CURRENT INTELLIGENCE WEEKLY SUMMARY

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CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO.
OCI N0.0417/62
18 May 1962
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
State Dept. review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent the
immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 May 1962
T H E W E E K I N B R I E F
(Information as of 1200 EDT 17 May)
SOVIET FOREIGN POLICY DEVELOPMENTS .
. Page 1
The USSR continued last week to manifest impatience
and concern over the future course of ]Berlin negotiations.
The Soviet press expressed further doubts about the West's
desire for a peaceful settlement, and ]Khrushchev
was quite worried about the
present situation because he had lost confidence in the
Americans. The USSR nevertheless has not threatened to
break off the Berlin talks and has avoided setting a new
deadline for a separate peace treaty with East Germany.
Soviet propagandists continue to build a case for a re-
sumption of nuclear tests. Khrushchev has reiterated earlier
warnings that the USSR will resume testing because of the
US resumption of atmospheric tests.
LAOS . .
Souvanna is returning to Laos next week, but it is
doubtful that an early settlement among the three princes
can be arranged. The military situation in northwestern
Laos has stabilized; enemy forces have not pursued their
advantage and apparently intend no action against Ban
Houei Sai under the present circumstances. The position
taken by the USSR in propaganda and in private diplomatic
talks suggests that Moscow expects neither an early polit-
ical settlement nor a serious deterioration in the military
CHINESE REFUGEE PROBLEM AT HONG KONG . . . . . . . . . Page 4
The number of refugees crossing from South China to
Hong Kong has sharply increased during the past week, and
Peiping is making no effort to stem the flow. The Brit-
ish authorities are returning several thousand every day,
but they believe the number cannot be reduced to manage-
able proportions unless the Chinese Communist authorities
help. Meanwhile as thousands gather in the vicinity of
the border, the British have become increasingly concerned
. Page 2
over the possibility of an ugly incident.
SOUTH VIETNAM . . . . . . . . . . . . . . . . . . . . . . Page
The Viet Cong have stepped up sabotage of rail and
road communications and have'demonstrated an increased will-
ingness to engage in combat with regular South Vietnamese
army units. The government's airborne troops and airstrikes
are apparently causing heavy casualties, but the Viet Cong's
small-arms fire ~F.~....mst helicopters is 'becoming more ef-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 May 19112
FRANCE-ALGERIA . . . . . . . . . . . . . . . . . Page 7
The intensification of OAS terrorism in Algiers and
Oran has forced Paris and the provisional Algerian govern-
ment (PAG) to seek closer cooperation in implementing the
cease-fire accords. Both sides agree on going ahead with
the referendum now scheduled for 1 July. The PAG fears,
however, that French reluctance to force a showdown with
the OAS means that suppressing the OAS will be left to
Algerian army elements--thereby enhancing the Algerian
army's political role after the referendum.
Indonesia's new military purchases from the USSR,
which reportedly total $70,000,000, are apparently in-
tended both to convince the Dutch of the need to negoti:=-
ate a peaceful transfer of West New Guinea and to improve
Indonesia's capability for possible full-scale military
action. The Hague has announced Indonesia's largest in-
filtration. thtasi; far, a paratroop drop of some 40 men on
the south; coast on 10 May, and has sent land and paval
units to the area. Indonesia has in effect rejected the
Dutch qualified offer on 7 May to resume talks.
CONGO . . . . . . . . . . . . . . . . . . . . . . . . . . Page 9
Tshombe is ill and has indicated that he will not re-
turn to Leopoldville before 18 May. UN officials are dis-
couraged over the lack of progress toward an agreement on
Katangan reintegration; their efforts at mediation during
the current recess in the Adoula-Tsho:nbe talks appear only
to have further emphasized the differences between the two
sides. Adoula's political position remains precarious, and
try again to seize Tshombe if he returns to Leopoldville.
PORTUGAL . . . . . . . . , . .
. . . . Page 10
Salazar's mounting difficulties have been apparent in
violent antiregime demonstrations on 1 and 8 May and in a
widening breach between the government and university stu-
dents following the police action against them on 11 May.
The Communists are exploiting the situation, and further
there are again reports of Salazar's early
BRITISH NEGOTIATIONS WITH THE EEC . . . . . . . . . . . Page 11
Little substantive progress appears to have been made
at the ministerial meeting of 11-12 May toward an agreement
on Britain's accession to the Common Market (EEC). The EEC
ministers accepted Britain's plea that at least the broad
outlines of such an agreement should be reached by late
July, and arvigorous negotiating timetable now has been set.
British officials are disappointed, however, with the re-
strained reception their specific trade proposals received.
It appears that the political obstacles to Britain's entry
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 May 19b,2
DROUGHT IN THE BRAZILIAN NORTHEAST . ., . . . . . . . . . . Page 12
The chronic poverty of Brazil's northeast--an area one
third the size of the continental United States with a per
capita annual income of about $100--is being accentuated by
drought and spreading food shortages. Since the beginning
of May, thousands of peasants have invaded the towns,
threatening to sack food stores, and in many instancess,vio-
lence has been forestalled only by'the distribution of small
emergency stocks. The government declared a state of emer-
gency on 13 May. The Peasant Leagues, led by pro-Communist
Francisco Juliao, are centered in the northeast and pro-
vide an organizational framework for Communist exploita-
tion of the shortages.
. Page 13
President Macapagal's decision to postpone his trip
to the United States--although directly a reaction to the
defeat of the war-claims bill in the US Congress--also
reflects his problems with his own congress and his po-
litical opposition. He has only a tenuous majority in
the lower house and faces an evenly divided Senate. With
a program emphasizing economic progress and continued
close relations with the US, Macapaga]. apparently viewed
the defeat of the war-claims measure as potentially dam-
aging to his personal position as a party and national
leader.
PEIPING MOVES TO CURB INFLATION . . . . . . . . . . . . . Page 14
Communist China has extended rationing in major cities
to almost all consumer goods in an effort to curb inflation
and speculation. Many other anti-inflationary measures have
been instituted since last December, when continuing short-
ages of basic consumer goods caused prices to rise sharply.
USSR SETS UP TRANSPORT COORDINATION COMMITTEE . . . . . . Page 15
Khrushchev announced on 10 May the establishment of a
transport coordination committee which is to be directly
subordinate to the Presidium of the Council of Ministers.
Soviet transport has long been impeded by such problems as
poor scheduling, lack of coordination, and port congestion.
JAPANESE-SOVIET FISHERIES AGREEMENT . . . . . . . . . . . .Page 17
The seventh annual northwest Pacific fisheries agree-
ment between Japan and the USSR reduces the Japanese salmon
quota in the area covered by the convention by an additional
15 percent and establishes restrictions in a broad new area
around Japan itself. Reaction in Japan has been unusually
vehement, and the Ikeda government is expected to come under
further criticism from fishery interests when the magnitude
of its concessions to Moscow becomes fully known.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 May 1962
GHANA ? e . C
Page 18
President Nkrumah has been moving on several fronts
to enhance his popularity, tighten his control of the govern-
ment machinery, and develop a greater sense of national
solidarity. He has clipped the wings of potential rivals
within the regime, while making conciliatory gestures to-
ward political opponents outside it. These moves seem
aimed at accumulating political capital on which Nkrumah
can draw if, as seems likely, he has to impose new economic
austerity measures or formalizes the country's one-party
system, as desired by some 01 his militant' supporters,
SPECIAL ARTICLES
YUGOSLAV-SOVIET RELATIONS . . . . , Page 1
Yugoslav-Soviet state relations are improving. This is
in line with Khrushchev's effort to enhance Moscow's stand-
ing with the nonaligned states and apparently reflects his
indifference to the effect an improvement of relations with
Tito might have on the Sino-Soviet dispute. Moscow may go
so far as to restore Yugoslavia to observer status in the
bloc's international economic organization (CEMA) and may
even offer some developmental loans, The improvement in state
relations has been brought about only by ignoring ideological
disagreements so deep that Yugoslavia almost certainly will
not rejoin the bloc in Tito's lifetime,
INDIA'S NORTHERN BORDER DEFENSE . . . . . . a , , , . , m Page 6
Deficiencies in India's large military establishment
have been a major impediment to New De]:hi's efforts to check
Chinese Communist border encroachments. The country's
leaders have maintained a tough diplomatic line, hoping to
gain time for further improvement in their military capa-
bilities. In the meantime, while not compromising their
policy of nonalignment, they have cautiously looked for ex-
ternal support and have sought to encourage Soviet "impartial-
ity" in the Sino-Indian dispute,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
WEEKLY REVIEW
SOVIET FOREIGN POLICY DEVELOPMENTS
The USSR continued last
week to manifest impatience and
concern over the future course
of Berlin negotiations. The
Soviet press expressed further
doubts about the West's desire
for a peaceful settlement, and
Khrushchev
as quite
worried about the present situ-
ation because he had lost con-
fidence in the Americans. An
11 May article by Izvestia's
authoritative commentator on
German and Berlin affairs, Pol-
yanov, warned the West against
allowing West German obstruc-
tionism to disrupt the "tender
sprouts of understanding" which
have developed in the US-Soviet
talks. He renewed the attack on
recent visits to West Berlin by
Chancellor Adenauer and other
West German leaders as attempts
to frustrate a Berlin agreement.
Athens for clearing the way
for equipping West German forces
with nuclear weapons. In addi-
tion to Khrushchev's skeptical
remarks about US policy 0 25X1
Foreign Min- 25X1
is-ter Gromyko expressed doubts
concerning US intentions general-
ly during a talk on 8 May with
the British ambassador on events
in Laos.
Despite these critical re-
marks., undoubtedly intended to
reach American officials, Mos-
cow's treatment of President
Kennedy's press conference last
week highlighted the President's
remarks regarding US intentions
to continue the Berlin talks.
