CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A003300120001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 47
• Document Creation Date: December 20, 2016
• Sequence Number: 1
• Content Type: SUMMARY

Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
CONFIDENTIAL
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO -R
OCI NO. 0300/61
5 October 1961
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE l
DOCUMENT NO.
NO CHANGE IN CLASS. ^
0 DECLASSIFIED
CLASS. ((HANGED TO. TS
NAVY NEXT R?VI:W DATE: 1990
completed. DATE: 1--5 .JuyPOO BEYIEWER:
DOS review completed
OSD review(s) completed.
nm7ENTIAL 25X1
9 f
r
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 rnti CrnCMMTI A If
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
NOV
EAST-WEST RELATIONS . , . . . , . . . . page 1
Moscow's treatment of the Rusk-Gromyko conversations
and its general commentary on the Berlin situation suggest
that the Soviet leaders are confident that formal negotia-
tions will be arranged. Pravda conveyed a favorable im-
pression of the New York ads, and a Soviet public lec-
turer in Moscow has predicted the exchanges would be fol-
lowed by negotiations ensuring a peaceful settlement. So-
viet spokesmen have stated privately that the next few
weeks will be decisive in determining the bloc's next moves
and have hinted that the year-end deadline could be extend-
ed. A Soviet memorandum to the UN on partial disarmament
steps and European security arrangements also was intended
to strengthen the Soviet effort to obtain an agreement on
negotiations by indicating a willingness to broaden the
agenda of any East-West talks.
UNITED NATIONS DEVELOPMENTS .
. Page 4
Much of the UN activity during the 16th General As-
sembly--now in its third week of general debate--centers
on private negotiations to avert a Chinese Nationalist
veto of Mongolia's admission. Such a move would prevent
Mauritania's entry and also have far-reaching consequences
on Taipei's position in the United Nations. UN members
are also attempting to break the deadlock between the So-
viet bloc and the West over the appointment of an interim
secretary general.
SYRIA-EGYPT . . . . . . . . . . . . . . . . . . . . . . . Page 5
Nasir's prestige appears to have sunk to an all-time
low following Syria's break with the UAR. He had ordered
contingency military preparations to permit rapid movement
of Egyptian troops to Syria, but apparently has become less
hopeful that a counterrevolt will take place to afford him
the opportunity for direct military action in its support.
He probably now will concentrate on a large-scale program
of subversion against the new Syrian government and also
try to accelerate the progress of his own revolutionary
movement in other Arab countries. The Kuzbari government
and the "Syrian Army Revolutionary Command" have consoli-
dated their control and, in order to allay suspicion a-
roused by their rightist background, are attempting to
conciliate public opinion by promising to continue and
expand some of the social and economic reforms instituted
by Nasir. The USSR is maintaining an officially noncom-
mittal attitude toward the revolt, although its leaders
probably see the split as an opportunity for renewed Com-
munist activity in Syria.
OSD review(s) completed. CONFIDE L
BRIEFS
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 r-AMMeinIMMTIAI
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
CONGO . . . . . . . . . . . . . . . . . . . . . . . . . . Page 7
Little progress has been made in the negotiations be-
tween UN and Katanga representatives, and the situation in
Elisabethville remains tense. Each side professes confi-
dence in its military superiority and is preparing for pos-
sible further conflict. The stalemate apparently has pro-
duced further pressure on Adoula to order a Congolese of-
fensive. The schism between moderate and Gizengist fac-
tions in the central government continues.
LAOS . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 9
Souvanna Phouma, Souphannouvong, and Boun Oum are to
meet at Ban Hin Heup on 6 October to resume negotiations
for the establishment of a coalition government. General
Phoumi has indicated that Vientiane is willing to accept
Souvanna as premier if the coalition cabinet reflects a
"proper balance." Kong Le - Pathet Lao forces continue
"mop-up" operations against Meo units in the Plaine des
Jarres area; Vientiane troops, meanwhile, are conducting
patrols in central Laos. At Geneva, general agreement
has been reached on the future role of the conference co- 25X1
FRANCE-ALGERIA . . . . . . . . . . . . . . . . . . . . . . Page 10
French-Algerian negotiations seem likely to be resumed
soon, in view of the reportedly favorable reaction of the
provisional Algerian government to De Gaulle's 2 October
television address. In Algeria, however, tension between
Europeans and Moslems remains high and is being stimulated
by the rightist Secret Army Orgaftization, which hopes to
provoke enough violence to wreck any prospect of a nego-
tiated settlement. While De Gaulle's threat to dissolve
parliament and to reassume emergency powers has further
antagonized his domestic critics, all except the extrem-
ists seem hesitant, because of the lack of a democratic
alternative, to risk action which might overthrow him.
FRANCO AND US BASES .
Page 12
General Franco's public statement on 1 October that
"circumstances counsel revision" of the ten-year US-Spanish
defense and bases agreement implies that he will soon press
for new concessions. The treaty runs until September 1963,
with a provision for automatic extension; any negotiations
for revision would normally get under way in the next few
months. Spanish officials have indicated for some time
that they want more modern arms; more recently, in a sep-
arate development, they have pressed for US support of
'
Spain
s and Portugal's African policies.
CONFIDENTIAL
it
PP TFP.q
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 PONM VNT1AL
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
.r; N"We
CURRENT INTELLIGENCE WEEKLY SUMMARY
5 October 1961
SOVIET DOMESTIC PROPAGANDA ON THE PROSPECTS OF WAR . . . . Page 13
Internal press and radio commentary associated,,,with
major tough Soviet statements addressed to the West have
on several occasions aroused anxiety among the Soviet.pub-
lic. These have, in each case, been followed by efforts
to allay domestic fear that war might be imminent. Some
Soviet citizens seem to have developed a certain amount
of indifference to official statements. Others, however,
were undoubtedly perturbed by official statements that
the international situation is serious but appear to ac-
cept the reassurances which have followed. There appears
F_ Kilru-,;
to be little doubt among the Soviet people that
shoheV^,s; posi.tlern on the German question is Just.
CROP PROSPECTS IN THE SINO-SOVIET BLOC . . .
Page 15
Crop prospects for the Sino-Soviet bloc in 1961 are
not outstanding and in some areas, notably Communist China,
are particularly poor. China's prospects for a third suc-
cessive unfavorable agricultural year indicate that food
shortages--together with malnutrition and related health
problems--will probably continue to plague the regime
throughout the coming winter and spring.
With the exception of the New Lands, growing condi-
tions for small grains were generally favorable in the
USSR this year. Although expected to be 15 to 20 percent
above the poor harvests of 1959 and 1960, this year's to-
tal grain harvest will still be below the bumper harvest
of 1958, leaving the regime with little progress during
the past three years toward its ambitious 1965 agricultural
targets.
Total output of grain in the European satellites is
estimated to be about the same as last year, largely be-
cause of a bumper crop in Poland. No basic improvement
in the per capita availability of food is expected for the
satellites in 1961/62. East Germany, Hungary, and Bul-
garia will probably have the most difficulty in meeting
consumer demands for foodstuffs.
HOUSING PRIORITY LOWERED IN USSR . . . . . . . . . . . . .
A newly published figure for housing construction in
the USSR in 1960, significantly lower than that originally
claimed in the official plan report, is a new indication
of reduced priority for Soviet housing and casts doubt on
the possibility of achieving the Seven-Year Plan (1959-65)
for housing. A substantial underfulfiliment of the plan
in 1960 and subsequent housing data suggest that the So-
viet regime decided in mid-1960 to sacrifice part of the
popular housing program to other construction projects.
Page 17
HUNGARIAN FIVE-YEAR PLAN REVISED . . . . . . . . . . . . . Page,. 18
Following above-plan performance in 1959 and 1960,
the Hungarian regime has announced higher goals for pro-
duction in certain industries and for national income in its
WE-
CON DENTIAL
BRIEFS
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 nnnirfnGNTIAI
Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
Second Five-Year Plan (1961-65). Planned investments have
been cut, however, allowing larger expenditures for mili-
tary purposes and, possibly, for repaying foreign loans.
The revised plan is generally conservative and probably
will be fulfilled in its main aspects. 25X1
COMMUNIST CHINA CELEBRATES NATIONAL DAY . . . . . . . . . Page 1E9
On 1 October the Chinese Communist regime went through
the motions of celebrating the 12th anniversary of its
founding, but in contrast to previous National Day cele-
brations the principal speechmakers made few boasts con-
cerning the past year's achievements. Instead they spoke
of "certain difficulties," "three successive years of grave
natural calamities," and "a reduction of agricultural out-
put," and said 1961 and 1962 would mark a period of eco-
nomic consolidation and adjustment. On foreign policy
matters, Peiping's tributes to Sino-Soviet friendship were
met by unresponsive Soviet speeches and pro forma Soviet
attendance at National Day functions in both Peiping and
Moscow.
PEIPING'S RELATIONS WITH JAPAN . . . . . . . . . . . . . . Page 20
Communist China has in recent weeks engaged in a prop-
aganda campaign of growing shrillness against the Japanese
Government. Reacting to what it considers Prime Minister
Ikeda's increasing hostility, Peiping now calls him "worse
than" his predecessor, Kishi. Annoyed with Japanese So-
cialists for their new coolness toward united front tactics
with Japanese Communists in anti-US activities, Peiping is
casting about for new leftist channels through which to
influence Japanese politics. 25X1
FACTIONALISM IN SOUTH KOREAN REGIME . . . . . . . . . . . Page 22
Factional struggle threatens the stability of South
Korea's ruling military council. Security boss Col. Kim
Chong-pit, whose followers tend to favor protracted mili-
tary rule and a state-operated economy, is pressing for
the removal of the council's vice chairman, Maj. Gen.
Yi Chu-il, whose group appears to want a more moderate
approach to the country's difficulties. The chairman
of the council, Lt. Gen. Pak Chon -hui is believed to be
working to avoid a showdown. 25X1
GHANA . . . . . . . . . . . . . . . . . . . . . . . . . . Page 23
The regime's arrest on 3 October of prominent politi-
cal adversaries and leaders of the union which spearheaded
last month's strikes underscores Nkrumah's determination
to forestall the emergence of any effective opposition
movement. The arrests, along with the removal of K. A.
Gbedemah from the cabinet last week, have stimulated new
discontent with Nkrumah's leadership, especially among
labor elements. However, Nkrumah's move may intimidate
into inaction Gbedemah and other moderates within the ruling
party who appeared to bectygt~t~~~VVarlc, ,ppen opposition.
~~ rr f + HL 25X1
IV
BRIEFS
Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
 I)KICInCMMT1A1
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
BRITAIN AND THE COMMON MARKET .
Page 25
London has agreed to outline to a preliminary minis-
terial meeting to be held in Paris on 10 and 11 October
the specific concessions it seeks before joining the Euro-
pean Common Market (EEC). Criticism of British accession
by other Commonwealth members has sharpened in recent weeks.
The Macmillan government may find it increasingly difficult
to reconcile the general assurances it has given the Common-
wealth and British agricultural interests with an approach
to the EEC that is sufficiently forthcoming to give the
formal negotiations a good start early in November.
Page 26
President Dorticos' month-long trip to the bloc has
elicited extensive propaganda support for Cuba and paved
the way for negotiations on Cuba's 1962 trade with the
bloc. Continuing executions in Cuba and Cuban subversion
abroad may increase Latin American distaste for the Castro
regime, but Brazil has recently indicated its opposition
to any multilateral action against Havana.
El Salvador's provisional military government is mak-
ing preparations for election of a constituent assembly
in December and is developing a party organization for
this purpose. It continues resolved to carry out its pro-
Page 27
gram of basic socio-economic reform; concessions made last
week to powerful landowning families on a decree favoring
agricultural laborers were probably only a tactical maneu-
ver in the pre-electoral period.
fort. In order to sell its planes to non-Communist coun-
tries, Moscow has offered them at reduced prices and has
emphasized favorable credit terms. Some of the newer So-
viet models, smaller and more economical than the earlier
SOVIET TRANSPORTS IN THE WORLD AVIATION MARKET , . . . . . Page I
There are few important differences in speed, range,
and carrying capacity between the jet and turboprop trans-
port aircraft of the USSR and comparable Western models.
Western aircraft, however, are generally superior in fuel
economy, cost of maintenance, durability, safety, and com-
planes, will probably be fairly widely accepted abroad.
CON~AENTIAf.
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 11ThIFIIlFNTIAI
Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
w, f..
CURRENT INTELLIGENCE WEEKLY SUMMARY
5 October 1961
CYPRUS AFTER A YEAR OF INDEPENDENCE .
. . . Page 9
Cyprus is experiencing large-scale unemployment, a
serious drought, increasing violence, and the growing
influence of a domestic Communist party. Greek Cypriot
extremists continue to demand union with Greece, and
some members of the Turkish minority are again coming to
feel that partition of the island is the "final answer"
for communal problems. The government continues to func-
tion effectively, however, and both President Makarios
and Vice President Kuchuk appear determined to make the
Cyprus settlement work. Makarios, in the face of Turkish
Cypriot objections, is pursuing a "nonaligned" foreign
policy but--as indicated by his remarks at the recent
Belgrade conference--with an awareness of Cypriot economic
dependence on and cultural affinity for the West. Com-
bating the continued growth of Communism appears to pre-
sent the government with its greatest challenge.
