token purchases last year of
T-54 tanks, an IL-23 aircraft,
and a number of diesel motors
for small naval craft.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
Before 1959 Finland pur-
chased no Soviet military equip-
ment except motor vehicles for
its armed forces, largely be-
cause of the attitude of the
Finnish military. Unlike the
political officials, the mili-
tary leaders retain a deep dis-
trust and dislike of the Soviet
Union and regard dependence on
Soviet military equipment as
unwise. Moscow, however, has
persisted in its offers of
military aid--including MIG
jet fighters--and has sought to
encourage more friendly re-
lations between the #igher
military echelons of the two
countries by visits and ex-
changes of various types.
Finnish President Kekkonen
has been one of the prime movers
in the effort to foster closer
military ties with the USSR.
He has actively supported pur-
chases of Soviet military equip-
ment, apparently in order to
balance similar acquisition in
the West and thus demonstrate
Finland's "neutrality" in this
respect. The opposition of
certain influential military
leaders probably was overcome
by the realization that, under
present conditions, there is
little likelihood of an increase 25X1
in defense appropriations which
would permit significant pur-
chases in the West.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
NORTH VIETNAM'S DEFENSE MINISTER UNREPORTED SINCE EARLY MAY
North Vietnam's General Vo
Nguyen Giap, minister of defense
and long a trusted lieutenant
of Ho Chi Minh, is not known to
have made a public appearance
since 6 May. Giap has been ab-
sent for long periods before--
for over two months in late
1957, when he returned with his
party and government stature un-
scathed.
The 48-year-old Giap is a
professional soldier who ham-
mered guerrilla bands into a
regular army and led it success-
fully against the French at Dien
Bien Phu. His military exploits
and a flare for oratory have
given him a popular following
which, together with his con-
trol of the army, might be con-
sidered potentially dangerous
by some of his politburo col-
leagues. There have been re-
ports of friction between Giap
and the party's number-three
man, tough-minded theoretician
Truong Chinh, who favors strong
political influence in the
army.
Truong Chinh's hand prob-
ably was strengthened last year
when his protege--Nguyen Chi
Thanh, head of the army polit-
ical department--was given equal
military rank with Giap. Thanh's
promotion to full general led
to speculation that Giap was op-
posing use of the army as a
giant labor corps. Military
units devoted an impressive
165,000 workdays to agriculture
during the first half of 1960,
but complaints about lack of
discipline and of "enthusiasm
for production" suggest that
morale and efficiency have suf-
fered as a result of the labor
program.
Regardless of any sniping
there may be in the politburo,
the possibility of Giap's polit-
ical eclipse seems to be ruled
out for the moment, as he emerged
from the recent government reor-
ganization with an impressive
list of titles. On 15 July, he
was renamed vice premier and
minister of defense, made vice
chairman of the National Defense
Council, and appointed head of
the National Scientific Research
Commission charged with technical
innovations in North Vietnam's
economic development plan. It
is possible Giap has been travel-
ing to other bloc countries in
connection with this commission's
program, or that he has been ar-
ranging for modernization of North
Vietnam's armed forces--illegal
under the Geneva agreement.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
The Cairo press recently
stated Giap was in North Africa
training Arab volunteers for
the Algerian rebels. This re-
port_,_ however
based primarily on the fact
that the last time Giap was
observed, he was in the
company of a high-ranking Al-
gerian delegation visitin
COMMUNIST CHINA DEVELOPING ALUMINUM INDUSTRY
Communist China today
possesses a rapidly growing,
technically modern aluminum in-
dustry. Output has risen from
an initial 2,000 tons in 1954
to 70,400 tons in 1959.
COMMUNIST CHINA
ALUMINUM METAL PLANTS
4~ 1 L:
L> N
Fully operational
Partly operational
Under construction
shun plant, the sole producer
up to 1957, has been expanded
to 60,000 tons annually. Addi-
tional facilities now under
construction will give China a
total designed capacity for
0
Il. 60,00
`' t t j inn/` S.
ti NonT" `.1
14 t'a a~J,~-.i v e,Nnm
~T II aI LA NI~ '`;IeTN Aa
Current plans are for an
output of 180,000 tons for 1965,
and this goal appears conserva-
tive in view of construction
now under way on new production
capacity. Capacity at the Pu-
ge of canst uctia ^.
ca to T.
1,000 ~ ne caPac tY
U
1,000 1~10A00
ffofe% .
Wuhan. tfsiaofen9000
Chucho
"1,000
0,000
tfuan9pU
aluminum production of over
270,000 tons. Some of these
are in early stages of construc-
tion; others have begun limited
operations. The auxiliary fa-
cilities necessary for a fully
SECRET
PART II NOTES AND COMMENTS
S6 000 `
hun
Chongc
1' _i b0 p0 `~
J N~RTN
on
sh
nt
I- Fu
T an95hon
1,000 2.000
~ chuan otoo
uan Yq?9
Tait' ~loonsuaciroa
own
1 .000 iSiag aY irn 50 ,
and czD
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11 August 1960
integrated, self-sufficient alu-
minum industry also are under
construction.