The omission of the President's
comment that the US had never
expressed high optimism about
the talks reflected Soviet in-
terest in keeping the negotia-
tions alive.
Polyanov also restated
Soviet criticisms of the US-
proposed international access
authority and objected to West
German membership on its board
of governors. He reaffirmed
that the USSR and East Germany
would not object to an interna-
tional access organ provided
its functions were confined to
settling disputes arising from
an access agreement with East
Germany, but repeated the
standard position that liquida-
tion of the "occupation regime"
and withdrawal of Western "occu-
pation forces" are the prere-
quisites for the creation of
such an organ.
Soviet propaganda maintained
the drumfire against the West's
alleged two-faced policy which
has encouraged Adenauer's in-
transigence and denounced the
NATO ministerial meeting in
Disarmament and Nuclear Testing
Moscow has continued its
propaganda campaign to justify
a resumption of Soviet atmospher-
ic nuclear testing. It has
kept the campaign well within
bounds, however, and has stopped
short of using it as a vehicle
for vituperative anti-American
staLtements.
Soviet comment on the 17th
anniversary of V-E Day, including
statements by Soviet military
leaders, briefly and routinely
took note of the US resumption
of testing in the atmosphere,
denouncing it as a measure
aimed at increasing the nuclear
arms race. In a Pravda article
commemorating the anniversary,
Marshal Malinovsky strongly
hinted that the USSR also in-
tends to resume soon when he
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said that, in view of the US
resumption, "the Soviet people
must institute the necessary
measures to strengthen even fur-
ther the defense of their state."
In his first public comment
on the US resumption, Khrushchev
told Western newsmen on 16 May
during his tour of Varna, Bul-
garia, "We are forced to renew
our tests because, in spite of
our appeals, the Americans did
not refrain from renewing theirs."
Moscow has continued to re-
port Soviet workers' meetings
protesting the US action. These
meetings are clearly intended
to lay the groundwork for a So-
viet resumption.
Other Soviet statements on
the US resumption have warned that
Souvanna Phouma, in France
since early April, has announced
his intention to return to Laos
by the beginning of next week.
This move is apparently in re-
sponse to Vientiane's recent
agreement to resume coalition
talks based on the assignment
of the key posts of defense and
interior to Souvanna. Prior
negotiations had foundered on
Phoumi's insistence that the
two ministries be held by Vien-
tiane representatives.
Souvanna is not at all
sanguine that an early settle-
ment among the three princes
can be arranged. He suspects
that Phoumi will attempt to
stall on a conference site
and on conditions. Phoumi has
already indicated that before
any meeting he would require
"firm assurances" that, in a
coalition government, all im-
portant decisions of the interior
and defense ministries would
the USSR will be forced to answer
in kind with tests of "new types"
of its nuclear weapons. In a
speech last December Khrushchev
claimed that the USSR, as a
result of its tests in the
fall, "obtained a mighty new
weapon"--thermonuclear bombs
with a power of 50 to 100 mega-
tons and more.
At Geneva, Soviet delegate
Zorin has refrained from bring-
ing up the question of a recess
since he announced at the 10
May session that he was willing
to continue the negotiations
"without a break." The neutral-
ists have made it clear, how-
ever, that they want a recess,
although for a shorter period
than the two months Zorin sug-
gested.
be by unanimous agreement of the
three princes, and that the
separate military and admin-
istrative structures would re-
main intact until a suitable
integration arrangement could
be achieved.
Soviet propaganda on the
Laotian crisis and the USSR's
position in private diplomatic
talks do not suggest that the
Soviet leaders now contemplate
any major Communist offensive
in Laos to exploit the capture
of Nam Tha or that they are
seriously concerned about the
possibility of US military in-
tervention in Laos. Moscow is
giving heavy publicity to the
deployment of US forces in
Thailand, charging that American
"gunboat diplomacy" belies US
pledges to seek a peaceful
solution and stating that such
a policy "cannot be conducive
to a peaceful settlement."
Soviet comment has avoided any
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threat of counteraction beyond
standard expressions of support
of "peace-loving people" for
the Laotians.
The relatively complacent
line taken by Soviet Ambassa-
dor Dobrynin in his 15 May talk
with Secretary Rusk suggests
that the USSR expects neither
an early political settlement
nor a serious deterioration
of the military situation. He
stated that there is no change
in Soviet policy--which he said
remains firmly based on the
Vienna understanding between
President Kennedy and Khru-
shchev supporting a neutral
and independent Laos. He said
Moscow favors the formation
of a coalition government and
conclusion of a settlement
based on the Geneva agree-
ments as soon as possible.
Pobrynin, however, repeated
the skepticism regarding US
intentions expressed earlier
by Gromyko and Deputy Foreign
Minister. Kuznetsov by indicat-
ing doubt that the US has
used all its influence with
Phoumi. He said Moscow re-
gards the deployment of US
forces as a very serious step
whiLch can only aggravate the
situation and warned that
he did not know how the sit-
uation will develop if a
settlement is not achieved soon.
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Peiping was slow to re-
act to Laotian developments
since the fall of Nam Tha,
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providing its first independ-
ent comment in a People's
Daily editorial of The
paper warned, "The Chinese peo-
ple cannot remain indifferent
to the threat of US interven-
tion in Laos and to increas-
ingly flagrant US collabora-
tion with remnant Chiang Kai-
shek brigands." This statement
follows a pattern the Chinese
have used before in hopes that
raising the specter of Chinese
intervention would forestall
further US military moves in
the area.
Throughout the Laotian
crisis, Peiping had repeatedly
intimated that Chinese Nation-
alist irregulars could provide
a pretext for Chinese Communist
military intervention. On 2
April 1961, Foreign Minister
Chen Yi stated that if SEATO
forces moved into Laos, the
Chinese Communists would respond
by sending in their own forces.
In connection with this state-
ment, Chen also cited the threat
Nationalist irregulars allegedly
posed for China's security.
In the 16 May commentary,
People's Daily threatened no
action more specific than height-
ened vigilance and made no
reference to threats to the
security of China.
Government forces--driven
from Nam Tha on 6 May--withdrew
across northwest Laos to the
town of Ban Houei Sai on the
Mekong River. The move from
Nam Tha--characterized by poor
leadership and a total organi-
zational breakdown--once more
provided firm evidence of the
impotence of government forces
when confronted by well-led and
well-disciplined troops. The
Pathet Lao - North Vietnamese
forces apparently declined to
exploit their military advantage
at Ban Houei Sai; a recent ground
reconnaissance to a distance of
15 miles east of the town did not
reveal the presence of enemy troops.
General Phoumi, apparently
discouraged regarding the chances
of recovering northern Laos, has
indicated that his main defense
effort will be centered south of
the Nam Ca Dinh River in central
Laos. In northern Laos, such
bases as Luang Prabang, Vientiane,
and Sayaboury would be retained 25X1
as centers from which extensive
guerrilla warfare operations would
be conducted.
CHINESE REFUGEE PROBLEM AT HONG KONG
The number of refugees from
South China to Hong Kong sharply
increased during the past week,
and Peiping is making no effort
to stem the flow. In the past
the Hong Kong police ordinarily
arrested one or two hundred il-
legal border crossers a month.
In the month of April the figure
jumped to 1,500, and in the first
two weeks of May, over 17,000
were apprehended--4,543 on 14
May alone. These figures in-
clude only those attempting to
cross the 15-mile land frontier
between China's Kwangtung Prov-
ince and the British colony;
large numbers are also attempt-
ing to come in by sea.
The Hong Kong authorities
are sending back most of the
boarder crossers they apprehend,
and as of 15 May the Chinese
Communists were still accepting
them. Many of the refugees,
however, are remaining in the
border area to try again. The
size of the groups making the
crossing is growing; the border
guards had to use force to
bring into custody a rowdy band
of 2,500 refugees on 13 May.
As thousands gather in the
vicinity of the border the
British authorities have be-
come increasingly concerned
over the possibility of an ugly
incident.
It is as yet difficult to
determine just why the bans on
emigration have been lifted.
Previously it had been hard
to obtain exit permits from
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Communist China, but in April
public security officials in
Canton, Kwangtung's capital, were
told to process as many permits
as possible for persons wanting
to emigrate to Hong Kong or
nearby Portuguese Macao. They
were told that the reason for
the change in policy was the
necessity of further reducing
urban population and the un-
desirability of sending any
more city residents to the
countryside.
Most of the refugees are
young adults from farming dis-
tricts near Hong Kong. Inter-
rogation of the refugees has
disclosed that local Communist
officials asked the refugees
to remain in China but did not
prevent their leaving. Observa-
tions at the border show that
in many cases border guards
actually helped the refugees to
cross.
The about-face in Communist
policy may stem from the real-
ization that, in Kwangtung at
least, there are too many mouths
to feed and it is better to
allow surplus population to be
siphoned off, at least from
those areas where Hong Kong
presents a ready alternative.
In addition, the officials may
be chary of taxing their public
security control apparatus by
trying to stanch the flow, pre-
ferring to let the Hong Kong
authorities bear the onus for
this.
The refugees themselves
give hunger as their reason for
leaving; however, the British
report that the majority appear
in good health, although lean.
This is the time of the year
when food stocks throughout
China are at their tightest;
rations have reportedly been
cut recently in some areas just
to the east of Hong Kong which
were particularly hard hit by
weather last year. The harvest
of early rice in Kwangtung is
four to six weeks off, although
some early vegetables are prob-
ably ripening now.
The responses of the ref-
ugees correspond with the answers
given in a recent poll of Chi-
nese students by the Hong Kong
Government. Out of some 3,600
such students who were allowed
by the Communists to visit rel-
atives in Hong Kong during the
Chinese New Year's vacation
last February, about 3,100 have
refused to return in the main-
land. The principal reason
given was hard living condi-
tions in China. In the opinion
of the US Consulate General in
Hong Kong, the decision of such
large numbers to abandon their
mainland education represents
a vote of no confidence by the
students in the future prospects
of the Peiping regime.