CONFIDENTIAL
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
Iftol, IA)P Iut1V I IAL Nwe
EAST-WEST RELATIONS
Moscow's treatment of the
conversations between Secretary
Rusk and Foreign Minister Gro-
myko and its general commentary
on Berlin suggest that the So
diet leaders are confident formal
negotiations will be arranged.
Following the third meeting be-
tween Secretary Rusk and Foreign
Minister Gromyko on 30 September,
Pravda on 2 October quoted from
a US statement that the sessions
were cordial, that they were re-
lated to the possibility of
East-West negotiations, and that
Gromyko was likely to meet with
President Kennedy. Soviet press
coverage of the first two dis-
cussions merely reported that
the meetings had been held but
gave no indication of the gen-
eral atmosphere or possible re-
sults. The coverage of 2 Oc-
tober, therefore, conveys an
impression that the talks are
proceeding favorably.
Izvestia also injected a
hopeful note in an article
which cla'ime..d. that the Soviet
people did not believe that
the international situation
was entirely covered with the
"leaden clouds of war." A
speaker at a public lecture in
Moscow on 26 September predict-
ed that the Rusk-Gromyko talks
would be followed by negotia-
tions and cited the US-Soviet
agreement on disarmament princi-
ples as a favorable sign. The
East German party organ Neues
Deutschland echoed this line
in an editorial of 28 September,
stating, "Everyone realizes now
that there will be negotiations."
Polish party First Secretary
Gomulka on 30 September also
asserted that "on our side nothing
stands in the way of a peaceful
solution of the German problem
by means of fruitful negotiations
and mutual agreements." The Pol-
ish news service reported that
"UN circles" expect an East-West
foreign ministers conference to
be followed by a summit meeting.
This general line suggests
that Moscow views the Rusk-Grog
myko talks as the opening of a
decisive phase in the Berlin cri-
sis. A number of Soviet journal-
ists, in their contacts with Amer--
ican officials, have stressed
that the next several weeks will
determine the future course for
the bloc and have hinted that
the Soviet year-end deadline for
a solution could be revised if
negotiations were in process or
scheduled. The third secretary
of the Soviet Embassy in Mexico
City stated that the USSR was
not disposed to sign a separate
East German treaty if there were
real possibilities for East-West
agreement.
A Pravda correspondent
claimed that the next six weeks
would be most important for set-
tirmg: a date for a meeting at the
highest level. He added that..
the date could be "sometime in
1962" provided the US agreed to
the principle of negotiations.
A TASS correspondent also empha-
sized negotiations and warned
CONFIDENTIAL
5 Oct 61 WVVVT.V RFV T VW name 1 of 27
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3 '
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
that if they failed to material-
ize, Khrushchev would have some
"very interesting warnings" at
the Soviet party congress.
Communist sources in London
were apparently responsible for
press reports that the bloc
foreign ministers would convene
in November to consider the next
move on Germany. According to
these reports, the bloc would re-
view the results of current East-
West contacts, such as the Rusk-
Gromyko conversations, and de-
cide whether to proceed with a
peace treaty before the end of
the year. If no East-West ne-
gotiations were arranged by No-
vember, the bloc would go a-
head as announced and convoke
a peace conference, but that if
it was clear the West was pre-
pared to negotiate, the Warsaw
Pact ministers would recommend
postponement of a peace con-
ference until "two or three
months" into 1962. Other press
reports quoted "Communist diplo-
mats" as saying that the bloc
might postpone a separate treaty
if the West agreed to negotiate
a Berlin settlement.
These semiofficial state-
ments have been accompanied by
an official effort to appear
responsive to Western views
that the agenda of any formal
negotiations should be broader
than the Soviet proposal of a
peace treaty and free-city status
for West Berlin. The Soviets
have begun to emphasize European
security and certain limited
partial disarmament measures
to show willingness to enlarge
the scope of East-West discus-
sions. The Soviets have made
it clear, however, that European
security discussions are no sub-
stitute for a German treaty.
Disarmament
A Soviet Government memo-
randum submitted to the 16th UN
General Assembly suggested reach-
ing agreement on freezing mili-
tary budgets, denouncing the use
of nuclear weapons, banning war
propaganda, concluding a nonag-
gression pact between the NATO
countries and the Warsaw Pact
nations, withdrawing foreign
troops from the territories of
other countries; taking measures
against the further spread of
nuclear weapons, creating atom-
free zones, and taking steps to
lessen the danger of surprise at-
tack.
All of these measures have
appeared as provisions of earli-
er Soviet disarmament proposals,
although not necessarily as "par-
tial" disarmament measures. The
increase in the number of partial
disarmament measures listed may
be aimed at countering neutralist
dismay over the Soviet position
that a test ban solution can be
reached "only" through agreement
on general and complete disarma-
ment. Several of the measures--
a NATO - Warsaw Treaty nonaggres-
sion pact, establishment of a
nuclear-free zone in Central Eu-
rope:,; withdrawal or at least re-
duction of foreign troops in Eu-
rope, and a ban on supplying nu-
clear weapons to other countries
--are probably calculated to ap-
peal to groups in Western Europe
who favor tying European security
arrangements to a German settlement.
CONFIDENTIAL
5 Oct 61 WEEKLY REVIEW Pane 2 of 27
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3 '
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
SECRET
The memorandum's call for
reciprocal commitments not to
be the first to use nuclear
weapons is at variance with a
recent statement by Khrushchev.
The Soviet leader--who in past
years had advocated such an
agreement--told New York Times
correspondent SuT erger ear y
in September, "It would be un-
timely at present to say that
in the event of war, atomic
weapons would not be employed."
He added that if both sides
were to promise not to employ
nuclear weapons but retained
their stockpiles and the'im-
perialists unleashed a war,
"any side" that felt it was
losing would "undoubtedly use
its nuclear bombs."
Berlin
Bloc leaders continue to
stress possible guarantees for
future access to West Berlin.
Gomulka said on 30 September
that the peace treaty will
allow a "solution of the West
Berlin problem in a way. . .which
will provide it with free com-
munications with the world and
international guarantees of the
interested powers or guarantees
of the UN." On the same day,
Czech President Novotny asserted
that if Berlin had become a
question of Western prestige,
"Let us agree on guarantees for
West Berlin, as clearly indi-
cated by Khrushchev."
the deadline.
The bloc's intention to
sign a separate peace treaty
by the end of the year continues
to be muted in statements and
propaganda, although it appears
occasionally. Gomulka referred
to the deadline in speeches
during a visit to Prague; an
Izvestia editorial on 29 Sep-
tember mentioned a treaty by
the end of the year; and East
Germany has continued to stress
SECRET
5 Oct Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3 = 3 of 27
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
Nftw'law
CURRENT INTELLIGENCE WEEKLY SUMMARY
UNITED NATIONS DEVELOPMENTS
The 16th UN General As-
sembly is in its third week of
general debate. Most activity,
however, is taking place in pri-
vate negotiations among UN mem-
bers on such key issues as the
admission of Mongolia and Mauri-
tania and the appointment of an
interim secretary general.
Admission of Mongolia
The Security Council on 2
October again deferred considera-
tion of Mauritania's and Mongo-
lia's membership applications.
All 11 council members acquiesced
in the deferral, reportedly to
allow time for further negotia-
tions with Nationalist China on
its opposition to Mongolia's en-
try into the UN. The USSR still
insists it will veto Mauritania's
application if Mongolia is re-
jected. Mauritania's applica-
tion is first on the agenda, but
the USSR has circumvented this
tactical dilemma by threaten-
ing to veto Mauritania's admis-
sion unless Mongolia has already
been accepted.
The Security Council will
probably meet again soon on the
problem, and a Nationalist veto
of Mongolia then could accelerate
the assembly debate on Chinese
UN representation and might also
lead to early Soviet efforts to
have the assembly reject Taipei's
credentials--a vote requiring on-
ly a simple majority. The West
wants to have the issue debated
as an "important question" re-
quiring a two-thirds vote.
possibly be such that the group
in the end would vote as a bloc
and oppose Nationalist China.
The Secretary Generalship
The Soviet delegation has
further modified its position
on Dag Hammarskjold's successor
in an effort to meet the Afro-
Asians' objections and to gain
their support for some form of
the troika principle. The bloc
is currently pressing a proposal
for the Security Council to name
a provisional "chief of the sec-
retariat" plus three deputies--
one each from the West, the So-
viet bloc, and the neutral
states. This four-man directo-
rate would be required to act in
the spirit of "concord" and to
serve until April 1963, when
Hammarskjold's term would have
expired.
In his explanation of this
plan to Ambassador Stevenson,
chief Soviet delegate Zorin was
ambiguous on the question of
whether the Soviet terminology
involved a veto power for the
deputies. On 1 October, however,
the Soviet delegation published
a formal statement outlining
the proposals and denying that
Moscow envisaged a veto power
by any of the deputies.
The Soviet delegation has
been seeking support from Afro-
Asians for this latest plan.
The USSR reportedly has agreed 25X1
to the appointment of Burma's
U Thant as interim secretary
general with full powers. F__1
Although spokesmen for the
twelve French African states in
the Brazzaville group continue
to assert that they will oppose
Taipei as a bloc if Mauritania
is denied UN membership because
of a Nationalist veto of Mongo-
lia, there are indications that
the group is not as unified on
this issue as some spokesmen
claim. Foreign Ministry officials
of Cameroun, Togo, and even
Senegal have recently expressed
opposition to Chinese Communist
membership in the UN. However,
resentment of Taipei could
The USSR's main purpose
seems to be to avoid a decision
which would reconfirm the exist-
ting situation and represent a 25X1
defeat for the Soviet contention
that the executive branch of the
UN should be reorganized.
5 Oct I Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3 4 of 27
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
rove %a
The early-morning coup in
Damascus on 28 September caught
the Nasir regime completely by
surprise, and the small military
clique responsible for the action
quickly consolidated its initial
success with comparatively little
resistance throughout Syria.
With the possibility of any pro-
Nasir counterrevolt in Syria
becoming increasingly remote,
Nasir appears to be slowing down
the contingency invasion prepa-
rations noted in the days imme-
diately following the coup.
The ineffectual drop of
about 100 paratroops in the
Latakia area early on 29 Septem-
ber was meant to be the first
move in an invasion plan appar-
ently based on a faulty inter-
pretation of the situation, com-
bined with Nasir's determination
to take the strongest possible
stand against the rebels through-
out the crisis. Freighters at
Alexandria continued loading of
invasion materiel until 3 October,
probably in the hope that some
sign of indigenous support for
an invasion attempt would show
itself. With the chances for
direct military action apparently
fading, Nasir will probably con-
centrate on subversion.
The Kuzbari regime in Syria,
.well aware that it will be called
reactionary, has made strenuous
efforts to give the impression
that social gains made during
the UAR period will be retained.
The appointment of a moderate
socialist as minister of national
guidance was a move in this
direction, as have been several
announcements that such worker
benefits as employee profit
,sharing and participation in
management would be retained
and expanded. The agrarian re-
form law decreed by Nasir also
is to be carried out.
leaders Akram al-Hawrani and
Salah al-Din Bitar. Apparently,
the Kuzbari regime promised
early parliamentary elections
in return for this support.
Nasir's monolithic political
movement, the National Union,
has been dissolved throughout
Syria.
Schools have been closed
while the curriculum is being
"cleansed" of material glorify-
ing Nasir as the champion of
Arab unity. Egyptians in Syria
have been ordered to register
with security authorities as
foreigners, but orders for their
mandatory expulsion have been
rescinded; several hundred have
already returned to Egypt.
The prospects for continued
maintenance of a stable govern-
ment in Syria do not appear good.
Before union with Egypt, Syria
was beset with internal political
turbulence, and coups and counter-
coups were'frequent. The Kuz-
bari government will probably
be subjected to increasing pres-
sure from less conservative
political groups. There is,
moreover, reason to believe that
some of the army officers in the
revolutionary command are not
entirely satisfied with the make-
up of the Kuzbari cabinet.
Only Jordan among the Arab
states has so far recognized
the Kuzbari government; Qasim
and King Saud are undoubtedly
greatly pleased at Nasir's set-
back but have given no indi-
cation when Iraqi and Saudi
recognition would be extended.
Beirut has been the-scene
of several sizable pro-Nasir
and pro-UAR demonstrations
since the coup and is apparently
being used by Egypt as a base
of operations against Damascus.
The new government's inter-
nal position should be strength-
ened by the 1 October declaration
of support from a cross-section
of Syrian political leaders, in-
cluding those who were respon-
sible for Syria's union with
Egypt in 1958. Of particular
significance is the open suppG5A
of such leftists as Baathist
Because Iran and Turkey
were also prompt to establish
relations with Damascus, their
ships are being refused service
in transiting the Suez Canal.'
Public reaction in Egypt
a ears to have been largely
thetic, and the Nasir regime
is reported concerned over the
5 Oct 61 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001 3..'ge 5 of 27
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
SYRIA
International boundary
Provincial boundary
o 20 40 60 Miles
0 20 40 60 Kilometers
? Palmyra
possibility that the Syrian re-
volt might prove contagious.
Nasir's prestige is described
as at "an all-time low," and
Egyptian police have been
placed on alert.
Moscow is treating the
Syrian situation with caution.
Although the USSR almost cer-
tainly welcomed the split as
an opportunity to resume Com-
munist activity in Syria, its
official attitude is circum-
scribed by the importance of
maintaining harmonious relations
with Nasir. Ambassador Thompson
believes the Soviet leaders will
wait to see if the Damascus
government can establish itself
firmly and let Western powers
"test UAR reaction."
