WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004300030001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 33
• Document Creation Date: December 21, 2016
• Document Release Date: March 24, 2009
• Sequence Number: 1
• Publication Date: December 13, 1963
• Content Type: SUMMARY

7'i9" A roved for- Release 2009/03/24: CIA-RDP79-00927A004300030001-3
OCI Nos 0310/63
Copyr,No. ..
i
WEEKLY SUMMARY
State Dept. review completed.
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
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(Information as of 1200 EST, 12 December 1963)
THE COMMUNIST WORLD Page
KHRUSHCHEV'a CHEMICAL PROGRAM
The program outlined in his speech before this week's
central committee plenum will require a significant
redirection of the soviet economy. Its adoption, nor-
mally a virtually pro forma procedure, will provide
a demonstration of Khrushchev's political strength.
MOSCOW SHIFTS TACTICS IN STRUGGLE WITH PEIPING
Failure to rally support for a new world Communist
meeting to condemn Peiping seems to have led the
Soviets to initiate a self-imposed pause in the
polemics, but the Chinese have not reciprocated.
MONGOLIAN RELATIONS WITH COMMUNIST CHINA WORSEN
Mongolia's unprecedented diplomatic protest to Pei-
ping over "outbursts" by Chinese personnel in Ulan
Bator will accelerate a deterioration of relations
resulting from Mongolia's pro-Moscow position.
GHEORGHIU-DEJ'S VISIT WITH TITO
The Rumanian leader's choice of Yugoslavia for his
first visit to an East European state since 1961
shows his middle-of-the-road position in the Commu-
nist world and Moscow's tolerance of such a stance.
POLISH PLENUM INDICATES ECONOMIC CHANGES
Plans for 1964-65 show increased emphasis on agri-
culture and some shifts in investments. Little
relief is in sight for the consumer in 1964.
UPSURGE IN SOVIET MILITARY AID DELIVERIES
Numerous shipments in recent weeks reflect the im-
plementation of new military aid agreements as well
as maintenance and modernization under long-estab-
lished programs.
ASIA-AFRICA
ORDERLY CHANGE OF LEADERSHIP IN THAILAND
Following the death of Marshal Sarit, the premier-
ship passed smoothly to his equally pro-Western
successor, but maneuvering around key power posi-
tions has begun.
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ASIA-AFRICA (continued) Page
COMMUNISTS INCREASE CAPABILITIES IN SOUTH VIETNAM
Although the pace of their military activity has
subsided from last month's record high, the Viet
8
Cong still show a capability to
develop improved
tactics and to maintain a supply
trained leaders from the north.
AREA NOTES
of weapons
and
On Iraq-Syria and Morocco-Algeria
DAHOMEY'S POLITICAL SITUATION STILL UNSTABLE
Dahomean labor leaders who precipitated the over-
throw of the government last October continue to
exert strong political and economic pressure. A
scheduled constitutional referendum has been can-
celed without explanation.
EEC MINISTERS WEIGHING AGRICULTURE AND TRADE ISSUES
The settlement of difficult agricultural questions
is complicated by their close connection with EEC
participation in the 1964 tariff talks envisioned
by the US Trade Expansion Act.
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EUROPE (continued)
THE FRENCH POLITICAL SCENE
De Gaulle seems to have given up the idea of seeking
a second term in a special vote this spring, but his
opponents are already trying to agree on a car}didate
to oppose him in the regular election due in 1965.
NEW ITALIAN GOVERNMENT BEGINS ITS WORK
The first major test for the center-left coalition
will probably be its ability to cope with urgent
economic problems in the face of stepped-up, Commu-
nist-promoted labor unrest.
LABOR UNREST IN ICELAND
Wage increases demanded by Communist-dominated la-
bor unions would endanger the government's economic
stabilization program and impose new inflationary
pressures.
WESTERN HEMISPHERE
PRESENT PROSPECTS FOR OAS ACTION ON CUBA
While Venezuela's strong case, now before an inves-
tigating committee, may be supported by a majority
of OAS members, unanimity is unlikely in view of
Brazil's and Mexico's opposition and the influence
of these two on the fence straddlers.
CUBAN DRIVE TO INCREASE TRADE WITH WESTERN EUROPE
Castro's recent overtures to the ambassadors of
Italy, Britain, and France reflect his desire to
increase trade with these countries as well as to
obtain the services of Western technicians.
DEVELOPMENTS IN BOLIVIA
The miners' defiance of the government has brought
about an open break between President Paz and the
miners' champion, Vice President Lechin, and could
lead to a bloody showdown.
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WESTERN HEMISPHERE (continued) Page
CONTINUING POLITICAL INSTABILITY IN BRAZIL 19
Renewed rightist plotting and leftist agitation are
contributing to the deteriorating political situa-
tion, but President Goulart has shown no sign of
acting to reduce tension.
SITUATION IN DOMINICAN REPUBLIC REMAINS UNEASY 20
Pro-Castro guerrilla bands, while not an immediate
threat to the military-installed regime, may even-
tually draw support from moderate leftists who fear
rightist domination will prevent impartial elections.
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Khrushchev's program for
sharply boosting chemical output
in the next seven years was formally
proposed in his 9 December speech
before the Soviet central committee
plenum. This program, essentially
the one he described to Western
officials during the past spring
and summer, will require a signif-
icant redirection of the Soviet
economy, will draw heavily on re-
sources needed for other indus-
tries and possibly defense, and
will necessitate large-scale im-
ports of chemical equipment. Its
adoption, normally a virtually
pro forma step at the end of the
plenum, will provide an impressive
demonstration of Khrushchev's po-
litical strength.
Specific Goals
Khrushchev foresees a compre-
hensive increase in chemical prod-
ucts--literally from plastic bags
to antibiotics, but chiefly fertil-
izer, plastics, and synthetic
fiber. Gross output of the chem-
ical industry is planned to in-
crease about 18 percent annually
for the next seven years--much the
same rate scheduled for the cur-
rent Seven Year Plan which ends
in 1965, but well above the rates
actually achieved. He said fer-
tilizer production, now 20 million
tons annually, is to go up to 70-80
million tons by 1970. In the de-
tailed calculations presented in
the speech, he used 80 million
tons as the goal.
