WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004100100001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 33
• Document Creation Date: December 21, 2016
• Document Release Date: June 5, 2008
• Sequence Number: 1
• Publication Date: August 16, 1963
• Content Type: SUMMARY

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lei .9ugust 1963
E)C I No . ~-293/63
c?~y No .- ~ 5
WEEKLY SUMMARY
OFFICE OF CURRENT INTELLIGENCE
State Dept. review completed.
CENTRAL INTELLIGENCE AGENCY
DIA review
completed.
R.;I'U?i:"~I `?`t~3 I ~~~O~~PS C:rAi~T
JOB Lj~J~ ~ ,,~ BOX
SECRET
GROUP I Excluded from automatic
downgrading and declassification
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SE C'RET
C O N T E N T S
(Information as of 1200 EDT, 15 August 1963)
THE CUBAN REGIME'S ECONOMIC AND POLITICAL PLANS
Havana is planning to implement a number of meas-
ures to tighten the regimentation of the populace
in an all-out effort to increase production.
THE COMMUNIST WORLD
MOSCOW DEFERRING NEW MOVES ON DISARMAMENT
Soviet propaganda and other statements on the test
ban treaty suggest Khrushchev wants to put off fur-
ther steps until he can assess his new policy in
terms of both East-West and intrabloc relations.
SHGHEV'S IMPENDING VISIT TO YUGOSLAVIA
KHRU
With the abortive Sino-Soviet talks behind him, Khru-
shchev will take another major step in his courtship
of Yugoslavia by vacationing with Tito this month.
KHRUSHCHEV'S REMARKS ON THE SUCCESSION PROBLEKhrushchev
In a recent talk
singled out the two new party secre arses, Brezhnev
and Podgorny, as leading candidates to succeed him.
KHRUSHCHEV'S NEW ECONOMIC COURSE
Khrushchev contin-
ues to speak o imminent mass ve investments in agri-
culture and consumer welfare, and has linked such
a course to a reduction in military spending.
PEIPING'S MOUNTING PROPAGANDA ON US RACIAL PROBLEMS ~
While the main theme of the recently launched drive
is "persecution" of Negroes in the US, peiping's
major antiwhite campaign--with Mao as its star--has
clear anti-Soviet overtones.
COMMUNIST PROBLEMS AND TACTICS IN SOUTH VIETNAM 8
The Viet Cong guerrillas have apparently shifted
their tactics in an effort to counter the growing
effectiveness of the South Vietnamese Government's
operations against them.
SE C;RET
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SECRET
POLITICAL MANEUVERING IN LAOS
With military activity bogged down by the rains,
proposals for new political talks and problems of
neutralist-rightist relations have taken center stage.
BURMESE REGIME NEGOTIATING WITH DISSIDENTS
General Ne Win and Communist insurgents seem to be
moving toward a settlement which the Communists hope
will give them significant political influence. Army
elements are apprehensive of this development.
INDIA'S CONGRESS PARTY IN DISARRAY art leader is
Nehru's grip, as a national and a p Y >
slipping, because of his own political and physical
decline and because of mounting problems within the
Congress Party.
PAKISTANI RELATIONS WITH COMMUNIST CHINA
The Ayub government appears to be establishing con-
tacts with the Chinese Communists in the military
field
IRAQ AND SYRIA MOVE TOWARD UNION
Nasir has publicly dropped plans to unite Egyp t
place on him the onus ror
CONFLICTS MAR MEETING OF AFRICAN UNITY GOUNGIL
The inaugural session last week of the ministerial
council of the new 32-member Organization of African
Unity left a number of important issues unresolved.
failure of the earlier project.
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EUROPE (continued)
Page
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FINLAND ALLOWS NEW WEST GERMAN TRADE OFFICES
Bonn's request was granted, however, an a basis in-
tended to discourage any similar request from East
Germany and undercut any Soviet protest.
AREA NOTES
Italy and Spain
URUGUAYAN CABINET CRISIS
The crisis was precipitated by the resignation of
the finance and agricultural ministers on 6 August.
STIKKER PROPOSAL TO REVISE NATO PLANNING PROCEDURES
The NATO secretary general's plan is intended to
solve the problem of bridging the "gap" between the
minimum strategic requirements set by military au-
thorities and the defense effort which members gov-
ernments find it politically feasible to make.
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WORLD ORGANIZATIONS (continued) Page
INTERNATIONAL COFFEE CONFERENCE 21
Resentments aroused over choice of an executive di-
rector raise doubts about the long-term viability
of the organization established to stabilize the
coffee trade.
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THE CUBAN REGIME'S ECONOMIC AND POLITICAL PLANS
Cuban leaders are planning
a number of new measures intended
to further consolidate the re-
gime and make its administrative
and economic machinery more effi-
cient. The combined effect of
these measures will be to in-
crease the regimentation of the
populace in an all-out effort
to increase production.
The problem of low labor
productivity, which has long
plagued the regime, will be
attacked through a system of
work norms and standardized
wages providing penalties for
failure to meet the norm and
pay increases for exceeding it.
Norms which are persistently
overfulfilled wfll of course
be raised. These measures to
compensate for diminishing
labor incentives and growing
apathy by establishing tighter
discipline and control over
labor will, if applied harshly,
almost certainly have an adverse
effect on labor morale and
significantly increase labor
disaffection.
