CURRENT INTELLIGENCE WEEKLY SUMMARY

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Is
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CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 369
OCR NO. 0304/61
3 November 1961
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
State Department and OSD review(s) completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent the
immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SOVIET PARTY CONGRESS
The final days of the 22nd diminution in favorable refer-
Soviet party congress were high- ences to Khrushchev.
lighted by new revelations of
the crimes of Stalin, a clear
warning to Albania that it faces
expulsion from the Communist
bloc, and a reshuffling of the
Soviet party's top governing
bodies.
On 30 October, Khrushchev
delivered a "summary" address
in which he leveled fresh charges
at Stalin and called for the
construction of a monument to
victims of Stalin's terror. De-
mands were made at the congress
that Stalin's body be removed
from the Lenin-Stalin Mausoleum
on Red Square. The congress
unanimously approved tL propos-
al, and Stalin's remains have
now been buried in the Kremlin
wall.
This final degradation for
Stalin was obviously intended
to destroy once and for all the
symbol of past terror and to
sharpen the contrast between
his style of rule and that of
the present "Leninist" leader-
ship. Throughout the congress,
attacks on Stalin and the anti-
party group were accompanied by
increasingly fulsome accolades
for Khrushchev which served to
define clearly the advantages
of his rule and to establish
further his authority in the
Communist hierarchy.
There were, however, signs
of Kremlin concern that the
burgeoning "cult of Khrushchev"
might be subject to misinterpre-
tation. By the end of the week,
Moscow intellectuals were ask-
ing how Khrushchev could contin-
ue his attacks on Stalin while
building his own "personality
cult." Khrushchev himself
chided congress delegates for
the tribute he had received,
pointing out that it should
properly have gone to the cen-
tral committee. while subse-
quent speakers paid lip service
to collective leadership, how-
ever, there was no significant
On 28 October, party secre-
tary Frol Kozlov--Khrushchev's
second-in-command--delivered the
report on the proposed new stat-
utes governing the internal life
of the party. His remarks made
it clear that the statutes would
go into effect as published for
"discussion" last August.
The congress went into its
final phase on 30 October with
the election of a new central
committee of 175 full and 156
candidate members--an increase
of approximately a third over
the central. committee elected
at the 20th congress in 1956.
The new central committee held
a brief plenum on 31 October
to "elect" the presidium and
secretariat, the Soviet party's
top governing bodies.
Khrushchev's reshuffling of
these two bodies leaves unaffected
his principal deputies--Kozlov,
Suslov, Mikoyan, Kosygin, and
Brezhnev. Kozlov's position as
number-two man was formalized
by placing his name second, after
Khrushchev's, in the listing of
the new secretariat. The rest
of the names were in the usual
alphabetical order. In line
with Khrushchev's emphasis on
the supremacy of the party,
most of the newcomers are party
professionals.
Probably the most important
result of the changes is the
strengthening of the party's
administrative arm--the secre-
tariat, which is headed by Khru-
shchev. It was enlarged from
five to nine members. Ilichev,
the propaganda chief; Shelepin,
currently head of the secret po-
lice; Ponomarev, party ideological
expert; and Spiridonov and Demichev,
both regional party leaders, have
been added. Mukhitdinov, former-
ly the top Asian expert, has been
dropped. Mukhitdinov also appar-
ently had responsibilities in the
field of Soviet-Albanian relations.
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FULL MEMBERS
OLD NEW
CURRENT INTELLIGENCE WEEKLY SUMMARY
SOVIET COMMUNIST PARTY
(LEADING ORGANS)
A.B. Aristov L.I. Brezhnev
L.I. Brezhnev N.S. Khrushchev
Ye.A. Furtseva A.N. Kosygin
N.G. Ignatov F.R. Kozlov
N.S. Khrushchev O.V. Kuusinen
A.N. Kosygin A.I. Mikoyan
F.R. Kozlov N.V. Podgorny
0. V. Kuusinen D.S. Polyansky
A. I. Mikoyan N.M. Shvernik
N.A.Mukhitdinov M.A. Suslov
N.Y. Podgorny G. I. Voronov
D.S. Polyansky
N.M. Shvernik
M.A. Suslov
CANDIDATE MEMBERS
OLD NEW
V.V. Grishin V.V. Grishin
Ya. E. Kalnberzin Sh.R. Rashidov*
A.P. Kirilenko K.T. Mazurov
D.S. Korotchenko V.P. Mzhavanadze
K.T. Mazurov V.V. Shcherbitsky*
V.P. Mzhavanadze
M.G. Pervukhin
P.N. Pospelav
G. I. Voronov
OLD NEW
N.S. Khrushchev - 1st Secy N.S. Khrushchev - 1st Secy
F.R. Kozlov F.R. Kozlov
O.V. Kuusinen P.N. Demichev*
N.A. Mukhitdinov L.F. llichev*
M.A. Suslov O.V. Kuusinen
B.N. Ponomarev*
A.N. Shelepin*
I.V. Spiridonov*
M.A. Suslov
*Individuals elected to Presidium or Secretariat for first time.
Listed below are their other current positions,
Demichev - Party 1st Secretary, Moscow City Shcherbitsky - Premier, Ukrainian Republic
llichev - Head, Propaganda & Agitation Departmenr of Shelepin - Chairman, Committee of State Security (KGB)
the Party's Central Staff under the Council of Ministers, USSR
Ponomarev - Head, International Department of Spiridonov - Party 1st Secretary, Leningrad Oblast
the Party's Central Staff
Rashidov - Party 1st Secretary, Uzbek Republic
The presidium, which is
charged with the over-all formu-
lation of Soviet policy, now
consists of eleven full and five
candidate members. Four full
and five candidate members were
removed; the majority were of-
ficials whose political pres-
tige had been waning for some
months. Despite their advanced
age, Kuusinen and Shvernik were
retained on the presidium and
also as central party secretary
and chairman of the party con-
trol commission, respectively.
As in the past, the candidate
members--who have only a con-
sultative voice in policy de-
liberations--were drawn chiefly
from representatives of the
Soviet Union's national minority
areas.
G. I. Voronov, a fast-rising
party professional with consider-
able experience in agricultural
work who was brought into the
presidium as a candidate less
than a year ago, was promoted
to full membership. He was
also made Khrushchev's first
deputy in the bureau which ad-
ministers party affairs in the
Russian Republic (RSFSR).
The congress devoted the
afternoon of 31 October to for-
mal endorsement of Khrushchev's
policies. His central committee
report, the party program, and
the new party statutes were
adopted unanimously. Khrushchev's
brief closing remarks were de-
voted primarily to thanking the
various foreign delegations for
their participation.
The cases of the ring-
leaders of the anti-party group--
Molotov, Malenkov, and Kaganovich--
apparently will be turned over
to the party control commission
for review, as was suggested in
Shelepin's speech to the con-
gress. Mikhail Pervukhin lost
his candidate membership on the
presidium, and with Bulganin,
Sakarov, and Voroshilov was
dropped from the central com-
mittee.
Foreign Policy Implications
Closing speeches by the
Soviet leaders made it clear
that the attack on Albanian
leaders Shehu and Hoxha was in-
tended as a challenge to the
Chinese to cut their ties with
Albania rather than support a
state which the USSR and the
European satellites considered
outside the bloc. Khrushchev
specifically took up Chou En-lai's
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CURRENT INTELLIGENCE WEEKLY SUMMARY
rebuke for bringing the dispute
into the open, and replied that
if,the Soviet central committee
had taken any other stand it
would have appeared "to be
afraid" to report the disagree-
ment with Tirana to the party.
Khrushchev claimed the
USSR had done "everything in
its power" to bring about good
relations with the Albanian
leadership. With heavy sarcasm,
he said that if the Chinese de-
sired to mediate the dispute,
"hardly anyone can make a better
contribution to the solution of
this problem than the Communist
party of China." Khrushchev
underlined the meaninglessness
of this "appeal" by making it
clear that only the removal of
Hoxha and Shehu would satisfy
the Soviet party.
Kozlov on 28 October left
no doubt that the Soviets con-
sider the Albanians outside the
bloc as:long as there is no for-
mal recantation or change in the
Albanian leadership. He warned
that the "vicious policy" of
the Albanian leaders "can lead
to the breaking away from the
socialist camp" and to -the po-
litical isolation of the Albani-
an party in the international
Communist movement. Kozlov also
.attacked Chou's position by
stating that "true unity" can-
not; be based on "hushing up
the vicious course of the Al-
banian leadership."
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Chinese Communist Reaction
While Khrushchev and his
fellow speakers spared little
effort to drive home their pub-
lic challenge to the Chinese,
Peiping has avoided a reply in
kind. Since Chou's 19 October
rebuke to Khrushchev, Peiping
has not commented directly on
the Albanian and anti-party
issues. The silence probably
reflects the careful delibera-
tion the Chinese politburo has
been giving the preparation of
its position, and a statement
may be forthcoming soon.
Chinese propaganda mean-
while continues to walk a care-
ful middle course. During the
past week, Peiping has broadcast
a reaffirmation of its support
for Tirana, and has explicitly
endorsed the Hoxha leadership.
On the other hand, it has carried
in full the bitter Soviet con-
demnation of Hoxha while ignor-
ing the vituperative Albanian
attacks on Khrushchev.