Under present circumstances,
Hong Kong officials believe that
they have no alternative but to
return as many refugees as possi-
ble. Despite a prosperous
economy, the colony is hard
pressed to provide work for a
growing labor force. Opportunities
for resettlement of Chinese
abroad are severely restricted.
The government is spending 33
percent of its budget for so-
cial services. Out of a burgeon-
ing population of over 3,000,000,
an estimated 1,000,000 are ref-
ugees in need of some assistance.
A high government official
has said the border situation
is still under control, but
the flow cannot be reduced to
manageable proportions without
help from the Communist author-
ities. He despaired of trying
to build bigger and better fences
to hold back the refugees unless
such barriers are backed up by
"the kind of force the Hong Kong
government strongly desires not
to use."
ag,anda .
The British oppose any ac-
tion that would irritate the Chi-
nese Communists. They believe
Chinese Nationalist efforts to
expand the role of the UN High
Commissioner for Refugees in
Hong Kong are likely to aggravate
the situation. Taiwan's interest
in the refugees has been confined
largely to exploitation for prop-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The Viet Cong are maintain-
ing a high level of activity.
They have stepped up efforts to
disrupt rail and road communica-
tions and demonstrated increased
willingness to engage regular
South Vietnamese units. Civil
Guard and Self-Defense Corps
posts, however, continue to be
prime targets, and there have
been several attacks recently
against the government's land-
development centers and construc-
tion projects, which are fre-
quently defended by such forces.
Government troops continue
to report heavy Viet Cong casual-
ties and the destruction of Viet
Cong installations as the result
of airstrikes and operations by
airborne troops. The Viet Cong
are showing increased effective-
ness with small arms fire against
helicopters while they are land-
ing or taking off in guerrilla-
infested areas. Curtailment of
rail traffic and the danger of
road ambush are leading to fur-
ther government reliance on air
communications. During the past
wo weeks, one province in the
Second Corps area was the scene
of repeated bridge sabotage and
a direct attack on a repair train;
two train derailments in the
First Corps zone resulted in
one case in heavy casualties in a
Civil Guard contingent which
was being moved south.
There is little firm infor-
mation on the extent of infil-
tration from North Vietnam.
Evidence of military encampments
along the Laotian - South Viet-
namese border south of Route 9
has been reported, and a govern-
ment force reportedly clashed
with enemy troops in this area
isle de'eha $joe ,Il l
Rach Gia',%
on 8 May, killing five and cap-
turing a submachine gun with
three magazines of Chinese-made
ammunition. Following low-level
reports that a Viet Cong force
of about 200 men crossed from
Laos into the Kontum area of
South Vietnam on 6 May, a South
Vietnamese regular army patrol
on 7 May reported sighting such
a force, armed with six mortars,
recoilless rifles, and light
weapons. These sightings were
near known infiltration routes
and may indicate reinforcement
of existing Viet Cong units with
personnel and heavy weapons from
North Vietnam.
SudA vim
Communist Guerrilla Activity
e!-~ Quang Tri
11
-Ban Me Thuot
Phan Thiet
Military region boundary 25X1
(South Vietnamese)
Railroad
- - - - Road
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
FRANCE-ALGER]A
The intensification of
terrorism by the Secret Army
Organization (OAS) in Algiers
and Oran has forced Paris and
the provisional Algerian gov-
ernment (PAG) to seek closer
cooperation in implementing
the cease-fire accords. Both
sides agree on going ahead
with the referendum scheduled
for 1 July. The PAG fears,
however, that the French re-
luctance to force a showdown
with the OAS means that sup-
pressing the organization will
be left to the Algerian Na-
tional Army (ALN)--thereby
enhancing that element's po-
litical role after the referen-
dum.
Both French and PAG au-
thorities recognize that the
terrorism will probably not
be stopped by 1 July. About
300, or 70 percent, of the
"professional" OAS terrorists
in the Algiers region have
been arrested,
ou-c terrorism continues-to
increase. The "professionals"
have been replaced by youths
who have been encouraged in
disrespect for law by their
environment in recent years.
They have no police records,
however, and their age limits
police efforts to cope with
them as a group. Efforts are
under way to handle this prob-
lem by having the government
draft all males between 18
and 25 years old in Algiers
and Oran.
High Commissioner Fouchet
is reportedly resigned to con-
tinued opposition to the Evian
accords from the European
population in Algeria. The
government's determination to
proceed with the referendum
is nevertheless evident in
reports that the small staff
under Minister for Algerian
Affairs Joxe is concentrating
on the mechanics of setting it
up. Increasingly tough meas-
ures to curb terrorism are
being implemented, but short
of an all-out military sub-
jection of Algiers and Oran,
which responsible authorities
are
loath to push,
voting
may
not
be possible in
those
cities.
Joxe
and President
Fares
of
the
Provisional Executive
agree
that
a massive pro-independence
vote
will be forthcoming
from
the
rest of Algeria. Two
weeks
after the referendum, there
will be elections for a new
Algerian administration, thus
permitting the French to transfe]25X1
power immediately thereafter.
the OAS goal was still to goad
Mosle.ns into retaliating
against the Europeans. 0 25X1
the ultimate objective 25X1
was less to take over Algeria
than to show that De Gaulle
was unable to enforce his Al-
gerian program. While there
is some evidence that the OAS
may still see a partition as
an acceptable solution, the
recent activities of ex-colonel
Argoud in contacting French
forces in Germany point to the
broader goal. Eight officers
have been arrested and more than
twenty others, including two
generals, are being removed
from the active list as a re-
sult of Argoud's attempt to
win their support.
Members of the Algerian
National Revolutionary Council
(CNRA) are assembling in Tunis
in preparation for a meeting,
presumably next week in Trip-
the ALN wi not be able to
dominate the forthcoming meet-
ing. They may succeed in forc-
ing the dismissal of some PAG
ministers, however, and may
force the moderate PAG members
to defend their policy of co-
operation with the French.
While no major reorganization
is in prospect now, Ben Bella's
influence on the policies of
the nationalist movement will
become more apparent when it
becomes a political party in an
independent Algeria.
25X1
25X1
SECRET
18 May A7 S,vti,"V vT V DTTTT Tfi?
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CURRENT INTELLIGENCE Vr'EEKLY SUMMARY
The new military aid agree-
ment, reportedly totaling
$70,000,000, which Indonesian
Foreign Minister Subandrio con-
cluded with the Soviet Union
on 8 May is said to provide
for the supply of additional
Soviet aircraft, submarines,
and surface-to-air missiles.
While granting additional aid
to Indonesia, the USSR refused
a moratorium on Indonesian pay-
ments due under extensive agree-
ments negotiated in 1960 and
1961.
tiate in good faith and that
he could not agree that Luns'
statement amounted to acceptance
of the Bunker plan.
Subandrio said that Indo-
nesian information indicated that
the Dutch feel time is on their
side and are not interested in
reaching an agreement. He said
the Indonesians were willing to
resume talks but that, in view
of the Dutch attitude, it is
better not to do so now.
Sukarno and Subandrio have
explained the purchases as
necessary "to face all even-
tualities" in the West New
Guinea dispute. These pur-
chases are apparently intended
both to improve Indonesia's
military capability for a pos-
sible full-scale resort to force
and to persuade the Dutch to
negotiate a peaceful transfer
of West New Guinea.
The Hague has announced an
Indonesian paratroop drop of
about 40 men on 15 May on the
south coast of West New Guinea.
The Dutch have dispatched in-
fantry, marines, and naval units
to the area in a move to seal
off the infiltrators. They
report that most of the approxi-
mately 45 paratroopers dropped
on 26 April in the same area
have been captured, and most
of the 190 men who landed by
sea in small groups at various
locations on the coast and off-
shore islands in March have been
captured or killed.
Subandrio has essentially
rejected Dutch Foreign Minister
Luns' offer of 7 May to resume
talks. Lunstinote had warned
that Dutch readiness to dis-
cuss the Bunker proposals did
not mean willingness to hand
over West New Guinea, and he
insisted that either side have
the right to add to the agenda
any subject it deemed relevant.
Subandrio told Ambassador Jones
on 15 May that he did not feel
the Dutch were willing to nego-
A Dutch Foreign Ministry
official informed the US Embassy
on 11 May that the cabinet would
probably adopt a more liberal
position on the Bunker proposals
than that taken by Luns in his
recent talks with Secretary Rusk.
The cabinet was less insistent
than Luns on an early plebiscite
on New Guinea's self-determina-
tion and was prepared to accept
any reasonably honest Indonesian
offer in this connection "if
talks could be gotten under way."
The official saw no prospect of
a cabinet change over the West
New Guinea issue, but said the
government might fall on some
minor domestic question. The
opposition Labor party continues
to press for a peaceful solu-
tion of the dispute on almost
any terms, but,
25X1
25X1
Dutch public reaction to Suban-
drio's trip to Moscow may make
the party more circumspect in
its hostility to Luns.
The first contingent of
865 Dutch troop reinforcements
is scheduled to arrive in West
New Guinea on 27 May. The
second increment of 880 men sailed
on 4 May. The remaining 900
men of the 2,650 total planned
army reinforcements may be
flown to Curacao and be picked
up there by ship. With their
arrival, all 1,700 marines
in New Guinea will be relieved
of garrison duty and will be
organized into mobile units
which can be deployed at short
notice against Indonesian in-
filtrators.
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vr~ LJZ J.LW i- Now
ing to Leopoldville before 18
May; UN officials confirm that
he is suffering from a lung
infection. UN authorities are
Tshomb6 has indicated that
he is ill and will not be return-
REPUBLIC OF THE CONGO
CENTRAL AFRICAN REPUBLIC
BANGUI -Bongas$ou'sw~
SUDAN
~' ?BOneo
Gemena t gkeli. Mungbere
Bumba ~ButORIENTALE
Mat
Krlana
L.pta?JKiama Mangno? Baue nvele
Kapanga~;'
Kamina K A T A N G A
LEOPOLDVILLE $
Kasongo
F I Fragcf K A S'?A I ]
DVILLE r ?
