WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004300080001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 26
• Document Creation Date: December 21, 2016
• Document Release Date: June 12, 2008
• Sequence Number: 1
• Publication Date: January 17, 1964
• Content Type: REPORT

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OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
State Dept. review completed
17 January
OCI No. 0314/64
Copy No.
77
WEEKLY SUMMARY
T
GROUP 1 Excluded from outoniotie
1 e qowngraaing and declassification
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(Information as of 1200 EST, 16 January 1964)
THE COMMUNIST WORLD Page
STATUS OF THE BERLIN PASSES ISSUE
Recent developments, including Ulbricht's "unoffi-
cial visit" to Moscow last week, suggest the bloc
may be planning new initiatives on the Berlin sit-
uation. The East German and West Berlin negotiators
have continued discussions, with no result thus far.
SOVIET GRAIN TRADE
The USSR now has purchased 9 million tons of Western
wheat and will probably soon buy 3 million more from
US exporters. It is also buying large quantities of
flour and other grains.
C:IOU EN-LAI'S AFRICAN TOUR
The Chinese Communist premier has made a favorable
impression on his hosts during the first month of
his good-will tour, but his shrewd diplomacy has
produced few tangible achievements.
NEHRU'S ILLNESS BRINGS UNCERTAINTY TO INDIA
His associates have begun jockeying for position,
and most major decisions are likely to be deferred
pending clarification of his future status.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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ASIA-AFRICA (continued)
LONDON CONFERENCE ON CYPRUS OPENS
Greek and Turkish Cypriot positions still appear
virtually irreconcilable, and the Athens and Ankara
governments have little room to maneuver.
INDONESIA PROPOSES AFRO-ASIAN CONFERENCE
Djakarta wants a forum for expounding its anti-
Malaysia policy, but Tito and Nasir have other
ideas.
ZANZIBAR GOVERNMENT OVERTHROWN
The ouster of the Arab-dominated regime is likely
to lead to a continuing power struggle between Af-
rican nationalists and pro-Communist elements in
the new government.
BEN BELLA'S DIFFICULTIES MOUNT IN ALGERIA
Opposition elements have demonstrated against de-
pressed economic conditions, but they remain dis-
united and Ben Bella is taking increasingly harsh
measures against them.
PROPOSED UNION OF WESTERN EUROPEAN AIRLINES
The four prospective members are about to resume
talks, but it is far from certain they can over-
come the problems which have kept the project
in the talking stage for six years.
SOCIALISTS REGAINING STRENGTH IN FINLAND
Soviet antipathy toward Finland's Social Democrats,
which has kept them out of the government, appears
to be abating, and the Socialists themselves are
trying to heal their six-year-old factional split.
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WESTERN HEMISPHERE
SITUATION IN PANAMA REMAINS EXPLOSIVE
A recurrence of anti-US violence is possible
Nationalist sentiment is still at fever pitch, and
Communists, pro-Communists, and pro-Castroites are
working together to manipulate. it for their own
purposes.
CASTRO'S TRIP TO MOSCOW 15
The purpose of the unexpected trip is not clear,
but it might be to discuss how best to exploit the
Panama affair or to seek Soviet backing for a con-
certed propaganda drive now against Guantanamo.
SOVIET-CUBAN 1964 TRADE PACT 16
Soviet exports to Cuba are set at a record $385
million, a large share of which will be financed
by new Soviet credits.
17
TURMOIL IN BOLIVIAN POLITICS
The next move--possibly violence--in the rivalry between
President Paz and Vice President Lechin hinges on
the outcome of the ruling party's convention opening
this week.
NEW COMMUNIST SUCCESSES IN BRAZIL'S LABOR MOVEMENT 18
With help from the Goulart administration, Commu-
nists now control four of Brazil's six national
labor confederations.
IMPORTANT CHILEAN BY-ELECTION SCHEDULED 19
With a presidential election six months off, the
campaigning and outcome of a 15 March by-election
should give some indication of political trends.
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The Communist World
The USSR and East Germany
may be planning new initiatives
in the negotiations on passes
for West Berliners to enter East
Berlin. At Khrushchev's invita-
tion, Ulbricht paid an "unoffi-
cial visit" to Moscow on 9 and
10 January. His top specialist
on Berlin and Germany, First
Deputy Foreign Minister Winzer,
had arrived in Moscow sometime
earlier.
One topic of conversation
was probably Khrushchev's re-
cent conference with Gomulka in
Poland and the implications for
Central and Eastern Europe of
the "peace proposals" made by
these two leaders at the year's
end. Soviet Ambassador Abrasi-
mov had traveled to Ulbricht's
vacation hideaway on 24 Decem-
ber, presumably to fill Ulbricht
in on current Soviet thinking
on Berlin and Germany.