Changes are also being
planned in the agricultural
field, Castro explained in a
9 August speech before the clos-
ing session of the national con-
gress of the Association of
Small Farmers (ANAP) that he
expects all remaining privately
owned farm lands in excess of
five caballerias (about 166
acres) will ultimately be ab-
sorbed by the state and that
state farms, which he predicted
may eventually comprise up to
70 percent of Cuba's cultivated
area, will be the main source
of agricultural production.
The remaining "small farmers,"
owners of five caballerias or less,
will be free to operate as they
wish, Castro said, but he im-
plied that circumstances will
lead them to form cooperatives.
It was announced during the
ANAP congress that Cuba's large
agricultural bureaucracy, the
National Agrarian Ref arm Insti-
tute (INRA), will be thoroughly
reorganized this year and will
become the Ministry of Agricu l-
tural Production. In the proc-
ess, certain functions will be
decentralized, giving greater
responsibility and authority to
regional managers. zt has not
been revealed whether veteran
Communist leader Carlos Rafael
Rodriguez, who has been presi-
dent of INRA since February
1962, will remain Cuba's top
agricultural official and assume
cabinet rank with the organiza-
tion's transition into a ministry.
Castro in his recent speeches
has leveled particularly bitter
attacks against remnants of the
Cuban middle classes, which
he calls "parasites," and the
source of counterrevolutionary
plotting against him. It was
in the context of one of these
attacks that he announced on
26 July the impending establish-
ment of obligatory military
service for all Cubans. This,
combined with a stricter enforce-
ment of compulsory education
laws, will help Cuba become a
country "more and mare of workers
and less and less of parasites,"
he explained. It is important,
he declared, that the sons of
today's parasites not become
tomorrow's "potential lumpen."
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Recent Soviet statements
and Communist propaganda treat-
ment of the nuclear test ban
treaty strongly suggest that
Khrushchev intends to maintain
reduced tensions with the West
and to avoid any specific moves
which might jeopardize the at-
mosphere of "limited detente"
which he has tried to create.
Moscow continues to laud
the nuclear test ban treaty
but is giving minimal attention
to other partial disarmament
measures. This reflects Khru-
shchev's intention to avoid any
action which might prejudice
approval of the treaty by the
US Senate. It also indicates
the Soviet leader's desire to
defer any further major moves
until he has had ample time to
assess the course of his new
policy decisions, not only in
terms of East-West relations
but also against the background
of the Sino-Soviet quarrel.
At the Geneva disarmament
conference, the chief Soviet
representative maintained on
11 August that there should be
only a "general discussion"
of such collateral disarmament
measures as a nonaggression
pact, and that any detailed
negotiations should be post-
poned until after the opening
debate of the UN General As-
sembly in September.
Moscow radio now predicts
that the earliest date for Senate
endorsement of the treaty would
be mid-September. Although
predicting ratification, Pravda
foresees a "sharp, princip-Iec~
struggle" over the treaty and
observes that on "its outcome
will depend to a large extent
the prospects for international
relations in the near future."
The USSR's comparatively
cautious treatment of US policy
at the present time is reflected
in the low-key reaction to the
recent US underground nuclear
test which has been mentioned
only briefly in the Soviet
press. Soviet commentators,
while citing the US test as a
"reminder" that further steps
were needed to lessen inter-
national tension, have implied
that the nuclear test may have
been a "concession" in connec-
tion with the US Senate's con-
sideration of the nuclear test
ban treaty.
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`~ SECRET ''
Against the backdrop of
the collapse in the Sino-Soviet
talks, another major phase of
the campaign to draw Yugoslavia
closer to the Soviet bloc has
begun. Khrushchev will vaca-
tion with Tito from 20 August
to 3 September, while Hungarian
party chief Kadar will spend
9-11 September with Yugoslavia's
leader.
Dealings with the USSR
over the past two years have
encouraged the Yugoslavs to
have confidence in the bloc,
while at the same time their
relations with the West have
been gradually deteriorating.
The USSR's present pursuit of
detente with the West and re-
laxa~ion of rigid and all-per-
vasive party controls in Eastern
Europe are policies which long
have been urged by ,Tito. Belgrade,
moreover, need. no longer fear
that Khrushchev will sacrifice
his Yugoslav policy to accom-
modate Peiping.
The groundwork for the
Khrushchev visit probably was
laid during the exchange of
four high-ranking Yugoslav and
Soviet delegations since mid-
July. one of the Soviet groups
was headed by ll4oscow's permanent
representative to the bloc's
Council for Mutual Economic
Assistance (CEMA)--suggesting
that Yugoslavia's bid for observer
status in that body finally may
have been approved, with the
public announcement reserved
perhaps for Khrushchev while
in Yugoslavia.
The Soviet first secretary
will be accompanied by his party's
expert on relations with ruling
Communist parties, and a sub-
stantial improvement in relations
between the Soviet and Yugoslav
parties may be the most important
result of the visit. Khrushchev's
Yugoslav policy probably will
encourage the nationalistic ten-
dencies in the European satel-
lites but he is apparently will-
ing to accept the risk.
Kadar's visit will consti-
tute.a minor concession by the
Yugoslavs in finally placing
Tito's seal of approval of the
current Iungarian regime. Fol-
lowing the Hungarian revolt,
Belgrade first insisted and then
continued. to imply that Kadar's
reign was illegitimate.
