WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A005100120001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 63
• Document Creation Date: December 21, 2016
• Document Release Date: November 12, 2008
• Sequence Number: 1
• Publication Date: January 28, 1966
• Content Type: SUMMARY

Approved For Release 2008/11/12 : CIA-RDP79-00927AO05100120001-4
State Dept. review
completed
'ARMY review(s)
completed ~
Copy' `e.
SECRET
GR:QUR (,.Ecc vs~ed:fcorn,cwtorpaticA
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Approved For Release 2008/11/12 : CIA-RDP79-00927AO05100120001-4
 25X1 Approved For Release 2008/11/12 : CIA-RDP79-00927AO05100120001-4
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SECRET
(Information as of noon, EST 27 January 1966)
VIETNAM
The largest allied effort of the war--a search-and-de-
stroy operation launched in Binh Dinh Province on 26 Jan-
uary--encountered light enemy contact in its initial
phase. Meanwhile, Hanoi has repaired the bomb damage
to Dien Bien Phu Airfield and is extending the runway
2,000 feet. An unprecedented and as yet unexplained air-
the operation is essentially
a cargo drop. Meanwhile, Hanoi is preparing its people
for a resumption of the air raids and the possibility
SOVIET MILITARY TRANSPORT AVIATION
The Soviet military air transport force has been grow-
ing and is improving its capability to respond
rapidly to emergency situations.
RICH GOLD FIELD UNDER DEVELOPMENT IN THE USSR
The Muruntau deposits in central Asia will eventually
yield an estimated $20 million worth of gold annually
at the lowest unit cost in the USSR.
SECRET
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SECRET
HUNGARIAN PARTY FACTIONALISM AND POPULAR DISSIDENCE
Popular unrest over recently introduced economic
measures, and factionalism at top party levels stemming
in part from proposed economic reforms, are compound-
in- the difficulties facing the Kadar regime.
SOVIET-JAPANESE TRADE AND AIR AGREEMENTS SIGNED
The agreements provide for only a gradual increase
in trade through 1970, and for a direct Moscow-
Tokyo air route for the first time.
PEKING STEPS UP SUPPORT FOR INSURGENCY IN THAILAND
The Chinese probably regard Thailand as an area with
considerable future potential for actions aimed at
undermining the US presence in Southeast Asia.
Asia-Africa
THAI-CAMBODIAN BORDER TENSIONS CONTINUE
New flare-ups are likely following last week's clashes
near the Gulf of Siam. Increasing activity of the
Khmer Serei seems responsible for the trouble be-
SECRET
Page ii WEEKLY SUMMARY 28 Jan 66
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SECRET
INDONESIAN STALEMATE CONTINUES
The army is trying to counter Sukarno's call for a "Su-
karno front" of leftist supporters.
NEW INDIAN GOVERNMENT SETTLES IN
Prime Minister Gandhi has pulled together a cabinet
much like that of her predecessor, and is likely to con-
tinue Shastri's practical approach to India's massive
economic problems.
ARMY REGIME CONSOLIDATING IN NIGERIA
No visible opposition to Genera]. Ironsi's military gov-
ernment has appeared, and the regime seems to be gain-
ing confidence.
Europe
BEN BARKA AFFAIR STRAINS FRENCH-MOROCCAN RELATIONS
Both nations apparently are trying to avoid a complete
diplomatic rupture. Meanwhile, I)e Gaulle's opponents
have seized upon the issue to embarrass him.
MORO DESIGNATED TO FORM NEW ITALIAN GOVERNMENT
He stands a good chance of forming a new center-
left government, but maneuvering among members of his
own party and between the coalition parties could de-
lay its formation.
SECRET
Page iii WEEKLY SUMMARY 28 Jan 66
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SECRET
DOMINICAN MILITARY CHIEFS REMAIN DESPITE CAAMANO'S DEPARTURE 21
Although refusing to accept new assignments, the military
has indicated it will not move against Garcia Godoy at
present. Navy chief Jiminez, who has been urging a moder-
PERUVIAN REGIME'S RELATIONS WITH CONGRESS STRAINED
The senate's censure of the justice minister has
created strained relations and has pointed up growing
difficulties in the coalition supporting President
Belaunde.
ECUADOREAN JUNTA REVISES PLAN FOR RETURN TO CONSTITUTIONAL
GOVERNMENT
Its announcement that congressional elections will be
held simultaneously with the presidential election
scheduled earlier for 5 June is a major concession to
politicians.
SECRET
Page iv WEEKLY SUMMARY 28 Jan 66
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SECRET *00
With the expiration of the
78-hour, holiday cease-fire on
23 January, South Vietnamese and
allied forces resumed major op-
erations, thus far encountering
only sporadic enemy resistance.
The largest allied effort of the
war was launched in Binh Dinh
Province on 26 January when some
17 South Vietnamese, US, and
South Korean battalions began a
search-and-destroy operation
north of the provincial capital
near the coast. Only light con-
tact was initially reported.
Earlier, US military officials
in Saigon had reported that the
North Vietnamese 18th Regiment,
probably one Viet Cong regiment,
and possibly two other Communist
regiments--as yet unidentified
--were filtering into the north-
eastern sector of the province.
Viet Cong incidents in-
creased after the cease-fire pe-
riod, although no major attacks
have yet been reported. The
most significant action during
the post-Tet period was an enemy
mortar bombardment on 25 January
directed against US and South
Vietnamese installations in Da
Nang, which killed four and
wounded 25 others. The attack
included several rounds from a
120-mm. mortar--the second in-
stance in which Viet Cong forces
have employed this heavy weapon
in South Vietnam.
During the four-day cease-
fire, enemy activity slackened
considerably, but did not stop
altogether. Most of the 106 in-
cidents which occurred during
this period were concentrated in
the Saigon area, near Da Nang,
and in Phu Yen Province. Al-
tihough several serious incidents
were reported, the majority con-
sisted of harassment of outposts,
patrols, and aircraft.
Political activity in Sai-
gon during the week came to a
virtual halt as observance of
the lunar new year holiday pre-
vaailed. The US Embassy has re-
ported, however, that Vietnamese
Government relations with monta-
gnard tribesmen in the central
highlands have continued to de-
te,riorate. Last month's short-
lived revolt in several high-
land provinces, which was in-
spired by the tribal autonomy
movement FULRO, was the most re-
cent serious reflection of funda-
mental montagnard grievances.
Since then, the government has
reacted firmly to circumscribe
the FULRO movement, but has not
yet developed a consistent policy
toward the tribal population.
Part of the difficulty at present,
the US Embassy reports, is the
existence of friction within the
South Vietnamese Government be-
tween Saigon officials and the
local area commander as to who
will control montagnard affairs.
SECRET
Page 1 WEEKLY SUMMARY
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SECRET
H I
A
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28 JANUARY 1965
The Indochina -South'China Area
GhtaiaF7flin
HAINAN
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 Approved For Release 2008/11/12 : CIA-RDP79-00927AO05100120001-4
EGRET
In Hue, about 1,000 persons
gathered at one of the main pa-
godas during the holiday period
to pray for peace. Organized by
a local Buddhist student associa-
tion, the meeting was orderly
and similar to other student
prayer-for-peace meetings held
in Saigon in recent weeks. Al-
though some student statements
and banners were reminiscent of
the former militant anti-Ameri-
can student movement in Hue,
there is no firm indication yet
as to whether the meeting was
the beginning of a general peace
movement or a special Tet cere-
mony.
DRV Military Developments
Hanoi has repaired the
bomb damage to Dien Bien Phu Air-
field since 14 January and is
extending the 4,000-foot runway
some 2,000 feet. This airfield
has not been used since June
1965, when it was made unservice-
able by US air strikes. The Com-
munist intent in reactivating
the field could be to make it
serviceable for jet fighters,
or to use it as a logistical
staging area for PAVN operations
in Laos.
An unprecedented and as yet
unexplained airlift is being con-
ducted to the Dien Bien Phu area.
Most of this activity, has con-
sisted of paradrops in the plains
area south of the airfiaid
13 parachutes on the
,round southwest of the airfield
with box-Like objects still at-
tached to some of the shrouds,
suggesting that the operation is
essentially a cargo drop.
DRV Propaganda
In addition to taking maxi-
mum advantage of the bombing lull
to complete bomb damage repair
and move supplies, Hanoi is pre-
paring its people for a resump-
tion of the air raids and the
possibility of a long and pro-
tracted war. On the occasion of
the lunar new year celebrations,
regime propaganda took a very
confident line on the question
of eventual Communist victory
using the theme "time is on our
side." This was coupled, how-
ever, with warnings of more dif-
ficult times immediately ahead.
Hanoi broadcast Western news re-
ports of a US troop build-up in
the South and the possibility of
an extension of the bombings into
the Hanoi-Haiphong area. The 25X1
broadcast admitted that such
steps would probably prolong the
war.
SECRET
Page 3 WEEKLY SUMMARY
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 C,Pf'P IT
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The An-B (Camp) carries a normal load of nearly 21,000 lbs. or 75 troops to a range of over 1,300 n.m.
Camps make regular paradrops in East Germany and have flown air sampling flights related to Chinese
Communist nuclear testing.
load of about 20,000 tbs. or 91 troops to a distance of
a
mal
it
l
d
y
p
s nor
iver
e
The An-12 (Cub) can
about 1,300 n.m. The Cub's ability to operate from unpaved strips and its design for rapid cargo hand-
ling have made it the mainstay of Soviet Military Transport Aviation.
Still in the prototype stage of development, the giant An-22 (Cock) transport is expected to improve
Soviet airlift capabilities considerably. The Cock should be able to transport a maximum load of
176,000 lbs. to about 2,800 n.m.
SECRET
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NWIV
SECRET
SOVIET MILITARY TRANSPORT AVIATION
Soviet military air transport
activities have provided good evi-
dence of the current capabilities
of Soviet Military Transport Avia-
tion (VTA).
Last April Soviet transports
lifted about 5,000 airborne troops
from the Soviet Union into East
Germany during the West German
Bundestag meeting in Berlin; in
October, about 100 Soviet assault
transports airlifted part of a
Polish division, about 1,000 men
plus equipment, into southern East
Germany as part of a Warsaw Pact
exercise.