As part of their maneuvers
in the question of passes the
East Germans are publicizing
their claim that West Berlin's
Senat, by signing the agreement
on Christmas passes, implicitly
acknowledged West Berlin's "spe-
cial status," i.e., independent
of West Germany. They are also
claiming privately that the East
German leadership was seriously
divided on Christmas passes pol-
icy and that massive Soviet pres-
sure had to be applied to bring
about the concessions necessary
to induce the Senat to accept
the 17 December agreement. In
particular, the East Germans are
seeking to involve Brandt's con-
fidant, Press Chief Egon Bahr,
in direct talks with GDR offi-
cials.
As government leaders in
Bonn and West Berlin continue
to debate the pros and cons of
any new agreement, the repre-
sentatives who negotiated the
original accord continue to ex-
change preliminary views on a
permanent pass agreement, In
a meeting on 10 January, West
Berlin's Korber conveyed Bonn's
desire to keep the talks in in-
terzonal trade channels, while
East Germany's Wendt proposed
that the negotiating level be
raised to an exchange between
Mayor Brandt and East German
Deputy Premier Abusch.. Both
these proposals were rejected.
Wendt subsequently suggested an
interim arrangement to let West
Berliners visit East Berlin for
important family events, with
passes to be issued, as before,
by East German officials in West
Berlin. The two negotiators will
meet again on 17 January.
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The Communist World
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SOVIET GRAIN TRADE
Soviet demand for imports
of grain remains high. The USSR
already has purchased 9 million
tons of wheat in the free world
for delivery by July. An addi-
tional 3 million tons probably
is to be purchased soon. Ameri-
can grain exporters hold as yet
unused export licenses for that
amount.
In addition, the USSR con-
tinues to purchase unusually
large amounts of wheat flour--
500,000 tons (equivalent to about
700,000 tons of grain) now has
been bought in Western Europe.
Other grains also are being im-
ported in increasing quantities.
Contracts for 125,000 tons of
rice have been signed with Egypt,
Moscow has sharply cut back
its wheat export commitments.
Only shipments to Cuba have been
maintained in full. Deliveries
to free world countries have vir-
tually ended
rope, which have averaged about
5 million tons of grain annually,
are being reduced. Three Euro-
pean satellites have concluded
their first long-term wheat im-
port agreements with Canada, and
one has just signed such an agree-
ment with France as well.
About three fourths of the
USSR's $500 million in gold sales
in 1963 were made following its
decision to import large quanti-
ties of wheat. These sales more
than adequately cover the $150-
175 million worth of wheat and
flour imported in 1963 as well
as other convertible currency def-
icits for that year. Some cash
carry-over will be available to
apply to 1964 imports.
However, wheat and flour
already under contract will cost
about $600 million, and the US
licenses--if converted into con-
tracts--would add some $225 mil-
lion to the bill. Soviet gold
sales this year already total
$40 million, and are likely to
exceed the 1963 level despite
the fact that convertible cur-
rency expenditures for other
roducts are being minimized
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17 Jan 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 2
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Exports to Eastern Eu-
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Now in the backstretch of his
African tour, Chou En-lai has ap-
parently made good progress toward
achieving Peiping's modest objec-
tive: improving the Chinese Com-
munist image in the area. Chou's
shrewd handling of various national
leaders during his month on the
road has thus far made a favorable
impression on his hosts.
Nasir told Ambassador Badeau
he was surprised by Chou's quiet
intelligence and his apparent will-
ingness to accept the principle of
nonalignment. Nasir also said he
was relieved that Chou did not
"attempt to mount an offensive"
against the Soviet Union. The Chi-
nese premier has in fact avoided
public polemical thrusts at Moscow,
Other African leaders have
been favorably impressed by Chou's
reasonable and easygoing manner.
While he has defended the Chinese
positions on the Sino-Indian border
impasse, the nuclear test ban, and
the convening of Afro-Asian and
nonaligned conferences, Chou still
appears to have had some success
in erasing the image of a militant
and obstructionist China. The
joint communiques issued at the
conclusion of each of his African
stops have avoided most contro-
versial issues, and it has become
apparent that in the search for
common ground Chou has attempted
to minimize differences and play
up the importance of earlier con-
tacts.
Despite his adroitness in
dealing with his hosts, Chou's
tangible achievements have not
been dramatic. Although Chinese
propaganda has hailed the Tunisian
visit as a major diplomatic vic-
tory, Peiping's success there ap-
pears to be only a qualified one.
Chou's brief stopover in Tunis
came after a nine-day side trip to
Albania, and was apparently ar-
ranged only after the African tour
was well under way. Nevertheless,
President Bourguiba's reception of
Chou was not enthusiastic, and he
made it clear to his guest that the
establishment of diplomatic rela-
tions--a step he had announced as
imminent as far back as 1958--does
not mean Tunisian endorsement of
many Chinese policy positions nor
even the early appointment of a
Tunisian envoy to Peiping.
