COMMUNIST AID AND TRADE ACTIVITIES IN LESS DEVELOPED COUNTRIES, APRIL 1976

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79S01045A000100060001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: December 15, 2016
• Document Release Date: February 25, 2004
• Sequence Number: 1
• Publication Date: June 1, 1976
• Content Type: REPORT

Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
Secret
Communist Aid and Trade Activities
in Less Developed Countries, April 1976
Secret
ER CAT 76-006
June 1976
Copy N2 58
25X1
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
 25X1 Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
 Approved For Release 2004/03/15 : CIA-RDP79S01045A000100060001-5
SECRET
25X1
CONTENTS AND SUMMARY OF EVENTS
(April 1976)
Highlights
? Moscow signed an agreement to construct an aluminum plant in
Algeria; foreign exchange cost could exceed US $100 million.
? South Yemen may have received $25 million in new Soviet develop-
ment credits.
? Morocco has again postponed discussions on a Soviet proposal to
develop phosphates at Meskala.
? Poland agreed to provide up to $35 million in fisheries assistance to
Senegal.
? The USSR and India signed a new five-year agreement that envisions
total annual trade of more than $1.1 billion by 1980.
25X1
Page
Article
Soviet Fisheries and Maritime Aid to Less Developed Countries . . . . . 1
Summarizes Soviet fisheries and maritime assistance to LDCs in 1975.
Other Activities
Military . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Approved For Release 2004/03/15 : CIA-RDP79S01045A000100060001-5
 Approved For Release 2004/03/1%g -RDP79S01045A000100060001-5
25X1
COMMUNIST AID AND TRADE ACTIVITIES
IN LESS DEVELOPED COUNTRIES
APRIL 1976
SOVIET FISHERIES AND MARITIME AID
TO LESS DEVELOPED COUNTRIES*
One Major New Aid Initiative in 1975
Moscow's $33 million commitment to Somalia in 1975 was the largest it ever
made to a less developed country for fisheries development (see Table 1). Otherwise
in 1975, the USSR provided
only small amounts of new
assistance to Gambia, Guin-
ea-Bissau, and Portugal, all of
whom signed their first fisher-
ies agreements with Moscow.
The accords include technical
services, training, equipment,
and facilities as well as surveys
on marine resources and off-
shore geological formations.
About 750 Soviet tech-
nicians were in LDCs in 1975
to conduct research. to train
local personnel, and to con-
struct and manage port facili-
ticsand fish-processing plants.
About 300 trainees from
Soviet Fisheries Agreements with LDCs
1975
Recipient
Gambia ........
Guinea-Bissau ...
Value
millions
US$
LDCs went to the USSR for training.
2.0' Port facilities; fishing vessels; and
training.
0.5' To establish commercial joint ven-
tures; USSR to supply refriger-
ated trawlers and 90% of crew.
0.51 Training Portuguese technicians
and equipment to outfit Por-
tuguese fishing vessels.
33.0 $14 million in grants and $19 mil-
lion in soft loans for training,
small vessels, fishing gear, fishing
bases, onshore port and process-
ing facilities, repair facilities, and
a training school.
25X1
Note: The substance of this publication has been coordinated with the Bureau
of Intelligence and Research of the Department of State, with the Defense
Intelligence Agency, and with the Agency for International Development.
Comments and queries regarding this publication are welcomed. They may be
directed to the Office of Economic Research,
25X1
Approved For Release 2004/03/15 : CIA-RDP79S01045A000100060001-5
 Approved For Release 2004/03/11E& --RDP79S01045A000100060001-5
Moscow joined at least 5
countries-largely in Africa-
ir, commercial fishing ven-
tures. This brought the
Soviet-LDC total for joint
fishing operations up to 12 by
the end of the year, and nego-
tiations were in progress with
another eight countries for
similar ventures (see Table 2).
A new trilateral venture also
was arranged in West Africa
by a Soviet-French company
that is licensed and operating
out of Sierra Leone.
Status of Fisheries Program
Since 1956 the USSR
has signed fisheries agree-
ments, valued at an estimated
Status of Soviet Joint Fishing Ventures' with Less Developed
Countries As of 31 December 1975
Argentina ..................