Moscow has announced, that
Yugoslav Defense Minister Gosnjak
will visit the USSR in mid-
September but has given no clue
as to the purpose of the trip.
Tito told Ambassador Kennon in
March that Yugoslavia would not
sign any military pacts but did
not rule out the possibility of
some more restricted. arrangements.
The USSR has already become
Yugoslavia's primary source of
new military equipment.
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``"' SECRET
In a rare reference to the
25X1 Soviet succession problem. Khru-
shchev recently told
settled and currently under dis-
cussion in the party presidium.
He singled out the two new party
secretaries--Leonid Brezhnev
and Nikolay Podgorny--as leading
candidates but added that, while
it was a difficult idea to enter-
tain, he had not lost all Nape
for the ailing Frol Kozlov's
recovery. He said that Kozlov's
speech and mind have remained
unimpaired, but with a paralyzed
left arm and leg he was still a
very long way from being well.
that the subject is un-
While in effect writing
Kozlov's political future off
the books, Khrushchev may have
been trying to allay recent
speculation that he and Kozlov
had been at odds. More signif-
icantly Khrushchev intimated
that the ranks of the leading
contenders had already been
narrowed and that eventually
either Brezhnev or Podgorny
would become party second secre-
tary. Thus Khrushchev still
seems to believe that by desig-
nating his choice in advance
Khrushchev
~ his about to undertake
massive new investments to
solve the USSR's pressing agri-
cultural problems and to promote
consumer welfare. In his most
recent Fonversation along these
the succession struggle will
somehow be eased.
The question remains as
to how much authority Khrushchev
will delegate to a newly desig-
nated heir. In the case of
Kozlov, the evidence suggests
that Khrushchev did very little
to give his second secretary an
advantage over his associates.
Khrushchev did not permit Kozlov
to develop an image of personal
leadership, and he kept close
rein on personnel appointments.
In the current case, Brezhnev
and Podgorny may have been
selected for closer scrutiny
in the secretariat before a
decision is made between them.
Such a situation would likely
open the way to rivalry and
friction.
During the past few weeks
Brezhnev has begun to come into
public prominence in his capac-
ity as a party secretary, pre-
sumably fulfilling some of the
duties previously handled by
Kozlov. Podgorny has been on
extended vacation, and his
new responsibilities are still
unclear.
lines--with US Secretary of
Agriculture Freeman on 30 July--
Khrushchev linked his new course
directly to a reduction in
military spending. ':'We are
fed up with rockets, we have
enough rockets," he said. "We
are going to divert this money
to agriculture."
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According to Khrushchev,
chemical fertilizer production
will be rapidly increased from
20 million tons today to 100
million by 1970. In 1961 the
announced objective for 1970,
which still stands publicly,
was 77 million tons. (Annual US
production of chemical ferti-
lizers now is about 34 million
tons.) While increased fertil-
izer production is the most
important single aspect of
Khrushchev's new course he also
spoke of the need far herbicides,
mixed feed. plants, storage
facilities, and farm machinery,
and for expanding irrigation.
A program of the magnitude
and diversity now being promoted
by Khrushchev does not yet ap-
pear to be actually under way.
Agricultural and chemical in-
vestment are growing fairly
rapidly and imports of chemical
equipment are increasing, but
neither of these on a scale
commensurate with the stated
program. However, the serious-
ness of Khrushchev's intentions
may be indicated in the wide-
spread. Soviet press campaign
which seems to be preparing the
way for the announcement of a
major new chemical program this
fall. Likewise,
Khrushchev has seemed keenly
aware of the detailed cost fac-
tors--which suggests that plan-
ning work is well under way.
In pushing the new program
Khrushchev will need foreign
technological assistance and.
equipment. He has already
lauded the US, German, and
British fertilizer programs and
suggested that the Soviet Union
could learn from these. While
noting the high prices of Amer-
ican equipment, he nonetheless
expressed a willingness to buy
"whole plants" from the US,
adding, however, that if the US
would not sell, Great Britain
and West Germany would. He
noted that the USSR has already
purchased fertilizer plants
from Germany and Holland and
has placed orders in Czech-
oslovakia, Poland, and East
Germany for fertilizer equip-
ment.
Khrushchev probably did
not mean that the USSR has enough
rockets of all kinds now.
Several missile programs--such
as the SA-2 and the MRBM--are
probably approaching completion,
but there is no indication as
yet that the USSR has decided
to phase down production and de-
ployment of other missile systems.
However, the effects of recent
decisions which might affect
these other missile programs
would not be apparent for some
time. In any case, missile
statements by Soviet leaders--
including several similar to the
present one--have frequently
been inaccurate and intended
to mislead.
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The Communist World
PEIPING'S MOUNTING PROPAGANDA ON US RACIAL PROBLEMS
Communist China apparently
believes that its recently
launched propaganda attack on
US "racial oppression" can be
used to advantage against both
the US and the Soviet Union,
In a blatant bid to win support
of the world's nonwhite popula-
tion, Mao himself loosed the
opening salvo of the current
campaign in his remarks at an 8
August reception for some minor
African visitors. The Chinese
leader's unusual statement, pub-
lished the same day, exhorted
world-wide unity against "Ameri-
can racial discrimination."