Chou now is on the West Afri-
can leg of his tour, visiting Ghana,
Mali, and Guinea--all of which have
long recognized Peiping. After
leaving Conakry on 27 January he is
scheduled to swing through East Af-
rica, stopping in Tanganyika, Kenya,
Uganda, Sudan, and the Somali Re-
public.
The Chinese were expected to
return to Peiping in mid-February,
At the close of their tour, the
Chinese leaders are committed
to state visits to Pakistan and
Ceylon.
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NEHRU'S ILLNESS
As a temporary expedient,
Home Minister Nanda, an 11-year
veteran of Nehru's cabinets, is
functioning in effect as acting
prime minister. Finance Minister
T. T. Krishnamachari is super-
vising Nehru's external affairs
portfolio. Neither is a con-
tender for Nehru's mantle. While
each of them as well as Congress
Party President Kamaraj--also a
noncontender--will consult with
Nehru on matters requiring im-
mediate decision, the over-all
effect of their stewardship will
be a near moratorium on decision-
making in Indian politics and
government until Nehru's future
is clarified. This is not likely
to occur before Parliament re-
convenes in mid-February, if
then.
Nehru was stricken during
the biennial conclave last week
of his Congress Party at Bhuba-
neswar, in Orissa State. Jock-
eying for position in the new
period. of uncertainty was quick
to begin, facilitated by the
presence there of every major
Congress leader in the country.
They used the opportunity for
extensive formal and informal
consultations, and each one's
performance on the floor of the
session took on new meaning in
the context of the leadership
question.
Among the people who will
play an important role during
the convalescence will be Pres-
ident Radhakrishnan, whose
activist bent will ensure his
maximum use of presidential
powers in any power vacuum.
Nehru's 46-year-old daughter
Indira Gandhi is already playing
a strong role as his main channel
of communication with the outside
world. Long his only real con-
fidante, Indira is a member of the
party's leading policy-making
organs and has served as party
president. The party's noisy
left-wing, which has always
drawn strength from its influence
with her father, would probably
press for her appointment as
his successor, but she does not
have the necessary party-wide
strength to be selected.
Lal Bahadur Shastri is
generally conceded to be the
party's overwhelming choice to
succeed Nehru. A former home
minister, the 59-year-old Shastri
has been working full time on
party matters since August. He
has long been a trusted Nehru
aide, has few enemies, and has
a reputation as a conciliator. and
as a competent parliamentarian.
His politics are moderate and
pragmatic, but he is colorless and
has had few opportunities to
demonstrate decisiveness. Less
urbane and more genuinely Hindu
than Nehru, Shastri could be ex- 25X1
pected in general to continue
policies long associated with
Nehru.
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As the London conference on
the Cyprus crisis opened on 15
January, the Greek and Turkish
Cypriot positions still appeared
virtually irreconcilable and an
uneasy truce prevails on the
island.
The Greek Cypriots, backed
by Athens, propose making Cyprus
a unified state governed by ma-
jority rule with no special ties
to either Greece or Turkey.
They would accept what they term
"adequate" guarantees for the
Turkish minority. The Turkish
Cypriots, outnumbered four to one,
assert that they have lost all
confidence in Greek promises and
are demanding greater security to
ensure the survival of their com-
munity. Any scheme to meet their
demands probably would include
some form of physical separation
of the two ethnic groups and a con-
tinuation of the Ankara govern-
ment's right to intervene if nec-
essary to protect Turkish Cypriots.
The maneuverability of the re-
gimes in both Greece and Turkey is
severely limited. In Athens, an
interim cabinet is marking time
until the general elections set
for 16 February
In Ankara, Prime Minis-
ter Inonu s minority government is
vulnerable to attack for any seem-
ing weakness at London. Atrocity
stories highlighted by the Turkish
press contribute to the continuing
high degree of sensitivity among
the Turkish public and armed forces
to events on the island.
London is seeking an early
end to a pence-keeping role by
British troops. UN Secretary
General Thant has for the moment
declined to send a personal ob-
server to Cyprus, as requested by
all parties to the dispute. He
suspects that both the Makarios
government and the British hope
to have the UN take over direct re-
sponsibility for keeping the peace.
Bitterness and distrust still
dominate relations between the
communities on the island. In
rural areas, Turkish inhabitants
of heretofore mixed villages are
moving into exclusively Turkish
settlements. Occasional shooting
incidents continue to be reported,
and widespread violence could erupt
at any time--particularly if ex-
tremist leaders on either side were
to conclude that such violence
would further their political aims.
The Turkish armed forces units
and naval vessels which were de-
ployed to the Iskenderun area of
southern Turkey during the height
of the communal violence have not
significantly changed their posi-
tion. Ankara maintains the capa-
bility of mounting a limited in-
vasion of Cyprus with little or no
warning. Such action probably
would follow any renewal of large-
scale violence on the island.
Greek military leaders, meanwhile,
are seeking the assistance of NATO
allies in pressing the Turks to re-
turn some of the naval vessels to
home ports.