This is a considerable reduc-
tion from the 100-million-ton goal
publicized by Khrushchev until very
recently and conforms to a sugges-
tion from a group of Soviet scien-
tists published in Pravda on 17 No-
vember that the plan be lowered
in favor of greater investment ef-
fort in agriculture to make more
efficient use of the fertilizer.
The scientists did not advocate a
lowering of agricultural production
goals and, in fact, Khrushchev
called for producing more grain
than originally scheduled for 1970
at the 22nd party congress late in
1961.
The lower fertilizer goal prob-
ably also reflects greater costs
than were originally anticipated.
Late in September, Khrushchev spoke
on fertilizer investment of 3-4
billion rubles. In his plenum
speech he said that 4.5 billion
rubles has been earmarked for the
purpose.
The 1965 goal for fertilizer
output of 35 million tons has not
been changed. The 1980 goal of 135
million tons announced at the 22nd
congress has been raised to 170
million tons.
The original 1970 output goal
for plastics and synthetic resins
has apparently been reduced by about
one quarter, but still represents
an enormous increase--six to seven
times the present level. The 1970
goal for synthetic fibers remains
at the level set at the 22nd con-
gress--l.35 million tons, or over
four times current production.
Although some production fig-
ures were lowered, the total in-
vestment requirements appear to be
significantly higher than Khrushchev
cited earlier this year, probably
reflecting a more realistic appraisal
of actual costs of the undertaking.
Total investment in the chemical
program over the seven-year period
is to be over 42 billion rubles
(about $85 billion in terms of US
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prices for investment activities),
slightly more than investment in the
entire economy in 1962.
Khrushchev plans for 200 new
chemical plants to be built and 500
reconstructed and expanded (1964-70).
The Seven Year Plan (1959-65) called
for 140 and 130 in these same cate-
gories.
Machinery requirements in sup-
port of the contemplated program are
impressive. Khrushchev called for
the Soviet chemical machine building
industry to increase its output to
four times the present level by 1970.
The annual rate of increase under
such a plan would be more than double
actual performance in recent years.
Machinery Purchases Abroad
The chemical machine building
goal, at first estimate, appears to
leave the chemical industry at least
one quarter short of equipment it
needs. According to Khrushchev,
Eastern Europe will supply a signif-
icant portion of this.
However, the satellites' capa-
bility to do so is limited by their
own domestic requirements and indus-
trial capacity. Since the USSR and
satellites lag considerably behind
the West in development of modern
chemical processes and equipment,
to rely on their own resources in
this field would result in either a
slower growth rate as technology is
being developed or a chemical indus-
try less modern than its Western
counterpart.
Khrushchev, obviously aware of
this, stressed that the Soviet Union
will be in the market for Western
equipment and "whole plants" "if cred-
it is available" and "no political
conditions are attached."
Effects on Other Industries
It is clear that Khrushchev in-
tends his program to convey a strong
consumer orientation. He warned that
the course would require a "tempo-
racy" slowdown in other (unspecified)
industries and that the "efforts of
all our resources" will be needed.
Khrushchev did not mention the
impact of the program on military
priorities, but it seems likely that
the program as outlined would require
at least some reduction in the rate
of expansion of the military program.
At one point in the speech Khrushchev
pointed to the obvious strategic uses
of chemistry.
Significance for Agriculture
A major portion of the speech
was devoted to the use of chemicals
in agriculture. Khrushchev called
for top priority for the use of fer-
tilizer and herbicides as a means of
expanding grain production. He adopt-
ed a flexible attitude toward the
problem of making maximum use of the
fertilizer--calling for a much
greater degree of local initiative
and for more rational farming methods.
Two of Khrushchev's favorite
projects, the New Lands and the corn
program, have been subordinated to
the new approach. Khrushchev again
implied that farming in the New Lands
will not increase and that corn grow-
ing must be re-examined in the light
of the fertilizer program. Both de-
velopments have been anticipated in
the Soviet press recently.
Even if the fertilizer production
goals are met, this in itself will not
solve Soviet agricultural difficul-
ties. Almost certainly, more time is
needed than Khrushchev admitted, and
there are a variety of handicaps which
will not be easily overcome, includ-
ing climate, organization, ideology,
and long years of neglect. In addi-
tion, it is by no means clear that
Khrushchev will be able to encourage--
or, for that matter, will permit--the
local approach to farm management that
will be required if the extensive fer-
tilizer application program is to suc-
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MOSCOW SHIFTS TACTICS IN STRUGGLE WITH PEIPING
Having failed to rally suf-
ficient support among foreign
parties for a new international
Communist conference to condemn
the Chinese, the Soviet leaders
now seem to be preparing for a pro-
tracted stalemate in the conflict.
They have reverted to a posi-
tion set forth by Khrushchev at
the East German party congress
last January, when he appealed
for "tolerance and patience," a
cessation of polemics, and a
pause to give the adversaries a
"chance to calm down" before con-
vening a conference.
Two authoritative Pravda
articles on 27 November and
December commemorating the an-
niversaries of the 1957 and 1960
Moscow meetings renewed Khru-
shchev's appeals, avoided direct
assaults on the Chinese, and
reiterated his dictum that "time
will determine which point of
view is correct."
In view of the strong re-
sistance within the Communist
movement to any Soviet attempt
to force a showdown, which almost
certainly would result in a for-
mal and avowed rupture, the So-
viet leaders apparently see no
alternative to accepting another
pause, during which they will
pursue less provocative and risky
efforts to isolate the Chinese
and prove that Peiping is solely
responsible for continuation of
the conflict.
Moscow is maintaining a
virtual suspension of anti-Chi-
nese propaganda. The Pravda
article of 6 December piously
warned against "overdramatizing
the situation and regarding it
as "irreparable.'" It recalled
Khrushchev's appeals in January
The Communist World
and October for a cessation of
polemics and proposed discussions
within the "normal channel of inter-
party relations," which would create
"more favorable conditions" for a
new world Communist meeting. There
are no indications, however, that
the Russians expect either a resump-
tion of bilateral talks or an inter-
national conference in the near future.