Serious technological dif-
ficulties, relating primarily
to the necessity of using in-
ferior raw materials, have had
to be overcome. Almost all of
the aluminum ores available in
Communist China have a high
silica content and, when proc-
essed conventionally, involve
considerable waste and yield
an inferior aluminum. The Chi-
nese dealt with this problem
by adding .a preparatory process
--developed by the Japanese and
later improved by the USSR--
which results in a product that
can be processed by convention-
al methods. Despite this evi-
dence of technical competence,
China's aluminum industry op-
erates at high real costs com-
pared with Western standards.
Imports accounted for about
10 percent of new aluminum sup-
plies in China in 1959. The re-
gime has placed'a high priority
on the achievement of self-suf-
ficiency in aluminum production,
and sufficient new capacity ap-
pears to have been undertaken,
to make this objective attain-
able within the next three or
four years.
PEIPING MOVES TO SETTLE BORDER DISPUTES WITH BURMA AND NEPAL
Peiping has moved to clear
up border problems with Burma
and Nepal as part of its effort
to counter the image of an ag-
gressive China. The Chinese ap-
pear to have compromised on the
main points at issue in the
long-standing Sino-Burmese bgund-
ary dispute and to have made a
satisfactory reply to Nepal's
recent protest over alleged
Chinese troop incursions.
Premier Thou En-lai has
sent Nepalese Premier Koirala a
series of conciliatory replies
to his protest on 11 July that
Chinese troops had crossed into
Nepal's territory in the course
of photographic and survey mis-
sions. Koirala's charges fol-
loved the Sino-Nepalese clash
in the Mustang area on 27 June.
Chou's replies were intended to
smooth the path for the joint
Sino-Nepalese talks on border
demarcation to be held in
Katmandu and to deny India the
opportunity to point to inci-
dents along the Sino-Nepalese
border as proof of Chinese ag-
gression.
Although Chou again denied
that Chinese troops had entered
Nepal, he stated that the forces
had been entirely withdrawn.'from
the demilitarized zone, and
claimed that Koirala was "mis-
informed" over reports of new
incursions. According to Nepa
lese officials, Chou also offered
"profuse apologies" for the Chi-
nese action in extracting "con-
fessions" from ten Nepalese
villagers at the time of the
Mustang incident. While re-
serving his government's stand
that Chinese troops crossed into
Nepal at the time of the Mustang
incident, Koirala reportedly is
satisfied with the Communist
replies and expects a speedy
resolution of the disputed
border areas.
Peiping has used the re-
cent progress toward a solution
of the long-standing Sino-Bur-
mese dispute to prove that New
Delhi is to blame for the dead-
lock in the Sino-Indian boundary
negotiations. Chinese commentary
on the agreement reached on 2
August by a joint Sino-Burmese
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
border commission has stressed
that the settlement of any
boundary question "cannot
depend on unilateral efforts
alone," and that the progress
of Sino-Burmese talks was proof
that "complicated boundary
questions" can be settled;,Dy
peaceful negotiations,,ptovided
both governments and leaders
are willing.
last September, special in-
terest was shown in Chinese
agricultural methods, and
Kabul now may seek some Chinese
technical aid to increase
food a
nd textile
production
under
its Second live-Year
Plan
(1961-66)
'.%abul will
probably welcome
a friend-
ship treaty as a means of
emphasizing that it remains
aloof from tensions between
Communist China and some other
In the agreemebt, which
is to be the basis for a final
border treaty, Pei-
ping accepted the
Burmese definition
of the extent of the
Kachin State area in
the north to be ceded
to China and granted
Burma clear title to
the Namwan Leased
Tract in return for
a small segment of
the Ira States in the
south. The Burmese
hope the treaty will
be ready for signature
during )Prime Minister
U Nu's prospective
visit to Peiping in
October.
The Chinese will
undoubtedly use the
visit of Foreign
Minister Chen Yi to
Afghanistan in late
August to bolster the
impression of a China
anxious for "peace-
?ful coe*tmteneN'"
with its neigh-
bors.
During the visit
of the delegation led
by Afghan Prime Minis-
ter, Naim to Peiping
SINO-BURMESE BORDER AREA
International boundary, as shown on
former Chinese Communist sources
Road
Railroad
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
New Delhi's recent actions
in expelling Chinese Communist
nationals and closing down New
China News Agency (NCNA) facili-
ties in India point up the Nehru
government's continuing vexation
with Communist China's policies.
In late July, 16 Chinese
residing in Bengal were reported-
ly ordered to leave the country.
At least three of them were
born in India and were associat-
ed with the Communist journal
China Review. These expulsions,
some of w1T1_ch have been confirmed
by official sources, appear de-
signed to curtail Communist ac-
tivities among the large Chinese
minority living in eastern India.
The action against NCNA
was slow in unfolding. New Del-
hi had long been disturbed by
NCNA's activities in India, but
the agency's slanted reporting
on the recent government workers'
strike apparently brought the
issue to a head. India re-
fused to renew the visa of Kao
Liang, NCNA's correspondent in
New Delhi, charging him with
malicious and tendentious re-
porting. New Delhi reportedly
then refused to issue a visa
for his proposed replacement
and ordered the Chinese to va-
cate NCNA office space and com-
munications facilities. Peiping
withdrew the correspondent and
his staff with an air of ag-
grieved innocence and lodged a
protest with the Indian Govern-
ment denying the "unreasonable"
Indian charges and demadding
restoration of NCNA's facilities
in New Delhi.