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Indonesia is intensively Asian interest in holding a
canvassing African and Asian na- "nonaligned" conference that
tions in an effort to arrange would purportedly deal with the
a conference on the "struggle
against colonialism, imperial-
ism, and neocolonialism." Dja-
karta wants to hold a prepara-
tory political conference of 17
governments early this year and
a full gathering of some 60 na-
tions before the year is out. In-
donesia's particular interest in
an Afro-Asian gathering at this
time apparently is to secure a
forum for expounding its anti-
British, anti-Malaysian policy.
Indonesian activities are
running counter to Yugoslav and
Egyptian efforts to evoke Afro-
Following their rapid over-
throw of the old Arab-dominated
regime on 12 January, Zanzibar's
new rulers appear to be in un-
challenged control. Their public
statements indicate confusion and
internal friction, however, and
a continuing power struggle seems
likely between African national-
ist and pro-Communist elements.
While the coup was executed
by members of the new nation's
African majority--which has long
resented domination by the en-
trenched Arab minority (compris-
ing 16 percent of the population)
--it appears to have been in-
spired and organized by Abdulrah-
man Mohammed, an Arab known as
"Babu." As the outspokenly pro-
themes of economic development
and world peace. Communist
China is giving Djakarta's pro-
posal strong support in the
hope of dominating the gather-
ing and of undercutting the
Tito-Nasir plan, which would
exclude Peiping. The Soviet
Union is supporting efforts
toward both conferences. If
both are scheduled, Indonesia
will try to stage the Afro-
Asian preparatory meeting be-
vene the nonaligned group.
Communist representative of Pei-
ping's New China News Agency,
he had been the mainspring of
all Communist activity in Zanzi-
bar. He was formerly secretary
general of the Arab-led Zanzibar
National Party (ZNP) which con-
trolled the ousted government.
He is minister of external af-
fairs and trade in the new re-
gime.
The revolt may have been
triggered by last week's police
raid on the headquarters of
Babu's small revolutionary, Pei-
ping-financed, Umma Party--an
indication that the hitherto
complacent government was pre-
paring to crack down on the
extensive growth of Communist
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Mkokofoni ? I
ZANZIBAR
.-,'ZANZIBAR
4- V I"
Makuoduchi
Kizimkazi
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activity. Anti-Arab feeling
had been heightened by the an-
nouncement of an impending eco-
nomic agreement with Egypt and
a plan to put loyal ZNP sup.
porters in place of the main-
land Africans who comprised the
majority of the noncommissioned
officers in the island 800-
man police force.
Leading the attack was self-
styled "field marshal" John Okelo,
believed to be a Kenya-born for-
mer Zanzibar police offic4.al F_
The actual fighting was
carried out by some 400 members
of the youth wing of the Afro-
Shirazi Party (ASP) and 200 from
the Umma youth group armed with
rifles and Czech submachine guns.
It was spearheaded by at least
20 firebrands
Babu had built his follow-
ing mainly among the youth wings
and labor unions of the various
political parties. As chief
purveyor of Communist scholar-
ships, he attracted the young,
partially educated Africans who
found advancement blocked by
the Arab and Asian minority, as
well as the political malcontents
and Communist sympathizers. Many
of these have visited Eastern
Europe, Cuba,and China for tours
or short training courses. Nearly
all Zanzibar union officials
with any leadership potential
have received indoctrination
in Communist countries.
The other members of the
new government, including Presi-
dent Abeid Karume,are ASP lead-
ers and have the support of the
African majority. Several of
them are pro-Communist. The
Tanganyikan and Israeli govern-
ments have actively aided the
ASP in the past.
Kassim Hanga, a Moscow-
trained Marxist with a Russian
wife, was first proclaimed prime
minister, but now is in the lesser
position of vice president. His
rabidly racist, pro-Communist
outpourings had previously kept
him in relatively minor roles in
the ASP. Shuffling of govern-
ment posts suggests that Presi-
dent Karume is trying to keep
the African nationalists in a
dominant position over the pro-
Communists.
Kenya and Uganda were quick
to recognize the new regime. Tan-
ganyika's Nyerere favors it, but
is delaying recognition because
he is opposed as a matter of
principle to the forcible over-
throw of a constitutionally elected
government. The regime's foreign
policy will probably be outspokenly
anti-West, and anti-US in particu-
lar, and it will almost certainly
press for an early removal of the
NASA space tracking station.
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BEN BELLA'S DIFFICULTIES MOUNT IN ALGERIA
President Ahmed Ben Bella
faces mounting dissatisfaction
over Algeria's depressed eco-
nomic situation, and his personal
popularity is declining. He is
taking increasingly drastic steps
to control a potentially chaotic
situation and to eliminate his
political opposition, even though
it is fragmented, uncoordinated,
and probably incapable of up-
setting him.
