CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A001700360001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 6
• Document Creation Date: December 15, 2016
• Document Release Date: May 11, 2004
• Sequence Number: 1
• Publication Date: September 25, 1954
• Content Type: REPORT

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25 September 1954
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Copy No.
CURRENT INTEL IGENCE BULLETIN
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DOCUMENT NO
NO CHANGE IN
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RUTH: HR 70-
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Office of Current Intelligence
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CENTRAL INTELLIGENCE AGENCY
State Dept. review completed
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SUMMARY
SOUTHEAST ASIA
I. Comment on new Vietnamese cabinet (page 3).
2. Indonesian official exhibits serious interest in American aid
(page 4).
SOUTH ASIA
3. Pakistan may take Kashmir issue to Security Council (page 4).
WESTERN EUROPE
4. Belgian foreign minister comments on.Mendes-France's attitude
toward London conference (page 5).
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SOUTHEAST ASIA
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1.. Comment on new Vietnamese. cabinet:
Premier Diem's formation on
24 September of an enlarged cabi-
net including representatives of the
Cao Dai ? and Hoa Hao sects will provide him with some organ-
ized political and military support, which he has hitherto
almost completely lacked. It will also undercut the French
argument that Diem must be removed because his government
represents "nothing." The Cao Dai and Hoa Hao organizations
exercise in their respective spheres north and west of Saigon
temporal and spiritual control over a population numbering
from two to three million of a total of eleven million in south
Vietnam.
Continued local opposition to the Diem
government will be represented chiefly by the Binh.Xuyen gang-
ster organization and by General Hinh and certain army officers.
At least until the announcement of the new cabinet, French offi-
cials in Saigon were continuing to encourage opposition to Diem
among these groups. However, since Hinh's ability to control
the army is uncertain, and since the Cao Dai and Hoa Hao have
a combined force of over 20,000 disciplined troops, the likeli-
hood has increased that a face-saving solution will be found to
the Hinh-Diem dispute. The French, whose expeditionary corps
is the controlling factor, have consistently taken a position
against the use of force in the present crisis. An uncertain
factor is the attitude of Bao Dai, whose approval is not yet
assured.
The new government consists of an
incongruous mixture of profiteering war lords and idealistic
nationalist intellectuals, a situation which is bound to lead to
some degree of friction and to pressure on Diem to relax his
rigid concept of honesty among officials. Nevertheless, it is an
essentially nationalist government and, assuming it wins Bao
Dai's approval, the change marks a step toward stable govern-
ment
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2. Indonesian official exhibits serious interest in American aid:
The director of the Foreign Operations
Administration program in Indonesia
reports a growing recognition among
Indonesian leaders .of the critical
nature of the country's inancial situation. Djuanda, chief of
the Planning Bureau of the Ministry of Economic Affairs, has
said Indonesia faces the alternative of obtaining foreign aid or
imposing a drastic austerity program which would involve a
virtual embargo of imports for three years. Djuanda requested
figures on American aid to India and stated, "Any conditions
that India can agree to, we can agree to more readily:'
Comment: Indonesia's economic and
financial situation has sharply deteriorated since early 1952.
This has been partly the.result of reduced prices for its princi-
pal exports:, More basic, however, have been the failure to
restore production to prewar levels and vast increases in the
budget.
The present American aid program is
limited to approximately $4,000,000 a year, largely because the
Indonesian government refused to give assurances required by
American law and because Indonesian officialdom and the press
have regarded aid from the United States as an effort to buy
their loyalty to the "American bloc."
SOUTH ASIA
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3. Pakistan may take Kashmir issue to Security Council:
The Pakistani cabinet secretary in-
formed the American embassy in
Karachi on 23 September that
Pakistan will soon start preparations
to take the Kashmir case to the UN Security Council. Prepara-
tions will be delayed, however, if Indian prime minister Nehru
insists on continuing his recent correspondence with the Pakis-
tani prime minister on the issue.
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The cabinet secretary stated that
the United States had a great responsibility for supporting
Pakistan's case in the Security Council because of the risks
Pakistan had taken in, accepting American military aid and
because of Nehru's argument that this aid changed the con-
text of the Kashmir dispute.
Comment: Pakistan has frequently
pleaded for more active American support on the Kashmir ques-
tion. There is little likelihood, however, that any action the
United States might take would alter either India's adamant stand
against giving up any territory it now holds or Pakistan's bas-
ically pro-American orientation.
WESTERN EUROPE
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4. Belgian foreign minister comments on Mendes-France's attitude
toward London conference:
France will adopt neutralism,, claiming that France was deserted
by its friends and allies as at the Brussels conference. Spaak
believes that Mendes-France is too strongly supported by French
.public opinion to be overthrown by hostile factions in the Na-
tional Assembly.
The American embassy in Brussels
reports that Belgian foreign minister
Spaak believes that if the London con-
ference fails, French premier Mendes-
Spaak doubts that the problems facing
the London conference can be solved, especially the question of
control of German armaments, the technical details of which he
feels might be insurmountable even if agreement were reached
in principle
Comment: Spaak is still upset by
Mendes-France's conduct at Brussels.
The French premier will probably try
to avoid being isolated again at the London conference and will
make every effort to get British support for his proposals.
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