Although the Chinese re-
sponse is being composed in an
atmosphere of deepening economic
troubles within China, it is
doubtful, as Chou En-lai implied
at the Soviet congress, that
these alone will sway the Chi-
nese.? Faced with similar econom-
ic woes during last year's
Sino-Soviet outburst, Peiping
did not yield, despite the fact
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CURRENT INTELLIGENCE WEEKLY SUMMARY
that the withdrawal of Soviet
technicians contributes' to a
distasteful interruption in its
industrialization drive. China's
economic difficulties have doubt-
less. grown worse, but as long
as the leadership remains will-
ing to suffer a diminished rate
of industrial growth, Khru-
shchev's economic leverage falls
short of being decisive.
Should Peiping delay further
the publication of its reply to
Khrushchev, some indication of
the Chinese mood will be apparent
from Peiping's treatment of the
Soviet October Revolution anni-
versary on 7 November and the
20th anniversary of the Albanian
party on 8 November. According
to a Western press service in
Peiping, diplomatic observers
there expect the Chinese to
send a high-ranking delegation
to the Tirana celebrations.
Peiping's rump delegation to
the Soviet party congress left
Moscow as quickly as possible
after the close of the congress
on 31 October.
Albanian and Satellite Reaction
Albania this week appeared
ready to go on the offensive in
replying to Soviet attacks on
its leadership. Although Alba-
nian propaganda media had re-
ported telegrams and letters
protesting the attacks since 20
October--when Tirana issued its
statement of defiance--edito-
rials in the leading party
daily, Zeri i Popullit, at first
merely reass-irted the correct-
ness of the Albanian position
without specifically mentioning
Khrushchev.
On 1 November, however,
Zeri i Popullit labeled Khru-
shchev a fitter and under-
minei.? of international Commu-
nism." It claimed that he had
failed in his objective, since
only 25 of the 71 Communist
party delegations had endorsed
his attacks. It described his
attacks as drawn upon "false,
dirty lies" peddled by imperi-
alists and Yugoslav revision-
ists.
The European satellites
have been extremely cautious in
handling the Albanian situation.
Aside from reprinting anti-
Albanian statements made at
the Soviet congress, they have
largely indulged in editorial
comments which go no further
than these speeches. None of
the satellites has reprinted
the Albanian central committee
declaration, and only Poland
has reprinted the Chinese dele-
gate's comments.
Czechoslovakia was the
first to add to the criticism
of Albania aired at the congress,
charging that Albania, covering
up its economic failures by rely-
ing on economic aid from the
"socialist camp," had objected
to the policy of offering aid to
independent countries in Asia
and Africa as strengthening a
potential enemy while failing
to aid "socialist camp" coun-
tries.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SOVIET MOVES IN THE BERLIN SITUATION
Soviet response to the US
display of force at the Berlin
sector border last week re-
flects Moscow's desire to give
strong support to East German
claims to authority over East
Berlin without bringing on a
test of strength on this is-
sue prior to formal East-West
negotiations or the signing
of a peace treaty with East
Germany.
The new East German de-
mands that US personnel in
civilian clothes identify them-
selves to East German police
before crossing into East Ber-
lin constituted a further
move to maneuver the US into
recognizing East German sover-
eignty in East Berlin. This
latest move probably was based
on the assumption that the US
would acquiesce in the new
identification procedures,
particularly since the British
have long complied with them
in practice. The US response
in providing armed escorts to
accompany officials in civilian
clothes crossing the border,
backed by a display of US armor
on the sector border, seems to
have caught the Soviet and East
German authorities by surprise.
After a period of apparent
hesitation, the Soviet comman-
dant in East Berlin sent a letter
to the US commandant on 26 Octo-
ber rejecting the US demand
that a Soviet officer be sta-
tioned at the checkpoint and
warning that use of force by
the US would be met by "counter-
measures" from the Soviet side.
Following two additional US
armed probes into East Berlin
on 27 October, seven Soviet T-
54 tanks were moved up to the
Friedrichstrasse checkpoint.
On the same day, Foreign
Minister Gromyko rejected Ambas-
sador Thompson's protest re-
garding the East German actions
and delivered a counterprotest
which warned that if the US
probes continue, "they will be
regarded as an act of provoca-
tive armed invasion of GDR terri-
tory, and the German Democratic
Republic will be given necessary
support for purposes of ending
such actions." Gromyko also
rejected the US demand that a
Soviet officer be stationed at
the checkpoint and asserted, in
effect, that the East Germans
have the authority to permit or
deny all passage across the sec-
tor border. He acknowledged,
however, that US military per-
sonnel are permitted to visit
East Berlin without hindrance,
provided they observe the "nec-
essary formalities."
Gromyko made no response
to Thompson's suggestion that
discussions could be continued
in Moscow or Berlin. He charged
that US countermeasures were
in violation of his understanding
with Secretary Rusk that neither
side would resort to unilateral
action and asserted that the US
evidently had changed its posi-
tion. The USSR, he added, would
be compelled to draw the "ap-
propriate conclusions."
On 28 October, the Soviet
tanks were drawn back from the
crossing point after facing US
tanks for 15 hours. The Soviet
tanks left first, but Soviet
armed,-troops began patrolling
the half-mile stretch of road
between the Soviet tank park
near Unter den Linden and the
checkpoint.
The Soviet show of force
seems to have been held to the
minimum judged by the Soviet
leaders as sufficient to avoid
any appearance of retreating in
the face of the US display of
force and to maintain the
credibility of. repeated Soviet
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CURRENT INTELLIGENCE WEEKLY SUMMARY
commitments to defend East Ger-
many in the event of a Western
resort to force over the Berlin
issue, The intervention of
Soviet forces tends to undercut
the USSR's contention that it
has no further responsibility
in a matter which is the con-
cern of the East Germans alone.
However, Moscow apparently felt
obliged to take actions to
induce the US to forego further
use of armed escorts, to protect
the East Germans against further
blows to their prestige, and to
prevent a test of strength which might
jeopardize the prospects for
formal East-West negotiations,
Despite Gromyko's defense
of East German claims to sover-
eignty over East Berlin and
his insistence that these "sover-
eign rights" are not subject
to negotiation, the Soviet
leaders probably recognize they
are on weak legal ground in
challenging Western military
access to East Berlin prior to
the signing of a peace treaty,
which they claim will liquidate
all vestiges of the four-power
status of Berlin.
on the basis of "positions of
strength."
Demarche to Finland
On 30 October, Foreign
Minister Gromyko handed the
Finnish ambassador a note re-
questing that consultations
begin under the terms of the
1948 mutual assistance treaty,
which provides that the two
countries will confer "if it
is established that the threat
of an armed attack" by Germany
or an ally "is present." The
Soviet note cited the "alarming
situation" in Germany and pro-
posed to hold consultations on
"measures for ensuring the de-
fense of the frontiers of both
countries" from the threat of
attack by West Germany.
The immediate Soviet aim
probably is to represent Finn-
ish agreement to hold such
consultation as an endorse-
ment of the Soviet contention
of an increasing military
threat from West Germany.
Despite the tense situation
in Berlin on 27 October, Khru-
shchev in his speech to the
party congress that day reiter-
ated his previous statement
withdrawing a deadline for a
German treaty and urging a
"businesslike and honest solu-
tion" of the German problem.
He also endorsed further US-
Soviet exploratory talks in
order "to prepare fruitful
negotiations," although he
coupled this with a warning a-
gainst the use of talks merely
to delay a settlement.
Khrushchev did not touch
directly on the events in Ber-
lin, but he stressed his usual
line that it was time the West
realized that it could not ne-
gotiate with the Soviet Union
In view of Khrushchev's
open support for Kekkonen, only
recently reaffirmed during So-
viet President Brezhnev's visit
to Finland, it is doubtful that
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Moscow will make extensive
political demands or requests
for military bases, in a recent
interview with an American
journalist Khrushchev once again
took personal credit for the
decision to relinquish the
Soviet base at Porkkala. It
is likely, however, that the
Soviets will make it clear
that they expect a Finnish
signature on any German peace
treaty.
Pressure on Finland will
also be_ used by the USSR to
influence-the German policy of
the other Northern European
countries. The Soviet note,
which was also given to Sweden
for information, accused "lead-
ing Swedish circles" of under-
estimating the danger of German
militarism and made extensive
charges against Norway and Den-
mark for cooperating with Bonn's
alleged aggressive plans. Nor-
wegian Foreign Minister Lange
will visit the USSR in mid-No-
vember, and the demarche to Fin-
land may have been timed to set
the stage for a more aggressive
Soviet line against both Norway
and Denmark.
Finnish, Scandinavian Reaction
The Soviet note took the
Finns by surprise and demon-
strated that their profession
of neutrality--the so-called
Paasekivi-Kekkonen line--does
not ensure noninvolvement in
"great power conflicts."
Foreign Minister Ahti Karja-
lainen has flown back to Hel-
sinki from the United States,
where he was accompanying
President Kekkonen on his
tour ending 2 November.
The Finnish Government
will undoubtedly agree to
some kind of "talks" with the
USSR. The Finns would, however,
be reluctant to accept the
Soviet view that present circum-
stances correspond to those
specified in the treaty as re-
quiring mutual defense con-
sultations. Acceptance of this
Soviet contention would open
the door for Soviet demands for
closer military cooperation.