Bangladesh .................
Benin ......................
Ecuador ...................
Egypt .....................
Gambia ....................
Guinea-Bissau ...............
Indonesia ..................
Iraq .......................
Liberia ....................
Malaysia ...................
Mauritania .................
Mauritius ..................
Morocco ...................
Peru .......................
Sierra Leone ................
Somalia ....................
South Yemen ...............
Spain ......................
Sri Lanka ..................
Agreement in principle
Under negotiation
Under negotiation
Earlier offer in abeyance
In operation
Under negotiation
In operation
Under negotiation
In operation
Offer under consideration
Under negotiation
Company approved in April
1975
Agreement signed
Agreement signed
Under negotiation
Agreement signed
In operation
In operation
In operation
Agreement signed
$180 million, with 28 less developed countries (see Table 3); about 46% of the aid
was provided to Africa and 30% to the Middle East. Although accounting for less
than 2% of Moscow's total economic aid to LDCs, fisheries assistance has helped
spread Soviet influence from the Indian Ocean across the Atlantic to countries
adjacent to major fishing grounds. The joint research effort with LDCs has assisted
Moscow in extensively exploring the southern reaches of the Indian, South Atlantic,
and Pacific Oceans.
The aid is provided either as outright grants or under long-term credits that are
repaid in reciprocal services. In either case, Moscow often requires LDC concessions
for its fishing fleet. These include port rights for Moscow's trawler fleet, use of
repair facilities, refueling, transfer of crews, and onshore processing. The services
provided at low cost by LDCs greatly enhance Soviet fleet efficiency.
Recent Soviet efforts to expand their participation in the ownership of LDC
fishing companies are intended to ensure exploitation of marine resources within
national waters boundaries, regardless of new international boundaries that may be
agreed to at the Law of the Sea Conference. Joint ventures usually give the USSR
2
SECRET
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
 Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
SECRET
490 ownership of the com-
panies. These are small in-
vestments with a high return.
Soviet vessels are leased or
purchased by the joint com-
pany; they are jointly manned
and used for training, re-
search, and fishing. Part of the
catch is delivered to LDCs for
local distribution; the re-
mainder is frozen and sold in
Western markets. Profits are
divided on the basis of owner-
ship shares. The extent of
Soviet aid to the companies is
not known, although the
USSR probably provides
training without charge and
possibly some equipment on
credit or as grants.
The USSR extended no
new maritime aid to LDCs in
1975, although it continued
to work on projects agreed to
previously. Through 1975 the
Soviets had pledged about
$65 million to 16 nations in
the form of merchant vessels
and harbor and shipbuilding
equipment. Usually maritime
aid has been given to help
LDCs make up deficiencies
that limit their trade with
Moscow-Egypt and North
Soviet Assistance Extended to Less Developed Countries For
Fisheries and Maritime Development
January 1956-December 1975
Million US 5
Tota12 ........................
183.1
65.0
Africa ........................
84.4
6.1
Algeria ......................
4.5
3.0
Equatorial Guinea ............
0.5
N.A.
Gambia .....................
2.0
N.A.
Ghana ......................
11.2
Guinea .....................
7.8
2.5
Guinea-Bissau ................
0.5
Kenya ......................
2.2
Mauritania ..................
2.0
Mauritius ...................
6.5
Morocco ....................
1.5
N.A.
Senegal .....................
4.4
Somalia .....................
38.4
N.A.
Sudan ......................
2.0
Tanzania ....................
0.9
Tunisia .....................
....
0.6
Middle East ...................
we
36.1
Egypt ......................
15.0
16.6
Iran ........................
8.3
1.5
Iraq ........................
19.0
1.5
North Yemen ................
7.8
16.5
South Yemen ................
6.5
Syria .......................
N.A.
South and East Asia ............
17.1
15.1
Bangladesh ..................
8.0
N.A.
India .......................
2.2
Indonesia ..................:
0.3
Pakistan ....................
3.6
Sri Lanka ...................
3.0
Latin America .................