The Soviet ambassador in Peiping
told the British chargd on 2 December
that the Chinese had not suggested
resumption and that no meeting was
planned in Peiping or elsewhere.
Although the Chinese have not
directly commented on the new Soviet
appeal, they have made it clear that
they have no intention of accommodat-
ing the Russians. On 10 December,
Peiping repeated its charge that
"anti-China propaganda" in the Soviet
press has exposed the "hypocrisy and
ulterior motives behind the CPSU
leaders' so-called call for a halt
to open polemics. Whereas Moscow
ignored the defiant tactics of the
Chinese delegation at the recent
World Peace Council session in War-
saw, Peiping played up the clashes
and denounced the USSR for "stage-
managing an anti-China scandal."
Peiping has also continued its
series of long articles attacking the
July exposition of Soviet positions.
The sixth, published simultaneously
in People's Daily and Red Flag on
12 December,-juxtaposes KE-ru-s-h-chev's
revisionist views of "peaceful co-
existence" with the correct Leninist
line followed by the Chinese. There
does not appear to be anything new
in the Chinese argumentation on this
question, but the article maintains
the Chinese insistence that Khru -
shchev is evil incarnate.
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In its first known diplo-
matic protest to Communist
China, Mongolia last week
charged that "outbursts" by
Chinese diplomatic personnel
in Ulan Bator provoked a Mon-
golian crowd to smash a propa-
ganda show window in the Chi-
nese Embassy. The unusual note
will undoubtedly accelerate the
deterioration in Sino-Mongolian
relations brought about by Ulan
Bator's increasingly sharp crit-
icism of Peiping's position in
the Sino-Soviet dispute.
This growing estrangement
has been reflected in recent
private remarks by Mongolians
belittling Chinese economic as-
sistance. Since 1955 Communist
China has provided workers for
extensive construction projects
in labor-short Mongolia. China's
failure to announce replacements
for workers who have returned
home this year after fulfilling
their contracts indicates that
this type of assistance is being
phased out. Peiping also ap-
pears to be stalling on imple-
mentation of a $50-million credit
offered in 1960. Conferences
on the subject in 19011 and 1962
closed without any communique
suggesting a failure to come to
terms.
Another factor adversely
affecting Mongolian-Chinese re-
lations is Ulan Bator's resent-
ment over a loss of revenue re-
sulting from a reduction in Chi-
na's use of the railroad through
Mongolia for its trade with Mos-
cow and the European satellites.
A Mongolian official has said
that these earnings formerly
made up a substantial part of
the Mongolian national budget.
Peiping so far has not re-
sponded publicly to Mongolian
attacks on its policy and is
not known to have acknowledged
the diplomatic protest.
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The Communist World
GHEORGHIU-DEJ'S VISIT WITH TITO
Rumanian Premier Gheorgiu-
Dej's choice of Yugoslavia for
his first visit to an Eastern
European state since 1961 gives
dramatic emphasis to Rumania's
middle-of-the-road position
within the "socialist common-
wealth" and Moscow's tolerance
of diversity within this group-
ing.
Even the stated purpose
of the visit, the signature of
an agreement on construction of
a hydropower and navigation sys-
tem at the Iron Gates section
of the Danube, is a demonstra-
tion of the two countries' will-
ingness to go ahead with a mu-
tually beneficial project in
spite of objections by other
riparian Communist countries
to the tolls that would be
charged. This and other agree-
ments such as the establishment
of a permanent bilateral body
for the development of economic
cooperation bring Yugoslav-
Rumanian economic relations to
their highest point since 1957.
The communiqud issued at
the end of the 22-30 November
talks announced agreement--as
might be expected--on such ques-
tions of international policy as
peaceful co-existence, disarma-
ment, anticolonialism, the test
ban treaty, and the German prob-
lem.. It mentioned the Sino-
Soviet dispute only obliquely,
obviously a Yugoslav concession
to Rumania's desire to remain
aloof from the polemics surround-
ing the dispute. Yugoslavia gave
some support to Rumania's pro-
posals for transforming the
Balkans into a "zone of peace."
There was no mention, however,
of one of Belgrade's pet insti-
tutions, the workers' councils,
which even Khrushchev has seen
fit to praise.
The day before Dej departed,
he was accorded an unusual in-
vitation to address a joint
session of the Yugoslav Federal
Assembly--an honor not even
Khrushchev has enjoyed. In addi-
tion, Tito accepted an invita-
tion to visit Rumania at some
future date.
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The Communist World
POLISH PLENUM INDICATES ECONOMIC CHANGES
The recent Polish central
committee plenum indicated that
plans for 1964-65 will be re-
vised to give greater emphasis
to agriculture as a principal
means of overcoming newly ad-
mitted economic deficiencies. A
remedial course of action was
adopted only after vigorous de-
bate, and further political
wrangling on economic issues is
likely, particularly if public
reaction to the revised plans
is adverse, as expected.
Party leader Gomulka's
speech at the plenum, in par-
ticular, makes it clear that
agriculture is one of the major
causes of current economic dif-
ficulties. Approximately half
of the short-fall in national
income in 1963 was the result
of decreased agricultural produc-
tion. The necessity for increased
grain imports coupled with the
decrease in exports of food and
light industrial products caused
a reduction in imports of indus-
trial goods and raw materials.
This in turn slowed the rate of
growth for light industry, chemi-
cals, and other industries which
depend in part on imports.
Major changes are to be
made in plans for 1964 and 1965.
Over-all investments in 1964 are
to rise only slightly, and in
both years will be lower than
originally planned. Reductions
are to apply especially to light
industry, the food industry,
building materials, and con-
struction (including housing).
Agriculture, however, is to re-
ceive 32 percent more of state
investment in 1964 than in 1963,
with a large additional incre-
ment going to industries that
support agriculture, especially
the chemical industry. The plan
calls for stringent controls on
wages and on the employment level
in an attempt to keep purchasing
power in line with available sup-
plies of consumer goods. Ex-
tensive changes in planning
methods are designed to make the
plan more responsive to shifts
in the requirements of the econ-
omy.
