CURRENT INTELLIGENCE BULLETIN - 1957/12/13

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02988536
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 16
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: December 13, 1957

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CURRENT
INTELLIGENCE
BULLETIN
13 December 1957
Copy No. 13s
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REVIEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
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CONTENTS
1b1. SITUATION IN INDONESIA
0/()2.
011)3.
AD 4.
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EUROPEAN INTEREST IN BULGANIN LETTERS
(page 4).
FRENCH DISARMAMENT DELEGATE PROPOSES "NEW
APPROACH" ON DISARMAMENT (page 5).
MIKOYAN FORESEES SLOWDOWN IN RATE OF SOVIET
ECONOMIC GROWTH (page 6).
REORGANIZATION OF THE SOVIET FOREIGN ECONOMIC
AGENCY (page 7).
tkid 6. NASIR MAY SEEK TO OUST SYRIAN CHIEF OF STAFF
(page 8).
07.
0k8.
ANGLO-EGYPTIAN TALKS SUSPENDED WITHOUT
AGREEMENT (page 9).
NEW ARAB UNREST DIRECTED AGAINST AMERICAN OIL
INSTALLATIONS IN KUWAIT NEUTRAL ZONE
(page 10).
SAUDI-JAPANESE OIL AGREEMENT SIGNED
(page 11).
INDO-PAKISTANI CANAL WATERS DISPUTE REACHING
CRITICAL PHASE (page 12).
AFGHAN TO PAKISTAN POSTPONED BY
KARACHI (page 13).
SECRET TRIAL OF GENERAL MALETER MAY BE UNDER
WAY IN HUNGARY (page 14).
ANNEX--Conclusions of the Watch Report of the Intelligence
Advisory Committee
(page 15).
13 Dec 57
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1. MOVE TO FORCE INDONESIAN PRESIDENT INTO EXILE
MAY BE UNDER WAY
(Information as of 2400 EST, 12 Dec 57)
Comment on:
Prime Minister Djuanda's announcement that
President Sukarno is "physically and men-
tally tired" and will leave Indonesia for a
"rest in a neighboring country," perhaps
within the next week, suggests that moderate elements are
making a serious effort to take control of the government and
check the drift toward chaos and Communist domination.
Earlier indications of intensive army activity give credibility
to reports that Sukarno is a virtual prisoner of the army, and
that his projected "rest" may, in fact, amount to at least tem-
porary exile. The motivation for such action undoubtedly would
be the belief that the only hope of preserving a united, non-
Communist Indonesia lies in getting Sukarno out of the country.
There will, however, be no renunciation of Indonesia's claim
to Irian or an immediate restoration of seized Dutch property.
Although Sartono, the vacillating speaker
of parliament, has been named to act as president in Sukarno's
anticipated absence, the real force behind the current moves is
probably a triumvirate composed of Djuanda, former Vice Pres-
ident Hatta and army Chief of Staff Nasution. The latter two
were primarily responsible for crushing the Communist upris-
ing at Madiun in 1948.
Vigorous opposition to Sukarno's departure
can be expected from leftist and Communist elements. They
were the first to suggest that Sukarno postpone his previously
scheduled trip to various Asian and Latin American countries
in order to continue his leadership of the Irian campaign. They
probably will try to use Sukarno's enormous popularity with the
Javanese masses to prevent his departure. This could lead to
open conflict with the army. Sukarno may also attempt to
maneuver himself out of his apparent predicament. If he suc-
ceeds, he will continue to throw his weight to the Communists
and facilitate the rapid expansion of their already considerable
strength.
13 Dec 57
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2, EUROPEAN INTEREST IN BULGANIN LETTERS
Comment on:
Initial European reaction to Bulganin's
recent letters indicates a widespread
desire to keep open the possibilities for
East-West negotiations, despite annoy-
ance at Moscow's patent efforts to under-
mine next week's NATO meetings. At the same time there
is emphasis on the need to fortify NATO's military position.
In West Germany, the independent Die
Welt's assertion that the notes might provide the "last chance"
to reach an understanding with the Soviet Union reflects the
general public uneasiness lest the establishment of NATO mis-
sile bases in the Federal Republic permanently freeze the divi-
sion of Germany. The press quotes Foreign Minister Brentano
as commenting favorably on the letter "moderate tenor," and
states he favors doing everything possible to bring about an
international detente.