A leading Helsinki newspaper
stresses that mutual verifica-
tion of the existence of a
threat of aggression by Germany
against Finland or the USSR
through Finland is the pre-
requisite for consultations
as proposed by the USSR; the
paper urges the Finnish Govern-
ment not to be too hasty in the
matter.
The Soviet note has greatly
alarmed the Scandinavians, particu-
larly the Swedes. The Russian move, how-
ever, is regarded primarily as a
cold war measure directed a-
gainst West Germany. The three
Scandinavian cabinets have met
in emergency sessions, and the
Norwegian and Danish governments
have rejected the charges against
them in the Soviet note by stat-
ing that their association with
NATO is solely defensive in
character.
Within Finland there is
considerable depression over
the involvement of Finland in
world politics. The ques-
tion of relations with the USSR
will assume an even more prom-
inent role in the presidential
election campaign, already under
way. Kekkonen's opponents may
argue that the Soviet note
indicates that Finnish-Soviet
relations are not as firm as
claimed by him, but most Finns
will be disposed to support
Kekkonen's re-election as the
only alternative to a crisis
in relations between the
countries which would be
almost inevitable if an in-
dividual more closely asso-
ciated with pro-Western ele-
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The uneasy peace in the
Congo has been broken by hostil-
ities between central government
forces and Katangan troops along
the Katanga-Kasai border. On
30 October, UN authorities in
Leopoldville informed Premier
Adoula that a Katangan aircraft
had bombed the railroad line
between Kamina and Luluabourg
in.Kasai Province. On the same
day Adoula, while stopping short
of a formal declaration of war,
announced a "police action"
aimed at destroying the Tshombd
regime.
Sporadic skirmishing along
the Katangan border had begun
as early as 18 October, appar-
ently between a Congolese Army
battalion and a company of Ka-
tangan troops. On 31 October,
Congo Army headquarters in Leo-
poldville admitted that two of
its battalions had crossed into
Katanga. The fighting inter-
rupted an exchange of notes be-
tween Tshomb? and Adoula which
showed some promise of leading
to "summit" negotiations;
Tshombd informed Adoula in late
October that he would not con-
sider negotiations until Congo-
lese forces had withdrawn from
Katanga. UN officials quoted
Adoula on 28 October as assuring
Tshombd that he would not invade
Katanga.
In Stanleyville, meanwhile,
Gizenga continued to recruit
for his "Lumumbist" party and
to strengthen his position as
a counterpoise to Adoula. On
25 October he eliminated a long-
time rival with the arrest of
the president of Orientale Prov-
ince, Jean Nanzika la . There are
indications that Gizenga's tacit
break with Adoula is not sup-
ported by some of his former
associates, including Interior
Minister Gbenye. Gizenga none-
theless appears to control
General Lundula, whose Congolese
Army forces in Orientale and
Kivu provinces total about 7,000
men.
Both Adoula and Gizenga
appear apprehensive that the
other may prove capable of gain-
ing the prestige which would go
with ending Katanga's secession.
During the last half of October,
while central government and Ka-
tangan forces skirmished along
the Kasai border, Gizenga moved
large numbers of troops toward
northern Katanga. The American
consul reported on 30 October
that since mid-October Gizenga
had airlifted about 1,500 troops
from Stanleyville to Kindu, in
addition to dispatching daily
truckloads of "soldiers, equip-
ment, and beer." Rumors of
Gizenga's preparations may have
prompted Adoula's announcement
of a "police action" against
Tshombd.
A senior UN official in
Leopoldville says the present
objective of central government
units along the Kasai-Katanga
border is to capture the air-
strip at Kaniama, from which
the Katangan aircraft reportedly
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CURRENT INTELLIGENCE WEEKLY SUMMARY
launched its attack on the
Kamina-Luluabourg rail line.
Although Swedish jets began a
patrol of the border area on
31 October with orders to shoot
down any Katangan aircraft, Am-
bassador Gullion has character-
ized UN officials as seemingly
unconcerned about the war threat.
In treating the Katanga air at-
tack as a violation of their
cease-fire agreement with Tshom
bd, UN officials appear to b
interpreting the agreement--
which assures Katanga of the
right of self-defense against
an attack from "the exterior"--
as not applicable to Adoula's
campaign to end Katanga's se-
cession.
On 29 October, Tshombd
flew from Elisabethville to
Geneva for a visit of one to
two weeks, ostensibly for rea-
sons of health.
On 30 October, Soviet UN
representative.Zorin stated
that the USSR will shortly raise
the Congo issue in the Security
Council., where the USSR will
preside during November. Am-
bassador Stevenson observes
that the USSR can be expected
to denounce the Katanga cease-
fire, endorse the central gov-
ernment's military action in
Katanga, and publicize Tshombd's
purchase of aircraft in Western
Europe.
Belgium's Foreign Minister
Spaak on 31 October emphasized
to Ambassador MacArthur that
precipitous financial and eco-
nomic sanctions taken to force
Tshombd to cooperate with the
Leopoldville government might
lead him to nationalize certain
Belgian industrial interests in
Katanga. Spaak said, however,
that the passports of all Belgian
mercenaries henceforth would be
denied and, if , possible, withdrawn.
Civilian personnel are to re
place Belgian military at the
consulate general in Elisabeth-.
ville. Belgian representative
Longerstaey in Leopoldville and
Colonel Vandewalle, in charge
of the Elisabethville Consulate
General, are being recalled to
Brussels to discuss possible
measures to bring Tshombd and
Adoula together.
tances involved would probably
lose the character of a military
Because most of Tshombe's
forces are located in southern
Katanga, large-scale fighting
along the Kasai-Katanga border
appears unlikely at this time.
Should Gizengist forces move
into northern Katanga, where
Tshombd has garrisoned certain
towns, battalion-level clashes
could result. Tshombd has never
exercised firm control of northern
and northwestern Katanga, and in-
vading units--even though of small
size--could possibly penetrate a
considerable distance toward
Elisabethville. Such incursions
would probably have little effect
on the stability of Tshom'he's
regime, and in view of the dis- 25X1
operation.
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The absence of major vio-
lence between Moslems and Eu-
ropeans during the 1 November
Moslem demonstrations in Algeria
keeps the way open for a re-
sumption of negotiations, which
both the French and the rebels
appear to desire.
SECRET
casion for De Gaulle to express
his own views on the Algerian
situation will be afforded by
Isis scheduled tour of Corsica
and two departments in the Mar-
seille area from 7 to 10 Novem-
ber.
The determination of French
military and security forces to
control the demonstrations in
Algeria and to separate the
two communities--emphasized by
the government's allowing the
press and radio to make the
public aware of extensive secu-
rity preparations--probably was
a major factor in preventing
racial clashes in the large
took part in the demonstrations,
and their relatively peaceful
conduct, as evidence of PAG con-
trol of the Moslem population.
The OAS may feel compelled
to continue its bombing and
other terrorist activities, and
any firm indication that a resump-
tion of negotiations is imminent
could lead it to attempt some
desperate act designed to pre-
vent a negotiated settlement.
The US consul general in Al-
giers commented last week that
the OAS is obliged to stage
increasingly spectacular feats
in order to retain its influence
over the European settlers.
Ministers for Algerian
Affairs Joxe, in a 28 October
press conference at Rocher-
Noir, formally rejected PAG
premier Ben Khedda's proposal
of 24 October for a "speedy
solution"--bypassing a self-
determination referendum in
favor of beginning with agree-
ment on Algerian independence
prior to negotiations on other
issues. He noted Ben Khedda's
willingness to pursue nego-
tiations on the standing French
policy of self-determination,
however, and described the
rebel statement as "a document
we can sit down over and work
on.""
Prior to Joxe's statement,
there was some evidence that
high French officials in Algeria
were nevertheless weighing the
possible advantages of immediate
accords with the PAG against
the possible problems of dealing
with it after a referendum con-
firms its leadership over the
Moslems. The American Embassy
in Tunis reported that there is
high praise there for the
"moderation, good taste, and
earnestness" of Ben Khedda's
statement.
The PAG sharply protested
the shooting of Moslems by the
French forces, but did not
threaten any specific retaliatory
action, and will probably point
to the numbers of Moslems who
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Although Joxe specified
in detail the guarantees the
European settlers have a right
to expect and refused to be
drawn into the issue of sover-
eignity over the Sahara, his
use of the phrase "unitary
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Algeria" as the basis for a
settlement may nevertheless be
a hint of further French flexi-
bility. Le Monde, pointing out
that it is a re el-coined phrase,
wondered whether the government
now was disposed to renounce
demands which the PAG regards
as incompatible with the princi-
ple of "unity." Joxe's reference
to creation of a provisional
authority and a local police
force as "eventually desirable
after a political agreement"
was interpreted by the US Em-
bassy in Paris as a sign that
his efforts to enlist Moslem
members for such a body have
thus far been unsuccessful.
Joxe's warning that France
seeks to avoid the creation of
"two Algerias" but that "neces-
sity sometimes makes the law"
appears to reflect a recent
undercurrent of official thinking
--attributed by the press to
Premier Debre's office--that
partition rather than regroup-
ment or departure may be the
lesser evil for France in the 25X1
long run if a satisfactory
settlement cannot be negotiated
with the PAG.