Mao sought to put US ra-
cial strife in. the context of a
growing militant and universal
protest against imperialism and
the last vestiges of colonialism.
In an effort to give his racist
theme a veneer of Marxist ortho-
doxy, Mao insisted that the
American Negro's "struggle" is
an integral part of the "class
struggle."
The fact that Mao himself
opened the propaganda campaign
demonstrates the importance with
which Peiping views the issue.
This is the most formal major
pronouncement Mao has made since
1958, and. his use of the first
person singular in a manner rem-
iniscent of Stalin--"I call upon
the workers, peasants..."--is
certainly designed to create an
aura of Olympian edict.
The Chinese probably believe
that the rising aspirations of
the American Negro will not be
met by timely and sufficient con-
cessions, and they are undoubt-
edly counting on extensive West-
ern press coverage of US racial
incidents in the months ahead to
supplement their own propaganda
outpourings. Mao's statement and
the follow-up press caverage have
accused President Kennedy of pur-
suing "two-faced" tactics on
civil rights legislation. The
vehemence with which the Chinese
allege administration duplicity
may also reflect serious Peiping
concern that US Government policy
in support of Negro rights is
taking some of the edge off hate-
America campaigns in Asia, Africa,
and Latin America.
While the main theme of the
current drive is "persecution"
of Negroes in the US, the deci-
sion to mount a major antiwhite
campaign has clear anti-Soviet
overtones. Peiping has repeat-
edly challenged Moscow on racist
grounds in predominantly non-
white international gatherings.
Chinese representatives actively
exploited Soviet vulnerability
on this issue earlier this year
at the Afro-Asian Solidarity
Conference in Tanganyika, and
again at a major journalist
meeting in Indonesia.
At a 12 August mass rally
in Peiping on the racial issue
a leading propagandist followed
charges of American "fascist
atrocities" with regard to the
Negro with an attack on "cer-
tain self-styled Marxist-Lenin-
ists" for "whitewashing" US of-
ficial policy. This sparked the
exit of two Soviet correspondents
--the fourth time the Soviets have
walked out on a Chinese speaker
since 1 August.
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The Communist world
COMMUNIST PROBLEMS AND TACTICS IN
The Viet Cong guerrillas
have apparently shifted their
tactics in an effort to counter
the growing effectiveness of
the South Vietnamese Govern-
ment's operations against them.
There is as yet no evidence
of an over-all sapping of Commu-
nist military strength, and they
remain capable of mounting bat-
talion-level attacks in many
areas of South Vietnam. Never-
theless, they now appear to be
placing greater stress than be-
fore on the conservation of
their forces and the protection
of their resources, in part by
exercising ever greater care to
avoid large military engage-
ments in which they da not have
an overwhelming chance of suc-
cess.
During the first half of
1963, large-scale--company or
battalion size--Viet Cong at-
tacks dropped over 50 percent
from the level sustained by the
Communists during the same
period in 1962, Sabotage and
propaganda activities were also
off about one half, while acts
of terrorism declined about 20
percent.
Although the Communists made
good on a boast to sharply step
up antigovernment activity in
connection with their "anti-US"
week from 15 to 21 July, the at-
tacks were predominantly small-
scale. Since the first days of
August, over-all Communist activ-
ities have again dropped sharply.
The main Communist strategy
now appears to call for as per-
sistent pressure on the govern-
ment as passible in the form of
small-scale actions .in the hope
that,over the long-pull,the vigor
of the government counterof-
fensive can be sapped. In this
connection the Viet Cong perhaps
foresee the possibility of a re-
duction in the US military com-
mitment to South Vietnam. Dur-
ing the last few months, the theme
of a "long and arduous" struggle
against the government has become
much more prominent in Communist
war propaganda.
The shift in Viet Cong tac-
tics has coincided with evidence
of a drop in Communist troop mo-
rale in recent months. Some of the
disillusionment can probably be at-
tributed to the successes achieved
in the government's food-denial
programs in certain areas of the
country, A few Communist combat
units in northern and central Viet-
nam have reportedly been forced to
abandon sustained combat operations
in favor of food production.
There is evidence that the
Communist leadership now is at-
tempting to overcome the morale
problem as well as confusion that
has arisen in the Viet Cong ranks
as a result of the stiffened gov-
ernment pressure, A 6 August
broadcast by the clandestine Com-
munist radio in South Vietnam re-
vealed that a large and widely
attended conference had recently
been held which "settled" a num-
ber of outstanding military and
political problems, including that
of distinguishing "friend from
enemy." There were strong hints
in the broadcast that some dele-
gates remain dissatisfied with
the tasks that had been assigned
them by the Communist leadership.
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POLITICAL MANEUVERING IN LAOS
In an effort to break the
political stalemate in Laos,
Premier Souvanna has proposed
that talks with the Pathet Lao
be held at the royal capital of
Luang Prabang after it has been
"neutralized." Rightist leader
Phoumi has expressed qualified
support for this proposal, but
Pathet Lao leader Souphannouvong
has not yet responded. Even
should the Pathet Lao accept
the proposal in principle, there
is no assurance that the fac-
tions will achieve an early
agreement over security arrange-
ments.
Souvanna is anxious to
come to some understanding with
the Pathet Lao so that he can
leave in the near future for
medical treatment in France.