Despite Gomulka's promises
when the current plan was pro-
mulgated that 1964 would see
the beginning of a rapid improve-
ment in the consumer's lot, per-
sonal consumption next year is
to increase by only 2.6 percent,
probably about the same as this
year. The reduction of housing
construction and indications
that difficulties in food sup-
plies, especially meat, will con-
tinue hit the already disgruntled
Polish consumer in two areas of
great concern to him. Plans to
revise norms and tighten wage
discipline are additional rea-
sons to expect an adverse
public reaction.
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UPSURGE IN SOVIET MILITARY AID DELIVERIES
An upsurge in Soviet mili-
tary shipments in recent weeks
underscores the continued high
level of Moscow's military aid
activities abroad. The deliver-
ies reflect implementation of
new military aid agreements as
well as maintenance and moderni-
zation under long-established
programs.
At least 12 shiploads of
Soviet military equipment have
arrived in Egypt since early Oc-
tober, compared with only three
or four in the previous three
months. Much of this material
is for the two-year-old surface-
to-air missile (SAM) program,
but additional naval equipment,
land armaments, and possibly air-
craft have arrived as well.
Two ships appear to have
carried Soviet military cargoes
to Yemen in early November--the
first noted since last summer.
Sporadic Soviet shipments are
being made to Iraq and Syria,
largely carrying out old agree-
ments, as no major arms deals
have been concluded with either
country in more than a year.
Another probable arms carrier
arrived in Cuba in early December
--the ninth major shipment there
this year
viet deliveries to Cuba in 1963
appear to have been for mainte-
nance of the existing mi lit ay
establishment.
Most So-
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Few Soviet military uexiveries
are going to Indonesia now, but ex-
ther SAM deployment in that coun-
try suggest that a new wave of
shipments may get under way soon.
tensive training programs and fur-
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f \ ~
VI ETNA1
VIETNAM
AM '( +"') ? .. 17I .u~,.`i Sou
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At least for the moment, the
Thai Government is operating
smoothly in the wake of Prime Min-
ister Sarit's death on 8 December.
The regime retains its pro-Western
orientation, the country is calm,
and the premiership has been trans-
ferred, thus far without incident,
to Thanom Kittikaciorn. The 52-
year-old Thanom, who was both de-
fense minister and deputy prime
minister under Sarit, has
pledged to follow the
policies of his predecessor "in
every detail, both external and
internal."
In the new cabinet announced
on 11 December, Thanom remains as
defense minister and also becomes
supreme commander of the armed
forces and commander in chief of
the army. General Chitti Navi-
sathien, who had been named by
Sarit acting army chief in late
November, has been "promoted" to
assistant supreme commander of
the armed forces. Interior Min-
ister Praphat retains his minis-
try, and has been appointed acting
deputy army chief and vice premier.
In one of the few changes in the
cabinet itself, Pote Sarasin, who
has been secretary general of
SEATO, has become Thailand's
minister for national economic
development.
It is unlikely that Chitti
and General Krit Sriwara, who is
the only ranking officer with
troops directly under him, will
be satisfied with this arrange-
ment. Further maneuvering is
therefore likely between factions
led by these two men on the one
side and by Thanom and Praphat
on the other, and changes in the
cabinet and military lineup could
occur at any time. There will
probably be no significant devel-
opments, however, in the immediate
future because of the Thai leader-
ship's respect for Sarit, whose
funeral ceremonies will not be
completed for three months.
Thus far, no new subversive
efforts from either inside or
outside the country have been
observed. Thanom and Chitti have
stated that the Thai Government
will remain strongly anti-Commu-
nist and will continue US-assisted
economic development programs
aimed at eliminating the sub-
versive potential.
COMMUNISTS INCREASE CAPABILITIES IN SOUTH VIETNAM
The pace of Communist mili-
tary activity in South Vietnam
has subsided almost to normal
after reaching a record high dur-
ing November. The full effects
of the November effort--when the
number of guerrilla incidents was
nearly double the monthly average
for this year--are not yet clear.
Preliminary reports indicate that
the Viet Cong made significant
gains in parts of the densely
populated delta.
Most of the Viet Cong's ac-
tivities--armed attacks and acts
of sabotage, terrorism, and prop-
aganda--were directed against
strategic hamlets and paramilitary
outposts in the delta provinces,
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several of which now are regarded
as critical. In Long An Province,
just south of Saigon, the Viet
Cong reportedly eliminated a
number of strategic hamlets,
thereby extending their influence
and physical control in rural
areas.
The deterioration of secu-
rity in this area had set in
earlier this year. The prolonged
political crisis in the capital
had obscured the fact that by
mid-1963 the Viet Cong had ad-
justed to the stepped-up US
Vietnamese pacification effort,
and that the Communists were
intensifying their own counter-
actions. Trends in operational
statistics, which had been gen-
erally favorable to the govern-
ment since mid-1962, seem to
have reversed this summer, and
the pace of Viet Cong activity
had been gradually rising before
the November upsurge. Govern-
ment casualties have increased
sharply while Communist losses
remained generally constant,
even though the latter still
exceed government losses in
absolute terms. The ratio of
weapons losses, which had fa-
vored the government, has
switched dramatically and now
is running three to one in favor
of the Viet Cong.
The Communists have achieved
this result by progressively im-
proving their capabilities and
modifying their tactics. They
now are focusing their attacks
on "soft" paramilitary targets,
and have reduced their vulner-
ability to government counter-
measures by fortifying their
.operational bases and improving
their antiaircraft techniques.
At the same time, the Viet Cong
have continued to evolve larger
and better equipped tactical
units. This evolution is facil-
itated by the continued infiltra-
tion from North Vietnam of unit
cadres and specialist personnel,
as well as weapons and explosives.
The evidence indicates that at
least 1,900 infiltrators have
entered South Vietnam this year,
and bloc-produced weapons are
being found with growing fre-
quency.
The new government is aware
of the magnitude of this renewed
Viet Cong threat, but is moving
slowly while it consolidates its
control. Government forces in
all tactical zones have resumed
normal operational activities,
but little apparent progress has
been made in revamping basic
policies or developing new pro-
grams. Many of the key projects
pushed by the former regime have
virtually ground to a halt while
pacification concepts are re-
studied in Saigon and key admin-
istrators at provincial and
district levels are replaced.