24.5
Argentina ...................
5.0
Chile3 ......................
17.0
Peru ........................
2.5
Europe .......................
0.5
7.7
Greece ......................
7.7
Portugal ....................
N.A.
'In the case of joint ventures, only the aid portion is in-
cluded here.
'Total based partly on estimated figures.
3Programs have been discontinued.
has begun to form joint
already in operation are
Yemen, for example. In the past
shipping companies with LDCs. The most important ones
with Iraq, India, Philippines, Somalia, and Egypt.
SECRET
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
 Approved For Release 2004/03/15 : CIA-RDP79S01045A000100060001-5
SECRET
Outlook for Continued Fisheries Aid
Soviet fisheries aid will continue as a profitable, low-cost form of assistance.
Emphasis on joint ownership of shipping companies and fisherie research are likely
to increase.
OTHER ACTIVITIES
Economic
Algeria. The USSR signed an agreement to construct an aluminum plant at
Msila with a capacity of 140,000 metric tons per year. Financing for the facility,
whose foreign exchange cost could top $100 million, was not announced.
Guinea. The USSR agreed to pay the S4.73 per ton Guinean export tax on
bauxite retroactive to October 1974. The $10 million payment will be credited
to Guinea's ruble account, which is for buying goods from the USSR. In the future,
tax payments will be used to reduce Guinea's long-term debt to the USSR and
its clearing trade account debt. Meanwhile, bauxite price negotiations are
continuing. Conakry wants Moscow to pay the $17.00 per ton price paid by other
customers for Kindia bauxite rather than the $6.50 per ton it now pays.
Guinea-Bissau. Guinea's President Cabral signed long-term economic
cooperation and trade agreements with Romanian officials while in Bucharest.
Mauritania. A Soviet delegation was in Mauritania to discuss further
developments under a 1973 fisheries cooperation agreement. The USSR already
has provided two fishing vessels and plans to construct a research institute.
Morocco. Rabat has postponed a joint Soviet-Moroccan intergovernmental
commission meeting scheduled for the end of May. Moroccan officials give as a
major reason for the delay Moscow's insistance on including on the agenda the
Meskala phosphate development project. The agreement, originally scheduled for
signing late in 1975, was postponed by King Hassan because of Soviet support
for Algeria in the Western Sahara dispute.
Mozambique. East German specialists in agriculture, forestry, and food
processing discussed implementation of a 1975 technical assistance agreement at
meetings held in Mozambique.
4
SECRET
Approved For Release 2004/03/15 : CIA-RDP79S01045A000100060001-5
25X1
25X1
 Approved For Release 2004/03/11E56PA-RDP79S01045A000100060001-5
The USSR donated medical supplies to Mozambique in April, valued at
$275,000. A 27-man Chinese medical team also arrived under a health agreement
concluded in November 1975.
Senegal. Poland has agreed to provide trawlers to Senegal and to construct
a dock, processing, and storage facilities. The $35 million project is reportedly
to be financed with long-term credits. In return, Senegal granted Poland fishing
rights in its territorial waters.
Senegal signed its first general economic agreement with Romania.
1: 1
Sudan. China and Sudan signed their annual trade protocol, calling for $65
million worth of trade in 1976, almost $20 million below last year's level. Sudan
will exchange cotton for Chinese textiles, light industrial products, and rice. Trade
between the two countries is carried out in hard currency.
Zaire. A team of Chinese technicians arrived in Zaire to begin work on an
80,000-seat Olympic stadium being financed under a $100 million Chinese line
of credit.
Burma. The Burmese Minister for Industry was in Prague to discuss further
Czech assistance to Burma's tractor industry. Czechoslovakia constructed a tractor
assembly plant in Burma under a $13 million 1966 credit.
Philippines. East Germany's first trade delegation to Manila proposed a trade
agreement to replace present conduct of trade through third countries.
Representatives of the Philippines Chamber of Industries reportedly have
signed a number of cooperation agreements with Poland.
