CRITICAL SITUATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91T01172R000300170005-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 21, 2016
• Document Release Date: October 25, 2007
• Sequence Number: 5
• Publication Date: January 13, 1955
• Content Type: REPORT

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This report is divided into
two parts:
The first consists of items
on situations where developments
may occur in the near future.
The second part consists of
status reports on other impor-
tant situations where critical
developments are not expected
immediately.
DIA review(s) completed.
ARMY review(s) completed.
State Dept. review completed
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COSTA. RICAN REBELS FACE
Page 6
The Costa Rican rebels are believed to have
suffered a serious blow with the .recapture of the
town and airstrip at Villa Quesada by government
forces on 12 January.
HAMMARSKJOLD REPORTED
' C"" . . Page 7
The UN secretary general. is reliably reported
to be "moderately optimistic"' about a favorable
outcome in the American airmen's case.
PARIS ACCORDS STILL FACE
. Page
Approval of the Paris acec-rds-still faces
two major difficulties: Mendes-France's desire
for talks with the USSR and WEU opposition to
his plan for an arms pool.
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FRENCH PLANNING ANEW
Page 9
The French apparently intend to reopen
their campaign. to get rid of Premier Diem.
STATUS REPORTS
ATIONS Page 10
Threat to Tachen Islands
Indonesia
The Afro-Asian Conference
French North Africa
Yugoslav-Viet Minh Relations
Panama.
Laos
US Consulate in Hanoi
SITUATIONS WITHOUT
VELOPMENTS . Page 14
Arab-Israeli Dispute
Possible Schism in Egypt's RCC
British-Arab Oil Dispute
Greece
"Liberation" of Formosa Plans
Egypt and the-Sudan
Syria
Burma
CRITICAL SITUATIONS Page 4
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COSTA RICAN REBELS FACE
I I E
The-Costa Rican rebels who began action against
the government of Josh Figueres early on 11 January
are believed to have suffered a serious-blow with
the recapture of the town and airstrip at Villa
Quesada by government forces the next day. Rebel
forces, however, have made new incursions-along the
Nicaraguan border, in the extreme northwest of the
country, and the government had not gained control
of the situation early on 13 January.
The American army attachd noted in December
that a revolutionary movement beginning in the
northwest would be unfeasible and that the terrain
between there and the capital was easily defensible.
The Venezuelan and Nicaraguan governments--
from which the rebels are believed to have obtained
material support--are unlikely to commit their own
forces openly.
The arrival of the special investigating com-
mittee of the Organization of American States in
Costa Rica on 13 January may cause the rebels to be
denied their air bases in Nicaragua and prevented
from using bases elsewhere outside Costa Rica.
This would make it impossible for the rebels to
use planes unless and until they could capture a
base in Costa Rica itself and would deprive them
of a major psychological as well as military
advantage.
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ar~
HAMMARSKJOLD REPORTED
"M DE TELY OPTIMISTIC"
First reports on the results of the
Hammarskjold mission support earlier indica-
tions that Peiping intends to hold for some time
the 11 American airmen imprisoned as "spies," but
that the door remains open for a settlement.
severs inese ommunist statements that Peiping
could not be "intimidated" into releasing the air-
men but that their cases might be "reviewed."
There is a conflict between reports on the
relationship of the case to other questions.
Hammarskjold's aide has said that Chou was tying
the airmen's case to a "whole complex of questions
at issue." pfficials in Tokyo report, on the other
hand, that Chou did not relate the case to any
other issue.
Until these contradictory reports are clari-
fied, it will remain uncertain whether Peiping
hopes to bargain with the United States on the
case. Peiping's propaganda has consistently sug-
gested that a settlement might be sought on the.
basis of American compromises on such issues as
China's seat in the UN, American-Nationalist
operations, Chinese prisoners of the Korean war,
and Chinese students in the United States.
In any case these larger questions may arise
in any future negotiations on the airmen. Mean-
while, Peiping might seek to stimulate negotiations
by soon freeing some American citizens not charged
with espionage.
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PARIS ACCORDS STILL FACE
O I FI TI S
Prospects for approval of the Paris agreements
by the French Council of the Republic are worsening
but chances of a favorable vote are still at least
slightly better than even.
Two major obstacles are apparent: Adendes-
France's desire for talks with the USSR and opposi-
tion to his plan for an arms pool.