._\_j, D A M A S C 11 S ",
W A /
Darn ? ~'
\y
? Suwayda O R A N
`
R K) E Y
Q ishli
~~ ( Al
The outlawed Syrian Commu-
nist party on 4 October pub-
lished a statement in a Beirut
Communist newspaper hailing
the revolt as "an expression
of hatred for imperialism and
Pharaonic domination." The
party calls for release from
jail of the "detained nations---
alists" and for "'a national
democratic rule hostile to
imperialism and based on free
parliamentary elections."
Party leaders, effectively
suppressed by Nasir for three
and a half years, are obviously
looking forward to a climate
in which they can operate
more successfully.
5 Oct 63 WEEKLY REVIEW Page 6 of 27
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY 3URY
Little progress has been
made in the negotiations between
UN and Katangan representatives
and tension is continuingr.,in.Elis-
abethville. The points at issue
are the position of Katangans
European mercenaries. and the
terms of Katangans reintegration
with the rest of the Congo. Ka-
tangan officials claim that the
mercenaries have been dismissed,
and that their repatriation now
is the concern of the UN and the
foreign consular corps. UN rep-
resentatives charge that the
Europeans have merely gone under-
25X1 ground.
A high UN official has told
the Katangans that unless they
helped to round up the remaining
white mercenaries, the UN would
have to take "appropriate meas-
ures" to seize the Europeans.
The American consul in Elisabeth-
ville comments that such measures
might lead to a reopening of
hostilities.
They:>Katangan..XN:.megotiat ions
are complicated by the belief of
the UN in its military superiori-
ty, and by Tshombe's apparent
feeling that he must put up a
bold front. UN commander
McKeown, in a 30 September con-
versation with Ambassador Gul-
lion, admitted the difficulties
in planning and the language
barriers encountered by the UN
in the past, but ascribed its
present posture mainly to an un-
willingness, based on humanitar-
ian considerations, to go on the
offensive. He deprecated the
Katangan "attacks," which he
said were actually ill-directed
mortar and small-arms fire.
McKeown indicated that with the
addition of a small jet fighter
capability, the arrival of 20
armored personnel carriers, and
some regrouping of forces, the
UN would have the Katangan sit-
uation in hand.
The American Consulate in
Elisabethville, while confirming
that the UN troops believe that
"next time we shall finish the
job we started last time," re-
ports that the UN Elisabethville
headquarters has no intelligence
organization. UN troops have
been ostracized by local civilians
and have little chance to gain
information by informal contacts.
The consulate also reports
that on the Katangan, side there
is a mixture of confusion and
confidence, with much talk of
a "last-ditch stand" and "whip-
ping the UN again." The Katan-
gans have received at least one
and possibly six Dornier light
transports, which could be used
for reconnaissance and limited
bombing missions. UN officials
believe that mercenaries and
military equipment are still
being smuggled across the Rho-
desian border, the vehement pub-
lic and private denials of Rho-
desian officials notwithstand-
ing.
Rioting by anti-Tshomb6
Baluba tribesmen in areas around
Elisabethville is further com-
plicating the security situation
in Katanga. The 30,000 tribes-
men in the Elisabethville refugee
camp reportedly are also being
molested by pro-Tshomb6 youth
groups. Estimates of the number
killed in these essentially trib-
al outbreaks range from 50 to 100.
Tshomb6 has maintained a
moderate posture on the question
CONFIDENTIAL
5 Oct 6 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3 ;e 7 of 27
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
NWW' tit c'iui 1 %00#
of negotiations with Leopold-
ville, but he apparently re-
mains unwilling to meet with
Premier Adoula on ground con-
trolled by the central govern-
ment. Adoula, in conversations
with Ambassador Gullion in Leo-
poldville, has also taken a rel-
atively moderate stand on the
substantive issues, but he has
so far rejected Tshombe's offer
to hold talks at a neutral site.
The continuing stalemate
in Katanga apparently is result-
ing in further pressure on Adou-
la to order a Congolese offen-
sive. He told Ambassador Gul-
lion recently that he had threat-
ened to resign in order to head
off the "activists" in his cab-
inet; nevertheless, Congolese
military leaders apparently are
planning a large-scale invasion
of Katanga from both Kasai and
Kivu provinces. The Congolese
command has had no training for
such an operation, and trans-
port and logistic facilities
are inadequate, while liaison
between Mobutu's Leopoldville
headquarters and the various
army components is tenuous.
There is evidence of a
continuing schism in Leopoldville
between the moderate and Gizen-
gist factions which has not been
healed by the appointment of
several Gizengists to the Adoula
cabinet. Adoula apparently is
relying on splits in the radical
bloc--particularly between Gi-
zenga and Interior Minister
Gbenye--to keep it under con-
trol. He admitted to Gullion
that there were differences be-
tween himself and Gizenga but
expressed confidence that Gizen-
ga could be controlled.
Gizenga, in a conversation
with Gullion, pressed strongly
for a Congolese constitution
which would effectively end Ka-
tangan separatism. He was e-
vasive when asked if he favored
Congolese military intervention.
He also insisted that the gov-
ernment must have relations with
all countries--presumably a
reference to his Soviet bloc
and Afro-Asian supporters, whose
accreditation Foreign Minister
Bomboko has been trying to de-
lay,
Belgian Foreigii Minis-
ter Spaak remains convinced that
Belgian interests in the Congo
can be. preserved only: through
the reintegration of Katanga
and the continued presence of
the UN; he says he has been
pressing Belgian economic in-
terests, notably the Union
Miniere and Soviet? Generale,
to use their influence with
Tshombe for the peaceful rein-
tegration of Katanga. Coin
pany officials in Katanga, how-
ever, in the past have not al-
ways agreed with Spaak and have
frequently acted independently.
Both government and company
officials in Brussels are bitter
about UN actions in Katanga.
Spaak also told Ambassador Mac-
Arthur on 2 October that if the
UN again resorts to force, the
Belgian public will be outraged
and the government will be forced
to take a public position against
such action.
handled by a Belgian colonel.
Spaak has acceded, in the
face of strong domestic opposi-
tion, to pressure from Leopold-
ville for the withdrawal of Con-
sul General Crener from l;lisa-
bethville. Spaak had earlier op-
posed such a move on the ground
that Tshombe would not accept a re-
placement unless accredited to the
"Katanga government," thus depriving
thousands of Belgians of consular
protection, Crener will not be re-
placed, and Belgian affairs will be
SECRET
5 Oct 61 Tir"," rr, - .._
Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
SECRET ''vil
CURRENT INTELLIGENCE WEEKLY SUMMARY
Souvanna Phouma, Souphan-
nouvong, and Boun Oum are sched-
uled to meet at the front-line
village of Ban Hin Heup on 6
October to resume negotiations
for the establishment of a coali-
tion government in Laos. These
discussions, the first to be held
since the Zurich conference in
June, will be initiated on the
Vientiane-controlled south bank
of the Nam Lik; thereafter meet-
ings are to be held on alternate
sides of the river. Major points
for discussion include the des-
ignation of a premier, the dis-
tribution of portfolios in the
coalition cabinet, the demobili-
zation and integration of the
opposing armed forces, and the
timing of the national elections.
General Phoumi told Ambas-
sador Brown recently that Sou-
vanna would be acceptable as
premier if a coalition cabinet
reflecting a "proper balance"
among the three groups could be
put together. Phoumi indicated
that he would endeavor to ob-
tain key cabinet posts for "his"
group, but felt Souvanna prob-
ably would demand the Defense
Ministry for himself. Regard-
ing the vital question of in-
tegration and demobilization of
forces, Phoumi stated his in-
tention to arrive at agreement
on "broad lines of handling this
question" prior to the formation
of the government, with emphasis
on the implementation of demobi-
lization before elections.
Pa,thet Lao - Kong Le forces
have continued their mop-up
activities in Xieng Khouang
Province. Reports indicate the
loss by Meo units of posts at
Tha Lin Noi and Pha Phong in
the Plaine des Jarres area.
Farther south, in the areas south
and east of Thakhek, Vientiane
forces have continued their oper-
ations to eliminate enemy pockets.
At Geneva, general agree-
ment has been reached on the
future role of the cochairmen.
The approved draft, which
eliminates the initial Soviet
demand for a veto by the co-
chairmen over activities of
the International Control
Commission (ICC), allows
them to make recommendations to
the ICC, which it may accept
or reject. In a 27 September
discussion of the future func-
tion of the ICC in Laos, however,
both the Soviet and Chinese chief
delegates took the position that
it should carry out its activities
only with the full agreement of
and on request of the Laotian
Government. They maintained
that the concept of permanent
ICC teams at predetermined
inspection points was unacceptable.
The two bloc delegates
pressed the US delegate for an
estimate on how much longer the
conference would continue and
argued that, inasmuch as the
three Laotian parties have al-
ready expressed their views in
the Zurich communique, it would
not be necessary to have
a unified Laotian govern-
ment delegation at the con-
ference.
SECRET
5 Oct 6 Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3 9 of 27
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
Iftw %W41
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
In a private talk with Am-
bassador Harriman on 29 Septem-
ber, Soviet delegate Pushkin
reiterated the Soviet desire
for an early agreement and
indicated that there was at
least some room for negotiation
on the future of the ICC's
operation in Laos. However,
it is unlikely that the bloc
would agree to any plan which
did not limit the ICC's authority
to the terms of a general agree-
ment which would have to be con-
cluded between the commission
and a government headed by
Souvanna Phouma--who has stated
his opposition to the idea of
an ICC with unlimited authority.
French-Algerian negotia-
tions seem likely to be resumed
soon, in view of the reportedly
favorable reaction of the pro-
visional Algerian government
(PAG) to De Gaulle's 2 October
television address. In Algeria,
however, tension between Euro-
peans and Moslems remains high
and is being stimulated by the
rightist Secret Army Organiza-
tion (OAS), which hopes to pro-
voke enough violence to wreck
any negotiated settlement.
While be Gaulle's threat to dis-
solve parliament and to reassume
emergency power's has further
antagonized his domestic critics,
all except the extremists seem
hesitant, because of the lack
of a democratic alternative, to
risk action which might over-
throw him.
While the only specific
steps De Gaulle outlined on 2
October were aimed at establish-
ing a provisional executive body
to govern Algeria, he made some
attempt to mollify both the
Europeans in Algeria and the PAG
on his ultimate intentions. He
made up for his much-criticized
failure to mention guarantees
for Europeans at his 5 September
press conference, and stated
that he does not regard negotia-
tions and moves to establish a
provisional executive as mutually
exclusive. He stressed that the
initiative for any provisional
body should come from Algerians
themselves, although Paris will
reportedly set the process in
motion this month by establish-
ing, as a forerunner, a "con-
sultative committee" to advise
the Delegation Generalein
Algeria on problems of self-
determination. French of-
ficials profess hope--on the
basis of indications they
reportedly received during the
last round of talks at Lugrin
--that the PAG might be will-
ing to discuss participation
in a provisional body.
During the transition to
independence, the provisional
body would be supported by the
"local police force" De Gaulle
SECRET
5 Oct 61 WEEKLY REVIEW Page 10 of 27
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SO' ARy
has proposed. According to the
press, it will initially comprise
30,000-35,000 Moslems now'serv--
ing in or as auXiliarie. . ,of
French security forces--not the
army proper-;-and later, if ne-
gotiations with the PA;r are suc-
cessful, would incorpo.?ate 15,-
000-20,000 rebel guerri .ia tr.oops.:
A likely commander of the police
force he envisages to support
the proposed provisional execu-
tive appears to be Brigadier
General Ahmed Rafa, the only
Moslem general officer in the
French Army, who was promoted
from colonel early in September
and on 4 October was named in-
fantry assistant to the commander
in chief in Algeria.
Foreign Minister Couve de
Murville told Ambassador Gavin
in Paris on 3 October that talks
would begin soon with the PAG.
The PAG had reportedly felt that
France should make the first
overture toward resuming talks.
A PAG official in Tunis told the
US ambassador there on 29 Sep-
tember that the rebels were
alarmed by the growing strength
of the OAS. He said that while
they feared De Gaulle might not
be able to carry out commitments
made in negotiations, they never-
theless felt that only he could
judge when the internal French
situation would permit serious
new negotiations.
De Gaulle's speech will in-
crease the determination of the
OAS, especially in Algeria, to
provoke violence sufficient to
make a negotiated settlement
impossible.. The OAS will prob-
ably be encouraged by the impres-
sive response in the European
sections of Algeria to its 2
October call for a half-hour
general strike. The mobs which
SECRET
have recently been active in
Algiers were composed predomi-
nantly of young European toughs
who probably see little future
for themselves in an "Algerian
Algeria,'.' and question their
welcome elsewhere. They have
access to plenty of arms, and
might face the army and secu-
rity forces with the necessity
of firing on them.
De Gaulle's 2 October
characterization of politicians
playing "their discredited games
of the former system" destroyed
whatever good will he may have
earned in his consultations late
last month with party leaders.
Parliament convened in a sullen
mood when the fall session opened
on 3"October, and the Socialist
party has authorized its depu-
ties to introduce a censure
motion against the government
whenever an "opportune time"
occurs. Such a motion, if
passed, would almost certainly
lead to a dissolution of parlia-
ment, but the US Embassy in
Paris estimates that no re-
sponsible political leader is
currently prepared to meet De
Gaulle in a full-fledged public
fight.