The main component of the
VTA is that element serving the
Airborne Troops (VTA/ABN). This
force has about 650 transports
which are based in the western
USSR. In addition to providing
aircraft for operations of Soviet
airborne forces, the VTA/ABN also
satisfies nearly all the heavy air-
lift needs of the rest of the So-
viet military establishment, prob-
ably including the support of mis-
sile test ranges and strategic mis-
sile deployment, and the provision
of large-scale air transport for
nonairborne forces.
The VTA's ability to respond
to distant military and political
situations is still limited, how-
ever, by its size. It could prob-
ably airlift at least the assault
echelons of one Soviet airborne
division with all its combat equip-
ment in a single maximum effort.
This combat airlift capability
can be augmented to some extent in
an emergency by calling on the
civil air fleet and the transports
assigned to various air force com-
mands. The more than 500 heli-
copters subordinate to tactical
aviation could also be enlisted
but their short range would limit
their use to tactical airlifts.
The major transports used by
the VTA are the twin-engine AN-8
(Camp) and the four-engine AN-12
(Cub), both introduced in 1959.
These two turboprop aircraft were
the first Soviet assault trans-
ports which could load and dis-
charge cargo through rear doors,
reducing loading time. Both the
aircraft can use unsurfaced air-
fields but neither can transport
very large or heavy equipment.
Last year the Soviets made
the first public showing of the
:Largest aircraft in the world--
the AN-22 (Cock). This prototype
transport apparently can lift
:L76,000 pounds of cargo or 400
combat troops over a distance of
2,800 miles. With its normal load
of 50,000 pounds it reportedly
has a range of about 5,000 miles
without refueling and it can op-
erate from unpaved air strips. It
can also handle heavy and bulky
items such as missiles and heavy
ground armor.
The size of the Soviet
military air transport force has
been growing and the quality of
its aircraft improving. As a
result the USSR is working to-
ward a force able to provide sub-
stantial support rapidly in any
situation where it is required.
SECRET
Page 5 WEEKLY SUMMARY
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-J 1_.'1 Ld l V L'1 A
MAJOR USSR GOLD MINING AREAS
80787
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SECRET W
RICH GOLD FIELD UNDER DEVELOPMENT IN THE USSR
The USSR is now developing
the Muruntau gold field in Soviet
central Asia, which eventually
will contribute significantly to
Moscow's strained gold reserve
position. The deposits will
yield an estimated $20 million
worth of gold annually--about ten
percent of present total Soviet
production--at the lowest cost
per unit in the USSR.
Three gold discoveries were
reported in Uzbekistan as early
as 1959, but intensive study of
the Muruntau deposits did not
begin until 1961. By 1965 Soviet
geologists determined that Murun-
tau's potential was many times
the original estimate and that
it probably was the richest sin-
gle field ever discovered in the
USSR. A recent Soviet article
claims that Muruntau will yield
more gold than Kalgoorlie in
Australia, a field that has been
exploited since 1912 and still
produces $18 million worth of
gold annually.
Full-scale mining and process-
ing operations will probably not
begin at Muruntau until the late
1960s. Gold will be mined by the
open-pit method, which is more
economical than underground oper-
ations. Muruntau's favorable
southern location will also help
reduce production costs. Mining
costs in the principal gold re-
gions now being exploited--in the
Yakutsk ASSR and in Magadan Oblast
of the Soviet northeast--are
about $90 per ounce at the offi-
cial rate of exchange, or almost
three times the current world
market price of $35 an ounce.
Fragmentary evidence suggests
that the USSR originally intended
to develop Uzbekistan as a gold-
producing region simultaneously
with the leveling off of produc-
tion in the northeast in order to
reduce over-all costs. The pre-
cipitous decline in Soviet gold
reserves since 1963, however, has
apparently led to a decision to
continue expanded operations in
the northeast as well as to de-
velop the deposits in central
SECRET
WEEKLY SUMMARY 28 Jan 66
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SECRET
HUNGARIAN PARTY FACTIONALISM AND POPULAR DISSIDENCE
Hungarian party leader Kadar Because of various actions
may be faced with factionalism at over the past.year, the regime has
the top levels of the party. This suffered a setback in its relations
apparently stems in part from dif- with the population, which fears a
ferences over proposed economic re- hardening of policies. Popular
forms, now under discussion, which criticism and pessimism were already
among other things call for less de- mounting when the December price in-
tailed central planning and greater creases were announced, and reac-
independence for enterprises. This tion to the announcement was prob-
situation has been compounded by ably stronger than the party had
popular unrest over economic measures anticipated.
25X1 already introduced, specifically
the price increases announced on 19
December.
In a New Year's interview Kadar mace
critical reference to "narrow-
minded sectarians" opposed to his
policies. Moreover, the US Lega-
tion in Budapest reports there were
last-minute changes in and a close
vote on the 1966 economic plan in
the party central committee.
Hard-liners in the politburo
have not been a problem to Kadar
for some time. Rather, Kadar's op-
position in the party has come from
lower level provincial Stalinists.
The appearance of differences within
the highest party bodies does not
necessarily pose a direct personal
threat to Kadar, but it introduces
a new element into party affairs
which could seriously hamper the
regime's effectiveness.
A worker demonstration and
work stoppages resulting in as matey
as 70-100 arrests have been reported
in recent weeks. Western press ac-
counts of these developments drew
sharp and rapid denials from the
Hungarian Government--for foreign
consumption only. At home, however,
politburo member Komocsin admitted
in a-speech that the party was hav-
ing "temporary political difficul-
ties." Regime spokesmen have re-
sorted to issuing statements and
interviews defensively justifying
the price increases in an attempt
to counter popular discontent.
moderate policies.
tends difficulties for Kadar's
As in the past the regime
probably will continue to make ar-
rests sporadically, hoping thereby
to repress any further open mani-
festations of dissidence. The
problems within the party, however,
may grow as the essential economic
reforms are discussed further.
Even though the party intends a
very gradual introduction of the
reforms, this early opposition por-
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NE(,,'RL' 1 ' Nwo~
SOVIET-JAPANESE TRADE AND AIR AGREEMENTS SIGNED
The recently concluded So-
viet-Japanese five-year trade
pact calls for only a gradual in-
crease in trade through 1970. A
civil air agreement was also
signed which provides for a di-
rect Moscow-Tokyo air route for
the first time. Initially, at
least, the route, which will be
a joint enterprise, will use only
Soviet aircraft and crews.
After a sharp increase in
trade during the early 1960s--it
amounted to $150 million in 1960
--exchanges are expected to total
about. $400 million this year,
roughly the same level as in 1964
and 1965. The agreement report-
edly aims at expanding trade to
about $500 million annually by
1970. This modest increase is ap-
parently due to the inability of
the two sides to find suitable
new items to exchange.
As in the past, the USSR's
leading exports will be timber,
crude oil, pig iron, and coal,
accounting for about 80 percent
of Soviet deliveries. Japan's
exports will center on merchant
ships, machinery and plant equip-
ment, textiles, and chemical
goods. The trade list indicates
that Japan is scheduled to sell
about 100 ships to the USSR, in-
cluding freighters, fish factory
,ships, timber carriers, and re-
frigerator ships. A Soviet dele-
gation is expected to visit Japan
this March, reportedly to place
large shipping orders.
The air agreement permits
the Japanese to fly across Si-
beria on the Moscow-Tokyo route
under a jointly operated service
using Soviet aircraft and flight
crews. Both parties will share
financial interest in the under-
taking. After two years the
agreement can be reviewed with
the possibility of permitting the
Japanese to use their own air-
craft on this route but the So-
viets are not committed to any
change at that time.
to be held. F_
Soviet sensitivity to for-
eign overflights of Eastern Si-
beria had bottled up negotiations
held off and on since 1958. With
the Soviet TU-114 turboprop trans-
port in service on the new route,
air travel time between Japan and
Moscow will probably be reduced
by four to five hours, and by
still more when the Soviet IL-62
jet transport becomes operational.
Further Soviet-Japanese negotia-
tions covering flight rights be-
yond Tokyo and Moscow are still
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WEEKLY SUMMARY 28 Jan 66
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SECRET
PEKING STEPS UP SUPPORT FOR INSURGENCY IN THAILAND
The Chinese appear to be in-
creasing their efforts aimed -at
promoting insurgency in Thailand,
and for the first time have pub-
licly linked the growth of Commu-
nist activity there with the war
in Vietnam. Peking is being cau-
tious, however, in moving ahead
with its long-range plans to sub-
vert the Thai Government. The
Chinese probably regard Thailand
as an area with considerable fu-
ture potential for actions aimed
at undermining the US presence in
Southeast Asia. Peking is anxious,
however, to avoid provoking vio-
lent US reaction by moving too
quickly.
Peking has recently intensi-
fied its propaganda offensive
against the Thai Government, and
the current Chinese line warns
that, if Thailand does not stop
aiding US military operations in
Vietnam, Bangkok will be pulled
down in the inevitable defeat of
the "imperialists." On 2 January
Liao Cheng-chih, a senior party
spokesman, openly related the up-
surge in antiregime activity to
continuation of the war in Vietnam.
Liao asserted that in 1966 the
"Thai Patriotic Front"--set up in
Peking a year earlier--together
with "other political parties of
Thailand" would "make even bigger
contributions to the struggle
against US imperialism and in de-
fense of peace in Indochina."
The current long-range Chi-
nese campaign apparently got under
way about 18 months ago. In Sep-
tember 1964 the Chinese established
a new school in Peking which pro-
vided instruction in the Thai lan-
guage. Two months later they set up
the "Thai Independence Movement" in
Peking. The Chinese followed this up
in January 1965 by sponsoring the
"Thai Patriotic Front" dedicated to
the overthrow of the Thanom govern-
ment and to the elimination of US
influence in Thailand. In 1965 the
Chinese are reported to have made
at least one substantial purchase
of Thai currency in Hong Kong.
f k
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Page 10 WEEKLY SUMMARY
,Cni.nams.
O Sanach
3O-ii Dnc.