OPOI
olwe
zi lad oluille
,
Ku TANGANYIKA
~ gola'
-Luluabou rg? ~( bala?
[[ Nyuni ertvrlle
Yih Mapa? 'Al
IBA-g.'
~ J1
-/
' N, Kineu
*LUANDA ? _
ANGOLA
EQUATEUR ?Slanleyville
; oqullhaloille ?_ tt ~ (1
~PonMierville 'r
r
RUANgU
URUN I
FEDERATION OF RHODESIA
AND- NYASALAND
discouraged over the lack of
progress toward an agreement on
Katangan reintegration. Their
efforts at mediation during
the current recess in the Adoula-
Tshomb6 talks appear only to
have further emphasized the dif-
ferences between the two sides.
U Thant foresees little progress
when negotiations are resumed
and fears a stormy breakdown.
Before the recess Adoula
gave Tshomb6 a draft agreement
for consideration, and on 6 May
Tshomb6 presented his counter-
proposals to UN representative
Gardiner. The Katangan leader
continued to demand a loose Congo
confederation, and urged that
Katanga be integrated by gradual
stages until such time as a new
constitution can be agreed upon
for the whole country. Adoula
"exploded" on hearing the re-
sponse and characterized
Tshombd's position as totally
unacceptable.
Gardiner believes that un-
less Katanga is granted some form
of special status during the
transitional period, Tshomb6 may
be overthrown by an extremist
such as Munongo or Kibwe. Gardiner
claims the only matters of real
importance during a transitional
period are the status of the
Kai;anaan army, the collection
and distribution of revenues, and
the use of Katangan currency.
In Leopoldville, however, Adoula's
own position is precarious as
a result of his inability to
bring Tshomb6 to heel. Moreover,
UN officials fear that extremists
in the central government may
try again to seize Tshomb6 if
he returns to Leopoldville.
On 12 May, Leopoldville In-
terior Minister Kamitatu declared
a state of emergency in Kivu,
where provincial president Miruho
was removed from office following
a vote of censure in the provin-
cial assembly on 8 May. The
Adoula government, whose authority
in that province is tenuous, has
sent a three-man commission to
Bak;avu to assess the situation.
Unrest has been endemic in Kivu,
in part as a result of economic
stagnation and residual anti-
Lec,poldville sentiment dating
from the time of Gizenga's ascend-
ancy in the area.
SECRET
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Nwwo~ SECRET
CURRENT INTELLIGENCE MEEKLY SUMMARY
Salazar's mounting diffi-
culties are apparent in violent
antiregime demonstrations on 1
and 8 May and in a widening
breach between the government
and the university students fol-
lowing the police action against
them on 11 May. The Communists
continue to exploit the situa-
tion effectively.
The Communists seem to
have played an important part
in organizing the early May
demonstrations, which primarily
involved workers. The disturb-
ances on 11 May occurred when
the police invaded the campus
of Lisbon University to break
up a hunger strike by students
demanding more autonomy in uni-
versity affairs. Following the
detainment of several hundred
students and their supporters--
most of whom were subsequently
released--a group of 250 intel-
lectuals issued statements of
solidarity with the students,
and a large student protest
meeting was held on 14 May.
Students at Coimbra University
are similarly at odds with the
government.
There is evidence of in-
creasing dissatisfaction and
some confusion among those who
normally support the regime.
The government's handling of
the student strike was strongly
criticized to US Ambassador El-
brick by Dr. Marcelo Caetano, a
former minister of the presidency
and rector of Lisbon University
until his protest resignation a
few weeks ago. The embassy com-
ments that student elements may
join the political opposition
in a demonstration planned for
18 May. Still other demonstra-
tions are reportedly planned for
this month.
Salazar recovered
?om a serious illness in
January 1959, but his health
could be a plausible pre-
text for retirement.
young Overseas Minister
Adriano Moreira to be the
armed forces' choice to re-
place Salazar. Moreira has
made special efforts to cul-
tivate the military, and on
11 May he made a major ad-
dress at a student leaders'
convention where he was in-
troduced as "one in whom
this present generation has
confidence."
lit might be
necessary to select some com-
promise figure as his succes-
sor--for example, former
President Marshal Craveiro
Lopes. Other possible suc-
cessors--all basically con-
servatives--include Caetano,
Theotonio Pereira, ambassador
to the US, and Foreign Affairs
Minister Alberto ueira.
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
BRITISH NEGOTIATIONS WITH THE EEC
Despite a generally friend-
ly atmosphere, little substan-
tive progress appears to have
been made at the ministerial
meeting of 11-12 May toward an
agreement on Britain's acces-
sion to the Common Market (EEC).
The EEC ministers accepted
Britain's pleas that at least
the broad outlines of such an
agreement should be reached by
late July, however, and a
rigorous negotiating timetable
now has been set.
Of the proposals made by
the British, the most specific
was that the UK apply the EEC's
common external tariff to im-
ports of Canadian, Australian,
and New Zealand manufactures in
three successive stages begin-
ning in 1965 and becoming fully
effective--with some exceptions
--by 1969. This proposal is a
concession in principle by the
British and was welcomed as
such by the EEC. However, the
EEC expressed its considerable
reservations by questioning
whether this approach by rather
lengthy stages need apply to all
manufactured items or only to
selected ones, and whether in
view of the accelerated tariff
reductions within the EEC, the
transitional period requested
by London is not too long.
On the question of Common-
wealth exports of temperate-zone
farm products, which many ob-
servers consider the most dif-
ficult Commonwealth issue, the
UK presentation was considerably
more vague. The formula would
apparently guarantee Common-
wealth exporters outlets in the
enlarged EEC for their farm ex-
ports comparable to those they
now enjoy until such time as
worldwide farm commodity
stabilization agreements can be
negotiated. This formula is in
line with current thinking in
the EEC, but the key issue re-
mains the setting of firm
dates when the guarantees to
the Commonwealth would expire.
If Commonwealth suppliers are
assured of comparable outlets
in perpetuity, then they are
under no great constraint to
assist in finding alternative
arrangements.
A similar reluctance to
come to grips with basic issues
was evident in the discussion
of other Commonwealth-related
issues. The British pressed
hard for some EEC response to
London's proposals for low
tariffs or no tariff at all on
certain items, but the EEC
stressed the domestic producing
interests involved and the dif-
ficulty of deciding what tariffs
should be adjusted until it is
certain how large the EEC will
be. Although agreeing in
principle that guarantees are
needed for the continuing ex-
port of Indian and Pakistani
textiles, the EEC also requested
more time to'study the matter
and was wary of offering any
such guarantees to Hong Kong.
Concerning the extension of EEC
association to African members
of the Commonwealth, the six
merely sand they would have to
discuss "criteria" for acceptable
association candidates.
There was no reflection
in the discussion of these is-
sues of the recent political
developments related to Britain's
Common Market entry.
contrary to
press reports that Adenauer now
opposes UK membership, Bonn's
support has not changed. The
French played no active role at
the meeting and "made no trouble
even if Paris intends to
blackball the UK, it will
hesitate to be "too aggressive"
in seeming to do so. British of-
ficials, however, are disappoint-
ed with the restrained reception
their specific trade proposals
received, and it appears that
the political obstacles to Brit-
ain's entry remain more important
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The Brazilian Government
has declared a state of emergency
in the country's northeastern
states as a result of food short-
ages caused by drought. Since
the beginning of May thousands
of peasant families have in-
vaded towns, threatening to sack
food stores. In many instances
violence has been forestalled
only by the distribution of
small emergency stocks.
on 15 May adopted an emergency
program of public works and,
with the cooperation of the
air force, organized the dis-
tribution of food. Officials
in Pernambuco, where demon-
strations have been most wide-
spread, have charged that many
persons are hoarding and il-
legally transporting stocks
of basic foods and have threat-
ened to seize all such stocks.
This drought area, about
one third the size of the con-
tinental United States, is one
of chronic poverty, with a per
capita annual income of about
$100. The droughts have been
recognized as a national problem
for over 60 years; that of 1915-
18 caused 30,000 deaths. The
Brazilian constitution allocates
3 percent of all federal tax
revenues for antidrought meas-
ures. Past steps have been
largely temporary and piece-
meal, but the government recent-
ly established SUDENE, a federal
agency for comprehensive eco-
nomic development of the north-
east. In December 1961 the
organization received congres-
sional approval of the first
year of its long-range plan.
Even before the onset of
the present drought, prices for
food were rising rapidly through-
out the northeastern states.
The cost of living rose 70 per-
cent in the area during 1961,
in comparison with an approxi-
mate 40-percent rise in south-
ern Brazil. Some staples
doubled in cost during the year.
Over the past four months, as
drought has been spreading in
the northeast, two prime staples--
manioc flour and beans--have
increased in price by 500 and
250 percent respectively. Wages
have remained almost static,
however, with money extremely
tight and investment low.
The federal government on
13 May agreed to purchase large
quantities of food for distri-
bution, and the US released in
two northeastern cities 8,000
tons of corn stored under the
Food for Peace program. SUDENE
The Peasant Leagues, led
by pro-Communist Francisco
Juliao, are centered in the
northeast and provide an organ-
Bolivia
Area of poriodic droeghr
izational framework for Commu-
nist exploitation of the short-
ages. There are 80 to 100 of
these groups throughout the
area, with a total membership
of 60,000-80,000. They profess
to defend the rights of the
rural workers and are already
politically aroused over the
assassination of a key league
leader in Paraiba State in
early April. As a result of
plans for demonstrations in
Paraiba, army troops have been
deployed throughout much of the
25X1
25X1
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SECRET
President Macapagal's de-
cision to postpone his trip to
the United States--although di-
rectly a reaction to the defeat
of the $73,000,000 Philippine
war claims bill in the US Con-
gress--also reflects his prob-
lems with his own congress and
his political opposition. Al-
though he has been in office
since 30 December, Macapagal
still has not consolidated his
position as the nation's leader.