Apart from propaganda and
diplomatic protests, Chinese re-
course is limited, for there are
no Indian newsmen in China. Pei-
ping may attempt to harass In-
dians residing in China, but
it is unlikely to take any ac-
tion that would jeopardize the
joint "fact-finding" talks on the
border dispute which are about
to be reconvened in New Delhi.
President Sukarno is ex-
pected to announce some anti-
Dutch move on 17 August, In-
donesian independence day, in
retaliation for the recent
arrival of Dutch naval units in
Indonesian-claimed Netherlands
New Guinea.
Su- 25X1
karno is considering nationali-
zation of the Shell oil company
in Indonesia, or at least the
Dutch share of it. Although na-
tionalization of only the Dutch
part would be extremely compli-
cated, inasmuch as the company
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
now is held by Canadian Shell
and Shell Overseas of Lon-
don, Sukarno would give little
consideration to such a fac-
tor.
The Dutch ships, which
include the aircraft carrier
Karel Doorman and two cruisers,
arrived at Hollandia on 2 August
Karel Doorman Itinerary
Exercises
24-26 August
a o~
MISUL
}rosy V 8146 -79 August
M..It. ri
IN PONESI A
~~J .. PULAUPULAU
TANIMBAR
PULAU-PULAU
SWAB ~~ PULAU-
UUU000 PULAU
M ULUCC AS oARU
Hoiiandio* I
2-S August
AUSTRALIA
and will tour other West New
Guinea ports this month; they
re scheduled to leave the area
on 30 August. Their presence
poses the possibility of an armed
incident as a result of chance
encounters with Indonesian air
patrols. Djakarta has deliberately
revived Indonesian public con-
cern over the Dutch naval move-
ment, and President Sukarno's
speech on 17 August, which is
likely to be highly emotional
and extremely nationalistic,
will further increase tension.
The most critical period will
be from 24 to 26 August, when
the Dutch ships will be engaged
in exercises north of New
Guinea.
TERR. OF
NEW GUINEA
(Aus-isa)
TERR. OF
PAPUA
(Australia)
Sukarno may also
announce the formation
of his long-planned
National Front, through
which all political
and functional groups
would work with the
government. The front,
whose organization:
will extend to local
levels, is intended
to be the principal
vehicle for ensuring
mass support 'of
"guided democracy."
Despite the apparent
goal of harnessing
political parties,
it is unlikely that
the front will sig-
nificantly hamper
the Communists.
Sukarno contin-
ues to withhold his
full support from
army harassment of
the Communists. Since
army measures against them
began in mid-July, Sukarno
has in effect reassured the
Communists by stating publicly
that his views coincide in
many areas with those of the
party,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
The Afghan Army has been
expanded since last summer from
a force of about 54,000 officers
and men to approximately 70,000.
This increase continues an ex-
pansion begun two years ago,
when army strength was esti-
mated at 44,000.
Prime Minister Daud relies
heavily on the army to overcome
tribal and conservative religious
resistance to his development
and reform programs. He also
wishes to guard against moves
by neighboring Pakistan among
the frontier tribes.
When the army was increased
to 54,000 men in 1959, Daud sent
additional troops to the Push-
toon tribal areas near the Paki-
stani border. This initial ex-
pansion, however, was not suf-
ficent. The heavy concentration
of troops normally stationed in
the Kabul area was substantial-
ly reduced by diversions to the
tribal areas. The latest ex-
pansion may enable Daud to re-
EXPANSION
store the Kabul garrison to full
strength while maintaining the
enlarged force in the tribal
areas.
In addition, the expansion
will enable the army to satisfy
the increased demands on it as
the chief source of conscript
labor for economic development
projects. Work has begun on
several Soviet-assisted projects,
including dams, the Kushka-
Kandahar road, and the Kabul
airport, all of which will re-
quire large numbers of workers.
By placing an additional
burden on the army's already
inadequate command structure-and
support organizations, the rapid
build-up will probably reduce
the general effectiveness of
army units, at least temporarily.
At the same time, officers and
noncoms may come to rely more
heavily on Soviet military in-
structors and advisers in per-
formance Of their duties.F -
Elections to the Iranian
parliament are now in progress,
and the open rigging will re-
flect unfavorably on the govern-
ment and the Shah. The Shah,
although publicly promising free
elections, is trying to assure
an obedient new parliament. The
disorders which have been re-
ported from several places in
the provinces suggest that
strong security measures will
be necessary for the still-un-
scheduled Tehran elections.
However, these will have to be
held by early October if parlia-
ment is to open on schedule.
In the important city of
Isfahan an influential.' moderate
candidate has been arrested
and is being held incommunicado.
