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

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01098A000500110001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 114
• Document Creation Date: November 16, 2016
• Document Release Date: February 25, 2000
• Sequence Number: 1
• Publication Date: July 1, 1975
• Content Type: REPORT

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Secret..
No Foreign Dis.s.ent
Communist Aid and Trade Activities
in Less Developed Countries, May 1975
Secret
ER RP 75-20
July 1975
Copy
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Classified by 015319
Exempt from General Declassification Schedule
of E.O. 11632, exemption category:
?58(1), (2), and (3)
Automatically declassified on:
dote impossible to determine
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No Foreign Dissem
CONTENTS AND SUMMARY OF EVENTS
(May 1975)
Highlights
Significant Soviet activity in the Third World in May focused on North Africa.
During a visit to Libya, Soviet Chairman Kosygin apparently signed a military
agreement Kosygin flew on to Tunisia, where he signed
an agreement in principle to construct two dams, a Soviet specialty in the area. Soviet
officials arrived in Morocco to resume negotiations on a deal to develop phosphate
deposits in return for a long-term Moroccan contract to supply phosphate rock. China
signed its first direct trade contracts with Bangladesh and was negotiating its first
long-term iron ore purchase agreement with an LDC. The Philippines received its first
Communist aid, from Romania, while Bucharest was the beneficiary of a bond issue
sponsored by Kuwait on behalf of the Romanian Foreign Trade Bank.
Page
General
Summary of ER IR 75-16, Communist Aid to Less Developed
Countries of the Free World, 1974
Africa
Soviet Chairman Kosygin Visits North Africa 3
Chairman of the USSR Council of Ministers Kosygin signed agreements with
Libya and Tunisia during visits to the two countries in May.
Soviet MIG-23 Deliveries to Libya
The USSR delivered the first MIG-23 to Libya during May under an arms
_?
agreement concluded last year.
USSR and Morocco Resume Discussions on Phosphate Agreement
Soviet and Moroccan officials resumed discussions on a draft agreement
calling for Soviet assistance for exploitation of phosphate deposits at
Miskalas in return for long-term phosphate rock deliveries from Morocco.
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East Asia
Indonesia Proposes Projects for Communist Financing 4
The Indonesian National Planning Board has compiled a list of project
proposals for Soviet and East European financing valued at $825 million.
Philippines Receives First Communist Credits 5
Romania became the Philippines first Communist aid donor with a pledge
of $31 million in credits for a thermal powerplant.
Latin America
Brazil and China Negotiate Iron Ore Contract 5
During May, China was negotiating a long-term iron ore purchase contract
with Brazil, its first major deal with an LDC iron ore producer.
? Peru Signs $95 Million in Contracts with Hungary 6
Peru signed contracts in May to deliver $75 million in Peruvian commod-
ities to Hungary over the next five years and to purchase $20 million in
Hungarian equipment under credit.
Near East and South Asia
Bangladesh Signs First Trade Contracts with China 6
Bangladesh and China established their first formal trade links with the
conclusion of four contracts in May.
Egypt and USSR Sign Economic Agreements 7
Egypt and the USSR signed contracts to go ahead with construction of a
cement plant, expansion of an aluminum plant at Naja Hamadi, and other
projects.
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Romania Negotiates Kuwaiti Financing 7
During May, Romania's Oil Minister visited Kuwait to discuss the joint
establishment of a billion dollar petrochemical complex in Romania to use
Kuwaiti oil. In addition, Kuwait sponsored a second bond issue, valued at
$40 million, on behalf of the Romanian Trade Bank.
Other Activities
Economic 8
Military 12
Annex
Communist-LDC Trade Continues To Rise in 1973 A-1
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COMMUNIST AID AND TRADE ACTIVITIES
IN LESS DEVELOPED COUNTRIES
MAY 1975
General
Summary of ER IR 75-16, Communist Aid to Less Developed
Countries of the Free World, 1974
New Communist military and economic aid to the less developed
countries (LDCs) of the Free World dropped to US $2.7 billion in 1974, its
lowest level in three years. In spite of the reduced program, there was no
apparent change in Communist aid policy. Programs under way continued at
roughly the same pace as in most recent years, and the number of
Communist military and economic personnel stationed in LDCs increased.
Most of the decline in 1974 was in military aid, which dropped sharply
from the abnormally high crisis levels of 1973. Military aid, always more
politically oriented than economic aid, although 30% smaller in 1974,
demonstrated again the extent of the Soviet and East European commitment
to the Middle East. For Iraq it was a record year; for Syria, second only to
1973. Reflecting the strains in Soviet-Egyptian political relations, Egypt
received no new military aid, while aid to Iraq and Syria accounted for more
than 60% of the USSR's and Eastern Europe's $1.2 billion of new military
assistance to the LDCs. Iraq and Syria also had the largest contingents of
Communist military advisers. Most significantly, Moscow's new deliveries of
equipment to Iraq and Syria surpassed in sophistication the equipment
furnished to any other LDC. The supersonic MIG-23 jet fighters, shipped to
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 of the Office of
Economic Research, Code 143, Extension 5291.
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Iraq and Syria, have not been provided to Warsaw Pact countries. Also
reflecting political overtones, Iran was the only other country to receive a
large new military commitment in 1974 -- ground 25X1B
forces equipment, military support, and engineering equipment.
Moscow and Eastern Europe continued to use economic aid to advance
and protect their commercial and long-term economic interests. Again, in
1974, the formation of joint industrial and commercial ventures with LDCs
increased, and joint committees for economic cooperation were operating in
a number of LDCs as coordinating and aid planning bodies. New Soviet and
East European economic commitments in 1974 totaled $1.2 billion, about the
same as in 1973 but 25% below the 1971-72 records. The failure to furnish
large blocks of new aid reflected mostly the continuing slow drawdown of
previous aid. Although drawings against unused economic credits in 1974
reached a new high of $930 million, they were propelled by a record $265
million Soviet grain shipment to India. Otherwise, drawings would have
approximated recent annual levels.
The commercial motivation for economic aid was highlighted by the
large Communist credits to Argentina, intended to correct the imbalance in
Soviet and East European trade with Argentina. Other major Soviet and East
European economic aid went largely to ongoing projects, such as Moscow's
new credit ($216 million) to Pakistan for a steel mill being built with $210
million of Soviet aid extended in 1971. In an unusual move, Moscow agreed
to provide one-half of its $28 million budget support credits to Bangladesh in
hard currency.
China's $200 million of new economic aid in 1974 marked a significant
drop from its $575 million annual commitments since the Cultural
Revolution. Although still pursuing an active aid program in Africa, Peking
reduced its new economic aid pledges, mostly because of a lack of
opportunities and because outflows still were heavy for completing the Tan-
Zam Railroad, China's largest single aid project in the Third World.
Nevertheless, Peking's area of interest was unchanged, and except for a $25
million credit to Laos, its major effort continued on the African continent.
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Peking's two major clients -- Tanzania and Zambia -- again took the lion's
share (65%) of China's total economic aid. Its only significant military
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(Secret No Foreign Dissem)
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Africa
Soviet Chairman Kosygin Visits North Africa
Chairman of the USSR Council of Ministers Kosygin visited Libya and
Tunisia during May for wide-ranging talks on economic and political matters.
Kosygin probably negotiated a new military agreement with Libya in the
(Confidential)
As a result of discussions in Libya, the two sides signed an economic and
technical assistance agreement, whose provisions will be further elaborated
during the annual meeting of the Soviet-Libyan joint economic commission
in June. Libya has requested Soviet assistance for an iron and steel plant
and a nuclear powerplant, but it is unlikely that agreement on these projects
was reached. There was no public reference to discussions of Libyan oil
sales to the USSR. On the military side, Moscow has denied Egyptian press
allegations that a multibillion dollar military agreement was signed during
the visit, but the USSR probably signed a military supply agreement valued
at Libyan Chairman Qadhafi accepted the Soviet
leader's invitation to visit the USSR, presumably in the near future.
(Confidential)
In Tunis the Soviet delegation studied Tunisian requests for Soviet
assistance to Tunisia's new five-year plan. The USSR announced agreement
in principle to construct two dams under some $18 million of previous Soviet
credits and offered to expand Tunisia's fishing industry. (Confidential)
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Soviet MIG-23 Deliveries to Libya -
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The USSR delivered MIG-23s to Libya in May, the first
MIG-23s in Tripoli's inventory. The shipment moved under an arms
agreement concluded with the USSR last year. Libya becomes the fourth
Arab country to receive the advanced MIG-23. (Secret No Foreign Dissem)
USSR and Morocco Resume Discussions on Phosphate Agreement
Soviet and Moroccan officials resumed talks in Rabat on Soviet
development and exploitation of the Miskalas phosphate deposits. The draft
agreement calls for Soviet financing and construction of a phosphate mine at
Miskalas, construction of a 20-mile railroad to the port of Essouira, and
installation of phosphate handling facilities at the port. Under the proposal,
the USSR would buy 3-5 million metric tons of phosphate rock a year in
1980-90 and 10 million tons annually for a subsequent 15-20 years.
Negotiations which have gone on for more than a year foundered because
Morocco refuses to permit the USSR to reexport Moroccan phosphates or to
use them to raise exports of Russian-produced phosphates. Morocco also
wants a shorter term contract. Recent softening in demand for Moroccan
phosphates may strengthen the Soviet bargaining position. (Confidential)
East Asia
Indonesia Proposes Projects for Communist Financing -
The Indonesian National Planning Board has compiled a list of projects
suitable for Soviet and East European financing valued at $825 million. The
proposals concentrate on development of ports, inland waterways, inter-
island transport, and Indonesia's oceangoing fleet. Construction activity and
ship procurement carry a total price tag of more than $500 million. An
additional $95 million is for power development and $35 million for the
rehabilitation of railroad and motor transport facilites. The remaining
projects are scattered over agricultural processing and manufacturing
industries. (Secret No Foreign Dissem)
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During a tour of the USSR and Eastern Europe last fall, Indonesian
Foreign Minister Malik received assurances that Indonesian aid requests
would receive favorable consideration. The USSR signed a new economic
and technical assistance agreement in December. The magnitude of credits
will be set after Soviet review of Indonesian project suggestions. (Secret No
Foreign Dissem)
Indonesia's interest in following up on aid requests to Communist
countries may have cooled since Western countries pledged over $900 million
in new aid at their annual consortium meeting in May. This level was higher
than pledges in 1974. Jakarta's initiatives in seeking aid from Communist
countries last year were prompted by fears of a sharp decline in Western aid
attendant on Indonesia's increased oil earnings. (Secret No Foreign Dissem)
Philippines Receives First Communist Credits -
During a state visit to the Philippines in April, Romanian President
Ceausescu signed an agreement to provide $31 million for construction of a
thermal powerplant on Cebu. The terms of the credit agreement, Manila's
first with a Communist country, were not announced. Romania also agreed
to buy $65 million worth of nickel over the next six years. For its part, the
Philippines signed contracts to purchase offshore oil drilling equipment,
valued at $3.6 million, and 500 Romanian tractors. (Confidential)
Latin America
Brazil and China Negotiate Iron Ore Contract
Negotiation of a 10-year contract with Brazil marks China's first
attempt to conclude a long-term iron ore agreement with an LDC producer.
A Brazilian firm has offered 6.9 million tons of ore to be shipped at a rate of
about 700,000 tons annually through 1984. Prices would be negotiated each
year, but the current market value of the agreement is estimated at a
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minimum of $80-$90 million. The new agreement is consistent with Chinese
initiatives over recent years to assure long-term supplies of basic raw
materials for Chinese industry. Brazil, with its abundant supplies of
agricultural and other primary products, has become a particularly import-
ant trading partner for China over the past three years. (Secret No Foreign
Dissem)
Peru Signs $95 Million in Contracts with Hungary -
During May, Peru signed a $20 million contract with Hungary for
expanding the Canon del Pato hydroelectric plant as the final allocation
under a $38 million credit extended in 1972. Lima previously has drawn on
the credit to finance purchases of power generating and distributing
equipment and educational materials. Long-term trade contracts signed at
the same time are valued at about $75 million. Among other items, Peru
will export 40,000 tons of fishmeal annually (1976-78), worth $30 million at
current prices, as well as an estimated $36 million of copper and other
metals during 1975-80. Hungary is Peru's major East European trading
partner. In 1974, trade between the two countries totaled $19 million, of
which only $5.5 million represented Peruvian exports. (Unclassified)
Near East and South Asia
Bangladesh Signs First Trade Contracts with China
The Dacca press reported in May that Bangladesh established its first
formal direct trade links with China during the visit of a four-man
delegation to the Canton Trade Fair. Four contracts reportedly were signed,
but the goods to be traded were not announced. The agreements were hailed
as a prelude to the establishment of diplomatic relations. (Unclassified)
Bangladesh has been seeking new markets for its jute products and
views China as a potentially important source of cheap consumer goods
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imports. In addition, Dacca probably hopes that China might agree to
persuade Pakistan to adopt more favorable policies on the division of assets
and repatriation of Bangladesh nationals, questions outstanding since
Bangladesh achieved independence in 1971. Pakistan is the largest recipient
of Chinese economic and military aid in the Third World. (Unclassified)
Egypt and USSR Sign Economic Agreements - 6 K
Egypt and the USSR concluded a number of economic agreements during
May which should heighten activity at existing Soviet project sites in Egypt.