Meanwhile, in addition to the
influence of the OAS, there are
some elements in the armed forces
which dislike De Gaulle's policies
but do not want to precipitate 25X1
chaos and enhance prospects of a
fascist-type seizure of power.
They apparently hope to
back responsible civilians who
would take the initiative in 25X1
proposing and organizing a "demo-
cratic alternative" which could
assume power legally.
5 Oct 61 WEEKLY REVIEW Page 11 of 27-
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
lfto~
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
FRANCO AND US BASES
General Franco's public
statement on 1 October that
"circumstances counsel revi-
sion" of the ten-year US-Span-
ish defense and bases agree-
ment implies that he will soon
press for new concessions. The
treaty runs until September 1963,
and negotiations for renewal
would normally get under way in
the next few months. Spanish
officials have indicated for
some time that they want more
modern arms; more recently, in
a separate development, they
have pressed for US support of
Spain's African policy.
Under the 1953 defense
agreement, which provides for
two successive five-year exten-
sions unless one of the signa-
tories requests cancellation,
Spain granted the US permission
to construct and use air bases
located near Madrid, Saragossa,
and Seville and a naval base at
Rota, near Cadiz. In exchange
the US has provided military and
economic aid amounting to some
$1.2 billion since 1953.
Addressing cabinet members
and top-ranking military officers
at the celebration of his 25th
anniversary as chief of state,
Franco stated that the agreement
needed to be revised to meet the
new situation brought about by
recent technical developments.
In the spring of 1960, Munoz
Grandes, chief of the Spanish
High General Staff, repeatedly
stressed to the chief of the
Joint US Military Group and
visiting American military
S P A ~ N
MADRI%7!~-
SECRET
U.S. BASES IN SPAIN
717 Air base I, Naval base
0 MILES 200
5 Oct. 61 WEEKLY REVIEW Page 11.2 of 27
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
`y SECRET `'#l
CURRENT INTELLIGENCE WEEKLY SUMMARY
officials the need for strength-
ening and expanding the existing
agreement.
The US agreement to quit
Moroccan bases by the end of
1963 leads Franco to feel he
is in a much stronger position
to extract new concessions from
the US when the Spanish bases
agreement is renegotiated.
Madrid will become increasingly
insistent on this point as the
military capability of Morocco
improves. Spanish officials
have already expressed anxiety
on several occasions over the
security situation in Morocco
as the US bases phase out.
Madrid is particularly concerned
over the eventual renewal of
Moroccan aggression against Ifni
and the Spanish Sahara and over
demands by Moroccan nationalists
for the surrender of the en-
claves of Ceuta and Melilla.
Spanish officials have
shown considerable displeasure
over Washington's African
policy. On 8 August 1961, a
high official in the Spanish
Foreign Ministry vigorously
defended Portuguese policy in
Angola in a talk with US Navy
Secretary Connally. While the
official stressed that he was
speaking on a personal basis,
he argued that the US defense
agreement should logically lead
to US support for Spain's posi-
tion in Africa. In view of
Franco's statement in his 1
October speech that Portugal
was being attacked unjustly
abroad because of its African
policy, the Generalissimo
may have in mind pressing the
US for some expression of sup-
port in Africa.
SOVIET DOMESTIC PROPAGANDA ON THE PROSPECTS OF WAR
Soviet domestic radio and
press statements since July on
the prospects of war have taken
the line that while the inter-
national crisis is, grave, the
forces opposing war are strong
and growing stronger, and that
there is confidence that they
will prevail. These assurances
have been coupled with asser-
tions of the military strength
and preparedness of the USSR.
There has been no indication
that the population at large
is being steeled to endure a
war; the hardships of World War
II have been recalled frequently
and graphically, but without
citations of heroism or patriot-
ism. There appears to be little
doubt among the Soviet populace
that Khrushchev's position on the
German question is just.
25X1
25X1
On several occasions, pub-
lic anxiety was apparently aroused
by internal commentary associated
with tough Soviet statements ad-
dressed to the West but widely
publicized in the USSR. Such com-
ment has in each case been fol-
lowed by press and radio ef-
forts to allay domestic fear
that war might be imminent. Such
occasion-1. have included Khru-
shcheV's announcement on 8 July
SECRET
5 Oct 61 wT, PTrT V T?'VTTTvur no a 13 of 27
Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
of the suspension of demobiliza-
tion,. his radio-television ad-
dress of 7 August in which he
said the possibility of a West-
ern attack could not be excluded,
and the announcement on 30 Au-
gust of the USSR's resumption
of nuclear tests. The most re-
cent period of possible public
anxiety coincided with a series
of dire estimates of rising
international tension by Soviet
military leaders from 14 through
26 September.
On 25 September, however,
Khrushchev's statement to Nehru
that talks ?*can and must play
an important role in cleansing
the international atmosphere"
provided a counterbalance to
the military predictions. Daily
press and radio commentary echoed
both lines but by 27 September
had settled on a distinctly hope-
ful note.
Information has been sparse.
on the conclusions drawn by the
Soviet man in the street from
these frequently conflicting
statements. Some citizens ap-
there was little propensity to
blame either US or Soviet leader-
ship.
A trip by embassy officers
in early August to Alma-Ata and
Tselinograd confirmed this im-
pression. Many of the individ-
ual Soviet citizens encountered
expressed either deep fear or
hatred of the Germans. Another
trip by embassy personnel in
late August to Tbilisi, Bukhara,
Tashkent, and Samarkand revealed
continuing concern, especially
among educated and politically
informed Soviet citizens. The
embassy noted, however, that
they were receptive to explana-
tions of US attitudes on Berlin.
A trip to Murmansk by em-
bassy porsonnel'.in early Sep-
tember revealed "certainty" on
the part of the few Soviet con-
tacts made that war would not
come because it would be a "ca-
tastrophe for all concerned."
Successful negotiations were
expected on a German peace
treaty. None of the Soviet con-
tacts expressed any great con-
pear to have developed a cer- tern over the resumption of So-
tain amount of indifference to viet nuclear testing, regarding
them. Others, however, are it as merely one more step in
undoubtedly perturbed by the the military build-up of both
reiterations that the interna- East and West.
tional situation is serious,
especially in view of the re- In Moscow, however, indi-
gime's retention in the armed vidual members of the Soviet
forces of men due for discharge. intelligentsia for the first
In late July, the US Embassy time seem prepared to believe
in Moscow reported that ordinary that war is a possibility.
Soviet contacts in Moscow were In mid-September the US Em-
beginning to express great con- bassy received a report that
cern over the international sit- activists were conducting a
uation. Their reaction was pri- house-to-house campaign to
marily one of resentment at the reassure the population that
Germans for involving the US the Berlin problem would be
and USSR in their own quarrel; settled peacefully.
SECRET
5 Oct. ai W1 WT V 'D 1rTWWW page 14 of 27
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
'V
SECRET
CROP PROSPECTS IN THE SINQSOVIET BLOC
China
Communist China is facing
its third successive unfavorable
agricultural year. Grain output
for 1961 will probably be about
the same as last year's estimated
185,000,000 tons. This is also
the same level achieved in 1957,
when there were some 60,000,000
fewer to feed. As a consequence,
malnutrition and related health
problems can be expected to rise
sharply next winter and continue
at least through spring, with a
further decline in labor pro-
ductivity and continued public
discontent,
Peiping has published no
statistics on agricultural pro-
duction this year, but avail-
able evidence indicates that
the 1961 winter wheat harvest
was probably the smallest in
several years. The third
successive year of drought in
North China, a reduction in the
sown area, late planting with
consequent heavy winter kill,
seed shortages, and peasant
apathy all contributed to this
small harvest.
Weather conditions in
South China have apprently
been relatively good, and an
average crop seems likely.
In Central and East China,
however, drought conditions were
reported throughout the spring
and summer. The extent of
drought damage to the late rice
crop, harvested in October and
November, cannot be determined
yet. It is clOar, however, that
the outcome of the harvest in
this Yapgtze valley area--ac-
counting for 52 percent of the
rice acreage in China--wil?l
have major significance for
the coming year's food supply.
Conditions in Hupeh, one of
the major rice-producing
prd-vinces in this area, are
worse thus far than in 1959
and 19600
Despite continuing shortages
of foreign exchange, Communist
China is preparing to negotialILLEGIB
for further grain imports from
nonbloc sources in the coming
av- a ready hinted
o e anadian trade commis-
sioner in Hong Kong that they
wish to buy more grain in 1962
than was stipulated in the earlier
agreement. The Chinese have
contracted for delivery of
5,500,000 tons of foreign grain
in 1961 at a cost of more than
$350,000,000.
Asian Satellites
In North Vietnam, prospects
for the important October-November
rise harvest, which normally
accounts for two thirds of the
annual rice output, are causing
the authorities concern. Field
work is reportedly behind schedule
in many areas, with transplanting
of rice delayed by the abnormally
dry conditions during July and
August. Should growing conditions
remain abnormal, the effect on
the late rice crop will create
serious food problems for the
regime next winter.
While North Korea's expecta-
tion of a bumper harvest this
year may prove overly optimistic,
weather conditions suggest at
least a normal-to-good harvest.
Pyongyang has not been plagued by
the rural mismanagement which has
characterized Chinese agriculture
over the past few years.
SECRET
5 Oct 6] arc+ti+vrv ntitrTL+nr n.,' a 15 of :27
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
~.. SECRET %Wf
CURRENT INTELLIGENCE WEEKLY SUMMARY
For the third year in a
row the USSR has made little
or no progress toward the am-
bitious 1965 target for total
agricultural output. Grain
production this year, favored
by weather in all but the New
Lands area, will probably total
115,000,000-120,000,000 tons.
Although 15 to 20 percent above
the poor harvests of 1959 and
1960, this will still be short
of the 1958 bumper crop, which
by non-Soviet estimates was
probably about 130,000,000
tons. The USSR called it
141,200,000, and made this
figure the point of departure
for the 1965 goals, While
the traditional exaggeration
of grain figures, some inflation
will remain, and the Soviets
may well claim that the 1961
harvest is larger than that
of 1.958
Production of meat and
milk in 1961 will probably about
equal 1960 and will continue
to lag badly behind the in-
creases needed to meet the
Seven-Year Plan goals. More
feed and slightly larger herds,
as well as a mild winter and
early spring, have favored
the industry. On the other
hand, meat production at the
state slaughterhouses in the
first half of this year was
7 percent below the same period
last year, and the Soviet
press has conspicuously avoided
commenting on progress. Cotton
production is expected to be
somewhat above the mediocre
1960 crop, but dry weather in
some of the important growing
areas may keep the production
of sugar beets, sunflower seeds,
and fiber flax below the rela-
tively good 1960 crops.
Eastern Europe
In the European satellites,
total production of grain is ex-
pected to be about the same as
last year--about 43,000,000 tons--
largely because of the bumper
harvest in Poland. Preliminary
estimates of grain output in
1961 are down from 1960 in Bul-
garia, East Germany, Hungary,
and Rumania, and up in Poland,
Albania, and Czechoslovakia.
Weather conditions, which had
been generally favorable during
the spring for most crops through-
out the satellites, turned for
the worse about mid-June. As
the only bloc member without
any significant degree of col-
lectivized agriculture, Poland
has apparently done much better
than East Germany or Czecho-
slovakia under similar weather
conditions, primarily because
the collective units of the lat-
ter two countries had higher
harvest losses.
In spite of its bumper har-
vest, Poland will still need to
import about 1,000,000 tons of
grain if livestock herds and grain
consumption are to be maintained
at current levels, With the re-
cent US decision to delay signing
of a PL-480 agreement, Poland is
left with import commitments of
only 600,000 tons. If import needs
are not met, the government will
have to increase procurement of
domestic grain by raising com-
pulsory delivery quotas and/or in-
creasing free market purchases to
guarantee the grain supply.
With the possible exception of
Albania, no basic improvement in
the per capita availability of
food for the satellites is ex-
pected during 1961/62. East Ger-
many, Hungary, and Bulgaria will
probably encounter most difficulty
in meeting consumer demands for
foodstuffs. The most serious
shortages are likely in East Ger-
many unless it can increase its
imports, an effort which Walter
Ulbricht has said will not be made.
Nevertheless, availability of quality
foods in Eastern Europe, especially
in East Germany, Poland, and Czecho-
slovakia, is significantly greater
than in the Soviet Union and far
greater than in China.
SECRET
(Prepared by ORR)
5 Oct 6- Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3 16 of 27
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
SECRET
of the National Economo the
USSR for 1960 gives a figure
for housing construction in
that year considerably lower
than the amount originally
claimed in the official plan
report. This is a new indication
that the priority for housing
construction has been reduced
and casts doubt on the possi-
bility of achieving.the Seven-
Year Plan (1959-65) for housing.
A substantial underfdlf illment''of
the plan in 1960 and subsequent
housing'data appear to indicate
that, the Soviet regime decided
in mid-1960 to sacrifice part
of the popular housing program.
to other construction projects.