With a program emphasizing
economic progress and continued
close relations with the United
States, Macapagal apparently
looked to the war damage bill--
an addition to postwar payments
of $400,000,000--as at least one
objective he could regard with
confidence. The defeat of the
measure has the potential of
damaging Macapagal's personal
position as a party and national
leader.
Macapagal was elected by
a sizable popular majority on
a reform program. On assuming
the presidency, he had to deal
with an opposition Nacionalista
majority in both houses of Con-
gress which has delayed action
on his program. In early March,
Macapagal's Liberal party, with
the assistance of a substantial
number of disaffected Nacional-
istas, succeeded in installing
a Liberal party member as speaker
of the lower House. The new
"Allied Majority" has passed
most of the President's impor-
tant economic measures. The
new grouping, however, is un-
wieldy and unreliable, and
the administration's program
continues to play a poor second
to congressional preoccupation
with House organization.
The 24-member Senate,
evenly divided between 12
Liberals and an alliance of 11
Nacionalistas and one National-
ist-Citizens party member, is
still under Nacionalista leader-
ship. The President's relations
with it are correspondingly poor,
and it remains a potential ob-
stacle to the realization of
his policies.
SECRET
Purely popular reaction to
the defeat amounts to an exag-
gerated feeling of injured national
pride. The President probably
accurately expressed the general
view when he said that US action
had damaged the "unique relation-
ship" between the Philippines
and the United States which has
been based on "mutual respect,
friendship, and honor."
In an effort to prevent
the erosion of his own political
strength, Macapagal not only has
postponed his official trip to
the US--originally set for mid-
June--but has also changed Philip-
pine independence day from 4 to
12 July and has even spoken of
a future Philippine posture of
neutralism.
It is unlikely that Macapagal
will reschedule his US trip in
the near future even if the bill
is passed; passage, however,
would probably speedily salve
the country's wounded pride.
Failure to pass the bill will
maintain the issue as a chronic
irritant in US-Philippine rela-
tions and seriously complicate
Macapagal's domestic problems.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PEIPING MOVES TO CURB INFLATION
Rationing--heretofore ap-
plied only to basic foodstuffs
and cotton cloth--has been ex-
tended to almost all consumer goods
in major cities in Communist
China. Some 50 items--includ-
ing watches, bicycles, razors,
kitchen utensils, umbrellas,
andmatches--now are sold only
against coupons issued on the
basis of individual monthly
wages. The new system started
in Shanghai as early as January,
went into effect somewhat later
in Tientsin and Wuhan, and was
not introduced in Peiping until
late April. It has not been
mentioned in the official press.
In Tientsin in February,
a resident earning 50 yuan re-
ceived five coupons, or one for
each ten yuan.of his monthly
income. In Shanghai and some
cities in Chekiang, each person
reportedly receives one coupon
for each eight yuan of his
monthly income. Different
products require in addition
to their regular cash price a
specific number of coupons--
for example, 8 for a thermos,
50 for a locally made watch,
200 for a bicycle. In practice,
coupon values are adjusted by
authorities according to local
changes in supplies or demand.
Persons with many coupons com-
plain that the goods they want
are unavailable, while others
with few coupons seem to find
the system better than the
former first-come first-served
basis. Black markets have re-
appeared, although offenders
here are subject to punitive
action.
Inflationary pressures have
been an increasing problem for
the regime. In early 1961, acute
shortages of farm products and
light industrial items forced
the regime as an incentive meas-
ure to permit urban and rural
free markets and to increase
state purchase prices for agri-
cultural products. With this
easing of control in the state
pricing system, the inflationary
pressure generated by acute
shortages of basic consumer goods
was inevitably reflected in the
general price level.
Moves toward controlling
rising prices of basic con-
sumer goods were discernible
last December when the press ad-
vocated resumption of price con-
trols in rural free markets.
As of April, the regime had trans-
ferred many urban workers to
the countryside in order to re-
duce urban payrolls; curtailed
agricultural and industrial
loans to force farm organizations
to raise their own working
capital; imposed controls on
prices and marketing procedures
at rural free markets; and closed
free markets in several cities;
notably Shanghai.
Clearly, the regime has
the authority and the means to
control inflation by enforcing
price controls, marketing re-
strictions, and rationing, and
by punishing black-marketeers.
However, Peiping's problem is
to steer a course between allow-
ing peasants to earn more cash
income as an incentive to pro-
duction and yet keep the cost
of living for urban residents
within manageable )bounds. F_
(Prepared by ORR)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
USSR SETS UP TRANSPORT COORD;[NATION COMMITTEE
Khrushchev announced on
10 May the establishment of a
Transport Coordination Commit-
tee to be directly subordinate
to the Presidium of the Council
of Ministers. Soviet transport
has long been impeded by such
problems as poor scheduling,
lack of coordination, and port
congestion. Any improvement
in efficiency would be felt
throughout the civilian econ-
omy and would also support the
military in its contingency
planning.
In his first major speech
on the subject of transport
since the industrial reorgani-
zation in 1957, Khrushchev ex-
plained to a conference of
railway workers the need for
the new committee. He cited
such incidents as the return
to the USSR empty of a ship
which had carried cargo to
Cuba because of a lack of co-
ordination between the Minis-
try of Maritime Transport and
the Ministry of Foreign Trade.
He pointed out that in 1961 an
average of 15,000 freight cars
per day were idle on rail-
roads adjacent to frontiers and
ports. He urged that indus-
trial railroad sidings be
turned over to the Ministry of
Railroads in order to reduce
staff and costs.
While such transport prob-
lems have been chronic in the
Soviet Union, they have become
more acute because of sharp
increases in foreign trade.
Soviet seaborne trade has more
than doubled since 1956, and
total value of foreign trade in
1961 almost reached the level
envisaged for 1965 under the
Seven-Year Plan (1959-65). The
volume of cargo handled by So-
viet ports has increased by
close to two thirds since 1956.
Soviet port officials complain
that capital investment in
pier frontage, warehouse space,
and bunkering facilities has
not kept up with investment in
new ships.
Port congestion in 1961
resulted in costly time loss-
es by Soviet and foreign ships
and the railroads. Lack of
UNCLASSIFIED
STATISTICS ON SOVIET DOMESTIC TRANSPORTATION
Highway
River
Sea
Petroleum Pipelines
SECRET
(billion ton-miles)
Plan
488.6
1072.6
1232.9 - 1267.1
13.8
14.4 =
100.0-
31.6
27.2
108.2
161.0
3.4
41.1
126.7
NA
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SECRET
coordination between the For-
eign Trade, Maritime Transport, {
and Rail Transport ministries
has meant, that ports receive
freight for which no ships have
been ordered, and conversely,
that ships arrive with unplanned
cargo which must be stored
rather than transloaded direct-
ly from ship to railroad.
Cargo-handling problems
at ports are complicated by
the changing nature of the
freight. The share of general
cargo which requires a high
proportion of manual labor,
"CROSS ? HAULING PERENNIAL SOVIET PROBLEM UNSOLVED
(From Krokodii, March 1957)
such as machinery, has been
increasing, while that of
bulk cargo has been decreasing.
Instead of increasing the num-
ber of stevedores, port of-
ficials have been stressing
the acquisition of new cargo-
handling equipment, much of
it designed for bulk car-
goes.
Transport problems have
affected the internal economy
as well.. The problem of cross-
hauling apparently was not
solved by the subordination
of industry to regional ad-
ministration in 1957. In his
speech, Khrushchev pointed
out that "some goods are being
transported from Odessa to
Vladivostok, while the same
goods are being transported
from Vladivostok to Odessa."
There are also seasonal prob-
lems. Freight cars lie idle
in some areas when they are
desperately needed for the
grain harvest in others.
The new Transport Committee
is apparently superior to the
ministries and probably compa-
rable. in authority to the Commis-
sions for Foreign Economic Prob-
lems and for Cost, which are
also directly subordinate to
the Presidium of the Council
of Ministers. Some 80 percent
of Soviet freight moves by 25X1
rail, and the minister of rail-
road transport will head the
new committee.
(Prepared by OR
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CURRENT INTELLIGENCE WEEKLY SUMMARY
JAPANESE-SOVIET FISHERIES AGREEMENT
The seventh annual north-
west Pacific fisheries agreement
between Japan and the USSR,
signed in Moscow on 9 May, re-
duces the Japanese salmon quota
in the existing convention area
an additional 15 percent to
55,000 tons, while continuing
in force previously established
zones in which Japanese salmon
operations are totally banned.
Also as a result of Soviet
pressure, the pact establishes
restrictions on Japanese salmon
fishing in a broad new area to
the south, in waters around Ja-
pan itself. This agreement,
together with the Japan-US-
Canada tripartite Pacific fish-
eries convention, brings all
Japanese salmon-fishing opera-
tions under international con-
trol.
The negotiations, which
had dragged on for two and a
half months, were quickly brought
to conclusion following the ar-
rival in Moscow on 3 May of Ja-
pan's minister of agriculture
and forestry, -Ichiro Konc.
SOVIET AND JAPANESE SALMON QUOTAS
(metric tons)
Quotas for Japanese salmon fishing in the northwest
Pacific are set annually by the Japan-USSR Fisheries
Commission. Soviet quotas, on the other hand, are
announced informally and unilaterally by the USSR.