The USSR signed final contracts valued at $105 million to go ahead with a
600,000-ton cement plant at Asyut, to increase the capacity of the Soviet-
assisted Naja Hamadi aluminum complex to 166,000 tons annually, and to
expand a machinery plant. The USSR will take 35% of Egypt's aluminum
output. The two sides also discussed third-stage expansion at the Helwan
iron and steel complex, an undertaking that will require new credits.
Second-stage activity now in progress will raise steel capacity to 1.5 million
tons a year by 1976. (For Official Use Only)
The two countries also signed protocols on electrification projects
valued at $15.6 million. Projects include installation of transformers in
upper Egypt, renovation of the Suez power station, and improvements to the
Aswan power station. (For Of ficial Use Only)
Romania Negotiates Kuwaiti Financing -
Romania's Oil Minister visited Kuwait in May for talks which reportedly
covered joint participation in a petrochemical complex in Romania at a total
cost of $1 billion. Kuwait would supply 49% of the equity as well as the
crude oil feedstock for the venture. (Unclassified)
Romania already is importing small amounts of Kuwaiti crude under an
agreement signed in 1974. The new complex may come under an economic
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cooperation pact signed last year which calls for development of joint
projects in the chemical, petroleum, and construction industries over the
next five years. (Secret No Foreign Dissem)
In addition, the Kuwait International Investment Company was arrang-
ing a second bond issue on behalf of Romania during May. The $40 million
issue was to carry the same terms as a $60 million note negotiated in March,
which was fully subscribed by the Kuwait Ministry of Finance on behalf of
the Romanian Bank of Foreign Trade. Repayment is scheduled for eight
years at 9.5% interest. (Secret No Foreign Dissem)
Kuwait and other OPEC countries are likely to increase economic
contacts with Eastern Europe in search of new sources of raw materials and
outlets for surplus funds. East European countries, in turn, are seeking
means to finance higher oil and other import costs. Budapest will send an
economic delegation to Kuwait in June, most likely to follow up an earlier
Hungarian request for a $300 million line of credit from Kuwait. (Confi-
dential)
OTHER ACTIVITIES
Economic 25X1C 25X1C
Africa
Angola. The Secretary General of the Front for the National Liberation
of Angola (FNLA) intends to travel to Peking in the near future to request
increased Chinese military and financial assistance to his movement. China
currently is providing military instructors for the FNLA army. (Secret No
Foreign Dissem)
Gabon. Gabon signed an agreement on economic and technical
cooperation with Romania in May, Gabon's first such pact with a Communist
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country. A trade agreement was signed at the same time. The two sides
agreed to set up a joint committee to identify areas suitable for Romanian
assistance. Projects mentioned include a petroleum refinery and petrochem-
ical complex, agricultural development, and medical centers. (Unclassified)
Ghana. China and Ghana signed a protocol to their 1972 trade
agreement calling for a trade turnover of $21 million during the next year.
Ghana will export timber, minerals, cocoa, and other agricultural products in
return for agricultural machinery, ferrous metals, and textiles. (Unclassi-
fied)
Mozambique. Frelirno leader Machel reportedly departed for a week's
stay in the USSR in mid-May. The USSR has offered economic and military
support to Mozambique following independence on 25 June. (Confidential)
Somalia. A high-level Somali agricultural official departed for Peking
at the invitation of Chinese officials to discuss assistance to animal
husbandry, the development of water resources, and aid to the forestry
industry. China has been providing agricultural assistance to Somalia for
more than 10 years under an $18 million credit agreement. (Unclassified)
East Asia
Indonesia. The Indonesian government has approved the direct sale of
up to 10,000 metric tons of rubber to Bulgaria, with delivery to begin within
three months. The transaction could be worth up to $5.3 million.
(Unclassified)
Philippines. Hungary and the Philippines began formal negotiations on
their first trade agreement on 19 May. (Unclassified)
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Latin America
Brazil. Brazil is studying a Polish proposal to purchase ships of 20,000
to 50,000 tons from Brazil and to sell ships of up to 200,000 tons to Brazil.
Earlier this year, the two countries signed a $1 billion agreement for the
exchange of Polish coal for Brazilian iron ore. (Unclassified)
Ecuador. Construction is scheduled to start in June on a joint
astronomy research station to be manned by Soviet and Ecuadorean
scientists. (Unclassified)
Mexico. During May, China agreed to buy 1,000 tons of Mexican coffee
valued at $1 million. Trade between the two countries has been active since
the conclusion of their first trade agreement two years ago, and in 1973
exchanges approached $40 million. (Unclassified)
Mexican officials have responded cooly to an East German offer of $10
million in credits for the purchase of communications equipment. The offer
reportedly involved discounts of up to 30% on the German equipment, which
could be paid for under a barter agreement. (For Of ficial Use Only)
The USSR and Mexico signed a technical protocol on 20 May calling for
cooperation in machine building, energy, agriculture, geology, and other
fields. A joint committee will oversee technical exchanges under the
agreement. (For Official Use Only)
Trinidad and Tobago. Peking agreed to purchase sugar, cocoa, and
coffee and to consider purchases of other traditional products during the
visit of a trade mission from Trinidad in May. It is not known whether the
two sides considered a recent Chinese proposal to exchange oil industry
technicians. (Unclassified)
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Near East and South Asia
Bangladesh. Bangladesh and East Germany concluded their annual
barter trade protocol on 30 April calling for the exchange of $5 million of
East German medical and pharmaceutical goods, fertilizers, and typewriters
for jute goods and other products. (Unclassified)
Cyprus. Bulgaria signed an agreement to employ Cypriot personnel on
construction projects in Bulgaria. The number of workers involved was not
disclosed. (Unclassified)
The USSR will supply equipment for sulfuric and phosphoric acid plants
in Cyprus under the provisions of a trade contract to be signed in the near
future. The USSR already has delivered port equipment and a cement plant
to Cyprus, probably under an agreement signed earlier this year. (Unclassi-
fied)
Egypt. The Romanian-Egyptian trade protocol for 1975, signed in mid-
May, calls for a total turnover of $156 million, a slight increase over 1974.
(Unclassified)
India. The USSR has allocated $7 million for the preparation of
engineering studies for development of coal fields at Singravli and Raniganj.
(Unclassified)
A Soviet delegation led by the Deputy Foreign Trade Minister arrived in
India to continue negotiations on a new long-term trade agreement for 1976-
80. The two sides have announced plans to double the present level of
exchanges by 1980. In 1974, Soviet-Indian trade totaled $812 million.
(Unclassified)
Iran. Czechoslovakia and Iran signed a protocol to double trade in 1975
to $80 million. (Unclassified)
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Iraq. The PRC will purchase 50,000 tons of sulfur from Iraq under a
contract signed on 28 May. Deliveries will be completed in six months.
(Unclassified)
The joint Romanian-Iraqi economic commission signed trade and
economic agreements during a session held in Bucharest early in May.
Romania agreed to provide assistance to agriculture and the petroleum
industry. Romania extended $35 million in credits to Iraq for oil
development in 1971. Little activity has taken place under this agreement.
(Unclassified)
South Yemen. China signed a formal agreement in May to build a 140-
mile road, probably with funds from a 1972 agreement. (Unclassified)
Turkey. The USSR and Turkey concluded an agreement to expand the
capacity of the Soviet-financed Iskenderun steel mill from 1 to 2 million
tons of steel. In 1972 the USSR extended $158 million for second stage
expansion at the plant, bringing total commitments to the project to $421
million. (Unclassified)
Turkey's National Assembly has endorsed an agreement with the USSR
for joint construction of a dam on the Arpa Cayi River. Turkey's
contribution to the project, which will irrigate 40,000 acres on the Igdir
plain, totals $2 million. (Unclassified)
United Arab Emirates. A Romanian delegation to Abu Dhabi outlined
proposals to purchase crude oil in exchange for Romanian equipment and
expertise for the petroleum industry. (Unclassified)
Congo. The PRC delivered
to Pointe Noire in March.
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small patrol boats and helicopters
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These deliveries are part of a
military aid program which has been under way since late 1964. Secret No
Foreign Dissem)
Somalia. In early May a 16-member Somalian military delegation left
for a 10-day visit to the USSR. The delegation was expected to hold talks on
bilateral military relations with the Soviet government. (Unclassified)
Sudan. A Chinese military delegation left Peking on 19 May for Sudan,
to take part in the sixth anniversary celebration of the 29 May Revolution.
China has previously provided some worth of military equipment
to Sudan, including jet fighters and tanks. Although no major Chinese
deliveries have occurred since 1973, about in arms remains to be
delivered. The delegation may discuss delivery schedules for the remaining
equipment. (Secret No Foreign Dissem)
Zaire. North Korea has made its first delivery of artillery to Zaire. In
25X1B late March, North Korean artillery pieces were observed being
unloaded from a ship in Matadi. A North Korean-Zaire arms accord covering
this delivery was concluded last year when military delegations were
exchanged. Additional deliveries will probably include the range of weapons
common to a North Korean infantry division -- machineguns, antitank
missile launchers, recoilless guns, mortars, and artillery. (Confidential)
Near East and South Asia
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Afghanistan. MKraz-255 prime movers were shipped from the USSR
to Afghanistan in late March and an additional were delivered in early
April. These are the first known military deliveries since November 1974,
when deliveries stopped because of the winter weather. Tanks are expected
to be delivered soon; tank transporters were recently observed at a Soviet-
Afghan transshipment point. (Confidential)
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almost certainly includes Soviet military exports* as well as East European
exports under military contracts and economic aid agreements.
Discussion
Rising Prices Have Major Impact
5. Far higher prices for the food, metals, minerals, and other primary
products that constitute the bulk of Communist purchases from LDCs
contributed heavily to the overall increase in Communist-LDC trade. In
1973, for example, the USSR paid 30% more for rubber and 40% more for
sugar, and the price for raw wool more than doubled. The world market
price of other major Communist imports, such as Latin American copper,
grain, and fishmeal, rose 60%-90% in 1973 compared with 1972. Throughout
the year, prices for primary products rose faster than those for manufac-
tures. The increase in prices of Soviet exports, dominated by machinery and
equipment deliveries, reportedly increased by about 10% in 1973.
6. As world demand and prices rose for primary products in 1973 some
LDCs began to take a hard look at the profitability of their long-term barter
arrangements with Communist countries. LDC producers became less
willing to accept Communist machinery and equipment for hard currency
earning exports. By 1974, several LDC exporters of petroleum, phosphates,
metals, and agricultural raw materials had renegotiated some of their
agreements with Communist countries to require payments in hard currency.
Notable among these were Iran, Iraq, Syria, Ghana, Morocco, Nigeria, Sudan,
and Tunisia. This phenomenon was less evident among sub-Saharan African
countries than elsewhere. A large proportion of their imports from the
USSR and China, are shipped under aid agreements. Communist countries
often take less desirable commodities that do not find a ready market 25X1C
aaat, fi-
M* For a more detailed discussion of Soviet-LDC trade see ER IR 74-29,
Record Soviet-LDC Trade in 1973, November 1974, Confidential.
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COMMUNIST AID AND TRADE ACTIVITIES
IN LESS DEVELOPED COUNTRIES,
MAY 1975
ANNEX
COMMUNIST-LDC TRADE CONTINUES TO RISE IN 1973
Summary
1. Communist-LDC trade made unprecedented gains in 1973, over-
shadowing the record performance of the previous year. Price inflation and
changes in the values of currencies, however, contributed substantially to
the increase.
2. The dollar value of Communist-LDC trade turnover rose by almost
50%, to more than $13 billion, compared with a growth in total world trade
during the same period of about 40%. Still, LDC trade accounted for less
than 15% of total Communist trade, and for the LDCs this trade was only
5% of their total turnover.
