CURRENT INTELLIGENCE WEEKLY SUMMARY

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CIA-RDP79-00927A003100010001-7
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December 20, 2016
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April 17, 2006
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October 27, 1999
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SUMMARY
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Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 eo Slt CONFIDENTIAL CURRENT INTELLIGENCE WEEKLY SUMMARY COPY NO. 7 OCI NO. 0266/61 9 February 1961 CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE DOCUMENT NO. NO-CHANGE IN CLASS. 0 El DECLASSIFIED 25X1 CLASS. CHANGED TO: TS S 25X1 NEXT REVIEW DATE: AUTH: HR 70-2 DATE: REVIEWER: State Dept. review completed ANT;AJV25X1 TE 1Q351 Y AFR - , B0 '7oB Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 4 ~ 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. Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 OF IMMEDIATE INTEREST LAOS . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1 With the occupation of the strategic junction of Phou Khoun, government forces are planning a move eastward on he~~ettrong,Y,...de:ffended.,aKon'g=,Le : Pathet Iaao-:.bas's-xarea.L',, of the Plaine des Jarres; the forces committed to this movement, however, are believed inadequate. Probing action has already met strong resistance. The Chinese Nationalist irregulars who retreated into northwestern Laos from Burma are not now near any significant Pathet Lao concentration, Recent aerial reconnaissance indicates that Route 7 is open to truck traffic from North Vietnam as far as Ban Ban, some 40 miles inside Laos. Bloc airlift operations also continued throughout the week to sup- ply the Kong Le - Pathet Lao forces. Moscow still has not responded to the British com- promise proposal on 21 January for the return of the International Control Commission. . . . . . . . . Page 4 Mobutu, despite logistics problems and the question- able reliability of his troops, has begun to implement plans to retake Stanleyville. His river blockade of Stanleyville has been effective. The UAR and the bloc are still unable to send supplies for Gizenga across the Sudan. Meanwhile, Kasavubu has announced formation of a new Ileo government to replace Mobutu's commissioners. However, in view of the absence of representatives from the Katanga and Stanleyville regimes, it is unlikely to gain much wider- abheprtanby:.-.that athd K savxabu Mobbtu . Adminrietratlon4 . SOVIET PRESS COMMENTARY ON US POLICY . . . . . . . . . . . Page 7 Moscow's first press criticism of the US administra- tion appeared in Izvestia and Pravda articles of 4 and 5 February. Having permitted publication of the full text of the President's State of the Union message, the Soviet leaders probably felt those passages dealing with the bloc and specific East-West issues called for a response. First Deputy Premier Kosygin has indicated that Khru- shchev will return to New York for the UN General Assem- bly session, which resumes on 7 March. SECRET i THE WEEK IN BRIEF Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 SECRET 9 February 1961 PART I (continued) CUBA AND THE CARIBBEAN . . . . . . . . . . . . . . . . . . Page 9 The Cuban Government continues to be troubled by guer- rilla activities in the sierra Escambray area, and is now indicating some concern over the opposition efforts of Catholic and private school students. Castro's seizure of the company supplying water to the Guantanamo Naval Base does not increase the regime's capability to cut off the water supply or otherwise harass the base. How- ever, it does enable the Cuban Government to raise water rates in an effort to obtain additional needed dollars. The Trujillo dictatorship's economic difficulties have intensified, and in Haiti the threat of public dis- orders is increasing. The new civil-military leadership in El Salvador has succeeded in -curbing leftist elements. NOTES AND COMMENTS SOVIET PARTY LEADER DEMOTED . . . . . . . . . . . . . . Page 1 The appointment of Soviet presidium member Averky Aristov as ambassador to Poland is considered the result of political maneuvering among Khrushchev's lieutenants. Aristov has been relieved of his position as Khrushchev's deputy on the central committee's bureau for the RSFSR (Russian Republic), and his formal removal from the presidium is probably only a matter of time. Party ziecretary Frol Kozlov and RSFSSR Premier Dmitry Polyarsky stand to benefit most from. Arisr.ov's reverses. 25X1 SINO-6OVIET RELATIONS . . . . . . . . . . . . . Page 2 In contrast to the differences expressed openly by the Soviet Union and China in the period before the Moscow conference of Communist leaders in November, the two countries now present an air of cooperation and agreement. Despite the present stress on the importance of aino- Soviet solidarity and the attempts to play down differencesy however, basic disagreements are still indirectly ex- pressed in commentary from Moscow and Peiping. Should either party overstep the established limits for debate and policy, the dispute will almost certainly be renewed openly. SECRET ii Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 _-i t SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 PART II (continued) PEIPING MOVES TO ALLEVIATE DISCONTENT . . . . . . . . . . Page 4 Food shortages and public discontent have forced Peiping to make some concessions to the workers and peasants. These include provision of greater material incentives, toleration of black markets, and permission for peasants to cultivate their own gardens. In addi- tion, negotiations have now been completed for the pur- chase of about 2,400,000 tons of food grains outside the bloc. Peiping is concerned about the impression created abroad by accounts of Chinese food shortages. NORTH KOREA HALTS REPATRIATION OF KOREANS FROM JAPAN . . . Page 5 Pyongyang has suspended indefinitely the program under which nearly 55,000 of the 600,000 Koreans living in Japan have been repatriated to North Korea since December 1959. Although concern over an influenza epi- demic in Japan was used as a pretext, it appears that the reason is the embarrassment caused the Communists by a sharp drop in applications for repatriation. The North Koreans, however, are still hopeful that the issue will afford opportunities for irritating relations between Tokyo and Seoul, and they probably will resume the program later this year as a backlog of applica- tions builds up. 25X1 SOVIET-JAPANESE FISHERY NEGOTIATIONS . . . . . . . . . . . Page 6 The annual talks between the USSR and Japan over fishing rights in the northwest Pacific began on 4 February. Discussions between Soviet and Japanese offi- cials preceding the formal negotiations suggest that the USSR will continue to insist, as it has for several years, that the Japanese salmon catch be further reduced. Moscow will probably argue strongly that, in the interest of salmon conservation, there must be a southward expansion of the zone off the Kamchatka Peninsula and Kuril Islands in which Japanese fishing is restricted. 25X1 INDIAN THIRD FIVE-YEAR PLAN TO BE EXPANDED . . . . . . . . Page 7 Revisions in India's Third Five-Year Plan, which will go into effect on 1 April, will increase the requirement for foreign loans or grants to at least $5.8 billion. Less than 25 percent of this amount has yet been assured. Proposed outlay has been raised to $24.15 billion, largely as a result of pressures on Nehru and other cabinet members from political leaders in the Indian states. Although the plan is more ambitious than ever, Indian leaders, mindful of next year's general elections, believe it must be "bold and big" if it is to come at all close to meeting the country's political and economic requirements. SECRET iii Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 PART II (continued) IRANIAN ELECTIONS NEARING COMPLETION . . . . . . . . . . . Page 8 The Iranian parliamentary elections in progress since mid-January and now nearing completion have stimulated the strongest antiregime sentiment in recent years. The largest demonstrations have occurred in Tehran, where university students struggled with the police and de- manded the overthrow of the Shah. Government-backed candidates, including 14 "independents," are reported to have won prearranged victories in nearly all constitu- encies. DISCONTENT IN ETHIOPIA . . . . . . . . . . . . . . . . . . Page 9 The situation in Ethiopia eight weeks after the abor- tive coup appears to be deteriorating. Haile Selassie, preoccupied with handing out rewards and punishments, still delays forming a new government. Widespread concern over the fate of Menghistu Neway, the popular rebel leader whose trial is reportedly imminent, is arousing sympathy for the rebels. Dissident elements continue to spread antiregime rumors and to distribute subversive leaflets, DISSENSION IN FRENCH COMMUNIST PARTY . . . . . . . . . Page 10 Dissension has been developing within the top leader- ship of the French Communist party (PCF). In mid-January, accusations of rightist deviation were made against polit- buro members Marcel Servin and Laurent Casanova. The dispute centers primarily on their dislike of the PCF's policy of total opposition to De Gaulle, particularly his Algerian policy. There is support for the deviationist views among lower echelons of the party, and Secretary General Maurice Thorez apparently fears that strong dis- 25X1 ciplinary action would provoke extensive defections. FINLAND AND THE OUTER SEVEN . . . . . . . . . . . . . . . Page 12 Finland&s application to participate in the European Free Trade Association (EFTA or Outer Seven) will be a major issue before the EFTA council at the meeting which opens on 14 February. Although EFTA's members generally accept the political importance of linking Finland more closely to the West, they remain concerned over the impli- cations of President Kekkonen's agreement last November to extend equivalent tariff advantages to the USSR. There is little likelihood'. that Kekkonen could renegotiate his agreement with Moscow even if he were persuaded to try. SECRET iv Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 SECRET CURRENT IN1`ELLIGENCE WEEKLY SUMMARY 9 February 1961 PATTERNS AND PERSPECTIVES "GUIDED DEMOCRACY"AND THE INDONESIAN COMMUNIST PARTY . . . Page 1 President aukarno of Indonesia in 1957 rejected . parliamentary government as incapable of solving Indonesia's problems. h3ince then he has controlled affairs under the slogan of "guided democracy." He draws his principal support from two sources, each in conflict with the other-- the Communist party and the anti-Communist army. He main- tains his position by balancing these groups while relying upon his great popularity with the mass of people. The Communists have been given only advisory posts at the national government level. Despite some discontent among the Communists over cooperation with Sukarno, they have benefited by supporting him; and since his foreign policy does not conflict with wino-Soviet bloc interests, they can be expected to continue their support. 