RELEASE OF ER RP 75-15, COMMUNIST AID AND TRADE ACTIVITIES IN LESS DEVELOPED COUNTRIES, APRIL 1975, DTD MAY 1975, SECRET, TO FOREIGN GOVERNMENTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01098A000500060001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 18
• Document Creation Date: November 16, 2016
• Document Release Date: February 28, 2000
• Sequence Number: 1
• Publication Date: June 23, 1975
• Content Type: MF

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2 3 JUN 1975
MEMORANDUM FOR: CRS/ADD Release
Release of ER RP 75-15, Communist Aid
and Trade Activities in Less 3eveloped
Countries, April 1975, dtd May 1975,
Secret, to Foreign Governments
1. It is requested that the attached copies of subject report be
forwarded as follows:
#44-#46
#47
2. All OER responsibilities as defined in the DDI memorandum
of 13 August 1952, "Procedures for Dissemination of Finished
Intelligence to Foreign Governments, " as applicable to this report
have been fulfilled.
Chief, St/P/C/OER
Attachments: 4
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this yir,4tio `;
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CONTENTS AND SUMMARY OF EVENTS
(April 1975)
Page
Recent Developments in Soviet Fisheries Aid . . . . . . . . . . . . . . . . 1
Since 1959, the USSR has pledged more than $115 million in fisheries
development assistance to 30 countries. Recent fisheries agreements have
stressed the formation of joint fishing ventures and the provision of technical
assistance, in contrast to earlier pacts that called for financing equipment
and construction of onshore facilities.
Soviet Gold Extraction in Mali . . . . . . . . . . . . . . . . . . . . . . . . 4
The USSR and Mali signed contracts to go ahead with gold extraction at
the Kalana mines-a site which the USSR has been prospecting for several
years.
Europe
Portugal Negotiating an Aid Agreement with Moscow . . . . . . . . . . . . 4
Negotiations are reported nearing completion on Soviet aid for an
aluminum smelter and development of the cement industry in Portugal.
Romanian President Tours Islamic States . . . . . . . . . . . . . . . . . . 5
Jordan and Tunisia signed agreements on Romanian participation in
development projects and to expand trade during visits by President
Ceausescu.
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Page
Moscow Pledges New Development Aid to Bangladesh . . . . . . . . . . . . 5
The USSR signed an agreement early in April to provide $51 million in
additional credit to Bangladesh.
Greece Cancels Philippi Power Project . . . . . . . . . . . . . . . . . . . .
Greece has canceled the controversial Philippi power project, which
would have used peat as fuel for three steam power generators to be
provided by the USSR.
Iranian-Soviet-West European Gas Contract Signed . . . . . . . . . . . . . 6
The USSR and a West European consortium have concluded a contract
with Iran on the delivery of 1.3 billion cubic feet of gas per day to the USSR
and West European consumers.
Results of Iraqi Leader's Visit to Moscow . . . . . . . . . . . . . . . . . . 6
Baghdad's dispute with Syria over the allocation of Euphrates river waters,
probably was a major topic of Iraqi discussions in Moscow in April.
Iraq Signs Protocols with East European Countries
Iraq signed protocols on trade expansion and utilization of outstanding
credits with Bulgaria and signed an agreement on Hungarian assistance
to poultry farms costing $145 million.
Other Activities
)Economic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Military . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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COMMUNIST AID AND TRADE ACTIVITIES
IN LESS DEVELOPED COUNTRIES
April 1975
General
Recent Developments in Soviet Fisheries Aid*
Introduction
Since 1959 the USSR has concluded fisheries assistance agreements with 30
less developed countries (LDCs) and pledged approximately $115 million to support
fisheries development programs in LDCs (see Table 1). Most of this aid has been
channeled to African and Middle Eastern states. Although initially the program
was concerned with provision of equipment, in recent years it has emphasized
technical and research support. Moscow also is seeking client states adjacent to
major or potentially major fishing grounds. It hopes to establish joint companies
that will provide a modicum of security for continued Soviet exploitation of marine
resources throughout the world, regardless of future decisions that may emerge
from Law of the Sea deliberations.