Romania and the Philippines signed their 1976 trade protocol under which
Romania agreed to extend a $4.5 million credit for trucks and tractors, repayable
over five years at 6%-8% interest. Last year, Romania bought $96 million worth
of goods from the Philippines and sold them $26 million worth
L: I
5
SECRET
Approved For Release 2004/03/15 : CIA-RDP79S01045A000100060001-5
25X1
25X1
25X1
25X1
25X1
25X1
 Approved For Release 2004/03/119-CCIA-RDP79SO1045A000100060001-5
RET
Argentina. Argentina sold the USSR an additional 300,000 to 400,000 tons
of foodgrains, bringing the value of its 1976 grain sales to the USSR to an estimated
$100 million.
Bolivia. A new Soviet-Bolivian three-year trade agreement signed in March
includes 10-year credits at 4.5% to 5% interest and re ayment in Bolivian products.
F I
Brazil. The USSR is bidding on contracts to supply equipment to the Itaipu
power project. The effort is intended to offset a record $300 million trade deficit
the USSR had with Brazil in 1975.
Colombia. Soviet foreign trade officials offered Colombia up to $150 million
in 10-year credits for the purchase of hydroelectric power equipment for the $400
million Alto Sinu power project.
Ecuador. Ecuador announced cancellation of a 1975 joint oil exploration
agreement with Romania because it violated Quito's foreign investment laws.
I
The USSR offered fisheries assistance to Ecuador's new government during
the visit of a Soviet fisheries delegation in April.
Guyana. Guyana signed a trade agreement with Romania in April, its second
such agreement with an East European country.
Mexico. Poland ordered Mexican shrimp boats.
Peru. Czechoslovakia and Peru signed an economic cooperation protocol that
probably dealt with the use of $35 million worth of 1971 credits, mostly allocated
to electric power development. Peru also signed long-term contracts for the supply
of raw materials and semifinished products to Czechoslovakia. Trade between the
two countries exceeded $20 million in 1975, compared with an estimated $11
million in the previous year.
Trinidad and Tobago. China hopes to attract US buyers to a two-week trade
exhibit planned for September in Port of Spain. Exhibits will include a wide range
of products, including heavy industrial equipment.
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
SECRET
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
 Approved For Release 2004/03/11CR9{A-RDP79SO1045A000100060001-5
Bangladesh. The first Chinese ambassador arrived in Dacca under the agreement
to establish diplomatic relations signed last year. 25X1
The Ghorsal powerplant, built with $14 million in Soviet aid, reached full
capacity production in April. Its 1 10-MW capacity accounts for 16% of Bangladesh's
power production. 25X1
Cyprus. Cyprus plans to sign a long-term agreement on industrial and technical
cooperation with Romania in May.
Egypt. Egypt and Czechoslovakia signed a three-year trade agreement, which
will use dollars instead of sterling as the unit of account. Egypt is moving toward
the increased use of dollars for valuing transactions under bilateral trade agreements
because of wide fluctuations in the value of sterling.
25X1
25X1
Greece. The USSR and Greece have agreed to gradually replace their bilateral
clearing system with hard currency payments.
25X1
F
India. Bulgaria has agreed to assist in the establishment of an agricultural
complex in Bangalore. The project includes bringing about 10,000 hectares under
cultivation and building vegetable-processing facilities. F77 I 25X1
An Indian-Hungarian protocol, signed during a joint commission session, calls
for Hungarian assistance to the aluminum industry and for reconstruction of leather,
textile, and pharmaceutical plants. Joint projects in third countries were also
discussed, as well as increasing trade above the $50 million 1975 level.
A new Indo-Romanian protocol calls for doubling the level of their trade
by 1980: it was $112 million in 1975. The two countries also studied further
collaboration in metallurgy, petroleum refining, petrochemicals, and light industry.