~ ~ ~.OaT
{.. v+?Tew Gf'u OF
ni Nekton 0 PMro 0
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.--CAMBo
H0 Eak' Ponh
28 Jan 66
I/' i
tSaigon
O 00
25X1
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SECRET
THAI-CAMBODIAN BORDER TENSIONS CONTINUE
New flare-ups along the 400-
mile Thai-Cambodian border are
likely following last week's
clashes in the isolated Hat Lek
area on the Gulf of Siam.
Responsibility for initia-
tion of the fighting is not clear,
but it may have been precipitated
by an overly vigilant Cambodian
post anticipating an attack from
the Thai side of the border.
Both sides have brought up lim-
ited numbers of reinforcements
and small naval craft.
The scene of the fighting
has long been a trouble spot.
Tension in the area has been par-
ticularly high since late last
year, when Thai troops raided a
Cambodian outpost.
The disturbances are sympto-
matic of tension between the two
countries resulting from the
25X1 stye ped-up activity of
Khmer Serei dissidents.
25X1 significant new dissident at-
tacks have been reported since
the 30 December raid at 0 Smach.
The Cambodians are also 25X1
moving additional reinforcements
to border positions in the 0
Although statements emanat-
ing from Phnom Penh and Bangkok
are colored as always by rhetoric
which has characterized public
exchanges through the years,
there are some indications that
positions in the capitals may be
hardening. Sihanouk has publicly
indicated that Cambodian troops
will "retaliate" in the event of
future Thai "aggressions," and
there is some evidence that they
are already doing this. On the
Thai side, Foreign Minister Thanat
gave an unusual press conference
early this week in which he at-
tacked the Mansfield report's
treatment of Cambodia as too sym-
pathetic. He complained that the
report contained "veiled accusa-
tions" that Thailand and South Viet-
nam were violating Cambodian ter-
ritory
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SECRET
INDONESIAN STALEMATE CONTINUES
The Indonesian situation
remains essentially unchanged:
administration is largely para-
lyzed, maneuvering between Presi-
dent Sukarno and the army con-
tinues, and neither faction has
been successful in enlisting sig-
nificant foreign economic assist-
ance.
Sukarno has continued the
limited political offensive
which he began on 15 January. On
20 January--in their first show
of force since 1 October--left-
wing elements estimated to num-
ber 10,000 people staged a pro-
Sukarno demonstration as a coun-
ter to the anticabinet rallies
which the army had encouraged
the previous week. Sukarno told
the demonstrators and his assem-
bled cabinet that although he
was being pressed by "reaction-
aries" he would not retreat "even
one millimeter" until God and the
Indonesian people say he is no
longer wanted. He reiterated
his call for a "Sukarno front,"
which appears to offer an inci-
pient vehicle for the develop-
ment of a new political left.
The army is trying to con-
trol the front by ordering that
any individual or organization
that wants to join should regis-
ter this intention with KOTI,
the Supreme Operations Command,
through which the army functions
on nonmilitary matters. The army
permits the front to operate, how-
ever, except in West Java where
the local commander has prohibited
it. With the permission of the
Djakarta army commander, the
front hung anti-US banners in the
streets on 22 January. The ban-
ners were removed three days later
after the US Embassy had pro-
tested to both the Foreign Minis-
try and the military.
Army commander General Su-
harto has moved to strengthen his
control over the anti-Communist
and anticabinet Student Action
Command which staged large demon-
strations involving limited vio-
lence earlier this month. The
army apparently is concerned that
the students may take extremist
action that could be politically
damaging to the army and its
civilian supporters in the con-
tinued maneuvering with Sukarno.
Both Sukarno and the army
persevere in their approaches
to various foreign governments
for economic assistance. Both
factions find, however, that
significant aid is unlikely to
develop until a unified ad-
ministration is re-established
in Indonesia.
STIT (_"4R fa
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THE INDIAN CABINET
PORTFOLIO
Home Affairs
External Affairs
Defense
Railways
Food and Agriculture;
Community Development
Parliamentary Affairs;
Communications
Industry
Finance
Planning
Law
Transport; Aviation;
Shipping; Tourism
Commerce
Irrigation and Power
Education
Labor; Rehabilitation
MINISTER
* G. L. Nanda
* Swaran Singh
* Y. B. Chavan
+* S. K. Patil
C. Subramaniam
* D. Sanjivayya
S. N. Chaudhuri
Asoka Mehta
G. S. Pathak
N. Sanjiva Reddy
Manubhai Shah
Fakhruddin Ahmed
* M. C. Chagla
** Jagjivan Ram
shastri's cabinet
* Nshru's last cabinet
Earlis. Nehru cabinets
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_AW
Continuity appears to be
the watchword of the new Indian
Government as it prepares to
present its program to the next
session of Parliament, scheduled
to convene on 14 February. In-
dia's massive economic burdens
leave Prime Minister Gandhi lit-
tle recourse but to continue the
relatively practical approach
adopted by Shastri during the
past year.
Mrs. Gandhi has pulled to-
gether a cabinet that is little
changed from that of her predeces-
sor. Eleven of its 15 members
have previously held cabinet
posts, ten of them under Shastri
and nine under Nehru. Shastri's
most influential colleagues, De-
fense Minister Chavan and Agri-
culture Minister Subramaniam,
have retained their portfolios,
as have six other ministers.
An important addition to
the group is Asoka Mehta, the
deputy chairman of the govern-
ment's interdepartmental economic
planning commission, who has
been named minister of planning.
Mehta is ideologically in tune
with Mrs. Gandhi's socialist ap-
proach to national development,
but is not burdened with the
disruptive, doctrinaire rigidity
of leftist former finance minis-
ter T. T. Krishnamachari. Mehta's
ability to work harmoniously with
the present cabinet's more con-
servative Finance Minister Chaud-
huri, a recent Shastri appointee,
will be tested as the two put
together a 1966-67 budget for
presentation next month.
eration.
India's strained relations
with Pakistan have eased a bit
as both countries work toward
implementing the provisions of
the Shastri-Ayub Tashkent declara-
tion. On 22 January Pakistan's
army chief, General Musa, met in
New Delhi with General Chaudhuri,
his Indian counterpart, to discuss
mutual troop withdrawals from
positions occupied during last
year's India-Pakistan fighting.
They agreed to a preliminary
1;, 000-yard pullback by the end
of January and made plans to com-
plete the withdrawal by 25 Febru-
ary, the date specified in the
Tashkent declarations. UN ob-
server groups currently stationed
in Kashmir and the Punjab-Raja-
sthan area will oversee the op-
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The country has continued
generally calm, and General Iron-
si's new military regime appears
to be consolidating its position
and gaining greater confidence.
Major uncertainties about Nige-
ria's future remain, however, and
delayed tribal violence on a
large scale or a breakdown of
army discipline could still jeop-
ardize security.
Although planning still seems
to be mostly on a day-to-day ba-
sis, the frantic improvisations
of the period immediately follow-
ing the initiation of the coup
on 15 January by younger officers
have ended. Late last week
Ironsi, the regional military
governors he had named, and top
police leaders evidently agreed
on the basic outline of their
interim government. Subsequently
the formation of a Supreme Mili-
tary Council and a Federal Execu-
tive Council--both headed by
Ironsi and devoid of any civilian
members--was announced.
However, civil servants,
whom Ironsi had confirmed in their
positions along with the judici-
ary on assuming power, are play-
ing key roles in the new regime.
They appear to be keeping the
machinery of government function-
ing more or less smoothly both
in Lagos and in the regional
capitals. Over the longer run
serious difficulties are likely
to arise between these career
officials and the top military
leaders.
Thus so far the new leaders
seem to have little in the way
of a program. Domestically they
are committed only to the main-
tenance of law and order while
a new constitution is being pre-
pared. Foreign policy is to be
based on "nonalignment" and
"friendly relations with all,"
and foreign investors have been
reassured.
There continues to be no
visible opposition to the changes
and no reports of trouble from
the most likely initial source--
northern Muslim elements, civil-
ian or military. The new author-
ities have continued to be con-
cerned about this possibility,
especially last weekend when the
murder of respected former prime
minister Balewa was confirmed,
and have taken numerous steps
aimed at forestalling violence.
Statements by important tradi-
tional leaders urging calm and
support for the new government
have also helped. Moreover, it
now appears that the great major-
ity of Nigerians welcome the
avowed general objectives of the
new leaders--the eradication of
corruption and tribal-oriented
government.
For the immediate future,
much depends on Ironsi
and the advice he follows. Many 25X6
reports indicate he continues to
have difficulties with younger
officers who have their own ideas
of how the military government
should be run. Ironsi
will be strained
further as he becomes involved
in the details of reconstruction,
and especially in the development
of new power structures in the
now politically disorganized
Northern and Western Regions.
...7.(.'i GR L J[
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iow-
Europe
BEN BARKA AFFAIR STRAINS
The charges of high-level
French and Moroccan involvement
the abduction and presumed murder
in Paris of Moroccan leftist leader
Ben Barka have worsened relations
between the two countries and
created internal problems for each.
Both nations have recalled their
ambassadors but appear to be try-
ing to avoid a complete diplomatic
rupture.
French Foreign Ministry offi-
cials maintain that there is no in-
tention to cut off economic and
technical aid. The ostensibly pri-
vate three-day visit to Paris be-
ginning on 22 January of Moroccan
former foreign minister Guedira,
who has been used by King Hassan
in the past to smooth over diffi-
culties between the two countries,
probably signifies a desire by Has-
san to halt the deterioration of
relations.
In France, the government has
been forced to replace the head of
its external intelligence and coun-
terespionage service (SDECE) and to
shift the service from the premier's
office to the Armed Forces Ministry.
The changes probably were intended
to demonstrate that the government
was moving promptly and without re-
gard to the rank of the offending
parties. In addition, the moves
were a rebuke to the SDECE and a
means of exerting stricter control
over it.
Although the French press has
implicated cabinet-level officials
and at least one of De Gaulle's per-
sonal advisers, no official move
against these men has been apparent
thus far.
FRENCH-MOROCCAN RELATIONS
The political opposition, led
by defeated presidential candidate
Francois Mitterrand, has seized on
the issue to embarrass De Gaulle.