Government leaders expect
the consolidation phase to be
completed this month, and to
move ahead with new plans after
the first of the year. They
hope to produce some early mili-
tary results which would have a
favorable psychological impact.
The Viet Cong continues, however,
to demonstrate a capability to
counter government efforts with
improved tactics, more weapons,
and a continuing supply of 25X1
trained leaders from the north.
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Iraq-Syria: Tensions have
abated slightly in Baghdad, but
the Iraqi regime remains split in-
to Baathist and "nationalist" fac-
tions and rumors of coups and coun-
tercoups are still current. The
government apparently does not be-
lieve such moves are imminent, as
troops have largely been removed
from the streets. Baathist Defense
Minister Tikiriti has evidently
given in to pressure from President
Arif and acquiesced to the trans-
fer of a number of Baathist army of-
ficers from important commands.
Arif and the nationalists ap-
parently are aiming at gradually
eroding Baathist influence within
the regime while avoiding a show-
down that could precipitate a move
by army forces still led by Baath-
ists. Given the army transfers and
retirements of the past two weeks,
Baathist officers may in fact no
longer be able to oppose the na-
tionalist elements effectively.
Pro-Egyptian Foreign Minister
Hamid, who has ties with the
Morocco-Algeria: The seven-
nation organization of African
Unity commission--Ethiopia, Mali,
Ivory Coast, Nigeria, Senegal, Su-
dan, and Tanganyika--which is me-
diating the Moroccan Algerian dis-
pute has concluded its procedural
session, held in Ivory Coast. It
now awaits formal statements from
Morocco and Algeria, due by 22 De-
cember, defining their positions on
the border dispute. The commission
will again convene in late January
to consider these statements and
probably to form two subcommissions
to make on-the-spot investigations.
The commission apparently in-
tends to get around the question
Egyptian Embassy in Baghdad, this
week visited Cairo for talks with
President Nasir
In Syria, Premier Hafiz con-
tinues to seek broadened support for
his regime by pardoning and releas-
ing from custody "old guard" politi-
cal personalities identified with
the Syrian secession from the UAR in
1961. Hafiz appears to have won out,
at least for the present, in his
power struggle with extremist Baath-
ist Deputy Premier Umran, and the US
ambassador feels that Umran's in-
fluence in the government has been
sharply reduced. An open split between
moderate and extremist factions with-
in the Syrian Baath Party has not
developed, however, and it would ap-
pear that its leaders are attempting
to avoid mistakes that led to the 18
November coup in Baghdad.
of responsibility for the October
clashes by finding both parties equally
at fault. Its labors may be prolonged
by the inability of the four-member
cease-fire commission--formed as a re-
sult of Ethiopia's early peace-making
efforts--to delineate a demilitarized
zone. Although the mediators report-
edly received commitments from both
parties- that they would not aggravate
the border situation or start an
arms race during this period, minor
incidents are likely to continue and
each side can be expected discreetly
to improve its military position.
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The political situation in
Dahomey has remained highly vol-
atile in the six weeks since the
government was overthrown in a
popular revolution, and the
chances of its being stabilized
soon seem slim. The militant
unionists who played a major role
in the drive against President
Maga still constitute an explo-
sive force, There is also a pos-
sibility, albeit a diminishing
one, that Maga's disgruntled
fellow northerners may react vio-
lently to his recent house arrest.
The military remain the key
to the situation. The provisional
government leader, Colonel Soglo,
appears willing to provide for an
orderly transfer of power back to
civilian hands. It is doubtful,
however, that the military will
be willing to give up all their
political advantages even if and
when they ostensibly relinquish
control.
The unionists are certain
to exert strong influence de-
spite their relatively small
numbers and their previous or-
ganizational weaknesses. They
appear ready to return to the
streets if they do not soon re-
ceive substantial satisfaction
of their demands for a wage in-
crease and a larger political
role. They have begun to direct
their attention more and more
to political goals and may well
use their power to secure politi-
cal as well as economic conces-
sions. They have been forming
revolutionary committees through-
out Dahomey subordinate to a cen-
tral committee at Cotonou.
The US Embassy feels that
the unionists are the group most
susceptible to outside influences,
and that foreign subversive in-
terests can keep the situation
boiling simply by providing the
union leaders with funds.7-
The detention of ex-Presi-
dent Maga on 3 December, follow-
ing announcement of the discovery
of a northern-based plot against
the provisional government, has
thus far provoked no noticeable
reaction from northern tribesmen.
Fear of such reaction, however,
is reflected in the appointment
of one Chabi Mama, former secre-
tary general of Maga's ruling
party, and another northerner to
fill the gap Maga's arrest left
in the provisional government.
Chabi now emerges as chief spokes-
man for the north.
The constitutional refer-
endum originally set for 15 De-
cember has been canceled with-
out official explanation. How-
ever, early this week the union-
ists made known their opposition
to the recently prepared draft
constitution which called for a
presidential system rather than
the parliamentary regime they
favor.
When the constitution is
finally presented for a vote,
the regime may decide to follow
the recent precedents of Togo
and the Brazzaville Congo and
hold the referendum concurrently
with legislative elections. A
new national party embracing
all political tendencies is being
organized, and voters would prob-
ably be asked to endorse a single
national slate.
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Europe
EEC MINISTERS WEIGHING AGRICULTURE AND TRADE ISSUES
Cabinet ministers of the six
EEC countries are considering a
number of agricultural and trade
policy questions of critical im-
portance to the US as well as to
the Common Market itself. Their
talks began in Brussels early this
month and are likely to continue
into next year.
Under threats from France
that its future participation in
the EEC is at stake, the member
countries are trying to agree by
the end of December on the regula-
tions for trade in beef, rice, and
dairy products, and on community
arrangements for financing agri-
cultural subsidies and guarantees.
Formal discussions are to begin on
16 December regarding EEC Commis-
sioner Mansholt's proposals for
early unification of grain prices
--widely regarded as the key to
real agricultural integration in
the EEC.