Security conditions in
South Vietnam last month re-
verted to the pattern of gradual
deterioration at the village
level, where the Communists
maintain intensive political,
propaganda, and guerrilla activ-
ity. The large-scale Viet
Cong attacks and successes of
September were not repeated,
despite the occasion of South
Vietnam's National Day on 26
October. Infiltration through
Laos apparently continued at
a high rate; Communist guerrilla
strength within 25 miles of
Saigon was pointed.up by the
discovery on 25 October of a
half-mile-long underground in-
stallation.
In Saigon there is increased
official and military criticism
of Diem's administration and
new insistence on the need for
reform. The US Embassy's Task
Force believes further deteri-
oration or dramatic Viet Cong
successes could stimulate col-
laboration among such circles
to force changes in the govern-
ment. The Task Force also notes
that the government's declara-
tion of an emergency on 18 Oc-
tober apparently took the public
by surprise, and that rather
than creating a psychological
boost, it so far has contributed
to uneasiness.
SECRET
A government-inspired wave
of public indignation against
the Viet Cong over the murder
of South Vietnam's liaison offi-
cer to the International Control
Commission (ICC) has been ex-
tended to the commission itself
--particularly to the Polish
delegates--and may jeopardize
the activities of the ICC.
Peiping and Hanoi in the
past week have concentrated
their propaganda on the situa-
tion in South Vietnam, charging
particularly that General Taylor
carried to Southeast Asia a
"premeditated plan" to heighten
tension and create conditions
for US and SEATO military ven-
tures. The North Vietnamese
National Assembly closed its
fall session on 27 October with
an appeal to world parliaments
to condemn US activities in the
South, and on 30 October Hanoi
published a letter to the UN
reiterating earlier complaints
presented to the ICC and the
Geneva co-chairmen.
Communist insurgents.
The visit to Saigon by
Malaya's premier provoked an
accusation from Peiping and
Hanoi that Malaya was in col-
lusion with the Diem government.
Hanoi seems particularly con-
cerned over Malaya's readiness
to impart to the South Vietnamese
some of its experience in combating
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lqww-Noe
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Negotiations between the
rival factions in Laos toward
the establishment of a coali-
tion government have been de-
layed by the inability of the
three princes to agree on a
suitable meeting site. Souvan-
na's proposals for a meeting
on the Plaine des Jarres re-
ceived Souphannouvong's sup-
port, but were rejected by
Boun Oum and General Phoumi,
who suggested either Luang
Prabang or Vientiane.
Boun Oum's refusal to go
to the Plaine des Jarres may
be due in part to fear for his
personal safety; in part it is
in response to Souphannouvong's
refusal to accompany Souvanna
to Luang Prabang in mid-October.
A. more compelling reason, how-
ever, apparently is the view
shared by Boun Oum and Phoumi
that a coalition under Souvanna
would be unable to prevent
domination of the government
by the Pathet Lao. Boun Oum
and Phoumi may be stalling on
further negotiations until
after General Taylor submits
his recommendations on his
return from South Vietnam.
They may believe that American
moves in South Vietnam will
provide an indication as to
American willingness to commit
troops to Laos in support of
the Vientiane government,
Military activity was
limited to minor skirmishing
in all zones during the past
week, with the exception of a
mortar attack on Xieng Khouang
by a Meo guerrilla unit. Al-
though Souvanna lodged a protest
with the International Control
Commission (ICC) and commented
that "such provocations may
hamper the three princes' meet-
ing," he indicated at the same
time his renewed desire for such
a meeting.
Soviet and Chinese delegates
at Geneva have seized on the re-
newal of military activities to
charge the US with responsibility
for the "provocative actions" of
Phoumi's forces. The USSR has
recently been urging the US to
use its influence on Phoumi to
reach a political settlement with
Souvanna Phouma. On 25 October,
Soviet delegate Pushkin read an
official statement to Ambassador
Harriman strongly protesting
Vientiane's intransigence and
warned that excessive demands
on Souvanna for seats in the
center neutralist group of his
government could lead to a break-
down of the Geneva talks and to
a "renewed outbreak of military
action."
At Geneva, in new draft
proposals on the critical points
still at issue, Pushkin spelled
out Moscow's concept of the role
the ICC is to play in Laos. Es-
sentially, he maintained that the
ICC members may submit differing
opinions to the co-chairmen on
the basis of their findings fol-
lowing an investigation, but
that on all issues in which the
ICC is to submit conclusions
or recommendations for a future
course of action,, it must reach
a unanimously agreed position.
On voting procedures, Pushkin
adhered to his earlier position
that the ICC, "in agreement
with" the Laotian Government,
could initiate investigation by
a majority vote.
Pushkin also agreed that
if the issue of SEATO's rela-
tionship to Laos were "satis-
factorily settled," he would
accept a Western demand that
a guarantee be written into
any neutrality declaration pro-
hibiting the use of Laos as a
"corridor for aggression."
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v I ,rr
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CURRENT INTELLIGLfii CJ WEEKLY SUMMARY
"GREAT PROJECTS" IN THE
Khrushchev's 20-year pro-
gram, as presented at the 22nd
party congress, elaborated on
various "great projects" in
hydroelectric power, waterways,
and irrigation to support the
expanding economy. Although
reminiscent of the grandiose
land-reclamation projects of
the Stalin era, these plans
appear to be more feasible from
an engineering as well as an
economic point of view.
Stalin formulated a program
of combating drought and "trans-
forming nature" with extensive
shelter belts and such ambitious
irrigation projects as the Main
Turkmen Canal, which was to run
through the Kara Kum Desert in
Central Asia. A program begun
in 1948 was to establish an
extensive system of shelter
belts in the southern European
USSR, including semi-arid
regions where trees would not
normally grow. Characteristic
of most of these land-reclama-
tion schemes was their require-
ment of immense investment for
remote prospects of return.
The present plans for
hydroelectric power plants do
not imply the need for capital
allocations of the magnitude
which drained the economy in
the early 1950s. The plants
mentioned by Khrushchev have
long been discussed and have
even been reported as planned
for construction by 1980. Since
1958, when Khrushchev gave
priority to thermal plants
because they require less
initial capital outlay, the
major hydropower plants nave
peen redesigned and costs have
been cut. Khrushchev's
emphasis at the congress on
SOVIET 20-YEAR PROGRAM
"inexpensive hydroelectric
power" suggests that he now
favors the long-term benefits
of investment in hydroelectric
stations, which can be used to
improve flood control, water
transport, and irrigation as
well as to provide power.
Another project outlined
by Khrushchev is the lengthen-
ing of the system of artificial
waterways in the European USSR
from 11,000 kilometers (6,875
miles) in 1960 to 23,000 kilo-
meters (14,375 miles) in 1980.
Projects under way for some
time to build a passage 12 feet
deep from the Baltic to the
Black Sea, by way of the Volga
and Don rivers and connecting
canals, are to be completed,
and a new shorter route by way
of the Dnieper, Pripet, and
Niemen rivers is to be initi-
ated. The final link of the
Volga-Baltic waterway, the
first of these systems, is
under construction and scheduled
for completion in 1964.
The Khrushchev speech
added few details to previously
announced plans for developing
new metallurgical centers. The
intention to construct new
plants in the Eastern Regions
was first emphasized in the
Sixth Five-Year Plan and was
restated in the Seven-Year Plan
(1959-1965). Construction of
new capacity has been started
in Kazakhstan and in western
Siberia but is behind schedule.
Although new capacity undoubt-
edly will be built in the
Eastern and Central Regions,
the Ukraine and the Urals will
continue to be the principal
sources of steel production
during the 20-year period.
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%ope SECRET %we
CURRENT INTELLIGENCE WEEKLY SUMMARY
Khrushchev also spoke of
a plan, discussed for a number
of years, to reverse the flow
of the Pechora and Vychegda
River system. Completion of
this project would greatly in-
crease the annual generating
capacity of the Volga River's
hydroelectric power plants,
stabilize or reverse the falling
water level of the Caspian Sea,
improve river transportation
out of the northern timber
regions, and increase the sup-
ply of water in southern areas
where moisture is a limiting
factor in agricultural produc-
tion.
Khrushchev's program calls
for expansion of the irrigated
area in the western USSR from
the present 22,000,000 acres to
69,000,000 in the moisture-
deficient areas and for drainage
of an additional 10,000,000
acres. Many of the large
irrigation projects in Soviet
Central Asia he mentioned are
already under way.. However,
agriculture does not appear
to have received a sufficient
priority to make the invest-
ments required to accomplish
all of the irrigation goals.
Prepared by ORR)
EUROPEAN USSR
Selected
Waterways
32030
300
MILES
Vnl.r,A-RALr"C
WATERWAY
nuucow, I
llnopru~~rrror.cA~I
S'd
30 40 0
ALBANIA'S ECONOMIC RELATIONS WITH THE BLOC
The deterioration of Al-
bania's economic relations with
the Soviet bloc in recent months
has been highlighted by the de-
parture of Soviet technicians,
a reduction in trade with the
USSR, a similar--although not
as great--decline in trade and
aid contacts with the other
European satellites, and the
emergence of Communist China
as the principal supporter of
the Albanian industrialization
program.
In contrast to previous
years,.whan many of Albania's im-
ports were financed by Soviet
credits, Moscow probably has
limited its shipments to Tirana's
ability to pay out of current ex-
ports to the USSR. Reports by observers.