Recent Developments
Since 1973, Moscow has added two new clients, Argentina and Portugal, as
fisheries assistance recipients. The amount of assistance will be determined after
agreement is reached on the character of the projects, but a large part of the
assistance certainly will be for technical services and training.
The USSR also has actively followed through on prior agreements with at
least 14 nations, including assignment of approximately 1,000 fisheries personnel
in LDCs. Among the most notable developments was the proposal to Indonesia in
December 1974 to reestablish the fisheries aid program abandoned in 1965. Moscow
has offered not only trawlers, crews, and training but also help in developing port
facilities.
Moscow encourages joint ownership of fishing companies and has approached
at least 14 LDCs about such ventures (see Table 2). It has joint agreements with
Egypt, Somalia, and South Yemen. Generally, these agreements provide for the
following:
May 1975
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? The ships used are of Soviet origin and are leased to the firm or purchased
by the LDC.
? Proceeds of the operation are used first to cover expenses of fishing
operations, and any residual profits are then divided equally by the two
parties.
?
? Ships used are jointly manned and are also used for training and research
purposes.
? A portion of the catch is delivered to the LDC for local distribution,
and the remainder is frozen and shipped to other markets.
Data on joint operations indicate that leasing and depreciation charges are
inordinately high. limiting profitability.
Moscow's interest in joint venture arrangements reflects the uncertainties of
pending decisions on a global Law of the Seas and the subsequent need for a
buffer position. Moscow, in concert with the world's other major fishing nations,
continues to push for inclusion of an optimum utilization clause* in any treaty
defining a new Law of the Sea fishing regime. LDCs with embryonic fishing
capabilities would be disadvantaged by such a provision; most at the outset would
have to permit foreign fleets to operate in their coastal water to optimize their
fishing activities through licensing arrangements, royalty payments, or joint
ventures. The Soviets view the latter as the more secure and profitable position
from which to operate.
Moscow's reliance on technical services as a major part of its assistance program
emphasizes basic economic considerations. Technical assistance is critical to
successful LDC fishing operations. It is less costly for Moscow to provide than
is equipment or onshore facilities which it furnished heretofore. Technical assistance
provides a higher return to Moscow in terms of fishing information as well as
an immediate return in profits from the ventures. Since the planned expansion
of Moscow's own fleet apparently is not being met, technical assistance in lieu
of equipment transfers places no additional strain on the USSR's overloaded
production capabilities.
Achieving maximum sustainable yield over time, consistent with certain environmental and economic
factors.
2
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Estimated Soviet Aid Extensions
for Fisheries Development
in Less Developed Countries
January 1960 - April 1975
Soviet Joint Fishing Venture Agreements
with Less Developed Countries
Recipient
Current Status
Total
Million
US $
115.6
Argentina
Bangladesh
Letter of Intent
Under negotiation
Africa
47.0
Egypt
Joint fishing venture under
Algeria
4.5
way in central Atlantic
Equatorial Guinea
Gambia
N.A.
N.A.
Gambia
Under negotiation
Ghana
11.2
Guinea
6.3
Indonesia
Offer
Kenya
Mauritania
N.A.
N.A.
Iraq
Agreement signed
Mauritius
5.0
Morocco
N.A.
Liberia
Offer under consideration
Senegal
6.7
Sierre Leone
N.A.
Mauritania
Company formation
Somalia
9.8
approved in April
Sudan
2.0
Tanzania
0.9
Mauritius
Offer pending
Tunisia
0.6
Middle East
37.7
Morocco
Protocol signed
Egypt
7.0
Iran
6.3
Peru
Under negotiation
Iraq
11.0
North Yemen
7.8
Somalia
Joint fishing venture
South Yemen
5.6
in operation
Syria
South and East Asia
N.A.
12.1
South
Joint fishing venture
Bangladesh
8.0
Yemen
in operation
India
2.2
Indonesia
0.3
Sri Lanka
Negotiations in limbo
Pakistan
1.6
Sri Lanka
Latin America
N.A.
18.8
Argentina
Chile'
N.A.
17.0
Peru
1.8
Europe
Portugal
N.A.
N.A.