Decisions yet to be taken on
the rice, beef, and dairy regula-
tions could result in a substan-
tial loss of markets for outside
producers. Moreover, despite the
increasingly favorable reception
the Mansholt plan is getting, it
is generally recognized that the
proposed price adjustments will
undermine the competitive position
of many West German farmers and
pose the threat of inflation in
France and perhaps other member
countries.
The settlement of these farm
questions--difficult in any case--
is doubly complicated by their close
connection with the EEC's partici-
pation in the 1964 tariff talks en-
visioned by the US Trade Expansion
Act (TEA). Paris insists that the
intracommunity regulations for
agricultural trade must be estab-
lished prior to agreement on poli-
cies toward trade with nonmembers.
West Germany and the Netherlands,
with their far-flung commercial in-
terests, are just as insistent on
obtaining commitments from Paris on
TEA policy before making any conces-
sions to the French farmer.
If the EEC is to negotiate ef-
fectively on TEA, it must first have
a position on the size of the tariff
cut it will support, how many ex-
ceptions to this cut will be per-
mitted, how to reduce tariffs on
those items in which there now is a
marked "disparity" between the EEC
and US rates, and, ultimately, how
to negotiate a reduction in bar-
riers to trade in agricultural prod-
ucts. The last two questions are
especially important. The US fears
the EEC Commission's negotiating
plan would do no more than freeze the
level of agricultural protection in
the EEC. Moreover, the "disparity"
rule which France and the commission
continue to press would have such
wide application as to jeopardize
the "Kennedy Round" objective of a
50-percent over-all tariff reduction.
Thus the next few weeks will
be a period of hazardous negotia-
tions and political tension. Most
of the Common Market countries
believe De Gaulle still needs and
wants the community, but they can-
not be sure that failure to
satisfy his agricultural objectives
will not provoke him into as star-
tling an act as his rejection of
British EEC membership last Janu-
ary. However, to appease him on
agriculture without a firm French
commitment on general trade policy
could make a fiasco of the TEA ne-
gotiations
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THE FRENCH POLITICAL SCENE
De Gaulle seems to have
given up the idea of seeking re-
election to the French presi-
dency in a special vote this
spring and now is expected to
seek a second term in the regu-
lar presidential election due
late in 1965.
Regardless of the timing
of elections, however, his op-
ponents have begun to bestir
themselves in an attempt to
agree on a candidate to run
against him. Gaston Defferre,
the Socialist mayor of Marseilles,
has begun to develop his
candidacy, but he will have a
difficult task in establishing
a national following and in cop-
ing with the inevitable Gaullist
effort to label him a Communist.
Even if De Gaulle's op-
ponents can agree on a single
candidate, they will face con-
siderable difficulty in trying
to settle on a common platform.
Opposition to De Gaulle has not
proved to be particularly pro-
ductive of electoral support.
Public opinion polls in
recent months have shown a drop
in De Gaulle's popularity, but
these should not be taken to
mean any substantial loss of
electoral strength. There is
a great deal of speculation that
De Gaulle will call a referendum
some time next year by way of a
new "vote of confidence." He
has several issues he could
pick for such a vote; a con-
stitutional amendment creating
a vice presidency has only limited
appeal for De Gaulle but he might
decide to go ahead with his de-
sire to reorganize the Senate.
In any event, De Gaulle is, as
usual, keeping his own counsel,
although he may tip his hand at
a press conference scheduled
for next month.
The Socialist Party lead-
ership, meanwhile, continues to
try to walk the fine line be-
tween "parallel actions" with
the Communist Party and a popu-
lar front agreement. Socialist
chief Guy Mollet returned from
a ten-day visit to the Soviet
Union last month intent on open-
ing a public debate with the
Communists to show the ideologi-
cal differences which separate
the two parties. The Communists
can hardly be expected to oblige
Mollet, however, and he may find
them pointing up the similari-
ties in party positions so suc-
cessfully that the Socialist
rank and file will see addi-
tional reasons to heed Com-
munist pleas for worker unity.
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PARTY COMPOSITION OF THE ITALIAN PARLIAMENT
(FOLLOWING APRIL 1963 PARLIAMENTARY ELECTIONS)
oo- SOCIAL
DEMOCRATS
(PSDI)
33
SOCIALISTS
(PSI)
87
CHRISTIAN DEMOCRATS
(CD)
GOVERNM
~' ENT C
SOCIAL O~CiO
DEMOCRATS
SOCIALISTS
(PSI)
(PSDI)
REPUBLICANS
6 (PRI)
CHRISTIAN DEMOCRATS
(CD)
LIBERALS
19 (PLI)
315
NEO-FASCISTS
15 (MSI)
CHAMBER
OF
DEPUTIES
MONARCHISTS
(PDIUM)
NEO-FASCISTS
(MSI)
SENATE
(PDI UM)
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Europe
A vote of confidence is ex-
pected before Christmas on the
program the new Italian Government
has just presented to Parliament.
The first major test for the cen-
ter-left coalition will probably
be its ability to cope with urgent
economic problems in the face of
stepped-up Communist-promoted la-
bor unrest.
At two cabinet meetings this
week, the four government parties
agreed on the assignment of re-
sponsibilities to five ministers
without portfolio, chose 42 under-
secretaries, and approved the
speech Premier Moro presented to
Parliament on 12 December. The
coalition will have a comfortable
majority in the Chamber of Dep-
uties if the four parties muster
their total of 386 out of 630
seats, and a favorable vote in
both Senate and Chamber is virtu-
ally assured.
Nevertheless, some Socialist
left-wingers and some Christian
Democratic right-wingers may make
good their threats to buck party
discipline. The Communists and
the parties to the right of the
Christian Democrats will vote against
the government.
The most critical problems the
government faces are on the economic
front. Most of the details of the
remedial measures have been agreed
upon, but implementation could be
slow, even with a possible shorten-
ing of Parliament's holiday recess
to allow work on the legislation
to begin before mid-January. The
government will be at some disadvan-
tage in pushing for austerity meas-
ures in midwinter, when a seasonal
economic slowdown increases unem-
ployment.