The handbook figure is
82,800,000 square meters, 2,200,-
000 lower than the total origi-
nally claimed and only 3 percent
above performance in 1959. This
reduction, which may be in part
an attempt at statistical
correction, is the latest'in a
series that started in December
1959. At that time it was
anticipated by State Planning
Committee (Gosplan) chief
Novikov that, of the 1960 hous-
ing goal of 101,000,000 square
meters of new urban housing,
only about 92,000,006 would be
completed. In January 1961,
the plan fulfillment announce-
ment stated that about 85,000-
000 square meters had been
built during the previous year.,.
The original reductions
seemed attributable to a; slow-
down in private housing con-
struction, probably because of
the reported cancellation of
state loans for private housing.
Subsequent information, however,
points to a substantial cutback
of housing to be built under
the state plan.
indicated that judging by state
housing accomplishment in 1958
and of 1959, the 1960 plan would
probably be overfulfilled by 7
to 9 percent. Instead, however,
the state housing goal for
1960 was underfulfilled by 7
percent.
This lower rate of housing
construction continued into 1961;
the report on the first six months
showed that only about 24 percent
of the year's state housing had
been completed. In spite of a
sharp improvement in July, state
housing completions still lagged
behind those of the first seven
months of 1960 by about 2 per-
cent.
A lower priority for hous-
ing is also indicated by the
decline in housing's share of
the volume of state construc-
tion to 28.7 percent in 1960
from 30.9 percent in 1959.and
32.6 percent in 1958. Further-
more, while the 1960 housing
plan was substantially under-
fulfilled, the over-all construc-
tion plan was virtually fulfilled.
The shortfall in state housing
in 1960 was so large that only
about half of it can be attrib-
uted to technical difficulties
during the transition to new
construction methods.
The chronic shortage of
housing in the USSR causes more
intense and widespread dissatis-
faction than any other aspect
of Soviet life. Accordingly, ' ' .
there has been no publicity on
the lowered priority for hous-
ing, in contrast to the fanfare
accompanying;the high priority
given to housing in 1957--which
resulted in a sharp rise in
housing in subsequent years.
Prepared by ORR)
SECRET
The nowt published RanAbook I The mid-1960 plan report
5 Oct 61 WEEKLY REVIEW Page 17 of 27
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
SECRET ?..o
CURRENT INTELLIGENCE WEEKLY SUMMARY
HUNGARIAN FIVE-YEAR PLAN REVISED
Following above-plan per-
formance in 1959 and 1960, the
Hungarian regime has announced
higher goals for production in
certain industries and for na-
tional income in its Second
Five-Year Plan (1961-65). Planned
investments have been cut, how--
ever, allowing larger expendi-
tures for military purposes and,
possibly, for repaying foreign
loans.
The goals established in
the original directives, pub-
lished in September 1959. were
generally more conservative than
the Five-Year Plan goals of any
other satellite, and apparently
this conservative outlook pre-
vails. The average rate of in-
crease in industrial production
from 1958 to 1965 now is planned
at 9.0 to 9.4 percent a year,
compared with 7.4 to 7.9 percent
a year in the 1959 directives.
Since the growth of industrial
production was about 11 percent
a year during 1959-60, the rate
of growth for 1961-65 will have
to be only 8.5 percent to meet
the five-year goal, or just
slightly higher than the maxi-
mum rate planned previously for
the seven-year period.
Agricultural production is
to increase 30 to 32 percent by
1965 over the 1954-58 average.
This target, which requires an
average annual rate of growth
of 3.5 percent from 1960, ap-
pears to be the most realistic
of any bloc goal for agriculture.
National income is expected
to increase 55 to 60 percent
from 1958 to 1965 instead of the
50 percent in the original
directives. This increase re-
flects both the higher goals for
industrial production and the
above-plan performance during
1959-60. Nevertheless, total
capital investment during
the five-year period will be
10 to 12 percent less than
previously planned. This scal-
ing down of investment targets,
however, is not designed to
benefit the consumer, as per-
sonal consumption is still
to increase slowly. The offi-
cial explanation for increas-
ing the goals for production
but not those for investments
is the need to raise expendi-
tures connected with national
defense.
However, increases 'in nation-
al income probably will permit
larger repayments than origi-
nally planned on loans re-
ceived from bloc countries
after the Hungarian revolt in
1956. No postponement in re-
payments of Soviet credits
has been reported for 1962-
65, and no new credits to
Hungary have been announced
to offset such repayments.
Because the now plan is
so conservative, it probably
will?be fulfilled in its main
aspects (Pre- . 25X1
pared by ORR)
SECRET
5 Oct 6 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3 e 18 of 27
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
SECRET
CURRENT INTELLIGENCE WEEKLY ZVW
COMMUNIST CHINA CELEBRATES NATIONAL DAY
Peiping gave little public- China's socialist construc-
ity to the advance preparations I tion.
for National Day (1 October)
in 1961. The festivities in
Peiping were similar in form to
those of 1960. The populace was
given a two-day holiday and a
few extra rations were issued--
but for the first time these in-
cluded no meat, a fact which
reflects the austerity forced
on the regime by its economic
setbacks. As in 1960, the:cus-
tomary mammoth parade of half
a million persons included mili-
tia but no military units. The
official press states that
2,000 guests from more than 70
countries were present, but
fails to add that many of these
were students, diplomats, and
others already resident in Chi-
na. The only prominent foreign
visitors were the President of
Cuba, the King and Queen of
Nepal, and Dowager Queen 1+.-
abeth of Belgium.
On foreign policy matters,
Peiping's attempt to paint a
rosy picture of Sino-Soviet
friendship was belied by unre-
sponsive Soviet speeches and
unenthusiastic Soviet attend-
ance at National Day functions
in both Peiping and Moscow. In
its unctuous speech on 28
September, Chinese arsa~? ,
Liu Hsiao promised his Soviet
audience in Moscow that Peiping,
following Mao Tse-tung's teach-
ings, would preserve Sino-Soviet
solidarity like the "apple of
our eye." Liu again endorsed
the Soviet Berlin stand and in-
timated--for the first time by
a Chinese spokesman--that the
Soviet party's draft program
has validity outside the USSR.
Back in China, People's Daily
also acknowledged Soviet ex-
perience could be helpful in
The Russians gave only
perfunctory attention to the
Chinese anniversary. In a
speech at a Moscow reception on
29 September, First Deputy
Premier Kozlov reiterated stand-
ard expressions of Soviet sup-
port for Peiping's "lawful place"
in the United Nations and for
liberation of Taiwan. He avoided
anything that could be construed
as Soviet tolerance of Chinese
ideological claims. In Peiping,
the Soviet delegation attending
the ceremonies contained no
major figures.
For the second year, Chou En-
lai did not give a banquet for
Soviet experts in China, a fur-
ther indication that Soviet techni-
cians have not returned in numbers.
The tone of both press and
public pronouncements on China's
domestic outlook was at sharp
variance with last year's. Al-
though it was evident by Octo-
ber 1960 that the regime was in
economic trouble, particularly
in agriculture, the full gravity
of the situation was not acknowl-
edged last year. The People's
Daily editorial of a year ago
stated, "There is every possibil-
ity for the Chinese people to
catch up with Britain... within
a period of less than ten years."
It spoke of the great leap for-
ward as a continuing movement
and called for an "unprecedented
bumper summer harvest in 1961,"
The corresponding People's Daily
editorial in 1961 admitted to
a "reduction of agricultural
output" as a result of "three
successive years of grave nat-
ural calamities',;' regarding
industrial production, the
SECRET
5 Oct 6-Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3 ,e 1* of Z7
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
-*me lwoo~
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
editorial eschewed further ex-
pansion for the time being and
simply suggested "readjusting,
consolidating, filling out, and
raising standards" for 1961 and
1962.
In its most specific :ref -
erence.to. industrial production,
People's bail stated that'..
"14 out of Dail
2- main targets"
for the Second Five-Year Plan
were fulfilled in 1959 and 1960.
If this is compared with Li Fu-
chun's announcement in March
1960 that 13 out of the 24 major
industrial and agricultural prod-
ucts had reached their 1962
targets by the end of 1959, there
is a clear implication that in-
dustry made little or no progress
during either 1960 or 1961 over
the level achieved in 1959.
The regime maintained that
the party's general policies have
always been correct, but conceded
a need to perfect the means for
putting them into practice. The
theoretical journal Red Flag
stated in its 1 OctoVer editorial
that "many of our cadres are
familiar with wars and revolu-
tion but they are not versed
in the rules and regulations
of socialist construction."
The editorial commented that
the party has called for a new
study movement to take up
"questions concerning the building
of socialism':'.' There was no
indication that the study move-
ment would take on the pro-
portions of a party purge.
At the top level, a11. full
members of the poliburo were
represented in the ceremonies at
Peiping except Peng Te-huai--
whose standing has been in
question since September 1959--
and two regional party bosses
who probably attended rallies
in their own areas : 25X1
Prepared jointly 25X1
with ORR)
PEIPING'S RELATIONS WITH JAPAN
Communist China has in re-
cent weeks engaged in a propa-
ganda campaign of growing shrill-
ness against the Japanese Govern-
ment. Peiping's anger began
when the Ikeda government refused
visas for a Chinese Communist
delegation to the Japanese
Communist party congress in late
July. The official Peiping
Peovle's Daily said the act
exposed Ikeda as "devoid of any
sincerity for improving Sino-
Japanese relations." The dele-
gation would have been the
highest Chinese Communist group
ever to attend a party
gathering in a non-Communist
country.
However, it was ex - Prime
Minister Kishi's visit to Taiwan
in mid-August which actually
triggered the current rash of
invective. The visit, although
a private one, was viewed by
Peiping as a blatant manifesta-
tion of Japanese plotting, with
Ikeda's connivance, to create
"two Chinas." Particularly
galling to Communist China was
Kishi's reference to Taiwan and
Japan as "two countries." Pei-
ping even accused Japan of having
designs on the island.
SECRET
5 Oct 6' ?--_ 20 of 2?
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
SECRET
Communist China's appre-
hensions of a resurgent Japan
in the Far East are comparable
to the bloc attitude toward
the possible revival of a mili-
tarized Germany in Europe. "The
iron hooves of Japanese aggres-
sion are rattling again," Pei-
ping asserts, adding that Japa-
nese monopolists and militarists
now are actively collaborating
with Washington and Taipei in
schemes against Communist China.
Chief of Staff Lo Jui-ching,
condemning alleged US-Japanese
connivance in planning a North-
east Asian military alliance,
warned on 28 September that
China "would never permit" Japa-
neseaggressive designs to come
to fruition.
The ghost of Japan.'s "Great-
er East Asia Co-Prosperity
Sphere" of the World War II is
revived in connection with what
Peiping regards as evidence of
Japan's political and economic
expansion in Southeast Asia.
Such warnings to Asians
probably reflect a sensitivity
to Japanese economic penetration
into Southeast Asian markets
Peiping hoped to have for itself
before economic difficulties on
the mainland stalled its foreign
trade offensive.
Chinese Communist hostility
toward Ikeda seems to have
reached the level of that direct-
04.1 at Kishi, with whom the
Chinese said they could have no
dealings. Visits to China by
members of the governing Liberal-
Democratic part's -were, once en-
couraaged,:,but Liberal-Democratic
visitors in June received only a
perfunctory welcome.
Peiping is particularly
annoyed over moves by the
Socialist party--formerly Peiping's
principal channel to left-wing
elements in Japan--and its af-
filiated labor federation, Sohyo,
to dissociate themselves from
united-front activities with
the Japanese Communist party
against Japan's ties with the
US. The Socialists and Sohyo
have instead begun to espouse
their own program of apparent
neutrality aimed at winning
greater popular support. Clearly
piqued, Peiping last summer
asked the Japanese Socialists to
delay sending a scheduled mission
to the mainland.
More recently, Peiping
responded to feelers from the
Socialists concerning the dispatch
of a delegation to the National
Day celebrations with an unethusi-
astic, "Come if you want;.,to.'!,,(:Still,
Peiping has not attacked the
Socialists publicly, suggesting
it may still hope that they will
be able to play a useful role in
promoting Peiping's and the Com-
munists' interests.
Meanwhile, Peiping seems to
be placing a greater reliance
on the Japanese Communist party
ltselfm The Communists are now.
called by Peiping the "vanguard"
of Japan's anti-US struggle, an
accolade formerly accorded the
Socialists and Sohyo. However,
Peiping is aware that Japanese
leftists are generally distrust-
ful of the Japanese Communists 25X1
and is searching for an osten-
sibly non-Communist channel to
SECRET
5 Oct 8' Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3 21 of 27
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
1401,
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
FACTIONALISM IN SOUTH KOREAN REGIME
The arrest by security
forces on 25 September of 28
persons linked to the vice chair-
man of South Korea's Supreme
Council for National Recon-
struction (SCNR), Maj. Gen. Yi
Chu-il, is the latest mani-
festation of a major factional
struggle between Yi and national
security boss Col. Kim Chong-
pil. Both men head powerful
alliances within the military
junta. The chairman of the
SCNR, Lt. Gen.Pak Chong-hui,
is believed to stand above the
conflict and to be working to
prevent a Showdown. Should he
fail, the stability of the
regime would be endangered.
Following the purge of the
coup's front man, Lt. Gen. Chang
To-yong, in'July, two major fac-
tions emerged in the junta--one
led by Kim, the other jointly
led by Yi and marine Maj. Gen.