25X6 SECRET v THE WEEK IN BRIEF Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 OF IMMEDIATE INTEREST Vientiane forces on 4 Feb- ruary occupied the junction of Routes 13 and 7 just north of Phou Khoun, opening the western approach to the enemy-held Plaine des Jarres area. Kong Le - Pathet Lao troops, after several days of delaying action, apparently offered little re- sistance to the final move on the crossroads. Artillery fire probably was the government's major asset in retaking this important position. Nearly half the force which occupied the Phou Khoun junc- tion is to be left behind to guard against enemy counterat tacks. leven the entire force would be bare- ly sufficient to capture the Plaine des Jarres. Phoumi reportedly hopes to retake the Plaine des Jarres within a week, but is likely to find it a formidable objective. His overoptimism suggests that he may not be prepared for any surprise resumption of offen- sive operations by enemy forces. The Kong Le - Pathet Lao force which abandoned.Muong Kassy and Phou Khoun is believed to have withdrawn along Route 7 virtual- ly intact. Other forces in the Plaine des Jarres area have had over a month to prepare their defenses, and their supply posi- tion has been steadily improved by the Soviet airlift. Route 7 between the crossroads and the Plaine des Jarres runs through rugged terrain highly suitable for ambushes. Substantial numbers of Kong Le - Pathet Lao troops con- tinue to block the southern ap- proaches to the Plaine des Jarres in the vicinity of Ban. Ta Viang, and the government airstrip at Tha Thom has recently been re- ported under sporadic shelling by 120-mm. mortars. The govern- ment has managed to reinforce Tha Thom, however, making its hold on this position some- what less tenuous than previous- ly. Elsewhere in the country, sporadic Pathet Lao harass- ment of isolated government posts continued during the week. In Phnom Penh, Souvanna Phouma recently told the Brit- ish ambassador that he hoped to make a "brief visit" of one or two days to Phong Saly and Xieng Khouang to see "troops and min- isters loyal to me." The ambas- sador received the impression that Souvanna was set on going as soon as possible. Afterward Souvanna plans to visit Saigon, New Delhi, Cairo, Paris, London, and Moscow but to return to Phnom Penh "if Sihanouk permits." The Cambodian leader reported- ly opposes Souvanna's plans to go to Laos. Sihanouk apparent- ly fears this may ruin chances for his proposed 14-nation con- ference to deal with the Laotian crisis. Souvanna's recent state- ments to the press reveal an in- creasingly bitter attitude to- ward the United States for al- leged "double-dealing." SECRET PART I OF IMMEDIATE INTEREST Page 1 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 -`. SECRET 9 February 1961 Souvanna to date has not acknowledged the Pathet Lao radio's claim that he had des- ignated Khamsouk Keola as "act- ing premier" in Xieng Khouang, to be assisted by Quinim Phol- sena and Tiao Sisoumang. ouvanna s pu is references to his "ministers" in Laos, moreover, imply that Khamsouk and the others are authorized to act in his reha1f on Laotian soil. The Pathet Lao and the "lawful (Souvanna) government" have announced formation of a "joint administrative commit- tee" for Luang Prabang Province, bringing to three the number of provinces having such coalition governments. A provincial coalition was established in Xieng Khouang early last month, and a similar body was created --on paper at least--in Pathet Lao - controlled Sam Neua Prov- ince last fall, before the Souvanna government in Vien- tiane was ousted. Phong Saly may be the next area to re ceive such an administration. The Chinese Nationalist irregulars who retreated into northwestern Laos in the wake of a Burmese Army offensive late last month appear deter- mined to settle down there. In their present location in Nam Tha Province, the ir- regulars are not likely to come into significant contact with the Pathet Lao, who are not be- lieved to have important strength in the area. For the moment at SECRET PART I OF IMMEDIATE INTEREST Page 2 of 11 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 ~ r. SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 least, Phoumi would probably not be inclined to accept any offer by the irregulars to'.play an ac- tive role in the fighting. He is doubtless not averse, how- ever, to permitting them to stay where they are for future use. Quoting Hong Kong news- papers and Western press agen- cies, Peiping has broadcast re- ports of the irregulars' pres- ence in Laos. The Boun Oum government capped a six-week anti-French campaign on 5 February by "symbolically" taking over Seno base in southern Laos. The 300 French military per- sonnel at Seno, apparently on instructions from Paris, of- fered no resistance. However?, the French have reserved their position on Seno, claiming that the Geneva agreements of 1954 gave them control of the base; they show no sign of being pre- pared to withdraw. Protracted and possibly acrimonious nego- tiations will be required be- fore the status of Seno is clari- fied. In the meantime, feeling between the Laotians and'.the local French is running big'-,. The bloc still shows lit- tle disposition to negotiate a prompt end to the civil war. Moscow continues to delay its reply to Britain's 21 January proposal that reactivation of the International Control Com- mission (ICC) be discussed with the King of Laos; Peiping, pub- licizing speeches made at a 2 February rally, is on public record opposing any compromise with Western formulas, The Peiping rally was small by Chinese standards--attend- ance was "over 1,000"--but it gave Foreign Minister Chen Yi a forum to restate his govern- ment's position on Laos. This position has shifted somewhat since late December, when Pei- ping, like Moscow and Hanoi, called for immediate reactiva- tion of the ICC. Now Chen Yi states that, "in view of the changed situation in Laos," even to reactivate the ICC, it would be necessary first to con- vene an "enlarged" Geneva con- ference. There is no change, however, in the Chinese posi- tion that regardless of what action is taken to solve the Laotian crisis, it must be taken "only by contacting and cooperating with the lawful government headed by Prince Souvanna." In his rally speech, Chen Yi also drew attention to So- viet support for pro-Communist forces in Laos--support he de- scribed as a "'righteous action." Chen Yi did not say how this support was being delivered-- the USSR does not admit it is operating an airlift--and his remarks may have been in- tended to justify his own offer of support if re- quested by the "lawful gov- ernment." Soviet assist- ance was mentioned again by Hanoi in a 7 February broadcast of a recent inter- view with Kong Le, who ex- pressed his thanks for as- sistance given by "the So- viet Union and other social- ist countries." Airlift operations into Laos continued throughout the SECRET PART I OF IMMEDIATE INTEREST Page 3 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 JGI,~CG L CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 week. The Plaine des Jarres area apparently now is being 25X1 supplied overland via Route 7. Aerial reconnaissance 25X1 ___indicates that the, road is open to truck traffic between the North Vietnamese border and Ban Ban, some 40 miles inside Laos. There are reports that as many as 75 trucks are carrying'supplies from North Vietnam to the Pathet Lao over this route. While this road could be- come an important Communist sup- ply route, a major effort would be required to keep it passable during the rainy: season, which will begin in about two months. The Pathet Lao now have Soviet 85-mm. field guns in addit onto 105-mm. howitzers emy soldiers who surrendered in the Phou Khoun area reported that there .were two 105-mm. howitzers and two 120-mm. mortars there and that two Pathet Lao platoons at Ban Na Nan were equipped with four 85-mm, artillery nieces of Czech manufacture. 25X1 25X1 CONGO Mobutu has begun a two- pronged offensive against the Gizenga regime in Stanleyville. A northern movement is to take off from Bumba in Equateur Province and proceed to Stan- leyville via Buta. Preparations were noted on 7 February at Leo- poldville when more than 50 trucks--some containing ammuni- tion--were loaded on barges in areas sealed off to nonofficial traffic. Some 290 troops, rein- forcements. for forces already at Bumba, were scheduled to leave by river late on 7 Feb- ruary, while an additional 185 troops, 34 trucks, and at least four antiaircraft guns are being shipped to Lisala. Mobutu has left for Bumba and If plans to be away from Leopold- ville for about two weeks. The other movement will use 300 troops which reportedly left on 7 February for Lulua- bourg; from there, they are to advance to Stanleyville through Lodja and Ikela. Mobutu, how- ever, faces serious logistic problems, and the reliability of his troops is questionable, particularly in connection with the Luluabourg. route. SECRET PART I OF IMMEDIATE INTEREST Page 4 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUi?.ARy 9 February 1961 Meanwhile, in Leopoldville President Kasavubu on 9 Feb- ruary announced the formation of a new government to replace Mobutu's.commissioners. The Republic of the Kibwe, the deputy pre- mier of Katanga, in- crease their influence. The ability of the Stanleyville re- gime to oppose Mobutu's military activities may be reduced as a result of his river blockade and the re- sultant acute gasoline shortage. Mobutu as- serts that disaffec- tion already ex lots : athong .Gl- zenga's troops in. eastern Kivu Prov- inca. Gizenga has been. unable. to .market the cot- ton and palm oil crops of his area. SECRET PART I OF IMMEDIATE INTEREST Page 5 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 premier-designate is Joseph Ileo,who was appointed in a' similar capacity last summer to replace Lumurnba. Ileo's -cabinet has many holdovers from previous