In addition, the Communists--
with whom Socialists are still allied
in the largest trade union confed-
eration--have called several large-
scale strikes mainly in an attempt
to use worker unrest to put pres-
sure on the government and try to
exacerbate the Socialist Party's
relations with its partners. Worker
demands for widespread wage increases
are in conflict with government
proposals to contain inflation and
avoid a further undermining of busi-
ness confidence.
25X1
i
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Europe
Iceland's governing coali-
tion of Conservatives and Social
Democrats is again being chal-
lenged by Communist-dominated
labor unions. The unions' cur-
rent demands for wage increases
averaging some 30 percent led
to a virtual general strike which
began on 10 December.
agrarian Progressive Party,
have continued their attacks
on the government. Extensive
strike action nearly occurred
in early November but was post-
poned for a month when the gov-
ernment agreed to defer parlia-
mentary action on a bill freez-
ing wages and prices.
The immediate issue is
whether or not the government
will be able to maintain the
integrity of the economic sta-
bilization program to which the
two cabinet parties committed
themselves when they assumed
power in 1959. The program has
been under almost constant at-
tack by the Communists, who have
used their control of the cen-
tral labor federation to foment
labor unrest as a means of under-
cutting the stabilization pro-
gram and forcing the government
to resign. The coalition suc-
cessfully weathered a similar
strike of some three weeks' dura-
tion in 1961, but only after re-
luctantly agreeing to inflation-
ary wage increases. The govern-
ment later sought to counteract
their inflationary impact by de-
valuing the krona--the second de-
valuation within a period of 16
months.
Since that time the Commu-
nists, aided by the largely
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13 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
Prime Minister Benediktsson
then sought to head off the
present strike by a compromise
proposal permitting wage in-
creases of up to 8 percent, which
was rejected by labor.
It is not clear how far
the Communists will be able to
exploit the present labor un-
rest for political purposes.
Many of the workers have be-
come disillusioned with the
politically motivated strike
activities of the Communists.
This sentiment was reflected
in the recent national elec-
tions when the Communists suc-
ceeded in doing little more
than holding their own. Un-
der these circumstances there
will be pressure for an early
settlement of the dispute which,
if substantially more generous
than Benediktsson's proposal,
is likely to result in a fur-
ther devaluation of the krona.
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Western Hemisphere
PRESENT PROSPECTS IOR OAS ACTION
Venezuela's charges of Cu-
ban aggression and interference
in its domestic affairs have
again brought the Organization
of American States (OAS) into
action against the Castro re-
gime. The allegations are the
result of Castro's continued
support for the terrorist Armed
Forces of National Liberation
and now are backed by solid evi-
dence provided by the discovery
early last month of a Cuban arms
cache in Venezuela.
The newly elected chairman
of the OAS Council, Ambassador
LaValle of Peru, appointed an
investigative committee consist-
ing of Argentina, Colombia,
Costa Rica, Uruguay, and the
US. The committee, presently
in Caracas, reportedly is highly
impressed with the accuracy of
the Venezuelan allegations, and
is also investigating Cuban prop-
aganda and political interven-
tion.
The outcome of the investi-
gation presently points toward
several possible courses of
action. These include OAS res-
olutions calling for a complete
hemispheric break in diplomatic,
consular, and economic relations
with Cuba, an air and naval
blockade to prevent Castro arms
shipments, cooperative Caribbean
surveillance of clandestine Cu-
ban activities, or a simple con-
demnation of the Castro regime
for interventionist activities.
Latin American response to
these prospective lines of ac-
tion is varied. Basically, a
hard core of 12 votes--not in-
cluding the US--favors any or
all of the courses mentioned,
if Cuba is judged guilty.
Fundamentally opposed to
any action is the Brazilian
delegate, who is probably skep-
tical about Venezuela's case.
Chile, however, shows signs
of altering its traditional non-
interventionist posture. With
pro-Castro sentiment at a low
ebb in Chile, the government
there may yield to the weight
of evidence and possible Ar-
gentine diplomatic pressure
and align itself with the anti-
Castro majority in the OAS.
Such a breakthrough might influ-
ence reluctant Uruguay to take
a stronger stand against Cuba.
The Mexican Government, how-
ever, while perhaps quietly favor-
ing measures against Castro, can-
not afford for domestic political
reasons to alter openly its char-
acteristic support of noninter-
vention. Haiti weakly shares
Mexico's opposition to action.
Peru, whose new President has
displayed little interest in
foreign affairs, will probably
not clarify its intentions until
the investigation is completed.
Present indications suggest
that, if the final report of the
five-nation investigating com-
mittee is conclusive and vigor-
ous, a majority of OAS members
will support increased measures
against Cuba. Unanimity, how-
ever, i,; unlikely because of
the opposition of Brazil and
Mexico and the influence which
these two powers exert on lesser
fence straddlers.
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Fidel Castro initiated a
round of conversations with
West European missions in Ha-
vana in mid-November. After a
four-month lull during which he
had few contacts with non-bloc
missions, Castro called in quick
succession on the ambassadors
of Italy, Britain, and France.
Diplomatic circles in Havana
interpret Castro's sudden dis-
play of friendship as indicative
of a Cuban desire not only to
increase trade with these coun-
tries, but also to obtain the
services of Western techni-
cians.
Castro's efforts suggest
dissatisfaction with the extent
of--and his present absolute
dependence on--the economic sup-
port he receives from the Com-
munist world. Whatever the
strains in Cuban-Soviet economic
relations, all evidence points
nevertheless to continuation of
the high level of Soviet bloc
economic activity in support of
Cuba and no wavering in Moscow's
adherence to its commitments.
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Riberalta
?` Cobija ??~ _p~
Santa Ana Z
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Western Hemisphere
DEVELOPMENTS IN BOLIVIA
Events of the past week in
Bolivia--beginning with the 5
December cabinet reshuffle fol-
lowed the next day by the govern-
ment's arrest of three Communist
labor leaders and the retalia-
tory detention of 21 hostages
including four Americans--prob-
ably will mark a turning point
in Bolivian politics. The long-
simmering dispute between Presi-
dent Victor Paz Estenssoro and
Vice President Juan Lechin has
developed into an open break,
and the chances for a rapproche-
ment row appear dim, even though
they had been political allies
since 1952.
