COMMUNIST AID AND TRADE ACTIVITIES IN LESS DEVELOPED COUNTRIES, AUGUST 1975

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000500230028-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 9, 2016
• Document Release Date: February 14, 2000
• Sequence Number: 28
• Publication Date: September 1, 1975
• Content Type: RP

 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
Secret
Nn l~nrei~~a l7~iirm
Communist Aid and Trade Activities in Less
Developed Countries, August 1975
Secret
ER RP 75.29
Septomber 1976
Approved For Release 2000/09/14 :CIA-RDP86T00608RQfb~5~230P~2~'~
 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
NATIONAL SCCURITY INFORMATION
Unaut~horizod Disc~oauro Subject to Criminal Sanctions
CIr??Illyd by 019710
!?rn+M Irom prn?nl d?cUUIlkNbn ?ch~luN
o/ ! O. I lED7, ???mplbn crl?pory:
4 btll l>, 171, rnd IJ)
_~ulornNkN-r Oa1ruNMd oe~
DN? Impo?~fbM l0 ONMmM?
Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
SECRt:T
Nn /~~relKn Dln+eam
CON'I'lsNl'S AND SUMMARY OIL CsVI3N'I'S
(August I y7S
Iligltliglttx
? '1'Itc USSR apparently signed a contract to dcyign st sts;el plant in Nigeria.
o 'i'hc USSit sul'1'crcd st setback when h;unusc;us announced that Soviet coil
exploration prrsonnel will be rcpbteed with teehnic!tuts from the West.
? Itomunist mctvcd to cement relations with I:gYht and Irsut through
protocols tc~ implcntent a number of large development prcrjccts.
Continuing Communist Tnnk Deliveries to Libya I
25X1 D
i'c~land and the USSR drlivc?red^mcdium t;tnks to Tripoli in August.
USSR Signs Ccmtracfs on Steel Mill in Nigcrin 1
'The USS1t rcportrdl, signal a contract to clcsign a I .S million metric tort
steel cornplcx in Nigeria, under study r~ncc 1 ~?!:?.
G.ech Maintenance Support to Indctnesinn Air force 1
A C'~cch maintenance learn is in Indc~nrsia supervising thr overhaul cf
L-~~) jet trainrrs unelrr a Srptrmhcr 1':?~ protocol.
Mexico Signs Coopern ion Agreement with CE1NA .. 2
In August, Mexico srgned a general cooperation agreement with the
Council for Mutual Economic Assistance, similar to the pact signed by Iraq
last rnontlt.
Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
SECRET
 Approved For Release 2000/09/14 ~~~RDP86T00608R000500230028-3
Nn ro-~IKn Dlaerm
1)rlivrrirs Under Savirt-Pcrtr;irtn Military Conlracta
Nearly C'umplrtr .. 2
Moscow has larl!ely complelccl equipment clclivcricr unclcr n I')7:~ f!rour+~'
forces al!reentent, :rs well as rnusl cti' Ihc~Ml-Ks unclcr ar A,Itril contract. 25X1 D
Near Istwt and South Asia
Ilangladrsh Tu Repay Suvict Wheat Lunn 3
13angladcsh plans to h~ty 4U,t7UU tans of wheal on Western markets th4~.
yc:rr ;ts :; first payment nn :r Sctvict wheat Ie;an.
Rontania L?:xpands 'a'irs with Egypt curd Iran . . 3
Rontania signal protocols in August to inrplemcnt a number of large
drvrlopntent projects in I?gypt and Ir:ut, two of its m,ijor air) recipients.
Palish Military Drlivcrics to India 4
The second of four medium-class tanning ships ordcreef in 197 is er route
to India, and delivery of trainer aircraft is hclicval imminent.
lrnq Receives hurthcr Sctvict Aircraft hrlivcrics .. S
25X1 D
'I'hc arrival ofd MI(.-?3 jet I~it;hters in /lukust hrint!s lh: r r~m;tcr of
M1G-23s in the Iraqi air force lo. cnout!h to equip at Ic,cst tLrr.c
squadrons. 25X1 D
Kuwait Military Negotiations with the USSR . . 5
Official kuwaiti sources denied n?pctrls Thal the USSR ha~~ n?fused to
supply arms to Kuwait.
First Sctvict Prtya `'lncs I)esUoycr [scort to Syria S
On ~S July. Syria received a ('rtya ll class dcstrayer, now the larl!rst
comhatant in the Syrian inventory.