1956
JAPAN
65,000
USSR
Not announced
1957
120,000
140,000
1958
110,000
120,000
1959
85,000
95,000
1960
67,500
70,000
1961
65,000
80,000
1962
55,000
Not announced
620514 -4
Japanese resistance to Soviet
demands for a southward extension
of the restricted area crumbled
after Kono met with Premier
Khrushchev, Deputy Premier Miko-
yan, and State Planning Fisheries
Chief Tshkov. The Japanese salmon
quota in the newly established
zone has been set at 60,000 tons,
a 10,000-ton cutback from Japan's
self-imposed quota in 1961, and
the USSR has obtained the right
to place inspectors aboard Jap-
anese patrol vessels to verify
compliance.
Executives of the Japanese
fishing industry who accompanied
Kono reportedly have offered to
purchase for cash the entire
Soviet salmon and crab catch in
the convention areas--crab and
herring operations also are con-
trolled by the agreement. The
Japanese presumably believe they
can resell the Soviet catch in
foreign markets at a profit. So-
viet officials have agreed in
principle to sell quantities
valued at approximately $15,000,-
000, but the Japanese doubt the
transaction could reach this
level.
Although both sides early
in the negotiations readily ac-
knowledged a decline of salmon
resources in the western Pacific,
reaction with the Japanese fish-
ing s.adustry has been unusually
vehement against what it regak'ds
as a "breach of faith" by Konoo.
Closely identified politically
and financially with fishery in-
terests, Kono had conveyed the
impression he would stand firm
against Soviet pressures. Land-
based fishermen on the islands
of Hokkaido and northern Honshu,
as opposed to mother-ship fleets
engaged in high-seas operations,
are particularly hard hit by this
agreement. In the opinion of a
senior official of the Japanese
Foreign Ministry, the Ikeda gov-
ernment probably will come under
increasingly severe criticism as
the Japanese industry and press
study the agreement and become aware
of th
Ee magnitude of the concessions
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Recent gestures of concilia-
tion by President Nkrumah toward
some of his domestic opponents
appear to have been motivated
largel.v by a desire to enhance
his popularity and Ghana's image
abroad and to promote national
solidarity. They could presage
new austerity measures necessi-
tated by the country's deterio-
rating financial situation, or
early steps to formalize the de
facto one-party system. The new
program of Nkrumah's Convention
People's party (CPP) emphasizes
the need for sacrifices by all
Ghanaians if economic goals are
to be attained and endorses the
one-party state as "the best an-
swer for government in Africa."
A referendum reportedly is being
planned to register popular ap-
proval for such a system.
Nkrumah has released some
160 of the several hundred per-
sons imprisoned without trial
since 1958 under the Preventive
Detention Act. Apparently none
of those freed, however, were
members of the opposition United
party (UP). He has also pro-
claimed a general amnesty appli-
cable, with "one or two" excep-
tions, to persons who have fled
the country, and has indicated
that planned amendments stiffen-
ing the detention law would be
modified.
The exiles, most of whom
reside in Togo, appear wary of
Nkrumah's overtures. The most
prominent political refugee,
moderate former finance minister
Gbedemah, reportedly dismissed
them as "a political trick" de-
signed to increase Nkrumah's
prestige and neutralize the op-
position.
Meanwhile, Nkrumah has over
the past two months significantly
tightened his personal authority
and direct control over the re-
gime. In addition to engineering
the downfall of his popular former
minister of industries, Krobo
Edusei, Nkrumah has deprived
another potential rival, leftist
labor leader John Tettegah, of
operational control over the
important Ghanaian Trades Union
Congress (TUC). Tettegah remains
titular head of the TUC, but re-
sponsibility for its internal
affairs has been assigned to a
person whose background and
loyalties are more closely tied
to the CPP and the President's
Office. Nkrumah clearly intends
to keep the unions, which he has
distrusted since the strikes
last fall, on a tighter rein
while making the TUC more than
ever an instrument of govern-
ment policy.
The strengthening of pres-
idential control and whittling
down of the authority of minis-
tries and politicians is ap-
parent in the recent announce-
ment that Nkrumah had decided
to install "expediters" or
"positive actionists" in all
departments of the state to
ensure prompt carrying out of
his decisions. Another pend-
ing administrative change will
bring still more of Ghana's
machinery for conducting foreign 25X1
affairs under the direct super-
vision of the President's Of-
f ice .
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SPECIAL ARTICLES
YUGOSLAV-SOVIET RELATIONS
Yugoslav-Soviet state re-
lations have been gradually
improving since the fall of
1960, when Khrushchev and Tito
met several times at the UN
session in New York. This trend
has been marked by the visit to
Moscow in January 1961 of
Yugoslav troubleshooter
Vukmanovic-Tempo, Yugoslavia's
subsequent signature of five-
year trade agreements with the
USSR and the European satellites,
a visit to the USSR by Yugoslav
Foreign Minister Popovic last
July, and a return visit by
Gromyko this April. Belgrade
has recently acquired Soviet
military equipment for the
first time since 1948, and
Soviet technicians are expected
in Yugoslavia momentarily to
help expand a steel mill.
Khrushchev's return to a
policy of repairing Soviet
relations with Yugoslavia is
consistent with his continuous
efforts to eliminate the more
unproductive aspects of Stalin's
legacy. In addition, it is in
line with his foreign policy
toward the West in demonstrating
Soviet willingness to "coexist"
with all states, no matter what
areas of disagreement may con-
currently exist. It is also
designed to encourage the non-
aligned states to be more re-
sponsive in their attitudes
toward the USSR.
Background
Khrushchev was forced to
shelve his policy of reinte-
grating Yugoslavia following
the events in Eastern Europe
during 1956, when pressures
for greater freedom from Moscow's
control, particularly in Hungary
and Poland, threatened to
destroy the bloc. Khrushchev
did not, however, return to
the policies and tactics of
the Stalin era, but attempted
only to isolate the virus of
Yugoslav "revisionism" while
trying to reconstitute the
bloc, on a new and more stable
basis.
In late 1957 and early
1958, the bloc, with Communist
China in the vanguard, began to
pressure Yugoslavia toward the
choice of either losing all status
and privileges of close associa-
tion with the Communist bloc
or acquiescing in the respon-
sibilities and discipline which
such membership entailed. Bel-
grade chose independence. In
November 1957, Tito feigned
illness to order to avoid
attending a conclave of Commu-
nist parties; his alternates,
party secretaries Rankovic
and Kardelj, refused to sign
the declaration, which restricted
the freedom of the individual
part:Les. Five months later
Belgrade emphasized its inde-
pendence at its own party
congress by adopting a program
which set down in categorical
fashion Yugoslavia's ideological
differences with Moscow.
By late 1960, Soviet
control over Eastern Europe
had been reconsolidated, and
Khrushchev was anticipating
a reactivation of contacts with
the West in order to measure
the new US administration.
At the same time, the left wing
of international Communism,
led by Peiping, had begun to
challenge the USSR. Khrushchev
had to move gradually lest his
dealings with Tito give sub-
stance to Chinese charges of
Soviet "revisionism." Khru-
shchev probably calculated
that there was no longer much
possibility of reconciling his
differences with the left wing
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CURRENT INTELLIGENCE WEEKLY SUMMARY
and, therefore, was not con-
cerned that his improved rela-
tions with Tito would make such
a reconciliation more remote.
for Yugoslavia's growing industry,
enhance the importance of Yugo-
slavia's voice in international
affairs, and proselytize his own
brand of Communism.
When Yugoslavia refused
to submit to Moscow's discipline
in 1958, the bloc ceased grant-
ing the Yugoslav state preferred
treatment. In May of that year,
all bloc developmental loans
were canceled, and the Yugo-
slavs were no longer invited
to meetings of the bloc's
international economic organiza-
tion (CEMA), in which Belgrade
had observer status. Neverthe-
less, normal state functions
were maintained, trade continued,
and cultural, scientific, and
trade union delegations moved
back and forth, if with decreased
regularity.
Communist China and Al-
bania, however, found common
ground in a violent anti-Yugo-
slav policy. As a result,
respective diplomatic missions
were eventually left in the
hands of charges, and Yugoslavia's
trade with these countries
dwindled to virtually nothing.
Yugoslav-Albanian relations be-
came particularly tense by late
1960, with border incidents
and publicized spy trials.
Tito, in an effort to
prevent this situation from
leading again to Yugoslavia's
complete political and economic
isolation from the bloc, argued
that ideological differences
should not harm interstate
relations. Belgrade's half-
hearted efforts to build up
relations with the West had
proven only partially satis-
factory. In 1959, Yugoslavia
refused to provide information
on intended use of US military
equipment under negotiation,,
and US military aid to Yugo-
slavia was terminated at Bel-
grade's request.
Tito's primary effort was
devoted to developing his ties
with the nonaligned states,
whose number was rapidly in-
creasing. He hoped that by
again identifying with these
states, he could secure markets
In late 1958 Tito under-
took his first of several visits
to numerous uncommitted states.
He succeeded in assuming a
position of leadership in this
group, as illustrated by the
convocation in Belgrade of a
conference of heads of state
from the nonaligned countries
in September 1961. In this
position, the Yugoslavs view
themselves as competitors of
both the East and West and
do not hesitate to criticize
either.
By the time of the UN
session in September 1960--when
Tito and Khrushchev met for
the first time since 1957--Khru-
shchev had apparently decided that
improved relations with Tito
could be turned to Soviet ad-
vantage. Tito had, despite
his differences with Moscow,
continued to agree with Soviet
foreign policies on almost all
issues not directly affecting
Yugoslav national interests
or those of another nonaligned
state. In addition, Belgrade
had by this time made abundantly
clear its violent opposition to
the policies of the Chinese
Communists, who were challenging
the USSR for influence in Asia,
Africa, and Latin America.
Khrushchev's decision paid off
in September 1961, when at
the Belgrade conference Tito
defended the Soviet resumption
of nuclear testing and Khrushchev's
aggressive German policy.