governments but fails to include any representatives- of the Katanga or Stanleyville regimes. It is not likely, therefore,to gain any greater acceptance by the neutralist. and Communist nations than the Kasavubu-Mobutu administration. Furthermore, Kasavubu's action may cause a split'with Mobutu, whose attitude toward the new cabinet is unknown. In. addition, the coopera- tion of Katanga Province with the Leopoldville regime may be- come more difficult in the fu- ture if rabid seces- C o 'n go sionists like Jean Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 So far Gizenga has re- ceived no significant assist- ance because of the Sudan's re- fusal to allow the UAR and the bloc to send supplies across its territory. On 7 February the Sudan warned that it would not permit any overflight, even a Red Cross mission, not sanc- tioned by the UN. Gizenga's adherents prob- ably stand to gain some equip- ment left by the UAR battalion in Equateur Province when it was withdrawn from the Congo in early February, The UAR battalion reportedly took out some 7 tons of equipment less than was shipped in. At the United Nations there has been a widely favorable re- sponse to Hammaskjold's pro- posals, which include the neu- tralization of Congolese fac- tions. Most Afro-Asian nations believe his ideas are a "step in the right direction," but they generally stress the need for the early release of Lu- mumba. Nigeria would make the UN responsible for law and order and permit the release of all political prisoners. In addi- tion, the Nigerians emphasize the-urgency of recalling par- liament prior to the formation of a new, broadly based federal government. In private conversations Soviet representative Zorin has expressed doubts that Hammar- skjold's proposals would work and insisted that Lumumba's immediate release and the with- drawal of all Belgians from the Congo were prerequisites for any solution of the Congo situation. Britain, France, and Belgium have reservations over the new proposals because of concern that Kasavubu's position may be undermined. Brussels and Paris appear to be getting more deeply in- volved in the internal Congo situation. Paris did not pre- vent French Colonel Trinquier from accepting an appointment as head of the Katangan armed forces, requiring only that he first retire from the French Army. Subsequently French offi- cials have indicated that Paris opposes service by Frenchmen in Katangan forces and pointed to a recent amendment of the na- tionality code allowing depriva- tion of French citizenship for serving in foreign armies. Of- ficials said that the government was also opposed to the recruit- ment activities of Katangan agents in France but made no mention of any plans to curb them. Meanwhile, Trinquier's re- marks in a 4 February press conference that it is impossi- ble to unify the Congo suggest that his influence may weaken Tshombe's willingness to main- tain even his present tenuous contacts with Leopoldville and thus further complicate the problem of inducing Katanga to participate in a federated Con- golese state. SECRET PART I OF IMMEDIATE INTEREST Page 6 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 rte, .-. SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 SOVIET PRESS COMMENTARY ON US POLICY Moscow's first direct press criticism of President Ken- nedy's administration appeared in Izvestia and Pravda articles of 4 and 5 February. Having permitted publication of the full text of the President's State of the Union message, the Soviet leaders probably feit those passages dealing with the bloc and specific East-West issues called for a response. The critical tone of these commentaries probably was de- signed to convey the impression that- the Soviet leaders believe the United States has failed to respond adequately to their in i1: ial overtures for improving relations. Bloc spokesmen have taken a similar line 25X1 by stressing that 25X1 the next move is up to the United States. Both articles and a simi- lar commentary in the weekly magazine Life Abroad found fault with the address. It wa said to repeat "cold war echoes" and to have failed "to renounce old, worn-out ideas." The main criti- cism was directed against the defense measures announced and the statements on arms control, which Izvestia described as avoiding the question of "ef- fective disarmament." Both papers attacked the statements on the aspirations of world Communism and the references to the situation in Cuba. Izvestia commented that al- though a President's message reflected a "passing" awareness of the crucial stage in inter- national relations, the US must now draw the "appropriate conclusions." Pravda cautioned against any judgment 'of US pol- icies on the basis of the "first steps" taken by the US and as- serted that only time will tell if the administration intends to embark on a new course in for- eign policy. The Soviet press on 3 Feb- ruary carried lengthy and largely SECRET OF IMMEDIATE INTEREST Page 7 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 SECRET 9 February 1961 accurate reports of the Presi- dent's press conference on 1 February. Quotations of his re- marks on a meeting with Khru- shchev and on Berlin policy were repeated verbatim. Extensive press and tele- vision coverage of the Presi- dent's economic message to Con- gress was utilized to,present only negative sides of the US economic situation. Soviet bloc commentaries on the President's special message to Congress on the US balance of payments and gold reserves pointed out that he failed to deal with the main cause of the difficulties --"unproductive military expendi- tures" to maintain foreign bases and support "puppet regimes." Soviet reports of Secretary Rusk's first press conference included his statement that the release of the RB-47 crew mem- bers did not mean that all prob- lems between the US and the USSR had ceased to exist. The propaganda pattern de- veloped by the USSR and the European satellites since the inauguration features relative- ly factual coverage of state- ments by US officials, some in- dication of optimism over fu- ture Soviet-American relations, but a skeptical over-all tone. This combination reflects con- flicting policy pressures on the Soviet leaders; they wish to create a favorable climate for the advancement of their objectives through negotiations with the West, but at the same time to avoid too favorable an estimate of US"intentions-- which might intensify the dis- pute with the Chinese. Moscow will probably main- tain a conciliatory position on the official level, but at the same time reply critically to US statements on the bloc's in- ternational posture and on specific East-West problems. In contrast to the criticism in the Izvestia article of 4 Feb- ruary, the Soviet note on the same date, agreeing to a post- ponement of the Geneva talks, omitted the standard Soviet position that the USSR pre- ferred to expedite matters and was agreeing only as a conces- sion to the US. Instead,Mos- cow noted the US desire to reach a successful conclusion to the talks. Soviet spokes- men have indicated that Khruhchev would attend the regular assembly session and would expect to meet SECRET PART I OF IMMEDIATE INTEREST Page 8 of 11 25X1 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET 9 February 1961 Despite Castro's seizure of the company which controls the water supply of the Guan- tanamo Naval Base, there is still no indication that he will at- tempt to use force against the base. The action does not en- hance Cuba's ability to cut off the water supply to the base. However, it will enable the Cuban Government to raise water rates in an effort to obtain additional needed dollars. During the television in- terview on 1 February Foreign Minister Roa reaffirmed an earlier Castro statement that Cuba would seek the recovery of Guantanamo through the channels of international law. The Cuban contention, according to Roa,is that the 1903 US-Cuban contract for. the lease of the base is invalid because Cuba was not then on "an equal footing with the United States." Also, Roa said, Cuba did not agree to the lease of its own free will, "because the Cuban people were coerced by a system of govern- ment imposed from abroad." The Castro regime during the past week stepped up its propaganda attacks on the US administration A broadcast assailed the US action'in pro- viding $4,000,000 for Cuban refugees in the United States, saying that since the previous administration had allotted only $1,000,000 to the "coun- terrevolutionaries," President Kennedy was "four times more the enemy of Cuba" than was his predecessor. President Dorticos told a teachers' rally in Havana on 4 February that the intensification of coun- terrevolutionary? activity by the Roman Catholic clergy and private school students was closely connected with the US action. The teachers' rally was convoked by the government in an attempt to counter the grow- ing opposition efforts of Catholic students and private educational institutions. The regime's attacks on these groups probably foreshadow a takeover of all Cuban private schools. Students at private second- ary schools and colleges through- out the country apparently par- ticipated in large numbers in a "strike" staged on 6 February as a protest against the execu- tion of counterrevolutionaries by government firing squads. SECRET PART I OF IMMEDIATE INTEREST Page 9 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET 9 February 1961 Acts of sabotage. and coun- terrevolutionary guerrilla ac- tivity continue to be reported, and there has been conflicting information on the progress of the campaign by militiamen to isolate and liquidate anti- Castro forces in the Sierra Escambray area of Las Villas Province. A major fire in a Havana tobacco plant on 6 February causing damage estimated at several million dollars was ap- parently the result of a sabo- tage operation. Newspapers and radio sta- tions have begun a full-scale propaganda offensive to mobi- lize "volunteers"--including women and children--to harvest the first "people's crop" of sugar cane. A shortage of cane cutters, which has put the harvest behind schedule, has resulted from the government's mobilization of the militia against the alleged US"invasion threat" during most of January. In the city of Guantanamo, mu- nicipal police have reportedly been ordered into the cane fields. The Colombian Government is under increasing domestic pressure to break diplomatic relations with Cuba, partly be- cause of the belief that Cuban agitation has encouraged the rising violence in rural