The most serious display
of antiregime feeling since last
October's Kabylie revolt occurred
early this month in Oran, when
local authorities apparently
encouraged demonstrations to
protest widespread unemployment.
The army had to be called in
to quell the rioting which en-
sued, and special courts sen-
tenced some 300 of the 50,000
demonstrators to six months to
two years of imprisonment. The
regime staged counterdemonstra-
tions in Oran, but they were
feeble by comparison.
In a further countereffort
to rally support, Ben Bella de-
livered a series of speeches
denouncing the bourgeoisie,
counterrevolutionaries, specu-
lators, and other "numerous
animals" who were attacking his
revolution, and announced the
creation of revolutionary courts
empowered to order the execu-
tion of those involved in
counterrevolution. When he left
for Cairo to attend the Arab
League chiefs of state meeting,
he delegated several members of
his government to conduct rallies
throughout the country in a fur-
ther attempt to recoup enthusiasm
for the regime.
Opposition elements seem
to be attempting to prevent
the holding of a national con-
gress of Algeria's only politi-
cal party, the National Libera-
tion Front (FLN). Ben Bella
pledged last October that this
congress would be convened with-
in five months but no date has
yet been scheduled. He prom-
ised that the congress would
provide a forum for the presen-
tation of all points of view,
but no opponent is represented
on the preparatory commission.
Despite their stepped-up
activity, opposition forces
have not yet focused on any one
issue or rallied behind a single
national figure. One potential
leader who has been soliciting
support throughout the country
is Mohamed Khider, erstwhile
secretary general of the FLN
who broke with Ben Bella last
spring. Ben Bella may also
be keeping a more watchful eye
on Defense Minister Boumedienne,
a possible contender for power
whom he. has seemed to be under-
cutting in recent months
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PROPOSED UNION OF WESTERN EUROPEAN AIRLINES
Officials of Belgium, France,
Italy, and West Germany are meet-
ing in Brussels on 20 and 21 Janu-
ary to lay the groundwork for ne-
gotiations in February aimed at
combining their major airlines.
This project has been under con-
sideration in one form or another
since 1957. If such a pool--to be
known as Air Union--is actually es-
tablished, it would have important
implications for American carriers
and for US air transport policy.
It is still far from certain, how-
ever, that the prospective members
will soon overcome the problems
which have kept the project in the
talking stage for six years.
As presently envisaged, Air
Union would involve both an inter-
governmental convention and an as-
sociation agreement of the partici-
pating airlines. These agreements
would result in the close coordina-
tion of the airlines' policies and
the pooling of certain activities,
but would not amount to a full mer-
ger. While the airlines would keep
their separate identities and oper-
ate their own routes, Air Union
would handle planning, sales, and
ground services. Equipment would
eventually be standardized, and
both costs and receipts would be
shared.
One of the major stumbling
blocks has been to find an accept-
able cost- and receipt-sharing for-
mula. The Dutch withdrew from the
talks in 1959 because they were dis-
satisfied with the share allotted
to KLM. Since then there have been
strong pressures from the Italians
and Germans for adjustments to ac-
commodate the recent rapid growth
of Alitalia and Lufthansa. It is
unclear whether they will be satis-
fied with a new proposal which would
reportedly allot Air France 34 per-
cent, Alitalia and Lufthansa each
28 percent, and Sabena 10.
Another major difficulty has
been French efforts to have Air
Union buy aircraft equipment manu-
factured by the member countries.
The present draft provides only that
the airlines consult with Air Union
before purchasing new aircraft. The
French, however, proposed an amend-
ment last year which would permit
Air France to purchase French equip-
ment even though Air Union may
have recommended equipment of some
other origin.
In view of these protectionist
tendencies, the US attitude toward
Air Union has been mixed. Air
Union, with a capacity on the North
Atlantic routes comparable to Pan-
American's, would be potentially
more efficient than the individual
airlines. The combine, however,
is also designed to strengthen the
international bargaining position
of the participating countries--
for example, by joint purchase of
aircraft and by mutual support in
bargaining for additional landing
rights. In particular, nonmember
countries have been concerned lest
Air Union at some point declare
the territory of its participants
a single jurisdiction in which
domestic traffic would be reserved
to the member carriers.
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SOCIALISTS REGAINING STRENGTH IN FINLAND
The Social Democratic Party
(SDP) , which was once Finland's
largest but which has been split
and isolated since 1957, is mak-
ing a comeback. Indications of
this are the reunification talks
now going on between the two So-
cialist factions, a softening of
the USSR's hostility toward the
party, and the weakened position
of the presently dominant Agrar-
ian Party of President Kekkonen.
Last fall the leaders of
both the SDP and the splinter
Opposition Social Democrats
(Skogists) began a series of in-
formal meetings aimed at reunify-
ing the two political groups to-
gether with their affiliated
women's, youth, and sports organi-
zations. The Skogists have in-
dicated they are prepared to as-
sume a subordinate role in these
organizations. However, their
demand to play a dominant role
in any amalgamated trade union
movement promises to be a seri-
ous stumbling block to Socialist
reunification. Some influential
members of the SDP are insisting
on a satisfactory trade union
settlement before going ahead
with a political merger.