In addition to pressing for more in-
formation, De Gaulle's opponents
have called for a special session
of parliament in order to question
the government. Without signifi-
cant defections from the Gaullist
majority in the National Assembly,
however, it is doubtful that the
opposition can force a special ses-
sion.
The harshness of France's at-
tack on Moroccan officials is begin-
n:Lng to arouse Moroccan nationalism.
For instance, the traditionalist
Istiqlal press, normally critical
of Minister of Interior Oufkir and
no friend of Ben Barka, has taken
an anti-French rather than an anti-
Ou.fkir line. The semiofficial Mo-
roccan press agency is countering
French press criticisms and is hit-
ting hard on the seamier aspects of
French official involvement, imply-
ing that De Gaulle himself surely
was aware of his agents' activities.
The King has been at pains to
demonstrate publicly his solidarity
with Oufkir. At the same time,
there is some tentative evidence
that he is firming up his ties with
the army, preparing the ground to
remove Oufkir, if he has to do so.
Oufkir, however, controls all police
un:Lts and himself has good military
connections.
Although Hassan has stressed
Morocco's desire to maintain good
relations with France, he might
nonetheless move quickly to be the
first to break relations if he felt
De Gaulle was about to do so.
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Premier-designate Moro's
chances of forming a new center-
left government appear promising.
Nevertheless, hard bargaining
among his Christian Democrats
(CD) and between the coalition
parties could delay its forma-
tion for as much as a month or
so.
The outcome of coalition
negotiations on the composition
of the new cabinet, and priori-
ties for legislative measures
will depend largely on Moro's
ability to paper over factional
conflicts in his own party.
Moro's resignation on 21
January was triggered by CD
"snipers" who helped defeat a
government bill on the establish-
ment of state-run nursery schools.
The negative CD votes breached
agreement with the CD's coali-
tion partners on an important
element of the government's re-
form program, and concern over
CD disunity on this crucial is-
sue prompted Moro's governing
partners to ask for his resigna-
tion.
The key to resolution of the
CD's immediate internal difficul-
Lies may lie in satisfying the
demands of the Fanfan; faction
which, along with CD right-wing-
ers, apparently helped defeat the
school bill. Fanfani has called
for a major party and government
shake-up. He may seek at least
three ministerial posts for him-
self and his followers in the
new cabinet. The CD's coalition
partners have been critical of
Fanfani's recent actions, how-
ever, and the CD will also prob-
ably have to try to satisfy the
demands of all its other factions
for representation in the cabinet.
If Moro fails to form a new
government, President Saragat
might, as a last resort, appoint
a caretaker government and call
for new national elections within
six months. None of the coali-
tion parties wants elections now,
however, and key leaders of the
three lay parties favored Moro
to head a new government.
little li lih d that they will
respond. 25X1
The Italian Communist Party
(PCI), which is holding its
eleventh national party congress
(25-31 January) has stepped up
its attacks on the center-left
and has reiterated its appeal to
left-wing CDs and Socialists to
,join with it in forming a new
government majority. There is
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Despite rebel leader Caa-
mano's departure on 22 January,
the military chiefs, led by De-
fense Minister Rivera, are re-
fusing to accept new assignments
and this position appears to
have overwhelming backing among
the armed forces. The military
has indicated it will not move
against Garcia Godoy at the
present time and navy chief Jimi-
nez, who has been urging a mod-
erate line on the other chiefs,
the removal of some controversial
civilian officials by the provi-
sional regime.
The failure of the provi-
sional regime to pay the military
their regular salaries for Janu-
ary may be an attempt to bring
them into line. Considering the
patience he displayed in effect-
ing Caamano's exit, however, it
seems unlikely that Garcia Godoy
would follow such a course of
action if he felt it would pro-
voke a rash countermove by the
armed services.
The chiefs appear convinced
that the Inter-American Peace
Force (IAPF) would not move
against them, and Rivera is
claiming he has written guaran-
tees from the Brazilians and
Paraguayans to this effect. It
is more likely, however, that
the IAPF will follow whatever
orders are given it by the OAS
Committee. This latter group
would probably be willing to use
force to back Garcia Godoy, but
only after exhaustive attempts
at peaceful persuasion fail.
Despite the military's hard
line, there may be some flexi-
bility in its stand. Before
Caamano's departure, for example,
Rivera had indicated he would
probably accept the Washington
attache post if assured by Gar-
cia Godoy that the rebel chief-
tain would not be allowed to re-
turn until after the June elec-
tions. Other concessions that
might appeal to the military are
a guarantee that no other com-
mand changes will be made and
Even if the impasse over.de-
parture of the military leaders
is resolved peacefully, there may
be some unpleasant by-products
such as an increase in anti-Amer-
icanism among military officers.
They are upset by continued US
support of the provisional regime
--which they see as leftist or-
iented at best.
Caamano departed with little
fanfare after receiving guaran-
tees as to the security of his
men from the OAS Committee. The
extent to which Garcia Godoy gave
the rebel leader concessions in
order to get him to leave is not
clear, but he may have made prom-
ises regarding integration of
rebel military into the armed
services that could be difficult
to keep. In any event, Caamano's
departure removes a constant ir-
ritant to the regulars and will 25X1
reduce the chance of renewed
fighting between the two hostile
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The senate's censure of Jus-
tice Minister Paniagua on 19 Jan-
uary did not provoke a major cabi-
net crisis, but it put a further
strain on executive-legislative re-
lations. Events surrounding the
censure, which forced Paniagua's
resignation, also pointed up grow-
ing difficulties in the alliance
between the Christain Democratic
Party (PDC) and President Belaunde's
Popular Action.
Paniagua's censure was one of
the most blatantly political anti-
administration moves to date by the
coalition of the moderate leftist
APRA and the moderate rightist Na-
tional Odrista Union (UND), which
controls both congressional houses.
The coalition attack was set in
motion, however, by the intemperate
behavior of Senator Hector Cornejo,
a PDC leader. Reacting angrily to
the irresponsible conduct of all
involved, President Belaunde gave
serious consideration to forming a
military cabinet. Cooler judg-
ment led him to appoint able PDC
deputy Roberto Ramirez del Villar
to the justice post. The naming
of Ramirez clearly reflects Be-
launde's irritation with Cornejo,
as the two men represent rival fac-
tions in the PDC.
The administration's relations
with Congress may become still
worse. APRA-UNO reportedly now is
considering censure of the minis-
25X1
The military junta, which
earlier had announced its plan to
restore constitutional government
in 1966 through presidential elec-
tions to be held on 5 June, has
now announced that congressional
elections will be held simultane-
ously.
This major concession to the
politicians was made on the advice
of several former presidents and
as a result of pressure from the
armed forces. Now afforded an op-
portunity to win remunerative seats
in the traditionally corrupt leg-
islature, second-echelon politi-
cians probably will be less inter-
ested in pressing demands for a
constituent assembly and an interim
president--earlier sought by most
politicians to strengthen their po-
sition during the transition period.
Some reduction in the size of
Congress may be decreed. As yet
the junta has reportedly made no
decision concerning a time for mu-
nicipal elections. Registration
of voters has progressed and, if
the political parties now turn
their attention to constructive ac-
tivity, the transition to civilian
rule should develop reasonably well.
Thus far, however, no figure of
stature has been put forward as a
presidential nominee, nor have the
parties begun adequate preparations
for the campaign.
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28 January 1966
OCI No. 0274[66A
DISARMAMENT NEGOTIATIONS RESUME IN GENEVA
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DISARMAMENT NEGOTIATIONS RESUME IN GENEVA
Disarmament talks resumed this week in Geneva
in the Eighteen Nation Disarmament Committee (ENDC).
Since the first talks in March; 1962, ENDC sessions
have run for a period of about three months between
recesses. Despite the lengthy consideration of dis-
armament issues by the UN General Assembly at its
20th session, and in other forums, nonaligned ENDC
delegates are eager to get back to Geneva. Never-
theless, there is no evidence of any significant
shift in the positions of the key nations, and the
outlook for progress presumably is further dimmed by
the war in Vietnam. Any advances seem likely to be
limited to a further sorting out of some of the is-
sues involved in a nuclear nonproliferation agree-
ment, a comprehensive'test ban treaty, a treaty ban-
ning underground testing above a certain threshhold,
and the creation of nuclear-free zones. Exploratory
talks for a world disarmament conference may also
disclose some of the problems involved in associat-
ing Peking with any disarmament talks.
Background
The present negotiations
stem from the sessions of the
United Nations Disarmament Com-
mission (UNDC), which was sud-
denly convened by the USSR last
spring for the obvious purpose
of providing a forum for attacks
on the policies of the United
States in Vietnam, the Dominican
Republic, and the Congo. The
USSR was joined by some of the
Afro-Asian nations in linking
disarmament with US aggression--
countries such as Algeria, Guinea,
Mali, and Jordan expounded on the
evils of colonialism and criti-
cized US "intervention all over
the world." When the debate did
focus on disarmament, most of
the serious speeches dealt with
the need to draw up a nonprolif-
eration agreement, but little
was accomplished. Even so, the
Western powers expressed hope
that the ENDC would be convened
later in the summer.
The USSR unexpectedly agreed,
and the ENDC met in August. Af-
ter an initial round of Soviet
propaganda, the discussion was
for the most part constructive,
dealing with a number of collat-
eral arms-control measures rather
than general and complete dis-
armament. Attempts to work out
terms of a nonproliferation treaty
were overshadowed, however, by
differences among the Western Al-
lies over its implications for
nuclear sharing in NATO, and the
meetings were cut short by the
opening of the 20th Assembly of
the United Nations.
The assembly inherited the
issues left over from both the
UNDC and the ENDC sessions. Five
disarmament resolutions were de-
bated and approved by the First,
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Committee (Political and Se-
curity Committee) and were then
passed overwhelmingly in the
assembly since none of them in-
volved substantive agreements.
However, the heavy majorities
chalked up by the assembly res-
olutions and the increased ini-
tiative shown by the nonaligned
members seem to have imparted a
sense of urgency to the resump-
tion of the talks in Geneva.