In April the USSR and India signed a trade agreement covering 1976-80 and
their 1976 trade protocol. The new agreement calls for trade to top $1.1 billion
annually by 1980, with Indian exports rising to $675 million in 1980. Trade in
1975 amounted to about $850 million, according to Indian data. The two sides
also signed agreements allowing repayment of the 1973 wheat loan in Indian goods
25X1
7
SECRET
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
 Approved For Release 2004/03/1~EE W-RDP79S01045A000100060001-5
other than wheat. Meanwhile, Prime Minister Gandhi inaugurated the hot strip
rolling mill at the Soviet-built Bokaro steel plant. She also announced plans to
visit Moscow early in June; her last visit there was in 1971. 25X1
Iran. An East German delegation to Iran in April proposed aid for Iranian
industrial projects in return for crude oil. Further discussions on the proposal are
to be held in Berlin in September.
25X1
The Romanian Prime Minister is scheduled to visit Iran in May to iron out
difficulties that have plagued trade relations over the past several months. Tehran
apparently has not made scheduled deliveries rider the current 25X1
protocol, and Bucharest has curtailed shipments of food and stopped construction
on railroad projects under commercial contracts. 25X1
Iran reportedly is pressuring the USSR to accept more Iranian exports to
balance trade in the non-gas barter account. The Shah wants to stimulate exports
to increase employment. In 1974, Iranian exports to the USSR were valued at
$300 million, of which natural gas comprised $175 million. The USSR bought
about 15% of Iran's non-oil exports. In the same year, imports from the USSR
reached S350 million.
Iraq. The East German Minister of Electrical Engineering and Electronics was
in Iraq to discuss proposals to participate in agricultural and transport projects
and to use East German computers in Iraqi industry. East Germany already is
financing railroad, port, electrification, and light industrial projects in Iraq under
an $84 million 1969 credit agreement.
Hungary's Minister of Construction signed agreements for constructing housing
projects in Iraq. Baghdad still has $80 million of unused Hungarian credits to draw
on.
Two Soviet ministerial-level delegations were in Iraq in April to discuss further
cooperation in the petroleum and machinery industries.
Jordan. A Czech economic delegation has proposed an economic and technical
cooperation agreement with Jordan. The details were not announced.
Kuwait. Romanian President Ceausescu held discussions with Kuwait's Deputy
Minister for Oil in Bucharest on plans for a Kuwaiti-financed petrochemical plant
in Romania.
25X1
25X1
25X1
25X1
25X1
8
SECRET
Approved For Release 2004/03/15 : CIA-RDP79S01045A000100060001-5
 Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
SECRET
South Yemen. It is not clear whether a recent $23 million Soviet loan to
South Yemen is new aid. Moscow had extended $55 million in aid to South Yemen,
of which about $30 million had been allocated for development projects. Soviet
plans to construct a second powerplant at Aden, however, may require new funds.
Moscow also has been prodding South Yemen to exploit iron and copper deposits
located by Soviet technicians.
Syria. Several Hungarian experts arrived in Syria to prospect for materials
needed for cement plants now being constructed by the East Germans and
Romanians.
UAE. Czechoslovakia is to supply four steam turbines, with a total capacity
of 240 MW, for a power station to be built in Dubai.
Military
Africa
General. Rhodesian guerrillas are continuing to receive small arms and
ammunition from the USSR and China through neighboring African countries.
Mozambique's Defense Minister visited Moscow in late April. President Machel
is scheduled to visit Moscow in May.
Algeria. Moscow has begun deliveries of equipment ordered late last year by
Algeria under a $450 million accord. Arrivals during the first quarter of 1976
included 70-100 T-62 tanks and possibly 16 MIG-21 aircraft. Moscow has held
off on shipments earlier this year, apparently waiting for the Algerian-Moroccan
conflict to cool down.
25X1
25X1
25X1
25X1
25X1
25X1
25X1
SECRET
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
 Approved For Release 2004/03/15 : CIA-RDP79S01045A000100060001-5
Chad. The USSR delivered two M-13 truck-mounted rocket launchers to the
Chadian army. This is the first direct Soviet arms delivery to this central African
country.
A Soviet military fact-finding mission visited Chad from 29 March to 6 April.
As a result of the visit, the Chad government agreed to send Moscow a list of
materiel requirements for its armed forces, which until now were supplied by
France. Moscow. agreed to deliver five rocket launchers by the end of May and
20 more later. The 16-round, 132-mm M-13 is an obsolescent rocket launcher used
by the Soviets in World War II and has been assigned a reserve/ training role.