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in Albania since late April
indicate that most Soviet per-
sonnel have left Albania.
Despite reported departures of
some satellite technicians,
Albania's trade relations with
the satellites are being main-
t ained,although probably on a
reduced scale.
In contrast to Albania's
almost total dependence on So-
viet and satellite aid in the
past for carrying out its
economic development plans,
long-term credits recently
granted by Communist China for
Albania's current five-year
plan (1961-65) exceed those
promised by all other bloc
countries combined. Albanian
requests to the bloc for credits
totaling some $160,000,000 in
early 1961 met with no response
from the USSR and little from
the satellites. China, however,
agreed to a $125,000,000 credit
in addition to the $13,500,000
previously extended.
Some of the $35,000,000
in credit extended by Czecho-
slovakia and East Germany in
1958 is still outstanding. A
Soviet credit of $75,000,000--
originally intended as the
initial Soviet contribution to
the Albanian plan--probably
has been abrogated.
Peiping's help falls far
short of filling the gap caused
by the disruption of Soviet-
Albanian economic relations.
Efforts to allocate the $125,-
000,000 credit for specific
industrial projects probably
are under way, but thus far this
credit has amounted to little
more than a declaration of
support. Chinese tech-
nicians and advisers have been
arriving in Albania regularly
since mid-1961, and by the end
of the year several hundred are
likely to be working there.
While Peiping's efforts
on behalf of Albania are
necessarily limited by China's
own economic difficulties,
the Chinese should be able
to provide sufficient goods
and services to enable Tirana
to withstand Soviet bloc
economic sanctions. In a
subsistence economy such
as Albania's, the short-run
effects of failure to ful-
fill the plan would not
be severe.
Albania has had little
success so far in finding
in Western Europe new sources
of goods, credits, and technical
aid. China may provide cash
for the Albanians to buy some
Western machinery and equipment,
but the lukewarm response
to Albanian economic overtures
in the West suggests such deals
will be limited to items which
the Chinese cannot provide direct-
ly. (Prepared by ORR)
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~.. ..r
JAPANESE - SOUTH KOREAN RELATIONS
A possible mid-November
meeting between Japan's Prime
Minister Ikeda and South Korea's
junta leader Pak Chong-hui
raises the prospect of a major
breakthrough in the long, fruit-
less efforts by the two countries
to normalize their relations.
An impromptu mission to Tokyo
in late October by South Korean
security chief Kim Chong-pil,
Pak's principal lieutenant,
apparently has paved the way
for Pak to stop in Tokyo for
discussions with Ikeda while
en route to Washington for a
visit.
The main factor of South
Korean interest in a quick
settlement appears to be the
need of Japanese assistance
for the military government's
economic programs. In addition
to disagreement between Tokyo
and Seoul about the amount of
such assistance, however, there
is the important Oriental ques-
tion of "face" involved in the
dispute over whether or not
Japan is obligated to compen-
sate Korea for Japanese rule
from 1905 until 1945.
Korean claims against
Japan cover broad categories,
both government and private,
including demands for reimburse-
ment for Korean savings accounts,
the Bank of Korea gold reserves,
national art treasures, ships,
and corporate investments--all
of which the Japanese are accused
of removing from Korea. The
claims also include demands for
compensation to Koreans subjected
to forced labor by the Japanese
and to families of Koreans killed
and wounded in Japanese military
service and labor battalions in
World War II. While denying
the legality of these claims,
Tokyo apparently is willing to
consider grants up to $350,000-
000. Seoul recently proposed
$800,000,000 as a negotiating
figure.
It is doubtful, in any
case, that Tokyo would extend
more than token assistance in
the absence of substantive
progress on other problems about
which Seoul seems less concerned.
Tokyo is anxious for the aboli-
tion or modification of the
South Korean prohibition against
Japanese fishing inside the
Rhee Line--which encloses an
area between 20 and 200 miles
off the Korean coast. South
Korean patrol vessels have
seized at least seven Japanese
fishing boats in the vicinity
of this line since the military
coup d'etat on 16 May.
Korean distrust of the
Japanese remains deep, especially
among the younger military
officers on whom Pak Chong-hui
depends for support. In Tokyo,
too, there are important ob-
stacles to a settlement stemming
from the divided opinion within
the ruling party about Korean
policy and from the possibility
that the Socialists may exploit
underlying Japanese disdain
toward the Koreans to provoke
opposition against any settle-
ment.
It is doubtful that either
government fully appreciates
the other's political handi-
caps in this respect; the
South Korean vice foreign
minister told the counselor of
the American Embassy in Seoul
in late September that if
current efforts for a settle-
ment failed, South Korea would
not make another attempt "for
some ears to come."
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` WF SECRET IWO
Turkey's military leaders
are disappointed and bewildered
by the poor showing of the
Republican People's party (RPP))
in the recent elections and
appear extremely reluctant to
return the country to civilian
government as they had pledged
to do by 29 October. The three
parties which had opposed the
military and appealed to the
sympathizers of former Premier
Menderes won 277 seats in the
lower house, against the RPP's
173. While no party had a ma-
jority, the officers are con-
cerned lest the opposition
parties Join in a coalition
which would be antagonistic to
the military and to the secu -
Larization and Westernization
of Turkey.
To preclude this possibil-
ity, some 20 high-ranking offi-
cers, including the chief of
the Turkish General Staff and
field army commanders, on 24
October compelled the leaders
of all four political parties
to sign an agreement embodying
'three conditions for the res-
toration of civilian authority.
The political leaders agreed not
to give amnesty to any of the
more than 450 members of the
Menderes regime now in prison;
not to interfere in the struc-
-uure and operation of the armed
:forces; and not to attempt to
reinstate the 4,000 officers
::forcibly retired since August
1960; and to support the former
chief of the Committee of
National Union, General Cemal
GGursel, as President of the
"epublic. The Grand National
Assembly elected General Gursel
President on 26 October, but
there have been delays in select-
ing presiding officers for both
houses and in negotiating a
coalition among the parties.
For their part, the civil-
ian politicians seem reluctant
to accept the responsibility
of heading a government in which
the military would continue to
hold power in most important
matters. Any new government,
moreover, will be hard put to
deal with Turkey's economic
problems. The public will com-
pare its performance with that
of Menderes, whose accomplish-
ments were tangible but often
unsound and brought the country
to the brink of bankruptcy.
Political uncertainty and inept
administration during the mili-
tary era reduced economic ac-
tivity to a low level. The
government will have difficulty
getting public support for the
taxation and other economic
measures necessary for renewed
economic development.
If the military are dissatis-
fied with the eventual coalition
arrangements, they may keep in
office retired General Fahri
Ozdilik, who has been designated
by the regime as acting prime
minister. This in effect would
continue the government of
technicians which has held
office for the past 17 months.
In this event, however, the
military would have to impose
more and more stringent controls
to maintain order.
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CURRENT INTELL]:GENCE WEEKLY SUMMARY
Constantine Karamanlis and
his right-of-center National
Radical Union (ERE) won four
more years of power in the Greek
parliamentary elections on 29
October. Karamanlis, who be-
came prime minister in October
1955, has held the office con-
tinuously for a longer period
than any other man in modern
Greek history.
This was a personal vic-
tory for Karamanlis, who has
consistently surrounded himself
with generally competent but
often colorless cabinet minis-
ters. The victory also con-
firmed the political sagacity
of the premier's decision to
hold elections this fall rather
than wait until his term ex-
pired next spring. The ERE's
success in winning a majority
in parliament, combined with
the stunning defeat suffered
by the Communist-front United
Democratic Left (EDA), justi-
fied Karamanlis' willingness
to gamble on a new electoral
:law less favorable to his party
than the previous one had been.
The new law prevented a "pop-
ular front" of all opposition
parties and led to a revival of
he non-Communist opposition.
ERE won nearly 50 percent
of the popular vote and will
have 169 of the 300 seats in
parliament. In 1958, ERE got
about 41 percent of the vote
but captured 171 seats because
of the more favorable provi-
sions of the electoral law in
effect then. The fact that
nearly 10 percent of the voters
switched to ERE reflects in-
creased confidence in Karamanlis,
who has established a record
of fiscal stability and wide-
spread economic development.
The Center Union, a coali-
tion of eight non-Communist
opposition parties which was
Formed in September, won about
:35 percent of the vote and will
have 107 seats in the parlia-
ment. Veteran Liberal politi-
cian George Papandreou is the
nominal leader of the Center
Union. Whether his coalition,
whose members range from the
far right to the moderate left,
will hold together is ques-
tionable. Spyros Markezinis,
reader of the Progressive
party, previously indicated
that his collaboration with
the Center Union was only for
the period of the campaign.
Nevertheless, a non-Communist
grouping has replaced EDA as
the major opposition in parlia-
ment; this means a pro-Western
alternative to ERE should Karam
manlis fall.
EDA,running as a single
party in 1958, won more than
24 percent of the vote and 79
seats in parliament. This year
it ran in coalition with an
agrarian party it had created
last summer. The coalition at-
tracted only 15 percent of the
vote, and parliamentary repre-
sentation of the far left will
be reduced to 24 seats. Soviet
menace on the international
scene and reaction to recent
Soviet and Bulgarian threats
against Greece were probably
major factors in the EDA set-
back.