Soviet criticism of the SDP
has noticeably lessened since
mid-1963, when Vaino Tanner, one
of the harshest critics of the
Soviets, retired as party chair-
man and was replaced by the more
moderate Rafael Paasio.. The
SDP leadership has responded
by stressing its support of Fin-
land's policy of friendship with
the Soviet Union. By doing so,
the Socialists hope to refute
Agrarian claims that the SDP's
antagonism toward the USSR has
jeopardized Finnish-Soviet rela-
tions and thus makes the party
ineligible to join any future
coalition.
Although the Agrarian Party
remains dominant, its power has
diminished lately in the wake
of two recent government crises.
The last Agrarian-controlled
cabinet resigned in December
over wage and price issues,
and a caretaker government of
civil servants is presently in
office. The SDP has so far
refused to participate in a
new cabinet because it felt
that it has more to gain by
staying out of the government
at the present time.
Finland, however, has a
long tradition of government
by an Agrarian-Socialist coali-
tion. Such a coalition might
well be revived if prelimi-
nary steps toward Socialist rec-
onciliation are successful.
It would be all the more in
prospect if the Social Demo-
crats register significant
gains in this fall's munici-
pal elections.
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Western Hemisphere
SITUATION IN PANAMA REMAINS EXPLOSIVE
The situation in Panama
remains explosive, and could
lead to a recurrence of anti-
US violence
Nationalist senti-
ment is e ng maintained at
fever pitch by Communist, pro-
Communist, and pro-Castro ele-
ments who have been working
together to manipulate it
for their own purposes. Also,
campaigning for the presiden-
tial election in May promises
to accelerate in the next few
weeks and could contribute to
the general unrest.
Much of the Chiari govern-
ment's apparent ambiguity re-
cently in defining its position
on Panama's diplomatic relations
with the US evidently stemmed
from the divergent pressures
exerted upon it. On the one
hand, the concern expressed by
several influential Panamanian
businessmen over the economic
consequences of a prolonged
break with Washington probably
reflects the opinions of many
informed Panamanians, including
many within the administration
itself.
On the other hand, Presi-
dent Chiari probably believes
that the prevailing popular
sentiment leaves him no choice
but to take an intransigent
stand in demanding a new canal
treaty. To appear weak and
indecisive on this issue would,
in his view, be tantamount to
an open invitation to plotters
to move against the government.
Originally a body of pro-
Castroite students was direct-
ing the movement to sustain pop-
ular indignation against the
United States. The leadership
now has been.taken over by a
group of prominent leftist law-
yers and newsmen which is the
driving force behind the activ-
ities of a Committee for the
Defense of National Sovereignty
created with a view to organiz-
ing and giving direction to the
anti-Americanism that has swept
the country. This committee
has the potential to bring strong
pressures on the government and
the various candidates running
for office; it is perhaps the most
effective instrument the Communists
have to achieve their long-range
aims in Panama.
Communists led the student
marchers who, on the night of
15 January, pressured Chiari
to stiffen his attitude on the
resumption of relations with
the US and to demand demilita-
rization of the Canal Zone. F-
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The Communist bloc has
kept up a sustained propaganda
campaign against the US on the
Panamanian issue. Soviet com-
mentary, while comparatively
moderate, has pointed out that
the US is trying to settle the
crisis without yielding to any
major Panamanian demand. Some
of it has linked the crisis with
Khrushchev's recent proposals
for an international agreement
renouncing the use of force in
settling territorial disputes,
claiming that events in Panama
made the proposals "more timely."
On 14 January, Soviet commen-
tators predicted that the move
to revise the canal treaty will
continue to spread and that US
unwillingness to agree to a
peaceful settlement of Panamanian
demands will lead to "further
complications."
Characteristically, Peiping
has pressed its attack much
harder. Its press and radio
are giving heavy coverage to US
"aggression" and there have been
numerous mass rallies--one of
which turned out 100,000 people--
in support of Panama. Mao Tse-
tung and other top leaders have
issued formal statements con-
demning the US and calling for
a world-wide struggle against
"imperialism."
Cuban propaganda continues
to make much of Panama. It seeks
to picture the .rioting as part of
a hemisphere-wide and spreading
uprising against US "imperialism"
--an uprising inspired by the
example of the Cuban revolution.
Claims of noninvolvement in the
Western Hemisphere
situation in Panama are implicit
in the Cuban allegations that
the "struggle" there is part of
a historically inevitable tide
against US "exploitation" in
this hemisphere.