If Mendel-France goes ahead with his plan to
invite the Soviet Union in the near future to a
conference to follow ratification of the Paris
agreements, the USSR will skillfully exploit the
invitation to delay or complicate the completion
of French ratification.
The French Council of the Republic may throw
the accords back into the National Assembly unless
agreement assuring strong controls over West German
rearmament--an uncertain prospect at present--is in
the offing by late February.
The idea of strong controls over West German
rearmament is politically popular in France.
Premier Mendel-France hopes to ensure council
-approval of the accords by winning assent from his
.Western European Union partners--which now have
many objections--for an arms pool plan which would
place all-Western European Union arms production
under supranational regulations,
Though enough progress will probably be made
by the WEU working group to convince the senators
that further delay is unwarranted, time is running
against the Paris accords--as well as against
Mendel-France's tenure in office. If the council
refuses to approve the accords because of qualms
over the arms production pool, reapproval by the
assembly in new balloting would be doubtful.
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FRENCH PLANNING ANEW
T T D IEM
-The French apparently intend to reopen their
campaign to get rid of Premier Diem.
In Paris, the minister for the Associated
States said last week that Bao Dai's immediate
return seemed to offer the only workable solution.
He also said the French were thinking in terms of
Tran Van Huu as premier and Nguyen Van Tam as
interior minister.
Bao Dai's prestige in Vietnam is, however,
at an all-time low. Moreover, neither Huu, an
advocate of "coalition" with the Communists, nor
Tam, a French stooge, has any popular support..
A recent tour of the provinces by Diem which
brought a strongly favorable popular reaction was
unreported in the French press.
A minute of understanding agreed to by General
Collins and General Ely on the training of Vietnam-
ese forces was, after considerable delay, virtually
.rewritten in Paris. General Collins recommends
against accepting it in its present version. He
thinks the French are deliberately stalling in
approving the points he and Ely had agreed on.
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STATUS REPORTS
IT ATIONS
Threat to Tachen Islands: Chinese Communist air
and sea attar s on ationa i,st naval vessels i,n the
Tachens on 10 and 11 January were the heaviest yet
staged, At least two ships were lost and four others
damaged,. All of the Nationalist vessels assigned. to
the Tachens were forced to withdrar~, Lacking air
and naval support, and with newly arrived troops
garrisoning the islands, the Tachens were left wide
open to a Communist attack,
There are two deterrents to an early Communist
assault on the Tachens, however. Major naval forces
of the U5 Seventh Fleet have been ordered to the
areag past appearances of the fleet have quieted Com-
munist activity along the island front. Moreover,
high winds are reported in the Tachens area, and the
heavy seas now running would make an amphibious opera-
tion very difficult.
IndonesiaA The Indoaa?sian government will-try
to made p~cal capital in the coming months out of
what they call the "Dutch-sponsored" security prob-
lem in the South Moluccas. By claiming Dutch inter-
ference in an area not far from Netherlands New
Guinea, Indonesia hopes to demonstrate the necessity
for transferring New Guinea to Indonesian sovereignty,
The extent of chronic dissidence in the South
Moluccas is small but increased enough to lead to
th~- reimposition of a state of emergency on 5 January.
The governor@nt has approximately 2,600 troops and
policy in the area and is sending no troop reinforce-
mentsp
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In Djakarta, meanwhile, President Sukarno's
presence and speech at a completely Communist-
dominated function on 9 January points toward an
ever increasing tolerance of Communist activity
between now and elections in late 1955. Sukarno
spoke at a reception which opened the second nation-
al conference of S?BSI, Indonesia's largest labor
federation. The chairman of SOBSI is a member of
the Communist Party Central Committee.
The Afro-Asian Conference; Communist China
and t o o om o powers-- n ia, Pakistan, Ceylon,
Burma, and Indonesia--are still the only countries
which have committed themselves to attend the Afro-
Asian conference in Indonesia next April. It is
quite possible all other invitees will ultimately
decide to attend. Even Thailand, the only country
thus far to register a definitely negative reaction,
is having afterthoughts and may well change its
mind.
No agenda has been adopted for the conference.
.Under these circumstances the Bandung gathering will
offer a sounding board for any nation with a griev-
anee to air. The-Arab states may sound off on the
Palestine issue and North African problems, Af ghan-
istan on Fushtoonistan, India on racialism in South
.Africa, and Indonesia on its claim to Dutch New
Guinea. The neutral countries--India, Burma and
Indonesia--may be expected to promote the idea of
"peaceful coexistence," particularly as between Com-
munist China and the-West.