Kim Tong-ha. The core of Kim
Chong-pills faction is a group
of young officers who were in
the "eighth class"--the class
of 1949--at the Korean Military
Academy. This class suffered
severe casualties in the Korean
war and subsequently found
promotions blocked by the rela-
tively youthful generals. The
officers in Kim's faction tend
to favor protracted military
rule and authoritarian measures
to solve the country's economic
and political problems. Yi's
faction is made up largely of
senior officers who are more
inclined to preserve accustomed
relationships and institutions.
All those seized on 25
September are alleged to have
been involved in preferential
treatment, based on regional
loyalties, to "illicit-fortune
seekers." Those favored are
among the 27 business leaders
who dominate the country's
economy and who have been ordered
to pay $37,000,000 in back taxes
and fines within six months. In
order to force the regime to grant
them more favorable terms, they
have cut back their business
activities, thus depressing the
domestic economy. Feeling
against the group is believed to
be particularly strong among
Kim's faction, which tends to
favor the nationalization of
industry. Pak's position on
nationalization is unknown, but
the struggle between Kim and
Yi may increase the pressure on
Pak to approve a state-operated
economy.
25X1
25X1
any showdown, Kim's ac ion
has the advantage that he controls
the secret police. Furthermore,
the 800 or more members of the
"eighth class" still on active
duty include a high proportion
of battalion commanders, the
lowest echelon of command to
exercise court-martial juris-
diction and one of the highest
permitting effective personal
contact with and personal
control of troops.
SECRET
na ge 22 of 27
5 Oct Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
140pe 1%W
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
GHANA
The Nkrumah regime's ar-
rest on 3 October of prominent
political adversaries and lead-
ers of the union which spear-
headed last month's strikes
underscores the President's de-
termination to forestall the
emergence of any effective op-
position movement. The move
suggests that Nkrumah, who
appears determined to increase
Ghana's ties with the bloc and
to press ahead with the imple-
mentation of "socialist ideals"
at home, will rely even more
than in the past on repressive
measures to silence his
critics.
Included among some 50 per-
sons taken into custody were
P,K. .K. .:.Quaido,. a member of
the right wing of the ruling
Convention People's party (CPP)
and a former cabinet minister,
and Joseph Appiah, the deputy
leader of the small parliamentary
group of the opposition United
party (UP). Veteran politician
J. B. Danquah, the UP's candi-
date against Nkrumah in last
year's presidential election,
was also arrested, as were a-
bout 18 leaders of, the Railway
and Harbor Workers Union and
a number of market women--a
politically important group in
Ghana.
railway system immediately went
on strike again in protest a-
gainst the arrests. A govern-
ment labor official has fore-
cast "real trouble" for the
regime.
Nkrumah did not move at
the same time against K. A.
Gbedemah, a long-time associate
who was ousted from the govern-
ment last week along with other
moderates who have expressed
their opposition to Nkrumah's
increasing alignment with the
bloc and reliance on left-wing:
advisers. This seeming over-
sight probably is attributable
to Gbedemah's close indentifi-
cation, especially in the minds
of Western negotiators, with
the still-unsigned Volta River
project.
However, Gbedemah's re-
moval from the political scene
is almost certainly only a
matter of time and may follow
quickly, especially if Nkrumah
is or becomes convinced that
his former lieutenant is plan-
ning an attempt to rally the
many discontented elements in
the country to his leadership.
Gbedemah stated publicly after
his ouster that he intended to
remain active in politics.
The detainees, who were ac-
cused of plotting Nkrumah's
assassination and other "sub-
versive activities," were round-
ed up under the Preventive De-
tention Act, which authorizes
the government to imprison per-
sons for five years without
trial. Some employees in Tako-
radi of the government-operated
feelings againnss ie 25X1
regime were continuing to run
high among workers
an tnat some o em,
in eague with members of the
SECRET
5 Oct P' uY1'C'TIT nVITIrDTT Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
''` SECRET NOV
UP, were attempting to organize
a general strike. The workers
were known to be still unrecon-
ciled to the new tax and forced-
savings measures imposed last
summer. Their hostility to-
ward the regime was undoubted-
ly increased by the recent
announcement that strikers
who had not returned to work
by 11 September--a week after
the strike began--would not
receive pay for any day not
worked.
According to the American
Embassy, when the strikes
finally ended on 22 September--
following a threat by Nkrumah
to treat holdouts as subver-
sives--there was a general
feeling among the participants
that all of them would be
paid for the entire time of
the strike.
GHAf1A
IVORY J B (7.
COAST
_^'.k,AjiAM GH,ANA
sa ; fli. r'
ASFYANTi
Kumasi
Koforiduua
(_T~l
Afieuye
Terns; -
- - - Regional boundary
25X1 ---- Road
THkorad mot/
Railroad
O MILES 50
A Ghanaian economic delegation
now is visiting the bloc to
conclude new project agreements
and credits arising out of
Nkrumah's recent two-month
tour of nine bloc countries.
Bucharest has announced that the
delegation signed a five-year trade
pact and agreements covering
"technical and scientific collabo-
ration," cultural exchanges,,and 25X1
air services with Rumania on 30
September.
SECRET
5 Oct Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3 ge 24 of 27
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
Iftor INE (JKE.L
BRITAIN AND THE COMMON MARKET
In response to a request
from the six Common Market (EEC)
countries, London has agreed to
outline to a preliminary minis-
terial meeting in Paris on 10
and 11 October the specific con-
cessions it seeks in applying
for EEC membership. These con-
ditions have heretofore been
couched in generalities. To
present the case in some detail,
Britain's representative, Lord
Privy Seal Heath, will reported-
ly tender six "papers" and make
a two-hour statement.
prime Minister Macmillan
has insisted from the beginning
that the terms of entry must
take account of the welfare of
Britain's farmers and the com-
mercial interests of its Com-
monwealth and Outer Seven part-
ners. As long as it was unclear
exactly what this would involve,
Macmillan could maintain that
these interests would not be
seriously hurt, while dampening
EEC suspicions that he might
be thinking of fundamental
treaty changes.
Developments of the past
few weeks will complicate
Heath's task of taking a suf-
ficiently forthcoming attitude
toward the Six without arousing
further domestic and Common-
wealth opposition. At meetings
in Accra and London recently,
Commonwealth criticism of
British accession was much
sharper than in midsummer (one
participant called the Accra
talks the "bloodiest" of such
meetings), and emphasis shifted
somewhat from worry over trade
to fear for Commonwealth co-
hesion. Some of this criticism,
especially from Australia and
Canada, was no doubt calculated
to encourage London to be "tough"
with the EEC.
The Macmillan government
was jarred, however, by the
hostility to the Common Market
expressed by Nigeria, Ghana,
and Sierra Leone, Association
of these three countries with
the EEC--on the same basis as
the ex-French and Belgian African
territories--had seemed one way
to avoid a "commercial division"
of Africa.
While all six EEC countries
appear to welcome, with varying
degrees of enthusiasm, the
prospect of Britain's entry,
none appears ready to sacrifice
fundamental EEC principles.
Indicative of this, the EEC
Council declared following its
26 September meeting that "re-
quest for membership in the
community implies on the one
hand acceptance without reser-
vation of the rules and objec-
tives of the EEC treaty, and on
the other hand membership in the
two other existing communities
--the Coal-Steel Community and
Euratom."
The need to preserve a
common front when the hard
bargaining begins has been the major
difficulty the Six have had in
organizing themselves for the
talks with London. France is
still opposed to a permanent
chairman of the EEC delegation,
favoring instead a rotation
system which would bring Couve
de Murville to the chair during
the probably crucial negotiating
period early next year. Paris
has had to agree, however, that
the talks opening in November
will be held in Brussels, the
seat of the Common Market,
and that the EEC Commission 25X1
will attend as adviser and
participate fully in coordinating
the EEC position.
;I +T
5 Oc- C9 U11WPVT.V RTi'VT 1 W Page 25 of 27
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
SECRET `"01
Cuban President Dorticos
left Peiping for Moscow on 3
October on the final leg of
his month-long tour of the
bloc. The Cuban-Chinese com--
muniqu6 cited Peiping's "pleas-
ure" that Cuba has "chosen the
road of socialist development,"
The communiques following his
Czech and Soviet visits in Sep-
tember had treated the subject
of Cuba's adoption of "social-
ism" with similar reserve. All
three bloc nations gave full
support to most other Cuban
themes, with Czechoslovakia and
Communist China endorsing Cuba's
claim that the US "occupation"
of Guantanamo naval base is
"unlawful." There has also
been ample bloc propaganda
.coverage of Havana's increas-
ingly frequent charges that a
"new US invasion of Cuba" is
being readied.
A delegation led by the
Cuban under secretary of foreign
trade arrived in Moscow on 27
September to negotiate details
of the Cuban-Soviet 1962 trade
program and may go on to other
bloc countries later. The Cas-
tro regime probably will press
for a larger volume of bloc
foodstuffs and other vital,con-
sumer goods to lessen the effect
of increasing shortages in these
areas.
In a speech on~.29 September,
Castro announced he had received
"good news" concerning bloc
purchases of Cuban sugar in 1962
in a communication from "Comrade
Dorticos and Comrade Blas Roca."
Roca, a long-time Cuban Commute
nist leader whose influence in
the government reportedly has.
increased sharply in recent
.months, played an important role
in the Dorticos delegation's
discussions with bloc officials.
According to Castro, the
bloc has agreed to buy 4,500,000
tons of sugar for the next four
years at more than the world
market price. This would be
500,000 tons over the amount
scheduled to be purchased by
the bloc this year. However,
in a 4 October press conference
in Moscow, Dorticos said the
bloc would purchase "at least"
4,860,000 tons of sugar annually
through 1965.
Evidence of Cuban subver-
sive activity abroad
an increased
executions of opponents within
25X1
25X1
Cuba may further serve to harden
free world opinion against Castro.
Costa Rica severed relations
with Havana on 10 September..
However, the Goulart adminis-
t,rat.i.on in Brazil--whose
attitude toward Castro would
be of' key importance in
any formal consideration of
possible OAS action on Cuba--
has categorically declared it-
self opposed to any "interven-
tion" in Cuban affairs.
Ecuador and Mexico, which
previously have expressed res-
ervations on any multilateral
consideration of the Cuban
problem, have given no indica-
tions of changing this posi-
tion thus far. Several other
Latin American states which
have long opposed the Castro
regime, including Peru and
Guatemala, have recently shown
sharper hostility toward Castro.
Guatemala has requested Panama
to notify Castro that Guatemal
will permit the establishment
of a Cuban government in exile
in its territory unless former
Guatemalan President Jacobo Arbenz
is expelled from Cuba within a
month.
SECRET
5 Oct 6 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3 ;e 26 of 27
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
Now UU&flUt v I IML
CURRENT INTELLIGENCE WEEKLY SUMMARY
EL SALVADOR
El Salvador's provisional
military regime, strongly com-
mitted to a program of basic
socio-economic reform, is making
preparations for a constituent
assembly election in December.
The regime came to power in a
military coup against a Commu-
nist-infiltrated government
last, January, and the young
officers who dominate it are
convinced that speedy reform
is the only alternative to a
Communist take-over. Theirs
has been the first Latin Ameri-
can government to launch a re-
form program in line with the
concepts of the Alliance for
Progress since these concepts
were outlined by President
Kennedy early this year.
Since the new regime came
to power, the United States has
authorized $23,000,000 in eco-
nomic assistance, mostly in the
form of loans. In addition,
the Inter-American Development
Bank has lent $8,000,000, and
another $9,000,000 is being
negotiated.
The upsurge of Communist
activity in El Salvador follow-
ing the ouster of the Lemus ad-
ministration last October had,
frightened members of the long-
dominant "fourteen families" '
and convinced some of them that
reforms are necessary. By early
March, however, there were signs
of open resistance to the new
government's reform program as
the elite families began to
realize that their position was
being threatened by their long-
time ally, the Salvadoran Army.
The government's first reform
measure, a decree providing for
a paid day of rest on Sundays
for agricultural workers, was
the first measure by any
Salvadoran government in favor
of agricultural workers, who
compromise the bulk of the coun-
try's population and have
generally lived at bare sub-
sistence levels under an eco-
nomic system little changed
since colonial times. Other
reforms have included the
lowering of rents in urban
tenements and increased govern-
ment control of the institu-
tion--long dominated by the
big coffee planters--which
regulates coffee sales, the
country's principal source
of export earnings.
The provisional regime
hopes that the support its
reforms are winning from the
lower and middle classes will
assure its newly organized
political party control of
the constituent assembly to
be elected late this year.
The diverse political parties
in existence prior to the
establishment of the "official"
party are considering the
formation of an opposition
coalition. Such a coalition
would probably'have the support
both of recalcitrant landowners
and Communist and pro-Communist
groups; such tactical alliances
have been made in the past in
El Salvador.
Government leaders are
seeking to avoid a climate of
class warfare and have ener-
getically sought to convince
the elite families that their
long-range interests would be
best served by supporting the
government's program. Last
week the government made a con-
cession to the landowning groups
by modifying and postponing the
effective date of a decree
setting minimum standards for
the food which agricultural
laborers receive as part of
their wages. This move was
probably a'pre-election tactic
signifying no weakening of
the resolve of government
leaders to carr out their
reform program.