The Shah has ordered that a
popular nationalist candidate
in another constituent be de-
feated "at an cos "
e c ums ness o e
present rigging will probably
alienate many otherwise com-
placent voters, and the in-
creased intriguing which can
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
be expected against the Shah
and the government will prob-
ably find a broader basis of
support.
The Shah has probably been
shielded from the realities of
the current situation--as has
been the case in the past--by
the self-serving hangers-on
who form most of his retinue.
He has been told several times
of the dangers of the present
course but appears to regard
such warnings as based on
ignorance of the true situ-
ation.
The removal on 8 August
of General Aryana from his post
as chief of the ground forces
is officially because of "in-
subordination." The Shah may
have felt that Aryana was gain-
ing too much power and popu-
larity or may have thought he
was engaging in intrigues against 25X1
the throne. Aryana has been ap-
pointed to a sinecure as adju-
tant to the Shah.
British officials and rep-
resentatives of Nyasaland po-
litical factions reached sub-
stantial agreement during the
recent constitutional discussions
on the protectorate's political
advancement. Nationalist leader
Dr. Hastings Banda accepted
a solution which gave the
Africans much less power than
he had demanded. As a result
of the conference, relations
between Britain and Nyasaland
nationalists are unusually
amicable, but the underlying
problem of the protectorate's
relationship with the white-
dominated Federation of Rho-
desia and Nyasaland has not
been solved.
he arrived in his homeland in
July 1958 after years of self-
imposed exile in the United
Staes and Britain. He was
imprisoned for his part in the
Nyasaland disorders of early
1959, and upon his release in
April 1960 seemed intent on
pursuing his extreme African
nationalist objectives. Although
he counseled nonviolence, there
was an implied threat of dis-
orders if his sweeping demands
for African advancement were
not met. Banda was greatly
impressed, however, by Brit-
ish Colonial Secretary Mac-
leod, whom he has character=
ized as a "Christian gentle-
man" and one with whom he can
cooperate.
Banda has waged a virulent
campaign for Nyasaland's separa-
tion from the Federation since
The talks began in London
on 25 July with all segments
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11 August 1960
of Nyasaland political opinion
represented. Banda demanded uni-
versal African suffrage, Af-
rican control of the Legisla-
tive Council, and an Executive
Council--containing heavy Af-
rican membership--which would
be more than advisory to the
governor. London agreed that
Africans will elect 20 of the
33 members on the Legislative
Council, but refused to appoint
more than three Africans to the
ten-member advisory Executive
Council. Furthermore, although
close to 100,000 natives now
will be eligible to vote, suf-
frage will be far from universal
and will be subject to income,
property, and literacy quali-
fications. Banda still hopes
to obtain Britain's agreement
to elections in November rather
than in 1961.
Banda's acquiescence to
the terms of the conference has
prompted speculation he may have
been reassured that in the forth-
coming constitutional review of
the Federation of Rhodesia and
Nyasaland, Britain will espouse
greater autonomy for Nyasaland.
His attitude is also seen as a
sign of confidence in his abil-
ity to control his nationalist
Malawi Congress party.
The successful conclusion
of the Nyasaland talks will give
Britain a breathing spell in
Central Africa, which is increas-
ingly becoming caught up in the
tension and conflict of nation-
alism and racialism. However,
the nationalists of Nyasaland
are not likely to remain con-
tent for long with anything less
than African control of the pro-
tectorate's internal affairs
and an early severance of ties
with the white-controlled Rho-
desian Government.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
PATTERNS AND PERSPECTIVES
SOVIET IMPORTS FROM WESTERN EUROPE ON THE RISE
The rise in Soviet imports
from Western Europe in 1960 has
been so great that the USSR's
usual export surplus in trade
with these countries has been
almost eliminated. Mounting
requirements for capital equip-
ment from the industrial West
will increase the strain on
Soviet foreign exchange re-
serves. As a result the Soviet
Union probably will intensify
its drive for long-term Western
credits, increase gold sales,
and attempt to expand ex-
ports--in some cases by selling
at lower than world
prices.
Soviet imports from West-
ern Europe for the first three
months of 1960 amounted to
$160,000,000--compared with
$80,000,000 for the same period
in 1959; exports totaled $168,-
000,000, barely keeping pace
with the level achieved in
1959.
The increase in imports
reflects to a large extent in-
creased imports of plant equip-
ment for the Seven-Year Plan
(1959-65). The importance of
Western machinery and equipment
for the achievement of plan
goals was evident in the $100,-
000,000 increase last year over
1958 in imports of machinery
and equipment from the West,
following a three-year period
during which such purchases
declined.gradually. The most
spectacular rise--to four
times the 1958 level--was in
chemical equipment, three
fourths of which came from
Britain and West Germany.
The USSR is expected to
buy $750,000,000 worth of chem-
ical plants and equipment from
the West during the Seven-Year-
Plan period. An estimated $100,-
000,000 worth had been imported
by the end of 1959, indicating
even larger imports in the next
few years. The $250,000,000 worth
of equipment ordered in 1959--
largely from West Germany,
Britain, Italy, and France--
will be reflected to a much
greater extent in Soviet im-
ports this year. Orders for
food-processing, metallurgical,
electronic, and other equip-
ment -are' expected to in-
flate Soviet purchases even
more.
