WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004700080001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 18
• Document Creation Date: December 21, 2016
• Sequence Number: 1
• Content Type: SUMMARY

Approved
For Release 2008/07/23: CIA-RDP79-00927A004700080001-4
State Dept. review completed
3.1 December 1964
SUMMARY
CENTRAL.INTF;:.t,,LIGF-NQF P~G.EN_C.Y
SECRET
GROUP I ,_Excluded from aut r at c
downgrading and declassification
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SECRET
(Information as of 1200 EST, 30 December 1964)
THE COMMUNIST WORLD Page
MOSCOW SHARPENS ITS CAMPAIGN AGAINST MLF
It is peddling the line among NATO members that the
MLF would reduce prospects for further arms control
agreements and jeopardize the detente in East-West
relations.
SOVIET-CUBAN ECONOMIC RELATIONS
Moscow is trying to have Havana stress agricultural
production, especially sugar, so Cuba can improve its
foreign exchange status and thereby ease the Soviet aid
burden.
AGRICULTURAL STAGNATION CONTINUES IN COMMUNIST CHINA
Regime hopes for a good agricultural year in 1964
have been frustrated by a poor autumn crop. This
adds further obstacles to Peiping's already arduous
task of reviving the depressed economy.
SOUTH VIETNAMESE POLITICAL CRISIS PERSISTS
Premier Huong and Chief of State Suu now appear to be
working toward a solution which would not reverse the
military's power play, but would create a replacement
for the dissolved civilian High National Council.
TSHOMBE STRONGLY OPPOSES CONGO CEASE-FIRE
The Congolese premier claims that his basic problem
is still the military defeat of the rebel forces
AREA NOTES
On Sudan
SECRET
31 Dec 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page i
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SECRET
EUROPE Page
ITALIAN PRESIDENTIAL ELECTION
Saragat's election brings to the presidency a man who
strongly supports the center-left concept and the social
and economic reforms its program calls for. The pro-
longed contest, however, has shaken the stability of the
Moro government.
OUTLOOK FOR THE FRENCH ECONOMY
Businessmen are uneasy about prospects in 1965 because
of the gradual slowdown in economic growth, rising
prices and wages in private industry, an unsatisfactory
level of investment,. and a deterioration in the balance
of trade.
AREA NOTE
On West Germany
PANAMANIAN EXTREMISTS SEEK TO REGAIN INITIATIVE
They are supporting ultranationalist demands that
Panama and the Canal Zone be neutralized. The announced
US intention to set up a new Canal treaty cut away most
of the common ground between the extremists and moder-
ates.
AREA NOTES
On Bolivia and on Cuba
SECRET
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The Soviet Union appears to
be sharpening its campaign
against the formation of the NATO
multilateral nuclear force. Mos-
cow's efforts have picked up
speed since the recent inconclu-
sive NATO ministerial meeting
and the decision by the US, UK,
West Germans, Dutch, and Ital-
ians to meet in January for a
full airing of the MLF question.
Moscow has been trying to
arouse concern among NATO mem-
bers that agreement on the MLF
would reduce prospects for fur-
ther arms control agreements and
jeopardize the detente in East-
West :relations. Warnings that
the USSR would adopt unspecified
countermeasures have been coupled
with hints of new initiatives on
European security and on an
agreement banning dissemination
of nuclear weapons.
In his recent talks with
US officials, Foreign Minister
Gromyko asserted that establish-
ing the MLF "in any form" giving
West Germany access to nuclear
weapons would constitute a "hos-
tile act" which would force the
Soviet Government and its allies
to draw the "appropriate conclu-
sions" for their security.
Soviet officials have also
stepped up activity in Scandi-
navia--a familiar tactic when-
ever the USSR is intent on dram-
atizing the "German problem."
They are stressing that the MLF
runs directly counter to European
sentiment in favor of a broad
nondissemination agreement. Dur-
ing a recent trip to Finland, So-
viet President Mikoyan appeared
to go out of his way to attack
the MLF as the "most important
obstacle" to the reduction of
tensions in Europe.
There have been some hints
that Moscow may pick up the sug-
gestion made early this fall by
the UAR and India that negotia-
tions on MLF be suspended pending
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY Page 1
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1W SECRET
further efforts to reach a non-
dissemination agreement. During
a recent and somewhat unusual
speaking tour through Norway and
Sweden, the chief Soviet dele-
gate at the Geneva Disarmament
Conference indicated that the
USSR might broach some proposal
along these lines at the UN.