CONFIDENTIAL
5 Oct 61 wFrur.v I? w rr'G'w ^- ge 27 of 27
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
GUNHUMIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
SPECIAL, ARTICLES
SOVIET TRANSPORTS IN THE WORLD AVIATION MARKET
Moscow's efforts to pene-
trate the international avi-
ation market and to conclude
civil air agreements outside
the bloc have focused attention
on the degree to which Soviet
aircraft--particularly the
latest model jet and turboprop.
transports--are commercially
competitive with comparable
Western models. There are few
important differences in per-
formance and design character-
istics. On the other hand,
Western aircraft are generally
superior in such factors as
fuel economy, maintenance,
durability, safety, and comfort.
For several years the
Soviet Union has indicated a
willingness to sell its large
transports outside the bloc,
but the IL-18, a medium-range
turboprop, is the first model
it has backed with a serious
promotional effort, including
offers at reduced prices and
on particularly favorable credit
terms. In mid-1960, Avtoexport
--a Soviet sales agency--was
CONFIDENTIAL
5 Oct 61 QTltr''T AT ADTTrT T.. 0
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
authorized to seek nonbloc buyers
for IL-18s and other civil air-
craft, including helicopters;
commercial officers from 23
foreign embassies in Moscow
were given demonstration flights.
Since then the USSR has delivered
nine IL-leis to Ghana, two to
Guinea, and two to Mali. Offers
to other underdeveloped countries
have not been accepted.
Characteristics and Performance
A comparison of Soviet
transports with those of the
West as to range, speed, carry-
ing capacity, and landing
facilities required reveal few
significant differences. Most
such comparisons reveal that
the deficiency of a Soviet
plane under one of these head-
ings is balanced by shortcomings
of its Western counterpart in
some other category.
An outstanding exception
to the general comparability
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
COJWIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
is the long-range turboprop
TU-114, which is clearly supe-
rior to any Western transport
in flight-range and passenger
capacity; the TU-114 can carry
from 120 to 220 passengers
up to 5,400 miles. On the
other hand, few countries
have enough territory to
warrant the purchase of such
a long-range transport. Khru-
shchev himself has admitted
that the TU-114 is basically
a bomber and is unsuitable
for passenger service.
Weaknesses common to
all Soviet transports are
the high rate of fuel con-
sumption and the use of
heavier airframe structures
than are manufactured in the
West. The carrying capacity
of Soviet transports is also
reduced by the heavier weight
of the aircraft engines.
Soviet aircraft are also
inferior in comfort and con-
venience, The TU-104, for
example, is extremely noisy.
Cabin pressurization is often
erratic, and cabin temperature
is said never to exceed 60?F.
Passengers are reportedly
distracted by excessive
structural vibrations. A
further cause of inconvenience
is the comparately small size
of the cabin doors.
Safety
The Soviet Union, unlike
Western countries, is not a
member of the International
Civil Aviation Organization,
which sets rigid safety charac-
teristics for its members'
planes. The large number of
crashes of TU-104s and IL-18s
within the past few years attests
to the inferiority of Soviet
aircraft to Western models in
safety characteristics. Because
of its high landing speed, there
have been many cases of tire
failures on the TU-104, and on
occasion water trucks have been
employed to wet down the brakes.
Few underdeveloped countries
have runways long enough to
accommodate a TU-104 safely.
Serious safety deficiencies
have also been evident in the
CONFIDENTIAL
5 Oct 61 SPECIAL ARTICLES Page 2 of 11
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
,%W UVIVI IILIV I JIjL `r-f
T
CURRENT INTELLIGENCE WEEKLY SUMMARY
IL-18s, and they were grounded
for a time in 1960 following
a series of widely publicized
crashes. The trouble apparent-
ly resulted from engine fires,
which could not be confined
and extinguished because of
lack of adequate fire protec-
tion. Although the IL-18s
are again flying, there is re-
portedly still considerable
skepticism about the aircraft.'s
safety among Soviet and satel-
lite travelers. The operational
safety of several other medium
transports--the AN AN-10,
and AN-12--is also questionable,
since they use the same engine
as the IL-18.
An additional defect of
Soviet turboprop transports
is the comparatively lengthy
time required to feather mal-
functioning engines; a few
seconds lost can mean serious
structural damage.
Cost and Economy
The initial unit cost is
lower for Soviet transports
than for the equivalent Western
aircraft, but such hidden
costs as those arising from
maintenance problems and ex-
pensive spare parts requirements.
make the difference illusory.
The high cost of spare
parts can make the Soviet air-
craft expensive, even as a
gift. Hungary received three
IL-18s gratis only to learn
later that the necessary stock
of spare parts would cost more
than the assessed value of
the aircraft. Maintenance
is easier for purchasers of
Western aircraft. US aircraft
manufacturers have offered
buyers complete maintenance
facilities in their own coun-
tries, thus obviating the need
for lengthy waits for parts
and overhaul.
Frequency of overhaul.
has also been a serious draw-
back of Soviet aircraft. Soviet
aircraft engines average only
200 hours before major over-
haul. By comparison, the
average intervals between
engine overhauls on Western
aircraft is 1,000 to 1,300
hours. Soviet propellers,
likewise, are short-lived.
The estimated life of a propeller
blade for the Soviet turboprop
engine is only 300 to 600 hours,
as opposed to 2,500 hours for
a comparable Western model.
The result is a vast dis-
parity in the operational avail-
ability of a Soviet aircraft
and a comparable Western model.
US jet transports, for example,
fly on the average three times
as much as their Soviet counter-
parts.
Even bloc purchasers have
accepted Soviet aircraft re-
luctantly.
Soviet aircraft purchased
by nonbloc countries have had
other serious faults affecting
economy of the operation. The
AN-12 turboprop transports,
for example, have experienced
fuel tank ruptures and blown
tires. Ghana Airways has had
to change its Khartoum-to-Accra
schedule from a weekly to a
bimonthly run because of engine
failures on the IL-13 in the
African heat.
CONFIDENTIAL
5 Oct 61 SPECIAL ARTICLES Page 3 of 11
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
25X1
25X1
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
CONFIDEITIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
Prospects for Soviet Sales
The shortcomings and un-
suitability of some models
of Soviet aircraft have been
readily recognized by pro--
spective purchasers, who have
viewed Soviet offers with
skepticism. Thus the Soviet
Union has never been able to
sell the TU-104 outside the
bloc, although it has fre-
quently offered the plane to
Middle East countries. How-
ever, Soviet willingness to
sell at a reduced price and
to provide favorable terms--
especially including payment
in native currency--are
strong inducements and have
brought limited acceptance
of the IL-18.
The newest transports
in the Soviet inventory--
the short-range turboprop
AN-24 and short-range jet
TU-124--are smaller, and more
economical than earlier models,
and offers of these aircraft
to underdeveloped countries
will probably meet with
greater success
(Prepared by ORR)
CONFIDENTIAL
5 Oct 61 R'DVrTAT. ARTTrT.RS parrs 4 of 11
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
UUN1-1UL 11AL_ __
CURRENT INTELLIGENCE WEEKLY SUMMARY
PRESIDENT KEKKONEN OF FINLAND
Urho Kekkonen, who will
visit the United States for
approximately two weeks begin-
ning 16 October, in almost six
years as President and previous
periods as prime minister has
become Finland's most contro-
versial postwar leader.. Now
nearing the end of his term as
President, Kekkonen is in the
midst of a bitterly contested
campaign for re-election early
next year.
The Finnish presidency is
invested by the constitution
with special powers in the con-
duct of foreign relations, and
Kekkonen has wielded these pow-
ers actively. As a result, he
has been sharply criticized for
what many of his countrymen re-
gard as an excessively accom-
modating attitude toward the
Soviet Union and a tendency to
portray himself and his Agrarian
party as the only elements in
Finland capable of maintaining
good relations with Moscow. He
has incurred further criticism
for keeping a hand in party
politics despite a Finnish tra-
dition of an austerely nonparti-
san head of state.
Born in north-central Fin-
land. in 1900, the son of a log-
ging foreman, Kekkonen has been
physically vigorous all his
life. He was national high-jump
champion in his youth and en-
gaged in a six-mile ski race
with 58-year-old King Olav dur-
ing his state visit to Norway
earlier this year. Kekkonen
studied law at the University
of Helsinki and received his
Doctorate of Law degree there
in 1936, after having done post-
graduate study in Germany.
As a young lawyer, Kekkonen
dedicated himself to a political
career and eventually became le-
gal adviser to the Agrarian par-
ty--one of Finland's three
largest parties, along with the
Social Democrats and the Commu-
nist-front Finnish People's
Democratic League (SKDL). Kek-
konen, like other aspiring young
politicians who joined the party
during this period when it suf-
fered from a dearth of young
leaders, is widely referred to
as an "asphalt agrarian" because
of his tenuous connection with
the rank-and-file small farmers.
Kekkonen was first elected
to parliament in 1936 and rose
rapidly in government circles.
By the time of the Winter War
with the USSR (1939-40), he had
already held three ministerial
posts. Little is known of his
official activities during
World War II except that from
1940 to 1943 he was chief of
the Bureau for Displaced Per-
sons, an organization whose task
was to aid refugees from Karelia,
the border province lost to the
USSR in 1944.
Postwar Career
Following the war, Kekkonen
served in a number of high posi-
tions, including that of direc-
tor of the Bank of Finland and
minister of justice. While
serving in the latter capacity
from 1944 to 1946 he handled the
proceedings against eight prom-
inent Finnish wartime leaders
who at Soviet insistence were
tried as "war responsibles."
These trials aroused much re-
sentment and controversy in
CONFIDENTIAL
5 Oct 61 JPECIAL ARTICLES Page 5 of 11
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
N. t,,UlYrtutlV 1 IAA.
CURRENT INTELLIGENCE WEEKLY SUM
Finland since the overwhelming
majority of Finns regarded the
eight as patriots. Kekkonen
incurred the dislike of conserv-
ative and labor groups as a
result of his part in the trial,
even though he played a rela-
tively minor role in the actual
proceedings.
He first became premier in
1950, and before he was elected
president in 1956 had headed
five cabinets--nearly all of
them coalitions composed of
Agrarians and Social Democrats.
It was during this period that
Kekkonen established his repu-
tation as the leading Agrarian
party politician and tightened
his control of the party, which
he has retained to this day. He
also became known as one of the
few non-Communist political
leaders in Finland considered
persona grata by Moscow, and
began to groom himself to suc-
ceed the aging elder statesman
Juho Paasikivi, a Conservative
party member, as Finland's next
president,
Presidency
Kekkonen won the presidency
by the narrowest margin in the
history of Finland's electoral
college--151 votes to 149 for
his Social Democratic opponent.
He has since sought to assume
the dignity of his office, but
there remains a gap between the
gregarious Kekkonen and the
stereotype of the remote and
austere presidents of Finland
who are accorded a respect sim-
ilar to the deference paid
elsewhere to royalty. He has
proved to be a "strong" Pres--
ident who has not hesitated to
exercise to the fullest the ex-
tensive powers granted him by
the constitution.
His term of office has
been marked by bitter recrim-
inations between his supporters
and those of almost all the
other non-Communist parties.
In addition to charges that he
has failed to rise above parti-
san considerations and personal
animosity in the discharge of
his presidential duties, there
has been sharp criticism of his
performance in the all-impor-
tant area of Soviet-Finnish
relations. He has chosen to
deal personally with any seri-
ous problems arising between
Finland and the Soviet Union,
and his frequent bypassing of
the Foreign Ministry and of
parliamentary committees in
handling these matters has
caused some resentment.
Soviet-Finnish Relations
Kekkonen's views on the
nature of Finland's relations
with the Soviet Union are di-
rectly influenced by his belief
that in order to maintain its
precarious position of independ-
ence, Finland can never pursue
political or military policies
in direct conflict with the
strategic interests of the So-
viet Union. In essence this
is what is referred to in Fin-
land as the "Paasikivi line,"
which Kekkonen's supporters, in
the campaign to choose presiden-
tial electors this January, are
seeking to describe as the
"Paasikivi-Kekkonen line." Ac-
ceptance of this policy dictates
CONFIDENTIAL
5 Oct 61 SPECIAL ARTICLES Page 6 of 11
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
w wIIFIUL[IIIHL ?/
CURRENT INTELLIGENCE WEEKLY s KIMART
that Finland must pursue a pas-
sive foreign policy, the prin-
cipal objective of which is to
avoid embroilment in disputes
between the major powers.
For Kekkonen the basic
problem of Finnish foreign pol-
icy is to convince the Soviet
Union of the security of its
northwestern frontiers and to
assure Moscow of Finland's de-
termination to resist attack
which might be launched against
the Soviet Union across Finland.
Finnish officials regard this
as the old problem of overcom-
ing traditional Russian suspi-
cion and seeking to assure Mos-
cow of the security of adjacent
strategic areas such as Lenin-
grad and Murmansk,
All non-Communist parties
in Finland support this policy
of nonprovocation, but there
are differences of opinion as
to how far Finland should rea-
sonably be expected to go in
this respect. The opposition
parties maintain that Kekkonen
has carried the assurances of
a friendly Finland on Soviet
borders a step further and has
acquiesced in Soviet interven-
tion in Finland?s internal af-
fairs. They cite the 1958 cab-
inet crisis when Moscow refused
to conclude a trade agreement
until the coalition government
of Social Democratic Premier
Fagerholm had been replaced by
a government more to its liking.