Since the USSR relies
greatly on foreign exchange
SOVIET IMPORTS OF MARRY AND EQUI
PR III THE INDUSTRIAL W1ST
1 )
1956 1957 1958 1959 1960'
'CHEMICJLL EQUIPMENT FIGURE NOT AVAILABLE (I ET QUARTER)
00@09 3 I AUGUST 1960
earned from such countries as
Britain to finance raw-materi-
als purchases from certain un-
derdeveloped countries, a con-
tinued high level of imports
from Western Europe would cut
deeply into the USSR's supply of
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
foreign exchange. To induce
increased commodity exports in
order to pay for import needs,
the USSR in the past has re-
sorted to price-cutting on
world markets.
Such tactics no doubt
played a significant role in
the stimulation of sales to the
West. In fact, the USSR
achieved an export surplus in
commodity trade with the indus-
trial West in 1959 amounting to
$100,000,000, the largest since
1955. The surplus, however, was
apparently inadequate to offset
a deficit in the Soviet balance
of payments in 1959, and the
USSR sold a considerable amount
of gold--estimated at $350,000,-
000. Soviet gold has appeared
in international bullion markets
again this year, with sales ex-
ceeding $50,000,000 by the end
of May.
Realizing the increased
pressures on its foreign ex-
ECONOMIC OUTLOOK IN SPAIN
The Spanish Government's
failure to provide policy guid-
ance to business and to encour-
age increased private investment
tends to prolong the country's
economic recession. Cabinet of-
ficials still disagree as to
what steps should be taken to
effect an upturn. Labor and
business pressure may force a
badly needed general wage raise
this fall, to offset the feel-
ing of the workers that their
interests are being neglected
under the year-old economic sta-
bilization program. Any sizable
change position, the USSR has
waged a campaign to obtain
long-term credits from the
West. Thus.far Moscow has al-
ready obtained promises of at
least $250,000,000 in govern-
ment-guaranteed private credits,
and has contracted for at least
$100,000,000 worth of goods un-
der them. Nevertheless, be-
cause of the anticipated large
volume of Soviet equipment pur-
chases from. the West during the
next few years, it is unlikely
that Western credits will be
large enough to offset the ex-
pected balance-of -payments def-
icit.
Repeated statements by Khru-
shchev that the USSR conducts
its trade on the basis of goods
exchange, as well as continuing
reports of Soviet price-cutting
on Western markets, indicate that
Western businessmen can expect
continually growing competition
from Soviet goods.
pay hike would probably gener-
ate inflationary forces, thereby
threatening the program's fur-
ther success.
Governmental Inaction
The stabilization program
has succeeded in controlling in-
flation and strengthening Spain's
balance-of-payments position, but
industrial output is expanding
at a snail's pace. Businessmen
are reluctant to increase invest-
ment, largely because of doubts
about the future. The struggle
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
in the cabinet between champions
and foes of the stabilization
program is not likely to be re-
solved soon, despite the fact
that Franco in a mid-July speech
endorsed the program for the
first time. Such a situation
does not augur well for an early
liberalization of the govern-
ment's economic policies, which
the Organization for European
Economic Cooperation (OEEC) has
been seeking.
Finance Minister Navarro
Rubio, chief proponent of the
stabilization program, stated
publicly on 27 July that the
present problem was to reacti-
vate and "restructure the
economy, while at the same time
maintaining present fiscal and
monetary controls to prevent
recurring inflation. He pro-
posed to achieve this reactiva-
tion by providing medium- and
long-term credit on a selective
basis. His approach is not
likely to succeed unless the
deep-seated uncertainty of po-
tential Spanish investors re-
garding future economic policy
is dispelled. The American Em-
bassy in Madrid feels that the
government must take bold steps
of the stabilization program,
appears unconcerned about re-
organizing the economy. In a
mid-July press interview he in-
dicated disagreement with the
general fiscal and monetary con-
trols set up under the program
and expressed the view that the
program's objectives should be
considered achieved. He called
for reactivation of demand, even
at the risk of inflation, through
direct intervention in specific
sectors of the economy rather
than through the general econom-
ic regulation employed up to now.
Planell, reflecting the in-
terests of vested groups, is al-
so reluctant to remove existing
curbs that discourage greater
private investment. Late in
June, in response to proddings
by the finance minister and the
OEEC for greater liberalization
in this field, he announced con-
trols would be lifted but only
in cases where investment in new
plants or expansion of existing
plants did not exceed $33,000 and
envisaged no imports of machin-
ery,-,, or raw materials.
Labor Discontent
to create conditions which
would make possible a general
reorganization of the economy.
For some time labor has
felt the lag in industrial pro-
duction as layoffs and dismiss-
als have mounted in various
Minister of Industry Pla=?- parts of the country. Recently
nell,who is a leading opponent there have been fairly large-scale
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
dismissals in factories in
Madrid, Burgos, Bilbao, and
Barcelona involving from 21
to 59 percent of the working
force, and a large machinery
manufacturing plant in Barce-
lona is reportedly faced with
the prospect of closing down
and dismissing all of its
3,601 employees if it does not
receive new orders in the next
two months. The American Em-
bassy believes there are nu-
merous other instances of siz-
able dismissals.