Desultory talks between neu-
tralist and Pathet Lao repre-
sentatives in Vientiane con-
tinue to show no progress toward
settling arrangements for a pro-
posed meeting between Souvanna
and Souphannouvong at the Plaine
des Jarres.
The military situation
remains generally quiet. Heavy
monsoon rains, washing out
bridges and roads, have lessened
chances for a major military
move by either side for the time
being. While the rains have
hampered aerial resupply to
neutralist and right-wing forces,
it is likely that Communist
forces, which depend almost
entirely on supplies brought
overland from North Vietnam,
have been even more seriously
affected. To complicate the
Pathet Lao supply problem
further, Meo guerrilla farces
have recently resumed operations
to interdict Route 7, the main
supply road from North Vietnam
to the Plaine des Jarres.
During this period of rel-
ative lull in military act-ion,
General Amkha Soukhavong, chief
of Souvanna's neutralist staff
in Vientiane, is continuing ef-
forts to develop a broadly
based neutralist force b,y at-
tracting "praneutralist" ele-
ments from both the right-
and left-wing factions. Amkha,
who wants to win over the .left-
leaning General Khamouane and
the dissident Colonel Deuane,
reportedly has obtained. promises
of military backing from several
conservative officers in Vien-
tiane. He is also said to have
the support of a former premier
Phoui Sananikone, a powerful
political figure in Vientiane.
General Phoumi, aware of the
challenge posed. to his position
by Amkha's maneuvering, has cau-
tioned his subordinates that the
neutralists --influenced. by left-
ist elements--may be tempted to
reach an accommodation with the
Pathet Lao which could. undermine
the conservative position, par -
ticular?v in the Plaine des
Jarres.
SE GRET
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Peace negotiations in
Rangoon between the Ne Win re-
gim~ and Communist insurgent
groups are moving ahead in an
atmosphere of political un-
certainty.
for several weeks. The long-
suppressed Communists apparently
are hopeful that they can obtain
a settlement which would permit
them to exercise political in-
f luence .
The arrest on 9 August of
several leaders of the moderate
and once-dominant Anti-Fascist
Peoples Freedom League (AFPFL)
and of former Premier U Nu's
Union Party (UP) indicates that
General Ne Win will not tolerate
any real opposition to his "rev-
olutionary action" program for
Burma, which emphasizes the
restoration of internal peace.
The leaders of the opposition
groups recently had become in-
creasingly outspoken in their
criticism of Ne Win's extreme
socialist views.
The leaders of both the
Burmese Communist Party (BCP)
and the smaller Communist Party
of Burma (CPB) are reportedly
in Rangoon for preliminary ne-
gotiations which may continue
Ne Win, however, cannot
afford to go too far too fast
in accommodating the wishes of
the Communists. The army,
which is the crucial power
element in Burma and has thus
far supported him, is showing
some signs of discontent over
his extreme policies, and par-
ticularly over the prospect of
substantial Communist influence.
Ne
Win's popular support is shrink-
ing rapidly, and 0 he has 25X1
turned to U Nu, the man he
deposed and the only other in-
dividual of real political
stature, in order to rally
bacl~ing for his program. It
seems doubtful that U Nu's
support will be forthcoming.
SECRET
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The Nehru government's
political touch is becoming
noticeably more uncertain.
Hard decisions are being evaded,
and hesitancy characterizes
both national and party leaders.
The success of the non-Commu-
nist parties on 13 August in
tabling for the first time for
parliamentary consideration a
resolution of no confidence in
the government is a symptom of
the drift that has developed.
A root cause is the grad-
ual physical and political de-
cline of Nehru, his country's
unchallenged leader for the past
1G years. Never a strongly
decisive leader, and even in
his youth more noted for his
enthusiasm than his organiza-
tional ability, Nehru's politi-
cal skills and sense of timing
appear to have grown rusty with
age. Politicians whom he long
overshadowed are becoming more
successful in asserting their
own and their regional inter-
ests. Behind many of their
manuevers lies a growing aware-
ness that a struggle for Nehru's
mantle may not be long in com-
ing.
While Nehru has made a
considerable recovery from the
shock of tl~e Chinese attack
last fall, he has not in recent
months been "on top" of things.
Tliis, combined with his well-
known stubbornness, has led him
more and more to waste his pres-
tige on lost causes. (3nly in
'the last week or two do his
party colleagues seem to have
impressed him sufficiently with
their own alarm at the present
state of affairs to stir him
to some action.
Paralleling the Nehru
problem has been the growing
organizational disarray of the
Congress Party. Although it
is still paramount in Indian
politics, it suffers from party
members' preference for the re-
wards of ministerial position
over the drudgery of party work.
A session last week of the
All.-India Congress Commit-
tee--called to ponder recent
losses in prestige by-elections
--made a ritual nod of praise
for Nehru's leadership, but
then, in effect, called on
him to lead by proposing that
he and he alone should decide
which state and central ministers
should be diverted from their
present government jobs to
full-time work to rejuvenate
the party.
The proposal could do much
to stem the drift in the Con-
gress' affairs, although it too
i:; likely to suffer from half-
hearted execution. It could
also shift party power align-
ments, which at the moment seem
to favor Finance Minister Morarji
Desai as Nehru's eventual suc-
cessor. No major governmental
shake-up is likely, however, and
it is doubtful that such gestures
and expressions of concern over
party affairs can push the 73-
year-old prime minister to alter
tions.
his long-standing habits suffi-
ciently to restore vigor to the
party's and government's opera-
SECRET
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The Ayub government seems
to have carried its policy of
limited accommodation with
Communist China a step further
by establishing contacts in
the military field.