Nonproliferation
At the head of the ENDC's
agenda will be the halting of
the spread of nuclear weapons.
With Peking's detonation of a
nuclear device in October 1964
and a ten- or twenty-nation nu-
clear world becoming a foresee-
able possibility, all the mem-
bers consider nuclear prolifera-
tion the most vital problem fac-
ing the committee. But there
agreement stops.
At'the UNDC meetings last
spring, the discussion of non-
proliferation began on the basis
of a 1961 Irish proposal that
nuclear states undertake to re-
tain absolute control of their
nuclear weapons and not to give
nonnuclear states control of
such weapons or power to decide
when they would be used. The
question was soon broadened,
however, by the vigorous in-
sistence of India and other non-
aligned countries on the need
for UN or other safeguards for
the security of the nonnuclear
states against nuclear black-
mail. The Indians and others
also insisted that nonprolif-
eration proposals be integrated
with other disarmament measures,
such as a comprehensive test
ban, a complete freeze of the
production of nuclear weapons
and means of delivery, and the
reduction of stockpiles of such
weapons.
When the nonproliferation
issue was later taken up at the
ENDC, serious consideration was
delayed by the well-publicized
differences among the Western
Allies over the terms of a draft
treaty. A draft prepared by
Britain prior to the opening of
the ENDC caused West Germany
in particular to object that the
language would impede the sub-
sequent organization of a NATO
nuclear force. Although the
British reluctantly agreed not
to present their proposals un-
til there had been sufficient
Allied consultation and consented
to the substitution of a last-
minute alternative Allied draft,
they nevertheless felt prodded
by domestic politics to state
their reservations to any treaty
leaving open the possible emer-
gence of a European-controlled
nuclear force.
In the ensuing discussion,
the Soviet Union stated that
the Allied draft could not serve
as a basis for negotiations be-
cause any treaty which permitted
the creation of a NATO nuclear
force was unacceptable. The
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nonaligned for their part gen-
erally welcomed the Western draft
since it was the first time that
specific terms had been proposed.
However, Brazil, India, Sweden,
the UAR, and Nigeria urged that
"both facets of proliferation"
--an increase in nuclear arsenals
and the spread of nuclear weapons
to other countries--must be dealt
with together. The final memoran-
dum of the nonaligned, however,
attempted to compromise between
the two positions by stating that
measures to halt the prolifera-
tion of weapons should "be coupled
with or followed by" tangible
steps to halt the nuclear arms
race and to reduce nuclear weap-
ons stocks and means of delivery.
A few days after the con-
vening of the 20th General Assem-
bly, the USSR offered its version
of an "appropriate" nonprolif-
eration treaty--one which would
prohibit any granting of the
right to participate in the own-
ership, disposition, or use of
nuclear weapons to nonnuclear
states directly or indirectly via
third states or groups of states.
After lengthy debates--which the
Soviets put to good use by at-
tacking NATO nuclear sharing as
well as the nuclear aspirations
of West Germany--a compromise be-
tween the Soviet and US draft res-
olutions was worked out by the
nonaligned members of the ENDC.
Passed by the assembly without a
negative vote, the resolution
recommended the earliest possible
resumption of ENDC negotiations
on a treaty containing "no loop-
holes" that might permit non-
nuclear states to gain access
-to nuclear weapons.
The prominence which West-
ern reporting during the past
year has given to the urgency
of the proliferation problem is
undoubtedly a factor in the
Soviet Union's ready agreement
to continue discussions in
Geneva. It probably hopes
that sufficient pressure for a
nonproliferation agreement
will be generated to cause the
Western Allies to lose interest
.in any kind of MLF for good,
and it may even be that this
is Moscow's sole objective.
The forthcoming talks, how-
ever, will permit further
probing of possibilities for a
compromise between the major
powers. Particularly, they
may clarify what the USSR has
kept obscure: the degree of
nuclear sharing Moscow would
accept and still sign a non-
dissemination agreement. In
any case, many on the ENDC
seem to feel this may be the
last year to work out some sort
of agreement. Certain states
such as India and Israel may
acquire nuclear weapons, and
several other nations such as
Sweden, Japan, West Germany,
UAR, Pakistan, and South Af-
rica may be motivated to develop
nuclear weapons.
Comprehensive Test Ban Treaty
Among the more important
goals of the nonaligned members
of the ENDC are. obtaining general
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adherence to the limited test
ban treaty of 1963 and extend-
ing that treaty to ban all test-
ing. The Chinese detonations
and the prospect of additional
tests by both Communist China
and France have given added
impetus to the first, and the
belief in some quarters that
there has been improvement in
detection and identification
systems for seismic disturbances
has encouraged optimism regard-
ing the second. The US on the
other hand believes that, while
there have been improvements in
detection capabilities, there
have been no substantial improve-
ments in identification capabil-
ities.
Although support for a com-
prehensive test ban treaty is
widespread among Western as well
as Afro-Asian powers, the chief
stumbling block remains the op-
position of the Communist nations
to any type of on-site inspec-
tion. At the UNDC sessions last
spring attempts were made to
work out a compromise. The UK,
in indicating its support for
such a comprehensive treaty,
said that--with the advancement
in means of detection--there
was a need for a smaller number
of on-site inspections. Sweden,
after calling on the nuclear
club to halt all testing, pro-
posed that there be a continuous
flow of data from national ob-
servation systems evaluated by
disinterested scientists who
would be a part of a "detection
club" of nonnuclear powers.
Sweden also introduced a resolu-
tion urging all states to adhere
to the partial test ban treaty
and requesting that the ENDC give
priority to extending that treaty
to underground tests.
At the ENDC sessions the
Western members continued to
stress the importance of extend-
ing the limited treaty to banning
underground tests. The US and
UK argued that the results ex-
pected from a world-wide net-
work of large-aperture seismic
arrays (LASA) would make it pos-
sible to determine the nature of
a greater proportion of seismic
disturbances, but that on-site
inspections would still be neces-
sary because some 20 percent of
underground events above a few
kilotons could still not be iden-
tified as to type by seismological
means. The LASA system is still
undergoing evaluation in the
West and until such evaluation
is complete, its ultimate effec-
tiveness cannot be determined.
The Brazilian delegate then sug-
gested that the present ban be
extended to cover tests above a
threshold of seismic magnitude
of 4.75 on the Richter Scale--
which he felt could be detected
by national means--but did not
call for a moratorium on smaller
tests.
Pressing hard for an agree-
ment, the nonaligned members
maintained that the nuclear powers
must be willing to take some
risks in order to conclude a com-
prehensive test ban. In a joint
memorandum they called for an
immediate suspension of all nu-
clear weapons tests and noted that
a comprehensive test ban agree-
ment would be facilitated by the
exchange of scientific informa-
tion between nuclear powers or
by the improvement of detection
systems if necessary. The Soviet
delegate, however, continued to
maintain that national means of
detection would be sufficient,
and announced that Moscow would
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accept a UAR proposal which in lened the need for on-site inspec-
essence endorses the Soviet call
for an unverified ban on all
underground testing.
In the General Assembly,
the eight nonaligned members
of the ENDC again carried the
ball, introducing a resolution
which urges'that all nuclear
weapons tests be suspended, that
all countries respect the lim-
ited test ban treaty, and that
the ENDC continue with a sense
of urgency to work on a compre-
hensive test ban--taking into
account advancement in the pos-
sibilities for international
cooperation in the field of
seismic detection.
This resolution was later
changed so that it no longer
called for the immediate suspen-
sion of nuclear tests, but urged
instead a permanent cessation
of all nuclear testing as soon
as possible, with the implica-
tion the ban would be subject
to a verification agreement.
The resolution stated that im-
proved seismic detection possi-
bilities should be considered
in reaching a comprehensive test
ban treaty and thus be a con-
dition for suspension of nuclear
testing.
Moscow objected to this
latter part of the resolution
and its acceptance by the General
Assembly could be considered a
defeat for the Soviet Union.
However, if the negotiations on
a nonproliferation agreement bog
down in the current talks, the
eagerness of the eight for some
alternative progress may lead
them to accept the view that de-
tection advancements have less-
The past year has seen a
sharp increase in interest in
a world disarmament conference.
This idea was advanced in 1961
when Ethiopia proposed a world
conference to outlaw the use of
nuclear weapons, and a resolution
to this effect was passed by the
General Assembly over the oppo-
sition of the Western powers.
A Soviet resolution calling for
the implementation of the resolu-
tion at an early date did not
come to a vote, however,
At the UN Disarmament Com-
mission meetings last spring, the
Yugoslav call for a world confer-
ence received overwhelming sup-
port from the nonaligned nations,
probably because of the lack of
progress on disarmament and their
desire to include the Chinese
Communists as well as the French
in any negotiations. In adopting
the resolution, the commission
recommended that the General As-
sembly urgently consider the pro-
posal, and at the Geneva talks
in August, the idea was again
briefly mentioned when Burma sug-
gested that the major powers must
take the initiative on the matter.
In the 20th General Assembly,
the Afro-Asians led the campaign
for UN approval despite opposition
from the Western powers who pointed
out the dangers, problems, risks,
and lack of promise involved. A
group of 43 nonaligned nations led
by Yugoslavia and the UAR intro-
duced a resolution calling for
a conference no later than 1967
to which all countries would be
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invited and suggesting consulta-
tions to establish a representa-
tive preparatory committee.
Saudi Arabia proposed that a
small group explore whether
there was in fact a constructive
basis for a conference. In De-
cember such a group met to dis-
cuss plans but made no decisions.
Since then the Western pow-
ers have been informally confer-
ring on the best way to handle
the matter. A world conference
would raise many knotty problems,
such as the attendance of divided
states and their willingness to
sit down together at the same
table. It remains uncertain
whether Chinawould attend. Dur-
ing the assembly discussions
Peking stated publicly that it
would not attend but some Commu-
nist delegations believe this
is not Peking's final word and
that if the conference were com-
pletely divorced from UN auspices
the Chinese would come. In any
case soundings will be taken
to see if the Chinese will par-
ticipate in an exploratory group.