Unemployment now exceeds
300,000, and the great majority
of the jobless receive no un-
employment compensation. In
addition, most workers still on
the job have lost overtime and
other incentive payments. For
some time there has been a
widespread feeling among the
workers that the sacrifices
called for by the stabilization
program have fallen primarily
on their shoulders. With their
per,cap'ita real income steadily
declining since the 40-percent
pay raise late in 1956, there
is growing political pressure
for a general wage boost as a
matter of social justice. Many
businessmen also favor it as a
means of stimulating lagging
consumer demand.
The finance minister has
shown his concern for social jus-
tice by sponsoring legislation
to provide special funds to fi-
nance certain specific objec-
tives, such as educational
scholarships, improved housing,
and loans for various groups in
the lower income classes. This
legislation was approved by the
cabinet on 10 June, and the funds
are expected to be available at
the beginning of next year. At
the same time, however, Navarro
Rubio insists present fiscal con-
trols must be maintained to a-
void inflation. The Commerce
Ministry, another proponent of
the stabilization program, takes
the position that economic sta-
bility is a prerequisite to the
achievement of social justice
and that the workers may imperil
their "hard-won social conquests"
if they demand wage increases.
Outlook
No early end to the eco-
nomic recession is in view.
Franco's announcement of sup-
port for the stabilization
program does not ensure the
resolution of cabinet differ-
ences over remedial measures
to spur an expansion of output
and the translation of intent
into action. Meanwhile, it
may be hard to head off worker
agitation for wage raises with
the admonition that labor will 25X1
be better off in the long run
if it "forgoes pay hikes now.
DEVELOPMENTS IN FRENCH-ALGERIAN PROBLEM
Prospects for an early re-
sumption of cease-fire talks be-
tween French officials and Al-
gerian rebel leaders are r'di-
miftishing. Algerian;;hppes 'for
increased international support
have risen following UN inter-
vention in the Congo, and there
has been an upsurge of terrorism
and military activity in Algeria.
While French public opinion ap-
pears increasingly ready to sup-
port De Gaulle's preferred solu-
tion--self-determination lead-
ing to some degree of autonomy
with close ties to France--the
rebels now may be less inclined
to accept such an arrangement.
Status of Cease-Fire Talks
Preliminary talks at Melun,
near Paris,Ubetween French
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1960
officials and Ahmed Boumendjel,
representative of the Algerian
National Liberation Front (FLN),
were suspended in late June,
largely over the issues of the
scope of subsequent discussions
and conditions for the recep-
tion in France of a rebel nego-
tiating team headed by Ferhat
Abbas, premier of the Algerian
provisional government. The
hard bargaining which charac.
terized these negotiations in-
dicated that substantive talks,
when held, would be difficult
and prolonged. Following the
breakdown, it was felt in Paris
that talks would not be resumed
before the fall session of the
UN General Assembly with its
anticipated annual test of in-
ternational support for the two
sides. There now appears to
be increasing pessimism in Paris
whether they will ever begin
again.
The French press bases its
current discouragement primarily
on international developments.
In particular, it is believed
in Paris that UN military in-
tervention in the Congo may
raise rebel hopes for similar
UN action to settle the Alge-
rian question. Until recently
it had been assumed that the
FLN would resume talks because
it '..had no 'alternative to
a continuation of the status
quo and an eventual request for
additional aid from Communist
China. The Congo pattern now
is seen as a way to permit in-
ternationalization of the con-
flict and avoidance of the ne-
cessity for a full rebel com-
mitment to either France or the
Chinese Communists.
In addition, there is spec-
ulation in Paris that the USSR
may reverse its position and
openly support 'the FLN. Khru-
shchev recently interceded on
behalf of an Algerian terrorist
who had been sentenced to death,
and the Soviet press and the
French Communist party have
renewed their attacks on French
Algerian policy.
Despite Moscow's
apparent intention to adopt a
more critical propaganda posi-
tion toward France's Algerian
policy, there is no other
evidence that the USSR is con-
sidering actual recognition
of the rebel government.
The bulk of the French pop-
ulation appears increasingly
favorable to De Gaulle's Alge-
rian policy. Rightist opposi-
tion, while still potentially
dangerous should there be any
new development which could be
interpreted as a "give away,"
is a less dominating factor on
the domestic scene than former-
ly. There is also less talk
about the danger of a coup in
the relatively relaxed atmosphere
that has prevailed since the
Melun talks ended.
Military Situation
French Army operations in
Algeria have continued without
apparent letup since the end of
the Melun talks. A major mili-
tary move, "Operation Cigale,"
with the crack 10th Parachute
Division as the principal army
unit, was launched on 25 July
in the Ouarsenis Mountains south-
east of Orleansville. Although
the operation was reported ham-
pered by extreme heat and rebel
dispersal into small groups, 169
rebels were killed and 65 taken
prisoner during the first week.