EDA spokesmen and bloc radio
stations have complained bitterly
of "police barbarism" and other
forms of repression against EDA,
but American observers state
that few complaints of intim-
idation have been confirmed.
Even before the election, dis-
satisfaction had developed among
the rank and file in EDA over
management of the campaign. The
exiled Communist party of Greece
will probably reappraise EDA
leadership, and this may well be
followed by the removal or demo-
tion of severe -time EDA
functionaries,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
EUROPEAN INTEGRATION DEVELOPMENTS
In a bid for early agree-
ment on closer European polit-
ical ties, the French have
prepared a draft treaty to co-
ordinate foreign and defense
policies of the Common Market
(EEC) countries and extend
their cooperation in scientific
and cultural fields. With the
exception of the Dutch, the
treaty was favorably received
by the EEC representatives at
the 19 October meeting at which
it was formally presented. Dis-
cussions are scheduled to resume
on 10 November, and several del-
egates have urged that the
treaty be ready for signature
when the heads of government
meet later this year or in Jan-
uary.
The French move is in keep-
ing with the "Bonn declaration"
issued on 18 July at the latest
such meeting of heads of govern-
ment. The six leaders called
at that time for closer polit-
ical, economic, and social ties,
instituted regular summit and
ministerial-level meetings, and
directed a committee to prepare
proposals to give "statutory
character to the unification of
the European peoples." This
committee has since held sev-
eral meetings, but prior to the
French initiative, proposals
under consideration were neither
very specific nor in treaty form.
The new draft preserves
the flavor of the loose confed-
eration first proposed by De
Gaulle in mid-1960, but it also
reflects the considerable evo-
lution in his thinking since
then. While a negative vote in
the council would still have the
force of a veto, the absence
or abstention of a council mem-
ber would not prevent the other
members from going ahead, and
such decisions would be bind-
ing for those countries which
approved them. They would be
executed by a political commis-
sion seated in Paris, and the
EEC's assembly would have rights
of interrogation aid recommen-
dation.
In view of these French
concessions, it is difficult to
say whether January is a real-
istic date for agreement. All
the other EEC countries would
prefer a political union more
binding than that proposed by
De Gaulle and one more closely
linked to the existing supra-
national institutions of the
EEC. Moreover, unless the union
is a tight one, the Dutch in
particular have opposed its con-
sideration of defense matters
lest this impinge on NATO's pre-
eminence in this field.
There is also the problem
of Britain. The smaller EEC
countries have been especially
anxious to include the UK in
any moves toward closer ties,
and London now has formally en-
dorsed the Bonn manifesto,
Whether prospective UK member-
ship in the EEC will be consid-
ered "an argument for speed or
for a more deliberate approach
to the conclusion of a political
treaty" cannot be predicted, in
terworth.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
ITALIAN GOVERNMENT CRISIS THREATENS
Italy's divergent center
parties are increasingly in-
clined to upset the agreement
whereby they provide a slim
parliamentary majority for
Premier Fanfani's minority
Christian Democratic government.
Only last-minute reversals by
party leaders prevented the
government's fall last week end
at the hands of the small
Republican party, which seeks
a reformist government dependent
on parliamentary votes from the
Nenni Socialists.
In the summer of 1960 the
center parties--Christian
Democrats, Social Democrats,
Republicans, and Liberals--tem-
COMMUNITY MOVEMENT 1
(PSDI)
INDEPENDENT LEFT 1
NOVEMBER 1961
COMMUNITY MOVEMENT 1
DEMOCRATIC SOCIALISTS 18.. 1 6 REPUBLICANS (PRI)
(PSD
I)
INDEPENDENT LEFT 1
Social Democratic leader
FANFANIGOVERNMENT Saragat, for his part, said he
SUPPORT
-19 ITALIAN DEMO. PARTY (PDI) week` to bring down Fanfani
Fascist support, which resulted
in widespread anti-Fascist
rioting.
There has since been in-
creasing pressure on the Christian
Democrats to enlarge their bare
parliamentary support by turning
to the Nenni Socialists. After
the November 1960 local elections
failed to give the center parties
a majority in several important
cities, the Christian Democrats
did join with the Socialists to
run these local administrations
and, more recently, the Sicilian
regional government. These moves
elicited threats, still unful-
filled, from the conservative
Liberal party to bring down
Fanfani.
would withdraw support if Fanfani
did not soon attempt a Nenni
Socialist - supported government
but agreed to wait until after
the Christian Democrats' party
3 SOUTH TYROLEANS (SVP) congress on 27 January. The
-5 INDEPEND'T MONARCHISTS immediately unless the Christian
24 NEO-FASCISTS (MSI) Democratic party agreed at once
to attempt a center-left govern-
ment immediately after the con-
gress.
NEO-FASCISTS (MSI) left government. Christian
9 ITALIAN DEMO. PARTY(PDI) national elections and thus post-
13 INDEPEND'T MONARCHISTS pone attempts to form a center-
Republican party secretary
Reale, however, reportedly agreed
on 28 October to wait, probably
fearing that the government's
SOUTH TYROLEANS (SVP) right-wing supporters would carry
porarily composed their serious
policy differences in order to
join in support of a govern-
ment headed by Fanfani and made
up entirely of Christian Demo-
crats. They took this action
after two months without a
government, and a subsequent
brief period of a Christian
Democratic cabinet with neo-
Democratic party secretary Moro
fears that the Republican party
will renege on this commitment
at the meeting of its party
directorate, now scheduled for
12 November. One factor in-
hibiting them will be removed
on that date, when the Presi-
dent enters the last six months
of his term and recourse to
national elections for solving
a government crisis becomes
constitutionally impossible.
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Negotiations may shortly
be resumed betweeen the Balaguer
government and the three major
opposition groups on the forma-
tion of a coalition regime in
the Dominican Republic. The
three groups are holding unity
talks with a view to avoiding
the lack of coordination that
was bhiefly responsible for the
breakdown in coalition negoti-
ations in early October.
The chief obstacle to
participation by the opposition
in the government continues to
be the post of General Ramfis
Trrjillo, son of the late dic-
tator, as chief of the Dominican
armed forces. The largest of
the opposition groups, the Na-
tional Civic Union (UCN), which
is supported by the majority of
Dominican business and profes-
sional people, has been insist-
ing that Ramfis' post be abol-
ished and that he leave the
country prior to the establish-
ment of a coalition regime.
The 14th of June party (PCJ),
which contains some of the
opposition's most vengeful and
uncompromising anti-Trujillo
elements, is even more adamant.
The third opposition group,
the Dominican Revolutionary
party (PRD), is somewhat more
conciliatory on the issue. PRD
leaders, who accept guidance
from such reformist Latin Ameri-
can leaders as Venezuelan Presi-
dent Betancourt ai.d ex-President
Figueres of Costa Rica, have
stated that they would be will-
ing to have Ramfis remain for
a limited period "at the pleas-
ure of the coalition government."
Recognition by opposition lead-
ers that Ramfis has a positive
role to play in maintaining
control of the restive armed
forces during the transition
to coalition government may
eventually lead the opposition
to accept his continuance for
a limited period.
Opposition groups may be
encouraged by the recent publi-
cation of Ramfis' September
letter to the OAS subcommittee
in which he vowed to resign
immediately upon the lifting of
OAS sanctions. Opposition among
the military to Ramfis' departure
is strong, and some officers
already suspect that he is mtoti-
vated primarily by the desire
to save himself, his family,
friends,and wealth--leaving
other officers to "face the
wrath of the people,"
Ramfis felt compelled to
state publicly on 30 October
that, while he will resign his
post when the situation becomes
''normal," he will always con-
sider the Dominican Republic
his home and will never leave
under pressure. On 1 November,
a letter was published to
Ramfis from 33 of his colleagues
in the air force describing
his continued presence in the
armed forces as "imperative."
"The history of the republic;' he
stated, "contains many blank
pages which await your writing
them,"
Meanwhile the government's
official political machine, the
Dominican party, is attempt-
ing to counter the steady de-
cline in its public support by
making new appeals to urban
and rural lower classes, who
have long provided it with a
semblance of "mass support."
A "congress" of farm laborers
opened under Dominican party
auspices on 28 October with the
announcement that the govern-
ment intends to implement a
program of agrarian reforms.
While the Dominican party is
thoroughly discredited among
the literate public, it still
commands all the resources of
the government and has used
some of these to prevent op-
position party organizers from
contacting the illiterate rural
workers.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The middle-of-the-road the MDP and APRA, the nation's
Prado administration suspended
constitutional guarantees fo1--
lowing rioting in Lima on 23
October. The riot was apparently
touched off by the attempts of
leftist and Communist leaders
to exploit a nationwide strike
of schoolteachers, which is
still not settled. As a pre-
cautionary measure, a number
of key Communists and sympa-
thizers have been arrested.
The violence, which led
to the death of one student,
is symptomatic of Peru's labor
difficulties. Workers in trans-
portation and in mining and
fabricating industries have
been the most vociferous in their
complaints against the inflation,
which has continued despite the
otherwise successful efforts of
Premier Pedro Beltran since
July 1959 to stabilize the Peru-
vian economy and build business
confidence. The government has
been reluctant to authorize in-
creases in wages and salaries
and has failed to push through
Congress the economic and social
reforms it has promised.