25X1
Pakistan's previous dis-
plays of friendship for the
Chinese Communists have included
the border demarcation agree-
ment in December 1962, a civil
air agreement in June 1963, and
Foreign Minister Bhutto's speech
on 17 July hinting at a defense
understanding with Peiping.
Some form of association with
China on defense matters has
been under discussion within
the Pakistani Government for
some months.
While Ayub recognizes that
Pakistan's dependence on US
military and economic aid limits
this policy, there is increas-
ing danger that his outrage
over Western military aid to
India will cause him to act
irrationally.
As Ayub
continues to move in Peiping's
direction, army attitudes will
be a determining factor in his
calculations. Many opposition
politicians also are dropping
the anti-Western line they have
taken during the past year and
now oppose Ayub's China policy.
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~r.-~ ~r
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The break between Egypt
and the Baathist regimes in
both Iraq and Syria was made
more explicit by Nasir in a
speech at Alexandria on 11
August. Devoting a third of
his time to an attack on the
Baath, he equated the Iraqi
and Syrian regimes for the
first time. Nasir also charged
the Baathists with betraying
the Arab nationalist movement
and declared that he will re-
f use to carry out the union of
the three countries scheduled
to take place in September.
Previously UAR propaganda had
carefully refrained from criti-
cizing the Baghdad regime, al-
though it strongly attacked
that in Damascus.
In Jordan, King Husayn
has become embroiled with the
Baathists, rounding them up
apparently without provocation.
At the same time, Husayn ap-
parently is seekin a rapproche-
ment with Nasir.
The arrest of
the Jordanian Baathists--a com-
mon enemy to both Nasir and
Husayn--may have set the stage
for such talks. Rumors of a
rapprochement between the two
are circulating in the Middle
East and have become the sub-
ject of attacks by Baathist
propaganda media.
The first meeting of the
council of ministers of the new
Organization of African Unity
(OAU), held in Dakar, Senegal,
from 2 to I1 August, demon-
strated that sharp divisions
and rivalries continue to exist
among the OAU's 32 members. The
participants, mostly foreign
ministers, wrangled extensively
16 Aug 63
throughout the meeting and never
did reach agreement on some key
issues. Aggressive efforts by
Guinean Fresident Tourd's repre-
sentatives to influence decisions,
all of which are subject to re-
view by the chiefs of state,
mostly backfired.
On the positive side, the
conferees finally recommended
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that the headquarters of the
OAU secretariat be located at
Addis Ababa, where the organiza-
tion was spawned last May. Dis-
gruntlement over this decision
on the part of both Nigeria,
which had lobbied hard for
Lagos, and Senegal, which had
pushed Dakar, spilled over into
other issues.
The ministers also agreed
to call for recognition of Holden
Roberto's rebel regime as the
legal government of Angola.
This decision undercuts efforts
of Roberto's rivals, who have
had Communist and radical Afri-
can support, to force him into
a merger. It also is a victory
for Congolese Premier Adoula,
who had been strongly criticized
by radical African governments
when he recognized Roberto's
provisional government last
June.
Although a conference
committee selected Diallo Telli,
Guinean ambassador to the UN,
as secretary general of the
OAU,' he failed to win majority
support in a vote taken at the
final plenary session. The task
of filling the embryonic or-
ganization's key permanent post,
now provisionally occupied by
an Ethiopian, was then passed
back to the chief of state.
The rejection of Telli was
in part a reaction to Guinea's
attempt, supported by Ghana and
Nigeria, to commit the 14 mod-
erate French-speaking states in
the African Malagasy Union (UAM)
to an early dissolution of their
"regional" grouping. Guinea
lost out here, too, as the for-
mula finally agreed on calls only
for the gradual integration of
UAM institutions into the OAU.
Nevertheless, the future of the
UAM is becoming increasingly un-
certain because of sharpening in-
ternal frictions, notably be-
tween Senegal and Ivory Coast.
The Dakar meeting also
failed to endorse any Portuguese
Guinean nationalist organization,
despite efforts by Guinea and
Algeria in behalf of the Guinea-
based African. Independence Party
for Portuguese Guinea and Cape
Verde (PAIGC). In this case,
the conferees deferred to Sene-
gal, which presumably was acting
to gain time in the hope of
strengthening Dakar's influence
in the Portuguese Guinean Nation-
alist Movement.
This issue, which was re-
ferred back to the OAU's "lib-
eration committee," is to be
considered again by the foreign
ministers when they convene in
Lagos, next February. At that
time, the ministers will also
review developments at the
forthcoming session of the UN
General Assembly, which the
council urged all African chiefs
of state to attend, and prepare
the ground for a spring OAU
"summit" meeting in Tunis.
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Europe
FINLAND ALLOWS NEW WEST GERMAN TRADE OFFICES
Finland has granted a West
German request to expand commer-
cial representation into two
outlying areas of Finland after
careful calculation of the ef-
fects an its relations with
both Germanies. The Finns have
maintained extensive ties with
West Germany and have only lim-
ited relations with the East
German regime, but the overrid-
ing considerations of neutrality
and Finnish-Soviet relations
have made them withhold diplo-
matic recognition from both
governments. Bonn's request
has been granted on a basis
intended to discourage any sim-
ilar request from Pankow and
undercut any Soviet protest.