Paz requested the resigna-
tions of the entire cabinet in
order to replace those ministers
who had maintained close ties
to Lechin. Lechinist supporters
were dropped from the ministries
of agriculture and mines, and
the minister of peasant affairs
was removed because he alienated
key peasant leaders. The new
cabinet is composed of persons
of demonstrated loyalty to Paz
who can be depended upon to sup-
port him in the currently pre-
carious political situation.
Paz and Lechin both have
committed their prestige so
fully in this crisis that each
one's maneuverability now is
severely limited in attempting
to find a mutually acceptable
compromise. The vice president,
a long-time labor leader with
close ties to the tin miners,
has claimed that he remains their
true friend and has made vitri-
olic attacks against Paz. Lechin
has asserted that Paz has become
a tyrant who "represses" the
ruling Nationalist Revolutionary
Movement (MNR) and has "sold
out" to the Americans--remarks
which could hardly be withdrawn
without seriously prejudicing
Lechin's political stature.
Nor can the President afford
to back down. Capitulation on
his part would so strengthen
Lechin's supporters that they
might be able to edge out Paz as
the MNR's presidential candidate
for next year's national elec-
tions. The party's nominating
convention is scheduled for Jan-
uary, and nomination by the MNR
is tantamount to election in
Bolivia.
A Paz defeat in the current
crisis also might provoke the
military to stage a coup, not-
withstanding the fact that they
have scrupulously supported
constitutional processes in
Bolivia since 1952. Paz, there-
fore,, seems to have no suitable
alternative except to deal firmly
with those who are now defying
the government's authority.
The government has encircled
the Huanuni - Catavi - Siglo
Veinte mining area with several
thousand troops and peasant
militia units. The opposing
miners are well-armed, trained
in the use of dynamite, and
would fight fiercely if attacked
by government forces. In a full-
scale showdown, however, the
military probably would triumph
over the miners.
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25X1
CONTINUING POLITICAL INSTABILITY IN BRAZIL
Renewed rightist plotting
and extreme leftist agitation
are contributing further to
the deteriorating political
situation in Brazil. Neverthe-
less, President Goulart has
yet to demonstrate any determi-
nation to act to stem the growth
of political tension.
Rightist plotters seem to
be taking specific steps toward
carrying out their long-talked-
about plans to overthrow Goulart.
In a 7 December television
speech, former Navy Minister
Sylvio Heck, one of the right-
ist leaders, accused Goulart
of working toward "subversion
of the social order," promoting
strikes, and collaboratin with
extreme leftist groups.
The rightists probably ex-
pect to capitalize on the dis-
satisfaction within the armed
forces caused by the removal
of Second Army commander General
Peri Bevilacqua, who was trans-
ferred after considerable pres-
sure for his removal from the
extreme left. However, this
group of rightists alone appears
to have only limited prospects
for staging a successful coup
at this time.
Adding to the political
ferment is a campaign by left-
posts.
ists to win important cabinet
Goulart must also contend
with renewed friction within
the government coalition. Fun-
damental disagreement over the
administration's agrarian re-
form program, a basic objective
of the president, has sharpened
the division between the Social
Democratic Party (PSD) and the
PTB. The interparty differences
have been further aggravated by
the recent defection to the PTB
of six PSD deputies from the
state of Maranhao, a development
which gave Goulart's party an un-
precedented edge in the Chamber
of Deputies. While no open
break between the two parties
is expected, the growing mis-
trust between them is impeding
constructive legislation.
Ambassador Gordon reports
that Goulart is in a tense
psychological state and physi-
cally exhausted. Rash action
by opposition elements could
provoke Goulart, in his present
condition, into taking des-
perate measures such as as-
suming extraordinary powers.
SECRET
13 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
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Caicos Is.
(U. K.) ,
Turks Is.
(U.K.)
IA.ITI /
Santiagtl! t
GoUern'ent Mop-Up bparoti?on
40-
La Vega ? -. Continue
San Juan -t
PORT-AU- ?? Azua I^ _~^
PRINCE >
DOMINICAN REPUBLIC
Areas of Recent Guerrilla Violence
0 25 50 100
PUERTO
RIC
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N.r+
SECRET
Western Hemisphere
Ground and air units in the
Dominican Republic appear to
have neutralized three guer-
rilla bands directed by the
pro-Castro 14th of June Polit-
ical Group (APCJ), but efforts
to crush a fourth group of 40-
80 men seem to have bogged down.
Rumors of two other guerrilla
fronts in the country's moun-
tainous interior remain uncon-
firmed.
The insurgents apparently
were discovered before they were
fully prepared to begin opera-
tions against the government,
and their failure to attract
significant popular support has
so far discouraged fighting.
Any immediate threat to
internal security seems to have
been at least temporarily con-
tained, but failure to elimi-
nate the remaining pockets of
resistance rapidly may have se-
rious repercussions. The APCJ,
declared illegal for its part
in the insurgency, now may see
subversion as its only course
of action. Similarly, at least
some exile members of the mod-
erate leftist Dominican Revolu-
tionary Party (PRD) are said to
have come to favor domestic
violence in their effort to
regain power. If such action
were undertaken, the party's
status as a democratic politi-
cal force could be undermined
or even eliminated. Another
body of potential antigovernment
militants is a group of recently
dismissed armed forces officers
and an unknown number of dis-
gruntled middle-grade officers.
Several of the country's
moderate leftist leaders are
convinced that growing extreme
rightist pressure and the mach-
inations of the minority parties
backing the present military-
installed regime have eliminated
any hope for impartial elections
to restore representative gov-
ernment. One object of their
concern is the newly organized
Liberal Evolutionary Party,
which is attracting numerous
wealthy rightists, including
prominent former supporters of
ex-dictator Trujillo. Moreover,
members of the Independent Do-
minican Action, an extreme right-
ist group which publicly took
credit for the 25 September
military coup, are already
threatening another coup unless
stronger "anti-Communist" meas-
ures are instituted immediately.
Growing fears of rightist
domination may eventually lead
some moderate leftists to join
forces with the would-be insur-
gents.
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,%W Iww
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