3
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The major fisheries centers have moved gradually southward in recent years,
with important implications for fisheries aid and Soviet fishing in general. Moscow
has used earlier fisheries aid to extend research on the southern reaches of the
Indian, South Atlantic, and Pacific Oceans, where over the past 18 months new
fisheries aid, including offers of joint ventures, has been extended. With the Soviet
fishing fleet already topheavy in support ships and with the need for repair facilities
closer to major fishing grounds, these joint ventures may well be the most
economically feasible way for the USSR to expand its exploitation of the world's
southern fisheries.
Prospects
Soviet fisheries aid is profitable and low cost and may be an important element
in effective fisheries exploitation in the, future. Joint ventures and technical
assistance will continue to keynote the program, which will concentrate on
recipients with access to lucrative fisheries areas.
Soviet Gold Extraction in Mali
The USSR and Mali have signed a contract allocating $5.7 million from earlier
credits for production of gold at the Kalana mines -- a site at which the USSR
has been prospecting for several years. The new agreement provides for construction
of wells, shafts, and, presumably, a processing plant. Annual output from the mine
is projected at 25,000 tons of ore initially, rising to 60,000 tons on completion
of the second stage (estimated to cost an additional $8.2 million). Capacity
operation will yield about 1 ton of gold annually which has a current market
value of about $5 million. (Unclassified)
Europe
Portugal Negotiating an Aid Agreement with Moscow
The Soviet press reported in late April that negotiations were almost complete
on economic aid to Portugal for an aluminum smelter and cement industry
development. Lisbon also is interested in Soviet aid in coal mining and nuclear
power generation. Earlier this year, Moscow and Lisbon signed a fisheries agreement
under which the USSR will supply equipment and training to Portuguese fishermen.
The terms and value of the Soviet aid proposals were not released. (For Official
Use Only)
4
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Romanian President Ceausescu's mid-April visit to Pakistan, Jordan, and
Tunisia produced new economic agreements with Amman and Tunis. Bucharest
will increase its imports of Jordanian phosphates, conduct oil exploration, and build
an oil refinery in Jordan on a joint venture basis. Romania also agreed to participate
in agricultural projects and to study Jordan's request for vocational training schools.
Details of these accords are to be worked out during the June meeting of their
joint economic committee, established last year. (Confidential)
A joint communique with Tunisia mentions a Romanian agreement to
participate in joint ventures in oil refining, water distribution, and agriculture. The
two sides also signed an agreement to increase their trade above the $14 million
level of 1974. (Unclassified)
Moscow Pledges New Development Aid to Bangladesh
For the fourth consecutive year the USSR has provided large amounts of
new aid to Bangladesh. A $51 million agreement for Soviet assistance to
development projects was signed in Moscow early in April. The credits, repayable
over 15 years, including 3 year's grace, at 2% interest, are somewhat easier than
those usually associated with Soviet agreements. (For Official Use Only)
Moscow has allowed $7 million of the credits for commodities to finance
local costs, a departure from standard practice. The rest of the credit --
$44 million - was allocated for constructing a cotton spinning mill, a gas
liquefaction unit, an experimental cotton farm, and continued geological
prospecting. Soviet aid pledges to Dacca now total approximately $300 million,
two-thirds of which was provided after Bangladesh's independence late in 1971.
(For Official Use Only)
Greece Cancels Philippi Power Project
Greece has scrapped its plans for a power project at Philippi because of local
farmer opposition. The original project was intended to use peat deposits at Philippi
as fuel for three 125-megawatt steam power units to be provided by the USSR.