If the conference is ever
convened, many Western powers
and especially ENDC members ex-
pect it will result in no more
than another round of propaganda
attacks between the East and the
West, and in the process will
undermine the ENDC. Alternative
suggestions which have been made
are the French proposal for a
conference of the nuclear powers,
and the Nigerian suggestion that
all "powerful" nations meet.
However, the nonaligned have set
high hopes on the larger arena and
are unlikely to give up the idea
unless Peking categorically re-
fuses to attend.
Other disarmament issues
discussed during the past year
may come up in Geneva, but none
is likely to receive much atten-
tion. An Italian proposal that
each nonnuclear state should uni-
laterally eschew acquisition of
nuclear weapons for a specified
period of time is an alternative
should a nonproliferation treaty
not materialize. However, the
nonaligned countries are increas-
ingly reluctant to relinquish
any chance of obtaining nuclear
weapons unless there is a pros-
pect of general and complete
disarmament. India has main-
tained that security assurances
must be given the nonnuclear
states, but its delegation made
no effort to obtain an endorse-
ment of joint nuclear guarantees
during the disarmament discussion
in the General Assembly.
The concept of nuclear-free
zones is a popular one among some
of the Latin American countries
and in the Middle East. Western
powers support such zones for
Latin America and the Middle
East, provided the balance of
military power is not disrupted
and the transit of ships carry-
ing nuclear weapons is not banned.
The Communist proposal for a nu-
clear-free zone in Central Eu-
rope has met with reservations
on the part of some of the West-
ern powers. Czechoslovakia and
Mongolia propose that the two
Germanies renounce the use of
nuclear weapons.. In the 20th
General Assembly, an African-
backed resolution was passed
which calls on all states to re-
spect the continent of Africa
as a nuclear-free zone. This
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may encourage a new initiative
by supporters of the Latin Ameri-
can nuclear-free zone.
Still other items to be
considered are the Western pro-
posals for a freeze on the num-
ber of strategic nuclear vehicles
and a cutoff on the production
of fissionable materials for
weapons use. These were dis-
cussed at the UNDC, but have re-
ceived only limited attention
since then. The UK delegate
suggested that these proposals
might be linked to an agreement
to destroy a specified number
of delivery vehicles in order
to bring existing nuclear weap-
ons down to "lower, safer, and
less costly levels."
The Soviet bloc has taken
the line that both proposals
are useless and would in effect
increase the danger of nuclear
war, since the US has vast stock-
piles of nuclear materials which
it would use to produce weapons
for a long time. The bloc also
opposes a freeze on delivery
vehicles because the US would
still have a considerable stock-
pile of warheads.
Another Western item will
be a proposal that developing
countries limit competition in
nonnuclear arms by entering re-
gional arrangements to refrain
from acquiring certain sophisti-
cated military equipment. Im-
plementation of these arrange-
ments would be properly veri-
fied in order that a military
balance be maintained.
The Soviets seem likely to
bring forth such old chestnuts
as the resolution they intro-
duced at the UNDC calling for
the withdrawal of troops on
foreign soil and the liquidation
of foreign military bases. In
the same forum, the Soviets pro-
posed a special conference in
1966 for the purpose of "banning"
nuclear weapons to be preceded
by a declaration by each nuclear
state that it will not be the
first to use nuclear weapons.
Support for such measures has
been limited to the Communist
satellites plus states such
as Nigeria, the UAR, Cambodia,
Iraq, Mali, and Chile, which
want foreign bases liquidated.
However, the Soviets may have
received a certain boost from
the General Assembly's approval
last fall of a resolution con-
demning the existence of mili-
tary bases in small territories.
Another Soviet idea is the
reduction of military budgets--
an approach supported by many
of the less-developed countries
which propose that the result-
ing savings be used for their
economic aid. Brazil has pro-
posed at least a 20-percent re-
duction, a figure supported by
Italy, India, Jordan, Haiti, and
many of the African countries.
The Soviets may play up this pro-
posal again by tying it in to in-
creased US expenditures in Viet-
nam. The Soviets are likely to
include chemical warfare on the
agenda as a means to attack US
actions in Vietnam.
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Finally, the Soviet "nu-
clear umbrella" proposal may
be raised once more. It calls
for the elimination of all nu-
clear delivery vehicles and war-
heads at the outset of general
and complete disarmament with
the exception of a limited num-
ber retained in the Soviet Un-
ion and the United States. The
West opposed this proposal be-
cause of its lack of balance and
realism as to timing and veri-
fication.
Any significant break-
through in Geneva appears doubt-
ful, despite the enthusiasm
for it in many quarters, the
growing understanding of the
problems involved, and the in-
genuity which has been demon-
strated in advancing possible
compromises. Against the tense
background of the Vietnam war,
many would consider even the
agreement to resume talks an
accomplishment. Whether Moscow
still wants to keep a door open
to the West, whether it sees
opportunities to advance its
influence with the nonaligned
countries, whether it feels it
could not afford to stay away,
or all of these, is difficult
to say. However, it may be
expected that the Soviets will
have much to say on Vietnam
before any meaningful discus-
sions are begun.
At this session the non-
aligned are likely to have a
more significant and influential
role. In the last UN session,
it was the Afro-Asians, often
supported by the Soviet bloc,
who passed proposals over West-
ern opposition. The resolution
on military bases in small ter-
ritories is an example. A
stalemate on a nonproliferation
treaty may be expected in Ge-
neva, and the resulting frustra-
tion is likely to cause the
eight nonaligned to put pressure
on the major powers for other
measures such as a comprehensive
test ban treaty. If the ENDC
fails to come forth with sub-
stantial progress, its prestige
as a disarmament forum will un-
doubtedly be damaged and in-
terest will probably shift to
preparations for a world dis-
armament conference.
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 SCIENCE AND TECHNOLOGY IN COMMUNIST CHINA
CENTRAL INTELLIGENCE: AGENCY
FFICE OF CURRENT INTELLIGENCE
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SCIENCE AND TECHNOLOGY IN COMMUNIST CHINA*
Communist China lags far behind the more ad-
vanced nations of the world in major areas of science
and technology. Peking's leaders want to narrow
this gap, and are making energetic efforts to pro-
vide research facilities and manpower to support
their ambitious development plans. A major share
of all scientific and technical resources appears
to be allocated in direct or indirect support of
advanced and conventional weapons programs. This
concentration is believed to be retarding seriously
the growth of a strong technical base for the
broader needs of the economy.
Chinese weapons develop-
ment. programs are based almost
entirely on technology made
available by the USSR before
aid was abruptly terminated in
1960. The Chinese are also
looking ahead and trying to de-
velop follow-on models to avail-
able Soviet designs for weapons
systems. The status of such in-
dependent work is unknown, how-
ever. It is possible that the
current emphasis on applying
available technology is taking
place at the expense of basic
developmental research needed
to achieve long-run objectives.
While the level of indus-
trial technology in China varies
sharply between sectors, on the
whole it is very backward and
in most industrial fields prog-
ress has been slow since 1960.
Significant successes have been
achieved in the field of advanced
weapons, however. By shrewd
allocation of scarce human re-
sources and with the benefit of
substantial past Soviet aid, the
Chinese have been able to explode
nuclear devices, undertake a
diversified missile program,
and embark on other military re-
search and development programs
of some significance.
Major Problems
China's key weakness is
the shortage of well-trained
scientists in the middle and
upper brackets of competence.
The regime could assemble a
team of researchers competent
to make progress toward almost
any single objective, but only
at the expense of other proj-
ects.
For the lower level of tech-
nical services, a good supply of
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technicians and narrowly trained
engineers is available. In 1965
China had some 846,000 living
graduates in scientific and tech-
nical fields, including 476,000
engineering specialists (see
chart). The large number of
graduates is not, however, a good
indicator of China's scientific
capabilities. Much of the train-
ing has been of low standard.
Only 10,000 or so have received
any training at the graduate
level and of these only some
3,000 scientists have had for-
mal training to the Ph.D. level,
mostly in the United States, Eu-
rope, or the USSR.
The first formal programs
offering four-year Ph.D.-level
training were established in the
universities and in the Academy
of Sciences in 1956. Current
total enrollment in such programs
is not known but may be on the
order of 2,500.
Another conspicuous weak-
ness is the shortage of research
apparatus, test equipment, ma-
chine tools, and various tech-
nological materials that require
sophisticated processing. China
has been turning increasingly to
nonbloc countries for scientific
equipment. From such countries
as France, the UK, Japan, and
Switzerland, China has been ob-
taining technical data designs
and prototypes of reliable equip-
ment, new instrumentation, unique
apparatus, and critical raw ma-
terials.
Chinese scientific research
work is primarily applied and is
concerned almost wholly with ur-
gent practical problems. Informa-
tion on most foreign research and
development accomplishments, both
basic and applied, is readily
available in scientific and en-
gineering journals, which the
Chinese monitor and exploit
routinely. Peking is reluctant
to tie up its limited scientific
manpower in extensive basic re-
search.
Organization of Research
Scientific research in Com-
munist China is being conducted
under a broad ten-year plan
(1963-72). The plan was drawn
up in 1961-62 with the aim of fill-
ing the gap left by the Soviet
withdrawal of aid in 1960. Chi-
nese determination to work out
a plan at a time when economic
dislocations made long-term eco-
nomic planning extremely diffi-
cult points up the high priority
assigned to scientific research.
Under party supervision,
the Chinese Government plans and
supervises scientific and tech-
nological affairs through the
State Scientific and Technologi-
cal Commission, a senior body in
the State Council (see chart).
The commission has possibly 40
or more divisions which handle
particular substantive scientific
and technological fields and per-
form or manage supporting services.
The commission is believed to have
a defense technology division for
incorporating military problems
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Cumulative Scientific and Technological Graduates by Field
of Specialization for Selected Years in Communist China
Other than 'Scientific & Technological
Natural Sciences
Agriculture
Health
Engineering
1950 1960
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into the national planning of
research and development. There
is close coordination within the
party of military and scientific
affairs. The chairman of the
State Scientific and Technical
Commission, Nieh Jung-chen, is
concurrently a vice chairman of
the party's key Military Affairs
Committee and was a marshal be-
fore the abolition of military
ranks in June 1965.