Two days after the riots,
both leftist and rightist oppo-
sition groups in the Senate
tried to pass a motion of cen-
sure against Beltran. They will
probably continue to press
charges of inefficiency in the
security forces and of undue
police brutality in an effort
to discredit President Prado's
administration with a eye to
no.-11t June's presidential elec-
tions. Beltran hopes to be
the candidate of Prado's Peru-
V4 Democratic Movement (MDP)
and was reportedly about to
resign from the cabinet to
launch his campaign. Though an
effective premier and minister
of finance, Beltran i not a
popular candidate and will
require the backing of both
largest mass-based political
faction. Neither the MDP, which
is essentially conservative, nor
APRA, which is leftist but not
Communist, would support Beltran,
however, if he appeared to have
resigned under fire.
APRA, which had been ct.-
lawpd for eight years when Prado
legalized it in 1956, may try
to run its own candidate. Victor
Raul Haya de la Torre, founder
of APRA, who has lived in Rome
since 1954, reportedly intends
to return to Lima in December
to try for his party's candidacy.
Haya and APRA have consistently
supported President Prado, but
Maya has expressed a strong
personal dislike for Beltran.
Other presidential candi-
dates are already in the field.
Fernando Belaunde Terry, demagogic
leader of the leftist Popular
Action party and second-running
presidential candidate in 1956,
has succeeded in obtaining the
backing of APRA Rebelde, a left-
wing splinter of APRA, and has
so far avoided alienating the
Communists, who are outlawed
but have influence in other
parties. Ex-President Odria,
who ruled dictatorially from
1948 to 1956, is also courting
both leftist and rightist support
for his candidacy.
The opposition parties, in
their efforts to undercut the
MDP and APRA,will also try to
embarrass the government on such
adaitional issues as the fail-
ure of the Peruvian proposal
in the OAS to investigate the
Cuban problem, but Peru's wide-
spread labor unrest gives them
their best opportunity. The
Peruvian Government evident-
ly expects further violence.
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CURRENT INTELL]:GENCE WEEKLY SUMMARY
SPECIAL ARTICLES
POLITICAL TRENDS IN FRANCE
Since the end of World
War II, France has had an up-
surge of economic vigor, and
its previously static popula-
tion has risen by nearly six
million. At the same time
there has been a decline in
the effectiveness of parlia-
mentary government and in pub-
lic interest in party politics.
Reflecting this trend, the cen-
ter of power has shifted to the
executive, and the Fifth Repub-
lic has neglected the develop-
ment of adequate channels of
communication from the citizen
to his government. The scope
of the communication problem
has thus far been obscured by
De Gaulle's personal popularity,
which is the main force holding
the present regime together;
his disappearance from the scene
will probably be followed by a
chaotic struggle for power.
As recently as 1940, the
French population was predom-
inantly middle-aged in compo-
sition, predominantly rural in
distribution, and employed
mostly in family enterprises
or small-scale businesses.
Since then, the population has
increased from 40 to 46 mil-
lion, one third of which is un-
der 20 years of age. More than
half the population now is ur-
ban; only 22 percent earn their
living from the land, and 66
percent derive their income en-
tirely from wages and salaries.
More than half the workers in
private industry are employed
by companies having more than
100 people on the payroll, and
some nationalized industries
have-thousands of employees.
The gross national product
has been increasing at the rate
of 5 percent per year since
1953 and even faster in 1960
and 1961. In industry alone,
the annual rate of growth has
been close to 10 percent. The
enhanced efficiency of French
industry is further reflected
in the way France, a tradition-
ally protectionist country, has
taken a lead in the tariff re-
duction policy of the European
Common Market.
The French citizen now
feels the impact of his gov-
ernment much more directly than
prior to World War II because
of the nationalization of pub-
lic services and many indus-
tries. A broad social security
program had been firmly estab-
lished by the mid-1930s, and
today the government is an im-
portant employer, marketer,
landlord, and supplier, as well
as educator, regulator, insurer,
and protector.
Since De Gaulle returned
to power in 1958, the govern-
ment has devoted increasing
attention to making the econ-
omy more efficient. In December
1958 it decreed measures to
streamline outmoded institu-
tions, update procedures, and
encourage regional planning,
for which technical experts had
long sought parliamentary sup-
port during the Fourth Republic.
Although many of the long-term
measures--especially those
creating regional, industrial,
commercial, and educational
centers and requiring large in-
,Vestments--are running behind
schedule, most of the decree
reforms have been reasonably
effective.
The emphasis in the consti-
tution of the Fifth Republic on
the executive function encour-
ages government by technicians.
Many of the top-ranking civil
service posts now are filled by
young technical experts deter-
mined to modernize France, and
there is an unprecedented num-'
ber of nonpolitical technicians
in the Debr6 cabinet.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Political Stagnation
The traditional forms of
political activity changed
relatively little between the
Third Republic and the Fifth.
Political parties continued to
represent doctrinal positions--
often those of a previous gen-
eration; electoral arrangements
remained heavily weighted in
favor of rural areas; and dep-
uties and senators went on try-
ing to organize, influence, and
upset governments according to
their own set of rules. The
decline in public interest in
politics was evident from the
mid-1950s on. As the Fourth
Republic continued, parliament
seemed to operate more and more
in a vacuum, and when the May
1958 coup occurred, parliament
had neither the will nor the
public backing to assert it-
self. In the three years of
De Gaulle's rule, there has
been considerable controversy
over the constitutional role of
the legislature, but as yet
there is no sign that the tra-
ditional parliamentary system
has regained public respect.
This diminished role of
the traditional "representatives
of the nation" leaves a polit-
ical vacuum between the chief
of state and the citizenry.
Many professional political
leaders are beginning to la-
ment openly the "breakdown of
communication" between the
state and those it governs, but
they are themselves hampered
by their failure to keep up
with the changing interests of
the electorate. All of the
older political parties, in-
cluding the Communists, have
been suffering from declining
membership and apathy and have
failed to recruit many new mem-
bers from the younger segment
of the population.
Despite the frequent at-
tacks on De Gaulle's alleged
"misuse" of his presidential
powers and his slighting of the
legislative branch, no respon-
sible political leader appears
prepared to meet him in a full-
fledged public combat. American
Embassy officials have detected
among the deputies an undertone
of admiration, as well as re-
lief that De Gaulle
command.
Dangers of the Situation
The present situation en-
courages extremists hopeful of
seizing power. Active plotters
against De Gaulle are few--many
are representatives of various
anti-republican leagues which
have existed for decades. Other
plotters are anti-Gaullists
from the Vichy period and pro-
ponents of keeping Algeria
French. Although various ex-
tremists try to exploit this
last issue, the French popula-
tion as a whole is almost com-
pletely behind De Gaulle's pol-
icy of withdrawing from Algeria
and is ready to support anything
he wants, especially if it seems
to promise an early end to the
war.
The Algerian issue, how-
ever, does mean some threat to
De Gaulle's position from among
the professional soldiers, who
are out of touch with develop-
ments in metropolitan France.
These officers have become em-
bittered by what they view as
political "giveaways" of the
territories they had been fight-
ing to save in successive colo-
nial wars since World War II,
and they have developed a theory
of the army's mission widely
divergent from the policies
proposed by Paris. Army loyalty
to the government in a showdown
is not certain, and the recent
wave of voluntary retirements
indicates the low morale of
field-grade and general offi-
cers.
Special Interest Groups
The failure of normal
political channels to maintain
communications between the cit-
izen and the government has also
encouraged various interest
groups to seek relief for their
grievances through direct ac-
tion, including the threat of
violence. The conflict over
Algerian policy has dealt a
blow to political stability in
this respect, establishing a
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CURRENT INTELLIGENCE WEEKLY SUMMARY
climate in which violence is
becoming a common method for
expressing group opinion.
Such groups as farmers,
shopkeepers, professional men,
students, and renters have
stepped up the activities of
their respective organizations.
The farmers' demonstrations
last summer, for example, tied
up whole regions in western
and southern France and threat-
ened at times'to break into
serious violence. The govern-
ment has offered some measures
to relieve farm distress--more
than it 'was willing,' to concede
before the demonstrations--but
the agricultural problem is
structural in nature, and offi-
cials admit that there is no
easy way to get excess manpower
off uneconomic farms and into
other activities.
The evolution of the labor
movement away from its earlier
revolutionary outlook may also
be interrupted. Since the im-
mediate post-war years, massive
strike activity had been giving
way to formalized bargaining
procedures,and permanent union
representation on various regu-
latory boards. In the major
crises of the Fifth Republic
to date, organized labor has
given the promptest and most
active support to the regime.
Nevertheless, the labor
unions have recently been less
reluctant to resort to direct
action to call attention to
lagging wage rates in the pub-
lic sector. Short strikes and
other limited demonstrations
by employees of the state and
some nationalized industries
have been well supported and
have had some effect in en-
larging government concessions.
Both Communist and non-Commu-
SECRET
nist unions have engaged in
these campaigns for specific
economic concessions, and should
this kind of cooperation be
prolonged, the political dis-
tinctions among the agitators
may become blurred.
Prospects
The constitutional outlook
for France seems increasingly
unclear. France has had such a
variety of regimes and its peo-
ple hold such a diversity of
political views that there is
no overwhelming public attach-
ment to any particular form of
government. De Gaulle's personal
popularity is the only firm
prop of the Fifth Republic, and
he has failed to prepare the
way, either politically or
psychologically, for a successor.