The marked similarities
in Yugoslav and Soviet foreign
policies result in part from
a common Marxist orientation.
Belgrade views "socialism" as
the wave of the future and
capitalism as a dying anachronism;
therefore, bloc policies toward
the West are by definition "pro-
gressive." At the same time,
there is an area of common
national interest: as a result
of its World War II experience,
Belgrade believes that peace in
Europe and its own security are
served by a weak, divided Germany.
SuT
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Finally, Yugoslavia's pursuit
of favor with the nonaligned
states leads it to assume violent
anti-Western, "anticolonial"
positions.
Yugoslavia's state relations
with Moscow's European satellites
have not improved apace. While
East European leaders on appro-
priate occasions call for im-
proved state relations, and dele-
gations are more frequently ex-
changed, no important develop-
ments have resulted and friction-
al incidents still take place.
Belgrade lodged a "most severe"
protest with the East Germans
in mid-March for forcibly re-
moving from trains Yugoslav
officials who were returning
from the Leipzig Fair. This
situation apparently reflects
the individual bias of the satel-
lite leaders and also suggests
a lack of Soviet directives or-
dering them to improve their
relations with Yugoslavia.
Economic Relations
Performance under long-term
trade agreements signed in 1961
has not matched expectations.
The Yugoslav-Soviet pact scheduled
a 100-percent increase by 1965,
but total trade with the bloc,
after rising somewhat in 1960,
fell back in 1961 to around
1959 levels. Trade with indi-
vidual bloc countries was so
uneven, moreover, that substan-
tial surpluses of trade were
registered with the USSR and
Poland, while equally substantial
deficits occurred with Hungary,
Czechoslovakia, and East Germany.
Belgrade has claimed that the
recent purchases of Soviet
military equipment were a straight
commercial deal to utilize its
trade credit with the USSR.
Belgrade has charged that
the bloc refuses to sell Yugo-
slav importers the high-quality
commodities they want. The
bulk of the blame, however,
probably lies with Yugoslavia,
which is economically oriented
toward the West. Yugoslav im-
porters and exporters prefer
dealing with the West, and im-
plementation of a trade liberal-
ization program early last year
gave them greater flexibility
to buy and sell where they
wished. Belgrade will have to
re-establish more direct con-
trols over the national economy
if trade with the bloc is to be
substantially increased.
Party Relations
International Communism,
for all practical purposes,
broke off party relations with
the Yugoslavs when all bloc
ambassadors but Poland's who
were attending the Yugoslav
party's seventh congress in
April 1958 walked out on the
proceedings. There are no in-
dications that these relations
will be resumed soon. Since
the Soviet party's 22nd congress
last October, such a ranking
bloc figure as Czech party
First Secretary Novotny stated
also that as long as the Yugo-
sla,vs "adhere to their revision-
ist theses, there can be no
normalization of relations along
party lines"--words subsequently
echoed by Bulgaria's Zhivkov.
A Soviet official in late
March claimed in a public lecture
to a Soviet audience that Bel-
grade had requested a restitu-
tion of party ties but had been
rebuffed.
The sole violator of the
international movement's ban on
party relations with Yugoslavia
is the Italian Communist party,
whose leader, Palmiro Togliatti,
is a noted proponent of polycentrism.
In the past six months, the Italians
have sent at least two party dele-
gations to Yugoslavia, at least
one of which discussed ideolog-
ical questions.
Ideology
Underlying Belgrade's
ideological differences with
the bloc is Yugoslavia's re-
fusal to subordinate its na-
tional interests to those of
the Soviet Union and recognize
the USSR as the supreme inter-
preter of Marxism-Leninism.
Moreover, as specific ideolog-
ical points are disputed they
become a source of conflict in
themselves.
The critical exchanges
with Moscow accompanying the
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promulgation of the Yugoslav
party's program in 1953 re-
vealed a wide area of ideologi-
cal disagreement. These dif-
ferences encompassed: the sig-
nificance of social change in
the Western world and the re-
sulting nature of present-day
capitalism; the possible ways
a country can make the transi-
tion from "capitalism" to "so-
cialism"; the correct role of
the Communist party in society;
the value of an international
Communist movement and its need
for unity; the propriety of the
division of the world into two
power blocs; collectivization of
agriculture; the proper role
of the state in a Communist
country; the causes and meaning
of the Hungarian revolution;
state centralism versus decentral-
ization; policy toward minorities;
and nationalism and national
Communism.
Since 1958, neither side
has seriously tried to resolve
these ideological differences.
In fact, the area of disagree-
ment has been broadened as each
fit subsequent developments in-
to its own ideological world
view. In 1960 Kardelj's book
Socialism and War, attacking
Chinese policies on theoretical
ground, asserted that "socialist
countries could wage an "ag-
gressive" war; Moscow challenged
this position. The Soviet
party's program, approved at
the 22nd congress, asserted that
the USSR is constructing an "all-
people's state"; Belgrade in
February evaluated this as a
"scientifically senseless and
politically harmful ideological
fetish," which "was buried by
Marx and Engels a century ago."
Tentative appraisals by Belgrade
and Moscow as to the legitimacy
of claims by various Afro-Asian
states to be building "social-
ism" give promise of additional
areas of disagreement.
Having denied Moscow's
pre-eminence in ideological
matters, Belgrade has instead
advocated "polycentrism" as
the preferred basis for inter-
national Communist collabora-
tion. By Yugoslav interpreta-
tion this would permit each
party voluntarily and by "auton-
~omrious and independent action..
to struggle for the concrete
objectives of the movement."
Moscow has attacked both the
Yugoslav and Italian varieties
of "polycentrism."
Despite the breadth of
the bloc-Yugoslav disagreement
over ideology and the occasional
outbreak of polemics, the bloc's
condemnation of Yugoslav "re-
visionism" has become increas-
ingly formalistic. This re-
sults in part from growing bloc
preoccupation with the Sino-
Soviet dispute. The Soviet
22nd congress declared "re-
visionism" to be the main
danger to international Com-
munism, but the bulk of its
vituperation was devoted to
"dogmatists"--in Communist Jar-
gon, the Chinese and Albanians.
In addition, at the East Ger-
mans' fifth party congress in
July 1958, Khrushchev directed,
"We must not devote more atten-
tion to the Yugoslav revision-
ists than they are worth." The
more attention we pay them, the
greater will be their belief
that they are playing a great
role."
This Khrushchev dictum has
enabled the bloc leaders to
avoid enunciating their own
shades of ideological differ-
ence in mandatory attacks on
one or another facet of Yugoslav
policy. On the whole, however,
bloc leaders are anti-Tito,
fearing that application of his
policies in their own countries
would lead to domestic upheavals.
Only Poland's Gomulka has shown
since 1958 any attraction to
Yugoslav positions, primarily
by his failure to collectivize
agriculture precipitately and
by his insistence on character-
izing Yugoslavia as a "socialist
state. Of the non-bloc parties,
only Italy's has shown any great
affinity for Yugoslav ideology.
In the Danish party, where
Titoism attracted a substantial
following, a split resulted,
and the Titoists established
their own party.
The trend of improving
Yugoslav-Soviet state relations
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CURRENT INTELLIGENCE WEEKLY SUMMARY
will apparently continue for
the foreseeable future. Yugo-
slavia expects to open negotia-
tions soon for a visit to Yugo-
slavia by Soviet "President"
Leonid Brezhnev.
There are a number of moves
Khrushchev could make in the
economic sphere. In 1959 and
1960 Belgrade asked for a re-
turn to observer status in CEMA.
Belgrade also is presumably
still interested in Soviet
developmental loans.
To date, the improvement
in Yugoslav-Soviet relations
has been limited and has been
possible only through ignoring
large areas of difference, even
at the state level. The Yugo-
slavs continue to proclaim,
for example, that the bulk of
the world's problems result from
its division into two hostile
blocs and to base their ap-
proach to international problems
on closer relations with the non-
aligned states; Moscow no longer
uses these as central points
in anti-Yugoslav propaganda.
Yugoslavia is at present
working to convene a conference
sometime this summer of eco-
nomic ministers from the un-
committed states to consider
how best to protect themselves
from the anticipated adverse
effects of the Common Market's
and CEMA's increasing integra-
tion.
Foreign Minister Popovic
is currently on a tour of Latin
America to enlist support for
the nonaligned group. Bel-
grade is also attempting to
organize a conference of inter-
national trade unions to build
a body of worker support for
the nonaligned movement and
to wean national unions away
from both the bloc's WFTU and
the West's ICFTU.
Recently Moscow has been
emphasizing only the positive
aspects of its state relations
with Belgrade. In the section
of his speech to the April
Supreme Soviet session devoted
to Yugoslavia, Gromyko noted
that "the positions of the
Soviet Union and Yugoslavia
are actually identical on
questions of disarmament and
coincide or are close on
several other international
problems. This of course is
very good...." The Soviet-
Yugoslav communique at the
conclusion of Gromyko's visit
to 'Yugoslavia earlier in
April had stressed the same
points.
In the ideological sphere,
differences between Moscow and
Belgrade are becoming increas-
ingly codified and institution-
alized. Both states, for example,
are in the process of adopting
new constitutions which will
embody their differing approaches
to "building Communism." Each
new commitment to the existing,
differing ideological views
further complicates the pos-
sibility of a reunion between
Yugoslavia and the bloc during
the lifetime of either Tito
or Khrushchev.
Tito would destroy the
bloc as presently constituted,
but considers himself a member
of the Communist world movement;
he thinks in Marxist terms.
The common Marxist grounding
of the leaderships of both
Yugoslavia and the USSR thus
provides both an element of
unity and of discord; the unity,
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Deficiencies in India's
large military establishment
have been a major impediment
to an effective policy for check-
ing Chinese Communist encroach-
ments along the northern frontier.