The actual execution of re-
search and development is carried
out principally by the Chinese
Academy of Sciences and by the
research organs of the various
technical ministries. The minis-
tries operate central research
academies with subordinate re-
search institutes, and have juris-
diction over additional research
facilities attached to industrial
plants.
The Chinese Communist Party
is dominant in scientific life.
Reliable party members are pres-
ent in each scientific unit.
Top authority rests with a party
man, who is not necessarily the
formal head of the unit. The
party not only supervises tech-
nical work of scientists but
also devotes much effort in an
attempt to try to improve their
political attitudes. Scientists
are repeatedly told that it is
important to be "red" as well as
"expert," and that this goal can
be achieved only by spending much
time studying the works of Mao
Tse-tung and applying his "think-
ing" in their research work. To
what degree political demands of
this sort will impede scientific
research will depend on the extent
to which scientists are allowed
to do their own work without in-
terference while merely giving
lip service to political shib-
boleths.
Major Fields of Research
Physics: Capabilities in
physics are sufficiently well
developed to provide for normal
scientific growth and for gen-
eral support of economic and
military needs. The Chinese
have made limited achievements
in low-energy nuclear physics,
but accelerators available for
research are few in number and
variety. High-energy physics
in China is confined largely to
theoretical aspects because of
a shortage of experimental fa-
cilities. About 50 scientists
were being trained in this field
at Dubna in the USSR before they
were pulled out in June 1965.
Mathematics: Chinese mathe-
maticians are competent and ac-
tive. Their work follows the
lead of foreign mathematicians
and most of it deals with appli-
cations in the areas of compu-
ters, automatic control, statis-
tics, operations research, and
linear programing.
Native competence in com-
puter technology is growing, but
China will remain behind the West
for many years. An increasing
number of special-purpose analog
computers and fairly high-speed
digital computers are becoming
available but their supply is
limited and strict allocation of
computer time is required to solve
priority economic and military
problems.
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V40
Military Affairs
Committee
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Politburo of the
Central Committer
of the Communist Party
Pory1
State Planning
Commission
State Scientific and
Technological Commission
State
Oceanographic
Bureau
Coordinolion
Divisions
Advisory
Committee
Science Section of
Propaganda Department
Chinese Scientific and
Technical Association
Provincial Scientific and
Technical Committees
----T--------1--T-----------------
1 t t
t 1 1
I
Ministry of
Chinese Academ
Ministry of Ministry of Other
Ministry of
y of Sciences Higher
Public National Technical
Ministries of
Agriculture
Education
Health Defense Ministries
Machine Building
China Universities
First - Civil Industrial
Universities Committee for
of Science and
Committee for
National Defense
Committees on
Equipment
and Colleges Agricultural
Technology Research
Medical
Research
Science Committee
Research
(Probable)
Second - Nuclear Energy
Third - Aircraft
Fourth - Electronics
Research
Academy of
Fifth - Weapons and Vehicles
Military Sciences
Central Research
IArtilery, armored
Academies and
vehicles, and
Institutes
possibly missiles)
Academy of
Sixth - Naval and Civil
Military Medical
Marine Engineering
Earth Sciences
Research
Research
Sciences
Laboratoles
Seventh - Possibly Missiles
Technical Sciences
Departments
Departments
of Plants and
Eighth - Agricultural
Philosophy and
and Institutes
and Institutes
Factories
Machinery
Peking
China
Specialized
University of
Medical
Technical Schools
Agriculture
College
and Colleges
State Economic
Commission
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Electronics: China is con-
ducting a wide range of research
and developmental activities
in electronics. Progress is
hampered, however, by deficien-
cies in other industries, not-
ably precision instruments,
metallurgy, and chemicals.
Work on lasers is handicapped
by lack of suitable high-qual-
ity crystals. Although many
types of germanium transistors
are being produced, China lags
considerably in industrial-
scale techniques for refining
germanium and silicon.
Chemistry: Some good work
in inorganic chemistry is con-
ducted by the Chinese, particu-
larly on the methods of anal-
ysis, and separation and prep-
aration of pure materials, es-
pecially for applications in
the fields of electronics and
nuclear energy. Chinese or-
ganic chemistry research is
far behind that of the West.
A major program on high polymers
has been initiated, yet work-
ers are capable of only a small
amount of high-quality basic
research. In the field of
pharmaceutical chemistry, some
very good original work has
been done, resulting in some
success in producing drugs for
export.
Metallurgy: China's metal-
lurgical research program is
expanding and China now pro-
duces a limited variety of al-
loy steels, including ordinary
grades of stainless steel, high-
speed tool steels, and some
spring steels. Corrosion-re-
sistant steels for use in fer-
tilizer plants have been de-
veloped. A limited capability-
for producing high-temperature
metals used in jet aircraft en-
gines and missiles may be develop-
ing. Aluminum and magnesium
technology is adequate and a
modest research activity has
been reported.
Geophysics: Meteorology is
probably the most active geo-
physical science in China. Con-
siderable work to improve weather
forecasting and equipment has
been accomplished and further
work is planned. Geodesy cap-
abilities are adequate for sup-
plying geodetic parameters for
an IRBM range but not for an
over-water ICBM range.
Military Applications
Military technology in China
places considerable emphasis on
the manufacture of duplicates
and modifications of foreign
equipment of proven capability,
especially Soviet guided missiles,
aircraft, naval weapons, and
electronics.
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Despite their urgent need
of missile equipment for air
defense, the Chinese are prob-
ably still several years away
from achieving widespread de-
ployment of surface-to-air mis-
siles. It has been expected for
some time that the Chinese would
equip at least some of their
fighters with air-to-air mis-
siles similar to the US Side-
winder or the Soviet AA-2 (Atoll).
There is, however, no firm in-
formation that China has been
able to develop these missiles,
either.
Missiles: China has had
an active uided missile program
since about 1958. With Soviet
assistance,*the Chinese con-
structed a missile test range-
head at Shuang-cheng-tzu with
a potential range of 1,100
miles, and a rocket engine test
center at Chang-hsien-tien. With
Soviet help, the Chinese also
established a small test range
and associated facilities for
its coastal defense variant of
the Kennel air-to-surface mis-
sile at Lien-shan on the Gulf
of Liaotung.
Page 8
Aircraft: The Chinese have
extensive design information on
Soviet combat aircraft of pre-
1960 vintage, and they have a
number of aircraft factories sup-
plied in whole or in the part
by the Soviets before 1960. The
Chinese are working hard to com-
plete some of the old Soviet pro-
grams. They probably will be
producing an advanced fighter
aircraft such as the MIG-21
(Fishbed) soon, and a larger
aircraft, possibly the TU-16
Badger subsonic jet medium bomber,
in two to three years. Inde-
pendent aeronautical research
has been limited. The Chinese
have a research establishment
consisting of a medium-size,
continuous-flow subsonic wind
tunnel and a supersonic gas dy-
namics facility with a capabil-
ity estimated to. be Mach 5_
Nevertheless it is unlikely that
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the Chinese will be able to pro-
duce a native-designed combat
aircraft in the next few years.
Naval Ships: Chinese naval
research capabilities have been
limited largely to copying So-
viet-designed navy ships, in-
cluding W-, R-, and G-class sub-
marines, Riga-class destroyers,
and Osa- and Komar-class fast
patrol boats. Nevertheless, the
Chinese now have the capability
for independent development of
minor surface warships and are
building a new large ship model
testing complex which will con-
siderably improve their capabil-
ities. According to an article
published in a Chinese tech-
nical journal in 1965, experi-
mental work has been under way
which could lead to development
of a high-speed submarine. The
model being tested had a hull
profile similar to the USS Barbel
or the nuclear-powered UM S iip-
jack .
The Chinese have acquired
Soviet designs for several types
of marine steam turbine and ma-
rine diesel engines. There has
been evidence of a Chinese in-
terest in nuclear ship propul-
sion since 1957. They have been
actively studying nuclear propul-
sion systems and in 1960 Premier
Chou En-lai stated that China
would have a nuclear submarine
within five years, a prediction
presumably made in the expecta-
tion of substantial Soviet as-
sistance. Probably little if
any assistance was actually given,
however.
If the Chinese wish to de-
velop a significant naval threat
to the United States they would
probably consider the nuclear
powered submarine a highly at-
tractive objective. Any con-
ventionally powered submarine
capable of reaching the US un-
refueled would be large and slow
and would be vulnerable to de-
tection both in transit and on
station.
Military Electronics: Most
work in this field has involved
adaptation of Western, Soviet
bloc, and Japanese equipment to
domestic production. The Chi-
nese have limited design capa-
bilities, however, and have pro-
duced three or four versions of
native VHF early-warning radars
and one native radar, the Cross
Slot, operating in the micro-
wave frequency range. In addi-
tion, they have produced versions
of Soviet radars, the Rock Cake
height finder and probably the
Fire Can AAA control radar. Evi-
dence of Chinese limitations is
their apparent inability to pro-
duce a surface-to-air missile
control radar. They obtained
perhaps as many as ten Fan Song
S-band radars from the Soviets
before mid-1960. They prob-
ably have been trying either to
copy this or design a simpler
native system, but there is no
firm evidence that they have
been successful in either course.
Industrial Applications
Although there are sharp
differences among sectors, the
general level of industrial
technology in China is far be-
hind that of the United States,
the USSR, Western Europe, and
Japan. China has adequate
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technology within some basic in-
dustries, such as steel, coal,
electric power, and aluminum,
but even in these industries
technical assistance from abroad
is required to keep up with ad-
vances in products, equipment,
and production techniques. In
more complex fields such as pre-
cision instrumentation, petro-
chemicals, chemical fibers, and
chemical fertilizers, China is
heavily dependent on imported
equipment as well as knowledge.
The backwardness of technology
is not a great hindrance in some
sectors, such as construction
and transportation, because
simple techniques can fill most
needs.
Automation in the Western
sense does not exist in most
industries. An exception is the
highly modernized electronics
industry, which uses such equip-
ment to produce electronic tubes
and several other electronic
components.
