CRITICAL SITUATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91T01172R000300170004-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 22, 2016
• Document Release Date: July 11, 2011
• Sequence Number: 4
• Publication Date: January 6, 1955
• Content Type: REPORT

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*14
This report is divided into
two parts:
The first consists of items
on situations where developments
may occur in the near future.
The second part consists of
status reports on other impor-
tant situations where critical
developments are not expected
immediately.
6 Jan 55 CRITICAL SITUATIONS
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TENSIONS INCREASE
IN CENTRAL A . . . . . . . . . . . . Page 6
The assassination of Panamanian president
Remon has increased tensions in Central America.
PART II
STATUS REPORTS
ON OTHER SITUATIONS Page 8
Prospects for Paris Agreements
Soviet Reactions to Paris Ratification
The Afro-Asian Conference
Burma
Hammarskjold in Peiping
Chinese Offshore Islands
"Liberation" of Formosa Plans
Japan-Orbit Relations
South Vietnam
Possible Schism in Egypt's RCC
Laotian Talks With Pathet Lao
Arab-Israeli Dispute
French North Africa
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SITUATIONS WITHOUT
SIGNIFICANT NEW VELOPMENTS . . . . . . . Page 16
Anti-Soviet Emigres
Satellite Security Shake-ups
Viet Minh May Challenge MAAG Personnel
Viet Minh "Refugee" Movement
US-South Korean Aid Agreement
Possible ROK Moves Against NNIT
South Korean Raids
Indonesia
Egypt and the Sudan
Syria
Finland
British-Arab Oil Dispute
Greece
Chile
Guatemala
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,%W V400
TENSIONS INCREASE
IN CENTRAL AMER=
The assassination of Panamanian president
Remon has increased tensions in Central America.
The chief of the Venezuelan national
security forces told the American embassy in
Caracas on 3 January that he considers Remon's
killing the prelude to further trouble in
Central America. He also said that Remon had
reported to Venezuelan president Perez Jimenez
two months ago that Cuban gunmen were planning
to kill both Perez and Remon.
The Venezuelan dictator and Nicaraguan
dictator Somoza may use Remon's murder to
"justify" intensified efforts to eliminate Costa
Rican president Figueres.
In Panama itself, Remon's murder will prob-
ably introduce a new period of instability.
Jose Ramon Guizado, the new president, will not
be as strong as Remon was, and Communists and
other opposition elements may try to exploit the
situation by stirring up disorder and making
other difficulties.
The American embassy in Panama City reported
on 4 January that the Guizado government will
sign the new agreement with the United States on
the Canal Zone "without question." The president
and his foreign minister admittedly fear that
"material postponement after 15 January would be
widely interpreted as a lack of United States
confidence" in the new government.
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VM-' ~fto
Remon's assassins and their motives remain
unknown.
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`r1410
STATUS REPORTS
OTHER I TIONS
Prospects for Paris Agreements: The Paris
agreements will probably be ratified by all the
European signatory powers.
Following the French assembly's approval of
the Paris accords, the French Council of the Repub-
lic will receive the bills on 11 January. The
council must give them a first reading within the
-two-month period provided by the constitution, or
before 11 March.
Although the council is expected to vote
favorably on the first reading, changes in the
text requiring further assembly concurrence could
delay final action on the accords until June. An
adverse vote would reopen the entire question of
German rearmament in the assembly.
Failure of the negotiations--scheduled to
begin on 17 January--for creating an arms produc-
tion pool might influence the council to return
the accords to the assembly. In such an event,
Ambassador Dillon opines that they would be
rejected. Agreement will probably be reached
on the pool, however.
There will be some danger of the council's
deliberately throwing the issue back to the assem-
bly if Mendes-France is overthrown--as seems
likely--before the accords are acted on by the
upper house.
Mendes-France plans to visit Rome from 11 to
13 January, primarily to seek support for his pro-
posal for a European arms production pool. The
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Italians want broader discussions, to cover general
East-West relations and Italian participation in
development projects in French overseas territories.
Mendes-France plans to return to Paris via Germany,
where he will discuss both the arms pool and the
Saar with Chancellor Adenauer.
None of the Benelux countries has as yet rati-
fied, but all three expect to complete ratification
by mid-February.
The final German Bundestag reading will take
place at the end of January or the beginning of
February. Action by the Bundesrat or upper house
is expected in March. Ample majorities are certain
on all the accords save the Saar agreement, which
will have a slim majority in both houses.