Approved For Release 2000/09/14 : QdA-RDP86T00608R000500230028-3
SECRET
 Approved For Release 2000/09/14 :~~~.-RDP86T00608R000500230028-3
Ne ForelKn l)luem
Ih1~;C
Syrin'1'u fL'nd Soviet Petroleum Activity 5
Syria's oil rrlinisler Ilnnouncc~ in -nill-August that Soviet ail cxpl~~rsltion
ncaivitics will he terminated in favor of WCStCrfl-type conccasion ~rr~ng~-
I11Cilts,
~tI1Cr AetiVitiC9
Military ... 9
w
Approved For Release 2000/09/14y~~~4-RDP86T00608R000500230028-3
 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
st:caET
Nrr l~o-rlkn. I)L+,+rrrn
C;UMMl1NIS'I' /111) ANU 1'12/11)I? /1C'I'IVI'I'ICS
IN 1.1?SS I)L'VL::LUI'I~I) COUN'1'Itlf?S
/t.tric~a
Continuing, C'ornrnunist 'I~nnk I)elivcrica to Liby,~
25X1 D
Poland and thr. USSR dcliverc:cl^ medium tanks to Tripoli in Auf;ust,
bringing the number of Cornrnunist rnedit--n t.rnks supplied to Libya sinrc
1910 to rnurc rh~ur I,000. Althouf;l+ army units arc believed to be using
only about 200 tanks, the Warsaw fact c~~xu~tries arc cxpcr_tcd to deliver
an .additional 1,000 tanks by rnid-1977. (Secret No i~orr.il;n I)issr.rn)
USSR Signs Contracts on Stccl Mil! in Nigeria
The USSR arrd Nigeria rr.c:cntly signed contracts for designs and
training facilities for along-awaited l.5 rnillian ton steel complex at
Ajaokuta. In the plnnnint; stage since 1967, the project has cnrountcred
long delays becaue of c:~ntroversy over location and size and questionable
availability of raw rnatcri.,ls. Current total cost cstirnates for the plant,
including a large allocation fur infrastructure, ranf;e as high as US $1.3
billion. (Sccrrt No F~orcign I)isscrn)
East Asia
Czech Maintenance Support to Incl~nesian Air Force
A Czech rnaintcnancc tca-n, in lndoncsia since early this year, is
supervising the complete overhaul of L-29 jet trainers purchased by
Note: Ttie substance of this publication has been coordinated with the
Bureau of lntelligcnc~ and Research of the Dcpartrncnt of State, with the
Defense Intelligence Agency, and with the Agency for International
Development. Comments Lnd queries rc ardin this publication arc
welcomed. They may be directed to of the office of
Economic Research, Code 143, Cxtension 5291. 25X1A
Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
SECRET September 1975
 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
SECRET
Indonesia in I9G4. All of Indonesia's L-29s arc ~~;;;~ectcd to be refurbished
by year's rnd under a September 1972 aP;~ccrncnt that provides engines and
spare parts for Indonesia's It oi:~i~ationai L-29s. Jakarta has made an
exception to its policy of not accepting military support from Communist
countries, because of the L-29s' importance to Indonesia's Air Force. TI1C
Czech aircraft is the most advanced jet trainer in Indonesia's inventory.
(Secret No Foreign Dissem)
Lat[n America
Mexico Sipns Cooperation A~rcemcnt with CEMA
On 13 August, Mexice~ signed a cooperation agreement with the
Council for Mutual Economic Assistance, calling for the establishmec~t of
a joint commission to explore cooperation in oil and natural gas. The
agreement appears to be general in nature and probabl;~ is similar to one
signed by Iraq last rnor:th. (For Official Use Only)
Deliveries Under Soviet-Peruvian Military Contracts
Nearly Complete
During July and August, Moscow continued to fulfill its military
agreements with Peru and tried to interest Lima in additional arms
purchases. (Confidential No roreigiti Gisscrn)
25X1 B
Peru recently took delivery of at least-tracked artillery prime
movers and 130-mm field guns, which along with - T->5 tanks
previously delivered Nrobably fulfills most of the contracts under the 1973
accord for ground forces equipment. Soviet and Peruvian technicians also
were assembling somt~ of the M1-8 helicopters delivered under an April
contract. An estimated 30 Soviet military personnel were in Peru at the
end of August. (Secret No Foreign Dissem)
25X1 B
25X1 B
Approved For Release 2000/09/14 ~E~I~-RDP86T00608R000500230028-3
 Approved For Release 2000/09/14 : ~I~TRDP86T00608R000500230028-3
Durinh a heruvian naval ~.;::Icgc~tion's recent visit to Moscow, the
USSR probably tried again to Soli Osa class guided mis,-ile pa?lrol boats and
has invited Pcr?u's mii7i~~ter :.~ *'~~ ri-avy to Moscow to follow up these
conversations. Howes-er, initial indications arc that Peru will not purchase
these hoots. The USSR hopes that Peru will ~~cc~.rt iYs of{er of MiG21 jet
fighters, but Lima a~;,~,cars satisfied with the avail:~.'.;ty of Western
aircraft. (Secret No Foreign Dissem)
Near East and Soup h Asia
Bangladesh To Repay Soviet Wheat Loan
Bangladesh will buy 40,000 tons of wheat on Western markets this
year to make its first payment on a 200,000-ton Soviet wheat loan.