During the next few years
technological progress in in-
dustry is not likely to speed
up from its present slow pace
unless China receives large-
scale technical assistance
from abroad. Defiance from
the USSR has deprived China of
a major source of assistance,
and its suspicious, intransi-
gent attitude toward nearly
all other foreigners makes
it unlikely that Soviet aid
will be replaced on the same
scale from any source. Techno-
logical advance therefore
probably will be at a slow rate
and will be centered on a
small group of industries. In
a few industries, however, es-
pecially those related to ad-
vanced weapons, a high priority
in the allocation of scarce
technical resources probably
will yield impressive improve-
ments in technological capa-
bilities
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28, January 1966
OCI No. 0274/66C
Copy No. 55
SPECIAL REPORT
CZECHOSLOVAKIA BEGINS IMPLEMENTATION OF NEW ECONOMIC PROGRAM
CENTRAL
OFFICE OF
INTELLIGENCE AGENCY
C U R R E N T I N T E L L I G E N C E
AC IVa U,Lcor",
zarTIUV TO
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CZECHOSLOVAKIA BEGINS IMPLEMENTATION OF NEW ECONOMIC PROGRAM
Czechoslovakia's new economic program was first
outlined two years ago to deal. with grave economic
shortcomings. It has become clear, however, that
after a year of experimentation, the party has de-
cided to retain important aspects of central control,
which could jeopardize some of the more liberal fac-
ets of the reforms. Although the party has announced
that many of the reforms were effective as of Janu-
ary 1966, as scheduled, both the recently published
party theses and the plan for 1966 indicate that the
actual nature and extent of the reform program will
depend to some degree on economic developments dur-
ing 1966, and to what extent earlier economic short-
comings are corrected. Some aspects of the program
as outlined in the party theses are to be discussed
at nationwide meetings in preparation for the party
congress in May, particularly new roles for local
organs of the government and party. It is already
apparent that certain changes such as the strength-
ening of the "national" committees which support
mainly local services and a revision of the party's
functions on a local level will cause much debate
and probably will create dissension.
The General Program
Faced with inefficient in-
dustry and agriculture which
have caused economic stagnation
since 1962, the Novotny regime
at the end of 1963 outlined a
new economic program designed
to bring about fundamental im-
provements in the economy, partly
by revamping the system of ad-
ministration and management.
The program was designed to es-
tablish more sensible criteria
for economic decisions, and, in
particular, to increase econom-
ic decision-making at lower
levels, but without posing a
threat to political leadership.
On paper the economic re-
form appears to be the most
liberal proposed for any bloc
country, but in practice the
changes to be made are no more
liberal than those adopted in
other East European countries.
In central planning, the pro-
gram calls for emphasis to be
further shifted from inflexible,
short-term quantitative goals
to establishment of broad, long-
term guidelines. A more realis-
tic price system and a decen-
tralization of management are
to be introduced. Individual
enterprises are to be allowed
to determine many of their own
short-range production plans,
set some prices, and have more
control over disposition of
their earnings. Increased ma-
terial incentives are stressed
as the major road to higher
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living standards. However, con-
tributions to economic growth
by both individual workers and
enterprises would be the basis
for determining the extent. of
these incentives.
The Prague regime is now
taking the first cautious steps
to put the reform into effect
throughout the country. Al-
though extensive experiments
were conducted in 1964-35 in
selected enterprises in apply-
ing some of the principles of
the new system, the regime has
made clear that complete intro-
duction of the new economic sys-
tem will not be achieved soon,
and will in fact be dependent
upon the carrying out of a price
reform in early 1938. The lead-
ership has no intention of es-
tablishing a completely free
market economy, and the reten-
tion of many essential elements
of a command economy in itself
will limit the extent of changes
that can be made.
A number of central con-
trols will continue to exist in
the economy. The regime will
continue to rely largely on ad-
ministered prices; only a small
portion (about tl percent) of
the prices are to be freely set
and these only for luxury con-
sumer goods. Labor allocations
and impor-tart investments will
continue to be made centrally,
but the individual laborer's
right to change jobs voluntarily
will for the first time be legal.
The industrial branch director-
ates are expected to exert sub-
stantial controls over their
subsidiary enterprises, but the
degree of control will not be
unifor m.
The party is devoting
considerable attention to the
application of scientific and
technical knowledge and higher
standards of efficiency in in-
dustry as a means of raising
the quality and technical stan-
dards, and thus the salability,
of Czechoslovak goods at home.
Goods are to be improved so as
to be competitive on the world
market in order to bring in
needed foreign currency and
improve Czechoslovakia's for-
eign trade balance.
Scheduled Implementation in 1966
Last November the party
central committee made certain
organizational and personnel
changes in the central organs
of government to enable them
better to carry out their new
functions of long-range planning.
Three existing ministries
of machine building and metal-
lurgy were merged into a single
Ministry of Heavy Industry. In
December the staffs of existing
and newly created state commis-
sions were augmented by person-
nel from economic ministries
and factories, as well as from
the academic institutions that
were prominent in the debate
on economic reform. These
changes had been preceded by
an industrial reorganization
during 1964 and 1935 in which
industrial enterprises were con-
solidated under approximately
85 branch managements instead
of the nearly 200 which existed
before.
Implementation of the
new program began on 1 January
1966 in all industrial, trade,
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and construction enterprises,
the services and purchasing sec-
tors, local industry, and in
the motor vehicle transportation
field. In such areas as agri-
culture and other transportation
fields, where the reforms are
not to be introduced until 1967,
experiments will continue to be
conducted over the next year.
Industrial branch managers
are now to take greater respon-
sibility for their enterprises,
and profits are to be the prin-
cipal measure of success or
failure. To what extent the
branch managers will be willing
or able to exercise their new
prerogatives remains to be seen.
Enterprises will now be able to
draw up their own production
plans in which demand for their
products will play a more impor-
tant role, and fewer detailed
plans will be imposed from above.
Because many individual enter-
prises must pay wages from in-
come, wages will therefore be
more directly dependent upon
good results. Wages in an enter-
prise will be subject to upper
limits (a ceiling on the growth
of wages) and lower limits (a
guaranteed wage). A good mana-
ger with a staff of energetic
workers should be able to pay
wages well above the lower lim-
its.
The goals established for
the 1966 draft economic plan in
general follow those set forth
in the previously published eco-
nomic program for 1966-70 and
take into account the moderate
achievements of 1965. Increases
slated for national income (3.4
percent), industrial output (5.6
Page 3
percent, and investment (7 per-
cent) in 1966 are within the
range of annual goals established
in the 1966-70 plan. In indus-
try the greatest increases in
production are planned for power
(8.8 percent), engineering (7.3
percent), and chemicals (7 per-
cent). Attempts will be made to
effect structural changes in the
heavy engineering industry so as
to improve the technical standards
of Czechoslovak heavy engineering
products.
The Role of Agriculture
Regime officials recognize
that sound development of the
entire economy cannot be accom-
plished without a more rapid
growth in the rate of agricul-
tural production. In order to
compensate for poor results
achieved in agriculture in 1965,
especially in crop production,
gross agricultural output in 1966
is slated to increase more than
the annual growth rate required
to meet the 1970 goal.
Although the agricultural
sector is not scheduled to change
over to a new system until 1967,
a number of steps will be taken
in the interim to promote im-
provement in agricultural pro-
duction. Increased incentives
and efforts to reduce production
costs are to be adopted this
year to stimulate the interest
of farmers and managers, respec-
tively, in production results.
An improved management system
for agriculture, including more
authority for producing units,
is to be introduced as another
stimulant to improve performance,
and steps are to be taken to
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ensure a constant level of man-
power in agriculture. In 1966,
moreover, the agricultural sec-
tor is slated to receive 21 per-
cent more equipment than it did
in 1965 and, along with this,
certain specified measures are
to be applied to overcome the
perennial problem of maintenance
of agricultural equipment.
Party Control
The recently published
theses for the party congress
to be held in May reaffirm the
party's leading role over the
economy, as did the official
document on economic reform.
The party is to be the major
element guiding introduction
of the program and "selling" it
to the people. Regional and
district committees and all ba-
sic party organizations are ex-
horted to put their authority
behind the implementation of
the new system. Under the sys-
tem the local party units have
been told that they are not to
guide production directly or
even to share responsibilities
for decisions of economic mana-
gers. Their principal function
is to provide managers with po-
litical support in applying eco-
nomic policy. Many local party
leaders object to this formula
since it could lead to a seri-
ous reduction of their author-
ity.
The "national" committees:
which are governmental bodies
functioning at local levels,
are to have greater financial
responsibilities at all levels
--including regional, district,
and town. As in the past, they
are mainly responsible for local
services, including social wel-
fare and cultural measures. The
party theses point out that the
national committees must achieve
maximum self-sufficiency finan-
cially, but presumably the cen-
tral party officials will watch
this closely lest the national
committees attempt to become too
independent. Their role vis-a-
vis the central organs, regional
planning, and agricultural coop-
eratives is to be set forth in
the coming months.
The party central committee
has called a conference of chair-
men of regional and district na-
tional committees and of national
committees of major cities for
the near future to delineate fur-
ther the role of the national
committees and how their greater
responsibilities can be dove-
tailed with management of the
economy. These changes have al-
ready led to debate and some
dissension in the party and gov-
ernment which are likely to in-
crease as the final formulations
are prepared for the party con-
gress.
The central committee has
published the theses so that ex-
tensive discussions on them can
take place at nationwide confer-
ences to be held prior to another
central committee plenary session
to be held in May. At that time
the draft 1966 economic plan
will be re-examined, and an elab-
oration of Czechoslovak economic
policy is to be made for approv-
al by the party congress.
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It is clear that the re-
gime is committed to the re-
forms, but the new program con-
stitutes such a departure from
past practices that party lead-
ers are still groping their
way. Both the timing and pro-
visions of the program there-
fore will be kept sufficiently
flexible to avoid insofar as
possible severe economic or
political dislocations.
It is probably in light in-
dustry, especially in the con-
sumer goods industry, that the
reforms will have a chance to
make the greatest headway for
the short run. If the program
as presently outlined does not
succeed in overcoming Czecho-
slovakia's more serious economic
problems in the long run, other
new methods for their solution
will have to be considered.
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