areas of the country. Peru, Paraguay, Nicaragua, Guatemala, Haiti, and the Dominican Republic al- ready have broken or "sus- pended" diplomatic relations with Havana. Dominican Republic government is on the point-of bankruptcy, largely because of Trujillo's long-continuing transfer of his and the govern- ment's assets abroad for his Few Dominicans interpret Trujillo's financial manipula- tions as evidence that he is preparing to flee the country soon. In fact, Trujillo's pres- ent political activities suggest that he feels confident of his position. His main hope of early improvement in the economic sit- uation lies in the sugar crop now being harvested and in the maintenance of legislative ar- rangements governing its market- ing in the United States. Under a law which expires on 31 March, the Dominican Republic obtains more than 200,000 tons of the former Cuban sugar quota with its premium of more than 2.5 cents per pound over the world SECRET PART I OF IMMEDIATE INTEREST 25X1 25X1 Page 10 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 SECRET 9 February 1961 market price.. It gets the same premium on its own quota. US officials in Ciudad Trujillo report that both the regime and dissident elements view congressional action on the Cuban "windfall quota" as the critical test of US policy toward Trujillo, and that the reaction of the dissidents will be strongly adverse to the US if the "windfall" is continued. The consul general believes that if it is canceled Trujillo may break consular relations and expropriate American-owned firms. The consul general be- lieves Trujillo's general pol- icy will be one of unrelenting efforts to replace representa- tive Latin American govern- ments with dictatorships, con- tinued violation of human rights in his own country, and the en- couragement of Communist-type propaganda and commercial con- tacts with the Soviet bloc. The recently reported in- tensification of Dominican plot- ting against Venezuelan Presi- dent Romulo Betancourt is prob- ably based on Trujillo's be- lief that his relations with the US will not improve substan- tially until Betancourt has been removed from the scene. Tru- jiilb's view is that Washington works against his dictatorship in cooperation with Betancourt because Venezuela's help is needed against Castro and be- cause the US must protect large private investments in the Ven- ezuelan oil industry. President Duvalier appears to be shifting from persuasion SECRET OF IMMEDIATE INTEREST Page 11 of 11 to his customary terroristic tactics in his efforts to end the opposition-supported stu- dent strike, the most open challenge to his authority in his three years in office. Early this month he also re- sumed his attacks on the Roman Catholic Church, which he ac- cuses of supporting the stu- dent strike. A bishop was forcibly removed from his diocese on 3 February by the military after a mob, apparent- ly with government sanction, looted his residence and of- fice. El Salvador The five-man civil-mili- tary directorate that took power on 25 January has at least temporarily curbed pro- Communist elements. The armed forces apparently con- tinue united and are reported determined to "run the show" until a new government has been elected. They have reiterated their promises of free elections this year and economic reforms to improve the lot of the peas- ants. There are, nevertheless, indications of a widespread feel- ing that one military government .has simply replaced another. Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 SECRET 9 February 1961 Averky Aristov, 57-year- old member of the party pre- sidium, has been relieved of his post as Khrushchev's deputy in the central committee's Bureau for the RSFSR (Russian Republic), which supervises party affairs in the Soviet Union's largest republic. He has been sent to replace Petr Abrasimov as ambassador to Warsaw. This move, which appears to be the outcome of competition among Khrushchev's lieutenants, deprives Aristov of a place in the Kremlin inner circle and marks another sharp setback in his political career. Party Secretary Frol Kozlov, current- ly thought to be Khrushchev's chosen successor, and RSFSR Pre- mier Dmitry Polyansky appear to be the principal beneficiaries of Aristov's demotion. death and was sent to a remote provincial post. He was re- called to Moscow in 1955 as a party secretary and in June 1957--when Khrushchev won his victory over Malenkov, Molotov, and Kaganovich--was again made a member of the party presidium. By December 1958 Aristov had become Khrushchev's only deputy,,on the RSFSR.bureau. In the reshuffle of the Soviet top .leadership last May, however, he was relieved as party secre- tary "to devote full time to his duties as deputy chairman of the RSFSR bureau." This pre- sumably was a prelude to his current demotion. Aristov continued to be, active in RSFSR affairs through last fall, and the republic was credited at the recent party central committee plenum with relative success in agri- culture as compared with other republics. There have been only minor criticisms of the work of the RSFSR bureau. Aristov, apparently an effective organizational spe- cialist, was in a position to strengthen his personal authority among the influential profes- sional party functionaries in the RSFSR. If unchecked he might have been able to develop a party machine strong enough to pose a serious obstacle to any attempt by Kozlov to take over undivided control of the Soviet Union when the question of the succession arose. By October 1952, Aristov had worked his way into the inner party circle around Stalin, but he lost out in the shake-up in March 1953 following Stalin's Gennady Voronov, one of the candidate members elected to the party presidium at the central committee plenum in January, replaced Aristov as SECRET PART II NOTES AND COMMENTS Page 1 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 deputy chairman of the RSFSR bureau. As a newcomer, he probably will be in no position to challenge Polyansky's au- thority in the RSFSR. Pol- yansky has been increasingly in the public eye, visiting the provinces and acting as prin- cipal spokesman for the repub- lic, and he may have resented sharing authority with Aristov. Abrasimov, who had been ambassador to Warsaw since Sep- tember 1957, said a he was returning o ministerial job or to "party work." SINO-SOVIET RELATIONS In sharp contrast to the bitter and open differences ex- pressed by the Soviet Union and China in the period before the November conference of world Communist leaders in Moscow, the two countries today are at- tempting to preserve an air of cooperation and agreement that belies the significant and basic disagreements which still exist. Comments from both countries continue to stress the impor- tance of Sino-Soviet solidarity, and in Laos, where points of friction might be expected to arise, there appear so far to be no significant disagree- ments. During the period when the ideological dispute was most acute, Moscow and Peiping stopped reprinting texts of important speeches and resolutions adopted in.the other country. Since November, however, the Soviet Union has reprinted the text of a December People's Daily editorial on the significance. of the November meeting and an incomplete text of the Chinese central committee resolution on the meeting. For their part, the Chinese have reprinted Khrushchev's Jan- uary speech, Suslov's report to the Soviet central committee on the meeting, and at least parts of that body's resolution. Since all this material contained clearly, differing views on how the struggle against imperialism should be conducted and on other disputed issues, it seems prob- able that a decision to reduce the total blackout of opposing opinion was one of the agree- ments reached at Moscow in No- vember. It is likely that the image of Chinese-Russian friend- ship will be given even greater emphasis during the celebrations on 14 February of the 11th an- niversary of the signing of the Sino-Soviet Friendship Treaty. By insisting that Sino-Soviet solidarity is the "core" of the whole Communist movement, how- ever, the Chinese are in effect warning the Soviet Union that it must give Chinese views seri- ous consideration. They empha- sized that they will "defend" the Moscow statement, just as they "defended" the 1957 Mos- cow declaration--in fact they used it to support their arguments in the dispute. Peiping thus appears to be giving notice that it is free to challenge those aspects of Soviet policy with which it disagrees. Taking their cue from Khru- shchev's 6 January speech on the conference, Soviet commentaries have stressed those aspects of the statement which reflect the positions maintained, in the face of Chinese criticism, be- fore November. In that speech, Khrushchev went beyond the Moscow declaration-in discussing policy toward the West; he re- stated his intention to engage the West in further high-level talks and developed the rationale behind this intention. SECRET PART II NOTES AND COMMENTS Page 2 of 13 25X1 25X1 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET 9 February 1961 Peiping, probably reflect- ing its continuing fear of high- level Soviet-US negotiations which might result in some sta- bilization of the world situa- tion and a consequent reduction in tension, has been trying to keep pressure on Khrushchev to act in accordance with the mil- itant tone adopted at the con- ference. The Chinese seem to feel that the declaration com- mits the world Communist move- ment to Peiping's tougher ap- proach to world events. They have not, however, returned to the polemics which marked Sino- Soviet relations prior to the November conference. Three major statements in 1961--a Red Flag article of 1 January, the Chinese Communist party's resolution on the Mos- cow meeting adopted on 18 Janu- ary, and a People's Daily edi- torial of 2J2 January on the party resolution--all underline those aspects of the Moscow declaration favorable to Pei- ping's militant precepts. While all three articles indicate that the basic dispute between Pei- ping and Moscow remains unset- tled, the People's Daily edi- torial uses t a rongest lan- guage in making Peiping's points. The editorial urges "un- yielding struggle" against im- perialism and support for rev- olutionary forces everywhere, reiterates that'the US is the "main enemy," and insists that the situation in colonial areas and even in parts of Europe-- Belgium in particular--is ripe for revolutionary action. It distorts the Moscow statement by asserting that the strengthen- ing of revolutionary