According to the agrecrricnt the Soviet wheat, valued at $35 million where
it was shipped in 1973, is to be repaid in kind over five years begin~~ing in
1975. Because of reduced world market prices for wheat, this y?:~r's
repayrrcnt to the USSR will cost less. Nevertheless, the repayment will
contribute additional strains on Gacca's already poor balance of payments.
(For Official Usc Only)
Repayments to the USSR also raised questions about future US PL
480 wheat deliveries to Bangladesh. Under existing regulations, the United
States cannot provide commodities under its PL-480 program to LDCs
that will export the same commodity during the year. However, PL-430
deliveries will be continued if Dacca buys the wheat in the llnited States
for direct shipment to the USSR. The Unitod States already has allocated
450,000 tons of grain under the PL-480 program for Bangladesh in fiscal
1976. (For Official Use Only)
Romania Expands Ties with Egypt and trrn
Roman: signed a series of protocols in August to expand existing
economic relati~~ns with Egypt and Iran. The new accords underline
3
Approved For Release 2000/09/14 ~~~-RDP86T00608R000500230028-3
 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
SECRET
Romania's drive to expand equiprnent rriarkets in tlic Ncar East.About one-
half of E~ucharest's $1.3 billion In Third World aid has been concentrated in
this are~n. (For Official Usc Only)
A protocol with Cairo calls fora joint itomanlan-Egypt!an bank,
Romania's first such venture in the Third World. The bank, to be located in
Egypt, is capitalix~~d at $25 million with 49~G Romanian ownership. Under
Egyptian law, the bank will be pcrrnltted to conduct transactions in local
and foreign currencies. Industrial agreements signed at the same time
call for implementation of projects agreed to under earlier credits: soda
and sulfuric acid plants, the Hamrawein phosphate complex, a petrochem-
ical project, and an agricultural complex. Romania offered $100 million in
new development credits to be made available when the $125 million
worth of air still outstanding under existing rredits is drawn. (For Official
Use Only)
Romania signed agreements with Iran to provide cement plants,
bakeries, machine tool plants, and a sodium silicate plant. Technicians will
undertake feasibility studies fo~? expanding a chemical plant at Shiraz,
electrification of the Dandar Abbas railroad, building an oil refinery and
petrochemical plant, and prefa~ricated housing projects. Aid to agricul-
ture also will be increased through the construction of grain silos and cold
storage facilities in Iran. (For Official Use Only)
Polish Military Deliveries to Ind~it~
the second of four Polnocny class mediu-~ landing ships ordered from
Poland in 1973 has been sent to India. The unit will be used primarily for
logistical support for the development of milit~iry bases in the Andaman
and Nicobar Islands. (Confidential No Foreign Diss~m)
Delivery of the first batch of Polish TS-11 Iskra trainer aircraft under
a March contract also is imminent. The original order, which called for- 25X1 B
4
Approved For Release 2000/09/14 ~?~R~ RDP86T00608R000500230028-3
 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
SECRET
25X1 B
TS-! ls, is believed to Itavc been increased The aircraft were
offered at $315,000 each, as part of an unspecified barter arrangement.