SOVIET-CUBAN ECONOMIC RELATIONS
Moscow continues to encour-
age Havana to emphasize agri-
cultural production, especially
the output of sugar, as a start
toward remedying Cuban economic
problems. Shiploads of farm
equipment and machinery have
been arriving recently. Just
as the sugar harvest began, the
USSR sent in 250 personnel to
operate and maintain Soviet-sup-
plied cane cutters, combines,
tractors, and trucks.
The Soviet effort is chiefly
linked to a desire to see Cuba
earn increased foreign exchange
and thereby ease the Soviet aid
burden. It is unlikely, how-
ever, that Cuban agriculture can
show sufficient growth during
the year to prevent a further
increase of Cuban debt to the
USSR.
The 1965 trade agreement
has been under negotiation since
November. The USSR presumably
has discussed Cuba's mismanage-
SECRET
31 Dec: 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Any new Soviet proposals
on nondissemination would at-
tract wide support from the neu-
trals and would be calculated to
invite favorable response from
key Allied nations with a view
to isolating the Germans and dis-
rupting MLF ne otiations.
ment this year of its foreign
trade, in which poorly planned
purchases from the West caused
a foreign exchange crisis.
During the nego-
tiations the USSR consulted in
Moscow with the Cuban ministers
of economy, agriculture, indus-
try, and foreign trade.
The Soviet drive to develop
Cuban agriculture has not notice-
ably cut back on other forms of
assistance. Moscow purchased
more than $20 million worth of
Canadian wheat in the past three
months for delivery to Cuba.
Large numbers of Soviet advisers
and technicians continue to im-
plement industrial aid projects
for which a wide variety of equip-
ment is regularly delivered.
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AGRICULTURAL STAGNATION CONTINUES
Peiping's hopes for a good
agricultural year in 1964 have
been frustrated by a poor autumn
crop. Grain output in 1964 is
estimated at about 170 million
tons, roughly three percent be-
low the 1963 estimate of 175
million tons. Rice output rose
in Central and South China, but
extensive flooding in North
China cut deeply into the har-
vest of miscellaneous grains.
Wheat production also dropped
slightly, with poor yields off-
setting increased acreages.
The regime has not yet acknowl-
edged these developments, how-
ever, and continues to talk of
a bumper harvest.
The 1964 grain estimate is
about 6 percent below 1957,
when there were approximately
90-100 million fewer people to
feed. Because of this popula-
tion growth, the current per
capita supply--including grain
imports of over 6.5 million tons
in 1964--is about 14 percent
below the 1957 level. It ap-
proximates the level reached
in 1960-61 when malnutrition
was widespread throughout China.
Comparable food difficulties
are unlikely in the coming year,
however, because of the expanded
output of subsidiary foods from
the peasants' private plots plus
the regime's demonstrated will-
ingness to import large amounts
of grain.
Nevertheless, the food sup-
ply is expected to tighten this
winter and spring, especially
in flooded areas of North China.
However, continued large imports
of grain in early 1965, together
with current efforts to increase
domestic procurement, should en-
able the leadership to ease re-
gional differences in supply and
prevent any sharp deterioration
in the over-all food situation.
Beyond the immediate problem
of guaranteeing sufficient food
supplies, the regime depends
heavily on agriculture to furnish
much of the support for economic
growth. It is increasingly clear,
however, that harvests which fail
even to match the growth of popu-
lation will severely restrict
Peiping's ability to pull the
economy out of its depressed
state, much less boost it into
rapid growth.
The failure to raise grain
harvests significantly over the
past 10 years--the current crop
is believed to be about the same
as the annual average during the
first five-year plan (1953-57)
--remains Peiping's most impor-
tant economic problem. Efforts
to solve it, however, have not
recognized this importance. There
is still no evidence of an effec-
tive program for agriculture. In
this area, the regime relies too
much on political panaceas, in
contrast to industry, where pri-
ority attention to modern wea ons
is beginning to pay off.
SECRET
31 Dec 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
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SECRET
SOUTH VIETNAMESE POLITICAL CRISIS PERSISTS
The political crisis stemming
from the military's dissolution of
the High National Council (HNC) on
20 December remains unresolved.
There are signs, however, that the
various protagonists in the conflict
are backing off somewhat from the
extreme positions they took last
week.