Kekkonnen?s handling of the ques-
tion of Finland?s association
with the European Free Trade
Association (EFTA) in early
1961 is also criticized because
he sounded out Moscow?s views
beforehand, although only eco-
nomic considerations were in-
volvedo
Kekkonen, however, main-
tains that a policy of "brutal
frankness and honesty" is
necessary in dealing with the
Russians and that even an es-
sentially economic matter ac-
quires political overtones in
the eyes of the ever-suspicious
Russians, Finland, therefore,
must be prepared to go to great
lengths to assuage these suspi-
cions.
Kekkonen?s views are also
influenced by his pessimistic
outlook on the outcome of the
East-West struggle. He be-,
lieves that in the past few
years the world balance of pow-
er has shifted from the Western
powers to the Sino-Soviet bloc.
Recalling Finland?s lonely
struggle against the USSR in
1939-40 and the fact that the
West did not come to the assist
ante of Hungary in 1956, Kek-
konen considers it his duty to
order Finland's relations with
the Soviet Union in such a
manner that even if war breaks
out between East and West, Fin-
land will remain unaffected.
His more pro-Western critics
regard this as not only illu-
sory but also dangerous for
Finland, since it could lead
to a "peace at any price" ap-
proach in dealings with Moscow.
Aware that the USSR could
overwhelm Finland at any time,
Kekkonen may be increasingly
inclined to reconcile himself
to a greater measure of Soviet
intervention in Finnish affairs
as the price to be paid to pre-
vent outright annexation or
absorption
Most Finns as well as
foreign observers concede that
CONFIDENTIAL
,ice
5 Oct 61 SPECIAL. ) :LAS Page 7 of 11
Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
VVIII 1UL1Vt il'tL _' ,'.
CURRENT INTELLIGENCE WEEKLY S
there is no doubt as to Kekko-
nen?s patriotism or his resist-
ance if confronted by flagrant
encroachments on Finland?s in-
dependence by the Soviet Union.
His defenders point out that
Kekkonen was one of three par-
liamentary deputies who in 1940
voted to continue the war with
the Soviet Union rather than
accept the onerous peace terms.
They also refer to Kekkonen?s
outspoken remarks at various
official dinners and luncheons
during Khrushchev?s visit to
Helsinki in September 1960 on
the occasion of Kekkonen?s 60th
birthday. The President then
asserted that the Communist
system was not an appropriate
one for his country and that
Finland would not become Com-
munist--even if all Europe were
converted--unless a majority of
its people so desired; he added
that he thought this would
never be the case,
Kekkonen?s critics, how-
ever, fear that in a crucial
situation he may not have the
courage and strength of charac-
ter of Paasikivi, who, they
maintain, was ready to say "no"
to Soviet demands when he be-
lieved Finland's interests
might be adversely affected.
These critics also believe
that Kekkonen is prepared to
go to any lengths to lessen the
possibility of Northern Europe?s
involvement in a future war and
that to accomplish this he
would be prepared to try to
push the Soviet line of coaxing
Norway and Denmark away from
NATO, Thus far, however, he
has not seriously advocated
this line in his frequent con-
tacts with his Scandinavian
colleagues.
Kekkonen has used exten-
sive travel in Europe--particu-
larly in Scandinavia--as one
means of seeking to develop
greater understanding of Fin-
land's special position between
East and West. He has also
made numerous trips to the
Soviet Union, most recently in
January 1959 when he met Khru-
shchev in Leningrad to discuss
the crisis in Finnish-Soviet re-
lations. Earlier this year
Kekkonen made official visits
to both Britain and Norway. His
visit to Canada and the US is
regarded by some observers as
an effort to strengthen his po-
sition in this pre-election
period and to mollify critics
who believe his numerous trips
to the Soviet Union have given
him a distorted view of the
world power balance.
How much Kekkonen?s own
views may be affected by West-
ern visits is somewhat ques-
tionable
Finns generally feel
that their national history
has left them little to 25X1
learn from the West in deal-
ing with the USSR and Kekko-
nen
E
Impervious
to any outside in luence ins
the matter of Soviet-Finnish
relations.
CONFIDENTIAL,
SPECIAL ARTICLES Page 8 of 11
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
.CURRENT.INTEL?LIGENCE WEEKLY SUMMARY
The first anniversary of
Cypriot independence--16 August
1961--found the new republic
facing a multitude of political
and economic problems: high
unemployment., the fourth con-
secutive year of drought, in-
creasingly frequent outbursts
of violence, and growing Com-
munist strength. Neither the
Greek Cypriots (80 percent of
the population) nor the Turkish
Cypriots (18 percent) celebrated
the anniversary, although gov-
ernment leaders observed the
event with a reception. Unlike
most colonial areas which have
gained independence in recent
years, there was never a move-
ment for a free Cyprus, and no
Cypriot "nationalism" exists
today.
The London-Zurich Agree-
ments, which established the
republic, have been observed for
the most part by all parties
signing them in 1959--the Greek
and Turkish Cypriot communities
and the governments of Greece,
Turkey, and Britain--because
all of them prefer the present
arrangement, unsatisfactory as
it may be, to the chaos that
would follow their repudiation.
Despite the island's many prob-
lems, the complicated machinery
of government set up primarily
to protect the Turkish Cypriot
minority has proved workable,
largely because of the efforts
of the Greek Cypriot President,
Archbishop Makarios, and the
Turkish Cypriot vice president,
Fazil Kuchuk.
Neither Makarios nor Kuchuk
has pressed demands for so-
lutions to remaining specific
disputes as long as further
negotiations leading to a com-
promise are possible. When
disputes within the government
have come to a head, however,
Makarios has acted with firm-
ness bordering on disregard of
the Turkish position.
The two leaders are prob-
ably aware that their subordi-
nates and likely successors
would be less likely to accept
compromise--a fact that empha-
sizes the necessity of settling
outstanding problems before they
leave office. General elections
are scheduled in 1965, and Ma-
karios has frequently stated
his desire to retire from po-
litical life at the earliest
opportunity..
The two major problems to
be negotiated between Greek
and Turkish Cypriots when in-
dependence was proclaimed were
the establishment of separate
Greek and Turkish municipal
governments in the five cities
on Cyprus--as provided for in
the constitution--and the im-
plementation of constitutional.
provisions for a 70:30 ratio
between Greeks and Turks in the
civil service. Considerable
progress has been made toward
fulfilling the requirement on
civil service.
Negotiations on municipal
governments remain deadlocked,
however, with the Greeks press-
ing for administrative separa-
tion and the Turks demanding
geographic partition. In April,
the Turkish members of the legis-
lature, in an effort to force a
more rapid pace in negotiations,
refused to approve an extension
of the tax law. Makarios or-
dered the tax collectors to
continue their work, despite
general agreement that he lacked
authorization for such a move.
Recently there have been indi-
cations that the Turks may be will-
ing to modify their, position on
the municipal governments issue.
)FIVTI
C F
AL
5 Oct el OnVf%T AT ADTT(1T T10 TI-.a 9 of 1 11
Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3 of
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
CURRENT INTELLIGENCE WEEKLY SUMRY
There has been a revival
of extremism in both communi-
ties. Reports of shootings
and beatings of political op-
ponents became more common in
the summer of 1961. There are
continuing reports that both
sides are smuggling arms into
Cyprus for possible future use
by terrorist groups.
Among the Greeks, an or-
ganization of former members
of EOKA, the underground organ-
ization which fought the British
from 1955 to 1959, has been
formed, calling itself the Pan-
Cyprian Organization of Fight-
ers. Both this organization
and the leading non-Communist
Greek Cypriot opposition party
repeatedly have denounced
Makarios for signing the London-
Zurich Agreements and have re-
vived the demand for "enosis"--
union with Greece.
Among the Turks, there is
an apparent loss of confidence
in the settlement, based on fear
of economic domination by the
Greeks, the delay in implement-
ing the constitutional provi-
sions designed to protect Turk-
ish interests, and the revival
of the enosis campaign. Parti-
tion, long the Turkish reply to
enosis, is again being suggest-
ed 'as the "final answer."
Communism is not at pres-
ent a threat within the Turkish
community, but among the Greek
Cypriots it remains the great-
est potential danger for the
future of the republic. The
Communist party, known as the
Restorative Party of the Work-
ing People (AKEL), the only
large organized political party
on Cyprus, received nearly 40
percent of the Greek Cypriot
vote in the 1960 legislative
elections. The party has five
of the 35 Greek members of the
House of Representatives--be-
cause of a pre-electoral agree-
ment with Makarios--and controls
the municipal governments in
three of the five cities.
AKEL continues to gain sup-
port by astute exploitation of
grievances among the Greek
Cypriots. The economic prob-
lems, the existence of the two
British bases on the island,
and a latent neutralist senti-
ment among the population all
invite such exploitation.
The Communists dominate
the largest and most effective
trade federation on Cyprus,
have active youth organizations,
and are expanding front groups
among farmers and women. Their
campaign has been aided by the
Soviet Embassy, established in
Nicosia in December 1960, and
by visiting Soviet cultural
and sports groups. A Soviet-
Cypriot Friendship Society was
created in March 1961. Radio
Moscow began daily broadcasts to
Cyprus in Greek and Turkish in
the spring of this year. AKEL
has thus far failed, however,
in its campaign to force Makarios
to request Soviet economic aid.
The Soviet Embassy has repeat-
edly stated that such aid is
available if requested.
The only major non-Commu-
nist Greek Cypriot political
organization is the government's
Patriotic Front, and this, in
essence, is a loose coalition
thus far dominated by Makarios.
While the Front is not now an
orthodox political party, there
have been repeated reports that
it is to be revamped, with district
and local organizations estab-
lished and a program designed
to counter some of the appeal of
AKEL. The non-Communist labor
federation, far smaller than its
AKEL-dominated counterpart, lacks
the funds and leadership to suc-
cessfully challenge its opposi-
tion for control of organized
labor.
The government has indi-
cated it may be about to move
against the Communist threat.
In July, Makarios warned AKEL
against "undermining" the work
of the government and implied
that AKEL's Lecognition as a
legal party, reinstated by the
CONI'IAL
5 Oct 61 RPIWTAT: APPTPT.tQ n--o 10 of 11
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
L; UN I IAL `"
CUi-W NT INTELLIGENCE WEEKLY SUMMARY
British shortly before inde-
pendence, may again be with-
drawn.
Foreign Relations
Cyprus' relations with the
major powers and with neighbors
in the area are generally good.
There has been no outstanding
problem with Britain. There
gard of Turkish Cypriot views.
A Turkish Cypriot delegation
recently visited Israel. Greece
and Turkey have small military
contingents on the island, and
an agreement between Athens and
Ankara for supplying arms to
the new Cypriot Army appears im-
minent.
Makarios' performance at
the neutralist conference at
Belgrade probably gives the
best indication of the govern-
ment's present foreign policy.
He emphasized by his attendance
that Cyprus is committed to a
policy of nonalignment. This
is a policy generally approved
by the Greek community--but not
by the Turks. When Kuchuk
threatened to veto Cypriot par-
ticipation in the conference as
in disregard of special treaty
obligations, Makarios replied
that if a policy of neutrality
was in conflict with provisions
of the constitution or any
treaty, then such provisions
were "completely unacceptable,
as the interests of the people
of Cyprus are above all." This
dismissal of Kuchuk's threat
did not lead to a veto, and
Makarios went to Belgrade, but
he was accompanied only by mem-
bers of the Greek community,
were occasional acts of sabotage
against the water line to one
of the two British bases in
July and August; these appear
to have been a reaction by farm-
ers to the goverment's failure
to provide an adequate water sup-
ply, rather than a demonstration
of antipathy toward Britain.
Cyprus decided in March 1961 to
remain within the Commonwealth
for a period of five years.
The Communists have crit-
icized the existence of Amer-
ican communications facilities
on Cyprus, the labor policy of
the American-owned Cyprus Mines
Corporation--largest employer
on the island--and the "meddling"
in domestic labor matters by
American personnel. The govern-
ment, however, has largely ig-
nored the complaints and has
maintained close relations with
the US Embassy.
Britain has supplied $15,-
000,000 in grant aid during the
first year of independence. The
US has sent 50,000 tons of PL-
480 grain, and in June 1961
signed a technical cooperation
agreement with Cyprus. In Au-
gust, the Cypriot Government
unveiled an ambitious five-year
development program calling for
the expenditure of some $173,-
000,000. It hopes to secure
half of the funds from foreign
sources. Makarios simultaneously
announced plans to sell the
"largest part" of the archbishop-
ric lands to landless farmers
and those with small holdings.
Makarios' visit to the UAR
in June was approved by nearly
all members of his community,
although the Turks were miffed
by the obvious Egyptian disre-
In his speech before the
Belgrade delegates, Makarios de-
nounced all forms of colonialism
and called for self-determination
for all people--including the Ger-
mans. His remarks on Germany and
Berlin were closer to the West-
ern position on these issues
than those of any other speaker
and were promptly criticized
by the Communist press on Cyprus.
Greek Cypriot leaders are aware
of the republic's dependence on
the West and generally support
the Western view in most inter-
national organizations. They
also recognize, however, the
potential value of association
with the nonaligned states--
particularly should the present
settlement founder and the
"Cyprus issue" once again be
raised before the United Nations.
CO 4 IDENTIAL
5 Oct 61
Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3 -1 of 11
 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300120001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3
(,C'ITr1T.MIIL r'
CONFIDENTIAL
mawaul
Approved For Release 2007/10/23: CIA-RDP79-00927A003300120001-3