(Confidential)
Iraq Receives further Soviet Aircraft Ucliveries
25X1 B 25X1 B
A Sovlct mcrcl~ant ship carryin~MlG-23 (loggers and-MIG-
21s arrived at the Iraqi port of Urnm Qasr in late August. This delivery
will bring the number of MIG-23s in the Iraqi air force --- enough to 25X1 B
equip at least three squadrons. The total number of MIG-21s now stands at
25X1 B about- The shipment provides evidence that the USSR is Honoring prior
military agreements with Iraq, despite the strains that have developed
between the two countries. (Secret)
Kuwait Military ~le~otiations with the USS[t
Official Kuwaiti sources c'Qnied reports that the USSR refused to
supply arms to Kuwait during the August visit of a military delegation to
Moscow. E~~:ier this year, the Kuwait press reported a Soviet offer to
exchange military equipment for crude oil. (Unclassified)
First Soviet Petya Class Destroyer Escort to Syria
Syria apparently received a Petya I[ class destroyer escort from the
USSR on 25 July. The Petya becomes the largest combatant in the Syrian
inventory. Besides Syria, only India has received an export model of the
Petya II, armed with two twin 76.2-mm gun mounts, two five-tube 21-inch
torpedo mounts, and two 16-ba~~rel 200-mm ASW rocket launchers. It also
has a minelayirg and dep~h-charge capability. (Secret)
Syria To End Soviet Petroleum Activity
Syria's oil minister announced in mid-August t{~at Soviet oil explora-
tion activity has failed to meet expectations and that Lamascus would
Approved For Release 2000/09/14 : CIA-RDP86T00608R000500230028-3
SECRET
 Approved For Release 2000/09/14 : ~~tDP86T00608R000500230028-3
terminate Soviet-assisted oil exploration in favor of Western-type
concession arra~~gements. (Unclassified)
Under recent concessions granted to Western firms, Syria will repay
exploration and development expenses from production only If oil is found.
Under the Soviet program, Syria must pay for Soviet equipment and
services even if the venture fails. Beyond the possible financial advan-
tages, however, Western technology is considered superior. (Unclassified)
Nonetheless, Soviet credits t:,taling $50 million, have been the major
support for establishing Syria's national oil industry, an industry that
currently produces about 1G0,000 barrels a day. (Unclassified)
OTHER ACTIVITIES
Economic
Africa
Mozambique. East Germany signed an agreement on 13 August to
provide Mozambique with assistance in animal husbandry and other
agricultural projects. Like other Communist countries, East Germany has
moved quickly to provide aid to the new government. Prior to independ-
ence, East Germany offered $S million in economic aid, possibly for
budget support, as well as aid for establishing a na ~ionai police service.
(Secret Nei Foreign Dissem)
Ni eria. Nigeria is preparing to negotiate contracts with Poland for
the expansion of shipyard facilities at Apapa. Polish technicians appar-
zntly completed studies for the expansion early in 1975. (Secret No
Foreign Dissem)
Somalia. A Somalian fishing industry official was in Moscow during
August to negotiate implementation of fisheries projects under a recent
Approved For Release 2000/09/14 : CIS RDP86T00608R000500230028-3
SECRET
 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
SECRET
$60 million Soviet credit to Somalia. (Unclassified)
Sudan. Sudan announced in August that a Bulgarian delegation is
expected soon in Khartoum to sign a $20 million credit agreement. 1"he
accord probably will reactivate 1967 credits that have gone unused. Sofia
probably plans to go ahead with meat and vegetable processing facilil;ies
called for under the original agreement. (Unclassified)
U anda. The USSR presented a preliminary mineral exploration rel-ort
prepared by Soviet geologists in Uganda earlier this year. This is the first
reference to Soviet assistance to geological exploration in Uganda.
Further Soviet activity in this field probably would require now credits, as
most of the $15 million in aid previously provided has been used.
(Unclassified)
Zaire. At a meeting of their joint commission in mid-August,
Romania and Zaire discussed forma ion of a joint agricultural and
livestock development company. (Unclassified)
Latin America
Bolivia. Bolivia has approved the final designs for a second Soviet tin
volatization plant, with a total cost of $15 million. Installation of the first
unit at Potosi has been plagued with delays and cost overruns. Original
estimates put the cost of each plant at $8.5 million, of which $6 million
represented Soviet equipment to be financed with a $28 million Soviet
credit. (For Official Use Only)
Dominican Republic. Romania has purchased $16 million worth of
sugar from the Dominican Republic so far this year. Trade between the
two countries previously had been negligible. (Unclassified)
Jamaica. A Chinese textile team arrived in Jamaica in mid-July to
study several textile projects first discussed when Jamaica established
Approved For Release 2000/09/14 : Cld-RDP86T00608R000500230028-3
SECRET
 Approved For Release 2000/09/14~K~4A-RDP86T00608R000500230028-3
diplomatic relations wltli China in March 1974. (Eor Official Usc Only)
Colombia. Colombia signed contracts valued at $21 million to
purchase buses from Hungary and streetcars from the USSR. The National
Federation of Coffee Growers is ~3cting as Intermediary In ~thc $12 m111Pon
Soviet deal and will finance the sale of streetcars to Bogota over 10 years
at 15916 Interest. The hiungarian buses will be financed under a trade
agreement. (Unclassified)
Chile. China has entered nrgotiatlons with Chile to purchase
chemical products, presumably nitrates. Last year, Chile sold about 65,000
tons of nitrates to China, but shipments in 1975 have been negligible.