French press commentary on Bulganin's
letter regards it as an attempt to exploit cracks in NATO, but
is chiefly preoccupied with the question of the establishment of
missile bases on French soil.
Responsible independent British papers
argue against giving the impression of automatically reject-
ing all Soviet proposals--presumably referring to the European
neutral zone idea�which they believe is worth considering.
The Labor press has used the letters to reiterate its call for
holding immediate talks with the USSR.
13 Dec 57
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3. FRENCH DISARMAMENT DELEGATE PROPOSES "NEW
APPROACH" ON DISARMAMENT
Comment on:
French disarmament delegate Jules Moch
is planning to seek authority to sound out
Moscow on a "new, bolder approach" to
disarmament, according to a French For-
eign Ministry spokesman. Moch says that Soviet scientific
advances have put the USSR on a plane of strategic equality
with the United States, and that several key concepts in re-
cent Western disarmament proposals--such as aerial inspec-
tion zones--are now obsolete. He maintains that the 16-18
December NATO meeting can be fruitful only if new disarm-
ament proposals are discussed.
Moch's plan would presumably be based
on his recent series of articles in the Paris daily Le Monde
proposing a "thinned-out zone" in Central Europe policed by
"symbolic" NATO and Warsaw pact contingents under a single
"neutral" command. The French Foreign Ministry thinks
such ideas are gaining ground in France, West Germany, and
Britain.
Moch has always opposed German rearm-
ament, and his plan for a "thinned-out zone" may be based
partially on a desire to avoid arming West German forces
with nuclear weapons. A Foreign Ministry spokesman doubts,
however, that Moch will get much support from the present
government.
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4. MIKOYAN FORESEES SLOWDOWN IN RATE OF SOVIET
ECONOMIC GROWTH
Comment on:
Soviet Deputy Premier A. I. Mikoyan
told the Swiss ambassador in Moscow
on 7 December that the average annual
industrial growth rate of the USSR
would drop "in the future" from last year's 11 percent to
7 percent as a result of the "maturity" of the Soviet economy.
This is the first time that a top Soviet figure has admitted
that the increasingly complex economy of the USSR will ex-
perience a slowdown in its rate of growth.
Mikoyan presumably does not anticipate
that the drop to 7 percent will occur before the 1960's. A
drop in the rate of growth was implied by Khrushchev's re-
cent forecasts for production of several major industrial
commodities during the next 15 years.
Mikoyan's admission of a slowdown in
long-term growth suggests that Soviet leaders anticipate a
delay in achieving their professed basic aim of "catching up
with the US" in per capita industrial output, unless they are
counting heavily on a depression in capitalist countries.
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5. REORGANIZATION OF THE SOVIET FOREIGN
ECONOMIC AGENCY
Comment on:
The USSR State Committee for Ex-
ternal Relations, formed shortly
after the June purge to deal with
Soviet foreign economic affairs, is
apparently being reorganized so that
it can more effectively carry out
Moscow's economic offensive in un-
derdeveloped areas and cope with
Soviet foreign trade problems.
the reorganization of Soviet
industry just six months ago has resulted in "several hun-
dred little governments" and has "completely swamped"
the Soviet trading organizations, several of which are un-
der the state committee's jurisdiction. Negotiations and
implementation of recent large-scale agreements with India,
Syria, and Egypt, as well as continuing economic meetings
with the other bloc countries, have added to the strain of the
present organizational structure.
13 Dec 57 Current Intelligence Bulletin
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6. NASIR MAY SEEK TO OUST SYRIAN CHIEF OF STAFF
Comment on:
Egypt intends to take action to oust
Syrian Chief of Staff Bizri.
the Egyptian President now is convinced that Bizri is a
Communist and that "something must be done about it."
Nasir requests urgently that for the next three months
the United States do nothing which might "make heroes" of
Bizri, pro-Soviet Defense Minister Azm, or Communist
party leader Bakdash.