3. All Communist countries participated in the increase, but the rise
in Chinese trade was proportionately greater than for others. The jump in
trade with the LDCs reflected Peking's more vigorous initiatives to expand
its markets and its need to augment raw material supplies to support its
expanding industrial effort. China continued to show a surplus of more than
$200 million in its LDC trade, in spite of a large deficit with Latin American
partners.
4. The overall Communist surplus in trade with the LDCs rose by $900
million in 1973, to almost $2.4 billion. Although much of the surplus cannot
be distributed among LDC trading partners, the undistributed element
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Approved For Release 2000/05/15 : CIA-Rl3IATikT01098A000500110001-9
elsewhere. Communist countries probably do not press for annual
settlements on barter account if African partners are facing severe payment
difficulties.
Direction of Trade
7. Although Latin American countries emerged as major raw mater-
ials suppliers during 1973, they did not challenge the dominance of Near
Eastern and South Asian countries in Communist trade (see the table).
8. The importance of the Near East and South Asian area was
bolstered by a doubling in the value of Communist fuel imports to more than
$600 million. This increase reflected expanded volume, as well as price
increases. Moscow almost tripled the volume of its crude imports from Iraq,
but the price rose only 20%. Iraq, Iran, and Afghanistan were the source of
most of the $400 million of Soviet fuel purchased from the Third World. The
volume of Eastern Europe's direct purchases of crude oil from LDC
producers rose almost 80% in 1973.
9. Latin America's increased importance as a raw materials supplier
reflected a rising demand in Communist economies for basic commodities to
satisfy agricultural shortfalls and to expand industrial production. Latin
America accounted for the largest relative gain -- more than 60% -- in
Communist-LDC trade turnover. Most of the increase came from a near-
doubling in the value of Communist imports of food, hides, and minerals.
The hefty Communist deficit in Latin American trade, experienced by all
Communist trading partners, doubled in 1973 to over $800 million.
10. In an attempt to stem the rapid deterioration in their trade
positions, all Communist countries intensified their sales campaigns in Latin
America. These were accompanied in 1974 by liberal Soviet and East
European offers of credits for sales of machinery and equipment. The USSR
was negotiating several large contracts for sales of power equipment to
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Secret
Approved For Release 2000/05/15 : Ca-rIADP79T01098A000500110001-9
Argentina and agreed to sell $160 million of petroleum products to Brazil.
However, most Communist trade activity was still on the buying side, with
additional new contracts in 1974 for sugar and other products from Brazil;
meat, grain, and hides from Argentina; and minerals and metals from Chile
and Peru.
Commodity Composition
11. Communist countries remain primarily a market for LDC raw
materials and agricultural products in spite of LDC attempts to increase
their sales of manufactured goods. For the USSR, raw materials and
foodstuffs still represented 55% of its total imports from the LDCs in 1973.
Although the share of manufactures has doubled since 1960, it accounted for
only 15% of total Soviet imports from the Third World. The most significant
change in the composition of Soviet-LDC trade is the large increase of fuel
as a share of total Soviet, imports. It accounted for 17% of total Soviet
imports from LDCs in 1973, compared with 12% in 1972 and only 7% in 1971.
12. Machinery and equipment dominate Soviet exports to the Third
World, having accounted for 50%-55% of Soviet exports to LDCs for more
than a decade. These sales have been maintained to some extent by credits
provided under the Soviet aid program. The ruble value of Soviet crude oil
sales to Third World customers dropped 15% in 1973, to only 6% of total
exports. Manufactured goods and other crude materials, however, main-
tained their usual-shares for most recent years of about 10% each.
13. The composition of East European trade is believed to follow the
Soviet pattern with a somewhat heavier weight to crude materials and fuels
in the import totals
14. Almost all of China's imports from LDCs were raw materials and
food. Developing countries provided 45% of China's crude materials imports
in 1973, including all of China's rubber, half of its cotton, and 45% of its
nonferrous metals imports.
Approved For Release 2000/05/15 : CIAADP79T01098A000500110001-9
Secret
Approved For Release 2000/05/15 : CIA-RDOblEbT01098A000500110001-9
15. Light manufacture's accounted for one-half of the PRC's exports to
LDCs while food made up most of the remainder. Among Peking's world
exports in 1973, 80% of its grain (mostly rice) exports, 70% of its iron and
steel exports, and 30% of its textiles went to the Third World. (Confidential)
Approved For Release 2000/05/15 : CIA-RDPA9301098A000500110001-9
Secret
'
Approved For Releaso2n9n991i9t5A1PoitsghIngloPtT9a946EPqMIDlecAPplz9countries
Million US $
al
arica
Algeria
Angola
Burundi
Cameroon
Central African Republic
Chad
Congo
Dahomey
Equatorial Guinea
Ethiopia
Gabon
Gambia
Ghana
Guinea
Ivory Coast
Kenya
Liberia
Libya
Malagasy Republic
Mali.
Mauritania
. Mauritius
1 Malawi
Morocco
Mozambique
Niger
Nigeria
Reunion
Senegal
Sierra Leone
Somalia
Sudan
Tanzania
Togo
Tunisia
Uganda
Upper Volta
Zaire
Zambia
Europe
Malta
Portugal
Spain.
East Asia
Brunei
Burma
Cambodia
Indonesia
Laos
Malaysia
Papua New Guinea
Philippines
Singapore
Thailand
Latin America.
Argentina
Bolivia
Brazil
Chile
Colombia
Costa Rica
Dominican Republic
Ecuador
El Salvador
Guyana
Guatemala
Haiti
Jamaica
Mexico
Nicaragua
Panama
Paraguay
Peru
Surinam
Trinidad and Tobago
Uruguay
Venezuela
Near East and South Asia
Afghanistan
Bangladesh
Cyprus
Egypt
Greece
India
Iran.
Iraq
Israel
Jordan
Kuwait
Lebanon
Nepal
North Yemen
Pakistan
Saudi Arabia
South Yemen
Sri Lanka
Syria
Turkey
Unspecified
Total
USSR
Eastern Europe
1972
China
Imports
513.9
136.4
10.5
Neg....1....?
....
1.0
Negl.
....
5.1
....
3.1
....
0.3
4.5
....
Negl.
19.2
Negl.
5.9
....
0.5
0.3
0.4
41.6
19...0..
0.9
6.3
....
17.8
0.9
....
0.4
0.5
Negl.
9.6
64...0..
N.A.
2.7
27...1..
24...6..
183.4
2.6
....
63.0
70.0
0.6
0.1
0.1
....
42.7
1.02
N.R.....
3.3
129.2
N.A.
.... 25.3
0.7
14.2
3.0
Negl.
..
....
Negl.
2.1
1.6
17.4
....
4.0
26.0
16.2
18.7
1973
Exports
1,130.7
350.5
15.02
Negl.
g.
6.1
1.1
1.0 2
3.9
3.7
10.6
4.6
6.9
27.1
10.1
5.1
1.8
5.2
14.6
....
35.9
7.8
4.8
5.8
18.8
35.2
100.2
1.9
2.3
1.42
2.2
1.8
15.0
22.6
1.5
0.6
20.5
471.0
3.7
15.72
N.A.
45.2
Negl.
147.6
1.82
24.3
232.7
Negl.
36.0
0.2
1.2
1:1332
16
Negl.
0.2
...
1.0
0.22
Noe00...1334...
14.1
0.2
0.5
0.6
N.A.
N.R.
0.2
....
250.6
6.1
....
0.1
33,92
1.2
Negl.
21.225
33.8
0.4
6.3
36.3
15.52
4.8
48.5
....
3.3
31.3
3.8
4.1
....
Imports
894.6
256.0
12.02
1...."7..
Neg...1......
952
98....37..
407 i.4.6..
Negl.
25 6...
7.7
N.R.
0.4
0.9
65.4
0.4
1.3
154:4.0.
24.8
6.6
0.1
6.4
140.8
2001 ..9:1..
Negl.
N.A.
N.A.
6.6
80:...
52.5
295.3
16...3 .
94.22
93.7
1.0
0.12
....
1 .1..
2.6
0.1
24.0
Nil.
62.22
N.A.
N.R.
--
195.9
3.4
????
Negl.
24.12
2.2
....
.3
3.2
Negl.
Nil.
Negl.
17:3...
1.3
19.02
4.0
37.4
28.1
30.6
1972
1973
1972
1973
1972
1973
Exports
5,114.4
752.2
139.0
0.1
6.1
0.1
0.8
2.4
2.7
0.1
11.5
0.1
4.45.7
23.3
54.3
7.7
13.0
5.5
86.4
Negl.
5.9
1.4
4.3
....
79.2
0.2
1.4
65.6
....
10.3
11.7
17.0
66.2
77.9
8.2
15.2
6.5
1.3
????
22.4
170.3
6.7
19.6
144.0
350.1
3.2
27...5..
46.0
....
73.8
2.7
1.5
183.7
11.7
200.7
21.5
2.1
91.6
29.2
20.5
1.3
0.2
5.4
0.1
0.4
0.4
1.9
0.2
7.6
0.4
1.3
Negl.
5.5
1.9
....
3.1
3.1
2,145.1
49.4
24.3
20.5
482.5
143.1
311.4
216.9
244.7
32.5
20.0
66.7
85.6
3.0
7.2
74.1
13.8
14.6
27.1
130.7
177.0
1,496.0
Imports
3,640.2
582.7
134.7
0.7
4.9
....
2.2
....
8.6
1.5
....
59 .5
6.8
10.0
7.8
....
55.7
1.5
1.4
1.7
. ...
77.7
Negl.
Negl.
35.0
....
1.0
2.2
5.3
66.0
23.0
6.3
23.6
24.2
....
....
21.4
117.5
0.8
7.9
108.8
203.1
Negl.
14.0
....
16.7
27.2
84.2
0.4
25.2
19.6
15.8
616.2
65.3
7.4
272.1
82.6
22.5
5.4
3.4
13.7
5.2
0.2
1.3
11.1
1.7
Negl.
....
84.2
6.0
10.2
15.0
8.9
2,045.8
39,3
20.0
19.7
515.2
123.7
576.4
241.7
108.4
14.9
0.6
....
21.3
2.9
2.2
83.4
1.2
4.0
46.6
119.1
105.2
74.9
Exports
7,716.5
994.7
171.3
0.2
2.7
10.2
0.5
1.1
21.,..86..
15.0
0.1
34.6
56.4
6.6
15.5
12.1
139.6
10.1
9.3
1.8
6.4
0.5
78.4
0.2
91.9
7.8
12.4
16.2
34.4
63.7
111.2
5.1
27.1
4.8
2.5
8.3
26.6
247.5
14.0
30.3
203.2
539.6
3.8
21.4
57.3
0.1
159.6
2.5
24.9
255.3
14.7
242.7
26.1
6.6
75.4
43.0
21.9
3.2
0.3
6.2
0.1
1.0
1.6
1.8
1.1
23.3
0.6
2.1
0.5
21.8
0.5
....
4.8
0.8
2,834.3
55.1
71.7
27.8
534.2
240.6
474.1
313.5
334.6
50.3
23.7
79.2
101.4
0.9
16.9
108.3
3.9
21.7
47.9
149.3
179.2
2,857.7
Imports
5,342.0
828.5
164.3
1...5..
6...6..
....
3.5
2.8
4.2
131 ..44..
76.0
2.6
10.0
12.2
....
155.6
0.8
0.7
2.6
. ,..
Negl.
102.9
0.1
54.9
Negl.
2.4
2.4
85.3
22.6
2.9
27.3
17.6
20.9
0.1
30.9
130.0
0.8
10.3
118.9
391.0
Ne1g...17...
16.7
....
250.3
0.8
6.6
108.4
6.5
1,072.4
165.6
23.2
444.1
137.2
14.2
7.7
21.1
14.3
7.4
10.4
8.6
5.4
31.3
4.6
Negl.
Negl.
141.3
1.7
....
33.2
1.1
2,795.1
51.3
39.1
25.1
617.0
183.1
742.2
338.9
313.9
18.9
0.6
22.5
33.9
0.4
1.6
77.5
4.1
65.1
125.7
134.2
125.0
Exports
2,495.6
249.3
67.6
N.R. 3
N.R.
1.1
0.1
N.R.
0.4
1.7
0.1
1.9
N.R.
N.R.
11.1
54.3
2.1
0.8
N.R.
10.4
....
1.3
N.R.
N.R.
N.R.
38.1
N.11.
N.R.
10...9..
1.7
1.0
14.2
20.7
0.7
1.7
3.3
4.1
N.R.