Bonn has profited from
Finland's long-standing pro-
German sentiment, and in recent
years has pursued an active
trading policy toward Finland
backed by substantial loans
and credits. West Germany now
accounts for 16 percent of Fin-
land's foreign trade--second
only to Britain--whereas East
Germany accounts for only one
percent. Both governments
maintain commercial offices in
Helsinki, but Bonn contends
that Pankow gains additional
trade and propaganda outlets by
utilizing Communist party chan-
nels throughout Finland.
A desire to counter East
German trading and propaganda
activities in other parts of
Finland apparently led to the
West German request to estab-
lash offices--in effect, con-
sulates--in the southwest coast
city of Turku and in the part
of Oulu near the head of the
Gulf of Bothnia. Bonn main-
tains that it has often lost
trade opportunities because
East German representatives
have "tricked merchants into
accepting Pankow as the legit~.-
mate representative of the
German people." The West Ger-
mans have indicated special
concern over East German activ-
ity in heavily Communist north-
ern Finland.
In answering the West Ger-
man request, the Finnish Gov-
ernment made it clear that per-
mission for the new offices
was given strictly on the basis
of reciprocity far the Hamburg
and Frankfurt branches of the
Finnish cammercial representa-
tion in Bonn. Helsinki's only
trade representative in East
Germany is East Berlin. Bath
the East and West German repre-
sentations are maintained only
by oral agreement.
There has been no Soviet
reaction thus far to the request
by Bann, but the Finns are pre-
pared for accusations that the
West German move into northern
Finland means renewed German
influence in the area. The US
Embassy in Helsinki has also
speculated that Moscow is pos-
sibly not in fact alarmed by
the move, but could use it as
an excuse to press for Finnish
concessions to the bloc.
16 Aug 63
SECRET
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~ SECRET ~
Europe
Italy: Italian President
Segni,i'n Fiis visit to Bonn at
the beginning of August, found
his talk with Adenauer largely
taken up with the chancellor's
expressions of concern over the
test ban treaty and US policy
toward European integration.
Segni rejected Adenauer's pro-
posal that Italy either adhere
to the Franco-German Treaty, or
negotiate a similar bilateral
agreement with France. How-
ever, he was said to be "deeply
impressed" by Adenauer's argu-
ments for a "new Europe" based
on the Franco-German Treaty.
Segni
had wanted to
vis ar s a so, but apparent-
ly feared an adverse reaction
at home and in the US. I
Spain: Unrest is increas-
ing among the 75,000 coal miners
in Asturias Province in northern
Spain, where 12,000-14,000
workers are idle because some
3,000 miners are out on strike.
The essence of the problem is
that workers are dissatisfied
with the labor syndicates that
represent their interests and
with the method of conducting
elections for syndicate offi-
cials. One of these officials
told the US Embassy in Madrid
early in August that the basic.
trouble is that many mines are
proving uneconomic to operate
as a result of wage increases
in 1962, and the workers refuse
employment elsewhere.
Although the civil gover-
nor of the province has closed
11 mines because of labor and
management failure to settle
their differences, Madrid is
not likely to lay down an over-
all policy until completion of
a collective agreement now
being worked out to cover all
Asturias miners. Some politi-
cal overtones are suggested by
the arrest of eight members
of the extreme left wing of
the clandestine Socialist
trade union labeled by the
police as Communist agitators.
SECRET
16 Aug 63 CURRENT:.INTELLIGENCE WEEKLY SUMbIARY
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HAITI
UNITED ST-AYES
Caul{ of /Mexico
~h
`~ CUBA ''-z
MEXFCO
c"~ ~BAHAMA
ISLANDS
GUADELOUPE
}~M ARTfNIDUE
~ BARBADOS
--' ~-- ~TRI N7DAD
.,
VENEZUELA ' ~~
BRITISH
"'~
_~
Cap-Haitien
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~.+~
SECRET
Western Hemisphere
The nine-day-old cabinet
crisis in Uruguay--precipitated
by the resignation of the finance
and agriculture ministers fol-
lowing an "implied censure" by
the senate on 6 August--has yet
to be resolved. On 9 and 10
August the ruling faction of the
Blanco Party decided to maintain
the present cabinet, but to con-
sider reorganization at a later
date. Minister of~Finance
Ferrer Serra continues to in-
sist that his resignation is
irrevocable. According to the
US army attachd in Montevideo,
the Uruguayan Army is becoming
increasingly concerned, and--
despite its tradition of shun-
ning politics--involved in
olitical affairs.
SECRET
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,,~- .,,,
NtNRU AND SEVERAL CABINET STRONCaMEN
AT RECENT CONGRESS PARTY CONCLAVE
Prime Minister
NEHRU
HINDUSTAN TIMES View
of Nehru's Problems
Finance Minister
DESAI
Home Minister
SHASTRI
Agriculture Minister
PATIL
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World Organizations
In accordance with. directives
from the NATO ministerial meetings
in December 1962 and May 1963, Sec-
retary General Stikker has drafted
a paper on procedures for securing
a closer alignment of strategy,
force requirements, ana the resources
available to meet them. This paper,
which was circulated early in June
and first discussed at a North At-
lantic Council (NAC) meeting on 25
July, proposes changes in the method
of establishing NATO's long-term
goals. Under the present system it
has seemed impossible to bridge the
*"gap" between the minimum require-
ments set by military authorities
and the defense effort which member
governments find it politically
feasible to make.