Moscow's token presence will serve to enhance President Malloum's prestige
as proof of "big-power" support. More importantly, the delivery will give the USSR
an additional military presence on the African continent. The addition of rocket
launchers to the army's inventory however, will not have a significant effect on
Chad's counterinsurgency effort against rebels in the north. The army has no other
artillery and only a limited number of mortars.
Libya, Moscow delivered 128 T-54 and T-55 tanks and 35 APCs to Libya
in March Czechoslovakia also delivered an
additional 65 T-54 55 tanks
25X1
25X1
25X1
25X1
The four new Soviet Osa guided-missile patrol boats delivered to Calcutta
earlier this year have now joined the Indian Western Naval Command in Bombay.
The new Osas have a greater range than the eight provided in 1971.
10
SECRET
25X1
25X1
Approved For Release 2004/03/15 : CIA-RDP79S01045A000100060001-5
 Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
SECRET
Iraq. Moscow has delivered 27 MIG-23s to Iraq so far this year. Four delivered
in late A ril brought Iraq's total inventory of these aircraft to 81.
It is estimated that
fiF
filled.
the contract is
h
en
23s w
Iraq could have as many as 100 MIG-
Iraq's severe shortage of jet-qualified pilots probably will prevent optimum
use of the new Soviet aircraft. Baghdad is currently estimated to have 300 jet
fighter pilots. Although an ambitious training program has been started to provide
more than 100 additional jet qualified pilots per year, the lack of trainable personnel
and the overall poor quality of operational pilots will prevent the air force from
graduating more than 30 to 40 pilots this year. With deliveries of other jet aircraft
plus normal pilot attrition, Iraq will be ble to man more than two or three
MIG-23 squadrons by the end of 1976.
II
SECRET
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
25X1
25X1
25X1
 25X1 Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
 Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
General. China plans to begin imports of 100,000 tons of bauxite annually
from Malaysia and Thailand, its first such purchases from these countries.
Philippines. Under a 1976 protocol the Philippines will continue to import
Chinese crude oil and other products in return for copper, sugar, lumber, and textile
products. Peking agreed to eliminate its trade surplus, which in 1975 was $22
million.
President Marcos plans to visit Moscow in May, where he is expected to
announce the establishment of diplomatic relations and sign the long-pending
Soviet-Philippine trade agreement.
Bolivia. The USSR extended S14 million in additional credits to Bolivia in
January 1976 to supplement aid provided under a 1970 agreement. The new credits
probably will finance cost overruns at the problem-ridden Potosi tin plant. The
foreign exchange cost of the Soviet-built plant has reached $20 million, from the
original $6 million estimate.
Brazil. In an attempt to redress its huge trade deficit with Brazil, China has
offered to export petroleum. In each of the past four years, China has imported
more than $60 million worth of Brazilian products but has exported less than
$1 million annually.
Brazil and Poland signed a five-year agreement in March calling for $3.2 billion
in trade through 1980. The new agreement supersedes a 1975 agreement that called
for S1.7 billion in trade over 10 years. If the level envisaged in the new pact
is achieved, Poland will become the largest East European trader in Latin America.
I
Chile. Peking has agreed to advance $80 million to Santiago in return for
180,000 tons of copper over an unspecified period. At least 38,000 tons of copper
are scheduled for shipment in 1976.1 1
Chilean government officials met in February to discuss ratification of an
agreement to reactivate Chinese credits extended to the Allende regime. Santiago
reportedly has asked China to raise the credit limit to $100 million from the $63
9
SECRET
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
25X1
25X1
25X1
25X1
 Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
million extended in 1972. China has tied the credit to the purchase of plants to
manufacture industrial and agricultural processing machinery. The Chilean private
sector, however, has shown little interest in the Chinese equipment.
Guyana. Ten Guyanese went to China for training in textile technology; the
Chinese are building a textile plant under a $26 million credit.
In an effort to initiate formal trade relations with Georgetown, Moscow invited
a Guyanese trade delegation to the USSR to discuss the exchange of sugar for
machinery and equipment.