About one-quarter of the equipment has arrived for the plant under an $89 million
contract signed in 1973. Alternative use of the equipment was allowed for in the
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original contract should plans for Philippi fall through. The equipment now may
be diverted to a lignite-burning unit presently under discussion. (Unclassified)
Iranian-Soviet-West European Gas Contract Signed
The USSR, Iran, and a West European consortium have concluded a 23-year
switch arrangement for the sale of natural gas to West Germany. Iran contracted
to deliver 1.3 billion cubic feet of gas per day to the Soviet border beginning
in 1981. The USSR will consume the gas in the Caucasus and, in turn, will deliver
approximately 1.1 billion cubic feet of Soviet gas at the Western terminal. West
Germany plans to use one-half of the gas and reexport the rest to Austria, Italy,
and France. (Confidential)
Gas prices will be linked to the price of oil at the time of delivery. The
West Europeans probably will pay Tehran directly in hard currency. The difference
in volume between the Iranian and Soviet gas deliveries probably represents a transit
fee to the USSR. (Confidential)
Iran will deliver the gas through a second pipeline to be built by Iran to
the Soviet border. Compressors for the project will be purchased from the USSR,
probably on a commercial basis. (Confidential)
Results of Iraqi Leader's Visit to Moscow
Iraq's dissatisfaction with the volume of Euphrates River water's flowing from
Syria undoubtedly was discussed in the mid-April talks. Moscow apparently refused
to play an active role in settling the dispute between the two major Soviet aid
clients. Last year, the USSR attempted to mediate the dispute at the technical
level, but Soviet recommendations on division of water were rejected by both Syria
and Iraq. Husayn's visit also was designed to reduce Soviet-Iraqi tensions caused
by Iraq's growing preference for Western materials and expertise. An agreement
on the peaceful uses of atomic energy was signed, but details were not announced.
(Confidential)
Iraq Signs Economic Protocols with East European Countries
The seventh session of the joint Iraqi-Bulgarian economic committee rnecting
ended with the signing of a protocol on the uses of some $23 million still
outstanding under credits provided in 1967 and 1970. Most of the aid will go
for food production and processing. The two sides also signed an agreement to
increase trade turnover to $140 million annually. Crude oil as in the past probably
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will bulk large in Iraq's exports to Bulgaria. In 1974, Sofia took $50 million worth
of Iraqi oil. (Secret)
In addition, Hungary signed an agreement to build poultry farms in Iraq at
a total cost of $145 million. Financing arrangements were not announced.
(Unclassified)
OTHER ACTIVITIES
Economic
Africa
General. Soviet Foreign Minister Kosygin is scheduled to visit Libya and
Tunisia in May. (Confidential)
Algeria. The Algerian Minister of Agriculture traveled to China at the invitation
of Chinese officials, probably to discuss further Chinese assistance to agricultural
and forestry development. China is providing limited agricultural assistance u,ndcr
a $50 million aid agreement. (Unclassified)
Gambia. President Jawara is scheduled to visit China in June to discuss
allocation of the $16 million Chinese credit extended earlier this year. Peking has
tentatively agreed to finance road construction, agricultural development, a hospital,
and a sports complex. (For Official Use Only)
Guinea. Guinea's Minister of Mines and Geology announced in April that the
USSR is to build a hydroelectric complex and to assist in establishing a new bauxite
mine and aluminum plant at Gaoual, near the Equatorial Guinea border. This is
the first indication that the USSR was considering financing a second aluminum
project in Guinea. There is no evidence that a formal agreement has been signed
on these projects. (Confidential)
Under the Soviet-Guinean trade protocol for 1975, Guinea will substantially
increase bauxite exports to the USSR from the Soviet-financed Kindia complex.
In April, bauxite exports from Kindia reached one million tons. (Unclassified)
Libya. A Romanian deputy minister of foreign trade was in Tripoli to discuss
the establishment of joint projects in Arab and African countries. (Unclassified)
7
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Libyan Prime Minister Jallud signed agreements on long-term trade and
economic and industrial cooperation during a visit to East Berlin in April. No details
were announced. (Unclassified)
Morocco. A Chinese mission composed of experts in equipment and industrial
machinery was in Casablanca to explore possibilities of sales to industrialization
projects in Morocco. (Unclassified)
The Czech Minister of Foreign Trade arrived in Casablanca on 26 April.
(Unclassified)
Togo. During April, China agreed to provide agricultural equipment valued
at $0.5 million as a grant. A similar gift of equipment worth $0.4 million was
made in December 1973. (For Official Use Only)
Tunisia. Bulgaria and Tunisia signed a protocol calling for Bulgarian assistance
to an agricultural complex in Matior to produce grain, vegetables, and livestock.