Chief of State Suu and Premier
Huong publicly stated their views
on the crisis in a joint communi-
que on 28 December, They lamented
the dissolution of the HNC and
called upon all interested parties,
including the military, to seek a
"fitting solution." Suu and Huong
appear to be working toward a solu-
tion which, without formally undo-
ing the military's dissolution of
the HNC, would permit the formation
of a new legislative committee
under the Chief of State. Such a
committee presumably would have
functions analagous to those of the
disbanded HNC, and probably would
include some of the original mem-
bers.
The terms of any compromise
would probably have to include the
release of political hostages be-
ing detained by the military and
arrangements for the permanent re-
tirement of the nine senior gen-
erals, including Big Minh and the
"Dalat" generals. This was the im-
mediate issue which precipitated
the crisis.
After initial efforts to ob-
tain signatures among field units
for anti-US petitions failed, Gen-
eral Khank now appears to be back-
ing down somewhat, although he still
avoids personal contact with Ambas-
sador Taylor. The "young Turk" com-
manders, while siding with Khanh in
defense of the military's action
against the HNC, have privately ex-
pressed disapproval of his anti-
American gambit.
The Buddhist leadership, us-
ing a weekend assault on the Bud-
dhist national headquarters by un-
identified hoodlums as an excuse, has
renewed its campaign against Premier
Huong. The Buddhists continue to
leave some room for negotiations
with the government, however. They
also apparently have not fully as-
sessed the implications of the mil-
itary power play of 20 December.
The Christmas Eve terrorist
bombing of a US military BOQ in Sai-
gon highlighted Viet Cong activity
during the past week. The general
pattern of Communist-initiated in-
cidents reflected an increasing num-
ber of small-scale attacks and am-
bushes, hamlet harassment, terror-
ism, mine detonations against gov-
ernment military convoys, and sab-
otage against highways, bridges,
and railroads. The Communists also
engaged in several larger scale
actions with varying degrees of suc-
cess. On the government side, a
helicopter-borne operation in the
southern delta area inflicted heavy
casualties on the Viet Cong and re- 25X1
sulted in the capture of a number
of heavy weapons and ammunition.
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
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SECRET
TSHOMBE STRONGLY OPPOSES CONGO CEASE-FIRE
Premier Tshomb6 remains
adamantly opposed to any cease-
fire proposals, and is buttress-
ing his forces to continue the
fight.
Tshomb6 has stated that
the cease-fire proposal in the
resolution before the UN Se-
curity Council this week is
"completely unacceptable" to
him, his cabinet, and President
Xasavubu. He says that a cease-
fire would be construed by Afri-
can nations as a political de-
feat for him,would give the
rebels time to reorganize and
rearm, would result in a de
facto partition of the Congo
and is unenforceable.
Tshomb6 and his entourage
also are resisting Belgian For-
eign Minister Spaak's proposals
--designed to improve Tshomb6's
image in Africa--that he broaden
his government, proclaim a gen-
eral amnesty for all rebels ex-
cept a few leaders, and replace
South African and Rhodesian mer-
cenaries with Europeans. Tshomb6
still 'wants to devote all his
efforts to the military defeat
of the rebels.
There have been few mili-
tary developments this week.
The Christmas holiday passed
without serious incident, de-
spite reports that major rebel
activity would occur at that
time. In the northeastern Congo,
government forces recently re-
captured Wamba, 45 miles south-
east of Paulis, and rescued over
100 hostages.
On the internal political
scene, Tshomb6 has begun pre-
liminary groundwork for the
February national elections.
Last week he convened some 200
tribal chiefs to discuss the
elections, and has indicated he
intends to rely on the tradi-
tional tribal structures for
support rather than on the dis-
credited political parties.
SE CRE T
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Sudan: Communist and non-
Communist Sudanese political
groups are maneuvering to strength-
en their positions for the parlia-
mentary elections now scheduled
tentatively for March or April.
The numerically weak Commu-
nists are making strenuous efforts
to build a broader popular base.
They have reportedly been trying
to woo the urban National Unionist
Party into forming a coalition.
Leaders of the opposing conserva-
tive Ansar brotherhood claim they
are determined to curb the Commu-
nists. The Ansar have scheduled
a mass rally for 1 January, at
which time they plan to demand
that the government take action
"against Communists."
Meanwhile, the breach between
the Arab north and three southern
Negroid provinces has become al-
most complete, and the South will
probably be excluded from partic-
ipation in the elections.
Southern leaders refuse to
return to the Sudan until their
demands for federation are guar-
anteed, but the central government
now declares that the Sudan is a
unitary state and that federation
will not be considered. The south-
erners have come out strongly
against Khartoum's aid to the
Congolese rebels. A resurgence of
anti-Arab terrorism in the south
is likely, possibly aimed in part
at disrupting the passage of arms
the Congo rebels.