Che Guevara, speaking on
12 January, called the rioting
in Panama "just a very pale
sample of what is to happen to
imperialism in America" in the
future. He declared that the
day of revolution in Latin Amer-
ica is coming ever closer: "It
announced itself in Caracas; it
has been in Guatemala for almost
two years; it is all along the
whole Andes, the'Sierra Maestra
of America." Cuban Education
Minister Hart also devoted a
lengthy portion of a scheduled
speech to Panama.
Official reaction in other
Latin American countries has
consisted for the most part of
carefully worded expressions of
regret over the violence and of
support for Panamanian "national
aspirations." The Peruvian Senate
approved a motion on 13 January
expressing the desire that the
canal be administered under the
inter-American system, a traditional
position of the APRA party.
Privately, several Latin Ameri-
can officials have expressed sur-
prise and dismay over the Chiari
government's behavior. Student
groups in several countries mounted
US demonstrations but none was
very successful.
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Western Hemisphere
CASTRO'S TRIP TO MOSCOW
The circumstances surround-
ing Castro's unexpected arrival
in Moscow on 13 January sug-
gest a decision made in haste.
The Cubans and Soviets say
that Castro is
Khrushchevginto a
vita-
invita-
long-standing
tion to "exchange views," rest,
and hunt. However, inasmuch
as Khrushchev has not yet re-
turned Castro's five-week visit
to the Soviet Union last spring,
there are almost
compelling
versal of protocol than the
official explanations suggest.
There is no evidence that
unresolved issues in Cuban-
Soviet relations had suddenly
become so acute as to require
immediate consultation at Cas-
tro-Khrushchev level. The
Cuban-Soviet trade protocol for
1964 had been signed in Havana
the day before Castro's depar-
ture. (See next article.) The
transfer of Soviet weaponsys-
s
tems to Cuban control smoothly. appears
Cas-
to be proceeding
tro's 2 January anniversary
speech, which dwelt heavily on
the Soviet "peaceful coexistence"
theme, had suggested that Castro
was swinging back to Moscow's
view on this point. There are
no known international Communist
gatherings planned in the imme-
diate future which might call
for Castro's presence.
There may, of course, re-
main issues in Cuban-Soviet
relations unresolved during
Castro's talks with presidium
member Podgorny, who headed
the Soviet delegation to Cuba's
anniversary celebrations. Cas-
tro and Khrushchev may also be
concerned about the future 25X1
course of the new administra-
tion in Washington and wish to
agree on a joint response to
possible US actions toward
Havana.
It is also possible that
the recent events in Panama
are behind Castro's Am-
bassador Kohler points out
that both Havana and Moscow
have a vital interest in de-
de-
ciding how to exploit
velopment. To Castro, the
Panama affair almost certainly
calls for an immediate step-up
in anti-US agitation and sub-
version in Latin America.
Another possibility is
that Castro may feel the time
is propitious to seek Soviet
backing for a concerted
effort-perhaps
the UN--to bring about the
evacuation of the US Naval Base
at Guantanamo Bay. This demand
is one of Castro's "Five Points"
of November 1962 and is imbedded
in the joint Castro-Khrushchev
communiqud of last spring.
communiqud noted that "the
hSo-
viet Government supports
principles with all resolve."
The anniversary greetings sent
to Cuba by Moscow and Peiping
early this month repeated sup-
port for the "Five Points."
The Cuban effort would logically
be linked to Panama's demand
for a revision of the Canal
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Western Hemisphere
treaty and aimed at US military
positions throughout the Carib-
bean.
Soviet and Cuban news media
have identified only four mem-
bers of Castro's entourage, all
of them relatively minor figures.
They include Major Pedro Miret,
a long-time Castro friend who
SOVIET-CUBAN 1964 TRADE PACT
The Soviet-Cuban trade
protocol for 1964 indicates
Moscow's continued heavy com-
mitment to support the Cuban
economy. Soviet exports to
Cuba are scheduled to rise to
a record $385 million this year,
and the USSR will continue to
make up for Havana's inability
to pay its own way.
Total Soviet-Cuban trade
is to increase to over $600
million, roughly equivalent to
the levels reached in 1961 and
19,62. Last year this trade
dropped to about $475 million,
largely because much of Cuba's
limited sugar supplies were
diverted to Western markets to
take advantage of high world
prices.
Although Cuban exports to
the USSR are due to increase
this year, there will be a
$160-million deficit to be
financed by new Soviet credits.
Communist countries, mainly
the USSR, already have provided
Cuba with roughly $500 million
is now Cuba's artillery chief;
Major Aldo Santamaria
and Dr. Rene Vallejo, Castro s
personal physician.
in balance-of-payments support
in the last two years.
The new agreement belies
assertions by some Western
observers that Havana's current
trade drive in the West is an
outgrowth of differences with
the USSR. Instead of demanding
that Castro use some of his
hard-currency earnings to pay
off debts, Moscow apparently
agreed to the Cubans' using
these earnings to plug critical
gaps in their economy through
purchasing in the West. Mean-
while, the USSR continues to
provide most of the island's
essential imports and to work
on long-term development of
the Cuban economy.