Peiping is claiming for its part that colonial-
ism will be the main. issue at the conference and
that the chief purpose of the meeting is to expand
the "peace area," The Chinese Communist delegation
can be expected to exploit these issues and may
make an effort to bring North-Korea and perhaps
the Soviet Union into the conference.
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The anti-Communist states will have to consult
closely if they are to .prevent China's Chou or
India's Nehru from dominating the proceedings and
associating the conference results with their ob-
jectives.
The anti-Communist delegations will be better
able. to do-this if Chou and Nehru became rivals
in eff orts to dominate the meeting. Chou, however,
is likely to try to attune his approach as closely
as possible to that of India and Burma so as not
to arouse these two countries'antipathy or to give
grounds for hostility among the other representa-
tives.
French North Africa: Armed attacks by terror-
ists an counter errorists" in French ~dorocco con-
tinue at a high rate,
French indecision or inability to deal with
the Moroccan problem, except by police reorganiza-
tion, is gradually turning the area into a
"political jungle," according to the American
consul general in Rabat.
The consul general says that the situation
provides fertile ground for Communist propaganda,
--for example, the, argument recently advanced-that
independence can only be acquired by fighting the
French and that "unconditional assistance" will be
provided by the "partisans of peace and liberty,"
headed by the USSR.
Premier ~endes-France considers conclusion of
current French-Tunisian negotiations essential be -
fore France's Moroccan policy can be reviewed.
The Tunisian. negotiations appear to be stalled
once again. The premier has shown no signs that
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he envisages any substantial changes. in policy
f or Morocco.
Despite the increasing tensions, French
security forces in the area should be sufficient
to contain demonstrations, but further isolated
incidents are likely to occur.
Yugoslav-Viet Minh Relations: The Viet Minh
may now ry to ester is re at ons with Yugoslavia.
Belgrade will undoubtedly expect the Viet Minh to
take the initiative, as Peiping recently did, so
as to compensate for its sharp rebuff of Yugo-
slavia's offer to establish relations with the Ho
Chi Minh regime in 1950.
The Soviet-directed campaign for '"normaliza-
tion" of Orbit relations with Belgrade made a major
advance with the joint announcement on 9 January
that Communist China and Yugoslavia had agreed to
establish diplomatic relations.
Panamao While the situation in Panama ap-
pears qu e , differences within President Guizado's
political coalition are already evident, and the
coalition may eventually dissolve into personal
factions. Continued support of Guizada by the
National Guard, Panama"s only armed force, is prob-
lematieal, and rivalry may be developing between
the two top commandants of the guard.
Laos; During the next several weeks, the
Communist-backed Pathet Lao organization will
probably exert increasing pressure on the royal
government to accept the principle of a special
status for Pathet Lao armed forces and officials.
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open clashes with government forces are fre-
quent. Faced with the threat of an extension of
guerrilla warfare, the government may feel obliged
to conclude a hasty political settlement.
US Consulate in Ilanoi: The American consulate
in Hano s un er constant surveillance by the
Viet Minh and written notes are taken on the com-
ings and goings of all personnel. The Viet Minh's
differing attitudes toward the Americans and the
other diplomatic and consular representatives in
Fla.noi are resulting in the increasing isolation of
the American representatives.
Viet Minh authorities insist on dealing with
consulate personnel as unofficial foreign resi-
dents, but have made no move to prevent the consu-
late from flying the American flag
It is possible that the Viet Minh, at least
for the time being, intends to avoid action against
our consulate which would provide the United States
with grounds for a public complaint or which might
cause the International Control Commission to
raise its eyebrows.
Note; There are no signifi.ca~nt new develop-
ments to report this week on the following situa-
tionst
Arab-Israeli Dispute
Possible Schism in Egypt's RCC
British-Arab Oil Dispute
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Greece
"Liberation" of Formosa Plans
Egypt and the Sudan
Syria
Burma
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25X1,
TOP SECRET /~j//////~///////~~/
13 January 1955
Copy No.
CRITICAL SITUATIONS
DQ~~rrtt~~t Fpm, ------.--------2___-- ~ A Weekly Report
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Date: =_%=,_,~~~~ 137"x__ gy,
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
TUP SECRET
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