SECRET
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MW N..Wi
SECRET
The Moro government has
been severely shaken by the pro-
longed and bitter presidential
election which almost disrupted
relations between the Christian
Democrats (CD) and their coali-
tion partners. Since the CDs
failed to vote solidly for Presi-
dent Saragat, he owes his margin
of victory to Communist support.
The Communists have lost no time
in exploiting this situation.
An immediate obstacle con-
fronting the Moro government is
the selection of a foreign min-
ister to replace Saragat, and per-
haps even a wider cabinet reshuf-
fle. More important to its sur-
vival, however, will be the out-
come of the fierce power strug-
gle now going on within the
Christian Democratic Party.
The failure of the CDs to
rally to one of their own candi-
dates during the prolonged bal-
loting--and its resultant failure
to elect a CD president--has in-
tensified internal factionalism
and left the party in complete
disarray. A left-wing leader
has already been suspended for
a year because his faction con-
sistently refused to back the
party's first "official" candi-
date--Giovanni Leone. Despite
the party's official backing,
a sizable share of the party
did not support Saragat on the
final ballot.
An early meeting of the
party's national council will
have to tackle the problem of
reorganizing factional represen-
tation on the party's top ad-
ministrative bodies. The out-
come of this struggle presumably
will clarify the party's inten-
tions toward the center-left's
program. It is presently far
from certain that Moro can muster
enough support to get the party
to agree to make progress on the
program and avert moves to re-
place him as premier.
Saragat's election repre-
sents a major victory for the
"lay" coalition parties and
brings to the presidency a man
who strongly supports both the
center-left and the social and
economic reforms its program
calls for.
PSI leaders, how-
ever, can be expected to insist
on firm commitments for early
implementation of certain re-
forms as a quid pro quo for stay-
ing in the government.
SECRET
31 Dec 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
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SECRET
Europe
OUTLOOK FOR THE FRENCH ECONOMY
French Government and busi-
ness circles are somewhat pessi-
mistic about the outlook for the
French economy. A recent survey
indicates that businessmen are
uneasy about their prospects in
1965. Major points of concern
have been the gradual slowdown
of economic growth, rising prices
aggravated by a rising wage level
in private industry, an unsatis-
factory level of private invest-
ment,and the deterioration in
the balance of trade.
The government's rigid ad-
herence to a stabilization pro-
gram keyed to price controls,
credit restraints, and a tight
budget has probably had an ad-
verse effect on the growth of
industrial production. France's
Economic and Social Council has
warned the government that these
measures "have killed both the
weeds and the young plants."
The stabilization program has,in
fact, been successful in check-
ing sharp price rises and dete-
rioration of France's trade bal-
ance, but only at the risk of
precipitating an over-all economic
slowdown which, in turn, would
mean mounting unemployment.
French financial circles
are critical of the government's
failure to bring about promised
structural reforms in the out-
moded French capital market. In
the Budget Bill for 1965, the
government included proposals
which were designed to strengthen
the capital market as an instru-
ment for the accumulation of
savings, which could then be
channeled into productive in-
vestment. Financial circles,
however, felt that these pro-
posals, which altered and re-
duced certain taxes affecting
securities income and transac-
tions, fell far short of what
was needed.
The continuing impasse with
labor on the wage issue is a
further complication. Current
union discontent is based on
the absence of any meaningful
dialogue with the government.
The unions distrust the govern-
ment's efforts to impose a com-
prehensive "incomes policy."
They also disagree with the al-
location of resources as well
as the social objectives out-
lined in the government's re-
cently approved Fifth Plan for
Economic Development. Despite
the impressive turnout in the
11 December general strike by
all three major unions, the gov-
ernment is standing pat in its
determination to hold wage rises
to 4 percent.in both the public
and nationalized sectors of the
national economy. The three
unions have announced plans for
another strike on 18-19 January.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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West; Germany: Bonn is con-
cerned over the burden being put
on German facilities by refugees
from East;ern Europe. There has
been a large increase this year
in the number of Czechs and Hun-
garians traveling to and seeking
asylum in West Germany, princi-
pally because travel controls
were relaxed by the Communists.