A Cuban mission in Moscow
is discussing other economic
topics with the Soviets. The
purpose of these conversations
is obscure. They may be aimed
at new aid arrangements, possibly
to be 'announced during or imme-
diately after Castro's visit.
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Bolivia appears to be in
for a prolonged period of un-
rest following the convention
of the ruling Nationalist
Revolutionary Movement (MNR),
opening on 17 January, to nom-
inate a presidential ticket.
US Ambassador Henderson reports
that the increasing vicious
competition between President
Victor Paz Estenssoro and the
leader of the pro-Communist wing
of the MNR, Vice President Juan
Lechin, points to a crisis sit-
uation, the proportions of which
will be largely determined by
what happens at the convention.
Since the December mining
crisis, Lechin has been maneu-
vering strenuously to win one
of the two top position
Paz is currently working
behind the scenes for renomination
to the presidency and for the
selection of a vice-presidential
candidate of his liking. His
choice of a running mate reportedly
is the relatively colorless pres-
ident of the Senate, Federico
Fortun Sanjines. However, Paz
may not be able to force Fortun's
nomination without losing the
support of important segments
of the party. Some dark-horse
candidate from the left may
eventually emerge.
Whatever the outcome of the
nominating convention, violence
in the cities and among the miners
and neasants seems inevitable.
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Western Hemisphere
NEW COMMUNIST SUCCESSES IN BRAZIL'S
Brazil's Communists, with
important assists from the
Goulart administration, have
achieved new successes during
recent weeks in their continuing
drive to dominate the country's
labor movement.
On 6 January, the National
Confederation of Industrial
Workers (CNTI), whose two million
workers make it Brazil's most
powerful labor organization, re-
elected Communist sympathizers
as president and secretary
eneral.
Before the election,
Goulart made a show of impar-
tiality between pro-Communists
and non-Communist candidates.
Through his labor adviser,
Crockatt de Sa, Goulart encour-
aged the non-Communists and may
even have advanced them some
money. At the same time, he
kept in contact with the pro-
Communists through Labor Minis-
ter Amaury Silva, and at the
last moment threw his full
support behind them.
In any event, the Goulart
regime will no doubt keep up
its close working relationship
with the CNTI, a relationship
which dates back to 1961 when
Goulart's aid was instrumental
to the Communists' takeover of
the organization. It has been
a mutually beneficial arrange-
ment; the CNTI is the mainstay
of the sprawling Communist-
dominated General Workers
Command, a focal point for much
of Goulart's extremist political
support.
A second Communist victory--
also achieved with the coopera-
tion of Goulart--was the out-
come of an election last month
to choose a directorate for the
newly formed National Confed-
eration of Agricultural Workers
(CONTAG). Five of the nine
members are known Communists.
Since Brazil's labor code speci-
fies that only one confederation
is authorized in any given field,
CONTAG will be at least the
nominal spokesman for Brazil's
four or five million salaried
rural workers.
These developments culmi-
nate months of effort by Goulart's
agrarian reform agency (SUPRA),
collaborating with the Communists,
to build a rival organization to
the church-sponsored National
Confederation of Rural Workers
which had previously sought un-
successfully to obtain recog-
nition. CONTAG is bound to
play an important role in
Goulart's campaign for sweeping
agrarian reforms.
Having gained control of
CONTAG, the Communists now domi-
nate four of Brazil's six
national labor confederations.
Since Goulart depends primarily
on labor for his political
support, the Communists are in
a good position to increase their
influence in Brazil so long as
they are careful not to overplay
their hand.
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Western Hemisphere
IMPORTANT CHILEAN BY-ELECTION SCHEDULED
A by-election in Chile set
for 15 March should provide a
good reading on political trends
as the campaign heats up for a
presidential election this fall.
Since 1961 the rural, politi-
cally middle-of-the-road con-
stituency involved has been rep-
resented by three deputies--
a Radical, a Christian Democrat,
and a Socialist. The death of
Socialist Deputy Oscar Naranjo
made the special election nec-
essary.
The outcome of this elec-
tion is important to the three
main political groups contest-
ing the presidency. These are
the progovernment Democratic
Front (FD), the center-left
Christian Democrats (PDC), and
the far-leftist Popular Action
Front (FRAP).
Judging by the district's
past voting record, the FD's
standard bearer would seem to
have the best chance of winning.
However, FRAP, with which the
Socialists and Communists are
affiliated, is running the lo-
cally popular son of the dead
deputy. A victory for him, or
even a good showing, would pro-
vide an important boost for the
prospects of FRAP's presidential
nominee, Salvador Allende.
The PDC, whose presiden-
tial candidate, Eduardo Frei,
is making a vigorous bid nation-
ally, is faced with the diffi-
cult choice of staying out of
the by-election or putting up
a lackluster candidate.
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