N.R.
N.R.
261?..69..
25.3
17.8
N.R.
4.7
....
3.2
N.H.
1.2
N.R.
5.3
3.4
32.0
2.2
1.0
8.6
14.0
3.3
Negl.
....
0.1
01.4
N.R.5.8
N.R.
....
0.7
N.R..-
N.R.
0.2
N.R.
....
1.4
0.1
1,100.4
46.1
10.6
8.6
322.0
39.2
167.6
115.6
109.0
N.R.
0.7
17.5
16.7
0.7
2.8
21.2
5.4
7.9
3.8
70.9
134.1
1,069.2
Imports
1,697.3
241.2
70.9
N.R.
N.R.
3.9
....
N.R.
1.2
2.5
N.R.
N.R.
37.1
6.8
4.3
0.8
N.R.
36.3
1.4
1.4
N.R.
N.R.
N.R.
28.7
N.R.
N.R.
24.0
0.4
1.9
3.5
1.3
1.0
4.7
8.3
0.8
N.R.
N.R.
N.R.
27.7
Negl. .
27.7
91.7
N.R.
3.3
....
8.2
N.R.
70.7
N.R.
....
5.6
3.9
164.2
27.7
3.0
79.6
8.8
1.4
3.4
3.4
2.8
3.4
Nil.-
N.R.
1.2
9.4
N.R.
N.R.
2.2
N.R.
10.2
2.7
5.0
1,159.9
37.3
9.4
8.1
299.6
36.1
385.6
162.1
74.5
N.R.
5.3
O.
0.
22.6
Negl.
12.0
65.0
41.0
12.6
Exports
4,063.8
283.8
87.3
N.R.
N.R.
N001.1.R......8695,..
2.2
N.R.
N.R.
13.1
56.4
5.3
N.R.00...0.3
3.6
N.R.
?-?
38.2
....
N.R.
14...8..
6.6
1.6
15.5
3.4
0.8
1.9
7.8
1.2
N.R.
N.R.
N.R.
42.0
1.5
N.R.
40.5
18.8
N.R.
2.6
3.6
....
N.R...2.130.5
8.6
2.8
55.8
6.1
5.4
12.6
21.6
1.1
0.3
....
0.3
N.R.
0.7
N.R.
N.R.
5.8
N.R.
1.1
0.8
1,527.5
45.5
58.7
10.3
374.2
57.5
300.8
185.4
191.0
N.R.N.R
3.4
10.7
15.5
0.9
4.6
17.0
3.9
15.5
8.5
97.3
126.8
2,135,9
Imports
2,406.4
271.0
N.R.
N.R.
3.5
2.8
4.2
3.0
N.R.
N.R.
37.8
2.6
8.4
????
N.R.
4E0
0.4
0.7
N.11.
35.2
....
N.R.
39.0
2.0
1.5
3...4..
7.3
3.2
N.R.
N.R.
N.R.
14.3
....
N.R.
14.3
144.4
N.R.
0.7
5.7
N.R.
....
4.3
3.2
386.6
97.5
16.5
157.3
17.0
12.6
6.9
21.1
0.9
5.0
9.3
N.R.
5.3
0.1
2.5
N.R.
N.R.
20.8
N.R.
7.2
0.8
1,577.4
46.4
13.2
6.9
356.3
49.4
494.1
185.9
257.3
:.....:
10.3
O.
O.
32.1
-
0.1
9.2
63.0
52.5
127.0
Exports
1,871.0
253.4
507....61..2
3...0..
....
6.6
0.1
1.6
6.2
....
4.3
8.8
3.5
50.6
Negl.
0.62
....
1.7
....
22.7
0.2
0.3
28.2
....
1.6
6.7
0.3
19.5
6.1
2.5
11.5
1.7
0.2
....
7.2
127.2
4.1
19.6
103.5
33.5
0.1
9.4
N.A.
4.6
Nog'.
3.6
0.4
....
7.1
8.3
154.1
18.9
82.8
7.2
17.2
1.3
0.22
5.0
0.1
01....64..
6.9
0.4
1.2
N.A.
5.3
0.9
N.R.
1.7
3.0
876.0
3,32
13.72
11.8
134.7
103.7
143.8
87.2
115.9
32.5
13.7
23.5
56.8
0.3
1.22
28.9
8.4
2.9
7.8
43.7
42.2
426.8
Imports
1,429.0
205.1
53,32
0.7
1.0
1.0
1.5
19.3
....
5.4
2.5
191.4-4
0.1
Negl.
1.7
29.8
Negl.
?-?
5.1
0.1
1.4
23.1
3.0
1.6
14.4
17.1
3.6
88.9
0.8
7.5
80.6
47.4
1.1
N.A.
8.5
0.1
10.8
0.4
0.6
14.0
11.9
268.6
35.0
4.4
129.5
3.8
20.5
1.9
....
10.9
1.8
?-?
0.22
....
....
1.7
1.7
Negl.
N.A.
39.3
5.02
N.R.
12.3
0.6
756.7
2.02
10.62
11.6
190.3 4
86.9
190.8
65.44
30.94
14.9
0.6
16.0
0.1
43.4
1.2k
Negl.
8.6
37.94
45.5
62.3
Exports
2,522.0
360.4
69.02
0.2
2.1
3.2
Negl.
8.9
0.1
2.0
10.9
1.3
10.6
5.2
93 .5
Negl.
0.62
1.2 2
250....65..
0.2
41.2
....
1.0
8.8
0.1
25.1
10.2
1.3
17.0
2.2
0.3
6.5
11.62
182.9
11.0
29.7
142.2
49.8
0.1
3.1
N.A.
8.5
0.1
10.8
0.7
0.6
14.0
11.9
150.9
19.8
....
62.5
5.1
20.8
2.7
0.3 2
05..61 2
????
1.2
1.62
0.8
8.5
0.6
1.9
N.R.
15.4
0.5
N.R.
3.5
Negl.
1,056.2
352
13.0
17.4
126.1
181.9
173.32
106.9
109.82
49.9
14.0
32.2
70.42
7.5
42.8
2.9
8.1
48.2
48.3
721.8
Imports
2,041.0
301.5
82.02
1.5
0.2
0.9
1.4
28,.....(.3..
1.6
3.5
671'0 4
Negl.
2.6
....
Negl.
42.1
0.1
8.2
Negl.
....
Negl.
19.9
5.2
2.52
18.7
9.0
0.1
6.1
109.1
0.7
10.2
98.2
105.8
....
Negl.
N.A.
11.0
39.1
0.8
51.6
3.3
390.5
51.8
6.7
2
1296 0 ..6.56..
0.7
1230.....424.. 2
Negl.
7.2
2.1
Negl.
Negl.
58.3
1.72
N.R.
26.0
0.3
1,021.8
1.5
25.9
18.2
236.6 4
131.5
248.12
127.74
53.44
18.9
0.6
5.2
23.62
.... ..
..
26.4
....
Negl.
18.5
34.6
51.1
112.3
Exports
747.8
249.5
13.8
Negl.
2.0
0.8
2.0
1.0
3.0
2.8
6.0
....
1.3
3.4
2.0
25.4
Negl.
4.02
1.4
2.6
18.4
Negl.
1.1
26.5
....
7.0
4.0
2.5
26.0
700411.......47011..
15.2
16.2
1.0
....
15.2
298.8
3.1
13.42
N.A.
38.2
Negl.
69.0
2.3
1.5
171.3
Negl.
14.6
0.4
1.1
0.2
8.0
0.3
0.2
0...3..
N.R.
0.1
Negl.
4.0
....
168.7
N.A.
....
0.1
0.2
25..8..
.
14.1
19.8
Negl.
5.6
25.7
12.1
2.0
3.2
24.0
3.82
15.5
16.1
0.7
--
I Total trade data are from official Soviet and East European trade handbooks; for China they are from
official LDC trade statistics. Distributed trade for Eastern Europe and China also is from LDC sources.
Soviet data for 1972 were converted at the rate of 1 ruble-$1.21; for 1973, 1 ruble -$1.35. The Soviet
data exclude ocean freight and insurance costs, whereas distributed exports from other Communist
countries include these costs, but their imports exclude them.
2 Estimated.
3 Not reported.
4 Including the estimated value of petroleum exports to Eastern Europe.
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c-oft-)
25X1 C
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CONTENTS AND SUMMARY OF EVENTS
(May 1975)
Africa
Soviet Chairman Kosygin Visits North Africa
Chairman of the USSR Council of Ministers Kosygin signed agreements with
Libya and Tunisia during visits to the two countries in May.
USSR and Morocco Resume Discussions on Phosphate Agreement
Soviet and Moroccan officials resumed discussions on a draft agreement
calling for Soviet assistance for exploitation of phosphate deposits at
Miskalas in return for long-term phosphate rock deliveries from Morocco.
Page
1
2
East Asia
Indonesia Proposes Projects for Communist Financing 2
The Indonesian National Planning Board has compiled a list of project
proposals for Soviet and East European financing valued at $825 million.
Philippines Receives First Communist Credits 3
Romania became the Philippines first Communist aid donor with a pledge
of $31 million in credits for a thermal powerplant.
Latin America
Peru Signs $95 Million in Contracts with Hungary 3
Peru signed contracts in May to deliver $75 million in Peruvian commod-
ities to Hungary over the next five years and to purchase $20 million in
Hungarian equipment under credit.
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Page
Near East and South Asia
Bangladesh Signs First Trade Contracts with China 4
Bangladesh and China established their first formal trade links with the
conclusion of four contracts in May.
Egypt and USSR Sign Economic Agreements 4
Egypt and the USSR signed contracts to go ahead with construction of a
cement plant, expansion of an aluminum plant at Naja Hamadi, and other
proj ects.
Other Activities
Economic 5
Military 9
Annex
Communist-LDC Trade Continues To Rise in 1973 A-1
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COMMUNIST AID AND TRADE ACTIVITIES
IN LESS DEVELOPED COUNTRIES
MAY 1975
Africa
Soviet Chairman Kosygin Visits North Africa
Chairman of the USSR Council of Ministers Kosygin visited Libya and
Tunisia during May for wide-ranging talks on economic and political matters.
Kosygin probably negotiated a new military agreement with Libya in the
25X1B (Confidential)
As a result of discussions in Libya, the two sides signed an economic and
technical assistance agreement, whose provisions will be further elaborated
during the annual meeting of the Soviet-Libyan joint economic commission
in June. Libya has requested Soviet assistance for an iron and steel plant
and a nuclear powerplant, but it is unlikely that agreement on these projects
was reached. There was no public reference to discussions of Libyan oil
sales to the USSR. On the military side, Moscow has denied Egyptian press
allegations that a multibillion dollar military agreement was signed during
25X1B the visit, but the USSR probably signed a military supply agreement
Libyan Chairman Qadhafi accepted the Soviet
leader's invitation to visit the USSR, presumably in the near future.
(Confidential)
In Tunis the Soviet delegation studied Tunisian requests for Soviet
assistance to Tunisia's new five-year plan. The USSR announced agreement
in principle to construct two dams under some $18 million of previous Soviet
credits and offered to expand Tunisia's fishing industry. (Confidential)
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25X1B
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COMMUNIST AID AND TRADE ACTIVITIES
IN LESS DEVELOPED COUNTRIES
MAY 1975
Africa
Soviet Chairman Kosygin Visits North Africa
Chairman of the USSR Council of Ministers Kosygin visited Libya and
Tunisia during May for wide-ranging talks on economic and political matters.
Kosygin probably negotiated a new military agreement with Libya in the
(Confidential)
As a result of discussions in Libya, the two sides signed an economic and
technical assistance agreement, whose provisions will be further elaborated
during the annual meeting of the Soviet-Libyan joint economic commission
in June. Libya has requested Soviet assistance for an iron and steel plant
and a nuclear powerplant, but it is unlikely that agreement on these projects
was reached. There was no public reference to discussions of Libyan oil
sales to the USSR. On the military side, Moscow has denied Egyptian press
allegations that a multibillion dollar military agreement was signed during
the visit, but the USSR probably signed a military supply agreement
Libyan Chairman Qadhafi accepted the Soviet
leader's invitation to visit the USSR, presumably in the near future.