Many of the Czechs can
qualify as Sudeten Germans, and
are promptly assimilated into
German life. The other refugees
must process at the Federal Re-
public's only non-German refugee
reception center, Camp Zirndorf
in Bavaria. By December, their
number had exceeded the camp's
normal capacity of 500. In con-
trast to past patterns, entire
families have been coming to
Germany recently. Even when
work is found for them, they can-
not always be allowed to leave
the camp because of the problem
of finding adequate housing.
that
will
German officials assume
the 1965 refugee influx
at least equal that of
1964,
and
they are afraid that by
sum-
mer
Zirndorf will have no room
for
newcomers. The Bavarian
authorities who run the camp
are extremely reluctant to en-
large the facilities.
In Prague, the government
recently issued a public warn-
ing acknowledging that the
travel relaxation opened possi-
bilities of defection
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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SECRET
Panamanians of the extreme
left, including Communist stu-
dent leaders, are attempting to
regain the drive stolen from
them on 18 December when Presi-
dent Johnson announced that the
US intended to replace the Canal
treaty with a new one encompass-
ing Panama's major demands.
The statement cut away most of
the common ground between the
extremists and the more moderate
Panamanian nationalists.
Communists are supporting
the emerging ultranationalist
demand that Panama and the Canal
Zone be "neutralized" by the
withdrawal of all US military
forces. The Robles government,
which was elated over the 18
December statement, apparently
feels it is politically inex-
pedient to repudiate publicly
the "neutralization" concept.
Ernesto Castillero Pimentel, the
Foreign Ministry's coordinator
of negotiations with the US,
claimed in a recent press inter-
view that the "neutralization"
demand was "official thinking
from the President of Panama
down...." Foreign Minister Eleta
has indicated to US officials
that he feels the mounting pres-
sure for "neutralization" cannot
be ignored, though he did indi-
cate privately that Castillero
was not speaking for the govern-
ment.
The rising radical politi-
cian Carlos Ivan Zuniga claimed
on 21 December to have informa-
tion that the US had installed
"military atomic guided missile
bases" in the Canal Zone. He
charged that this was incompati-
ble with what he called the basic
Panamanian objective of neutral-
ity. Peiping was quick to pick
up this nuclear theme in recent
Chinese Communist broadcasts
regarding US plans to build a
new canal.
Communist Panamanian stu-
dent leaders, who have made the
Canal issue their stock in trade,
continue to plan anti-US demon-
strations for 9 January, the
first anniversary of the rioting.
The explosion of three terrorist
bombs in Panama City on 28 Decem-
ber caused little damage, but
may have been the prelude to an
attempt to build up a climate
of unrest preparatory to the
anniversary date. Most knowl-
edgeable sources believe, how-
ever, that the US statement has
probably averted the threat of
serious violence on 9 January.
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Bolivia: Rumors that fol-
lower s o ex-President Paz Es-
tenssoro were plotting to as-
sassinate junta president Barri-
entos and overthrow the govern-
ment kept tensions high in La
Paz over the holidays. The min-
ister of government announced
to the press on 27 December that
such a plot had been discovered
but not completely smashed and
that Barrientos' life remained
in danger.
A reported plot
by the Bolivian Socialist Fa-
lange (FSB) bears watching. In
a recent conversation with US
Ambassador Henderson, Falange
Chief Mario Gutierrez repeatedly
evaded the ambassador's ques-
tions on FSB intentions. Gutier-
rez, however, sharply criticized
Barrientos and expressed con-
cern that the popular general may
become a presidential candidate.
The leftist newspaper Jor-
nada reported on 22 December
ha ' a group of Barrientos' fol-
lowers are organizing a new po-
litical party, the Popular
Christian Movement, to foster
his presidential candidacy. The
story has been largely confirmed
by one of Barrientos' close per-
sonal friends who is charged
with organizing the party. An-
other friend of the general, An-
tonio Arguedas, has resigned
his government ost to organize
the cam ai n.
Cuba: Che Guevara, Cuba's
most HT Cant spokesman for the
"anti--imperialist struggle," has
ended a week-long visit to Al-
geria and has started a tour
which apparently will include
the capitals of the more radical
African countries. Guevara ar-
rived in Mali on 26 December.
He is expected to visit Guinea,
Ghana, Congo (Brazzaville), and
possibly the Sudan, the UAR,
and Tanzania. His visits to Al-
giers and Bamako, however, have
been marked by a surprising lack
of publicity in the local press
and radio.
Guevara's main objective is
to push the "solidarity with
Africa" idea he stressed in his
11 December UN General Assembly
SECRET
speech, a central theme of which
is Cuba's "moral support" for
the Congolese rebels. He probably
also hopes to gain African sup-
port for the anti-US campaign
which Havana is expected to press
in the UN during the coming months.
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