Other French military ac-
tivity has been largely devoted
to cleaning out isolated pockets
of rebel forces and, particular-
ly along the Tunisian border,
preventing large-scale breaches
in the frontier barrages and
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1l August 1960..,
replying to harassing fire from
across the frontier. Progress
was also reported made in paci-
fication. The French have in-
creased the number of "auto-
defense" groups--civilian home
guard units--in Algeria and the
Sahara from 1,117 in June 1959
to 1,791 in June 1960.
Although some local rebel
commanders were reported to
have ordered an end to terror-
ist attacks following the reb-
els' agreement on 20 June to
send representatives to Paris,
they were apparently overruled
by higher rebel authorities.
French Army headquarters at
Algiers noted that there were
38 incidents of terrorism in
Algeria on 21 June compared
with the daily average of 35
during the first three weeks of
that month, and by late July
terrorist outbreaks were report-
ed to have reached the abnormal-
ly high level of 60 a day. In
one of the worst~.terrorjst at-
tacks since the rebellion be-
gan,a band of 20-30 uniformed
rebels machine-gunned a crowded
bathing beach 45 miles west of
Algiers on 31 July, killing
13 and wounding at least 7 oth-
ers.
Study Commissions
Paris, meanwhile, has or-
ganized four 25- to 35-member
commissions selected from Al-
gerians elected as senators,
deputies, mayors, departmental
councilors, and members of
chambers of commerce and agri-
culture. Moslems are in the
majority on these commissions,
although moderates among the
European settler group are also
included.
The commissions are-sched-
uled to convene separately in
Paris beginning in mid-Septem-
ber, each to discuss an as-
signed question, such as the
modernization of agriculture,
the role of local organizations
in Algerian development, region-
al and departmental organiza-
tion, and relations among the
various ethnic groups of Al-
geria. The competence of the
commissions apparently is not
limited to-these specific sub-
je'cts and may include other mat-
ters of a general nature such
as allocation of government jobs
and promotion of Moslems. Al-
though almost all members of
the commissions favor De
Gaulle's program for Algeria,
there is no indication that the
President will give them any
political role which would be
incompatible with the resumption
of Cease-fire talks.
The rebels and the "ultras"
among the settlers have de-
nounced the formation of the
study commissions. The rebels
see it as a move toward biasing
any future settlement and threat-
ening hopes for Algerian inde-
pendence. The "ultras" view
the action as a step away from
their desire for integration
with France.
It has also been announced
in Paris that a new information
service is to be set up in Al-
geria, probably directly under
the delegate general. The new
service reportedly will under-
take the job of promoting the
formula of Algerian "associa-
tion" with France. The proposed
scope of this operation among
the local population is indi-
cated by government plans to,
buy some 1,000 television sets
for installation at each army-
administered social center and 25X1
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sified information rogram.
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CURRENT INTELLIGENCE WFFKT,Y SUMMARY
il'August 1960_:
LATIN;'AMERICAN ::ATTITUDES TOWARD -INTEANATIONALi.HiAF7AIRS
The two meetings of Amer-
ican foreign ministers beginning
16 August in San Jose, Costa
Rica, to discuss Venezuelan
charges against Dominican dic-
tator Trujillo and the Cuban
issue will probably highlight
Latin American attitudes on in-
ternational affairs. All Latin
American countries profess a
strong attachment to the prin-
ciple of nonintervention in the
affairs of another country. These
Countries also show)in
varying degree an af-
finity for isolation-
ism, a desire to pur-
sue a course in for-
eign affairs, not ex-
clusively identified
with that of the Unit-
ed States, and a be-
lief that the United
States overrates the
menace of internation-
al Communism.
Only the three
major countries--Ar-
gentina, Brazil, and
Mexico--consistently
take an interest in
world affairs. Lat-
in America as a
whole shows a basical-
ly isalationist posi-
tion and has long op-
posed "entangling
foreign alliances,"
not only for its own
governments but to
some extent also for
the United States.
The Latin Americans
have criticized the
Marshall Plan because
it constituted a
commitment outside
the western hemi-
sphere at a time when
the Latin American
republics had hoped
the hemisphere could
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go'back to giving primary at-
tention.to its own affairs.
A letter to President
Eisenhower in February 1960
--ostensibly from Chilean
students but written by adult
politicians and probably rep-
resentative of the views
of most non-Communist Chil-
eans--was sharply critical
of the inter-American system. It
asserted that the treaties and
:erica
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 August 1966
other documents which estab-
lished the system made solidar-
ity with Washington a legal ob-
ligation but gave the United
States more advantages and few
er obligations than the Latin
Americans. The letter did
not advocate terminating
the relationship but did sug-
gest three obligations for the
United States: to work for
Latin American disarmament, to
support economic integration of
Latin America, and to strive to
eliminate dictatorships within
the hemisphere.
The forces working against
isolationism since World War II
--such as the United Nations and
improved communications--have
been partly counteracted in'
Latin America by the decreasing
influence within most countries
of the well-to-do, who are most
likely to have close personal or
financial ties ab3qoad.. While
this formerly dominant group is
being ousted from government of-
fices, foreign ministry person-
nel are usually the last to be
removed. In Bolivia, the gov-
ernment claims to have deprived
the traditional ruling group of
all political power, and there
is almost complete lack of in-
terest in foreign affairs.