Nasir's concern over Bizri at this time
parallels the alarm felt by Syrian radical Baathists over the
increasing influence of Azm and local Communists.
an
attempt was made recently to remove Lt. Col. Mustafa
Hamdun, a relative of pro-Egyptian Baath leader Hawrani,
from his post as army chief of personnel. This attempt,
possibly promoted by Azm and Bizri, may have been a "last
straw" which led the pro-Egyptian faction to appeal for Egyp-
tian intervention.
Nasiris prestige and influence in Syria is
probably still great enough to attain his objective if he pur-
sues it promptly and with determination. Although success-
ful action against Bizri would not mean a gain for Western
influence in Syria, it might be a setback to Soviet influence.
13 Dec 57
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7. ANGLO-EGYPTIAN TALKS SUSPENDED
WITHOUT AGREEMENT
Comment on:
The Anglo-Egyptian talks in Rome on
the conflicting financial claims arising
from the Suez crisis were suspended on
12 December with no date set for resump-
tion, evidently as a consequence of an
Egyptian political decision. A British
Foreign Office official had stated on 10
December that the Egyptians had threat-
ened suspension unless their latest proposals were accepted
promptly. The Egyptians probably hope to gain the most
favorable terms by delaying tactics. In addition, the outcome
of Egyptian-Soviet economic negotiations scheduled to begin in
Moscow on 17 December may be expected to influence the de-
ree of Egyptian willingness to compromise.
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8. NEW ARAB UNREST DIRECTED AGAINST AMERICAN
OIL INSTALLATIONS IN KUWAIT NEUTRAL ZONE
Comment on:
Political unrest has appeared in recent
weeks among Arab employees of the
American-owned Getty Oil Company in
the Kuwait neutral zone, accompanied
by at least two apparent acts of sabotage. In the last month,
Saudi authorities, who share with Kuwait jurisdiction over
the zone, have expelled three Arab troublemakers. In re-
cent weeks,
pictures of Nasir have appearea on
walls and vehicles, and circulation of Egyptian periodicals
has noticeably increased.
The outbreak of unrest follows the October
conference in Baghdad of the Arab League Petroleum Com-
mittee. Egypt's failure at the conference to impose its views
on the oil-producing states may have stimulated attempts to
promote disorders there and obtain the support of the oil work-
ers. One of Cairo's long-term objectives is to gain control of
all oil revenues for the benefit of "all the Arabs."
According to the American consul general,
the Egyptians have recently attempted to secure up-to-date
information about oil installations in Kuwait. Security against
subversive activity in Kuwait and areas under its control in
the neutral zone suffers considerably from indifference of the
Kuwaiti authorities. Communist activity, moreover, has in-
creased in Kuwait in recent months. Kuwait's production and
proved reserves of oil are the largest in the Middle East.
13 Dec 57
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9. SAUDI-JAPANESE OIL AGREEMENT SIGNED
A Japanese spokesman has confirmed
that his company signed an agreement
with Saudi Arabia on 10 December which
permits Japan to explore for oil in the
Kuwait neutral zone offshore area of the Persian Gulf. The
contract, which breaches the 50-50 division of profits pre-
vailing in the Middle East still must be ratified by King Saud.
In addition to yearly rental payments, the Japanese company
will give Saudi Arabia 56 percent of its net profits from all
phases of the operation--crude oil production, transportation,
refining, and retail marketing. A comparable agreement with
Kuwait, which has joint rights in the concession area, is ex-
pected shortly.
The principle of sharing profits from the
integrated operation, not solely from crude production, was
an important element in the Saudi demands. The Saudis may
be expected to use the terms of the Japanese agreement in an
attempt to obtain a similar profits-,sharing scheme on trans-
portation, refining, and marketing of the crude produced by
the Arabian-American Oil Company.
The agreement provides for a maximum
of four years' exploration. If oil sufficient for commercial
production is discovered, the Japanese company will receive
a 40-year lease, at the end of which all facilities within the
concession area will become the property of Saudi Arabia and
Kuwait.
Japan hopes to obtain through the agree-
ment an assured source of crude oil and to conserve foreign
exchange. The Japanese company, which is essentially a pro-
motional firm without engineering, transportation, refining, or
marketing facilities, may face serious difficulty in raising funds
for the operation. The company spokesman said that technical
assistance for oil prospecting would be sought from American
consultants.