Jamaica. China offered Jamaica a textile mill, reportedly at a favorable price.
The project, which could cost up to $12 million, has been under discussion since
the two countries signed an economic cooperation agreement in 1974. Contracts
are being prepared for signature by midyear.
Hungary has agreed to construct an aluminum plant in Jamaica, the first firm
commitment of development assistance from an East European country. The
agreement follows a 1975 Jamaican offer to exchange bauxite for Hungarian
aluminum technology. Jamaica has had trouble in attracting new Western investment
because of its threat to nationalize foreign holdings.
Mexico. China and Mexico announced plans to cooperate in developing water,
agricultural, and fishery resources. The two countries also agreed to exchange
petroleum industry technicians. A group of Chinese technicians is in Mexico
studying offshore drilling techniques.
Mexico and Romania signed agreements in February for extensive cooperation
in petroleum development. Romania will provide technical assistance in secondary
petroleum recovery techniques in exchange for Mexican assistance in offshore
drilling.
Poland and Mexico signed a trade agreement in early March under which
Poland will construct a coal mine, the first large Communist-assisted project in
Mexico. Poland and Mexico also will cooperate in electric power development,
nonferrous metals exploration, fisheries, and sulfur extraction. A joint commission
was set up to administer these activities.
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
SECRET
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
 Approved For Release 2004/03/15 : CIA-RDP79S01045A000100060001-5
Peru. China signed agreements with Peru to import $57 million worth of metals
and fishmeal and to sell rice and kerosene valued at $23 million. The kerosene
sale will be China's first outside of East Asia. Although China will still run a deficit
in its trade with Peru, the new agreement is designed to reduce the large deficits
of recent years. In 1974, China imported $72 million worth of metals and other
Peruvian raw materials but sold only $0.6 million worth of goods.
China reportedly will sell both the rice and kerosene at reduced prices. Rice
will be sold at almost $50 a ton below world market prices. The two sides may
have also reached agreement on the use of some of the outstanding Chinese credits
for agricultural equipment, possibly for the Chimbote irrigation project now being
studied by China. F7 I
Romania and Peru signed agreements in March to expand industrial
development cooperation, possibly drawing on some $25 million in Romanian
assistance provided in 1973.
Lima has signed contracts with the Polish firm KOPEX for an engineering
study of a mining and energy complex at Alto Chicaha in Northern Peru. Polish
technicians completed a feasibility study for the project, to use coal for thermal
power generation, under a 1972 credit agreement.
Uruguay. The USSR agreed to extend the life of a 1969 $20 million credit
agreement for machinery and equipment. About $3.5 million of the credit has been
drawn.
Bangladesh. Bangladesh and the USSR signed a protocol in Moscow at the
end of March, calling for $35 million in trade in 1976. Earlier in the month
Bangladesh signed its annual trade protocol with Bulgaria.
25X1
25X1
25X1
25X1
25X1
25X1
Approved For Release 2004/03/159 GM-RDP79S01045A000100060001-5
 Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
25X1
Bangladesh plans to buy 40,000 tons of wheat for shipment to the USSR
in July and August as the first of five installments repaying the 1973 Soviet wheat
loan.
Greece. Under a long-term agreement signed in late March, Romania will
undertake oil exploration and exploitation at several locations in Greece. Financial
terms were not announced. The two countries also signed a trade agreement calling
for S80 million in exchanges in 1976. Romania will export oil products, machinery,
metallurgical products, and vehicles.
India. The third session of the Soviet-Indian Economic Commission, chaired
by the head of the Soviet State Committee for Foreign Economic Relations, opened
in Moscow on 31 March. The commission was set up in 1972 to integrate Soviet
and Indian economic and commercial planning.
plans.
Iraq. The deputy chairman of the East German planning commission arrived
in Baghdad to discuss cooperation in economic planning. Iraq previously has drawn
on the services of East European economists in formulating economic development
Economic talks ended in Moscow with Soviet agreement to assist in the
construction of a new power station, a cement plant, and an irrigation network,
as well as additional assistance to the petroleum industry. Financial terms of the
new Soviet participation were not revealed.