The Italian Senate received from the Chamber
on 28 December the draft law ratifying WEU and
German entry into NATO. Consideration by the
Senate Commission on Foreign Affairs will commence
the latter part of January, with the floor debate
scheduled the middle or latter part of February.
Approval is expected despite the strong fight being
made against WEU by the Communists and the Nenni
Socialists.
Soviet Reactions to Paris Ratification: Orbit
commentaries on the French National ssem y's vote
for ratification of the Paris agreements suggest
that the USSR may postpone implementation of major
countermeasures until it has had time to assess the
results of the assembly's action and to appraise
the prospects for final completion of the ratifica-
tion process in Germany and France.
Moscow radio has pointed out that the Paris
agreements still have to go through the French
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Council of the Republic, and the Polish radio has
declared that "the fight is not over yet."
The Soviet leaders have thus maintained wide
freedom of action in the timing of any counter-
measures they may take and are not committed to
any irrevocable action in response to the com-
pletion of the first stage of the French
ratification process.
The Afro-Asian Conference: Most of the 25
countries invited by the five -Colombo powers to
attend an Afro-Asian conference in Indonesia next
April will probably accept.
Peiping has responded with enthusiasm. The
reactions of the Arabs and Africans have been
mixed, but most of them will feel they should
attend if others do. Thus far only Egypt has. given
evidence of attempting to develop a positive pro-
gram of its own. The Egyptian foreign minister,
confident of being supported by ten other countries,
has said he will attempt to draw Indonesia and Nehru
away from the Communists, avoid any semblance of
recognizing Communist China, and "give a good push
to the whole conference toward the Western way of
thinking."
Japan, the Philippines, and Iran are inclined
to participate, but have indicated a desire for
American guidance before making a decision. Only
Thailand has registered a negative reaction.
The Chinese Communists are expected to send a
strong delegation to the conference, probably under
Chou En-lai. The vague agenda, which lists only
one common denominator--racial and colonial problems--
is made to order for Peiping. The Chinese have
already described the conference as directed toward
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Nme
"enlarging the peace area," and Chou is likely to
advance concrete proposals to further diplomatic,
economic and cultural ties with the participating
countries.
Unless some of the non-Communist countries are
represented by equally dynamic personalities who
are prepared with proposals of their own, Peiping
is likely to steal the show.
Burma: The Burmese role at the recent confer-
ence of' the Colombo powers indicates that Rangoon
is unlikely to oppose any forthcoming Chinese
Communist proposal for closer Asian alignments.
Burma's premier, who bore the news that Peiping
wanted an invitation to the Afro-Asian conference,
threatened that Rangoon would boycott the confer-
ence if the Chinese were not invited.
Hammarskjold in Peipin : UN secretary general
HammarsEjol arrived in Peiping yesterday to try to
secure the release of UN personnel held by the
Chinese Communists.
Hammarskjold was reported to be "deeply confi-
dent" while in London last week, despite the efforts
of both American and British officials to discourage
optimism.
Peiping's resumption this week of intensive
propaganda on the "spy" case supports other indi-
cations that the Chinese Communists' first step
will be to try to persuade Hammarskjold that they
have a good case against all 13 American "spies."
Peiping will probably produce these 13 on request.
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It would appear to the interest of both Moscow
and Peiping to conciliate world opinion by releas-
ing at least the 11 airmen after making whatever
case can be made against them. Peiping's propaganda,
however, has suggested that, in the absence of Soviet
intervention, the Chinese will hold the airmen for
bargaining on several allegedly related grievances.
It thus seems likely that Peiping's second
step will be to make a bid, through Hammarskjold,
for American concessions on such issues as China's
seat in the UN, American-Nationalist relations and
operations, Chinese prisoners of the Korean war,
and Chinese students and financial assets in the
United States.
The Chinese may seek to keep interest in
negotiations alive by freeing certain other Ameri-
can nationals whose alleged offenses are less
serious than those charged against the airmen. For
example, Peiping might choose to release the four
other American airmen whom it admits holding and
who are accused only of air "violation."
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Chinese Offshore Islands: There have been no
significant clashes in the past week. The Commu-
nists continue, however,'to increase their capabil-
itjes for future operations and have recently demon-
strated their control of the waters north of the
Tachen Islands. A build-up of facilities on Commu-
nist-held islands in this area could be the prelude
to assaults on smaller islands in the Tachen group,
for example, Ichiang or Yushan.
A new airfield may be under construction about
50 miles west of Swatow, due west of Formosa and
about 150 miles south of the Quemoys.