(Confidential)
In Tunis the Soviet delegation studied Tunisian requests for Soviet
assistance to Tunisia's new five-year plan. The USSR announced agreement
in principle to construct two dams under some $18 million of previous Soviet
credits and offered to expand Tunisia's fishing industry. (Confidential)
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25X1B
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USSR and Morocco Resume Discussions on Phosphate Agreement
Soviet and Moroccan officials resumed talks in Rabat on Soviet
development and exploitation of the Miskalas phosphate deposits. The draft
agreement calls for Soviet financing and construction of a phosphate mine at
Miskalas, construction of a 20-mile railroad to the port of Essouira, and
installation of phosphate handling facilities at the port. Under the proposal,
the USSR would buy 3-5 million metric tons of phosphate rock a year in
1980-90 and 10 million tons annually for a subsequent 15-20 years,
Negotiations which have gone on for more than a year foundered because
Morocco refuses to permit the USSR to reexport Moroccan phosphates or to
use them to raise exports of Russian-produced phosphates. Morocco also
wants a shorter term contract. Recent softening in demand for Moroccan
phosphates may strengthen the Soviet bargaining position. (Confidential)
East Asia
Indonesia Proposes Projects for Communist Financing
The Indonesian National Planning Board has compiled a list of projects
suitable for Soviet and East European financing valued at $825 million. The
proposals concentrate on development of ports, inland waterways, inter-
island transport, and Indonesia's oceangoing fleet. Construction activity and
ship procurement carry a total price tag of more than $500 million. An
additional $95 million is for power development and $35 million for the
rehabilitation of railroad and motor transport facilites. The remaining
projects are scattered over agricultural processing and manufacturing
industries. (Secret)
During a tour of the USSR and Eastern Europe last fall, Indonesian
Foreign Minister Malik received assurances that Indonesian aid requests
would receive favorable consideration. The USSR signed a new economic
and technical assistance agreement in December. The magnitude of credits
will be set after Soviet review of Indonesian project suggestions. (Secret)
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Indonesia's interest in following up on aid requests to Communist
countries may have cooled since Western countries pledged over $900 million
in new aid at their annual consortium meeting in May. This level was higher
than pledges in 1974. Jakarta's initiatives in seeking aid from Communist
countries last year were prompted by fears of a sharp decline in Western aid
attendant on Indonesia's increased oil earnings. (Secret)
Philippines Receives First Communist Credits
During a state visit to the Philippines in April, Romanian President
Ceausescu signed an agreement to provide $31 million for construction of a
thermal powerplant on Cebu. The terms of the credit agreement, Manila's
first with a Communist country, were not announced. Romania also agreed
to buy $65 million worth of nickel over the next six years. For its part, the
Philippines signed contracts to purchase offshore oil drilling equipment,
valued at $3.6 million, and 500 Romanian tractors. (Confidential)
Latin America
Peru Signs $95 Million in Contracts with Hungary
During May, Peru signed a $20 million contract with Hungary for
expanding the Canon del Pato hydroelectric plant as the final allocation
under a $38 million credit extended in 1972. Lima previously has drawn on
the credit to finance purchases of power generating and distributing
equipment and educational materials. Long-term trade contracts signed at
the same time are valued at about $75 million. Among other items, Peru
will export 40,000 tons of fishmeal annually (1976-78), worth $30 million at
current prices, as well as an estimated $36 million of copper and other
metals during 1975-80. Hungary is Peru's major East European trading
partner. In 1974, trade between the two countries totaled $19 million, of
which only $5.5 million represented Peruvian exports. (Unclassified)
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Near East and South Asia
Bangladesh Signs First Trade Contracts with China
The Dacca press reported in May that Bangladesh established its first
formal direct trade links with China during the visit of a four-man
delegation to the Canton Trade Fair. Four contracts reportedly were signed,
but the goods to be traded were not announced. The agreements were hailed
as a prelude to the establishment of diplomatic relations. (Unclassified)
Bangladesh has been seeking new markets for its jute products and
views China as a potentially important source of cheap consumer goods
imports. In addition, Dacca probably hopes that China might agree to
persuade Pakistan to adopt more favorable policies on the division of assets
and repatriation of Bangladesh nationals, questions outstanding since
Bangladesh achieved independence in 1971. Pakistan is the largest recipient
of Chinese economic and military aid in the Third World. (Unclassified)
Egypt and USSR Sign Economic Agreements
Egypt and the USSR concluded a number of economic agreements during
May which should heighten activity at existing Soviet project sites in Egypt.
The USSR signed final contracts valued at $105 million to go ahead with a
600,000-ton cement plant at Asyut, to increase the capacity of the Soviet-
assisted Naja Hamadi aluminum complex to 166,000 tons annually, and to
expand a machinery plant. The USSR will take 35% of Egypt's aluminum
output. The two sides also discussed third-stage expansion at the Helwan
iron and steel complex, an undertaking that will require new credits.
Second-stage activity now in progress will raise steel capacity to 1.5 million
tons a year by 1976. (For Official Use Only)
The two countries also signed protocols on electrification projects
valued at $15.6 million. Projects include installation of transformers in
upper Egypt, renovation of the Suez power station, and improvements to the
Aswan power station. (For Of ficial Use Only)
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OTHER ACTIVITIES
Economic
Africa
Angola. The Secretary General of the Front for the National Liberation
of Angola (FNLA) intends to travel to Peking in the near future to request
increased Chinese military and financial assistance to his movement. China
currently is providing military instructors for the FNLA army. (Secret)
Gabon. Gabon signed an agreement on economic and technical
cooperation with Romania in May, Gabon's first such pact with a Communist
country. A trade agreement was signed at the same time. The two sides
agreed to set up a joint committee to identify areas suitable for Romanian
assistance. Projects mentioned include a petroleum refinery and petrochem-
ical complex, agricultural development, and medical centers. (Unclassified)
Ghana. China and Ghana signed a protocol to their 1972 trade
agreement calling for a trade turnover of $21 million during the next year.
Ghana will export timber, minerals, cocoa, and other agricultural products in
return for agricultural machinery, ferrous metals, and textiles. (Unclassi-
fied)
Mozambique. Frelimo leader Machel reportedly departed for a week's
stay in the USSR in mid-May. The USSR has offered economic and military
support to Mozambique following independence on 25 June. (Confidential)
Somalia. A high-level Somali agricultural official departed for Peking
at the invitation of Chinese officials to discuss assistance to animal
husbandry, the development of water resources, and aid to the forestry
industry. China has been providing agricultural assistance to Somalia for
more than 10 years under an $18 million credit agreement. (Unclassified)
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East Asia
Indonesia. The Indonesian government has approved the direct sale of
up to 10,000 metric tons of rubber to Bulgaria, with delivery to begin within
three months. The transaction could be worth up to $5.3 million.
(Unclassified)
Philippines. Hungary and the Philippines began formal negotiations on
their first trade agreement on 19 May. (Unclassified)
Latin America
Brazil. Brazil is studying a Polish proposal to purchase ships of 20,000
to 50,000 tons from Brazil and to sell ships of up to 200,000 tons to Brazil.
Earlier this year, the two countries signed a $1 billion agreement for the
exchange of Polish coal for Brazilian iron ore. (Unclassified)
Ecuador. Construction is scheduled to start in June on a joint
astronomy research station to be manned by Soviet and Ecuadorean
scientists. (Unclassified)
Mexico. During May, China agreed to buy 1,000 tons of Mexican coffee
valued at $1 million. Trade between the two countries has been active since
the conclusion of their first trade agreement two years ago, and in 1973
exchanges approached $40 million. (Unclassified)
Mexican officials have responded cooly to an East German offer of $10
million in credits for the purchase of communications equipment. The offer
reportedly involved discounts of up to 30% on the German equipment, which
could be paid for under a barter agreement. (For Official Use Only)
The USSR and Mexico signed a technical protocol on 20 May calling for
cooperation in machine building, energy, agriculture, geology, and other
fields. A joint committee will oversee technical exchanges under the
agreement. (For Official Use Only)
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Trinidad and Tobago. Peking agreed to purchase sugar, cocoa, and
coffee and to consider purchases of other traditional products during the
visit of a trade mission from Trinidad in May. It is not known whether the
two sides considered a recent Chinese proposal to exchange oil industry
technicians. (Unclassified)
Near East and South Asia
Bangladesh. Bangladesh and East Germany concluded their annual
barter trade protocol on 30 April calling for the exchange of $5 million of
East German medical and pharmaceutical goods, fertilizers, and typewriters
for jute goods and other products. (Unclassified)
Cyprus. Bulgaria signed an agreement to employ Cypriot personnel on
construction projects in Bulgaria. The number of workers involved was not
disclosed. (Unclassified)
The USSR will supply equipment for sulfuric and phosphoric acid plants
in Cyprus under the provisions of a trade contract to be signed in the near
future. The USSR already has delivered port equipment and a cement plant
to Cyprus, probably under an agreement signed earlier this year. (Unclassi-
fied)
Egypt. The Romanian-Egyptian trade protocol for 1975, signed in mid-
May, calls for a total turnover of $156 million, a slight increase over 1974.
(Unclassified)
India. The USSR has allocated $7 million for the preparation of
engineering studies for development of coal fields at Singravli and Raniganj.
(Unclassified)
A Soviet delegation led by the Deputy Foreign Trade Minister arrived in
India to continue negotiations on a new long-term trade agreement for 1976-
80. The two sides have announced plans to double the present level of
exchanges by 1980. In 1974, Soviet-Indian trade totaled $812 million.
(Unclassified)
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Iran. Czechoslovakia and Iran signed a protocol to double trade in 1975
to $80 million. (Unclassified)
Iraq. The PRC will purchase 50,000 tons of sulfur from Iraq under a
contract signed on 28 May. Deliveries will be completed in six months.
(Unclassified)
The joint Romanian-Iraqi economic commission signed trade and
economic agreements during a session held in Bucharest early in May.
Romania agreed to provide assistance to agriculture and the petroleum
industry. Romania extended $3.5 million in credits to Iraq for oil
development in 1971. Little activity has taken place under this agreement.
(Unclassified)
South Yemen. China signed a formal agreement in May to build a 140-
mile road, probably with funds from a 1972 agreement. (Unclassified)
Turkey. The USSR and Turkey concluded an agreement to expand the
capacity of the Soviet-financed Iskenderun steel mill from 1 to 2 million
tons of steel. In 1972 the USSR extended $158 million for second stage
expansion at the plant, bringing total commitments to the project to $421
million. (Unclassified)
Turkey's National Assembly has endorsed an agreement with the USSR
for joint construction of a dam on the Arpa Cayi River. Turkey's
contribution to the project, which will irrigate 40,000 acres on the Igdir
plain, totals $2 million. (Unclassified)
United Arab Emirates. A Romanian delegation to Abu Dhabi outlined
proposals to purchase crude oil in exchange for Romanian equipment and
expertise for the petroleum industry. (Unclassified)
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25X1B
Military
Africa
25X1B
25X1B
Congo. The PRC delivered small patrol boats and helicopters
to Pointe Noire in March. patrol boat is scheduled for delivery some
time before midyear. These deliveries are part of a
military aid program which has been under way since late 1964. (Secret)
Somalia. In early May a 16-member Somalian military delegation left
for a 10-day visit to the USSR. The delegation was expected to hold talks on
bilateral military relations with the Soviet government. (Unclassified)
Zaire. North Korea has made its first delivery of artillery to Zaire. In ?
25X1B late March, North Korean artillery pieces were observed being
unloaded from a ship in Matadi. A North Korean-Zaire arms accord covering
this delivery was concluded last year when military delegations were
exchanged. Additional deliveries will probably include the range of weapons
common to a North Korean infantry division -- machineguns, antitank
missile launchers, recoilless guns, mortars, and artillery. (Confidential)
Near East and South Asia
25X1B 25X1B
Afghanistan. Kraz-255 prime movers were shipped from the USSR
to Afghanistan in late March and an additional were delivered in early
April. These are the first known military deliveries since November 1974,
when deliveries stopped because of the winter weather. Tanks are expected
to be delivered soon; tank transporters were recently observed at a Soviet-
Afghan transshipment point. (Confidential)
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COMMUNIST AID AND TRADE ACTIVITIES
IN LESS DEVELOPED COUNTRIES,
MAY 1975
ANNEX
COMMUNIST-LDC TRADE CONTINUES TO RISE IN 1973
Summary
1. Communist-LDC trade made unprecedented gains in 1973, over-
shadowing the record performance of the previous year. Price inflation and
changes in the values of currencies, however, contributed substantially to
the increase.
2. The dollar value of Communist-LDC trade turnover rose by almost
50%, to more than $13 billion, compared with a growth in total world trade
during the same period of about 40%. Still, LDC trade accounted for less
than 15% of total Communist trade, and for the LDCs this trade was only
5% of their total turnover.