The country's leaders have there-
fore temporized, hopeful that
Peiping would not force a mili-
tary showdown which would fur-
ther demonstrate Indian weakness.
At the same time, while
not compromising their policy of
nonalignment, Indian leaders have
cautiously sought external sup-
port against the Chinese. They
have maintained close relations
with Western sources of aid and
have sought to encourage Soviet
"impartiality" in the Sino-Indian
dispute.
In direct relations with
the Chinese, the Indians have
maintained a tough diplomatic
line, insisting on Chinese with-
drawal from contested border
areas as the price for the type
of negotiations both sides con-
tinually claim to want. This
tough line, however, has been
undercut by the lack of equally
strong military backing.
The main purpose of India's
tactics has been to buy time to
improve its military capabili-
ties and supporting industrial
base to a point where its strength
would earn respect in Peiping for
Indian diplomacy or even compel
Peiping to evacuate the disputed
areas. This has been a recurrent
theme in Prime Minister Nehru's
public pronouncements on the
border problem.
"It is wise and essential that we think of
Military steps lest others fail. That is why we
have been engaged in road building, in building
up our military apparatus, and so forth. Until
that is done, our indulging in some adventure
will not be wise."--Nehru, 14 May 1962
ment
and
has
the
Military
Deficiencies
India's
military
establish-
has been
weak in
both human
material
terms.
Although it
adequate
manpower
resources,
growth of
the military serv-
ices--particularly the army--has
not kept pace with the rapid ex-
pansion in military commitments.
Recruits are often incapable of
meeting the ever-rising technical
demands imposed on them. This
generally low technical compe-
tence has been compensated for
only to a degree, and then only
in the army, by the superior
quality of fighting men produced
from among India's "martial races"
as a result of deep-rooted Brit-
ish-Indian military traditions.
Materiel deficiencies have
been even more severe. Much of
India's fighting equipment is
outdated. The pressure of eco-
nomic development on the country's
steadily dwindling foreign exchange
reserves has precluded massive pur-
ch.ases,while India's capacity to
produce its own heavy armaments
has not grown commensurately with
other industrial advances.
Terrain in the border area,
moreover, has imposed greater
than ordinary burdens on exist-
ing; equipment. While rail and
road nets in the interior are
adequate for the movement of
military forces and stores, the
border regions are difficult of
access and require heavy reliance
on pack animals (and in many
cases human porters) as well. as
airlift. Efforts to conserve
the useful life of obsolescent
equipment have limited the train-
ing cycle, particularly in the
armored corps, and airlift re-
qu:Lrements, even for routine sup-
port of isolated outposts, have
placed an intolerable burden on
the air force's aging transport
fleet .
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%ale SEC" T %of
CURRENT INTELLIGENCE WEEKLY SUMMARY
Increased Defense Spending
New Delhi has sought to im-
prove its military position by
steadily expanding defense spend-
ing, even though outlays have
not kept pace with the rise in
overall budgetary expenditures.
The more than $780,000,000 budg-
eted for defense in the fiscal
year which began on 1 April is
$100,000,000 more than last
year's expenditures and $200,-
000,000 more than the year before,
but less than in previous years
as a percentage of overall budg-
etary o'.itlays. This cautious
approach has been dictated by
New Delhi's unwillingness to
jeopardize the long-range goals
of economic development.
In addition, heavy outlays
for the development of heavy in-
dustry and for transport and com-
munications, while aimed at the
civilian economy, are not with-
out their impact on military
capability--for example, an am-
bitious road-building program in
the border areas during the past
three years.
Strengthening the Army
The major fighting force
is the army, whose expenses nor-
mally account for about 60 per-
cent of the defense budget. An
all-volunteer service, the army
has grown during the past three
years by about 150,000 men to a
total of 550,000--making it the
third largest in the non-Commu-
nist world.
Part of this increase comes
from the incorporation of some
25,000 state militiamen long em-
ployed with the regular army in
Assam and Kashmir. The activation
of more than 30 battalions of re-
serves accounts for nearly an-
other 25,000. Most of the in-
crease, however, has come from
raising new units to fill out the
two new divisions and the several
independent brigades established
since 1959. Army plans call for
the establishment of yet another
three divisions, which will bring
MNLIONS
OF
DOLLARS
445
412 410 399
.62
F9%u222lI%iffl
A- FIRST ESTIMATE B- ESTIMATE ( REVISED)
BASED ON ACTUAL EXPENDITURES
the total to 13. These will be
made up from independent units
already in existence and from
more than 25 new battalion-size
increments of infantry, artillery,
and armor which will be ready by
the spring of 1963. Engineer
and support units have also been
greatly expanded.
:Rapid expansion has strained
the army's resources. There are
enough general officers with
British training to fill the new
commands, but qualified field-
and company-grade officers are
in short supply; the pressure
on NCO ranks is even greater.
The demands are equally heavy on
equipment--particularly vehicles,
armor, and artillery--much of
which has been in reserve stocks
for some years. Frequent shifts
in duty stations and prolonged
service in remote outposts in the
north have brought morale prob-
lems.
Much of the army's increased
funds has gone to meet these an-
cillary problems of expansion.
Military installations and train-
ing facilities have been built
and improved, arrangements are
under way to buy new British
tanks and to manufacture tanks
in India, and other equipment,
such as radar, antiaircraft guns
and missiles, road-building equip-
ment, and radios, is being sought.
Pay and amenities also have been
increased. A portion of last
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year's increase in army spending
went to defray the costs of the
Goa invasion, although this
operation, in addition to its
political aspect, served as a
training and deployment exercise.
The Air Force
Many of the army's problems
are found also in the air force,
whose 30,000 highly trained volun-
teers man more than 800 jets and
500 propeller-type transport and
support aircraft. A jet moderni-
zation program, begun in the mid-
1950s in response to Pakistan's
acquisition of Sabre-jets, was
barely completed before pressures
began to mount to obtain the next
generation of aircraft to match
the supersonic fighters which had
subsequently come into Pakistan's
and China's possession. Lack of
money, in addition to imposing
restrictions on re-equipment,
has also curtailed the training
cycle and prevented the air force
from buying the sophisticated
electronic equipment necessary
for fully effective operations.
The failure of India's ef-
forts to produce its own fighters,
the limited number of European
jets (British Folland Gnats) now
being assembled in India, the
urgent need for modernization of
both fighter and transport air-
craft, and--most important--the
shortage of foreign exchange have
reluctantly led the air force,
prodded by Defense Minister
Krishna Menon, to look to the
Soviet Union. Twenty-four IL-14
Crate transports were purchased
as a stopgap to augment the over-
worked C-47-type Dakotas in use;
up to 16 AN-12 turboprop heavy
transports have been ordered for
moving heavy supplies into the
border regions; as many as 40
MI-4 Hound helicopters have been
added to the list of aviation
equipment purchased for rupees
for use in the remote northern
tracts; and negotiations are
"well advanced," despite some
air force objections, for MIG-21
jet fighters..
Acquisition of these Soviet
aircraft has posed additional
problems: the IL-14s have proved
to be poor cargo aircraft, the
7 AN-12s in use have had many
operational difficulties, and
complications are expected once
Soviet spare parts begin to swell
the already complex parts inven-
tory. The presumed political
advantages of dealing with Mos-
cow--in terms of the Sino-Soviet
dispute--coupled with accommodat-
ing financial arrangements and
availability
,,have apparently
overruled other considerations,
at least for the time being.
Pakistan and Other Diversions
An additional complication
in military planning with regard
to China is the unsettled charac-
ter of India's relations with
Pakistan. Recurring periods of
tension, coupled with the vulner-
ability of India's heartland to
Pakistani military action, require
the deployment of a substantial
portion of the Indian Army along
the border separating West Paki
stan from India and the Indian-
held portion of Kashmir from that
occupied by Pakistan. These
frontiers tie down 6 of India's
10 divisions, plus up to 12 addi-
tional brigades which are direct-
ly subordinate to higher head-
quarters in these areas.
The Indians this spring
have shown a willingness to de-
ploy elements from these forces
to bolster the thinly spread
battalions deployed against the
Chinese in Ladakh, but on pre-
vious occasions they have been
reluctant to reduce for any ex-
tended period the numerical
superiority of their forces ar-
rayed against Pakistan.
Other problems which dilute
Indian military strength include
the rebellion which ties down a
division in the Naga Hills of
Assam, the UN operations in the
Congo (to which India contributes
5,500 troops) and in the Gaza
strip (an additional 1,000), and
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iow~ %W9
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JAM ff~
AND
KASHMIR
tsis in dispute
Udha"rij
WESTEI
COMMA
Xv
(Corpsliq
stern Command Hq
yiAHAH SHTRA
(Southern
Command Hq)
Poona
SO ERN
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PI ADESl:I
PONurCHErm
POND CHERRY
the long-standing requirement
for military presence to back up
civil authority in various parts
of India itself. In Indian eyes,
these factors leave little sur-
plus for the northern border unless
there is continued expansion of
the military establishment.
Alternatives
India's tougher military
stance this spring is in part a
reflection of confidence in its
growing strength. However, the
problems posed by the need to ex-
pand and modernize the military
establishment will continue to
produce compromise solutions.
The alternatives include acqui-
escence in Peiping's claims,
reconciliation of Indo-Pakistani
differences, acceptance of out-
right military aid from the West,
large-scale Soviet assistance, or
a diversion of resources now com-
mitted to economic development.
None of these is likely to be
acceptable to New Delhi in the
absence of a major Chinese push
across the Himalayas or Chinese
acquisition of nuclear weapons.
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XXXIII
c
(
ore
T Si:ur..... H
EASTERN
Protectorate r.;r}_Yfrst
iK # BHLrTAN OMM N
Army Order of Battle (550,000 men)
10 Divisions (9 Infantry, 1 Armored)
15 Independent Brigades
Miscellaneous smaller independent units
of battalion size or smaller
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