forces is "completely identical" with the interest of safeguarding world peace. The editorial surpasses other Chinese comment since the November conference in showing satisfaction with the work of the Chinese delegation in Mos- ;cow: Expressing Peiping's be- lief that the Chinese scored a victory at the conference, it states, "We are particularly glad that the fundamental prin- ciples and revolutionary spirit of Marxism-Leninism, in which the Chinese Communists and the Communists in other countries have for many years persisted, are clearly reflected in the Moscow statement." Aside from theoretical discussions, Peiping has shown in at least three areas that it is pulling in the opposite direction from Moscow. On the new US administration, Peiping, while not directly contravening the Soviet line, has continued to publicize its uncompromising views toward the US Government. Toward Albania, Peiping continues to demonstrate its "inviolable" friendship despite the obvious and public displeas- ure displayed by the Soviet Union and the East European sat- ellites toward Albanian "devia- tionism." In discussing new economic agreements recently concluded with Albania, People's Daily on 3 February, in an ap- parent jibe at Moscow, empha Sizedthe correctness of the statement in the Moscow declara- tion that socialist countries "big and small" have equal rights and should "support each other." Finally, Peiping, along with Albania, has refused to fol- low the more energetic policy, pursued by the USSR and the East- ern European satellites since December 1960, of seeking to improve relations with Yugoslavia. Below the surface calm achieved by the November meet- ing, therefore, strong discon- tent with each other's views SECRET PART II NOTES AND COMMENTS Page 3 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET 9 February 1961 continues to exist in Peiping and Moscow. It can be expected to erupt when either of the parties oversteps the limits within which they have appar- ently agreed to disagree. Meager rations and long working hours have increased discontent in Communist China, peasants iiving near Shanghai and Canton were said to be re- sorting to all possible arti- fices to obtain food and to be making no effort to veil their dissatisfaction. Party cadres --who generally receive pref- erential treatment--were be- coming increasingly unpopular, discontent is rising among cadres, public security offi- cials, and army personnel, as their rations have also been cut. rumors current in Peiping in late December that peasant or- ganizations hostile to the re- gime have been springing up throughout the countryside. Ac- cording to these rumors, some areas in western China and Tibet have been "freed" from govern- ment control. Although such stories have undoubtedly been exaggerated, dissatisfaction has become wide- spread enough to force Peiping to make some practical conces- sions inimical to its basic philosophy. "Black markets" are reportedly operating in the major cities, except Peiping, allegedly because the authori- ties fear that closing them would increase resentment. In- centives, long neglected because the top leadership believed that it could substitute enthusiasm for material rewards, now are being re-emphasized. A Kwang- tung provincial paper stated in December that "small free- peasants to cultivate their own gardens and to market produce grown on them in free markets--would be a long-term policy. The Communists thus are countenancing the "bourgeois tendencies" against which they inveighed endlessly in the past. Even more striking evidence of the regime's concern about food shortages is seen, how- ever, in recent imports of food. Firm Chinese grain pur- chases from the free world now total about 2,400,000 tons, worth at least $160,000,000, from Canada, Australia, and Burma, and further sales are reportedly under negotiation. Other information points toward a sharp reduction in Chinese agricultural exports to both bloc and nonbloc des- tinations this year. The Chi- nese have informed Ceylon that Chinese rice will not be shipped under this year's rice- rubber pact, but the commitment will be filled with re-exports of Burmese rice. Chinese grain imports, the increasing petroleum and fer- tilizer purchases from the West, SECRET NOTES AND COMMENTS Page 4 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 In January Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET 9 February 1961 and the expense involved in moving such large quantities of cargo have already placed a heavy burden on China's finan- cial resources. There are re- ports that the Soviet Union has advanced sterling to finance the Chinese buying spree, but such a course appears unlikely. Oth- er possible methods of Soviet assistance, such as allowing even further increases in Chi- na's short-term indebtedness to the USSR, would be of little value in easing the pressure on Peiping, since the desired goods must come from outside the bloc. Rather than rely on Soviet aid, Peiping probably has decid- ed to stretch its financial reserves as far as possible. This may involve gold sales, perhaps an increase in Chinese exports to Hong Kong and Western Europe, and probably a decrease in imports of certain Western commodities. Chinese delaying tactics in current trade negoti- ations with the USSR and the European satellites probably reflect Peiping's moves to carry out such adjustments in its foreign trade policy. The Chinese Communists are exhibiting considerable sensi- tivity to the publicity their economic difficulties are re- ceiving abroad. Foreign Minis- ter Chen Yi observed on 4 Febru- ary that "imperialists and cer- tain reactionaries are now re- joicing and taking malicious delight...but they rejoice too early. . .the Chinese people will surely be able to surmount all difficulties, including natural NORTH KOREA HALTS REPATRIATION OF KOREANS IN JAPAN Pyongyang has suspended the program under which nearly 55,000 of the 600,000 Koreans living in Japan have been re- patriated to North Korea. Two Communist repatriation ships were scheduled to reach Niigata, Japan, on 9 February, but their arrival has been postponed in- definitely. Although concern that an influenza epidemic in Japan might spread to North Korea is given as the excuse, it appears that the sharp drop in applications for repatria- tion has proved embarrassing to the Communists, who agreed in November to accelerate the pro- gram. to North Korea. Between Decem- ber 1959--when the first group left--and November 1960, an average of 1,000 Koreans left Japan each week for North Korea. Since November, however, the weekly totals have declined. For the trip on 20 January, only 669 reported to the repatriation center at Niigata, although 1,084 applicants had been alerted. New registrations in January remained low, but Chosen Soren asserts that the rate will increase in April when the weather improves. North Korea has apparently had difficulty settling repa- Chosen Soren, the leftist federation of Korean residents in Japan, at one time confident- ly predicted that over 200,000 Koreans would seek repatriation 25X1 25X1 SECRET Pare 5 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 Pyongyang has used the re- patriation issue to irritate Japan's relations with South Korea, which strongly opposed permitting the Koreans in Japan to migrate to the Communist North. Seoul suspended trade relations with Japan in June 1959 when it was first reported that the Japanese and North Korean Red Cross Societies were nearing agreement on a repa- triation program. The trade ban was lifted in April 1960, as one of the last acts of the Rhee government. The repatriation program is still a potential irritant in Japanese South Korean relations, but the problem is, in effect, being ignored. Seoul and Tokyo now have agreed to negotiate on the status of Korean residents in Japan as part of their efforts to reach an over-all settlement of out- standing differences. Never- theless, Pyongyang is still hopeful that the repatriation issue will afford opportunities to obstruct a Japanese - South Korean rapprochement, and it is likely that the North Koreans will resume the program later this year as a backlog of applications builds up. SOVIET-JAPANESE FISHERY NEGOTIATIONS The annual talks between the USSR and Japan over fishing rights in the northwest Pacific began on 4 February. Discus- sions between Soviet and Japa- nese officials preceding the formal negotiations suggest that the USSR will continue to insistij,as it has for several years, that the Japanese salmon catch be further reduced. The quota was set at 120,000 tons in 1957 and has been steadily lowered--to 67,500 tons in 1960. The 1960 agreement also enlarged the zone in which Japanese fish- ing is prohibited; it now includes an area Japanese fish- ing interests considered vital to their smaller fishing oper- ations. The USSR has been concerned over declining salmon resources and has attempted each year to continue the talks for several months in order to obtain max- imum concessions. The Japanese come under pressure from their own fishermen to reach an agree- ment in time for the fishing season, which usually begins in mid-May. Since 1959 the United States has sought unsuccessfully to obtain an invitation to send an observer to the annual meeting of the Northwest Pacific Japa- nese-Soviet Fisheries Commission. The Soviet delegation has in- sisted on an unconditional in- vitation for a US observer to attend all sessions, while the Japanese wished to restrict at- tendance to certain scientific sessions. This year the USSR and Japan have agreed to allow a US observer for the scientific and technical meetings. His attendance at the plenary sea- ions of the Fisheries Commission, which begin on 20 February, will be contingent on a decision to be reached at the scientific meetings. It seems likely that the Soviet Union is reasonably sure SECRET PART II NOTES AND COMMENTS Paa,e 6 of 13 25X1 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 hlsl area open to Japanese only under restrictions defined by SovietJapanese fishery treaty of 1956 Additional area prohibited to Japanese 9 FEBRUARY 1981 NAUTICAL MILES 1000 salmon fishing in 1960 UNCLASSIFIED of proving its case that there must be a southward expansion of the zone off the Kamchatka Peninsula and Kuril Islands, in which Japanese fishing is re- stricted. Japanese For- eign Minister Osaka also ap- pealed to the Soviet fisheries minister to enter into negoti- ations with Japan on safe fish- ing operations. Ile pointed out that small Japanese fishing boats