Kuwait. Romanian President Ceausescu, on a visit to Kuwait in late March,
revived the question of Kuwaiti participation in a $1 billion petrochemical complex
in Romania. Last year, the two sides agreed to study the project, for which Kuwait
would provide half of the financing, as well as the crude oil for the plant. Romania
also proposed construction of a similar complex in Kuwait. Agreement was not
reached, however, suggesting that Kuwaiti objections to Romania's 1975 feasibility
studs' have not been resolved.
SECRET
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
25X1
25X1
25X1
25X1
 Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
Sri Lanka. China emerged as Sri Lanka's major trading partner in 1975,
according to the Sri Lankan press. The announcement was made at the inauguration
of the Sri Lankan-Chinese shipping line's services to Europe.
25X1
25X1
Syria. Syria's Petroleum Minister inaugurated duction at the Czech-built
distillation unit at the Horns petroleum refinery. ro 25X1
Turkey. The 17th annual Soviet-Turkish trade protocol, signed on 4 March,
calls for total trade of $170 million in 1976, slightly less than 1975 trade. In
addition, Turkey will ship $35 million worth of goods to the USSR for repayment
of past credits.
25X1
Construction is scheduled to begin soon on a $35 million dam on the Arpacay
River, which is being financed jointly by the USSR and Turkey. The waters will
be shared equally by the countries, as will the 17 million kilowatts of electricity
to be produced by an associated hydroelectric plant.
25X1
F7
Military
Kenya. In March, Moscow offered its first military assistance to Kenya.
Nairobi, worried about expanding arms inventories in Uganda and Somalia and
facing territorial claims by both. has also been negotiating with several Western
arms suppliers.
,IMalagasv Republic. The Malagasy Republic is scheduled to receive its first
Soviet aircraft - an MI-8 helicopter for VIP use.
Sudan. Soviet Deputy Defense Minister and Chief of Staff Kulikov will make
an official visit to Sudan in early April, reciprocating a visit by Sudan's armed
forces chief to the Soviet Union last July. Kulikov's visit closely follows the delivery
in early March of 11-]-2 MIG-17 aircraft under a Soviet grant.
25X1
25X1
Approved For Release 2004/03/155ECIATRDP79SO1045A000100060001-5
 Approved For Release 2004/03/15 : CIA-RDP79S01045A000100060001-5
Afghanistan. A Soviet military delegation arrived in Kabul in mid-March,
probably to sign protocols negotiated last year for armored personnel carriers to
be used to reorganize Afghanistan's three armored divisions. The additional
equipment will do little to increase the army's capabilities because of its
rudimentary logistic system and a shortage of skilled manpower.
Iran. Since 1974 Iran has received 22 of the 30 ZSU-23-4 self-propelled
antiaircraft guns that were ordered from the USSR, one of the few Soviet combat
systems purchased by Iran. Most of the $826 million in Iranian military orders
placed with the USSR since 1967 were for support equipment.
Sri Lanka. The ship Moscow gave Colombo last November has been identified
as a Mot class patrol boat, probably the naval combatant promised Prime Minister
Sirimavo Bandaranaike during her November 1974 visit to Moscow. The Mot is
an unsophisticated boat that uses an old type Osa hull.
The Soviets have built at least two or possibly three Mots and will quite likely
continue to produce a limited number of them. The Mot class was identified for
the first time last summer. Sri Lanka might be the first country to receive this
ship.
Syria. In late March, Damascus received its second Petya-1 light frigate from
the USSR; the first arrived in July 1975. The Petyas, the largest ships in the Syrian
navy, are valued at more than $10 million each and probably were ordered under
a S500 million 1974 arms agreement. Along with approximately 12 guided-missile
patrol boats, the Petyas will provide the navy with its main combat strength
25X1
25X1
25X1
25X1
14
Approved For Release 2004/03/~8~R&IA-RDP79S01045A000100060001-5
 Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
Secret
Secret
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
 STAT Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5
Next 9 Page(s) In Document Exempt
Approved For Release 2004/03/15 : CIA-RDP79SO1045A000100060001-5