3. All Communist countries participated in the increase, but the rise
in Chinese trade was proportionately greater than for others. The jump in
trade with the LDCs reflected Peking's more vigorous initiatives to expand
its markets and its need to augment raw material supplies to support its
expanding industrial effort. China continued to show a surplus of more than
$200 million in its LDC trade, in spite of a large deficit with Latin American
partners.
4. The overall Communist surplus in trade with the LDCs rose by $900
million in 1973, to almost $2.4 billion. Although much of the surplus cannot
be distributed among LDC trading partners, the undistributed element
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almost certainly includes Soviet military exports* as well as East European
exports under military contracts and economic aid agreements.
Discussion
Rising Prices Have Major Impact
5. Far higher prices for the food, metals, minerals, and other primary
products that constitute the bulk of Communist purchases from LDCs
contributed heavily to the overall increase in Communist-LDC trade. In
1973, for example, the USSR paid 30% more for rubber and 40% more for
sugar, and the price for raw wool more than doubled. The world market
price of other major Communist imports, such as Latin American copper,
grain, and fishmeal, rose 60%-90% in 1973 compared with 1972. Throughout
the year, prices for primary products rose faster than those for manufac-
tures. The increase in prices of Soviet exports, dominated by machinery and
equipment deliveries, reportedly increased by about 10% in 1973.
6. As world demand and prices rose for primary products in 1973 some
LDCs began to take a hard look at the profitability of their long-term barter
arrangements with Communist countries. LDC producers became less
willing to accept Communist machinery and equipment for hard currency
earning exports. By 1974, several LDC exporters of petroleum, phosphates,
metals, and agricultural raw materials had renegotiated some of their
agreements with Communist countries to require payments in hard currency.
Notable among these were Iran, Iraq, Syria, Ghana, Morocco, Nigeria, Sudan,
and Tunisia. This phenomenon was less evident among sub-Saharan African
countries than elsewhere. A large proportion of their imports from the
USSR and China, are shipped under aid agreements. Communist countries
often take less desirable commodities that do not find a ready market
* For a more detailed discussion of Soviet-LDC trade see ER IR 74-29,
Record Soviet-LDC Trade in 1973, November 1974, Confidential.
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elsewhere. Communist countries probably do not press for annual
settlements on barter account if African partners are facing severe payment
difficulties.
Direction of Trade
7. Although Latin American countries emerged as major raw mater-
ials suppliers during 1973, they did not challenge the dominance of Near
Eastern and South Asian countries in Communist trade (see the table).
8. The importance of the Near East and South Asian area was
bolstered by a doubling in the value of Communist fuel imports to more than
$600 million. This increase reflected expanded volume, as well as price
increases. Moscow almost tripled the volume of its crude imports from Iraq,
but the price rose only 20%. Iraq, Iran, and Afghanistan were the source of
most of the $400 million of Soviet fuel purchased from the Third World. The
volume of Eastern Europe's direct purchases of crude oil from LDC
producers rose almost 80% in 1973.
9. Latin America's increased importance as a raw materials supplier
reflected a rising demand in Communist economies for basic commodities to
satisfy agricultural shortfalls and to expand industrial production. Latin
America accounted for the largest relative gain -- more than 60% -- in
Communist-LDC trade turnover. Most of the increase came from a near-
doubling in the value of Communist imports of food, hides, and minerals.
The hefty Communist deficit in Latin American trade, experienced by all
Communist trading partners, doubled in 1973 to over $800 million.
10. In an attempt to stem the rapid deterioration in their trade
positions, all Communist countries intensified their sales campaigns in Latin
America. These were accompanied in 1974 by liberal Soviet and East
European offers of credits for sales of machinery and equipment. The USSR
was negotiating several large contracts for sales of power equipment to
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Argentina and agreed to sell $160 million of petroleum products to Brazil.
However, most Communist trade activity was still on the buying side, with
additional new contracts in 1974 for sugar and other products from Brazil;
meat, grain, and hides from Argentina; and minerals and metals from Chile
and Peru.
Corn modity Composition
11. Communist countries remain primarily a market for LDC raw
materials and agricultural products in spite of LDC attempts to increase
their sales of manufactured goods. For the USSR, raw materials and
foodstuffs still represented 55% of its total imports from the LDCs in 1973.
Although the share of manufactures has doubled since 1960, it accounted for
only 15% of total Soviet imports from the Third World. The most significant
change in the composition of Soviet-LDC trade is the large increase of fuel
as a share of total Soviet imports. It accounted for 17% of total Soviet
imports from LDCs in 1973, compared with 12% in 1972 and only 7% in 1971.
12. Machinery and equipment dominate Soviet exports to the Third
World, having accounted for 50%-55% of Soviet exports to LDCs for more
than a decade. These sales have been maintained to some extent by credits
provided under the Soviet aid program. The ruble value of Soviet crude oil
sales to Third World customers dropped 15% in 1973, to only 6% of total
exports. Manufactured goods and other crude materials, however, main-
tained their usual-shares for most recent years of about 10% each.
13. The composition of East European trade is believed to follow the
Soviet pattern with a somewhat heavier weight to crude materials and fuels
in the import totals
14. Almost all of China's imports from LDCs were raw materials and
food. Developing countries provided 45% of China's crude materials imports
in 1973, including all of China's rubber, half of its cotton, and 45% of its
nonferrous metals imports.
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15. Light manufactures accounted for one-half of the PRC's exports to
LDCs while food made up most of the remainder. Among Peking's world
exports in 1973, 80% of its grain (mostly rice) exports, 70% of its iron and
steel exports, and 30% of its textiles went to the Third World. (Confidential)
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CONTENTS AND SUMMARY OF EVENTS
(May 1975)
Page
Africa
Soviet Chairman Kosygin Visits North Africa 1
Chairman of the USSR Council of Ministers Kosygin signed agreements with
Libya and Tunisia during visits to the two countries in May.
USSR and Morocco Resume Discussions on Phosphate Agreement
Soviet and Moroccan officials resumed discussions on a draft agreement
calling for Soviet assistance for exploitation of phosphate deposits at
Miskalas in return for long-term phosphate rock deliveries from Morocco.
2
East Asia
Philippines Receives First Communist Credits 2
Romania became the Philippines first Communist aid donor with a pledge
of $31 million in credits for a thermal powerplant.
Latin America
Peru Signs $95 Million in Contracts with Hungary
Peru signed contracts in May to deliver $75 million in Peruvian commod-
ities to Hungary over the next five years and to purchase $20 million in
Hungarian equipment under credit.
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n
Conential
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Near East and South Asia
Bangladesh Signs First Trade Contracts with China
Bangladesh and China established their first formal trade links with the
conclusion of four contracts in May.
Egypt and USSR Sign Economic Agreements 4
Page
3
Egypt and the USSR signed contracts to go ahead with construction of a
cement plant, expansion of an aluminum plant at Naja Hamadi, and other
projects.
Economic
Military
Other Activities
Annex
Communist-LDC Trade Continues To Rise in 1973 A1
fi
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25X1B
25X1B
COMMUNIST AID AND TRADE ACTIVITIES
IN LESS DEVELOPED COUNTRIES
MAY 1975
Africa
Soviet Chairman Kosygin Visits North Africa
Chairman of the USSR Council of Ministers Kosygin visited Libya and
Tunisia during May for wide-ranging talks on economic and political matters.
Kosygin probably negotiated a new military agreement with Libya in the
(Confidential)
As a result of discussions in Libya, the two sides signed an economic and
technical assistance agreement, whose provisions will be further elaborated
during the annual meeting of the Soviet-Libyan joint economic commission
in June. Libya has requested Soviet assistance for an iron and steel plant
and a nuclear powerplant, but it is unlikely that agreement on these projects
was reached. There was no public reference to discussions of Libyan oil
sales to the USSR. On the military side, Moscow has denied Egyptian press
allegations that a multibillion dollar military agreement was signed during
the visit, but the USSR probably signed a military supply agreement
Libyan Chairman Qadhafi accepted the Soviet
leader's invitation to visit the USSR, presumably in the near future.
(Confidential)
In Tunis the Soviet delegation studied Tunisian requests for Soviet
assistance to Tunisia's new five-year plan. The USSR announced agreement
in principle to construct two dams under some $18 million of previous Soviet
credits and offered to expand Tunisia's fishing industry. (Confidential)
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Confidential
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USSR and Morocco Resume Discussions on Phosphate Agreement
Soviet and Moroccan officials resumed talks in Rabat on Soviet
development and exploitation of the Miskalas phosphate deposits. The draft
agreement calls for Soviet financing and construction of a phosphate mine at
Miskalas, construction of a 20-mile railroad to the port of Essouira, and
installation of phosphate handling facilities at the port. Under the proposal,
the USSR would buy 3-5 million metric tons of phosphate rock a year in
1980-90 and 10 million tons annually for a subsequent 15-20 years.
Negotiations which have gone on for more than a year foundered because
Morocco refuses to permit the USSR to reexport Moroccan phosphates or to
use them to raise exports of Russian-produced phosphates. Morocco also
wants a shorter term contract. Recent softening in demand for Moroccan
phosphates may strengthen the Soviet bargaining position. (Confidential)
East Asia
Philippines Receives First Communist Credits
During a state visit to the Philippines in April, Romanian President
Ceausescu signed an agreement to provide $31 million for construction of a
thermal powerplant on Cebu. The terms of the credit agreement, Manila's
first with a Communist country, were not announced. Romania also agreed
to buy $65 million worth of nickel over the next six years. For its part, the
Philippines signed contracts to purchase offshore oil drilling equipment,
valued at $3.6 million, and 500 Romanian tractors. (Confidential)
2
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Latin America
Peru Signs $95 Million in Contracts with Hungary
During May, Peru signed a $20 million contract with Hungary for
expanding the Canon del Pato hydroelectric plant as the final allocation
under a $38 million credit extended in 1972. Lima previously has drawn on
the credit to finance purchases of power generating and distributing
equipment and educational materials. Long-term trade contracts signed at
the same time are valued at about $75 million. Among other items, Peru
will export 40,000 tons of fishmeal annually (1976-78), worth $30 million at
current prices, as well as an estimated $36 million of copper and other
metals during 1975-80. Hungary is Peru's major East European trading
partner. In 1974, trade between the two countries totaled $19 million, of
which only $5.5 million represented Peruvian exports. (Unclassified)
Near East and South Asia
Bangladesh Signs First Trade Contracts with China
The Dacca press reported in May that Bangladesh established its first
formal direct trade links with China during the visit of a four-man
delegation to the Canton Trade Fair. Four contracts reportedly were signed,
but the goods to be traded were not announced. The agreements were hailed
as a prelude to the establishment of diplomatic relations. (Unclassified)
Bangladesh has been seeking new markets for its jute products and
views China as a potentially important source of cheap consumer goods
imports. In addition, Dacca probably hopes that China might agree to
persuade Pakistan to adopt more favorable policies on the division of assets
and repatriation of Bangladesh nationals, questions outstanding since
Bangladesh achieved independence in 1971. Pakistan is the largest recipient
of Chinese economic and military aid in the Third World. (Unclassified)
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uonnaenti at
Egypt and USSR Sign Economic Agreements
Egypt and the USSR concluded a number of economic agreements during
May which should heighten activity at existing Soviet project sites in Egypt.
The USSR signed final contracts valued at $105 million to go ahead with a
600,000-ton cement plant at Asyut, to increase the capacity of the Soviet-
assisted Naja Hamadi aluminum complex to 166,000 tons annually, and to
expand a machinery plant. The USSR will take 35% of Egypt's aluminum
output. The two sides also discussed third-stage expansion at the Helwan
iron and steel complex, an undertaking that will require new credits.
Second-stage activity now in progress will raise steel capacity to 1.5 million
tons a year by 1976. (For Official Use Only)
The two countries also signed protocols on electrification projects
valued at $15.6 million. Projects include installation of transformers in
upper Egypt, renovation of the Suez power station, and improvements to the
Aswan power station. (For Official Use Only)
OTHER ACTIVITIES
Economic
Africa
Gabon. Gabon signed an agreement on economic and technical
cooperation with Romania in May, Gabon's first such pact with a Communist
country. A trade agreement was signed at the same time. The two sides
agreed to set up a joint committee to identify areas suitable for Romanian
assistance. Projects mentioned include a petroleum refinery and petrochem-
ical complex, agricultural development, and medical centers. (Unclassified)
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Ghana. China and Ghana signed a protocol to their 1972 trade
agreement calling for a trade turnover of $21 million during the next year.