operating in the Northern Pacific are frequently seized by Soviet authorities for alleged infringement of the fishery agreement. The Soviet delegate replied that Moscow did not consider the present attitude of Japan friendly to the USSR and reiterated the official Soviet position adopted in 1958: that such problems could not be settled until a peace treat INDIAN THIRD FIVE-YEAR PLAN TO BE EXPANDED India's recent decision to raise by $525,000,000 expendi- tures under the Third Five-Year Plan, which is scheduled to be- gin on 1 April, was the result primarily of pressures on Nehru and other cabinet members by politicians-in the Indian states who have an eye on next year's national election. Chief bene- ficiaries of the boost will be state programs in agriculture, transport, and power. All of the increased in- vestment is earmarked for the publicly owned sector of the economy, in which proposed out- lay now has been set at $15.75 billion. Estimated investment in and by the private sector-- $8.4 billion--remains the same as originally forecast but may, as in the Second Plan, exceed the estimate. Total outlay for the new plan now will be $24.15 billion. SECRET PART II NOTES AND COMMENTS Page 7 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET 9 February 1961 INDIA OUTLAY FOR THREE FIVE - YEAR PLANS (BILLION DOLLARS) 44.15** =PUBLIC SECTOR = PRIVATE SECTOR nance part of the new investments. He has given no indication, how- ever, how he expects to cover the increased foreign exchange costs, now pushed to at least $5.8 bil- lion. This entire amount must be obtained from external sources, inasmuch as Indian foreign ex- change reserves, now hovering around $320,000,000, are as low as the Indians feel they can safely be allowed to drop. To date New Delhi has succeeded in obtaining foreign aid commitments FIRST PLAN SECOND PLAN TNIRD PLAN amounting to less than 25 percent (1951 ? 36) (1956.'61) (1961-166) of what full implementation of its new plan will require. Finance Minister Desai, who opposed the increase on the grounds that it would aggravate already dangerous inflationary pressures and raise the foreign exchange costs of the plan by an additional $300,000,000, was instrumental in preventing an even bigger increase sought by the states. The states, however, have been assured that starts will be permitted on additional projects during the latter stages of the plan on a funds-available basis; these will then be carried over to the fourth plan (1966-71). Desai has hinted that in- creased excise taxes may be im- posed on "luxury" items to fi- India will receive more than one billion dollars'worth of sur- plus agricultural commodities from the United States under the PL-480 program, but the $5.8 billion foreign exchange require- ment is in addition to this. With mounting political and economic problems on all sides, both Nehru and Desai feel com- pelled to launch an ambitious and imaginative program, adjusting to shortfalls if necessary, rather than risk not meeting India's requirements by initially aiming too low. The Iranian parliamentary elections in progress since mid-January and now nearing completion have stimulated the strongest antiregime sentiment in recent years. The elections, which ended in Tehran on 4 February, will probably be finished in the remainder of the country in a few days, and the 200-member Majlis may be organized about the middle of the month. Government-backed candidates,~including fourteen "independents," appear to have won as planned in nearly all constituencies. Allahyar Saleh, a popular moderate nationalist who is distrusted by the Shah because he once supported ex- Premier Mossadeq, was permitted to win in Kashan in an,attempt to convince the public that the elections were free. SECRET PART II NOTES AND COMMENTS Page 8 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 The strongest protest dem- onstrations in connection with the elections have occurred in Tehran, where university stu- dents, led by nationalists and probably with the support of Tudeh (Communist) elements, struggled with the police, threw stones, forced the bazaar to close, and called for the over- throw-,. of the Shah. Tehran Uni- versity and a teachers' train- ing college have been closed by the government. A group of nationalist leaders has taken asylum in the Senate to protest the arrest of student leaders. Student demonstrations have been getting weaker, but a bloody clash is still possible and would do much to increase opposi- tion to the regime. The general public apparently has not joined in the demonstrations. The cancel- lation of the elections last August and the resignation of Premier Eqbal because of rigging .at that time apparently led the public to expect some free choice in the current round. There are no indications that the Shah is again considering canceling the elections, but he may find it expedient to remove some provin- cial governors or high offi- cials as scapegoats. potential. General Bakhtiar, chief of the Iranian National Intelligence and Security Organization, who was instrumental in persuading the Shah to cancel the August elections, has chosen to absent himself from Iran at this time. This demonstration of noninvolve- ment in election rigging may sig- nificantly increase his political DI'SCONTENT''Ii ETHIOPIA The situation in Ethiopia appears to be deteriorating further; the American ambassador has characterized it as a "state of aimless drift." Emperor Haile Selassie has failed to reassert his strong personal leadership and continues to delay naming a new government. Preoccupied with security matters duringl.the eight weeks following the abor- tive coup, he is being offered conflicting advice by contending political factions, each of which he is said to have encouraged. Either the Emperor has not yet decided which group to support, or he intends to follow his earlier policy of playing off one faction against the oth- er. Meanwhile, the basic condi- tions which caused the uprising persist. The country is extreme- ly primitive: per capita in- come is among the lowest in Afri- ca and the illiteracy rate ap- proaches 95 percent. The so- cial structure remains essenti- ally feudalistic, with the Amhara tribal aristocracy monop- olizing the government. The re- gime's most vocal and potentially dangerous critics are'among middle-level government officials and the growing number of young, largely foreign-educated progres- sives who seek rapid social and economic reforms. The Emperor appears pri- marily concerned with pressing SECRET Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET 9 February 1961 charges against those who parti- cipated in or sympathized with the recent challenge to his authority and in rewarding his defenders. On 6 February four generals who remained loyal during the revolt were decorated and promoted, but the Emperor has made only one appointment-- a new minister of defense--to replace the several ministers killed by the rebels. over his fate has increased public sympathy for the objec- tives espoused by leaders of the abortive coup. Over 30 persons have been flogged for "spreading false rumors" in Addis Ababa; dissident elements nevertheless continue to cir- culate antiregime rumors, and leaflets are being distributed in the capital seeking support for the rebel cause. The American ambassador, commenting on the upcoming trial of the popular rebel leader General Menghistu--former com- mander of the Imperial Body Guard--believes that new dis- orders could break out in Addis Ababa if Menghistu is condemned to death. Widespread concern Dissension has been developing with- in the top leadership of the French Commun- ist party (PCF). In mid-January charges of rightist deviation were made against politburo members Marcel Servin and Laurent Casanova. Although the two are charged with criti- cizing Khrushchev's BACKGROUND Under the Fifth Republic's revised electoral law of 1958, the French Communist party has lost all but 10 of the 144 seats it formerly held in the National Assembly, However, it is still the largest (an estimated 250,000 card-carrying members) party in France and retains a strong voting appeal. It also provides lead- ership for the largest labor organisation, the General Labor Con- federation (CGT). It has had increasing difficulty, however, in getting the rank and file to follow party directives and it re- peatedly complains of declining membership. Secretary General Maurice Thorez, a long-time Stalinist, was temporarily thrown off balance by de-Stalinization in the USSR. He has, however, continued to follow the Moscow line and he appears to be firmly in the good graces of Khrushchev. policy of peaceful coexistence, the dispute centers primarily on their dislike of the PCF's policy of total opposition to De Gaulle, particularly with respect to his Algerian policy. Support for the deviationist views is evident among lower echelons SECRET PART II NOTES AND COMMENTS Page 10 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 The deviation charge arose immedi- ately from disagree- ment over the PCF's decision to vote "no" in the January referendum on De Gaulle's Algerian policy. Servin and Casanova allegedly differed with Thorez' view that De Gaulle, by attempting to build a third force in Algeria, with which to negotiate a settlement, was trying to circumvent talks with the Algeri- of the party, and Secretary General Thorez apparently fears that strong disciplinary action would provoke extensive defec- tions. Both members of the polit- buro since 1954, Servin heads the PCF's Organization Section, while Casanova handles the activities of intellectuals under party control. Casanova was credited with halting major defections from the PCF at the time of the Hungarian revolu- tion- Both men first came un- der open attack at a central committee meeting in January, but Thorez claims their devia- tion dates back at least two years. Official French sources say they have been excluded from activities of the politburo since July 1960; they retain their membership on that body, however. Servin and Casanova appar- ently have argued that the brunt of the party's attack should fall on French rightists rather than on De Gaulle, whom they regard as "bead of the liberal faction of the bourgeoisie." Thorez, however, insists De Gaulle heads a regime of "nation- alistic demagogy," controlled by the "monopolies" and pur- suing policies leading to fascism. An rebel government. They opposed the PCF's refusal to join with non-Communist organi- zations in demonstrations for a negotiated peace in Algeria. Casanova