Nationalist navy observers last month for the
first time sighted torpedo boats in the Swatow har-
bor. These boats, operating from Swatow, could be
used in sneak attacks on Nationalist vessels in the
Formosa Strait.
Other Communist military activity along the
coast has included small-scale training maneuvers
and construction of defensive fortifications along
the Fukien coast opposite the Quemoys and the Matsus.
"Liberation" of Formosa Plans: Chinese Commu-
nist efforts to subvert nese Nationalist personnel
may win important successes in the next few months.
Peiping made an offer to Nationalist armed
forces on New Year's Day which included a promise
of cash rewards for weapons, planes and ships de-
livered by defectors and which repeated previous
offers of amnesty, land and jobs for defectors.
Meanwhile, it has been confirmed that National-
ist defectors played a role in the Wuchiu Island in-
cident last November when, during a bombardment of
the island by several Communist naval craft, a few
members of the Nationalist garrison attempted to
incite panic among the defenders and thus facilitate
a Communist landing.
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Japan-Orbit Relations: For the first time in
a Japanese election campaign, Communists other than
domestic have voiced support for the Socialist Par-
ties and will apparently work for a Socialist vic-
tory in the vote scheduled for 27 February. The So-
cialists are not expected, however, to win more than
a third of the Diet seats.
The Chinese Communists have editorially endorsed
the Socialist Parties,
The Communists recognize their own weakness at
the polls, and would view the eventual establishment
of a Socialist government, dominated by neutralists
and infiltrated by Communist sympathizers, as a sig-
nificant forward step.
South Vietnam: The Binh Xuyen organization,
which controls the police, may sabotage public util-
ities in Saigon if Premier Diem carries out his
stated intention not to renew the Binh Xuyen's gam-
bling concession when the contract expires on 15
January. If Diem should temporize with the Binh
Xuyen, he would probably face new demands from the
Cao Dai and Hoa Hao sects. Chances are that some
"arrangement" will be worked out which will make
it possible to avoid a showdown.
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Possible Schism in Egypt's RCC: Egypt's Minis-
ter of National Guidance a a Salim's neutralist
speech on relations with the West on 27 December may
mark a schism in the Revolutionary Command Council,
with Salim championing Arab solidarity in opposition
to Prime Minister Nasr's policy of co-operation with
the West.
Salim, the most likely member of the council
to become a serious rival to Nasr, has been the cen-
ter of growing intracouncil dissension for some
While Nasr would probably win a test of strength
with Salim, the prime minister is likely to proceed
more cautiously for the time being in moving toward
closer relations with the West.
Laotian Talks With Pathet Lao: Within the next
few days the royal government wi send a delegation
to confer with representatives of the Viet Minh-
backed Pathet Lao at a site chosen by the latter.
The government had earlier insisted that the talks
be held in the capital. Its concession on the site
will give the Pathet Lao a psychological advantage
and facilitate Viet Minh domination of the conference.
Arab-Israeli Dispute: Israeli officials have
indicated to Western diplomats that their government
will continue to wage an unabated campaign in the
United Nations for the right of Israeli ships to
pass through the Suez Canal.
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The bitterly anti-Israeli pronouncements of
Egypt's Minister of National Guidance Salah Salim
on 27.December, even though made without authoriza-
tion of the Nasr regime, will aggravate the already
strained relations between the two countries.
French North Africa: Terrorism is on the in-
crease in French orocco, where there were 50 armed
attacks last week. These were attributed in part
to nationalist resentment against UN unwillingness
to act on the Moroccan dispute.
The American consul general in Casablanca re-
ports that he is "becoming increasingly concerned
at the upsurge of terrorist and counterterrorist
activity in Casablanca, and while the situation is
not now alarming, it would become so if the present
tempo and type of attacks continue."
In Tunisia, increasing nationalist impatience
with the lack of-progress in the negotiations on
Tunisian self-government now under way in Paris
threatens to lead to a renewal of nationalist non-
co-operation and possibly terrorism.
Note: There are no significant new develop-
ments to report this week on the following situa-
tions:
Anti-Soviet Emigres
Satellite Security Shake-ups
Viet Minh May Challenge MAAG Personnel
Viet Minh May Close Hanoi Consulate
Viet Minh '!Refugee" Movement
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US-South Korean Aid Agreement
Possible ROK Moves Against NNIT
South Korean Raids
Indonesia
Egypt and the Sudan
Syria
Finland
British-Arab Oil Dispute
Greece
Chile
Guatemala
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