Ghana will export timber, minerals, cocoa, and other agricultural products in
return for agricultural machinery, ferrous metals, and textiles. (Unclassi-
fied)
Mozambique. Frelimo leader Machel reportedly departed for a week's
stay in the USSR in mid-May. The USSR has offered economic and military
support to Mozambique following independence on 25 June. (Confidential)
Somalia. A high-level Somali agricultural official departed for Peking
at the invitation of Chinese officials to discuss assistance to animal
husbandry, the development of water resources, and aid to the forestry
industry. China has been providing agricultural assistance to Somalia for
more than 10 years under an $18 million credit agreement. (Unclassified)
East Asia
Indonesia. The Indonesian government has approved the direct sale of
up to 10,000 metric tons of rubber to Bulgaria, with delivery to begin within
three months. The transaction could be worth up to $5.3 million.
(Unclassified)
Philippines. Hungary and the Philippines began formal negotiations on
their first trade agreement on 19 May. (Unclassified)
Latin America
Brazil. Brazil is studying a Polish proposal to purchase ships of 20,000
to 50,000 tons from Brazil and to sell ships of up to 200,000 tons to Brazil.
Earlier this year, the two countries signed a $1 billion agreement for the
exchange of Polish coal for Brazilian iron ore. (Unclassified)
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Ecuador. Construction is scheduled to start in June on a joint
astronomy research station to be manned by Soviet and Ecuadorean
scientists. (Unclassified)
Mexico. During May, China agreed to buy 1,000 tons of Mexican coffee
valued at $1 million. Trade between the two countries has been active since
the conclusion of their first trade agreement two years ago, and in 1973
exchanges approached $40 million. (Unclassified)
Mexican officials have responded cooly to an East German offer of $10
million in credits for the purchase of communications equipment. The offer
reportedly involved discounts of up to 30% on the German equipment, which
could be paid for under a barter agreement. (For Official Use Only)
The USSR and Mexico signed a technical protocol on 20 May calling for
cooperation in machine building, energy, agriculture, geology, and other
fields. A joint committee will oversee technical exchanges under the
agreement. (For Official Use Only)
Trinidad and Tobago. Peking agreed to purchase sugar, cocoa, and
coffee and to consider purchases of other traditional products during the
visit of a trade mission from Trinidad in May. It is not known whether the
two sides considered a recent Chinese proposal to exchange oil industry
technicians. (Unclassified)
Near East and South Asia
Bangladesh. Bangladesh and East Germany concluded their annual
barter trade protocol on 30 April calling for the exchange of $5 million of
East German medical and pharmaceutical goods, fertilizers, and typewriters
for jute goods and other products. (Unclassified)
Cyprus. Bulgaria signed an agreement to employ Cypriot personnel on
construction projects in Bulgaria. The number of workers involved was not
disclosed. (Unclassified)
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The USSR will supply equipment for sulfuric and phosphoric acid plants
in Cyprus under the provisions of a trade contract to be signed in the near
future. The USSR already has delivered port equipment and a cement plant
to Cyprus, probably under an agreement signed earlier this year. (Unclassi-
fied)
Egypt. The Romanian-Egyptian trade protocol for 1975, signed in mid-
May, calls for a total turnover of $156 million, a slight increase over 1974.
(Unclassified)
India. The USSR has allocated $7 million for the preparation of
engineering studies for development of coal fields at Singravli and Raniganj.
(Unclassified)
A Soviet delegation led by the Deputy Foreign Trade Minister arrived in
India to continue negotiations on a new long-term trade agreement for 1976-
80. The two sides have announced plans to double the present level of
exchanges by 1980. In 1974, Soviet-Indian trade totaled $812 million.
(Unclassified)
Iran. Czechoslovakia and Iran signed a protocol to double trade in 1975
to $80 million. (Unclassified)
Iraq. The PRC will purchase 50,000 tons of sulfur from Iraq under a
contract signed on 28 May. Deliveries will be completed in six months.
(Unclassified)
The joint Romanian-Iraqi economic commission signed trade and
economic agreements during a session held in Bucharest early in May.
Romania agreed to provide assistance to agriculture and the petroleum
industry. Romania extended $35 million in credits to Iraq for oil
development in 1971. Little activity has taken place under this agreement.
(Unclassified)
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South Yemen. China signed a formal agreement in May to build a 140-
mile road, probably with funds from a 1972 agreement. (Unclassified)
Turkey. The USSR and Turkey concluded an agreement to expand the
capacity of the Soviet-financed Iskenderun steel mill from 1 to 2 million
tons of steel. In 1972 the USSR extended $158 million for second stage
expansipn at the plant, bringing total commitments to the project to $421
million. (Unclassified)
Turkey's National Assembly has endorsed an agreement with the USSR
for joint construction of a dam on the Arpa Cayi River. Turkey's
contribution to the project, which will irrigate 40,000 acres on the Igdir
plain, totals $2 million. (Unclassified)
United Arab Emirates. A Romanian delegation to Abu Dhabi outlined
proposals to purchase crude oil in exchange for Romanian equipment and
expertise for the petroleum industry. (Unclassified)
Military
Africa
Somalia. In early May a 16-member Somalian military delegation left
for a 10-day visit to the USSR. The delegation was expected to hold talks on
bilateral military relations with the Soviet government. (Unclassified)
Zaire. North Korea has made its first delivery of artillery to Zaire. In ?
25X1B late March, North Korean artillery pieces were observed being
unloaded from a ship in Matadi. A North Korean-Zaire arms accord covering
this delivery was concluded last year when military delegations were
exchanged. Additional deliveries will probably include the range of weapons
common to a North Korean infantry division -- machineguns, antitank
missile launchers, recoilless guns, mortars, and artillery. (Confidential)
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Near East and South Asia
25X1B 25X1B
Afghanistan. Kraz-255 prime movers were shipped from the USSR
to Afghanistan in late March and an additional Mwere delivered in early
April. These are the first known military deliveries since November 1974,
when deliveries stopped because of the winter weather. Tanks are expected
to be delivered soon; tank transporters were recently observed at a Soviet-
Afghan transshipment point. (Confidential)
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COMMUNIST AID AND TRADE ACTIVITIES
IN LESS DEVELOPED COUNTRIES,
MAY 1975
ANNEX
COMMUNIST-LDC TRADE CONTINUES TO RISE IN 1973
Summary
1. Communist-LDC trade made unprecedented gains in 1973, over-
shadowing the record performance of the previous year. Price inflation and
changes in the values of currencies, however, contributed substantially to
the increase.
2. The dollar value of Communist-LDC trade turnover rose by almost
50%, to more than $13 billion, compared with a growth in total world trade
during the same period of about 40%. Still, LDC trade accounted for less
than 15% of total Communist trade, and for the LDCs this trade was only
5% of their total turnover.
3. All Communist countries participated in the increase, but the rise
in Chinese trade was proportionately greater than for others. The jump in
trade with the LDCs reflected Peking's more vigorous initiatives to expand
its markets and its need to augment raw material supplies to support its
expanding industrial effort. China continued to show a surplus of more than
$200 million in its LDC trade, in spite of a large deficit with Latin American
partners.
4. The overall Communist surplus in trade with the LDCs rose by $900
million in 1973, to almost $2.4 billion. Although much of the surplus cannot
be distributed among LDC trading partners, the undistributed element
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almost certainly includes Soviet military exports* as well as East European
exports under military contracts and economic aid agreements.
Discussion
Rising Prices Have Major Impact
5. Far higher prices for the food, metals, minerals, and other primary
products that constitute the bulk of Communist purchases from LDCs
contributed heavily to the overall increase in Communist-LDC trade. In
1973, for example, the USSR paid 30% more for rubber and 40% more for
sugar, and the price for raw wool more than doubled. The world market
price of other major Communist imports, such as Latin American copper,
grain, and fishmeal, rose 60%-90% in 1973 compared with 1972. Throughout
the year, prices for primary products rose faster than those for manufac-
tures. The increase in prices of Soviet exports, dominated by machinery and
equipment deliveries, reportedly increased by about 10% in 1973.
6. As world demand and prices rose for primary products in 1973 some
LDCs began to take a hard look at the profitability of their long-term barter
arrangements with Communist countries. LDC producers became less
willing to accept Communist machinery and equipment for hard currency
earning exports. By 1974, several LDC exporters of petroleum, phosphates,
metals, and agricultural raw materials had renegotiated some of their
agreements with Communist countries to require payments in hard currency.
Notable among these were Iran, Iraq, Syria, Ghana, Morocco, Nigeria, Sudan,
and Tunisia. This phenomenon was less evident among sub-Saharan African
countries than elsewhere. A large proportion of their imports from the
USSR and China, are shipped under aid agreements. Communist countries
often take less desirable commodities that do not find a ready market
* For a more detailed discussion of Soviet-LDC trade see
Record Soviet-LDC Trade in 1973, November 1974, Confidential.
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elsewhere. Communist countries probably do not press for annual
settlements on barter account if African partners are facing severe payment
difficulties.
Direction of Trade
7. Although Latin American countries emerged as major raw mater-
ials suppliers during 1973, they did not challenge the dominance of Near
Eastern and South Asian countries in Communist trade (see the table).
8. The importance of the Near East and South Asian area was
bolstered by a doubling in the value of Communist fuel imports to more than
$600 million. This increase reflected expanded volume, as well as price
increases. Moscow almost tripled the volume of its crude imports from Iraq,
but the price rose only 20%. Iraq, Iran, and Afghanistan were the source of
most of the $400 million of Soviet fuel purchased from the Third World. The
volume of Eastern Europe's direct purchases of crude oil from LDC
producers rose almost 80% in 1973.
9. Latin America's increased importance as a raw materials supplier
reflected a rising demand in Communist economies for basic commodities to
satisfy agricultural shortfalls and to expand industrial production. Latin
America accounted for the largest relative gain -- more than 60% -- in
Communist-LDC trade turnover. Most of the increase came from a near-
doubling in the value of Communist imports of food, hides, and minerals.
The hefty Communist deficit in Latin American trade, experienced by all
Communist trading partners, doubled in 1973 to over $800 million.
10. In an attempt to stem the rapid deterioration in their trade
positions, all Communist countries intensified their sales campaigns in Latin
America. These were accompanied in 1974 by liberal Soviet and East
European offers of credits for sales of machinery and equipment. The USSR
was negotiating several large contracts for sales of power equipment to
A-3
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Argentina and agreed to sell $160 million of petroleum products to Brazil.
However, most Communist trade activity was still on the buying side, with
additional new contracts in 1974 for sugar and other products from Brazil;
meat, grain, and hides from Argentina; and minerals and metals from Chile
and Peru.
Commodity Composition
11. Communist countries remain primarily a market for LDC raw
materials and agricultural products in spite of LDC attempts to increase
their sales of manufactured goods. For the USSR, raw materials and
foodstuffs still represented 55% of its total imports from the LDCs in 1973.
Although the share of manufactures has doubled since 1960, it accounted for
only 15% of total Soviet imports from the Third World. The most significant
change in the composition of Soviet-LDC trade is the large increase of fuel
as a share of total Soviet imports. It accounted for 17% of total Soviet
imports from LDCs in 1973, compared with 12% in 1972 and only 7% in 1971.
12. Machinery and equipment dominate Soviet exports to the Third
World, having accounted for 50%-55% of Soviet exports to LDCs for more
than a decade. These sales have been maintained to some extent by credits
provided under the Soviet aid program. The ruble value of Soviet crude oil
sales to Third World customers dropped 15% in 1973, to only 6% of total
exports. Manufactured goods and other crude materials, however, main-
tained their usual-shares for most recent years of about 10% each.
13. The composition of East European trade is believed to follow the
Soviet pattern with a somewhat heavier weight to crude materials and fuels
in the import totals
14. Almost all of China's imports from LDCs were raw materials and
food. Developing countries provided 45% of China's crude materials imports
in 1973, including all of China's rubber, half of its cotton, and 45% of its
nonferrous metals imports.
A-4
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15. Light manufactures accounted for one-half of the PRC's exports to
LDCs while food made up most of the remainder. Among Peking's world
exports in 1973, 80% of its grain (mostly rice) exports, 70% of its iron and
steel exports, and 30% of its textiles went to the Third World. (Confidential)
A-5
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almost certainly includes Soviet military exports as well as East European
exports under military contracts and economic aid agreements.