was charged with re- fusing to set up within the PCPs peace movement a network of committees for peace in Algeria. Thorez has also injected some elements of the Sino-Soviet dispute into this case. He has charged that his two lieutenants --like the Chinese--oppose: Khrushchev's peaceful coexist- ence policy. He stated that they had approved publication of an article implying that the SECRET PART II NOTES AND COMMENTS Page 11 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 policy of coe>istence had ac- tually consolidated the "im- perialist countries." The PCF Paris daily, L'Hu- manite, has published extra-c - is - of resolutions of regional PCF organizations supporting Thorez' position on the nature of the De Gaulle regime and Algerian policy. Certain of these ex- tracts, however, indicated that Servin and Casanova's views are shared at lower party echelons. Thorez, in an obvious ref- erence to the high party posi- tions still held by Servin and Casanova, has stated that "a comrade may not be in agreement and may keep his opinions pro- vided he does not belong to the leadership." There are indica- tions, however, that he is try- ing to persuade the two devia- tionists to recant, presumably considering them too prominent to remain as simple rank-and- file dissidents. The PCF prob- ably fears that defections from the party would result if strong action were taken against the two. The proposed participation of Finland in the European Free Trade Association (EFTA or Out- er Seven) will be a major is- sure at the EFTA council meet- ing opening on 14 February. EFTA's members generally accept the political desirability-- even necessity--of an associa- tion arrangement in order to pre- vent Finland from coming under increased Soviet economic and political influence. Ties with Finland, however, have potential- ly far-reaching implications for the Seven as a whole and for its relations with the bloc, the Common Market (EEC), and GATT. Most of the difficulties stem from President Kekkonen's agreement last November to ex- tend to the USSR the same tariff treatment Finland would give its EFTA partners--a concession he thought necessary to win Mos- cow's assent. EFTA now seems to feel that the economic conse- quences of Kekkonen's agreement would not necessarily be serious either for Finland, whose trade with the USSR is governed by quotas, nor for EFTA, which is already keeping track of im- ports from outsiders with a certificate-of-origin system. The political problems of Mos- cow's "foot in the door" are, however, proving much more dif- ficult. Accordingly, EFTA is lean- ing toward setting up with Fin- land a new eight-nation free- trade area which would be for- mally separate from EFTA itself. This elaborate device would be intended to exclude Finland from consideration of such sensitive questions as a possible merger of the Seven with the Common Market, which Finland, under Soviet pressure, might object to. It would also be intended to afford members of EFTA proper, notably Austria, perhaps addi- tional protection against So- viet demands for most-favored- nation treatment such as that Finland has already conceded. With respect to the problem of obtaining from GATT the waiver Finland would require to give this privileged position to the USSR, EFTA countries seem in- clined either to claim very "special circumstances" or, if permitted, simply to ignore their. GATT obligations. While continuing to show irritation with the Finns for - SECRET PART II NOTES AND COMMENTS Page 12 of._ 13 Approved For Release 2007/10/23: CIA-RDP79-00927A003100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 having "caused" these problems, EFTA is in turn being privately criticized for seem- ing to bend its ef- forts toward "living with" the Finno-So- viet agreement rath- er than trying to find real alterna- tives. The associa- tion problem is also becoming increasing- ly involved in the rivalry between the EEC and the Outer Seven. Accusations have been heard from the EEC than. the EFTA, in pressing the Common Market to take a stand on the GATT issue in advance of an EFTA-Finnish agree- ment, is attempting to shift responsi- bility in the event Finland's accession bid is rejected. Of- ficials from the Seven, on the other hand, have accused the Common Market of spreading rumors that EFTA, which has three neutral members, is "soft" toward the bloc. There is little likelihood that Fin- land could be per- suaded to make a new SECRET European Free Trade Association (Outer Seven) European Economic Community (Common Market) approach to the USSR in the event EFTA should decide to suggest this. The Finns regard the agreement as the final So- viet word. Even if they should return to Moscow, there is a risk that Moscow might either impose still harsher terms for Finland's association with EFTA or offer Finland alternative economic concessions which would tie it even more closely to the Italy USSR. Although Kekkonen's do- mestic prestige would be ad- versely affected by EFTA's re- jecting Finland's application, Kekkonen would probably weather the adverse criticism by plac- ing the onus on EFTA, and even strengthen his position by call- ing on all Finns to stand together in the "crisis." SECRET PART II NOTES AND COMMENTS Page 13 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 PATTERNS AND PERSPECTIVES "GUIDED DEMOCRACY" AND THE INDONESIAN COMMUNIST PARTY Sukarno, Indonesia's Pres- ident for the past 15 years, has since 1957 promoted a "guided democracy"--essentially a ref- utation of parliamentary govern- ment in the Western sense--as a means of solving Indonesia's many problems. In imposing this concept, his principal sup- port has come from the Commu- nist party (PKI) and from the army, which is anti-Communist; by counterbalancing these op- posed groups, he has retained his own pre-eminent position. The Communists have ben- efited from their association with Sukarno and now have the largest and most vigorous party in Indonesia. They therefore are likely to continue to sup- port him, despite apprehension among some members that "guided democracy" conflicts with the party's ultimate program. assist the President in formu- lating policies. "Guided democracy" also en- visages a multilevel mass or- ganization--the National Front-- in which all loyal political parties and functional groups are to submerge their identi- ties and interests and support the government. As Sukarno interprets his concept, the significant socio- political elements of Indonesian society--religious, nationalist, and Communist--must merge. In order to achieve such a merger they must work together through- out the structure of "guided democracy" from the cabinet to the village units of the Nation- al Front, Beginnings of "Guided Democracy" Sukarno sees the goals of "guided democracy" as national unity and social justice. These are to be achieved through a government-controlled economy, an ambitious economic develop- ment plan, suppression of anti- government guerrilla warfare and of political elements which actively oppose "guided democ- racy," a controlled press, and the de-emphasis and perhaps abolition of political parties. Two anti-Communist parties which resisted "guided democ- racy" were dissolved last Au- gust:: the large Moslem Masjumi party and the small but articu- late Socialist party. The President provides the guidance, and his cabinet ex- ecutes the laws which a rubber- stamp parliament has passed. The Supreme Advisory Council, the National Planning Board, and the Economic Development Council, along with the cabinet, Sukarno has always been interested in mass political movement. Probably the great- est influence in his youth was Tjokroaminoto, a nationalist leader who combined Communist, nationalist, and Islamic ele- ments in one political move- ment and apparently in one po- litical philosophy. In the 1920s, under the Dutch colonial administration, Sukarno federated all Indone- sian nationalist movements. He constantly emphasized unity and mass action, asserting that the independence movement could not have an Islamic basis, nor should it await assistance from inter- national Communism. Sukarno paved the way for "guided democracy" during the closing days of the Japanese oc- cupation, when Tokyo was prepar- ing to give Indonesia independ- ence. In a now famous speech SECRET PART III PATTERNS AND PERSPECTIVES Page 1 of 9 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 of 1 June 1945, he synthesized Western, Islamic, Marxist, and indigenous village communal ideas. He outlined five prin- ciples--the Pantja Sila--which he proposed as the philosophic foundation of an independent Indonesia. The principles are nationalism, humanitarianism or internationalism, democracy or agreement through conferring, prosperity or social justice, and belief in God. He stated that he could compress the five principles into one--the tradi- tional Indonesian concept of "gotong rojong," roughly trans- lated as mutual cooperation. The Indonesian Republic, during the four years of inter- mittent warfare with the Dutch which followed the proclamation of independence on 17 August 1945, operated under a hastily written constitution which in- corporated the Pantja Sila and provided for a highly central- ized government. With the trans- fer of sovereignty in late 1949, European-trained Indonesian leaders--Sukarno was educated in Indonesia--who had already promoted the development of po- litical parties, succeeded in establishing a parliamentary government under a new consti- tution based on European models. The multiparty system re- quired the formation of coali- tion governments, each badly hampered by party rivalries and averaging less than a year in office. The first national elections--held in 1955--allot- ted seats on a basis of propor- tional representation and per- petuated the numerous parties. To end the ineffectiveness of the government and the con- tinuing divisive tendencies within the nation, Sukarno de- cided to take personal action. In 1956 he announced that his visits to the United States, the Soviet Union, and Commu- nist China would permit him to "see both sides and decids what is best for Indonesia." He returned from his tour de- termined to institute his "guided democracy." Postwar Communist Party . The Communist party played little part in the events sur- rounding Indonesia's declara- tion of independence in August 1945. . As , .a result: of Dutch and Japanese oppression, the party was small and poorly or- ganized and had no leaders of high caliber. In late 1945 the Commu- nists--after 20 