De Gaulle did hold one session
with political leaders in late
September, but this meeting
gave them little satisfaction,
and in general he has continued
to see the problem of political
communication between chief
of state and citizen as a one-
way affair.
Should De Gaulle disappear
from the scene now, it is doubt-
ful there would be any element
strong enough to achieve an un-
contested succession under the
present constitution. Although
several moderate elements have
begun efforts to arrange a "dem-
ocratic alternative" to De Gaulle's
rule, the prevailing mood con-
tinues to favor leaving things
in his hands. The prospects of
a struggle for power among right-
ists, military forces, Communists,
and other groups is a nightmare
which the majority of Frenchmen,
absorbed with their private ad-
justments to their modernized
society, prefer to ignore.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
COMPARISON OF THE ECONOMIES OF NORTH AND SOUTH VIETNAM
Natural advantages and
selective investment have en-
abled South Vietnam to achieve
higher living standards and a
greater increase in agricultural
production than North Vietnam,
where food production has been
lagging behind population growth.
North Vietnam, however, has set
a faster pace in industry by al-
locating a large proportion of
bloc aid and its own domestic
resources to investment in new
productive capacity. The Viet
Cong guerrilla activity, more-
over, will continue to detract
from the otherwise favorable
outlook for the South Vietnamese
economy.
Economic Effects of Partition
The partition of Indochina
in 1954 gave South Vietnam the
rich', rice bowl of the Mekong
River Delta--an area which ex-
ported more than a million tons
of rice a year prior to World
War II--and left North Vietnam
a food-deficit area, limited by
rugged terrain, dense vegeta-
tion, and poor soil. Further-
more, with an estimated 2,600,-
000 acres of virgin land await-
ing settlement, South Vietnam
has far greater potential in
agricultural resources. The
South, on the other hand, is
almost completely lacking in
mineral wealth, while North
Vietnam is one of the richest
areas in Southeast Asia in min-
eral reserves, with substantial.
deposits of tin, coal, zinc,
tungsten, manganese, bauxite,
and salt.
Industrial assets--includ-
ing all heavy industry except
electric power--went mainly to
North Vietnam. More than 70
percent of the production of
modern industry in prewar Viet-
nam had originated in the north-
ern half of the country. How-
ever, this relatively more fa-
vorable inheritance in industrial
assets was balanced somewhat
by the comparatively greater
damage to northern industry
during the Indochina war.
The labor force in both
countries remains predominantly
agricultural, and both lack
competent technical, adminis-
trative, and managerial per-
sonnel. Despite a loss of
900,000 refugees to the South,
North Vietnam still has the
larger population--16 million
against the South's 14 million.
State Economic Control
The government of South
Vietnam has assumed increasing
responsibility for the alloca-
tion of national resources.
Saigon's control over the na-
tional budget and its regula-
tion of foreign trade--together
with the need for heavy mil-
itary expenditures--have greatly
influenced the levels of con-
sumption and investment. How-
ever, in contrast to North
Vietnam, where the state owns
the means of production, cen-
tralized allocation of re-
sources in South Vietnam has
not implied participation by
the state in economic produc-
tion.
In its five-year develop-
ment plan (1957-61), South
Vietnam emphasized the expan-
sion and diversification of
agricultural production, de-
voting a major part of the
program to land reform. This
agrarian reform has been gen-
erally successful, in contrast
to forced socialization of
agriculture in the North, where
peasant resistance has delayed
the program and adversely af-
fected production.
North Vietnam has copied
its basic economic administra-
tion and planning techniques
from Communist China without
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such radical programs as the
communes and the "great leap
forward." This approach re-
flects Hanoi's realistic ap-
praisal of the country's rela-
tively modest economic resources
and the limits to which the
peasants can be driven.
Although the traditional
Communist goal of industriali-
zation will receive greater
stress in North Vietnam's new
Five-Year Plan (1961-65), there
is no indication that the pace
will be as frantic as China's
has been.
Economic Growth
Despite obvious differ-
ences in economic policies, the
economies of North and South
Vietnam have been expanding at
about the same pace since 1956.
The comparatively faster re-
covery of industry in the North
following the Indochina war re-
sulted in relatively higher
rates of growth in 1956-59, but
a serious decline in agricul-
tural production in 1960 result-
ed in an absolute decline in
gross national product (GNP)
for that year, compared with
a 5-percent gain for the same
year in South Vietnam. In
terms of total production, South
Vietnam's GNP was approximately
$1.5'billiori in 1960, compared
with $l.1`billioi for North Viet-
nam; per capita figures were
even further apart--$110 for
the South and $70 for the North.
Although industrial produc-
tion has doubled for both coun-
tries since 1956, it is still
only slightly above prewar lev-
els and in both countries re-
mains small in absolute terms.
In North Vietnam, industry ac-
counts for only about 16 percent,
and in South Vietnam 8 percent
of gross domestic production.
In total value, industrial pro-
duction in North Vietnam in 1960
was roughly one and a half times
that in South Vietnam.
Food Production
Agriculture, which is
basic to the economies of both
countries, occupies 85 percent
of the population in the North
and over 90 percent in the
South. Traditionally a food-
deficit area that relied on the
South to balance its food needs,
North Vietnam has gained a min-
imal self-sufficiency through
tight controls over the distri-
bution and consumption of grains.
South Vietnam has ibcreased food
production about 7 percent each
year since 1956. Whereas per
capita production of food in
North Vietnam in 1960 was about
10 percent below that in 1956,
in South Vietnam it was more
than 20 percent above. Rice
is the principal crop and main
diet staple for both countries;
roughly 90 percent of sown
acreage in both areas is plant-
ed to rice, and yields have
averaged about the same in both.
The production growth in the
South has resulted largely
from increasing acreage.
Per capita production of
rice in North Vietnam has, how-
ever, been consistently below
that of South Vietnam. Whereas
in 1956-57 it was about 90 per-
cent of per capita production
in the South, in 1958-59 it was
about 85 percent and in 1960
only about 68 percent.
A net importer of rice be-
fore World War II, North Viet-
nam now is a net exporter, but
only because of enforced low
levels of consumption within
the country. Committed to ex-
port 550,000 tons of rice in
1960, Hanoi was apparently hav-
ing difficulty in meeting its
obligations late in the year
and in early 1961; in several
instances, planned deliveries
were canceled altogether. Saigon's
rice exports reached 340,000 tons
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in 1960--only about one third
of the pre-war level--and even
before the recent floods,
planned 1961 exports had been
cut by two thirds because of
Viet Cong interference with
shipments to Saigon.
Between 1955 and 1960, to-
tal North Vietnamese imports
exceeded exports by an esti-
mated $392,000,000; in the
same period, South Vietnamese
imports have exceeded exports by
approximately $1,058 billion.
'Foreign economic assistance ex-
tended to the two countries made
up the difference.
InL_North Vietnam the re-
gime has been able to raise ex
ports as a percent of imports
from about 10 percent in 1955
to more than 60 percent in 1960.
Int Soutrh,Vietnam, exports still
account for only about one third
the total value of imports. Ex-
ternal economic aid as a pro-
portion of GNP in North Vietnam,
therefore, has been declining--
from about 15 percent in 1956
to about 4 percent in 1960--
whereas the proportion of grants
and credits to GNP in the South
has not dropped below 10 per-
cent during 1955-60. Conse-
quently, North Vietnam has be-
come less dependent on large
annual extensions of foreign
aid than has Saigon.
Economic Aid
Total economic assistance
to North Vietnam since 1955 has
amounted to $944,000,000, with
Communist China and the USSR
providing almost 90 percent of
it. The Chinese have given
somewhat more aid than the So-
viets, and there has been a
natural division whereby Pei-
ping furnished larger quantities
of basic materials and manpower
and Moscow sent relatively more
machinery and equipment. Almost
half of this aid was earmarked
for development projects sched-
uled under the First Five-Year
Plan. Of the other half, roughly
three fourths had been used by
1960 for the purchase of bloc
goods and services.
Economic assistance extend-
ed to South Vietnam under vari-
ous US programs since 1955 has
amounted to approximately $1.44 bil-
lion, or about 8 percent of total
US economic aid to all countries.
Of this total, over 90 percent
has been extended as grants-in-
aid, whereas only about 40 per-
cent of total bloc aid to North
Vietnam consisted of grants. As
of the end of 1960, roughly 70
percent of total economic aid to
South Vietnam during 1955-60 had
been used in financing the coun-
try's large net imports.
During this period, coun-
terpart funds have provided at
least two fifths of South Viet-
nam's entire budget revenue, but
only 20 percent of these budget
receipts from US aid have been
allocated to economic projects;
most of this revenue has gone
to meet the annual defense ex-
penditures of South Vietnam.
Viet Cong Activity
The South Vietnamese Gov-
ernment's major problem at
present is the Communist guer-
rilla activity. The Viet Cong
units are demonstrating an
ability not only to disrupt
communications and strike near
major population centers, but
to hold some localities in
sufficient strength to collect
taxes, exercise police power,
and deny the products of the
area to the Saigon regime.
Intensification of guerrilla
activity will make it increas-
ingly difficult for Saigon to
maintain the country's rate of
economic progress.
(Prepared by ORR)
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