Discussion
Rising Prices Have Major Impact
5. Far higher prices for the food, metals, minerals, and other primary
products that constitute the bulk of Communist purchases from LDCs
contributed heavily to the overall increase in Communist-LDC trade. In
1973, for example, the USSR paid 30%. more for rubber and 40% more for
sugar, and the price for raw wool more than doubled. The world market
price of other major Communist imports, such as Latin American copper,
grain, and fishmeal, rose 60%-90% in 1973 compared with 1972. Throughout
the year, prices for primary products rose faster than those for manufac-
tures. The increase in prices of Soviet exports, dominated by machinery and
equipment deliveries reportedly increased by about 10% in 1973.
6. As world demand and prices rase for primary products in 1973 some
LDCs began to take a hard look at the profitability of their long-term barter
arrangements with Communist countries. LDC producers became less
willing to accept Communist machinery and equipment for hard currency
earning exports. By 1974, several LDC exporters of petroleum, phosphates,
metals, and agricultural raw materials had renegotiated some of their
agreements with Communist countries to require payments in hard currency.
Notable among these were Iran, Iraq, Syria, Ghana, Morocco, Nigeria, Sudan,
and Tunisia. This phenomenon was less evident among sub-Saharan African
countries than elsewhere. A large proportion of their imports from the
USSR and China, are shipped under aid agreements. Communist countries
often take less desirable commodities that do not find a ready market
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?
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NO FOREiDiSSEM
Communist Aid and Trade Activities
in less developed countries, May 1975
Project No: 35.6931
June 5, 1975
SECRET
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ri rot..tycli
Analyst:
00500110001-9
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Ext. 5291
Appr4v
17v-4-"
t LAC.oF4 TS
Significant Soviet activity in the Third World in May
focused on North Africa. During a visit to Libya Soviet
Chairman Kosygin apparently signed a military agreement
Kosygin flew on to Tunisia,
where he signed an agreement in principle to construct two
dams, a Soviet specialty in the area. Soviet officials
arrived in Morocco to resume negotiations on a deal to
develop phosphate deposits in return for a long-term
Moroccan contract to supply phosphate rock. China signed
its first direct trade contracts with Bangladesh and was
negotiating its first long-term iron ore purchase agreement
with an LDC. The Philippines received its first Communist
aid, from Romania, while Bucharest was the beneficiary of
a bond issue sponsored by Kuwait on behalf of the Romanian
Foreign Trade Bank.
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isokkt,,1 e..?4 Q-aSitt,ScSd7 /L.444-4;
A4 t c)
, G/NERAL
t",,e
Summary ger.4.-e-Anal3Aat-Re orlw91717COmmunist Aid to Less Developed
Countries of the Free World, 1974
AIRICA
Soviet Chairman Kosygin Visits North Africa
Chairman of the USSR Council of Ministers Kosygin signed
agreements with Libya and Tunisia during visits to the two
countries in May.
Soviet MIG-23 Deliveries to Libya
The USSR delivered the first MIG-23 to Libya during May
.under an arms agreement concluded last year.
USSR and Morocco Resume Discussions on Phosphate Agreement
Soviet and Moroccan officials resumed discussions on a
AWIMAWODAgall
draft agreement calling for Sovietexploitation of phosphate
deposits at Miskaktas in return for long-term phosphate rock
deliveries from Morocco.
EAST ASIA
Indonesia Proposes Projects for Communist Financing
The Indonesian National
of pelsrfpeo.ed project* alued at $822. miii2.Zlifor Soviet and East
European financing 4-
Planning Board has compiled a list
Philippines Receives First Communist Credits
Romania became the Philippine S first Communist aid donor
with a pledge of $31 million in credits for a thermal powerplant.
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'AIN AMERICA
Brazil and China Negotiate Iron Ore Contract
During May, China was negotiating a long-term iron ore
purchase contract with Brazil, its first Zredeal with an LDC
iron ore producer.
5
Peru Sig4 $951tillion in Contracts with Hungary
A
Peru signed contracts in May to deliver $75 million in
Peruvian commodities to Hungary over the next five yearsrand to
purchase $20 million in Hungarian equipment under credit.
AR EAST .7&10 SOUTH ASIA
/ A
Bangladesh Signs First Trade Contracts With China
Bangladesh and China established their first formal trade
links with the con(71usion of four contracts in May.
Egypt and USSR Sign Economic Agreements
Egypt and the USSR signed contracts to go ahead with
114143
construction of a cement plant, expansion of aluminum plant
at Naja Harmitadi,land other projects.
. Romania Negotiates Kuwaiti Financing
During May, Romania's Oil Minister visited Kuwait to discuss
the joint establishment a billion dollar petrochemical complex
in Romania to use Kuwaiti oil. In addition, Kuwait sponsored a
second bond issue, valued at $40 million, on behalf of the
Romanian Trade Bank.
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No Foreign Dissem I
Secret
COMMUNIST AID AND TRADE ACTIVITIES
IN LESS DEVELOPED COUNTRIES
May 1975
uramary
Communist Aid to Less Developed
Countries of the Free World
New Communist military and economic aid to the less developed
countries (LDCs) of the Tree World dropped to US $2.7 billion in
1974, its lowest level in three years *sewateRATIGNIMEttatIMPAZtar. In
spite of the reduced program, there was no apparent change in
Communist aid policy. Programs under way continued at roughly the
same pace as in most recent years, and the number of Communist
military and economic personnel stationed in LDCs increased.
LVV
Most of the decline in 1974 was in military aid, which
dropped sharply from the abnormally high crisis levels of 1973.
Military aid, always more politically oriented than economic
aid, although 30% smaller in 1974, demonstrated again the extent
of the Soviet and East European commitment to the Middle East.
For Iraq it was a record year; for Syria, second only to 1973.
Reflecting the strains in Soviet-Egyptian political relations,
Egypt received no new military aid, while aid to Iraq and Syria
accounted for more than 60% R's and Eastern Europe's
$1.2 billion of new assistance, iraci`"and Syria also had the
largest contingents of Communist military advisers. Most significantly,
Moscow's new deliveries of equipment to Iraq and Syria surpassed
in sophistication the equipment furnished to any other LDC.
The supersonic MIG-23 jet fighters, shipped to Iraq and Syria
have not even been provided to Warsaw Pact countries. Also
reflecting political overtones, Iran was the only other country
25X113
to receive a large new military commitment in 1974 --
ground forces equipment, military support, and
engineering equipment.
1)C6 '
Moscow and Eastern Europe continued to use economic aid to ,An' Af/D
protect their commercial and long-term economic interests. Again)
in 1974A-the formation of joint industrial and commercial ventures
with Lffts increased, and joint committees for economic cooperation
were operating in a number of LDCs as coonating and aid planning
bodies. New Soviet and East Europeanitments in 1974 totaled
$1.2 billion, about the same as in 1973 but 25% below the 1971-72
records. The failure to furnishargee4ops few id reflected
mostly the continuing slow draWown `-ifb54,4' ') I Although
drawings against unused economic creditmteacned a new high of
$930-million, they were propelled by a record $265 million Soviet
grain shipment to India. Otherwise, drawings would have approximated
recent annual levels.
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 of the Office of Economic Research, Code 143,
Extension 5291.
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The commercial motivation for economic aid was highlighted
by the large Communist credits.to Argentina, intended to correct
the imbalance in Soviet and East European trade with Argentina.
Soviet and East European equipment sales under these credits could
rise to as much as $850 million over the next several years.
Other major Soviet and East European economic aid went largely
to ongoing projects, such as Moscow's new credit ($216 million) to
Pakistan for a steel mill being built with $210 million of. Soviet
aid extended in 1971. In an unusual move, Moscow agreed to provide
one-half of its $28 million budget support credits to Bangladesh
in hard currency.
China's $200 million of new economic aid in 1974 marked a
significant drop from its $575 million annual commitments since
the Cultural Revolution. Although still pursuing an active aid
program in Africa, Peking reduced its new economic aid pledges,
mostly because of a lack of opportunities and because outflows
still were heavy for completing the Tan-Zam Railroad,. China's
largest single aid project in the Third World. Nevertheless,
Peking's area of interest was unchanged, and except for a $25 million
credit to Laos, its major effort continued on tlae African
continent. Peking's two major clients -- Tanzania ai bia --
again took the lion's share (65%) of China's totalaid. rts only
significant military commitment ($61 million) was to its chief
military client-- Pakistan. ( 3/i/i/T0)
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Sovie Chairman Kosygin Visits North Africa
Chairman of the USSR Council of Ministers Kosygin visited
Libya and Tunisia during May for wide-ranging talks on economic
-1-cy
and political matters. re?rirreitorPoStaar KoSq Mori Ff1613
1\e-w i.kiLITSR4 Prc7ReEME;Nrr
As a result of discussions in Libya, the two sides signed
an economic and technical assistance agreement, whose provisions
will be further elaborated during the annual meeting of the
Soviet-Libyan joint econlmic commission in June. Libya has
requested Soviet assistance for an iron and steel plant and a
nuclear power plant, but it is unlikely that agreement on these
projects was reached. There was no public reference to discussions
of Libyan oil sales to the USSR. On the military side, Moscow
has denied Egyptian press allegations that a multabillion dollar
-6kt
1446"1/, military agreement was signed during the visit, .0
0 E.:) -CCL tv-(41
'tary.42aae4.'was.a.soncludedv Libyan
25X1B Chairman tgSQadhafi accepted the Soviet leader's invitation to 25X1B
25X1B
visit the USSR, presumably in the near future. (L)
In Tunis the Soviet delegation studped Tunisian requests
for Soviet assistance to Tunisia's new five-year plan. The USSR
announced agreement in principle to construct two dams under
some $18 million of previous Soviet credits7and offered to
expand Tunisia's fishing industry. (C)
FBIS 16 May 75
TUNIS 3128, 23 May 75 C
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Soviet MIG 23 Deliveries to Libya
25X113
(-)
The USSR delivered as many as MIG-23 s to Libya in May,
the first MIG-23?s in Tripoli's inventory. The shipment iz Mel)
V..,
OgAt
an arms agreement concluded with the USSR last year.
wiNMWESMOONOWnammiss Libya becomes the fourth Arab country to
receive the advanced MIG-23. CS,t1..1f10
111-VAI-JAA&
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USSR and Morocco Resume Discussions on Phosphate Agreement
Soviet and Moroccan officials resumed talks in Rabat on
Soviet development and exploitation of the Mipkalas phosphate
deposits. The draft agreement calls for Soviet financing and
construction of a phosphate mine at
Miskalas, acft=weall..&-o
.30-104 lb e .404 4 4.5a=f32111g0.0
construction of a4railroad ins a lation of4s facilitiea
AT ?Ns par ? Pvioc.F.tteire. HAMRA M6
erb....E.s.rmajouizal,,,rdzza-.441.64,Kt-lottoft Under the proposal!
the USSR would DANQQ:LW phosphateq4a.liwairion..
wo:
*leo= a year-677m 1980-907'beeate.deo 10 million tons annually
A Svtt-WINEWT,
for a a. ad
...aa.....oQwe&_ 15 tlf,20 years,- Wegotiations WHI0.114
eC-CALISC
have gone on for more than a year...-bot foundered w4iteiq Morocco
refuses to permit the USSR to reexport Moroccan phosphates or to
IMP% fh!SSOVKI
use vmpevts to ra exports of.&walat..daiaia-produced
WAMIS socareJTeam
phosphates. Morocco also contract.
Re cent softening in demand for Moroccan phosphates may axg=tore
sTA"'rt4etmty4;igrasoter ARGPr1t1/41( FbSflOti
- e a_ts-own-terms-frortr-ttrerivrorrs,. (C)
STATE RABAT 2534, 29 May 75, C
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SEGRET/NO Hi2E1571 BISSE11
Indoresia Proposes Projects fOr Communist Financing
The Indonesian National Planning Board has compiled a list-
c4tTlatrni
of projects for Soviet and EastEuropean financing
valued at $825 million.
The pr000sal5concentratel Isfeev4T-17p on
7-N?
igregUi)LAMO
development of ports, inland waterways, m.a.*Ris-transport, and
/1/,
Indonesia's ocean going fleet. Construction activity and sietr?9-wr
Tunbct.
procurement iiig.wslisliaromeergalit carry aAprice tag of more
than $500 million. An additional $95 million is
power development and $35 million for the rehabilitation of
railroad and motor transport facilities. The remaining projects
St4 kiewaittrauNIG )
are agricultural processing and4industrugS. tSpyruj
During a tour of the USSR and Eastern Europe last fall,
Indonesian Foreign Minister Malik recei'Ved assurances that
Indonesian aid requests would receive favorable consideration.
The USSR signed a new economic and technical assistance agreement
witemiTuee UA 4A. Sat er Ravtew
in December.Irowi4,..ly the