years under- ground--re-established them- selves as a legal party when the Indonesian Government per- mitted the formation of political parties. A Moscow-trained Indo- nesian, Musso, arrived in Au- gust 1948 to assume leadership of the still small and poorly organized party. He directed it to work toward establishing a national front, and particu- larly toward attracting the army. Madiun Revolt In September 1948, pro- Communist army elements in Cen- tral Java, resentful over re- ports that the government planned to remove them, seized the town of Madiun and adjacent areas. Communist party offi- cials called on the people to overthrow Sukarno as a "lackey of American imperialism." Sukarno broadcast an ap- peal to the people to choose between him and the Communists, and the army quickly subdued the rebellion. Most of the party's leaders fled or were SECRET PART III PATTERNS AND PERSPECTIVES Page 2 of .9 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 9 February 1961 executed, and the party organ- ization was reduced to near in- activity. The Communists have not forgotten their mistake at Madiun. They had placed them- selves in the impossible sit- uation of opposition to Sukarno, a mass leader of extraordinary skill and symbol of revolution. In writing the history of the Madiun revolt, the Communists later placed the blame on Mohamed Hatta, who was the prime minister at the time, and avoided any mention of Su- karno. PKI 1948-1958 The Communist party, de- prived of its seats in the leg- islature after Madiun, was re- instated in December 1949 when the Netherlands recognized Indo- nesian sovereignty. Its efforts at united front tactics were relatively unproductive until the spring of 1952, when a com- bination of political shifts and rivalries in the chaos of Indonesian politics produced greater tolerance for Communist activity and more opportunities for it to maneuver. By 1955, the Communists had become a first-rank party when they polled the fourth largest popular vote--over 6,000,000 votes--in the closely fought national parliamentary elections of that year. In the 1957 provincial elections,. which were never completed, the Com- munists had become the largest party in Java, which has 60 per- cent of Indonesia's population, and polled over 7,000,000 votes in Java and Sumatra alone. These advances can be attribut- ed not only to official toler- ance of Communist activity but also to the party's hard work and its identification with Sukarno and his policies. "Guided Democracy" and the PKI In 1958, in order to pro- vide a legal basis for "guided democracy," Sukarno began ma- neuvering for the return to the 1945 constitution, which called for a presidential cabinet and de-emphasized legislative pow- ers. The Communists, who were concentrating on parliamentary tactics and who anticipated that another election would catapult; them into a position of such strength that they could demand and get cabinet participation, at first in- directly opposed Sukarno. Chair- man Aidit stated that Indonesia needed both the leadership of President Sukarno and the "demo- cratic parliamentary system." The PKI encouraged non-Commu- nist parties to agitate against the 1945 constitution. As it became obvious that Sukarno was adamant, however, the Communists changed course and vigorously supported him, along with other secular par- ties who feared to offend the President. Sukarno proclaimed the 1945 constitution by decree in July 1959. During the next 18 months, Sukarno proceeded to fill in the structure of "guided democracy." Approximately 25 percent of the members of the appointed legis- lative bodies--the House of Representatives and the People's Congress--are either Communist or susceptible to Communist direction. The same is true of the Supreme Advisory Council and the Economic Planning Board. Approximately 30 percent of the members of the executive bodies of the National Front are sim- ilarly oriented. The lower SECRET TART III r PATTERNS-AND PERSPECTIVES Page 3 of Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET 9 February 1961 levels of this organization have not yet been selected but are likely to reflect the com- position of the executive boards. Both PKI chairman Aidit and deputy chairman Luk- man sit on the 19-member Eco- nomic Development Council, which will review the ambitious Eight-Year Development Plan. The Communists are not di- rectly represented in the cab- inet. Sukarno wants to appoint them to balance army participa- tion but thus far has hesitated to do so over army opposition. The Communists' presence in the two legislative bodies gives the party prestige but little real influence. Their work in the advisory councils seems so far to have had little effect; the councils' output has faithfully reflected Sukar- no's orders. The cabinet, where the Communists will press for participation, and the still- incomplete National Front ap- pear to be the organizations with which the party can make the greatest gains. Meanwhile the party will continue to use its influence as the country's only signif- icant mass organization to press Sukarno to expand and ex- tend his already leftist pol- icies. Despite the govern- ment's de-emphasis of political parties, the Communist party continues active at the village level, partly in anticipation of national parliamentary elections which are tentatively scheduled for 1962. Already strong in the labor movement, it is con- centrating on organizing the peasantry and infiltrating the army and police. Intraparty Differences Although cooperation with Sukarno has increased Commu- nist strength and prestige, mi- nority elements in the PKI re- portedly have voiced discon- tent over continued support of "guided democracy." Severe Communist criticism of the cab- inet in July 1960 may have re- flected the influence of these elements. The army, retaliated by arresting and interrogating party leaders, and, in three outlying provinces, it banned activities of the party and front groups. The party therefore planned to hold both a central committee plenum and an emergency party congress later in the year. The plenum reportedly was to be called to resolve growing "in- ternal contradictions" over party policy toward the govern- ment's programs, to examine whether "people's democracy" is attainable through "guided democracy," and to define tac- tics for the establishment of a national front. Before the congress or plenum could be held, however, Sukarno began to obstruct the army's anti-Communist campaign. During the fall of 1960, party representatives in the national congress joined in approving Sukarno's steps toward imple- menting "guided democracy." The party congress was canceled, and the central committee ple- num, when finally held in late December 1960, approved govern- ment decisions on "guided democ- racy" and ratified adjustments in party rules which had been made to conform with Sukarno's decree on political parties. SECRET PATTERNS AND PERSPECTIVES Page 14 of 9 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUIMARY 9 February 1961 Party chairman Aidit appar- ently regards the next phase of "guided democracy"--i.e., Com- munist participation in the cab- inet--as sufficiently similar to the party's limited goal of a united front government to merit the PKI's continued sup- port. Sukarno and the Communists Sukarno regards the Commu- nist party, with its claimed membership of 1,500,000, as an efficient mass-based organiza- tion which owes much of its suc- cess and probably its very ex- istence to its identification in the public mind with him and his policies. He presumably believes that he can use it to promote. his policies and con- trol it by threatening to with- draw his protection. Although apparently aware that the party could ultimately threaten his personal position, he does not seem to regard it as part of an international movement which threatens the country's inde- pendence. The Communists, although aware of the benefits of "guided democracy," apparently are peri- odically afflicted with the tra- ditional Communist fear of los- ing their identity in a general movement. More than balancing this fear, however, is the party's awareness that it is not yet in a position to dis- card Sukarno. Still the key leader in Indonesia, his power base is support by the masses, particularly those of Java, where the Communists draw their principal strength. The party's tactics must also take into consideration the Sino-Soviet bloc's over- all policy toward the President. The bloc is carefully cultivat- ing Sukarno by treating him as a major Asian-African leader, by strongly supporting his long-standing claim to Nether- lands New Guinea, and by ex- tending large-scale economic and military assistance. Sukarno apparently envi- sions "guided democracy" not only as a means of reaching national unity and development but also as a means of control- ling those elements which threaten his own position. As long as the Communists continue to support "guided democracy," he is unlikely to permit--and the Indonesian Army is unlikely to take--oppressive action a- gainst them. The primary po- litical question in Indonesia is: How far will the Communist party and Sukarno go in exploit- ing each other and which will be the loser? Sukarnl's long-range strat- egy is the evolution of a mass movement in which political identities are merged. Par- alleling this is the achieve- ment of an economic "liberation" for the average Indonesian, who will owe its accomplishment to Sukarno. In this utopia of cooperation and prosperity, Sukarno believes, the Commu- nist party and the program will be overwhelmed and forgotten. Its members, whom Sukarno re- gards as more Indonesian than Communist, will have been educated to cooperate willing- ly in a "gotong rojong" society, and "Indonesian socialism" will have been achieved. Meanwhile, Sukarno must balance the PKI against the army while at the same time insisting that the two forces work together. Although he would not hesitate to maneu- ver against the party if he felt it threatened his posi- tion, the party is unlikely to give him reason for doing so until, confident of support by the masses, it feels strong enough vis-a-vis the army to discard him. The outlook for the foreseeable future is one of continued Communist gains, including participation in SECRET Page .5_ of 9 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Next 4 Page(s) In Document Denied Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7 CONIFI TIALT SECRET rA iri NTIAL Approved For Release 2007/10/23: CIA-RDP79-00927AO03100010001-7