Stikker's plan involves two
phases. The first would be prima -
ril;~ afact-finding exercise, making
use of existing mechanisms in which
the NATO military authorities would
complete their long-term planning
studies, while data on individual
countries'present situations and
plans would be gathered from re-
plies by the member countries to
NATO's 1962 and 1963 questionnaires.
In phase two, a newly formed Joint
Planning Team (JPT) composed of
representatives of the International
Staff (NATO secretariat) and of the
military authorities would reconcile
the compiled data into a balanced
long-term force program for the
period. 1966-19?0. This program would
take into account not merely the
agreed military strategy but the
financial implications of this
strategy, and would indicate proposed
force contributions of all member
countries.
The JPT would also utilize the
conclusions reached by a Special
Group which had examined financial
and manpower resources expected to
become available from each country--
based on the OECD ten-year economic
growth assumption--in order to
establish long-term defense resources
planning programs for the period
1964-1970. Stikker envisages the
JPT long-term force plan as setting
forth several alternative strategies
and the requisites for each.
The fact that France had strong
objections to the Stikker exercise
was leaked to the press prior to the
25 July meeting. Although criticiz-
ing many aspects of the plan at that
meeting, the French took issue
chiefly with the concept of the simul-
taneous study of basic factors and
with what they considered the in-
vasion of national prerogatives.
In the first instance, they wanted
the studies undertaken in a priority
sequence, with first priority given
to an agreed strategic concept.
Moreover, they could not permit any
fact-finding mission from the JPT
to consult with their national au-
thorities at the planning level,
nor did they like the independent
status of the~JPT.
The priority sequence advocated
by the French would of course re-
sult in the same failure to match
approved strategy with available
resources which has been plaguing
NATO for years, whereas the essence
of Stikker's plan and its chief
innovation is the JPT concept--with
its implied reconciliation between
military and civilian factors at all
stages of the exercise. Moreover,
the JPT's independent status was
designed to keep it free from either
NATO or national guidance and thus
immune from contending interests.
With the exception of France,
all I3 countries which spoke at the
SECRET
16 Aug 63
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BASIC EXPORT QUOTAS UNDER
INTERNATIONAL COffEE AGREEMENT OF 1962
(IN 60-KILO BAGS)
BRAZIL
T8, 000, 000
COLOMBIA
b, 011,280
IVORY COAST
2, 324, 278
PORTUGAL
2,1.88,648
U GAN DA
1, 887, 737
MEXICO
1,509,000
EL SALVADOR
1, 429, 500
GUATEMALA
1, 344, 500
INDONESIA
1, 176,000
OTHERS
Under a million each
TOTAL
45, 587, 183
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World Organizations
25 July meeting agreed in princi-
ple with Stikker's procedure, al-
though some suggestions were
offered, particularly by the
West Germans. After some pri-
vate talks with the interested
delegations, Stikker told the
council on 31 July that the dif-
ferences appeared "bridgeable"
and that he proposed to revise
his paper for further NAC dis-
cussion early in September.
Stikker will attempt to meet
INTERNATIONAL COFFEE CONF'~RENCE
Acrimony over choice of an
executive director of the new
International Coffee Organiza-
tion raises doubts about the
long-term viability of the 1962
International Coffee Agreement.
This agreement obliges con-
sumer countries to cooperate
with producer countries in the
administration of coffee export
quotas. Given reasonable har-
mony among the signatories, the
agreement could therefore be
fairly effective where previous
ones were ineffective in stabi-
lizing the coffee trade.
The agreement is of partic-
ular interest to Brazil, which
is far and away the world's
leading exporter of coffee (see
table) and depends on coffee for
half its export earnings. Apart
from clear economic interest,
considerations of international
prestige have impelled Brazil
to take an adamant position on
the importance in general of
strong Brazilian influence in
the new coffee organization and
an the necessity in particular
some of the French objections,
perhaps by placing the JPT
under NAC or a special NAC com-
mittee, but he is resolved to
go ahead with the exercise even
if the French prove uncoopera-
tive. He hopes to complete it
in time to present it to NAC
for submission to the NATO min-
isters at their spring meeting
in 1964.
of a Brazilian national in the
post of executive director.
At the coffee conference
now meeting in London, the Bra-
zilian candidate for that post
has been strongly opposed by
African producers, the European
Common Market, and most other
consumer countries. The Brazil-
ians, who blamed the impasse
on US failure to come out
squarely for their candidate,
finally indicated they would
accede to a compromise package.
The likely compromise will
involve acceptance of a Brazil-
ian as executive director while
enlarging the power of other
key posts staffed by Africans
and representatives from con-
sumer countries. The resent-
ments that have been aroused
thus far, however, are likely
to flare up again and compli-
cate US efforts to keep on good
terms with all signatories of the
coffee agreement. Difficulties are
next likely to center on competi-
tion among producer countries to
get higher export quotas than pro-
vided for under the agreement.
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16 Au g 63
CURRENT INTELLIGENCE WEEKLY SUMMARY
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