Throughout Latin America,
interest even in the affairs of
other countries is normally
small, although the 30-year-old
Trujillo dictatorship is wide-
ly disliked. Most governments
until recently felt that the
Trujillo dictatorship in the
Dominican Republic was essential-
ly Venezuela's concern. This
feeling was dissipated only when
Trujillo flagrantly disregarded
the principle of noninterven-
tion by becoming involved in
the attempt to assassinate
Venezuelan President Betancourt
on 24 June. Most Latin Amer-
ican governments have seen
Cuba as a problem primarily
for the United States, a
position the have generally
abandoned mainly because of
Khrushchev's ambiguous mis-
sile threat and CUba.' s resort
in;?oarly July td,'-the' United Na-
tions 'instead .of~ the-Organiza-
tion of:.Amerioan.)States (OAS)..
Attitude Toward Neutralism
Although all Latin Ameri-
can governments except the Cuban
are consistently more friendly
to the United States than to the
USSR, few of them seek to iden-
tify their foreign policies ex-
clusively with that of Washing-
ton. Even the small countries
of middle America do not always
feel constrained to adhere to
international positions important
to the United States. The in-
tense enthusiasm for expression
of an individual foreign policy
is exemplified in Panama's
drive to fly its flag in the
Canal Zone as a manifestation
of titular sovereignty there.
Temporary inclination to-
ward the main adversary of the
United States appeals to nation-
alist sentiment. Certain Latin
American politicians such as
Argentina's Peron, Brazil's
Vargas,, Chile's Ibanez, and
Bolivia's Paz Estenssoro have
revealed such motivation by
their approaches to both Nazi
Germany and Soviet Russia. The
Latin Americans, however, rath-
er than swinging between pro-US
and `pro-USSR positions, oscil-
late between a neutral and a
pro-US stance.
Brazil's current attitude
is an example. It is irritated
because Argentina has taken over
Urazil'-s role as Washington's
most helpful friend among the
major Latin American countries.
Brazilians also feel Washington
has not been enthusiastic over
President Kubitschek's "Opera-
tion Pan America" (OPA), a pro-
posal for an intense inter-
American campaign against
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11 August 1960
underdevelopment, Which he
terms a threat to hemisphere
security.
Consequently, there has
been conflict among Kubitschek's
foreign policy advisers over
tactics to gain more US support,
the two main opponents being
Foreign Minister Lafer, who fa-
vors a "hard line" on Soviet
intervention in Cuba, and Ku-
bitschek's principal adviser,
Frederico Schmidt, who advocates
seemingly neutralist tactics for
bargaining purposes. Schmidt
believes that "eliminating the
Cuban problem" would reduce
Brazil's "blackmailing" power
for OPA.
Some Latin American offi-
cials share Lafer's opinion
that Soviet intervention in the
hemisphere poses a serious
threat to the OAS. Neverthe-
less, there is a feeling, par-
ticularly in popular opinion
but also among political lead-
ers, that the United States ex-
aggerates the Communist danger.
Pro-European Attitudes
Among the United States'
OAS colleagues, the South Amer-
ican countries:~especially, a
desire for increased independ-
ence from US policy is sometimes
expressed in pro-European rath-
er than pro-Soviet attitudes.
Schemes have been proposed for
a "union" of all Latin countries,
for a Hispanic community, for a
Franco - Latin American third
force opposing "the material
civilizations of the US and the
USSR," or--prior to the large-
scale withdrawal of the colonial
powers from Africa--for a South
Atlantic military pact. Pre-
vailing pan-American concepts,
however, have prevented any
serious consideration of these
schemes by most governments.
In Mexico, interest in in-
dependence from the United States
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is not normally reflected in
even temporary alignment with
extra-hemisphere powers. Never-
theless the Mexican Governmott,
alone among the Latin Americans,
refused to sign a bilateral mil-
itary agreement with the United
States in the early period after
World War II; it was one of two
wli&ch abstained on the Caracas
resolution of 1954 barring Com-
munist domination from the area;
and~in the past year it has been
more tolerant of pro-Cuban agi-
tation within its borders than
most other Latin American coun-
tries. Mexican attitudes tend
to reflect nationalism and
strained relations in the past
with the United States rather
than pro-Communist strength or
a neutralist position.
Prospects
At the approaching OAS
meeting the Latin Americans are
likely to find a consensus in
opposing Soviet intervention in
western hemisphere affairs. In
discussions of both the Trujillo
regime--which is extremely un-
popular among Latin Americans--
and the Castro government--which
in most countries has strong
defenders in leftist groups--
agreement will be more difficult
since most countries will
be reluctant to approve
decisive OAS intervention in
the affairs of another Latin
American state.
The Ecuadorean president
of the United Nations Security
Council, during the discussion
of Cuba last month when the
USSR charged that Latin American
history is one of open inter-
ference by the United States,
expressed a view widely shared
in Latin America: that the
United States does not inter-
fere in Latin America because
the Latin Americans have strug-
gled victoriously for the prin-
ciple of nonintervention.
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