(Unc!: sslfied)
Near East and South Asia
Afghanistan. On 22 July, Czechoslovakia signed a $6.5 million aid
contract to provi~tA b~.rses for a transportation project in Kabul and agreed
to assist a powerplant 3t Herat. (Unclassified)
Egypt. Egypt recently announced the completion of two poultry
combines, a vegetable dehydrating plant, and a meat processing plant
constructed by Bulgaria under credit agreements valued at $37 million.
(Unclassified)
Iran. The USSR signed a contract on 6 August to begin electrification
~~f the 90-mile rail line from Tabriz to Julfa, on the Soviet border. Th~+
USSR extended $18 million in credits in 1968 for rehabilitation of the line.
(Unclassified)
Iraq. Poland signed a $3 million contract to supply two pumping
stations on a turnkey basis far an irrigation project in Iraq. The Iraqi
government eventually plans to purchase 8U pumping stations fora $400
million irrigation project, and Warsaw is interested in establishing itself as
Approved For Release 2000/09/14 8 CIA-RDP86T00608R000500230028-3
SECRET
 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
SECRET
a reliable supplier of this type of equiprncnt through rapid delivery on this
contract. (Secret No Foreign I~issrrn)
Pakistan. Cl~inesc experts arrived in Pakistan rarly in August to work
out final details on construction of a sports complex rat islarnabad,
scheduled to begin in UctUbcr. The $35 rnillion complex, to nc cornpletcd
for the 197G Asian Garr~c~t, is tieing financed under a 1970 credit far $7.00
million. The two sidrs also recently agrcrd to start work on a $2,9 million
textile cornplex i!r Punjab under t~~~~ same credit. (Unclassified)
Sri Lanka. At the close of trade talks in Moscow in August, it was
announced that Soviet-Sri Lankan trade is planned to increase by S0~', in
1975 to approximately $2G million. Aid deliveries for expansion of tl~c
Scviet-built Oruwala steel rr~i!1 will contribute I~eavily to the increase in
Soviet exports, while Sri Lanka wily expand shipments of traditional
agricultural goods. (Unclassified)
S ria. Czechoslovakia signed a contract on 30 July to equip a $105
million fire plant at Hama. The financial arrangements for the project
were not revealed. (Urrclassificd)
Militate
25X1 B
Guinea. The USSR delivered- M1G-21 aircraft and military
vehicle4 to Conakry during August under a 1973 agreement valued at $20
million. The USSR previously had delivered -M1G-21s to Guinea this 25X1 B
year. (Secret No Foreign Dissem)
A Guinean delegation headed by the minister of defense visited
Bucharest in mid-August at the invitation of P..omanian military officials.
(Unclassified)
Approved For Release 2000/09/149 CIA-RDP86T00608R000500230028-3
SECRET
 Approved For Release 2000/09/14 : ~~I~~~tDP86T00608R000500230028-3
25X1 B
25X1 B
Guirteacr i)iss.au. The nurnbcr vt Soviet-supplied MIG-7.1 ie5 fighters in
Guinea I)issau rnsc-with the arrival- additional aircraft in
August. The delivery probably rorne; under an apreerncnt conr.luded by a
Soviet military delegation to Guinea last (all. (~ec-ret No I'oreipn hissem)
Mali. The 1.155(1 has rxpandrd military deliveries to Mali over t!~e past
threr months. A Soviet ship arrived i-i (:onakry with tanits, AI'Cs,-
truck-mounted rnissilc muncher destined for Mali. (n May and June. Mali
received- M(G~-! 7s and a- trainer under a (k~cernbrr 19yri
ngrcrmcnt. ('NCrct No (?'or~cign Discern) 25X1 B
Laos. Soviet-supplied Laotian river patrol boats reportedly have
appeared for the first time on the Mekong 1livcr borderir-g Thailand. The
boats probably were delivrrcd in May and .lone to he used to control
smuggling and illegal border crossing. (Un~-lacsificd)
Near East and South Asia
25X1 C
India. Nanuchka class gaited missile patrol boats arc among the
combat ships New Delhi will receive under the t~cbruary 195 Soviet-
(ndian arms agreement. The Nanuchica is armed with SS-N-9 surface-to-
suriace missiles and SA-N-4 surface-to-air missiles. Some of the s.vpd~icti-
cated weaponry probably will not be provided far the export model.
25X1 B
25X1 B
25X1 C
Approved For Release 2000/09/14 :CIA-RDP86T00608R000500230028-3
!0