(Unclassified)
The Tunisian Prime Minister traveled to Peking in April to discuss a speedup
in implementation of a $40 million credit extended by China in 1972. The two
sides agreed to begin construction of an irrigation canal, already surveyed by the
Chinese last year, and on the provision of 1.000 rail cars to Tunisia's national
railway. The only disbursements under the credit to date have been commodities
to cover local costs of Chinese doctors working in Tunisia. (For Official Use Only)
Laos. The USSR signed an agreement to provide food, textiles, and medicine
to Laos, presumably under an agreement negotiated in Moscow earlier this year.
The value of the assistance was not specified. (Unclassified)
Brazil. The Director of China's National Chemical Export and Import
Corporation, accompanied by two advisers, arrived in Brazil to study the Brazilian
market for chemicals, especially paints, varnishes, and pharmaceutical products.
China is attempting to increase exports to help correct a runaway trade deficit
with Brazil. In 1973, China imported almost $95 million worth of Brazilian
agricultural products, but Chinese sales were negligible. (Unclassified)
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Guyana. On 20 April, Georgetown announced that an economic and technical
cooperation agreement, negotiated during the March visit of Prime Minister
Burnham to Romania, had been signed. Romania will assist mineral exploitation,
hydropower, cotton farms, and wood processing plants. The announcement made
no mention of the extent of Romania's financial commitment to the projects.
(Unclassified)
Peru. During an April visit, an East German delegation headed by the Director
of Foreign Trade discussed possible economic assistance for projects totaling $100
million. The offer includes German participation in the textile, metallurgical, and
printing industries. Lima's response to the offer is not known. (Unclassified)
Bangladesh. East Germany and Bangladesh signed a new barter agreement on
24 April for trade of about $11 million through June 1976. The agreement is
the third between the two countries. (Unclassified)
India. The USSR has agreed to ship 1.2 million tons of petroleum products
to India this year, a slight increase over the previous year's level. Indian sources
report that petroleum products imports from the USSR in 1975 will save the
equivalent of almost $125 million in foreign exchange. (Unclassified)
Nepal. The Soviet ambassador recently donated approximately $28,000 worth
of medical supplies for use in the hospital being constructed with Soviet assistance.
(Unclassified)
South Yemen. The USSR completed a radio transmitting station and a model
farm in South Yemen during April. (Unclassified)
Syria. Syria and East.-Germany signed a long-term trade and an economic
and technical agreement in Damascus on 10 April. The provisions of the agreements
were not revealed. (Unclassified)
The Soviet Black Sea shipping line has opened a new regular route to Syria
to facilitate growing trade and aid activities between the two countries.
(Unclassified)
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Secret
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United Arab Emirates. An eight-member Chinese trade delegation began a tour
of Bahrain and the United Arab Emirates in late April. (Unclassified)
Military
Syria. A Soviet military delegation led by General Kulikov, the Chief of the
General Staff of the Soviet Armed Forces, visited Damascus in late April for
discussions with the Syrian Defense Minister on the USSR's military aid program.
(Unclassified)
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Secret
 Analyst: /pp r)/TA
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CONTROL RECORD FOR SUPPLEMENTAL DISTRIBUTION 25X1A
Dissem: 5 Jun 75 NO ELITE
SERIES NUMBER
ER RP 75-15
CLASSIFICATION OF REPORT
SECRET/NFD
DISTRIBUTION TO RC
29
DATE OF DOCUMENT
Ma 1975
NUMBER OF COPIES
560
NUMBER IN RC
COPY
RECIPIENT
DATE
NO. (S)
SENT
RETURNED
1-65
Rec'd in St/P /C
2 Jun 75
1, 2
D DI
3 Jun 75
3
D/OER 25X1A
4 Jun 75
4
DD/OER
It
5
NINE via O/D/OER
I'
6
SA/ER & D/SA/ER
I'
6 Jun 75
7
Ch/ 7/D 25X1A
8
D/TA
'I
9
St/P 25X1A
10, 11
II
12
I'
13
II
14
I'
15-17
I'
18-20
21
State for Embassy, Bonn (not sanitized
22-25
7
26
27-30
31-35
5X1C
36-39
40-42
SI
43
b
44-46
?
47
48
25X1A
49-56
57-65
3 Jun 75
6
(IAJ 7
b~o
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25X1A
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~146-0. 75
1-/
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25X 1A
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00060001-5
FORM 2353
2.65
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