13 Dec 57
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10.0INDO-PAKISTANI CANAL WATERS DISPUTE
REACHING CRITICAL PHASE
Comment on:
The canal waters dispute between India
and Pakistan may again develop into a
critical situation in view of the failure
of the International Bank for Reconstruc-
tion and Development to negotiate a settlement between the
two countries after seven years of continuous effort. Since
the bank's mediation has apparently failed to produce even
the usual short-term interim agreement continuing the tra-
ditional use of canal waters, India may now seriously con-
sider unilateral diversion of waters.
The dispute concerns the equitable dis-
tribution for irrigation purposes of the waters of six rivers,
all of which flow through Pakistan but on three of which
India controls the headwaters. India desires to divert the
flow of these three rivers to feed irrigation canals in its
Punjab State, thus leaving an insufficient amount of water
to supply Pakistan's own canal system. Bilateral negotia-
tions between the two countries prior to 1951 failed to reach
a solution as have the bank's efforts since 1951. The urgent
need of both countries for increased agricultural production
to keep ahead of growing populations makes water supply a
critical issue.
There is some possibility that an interim
agreement may be reached during talks between Indian and
Pakistani finance ministers scheduled for late December,
but the difficulties in the way of even an interim agreement
are considerably greater than before.
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11. AFGHAN KING'S VISIT TO PAKISTAN POSTPONED
BY KARACHI
Comment on:
Pakistan's last-minute request for
indefinite postponement of Afghan King
Zahir Shah's visit to Karachi, which
had been scheduled to begin on 10 De-
cember, may interrupt the gradual
rapprochement which has been taking place between the two
countries. Karachi's reason for the postponement was the
political crisis which occasioned the fall of the government
on 11 December.
Relations between the two countries had
gradually improved following a period of strained relations
resulting from the sacking of the Pakistani embassy in Kabul
in March 1955 and the subsequent Pakistani economic block-
ade which forced Kabul to increase its ties with the USSR.
One of the main features of the rapprochement had been a
diminution of Afghan propaganda advocating creation of a
separate state for Pushtoon tribesmen living in Pakistan.
Postponement of the royal visit emphasizes that continuing
political instability impairs Pakistan's ability to execute its
domestic and foreign policies and lowers Karachi's prestige.
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12. SECRET TRIAL OF GENERAL MALETER MAY BE
UNDER WAY IN HUNGARY
A secret trial of the principal military
figures in Imre Nagy's revolutionary
government--Minister of Defense Gen-
eral Pal, Maleter, General Istvan Kovacs,
and Budapest police chief Sandor Kopacsi--is to begin on
13 December, according to a usually reliable source of the
American legation in Budapest. The source says Maleter
probably will be sentenced to death.
Comment
The sentencing of Maleter would probably
precede a trial of Nagy.
Nagy has been brought to
Budapest in preparation for the trial.
the final decision to
try Nagy was made during the Communist conference in Mos-
cow. A death sentence for Maleter would demonstrate to the
Hungarian public the determination of the regime to continue
a policy of repression.
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ANNEX
Watch Report 384, 12 December 1957
of the
Intelligence Advisory Committee
Conclusions on Indications of Hostilities
On the basis of findings by its Watch Committee, the
Intelligence Advisory Committee concludes that:
A. No Sino-Soviet bloc country intends to initiate hostil-
ities against the continental US or its possessions in
the immediate future.
B. No Sino-Soviet bloc country intends to initiate hostil-
ities against US forces abroad, US allies or areas
peripheral to the orbit in the immediate future.
C. 1. A deliberate initiation of hostilities in the Middle
East is unlikely in the immediate future. However,
tensions in the Middle East continue to create pos-
sibilities for serious incidents.
2. There is no evidence of Sino-Soviet intention to be- *
come militarily involved in the Indonesian situation.
However, the Communists are exploiting growing
economic chaos and political instability, and the op-
portunity is developing for a Communist takeover of
government on Java, particularly if the army does not
maintain law and order in the face of labor union seiz-
ure of the means of production and distribution.
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