CURRENT INTELLIGENCE BULLETIN - 1957/02/06

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03161990
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: February 6, 1957

Approved for Release: 2019/12/04 C03161990
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CURRENT
INTELLIGENCE
BULLETIN
DOCUMENT NO.
NO CHANGE IN CLASS.
fl DECLASSIFIED
CLASS. CHANGED TO: TS einigspc
NEXT REVIEW DATE:
AUT.H: H
LREVIEWER
="16.4
3.3(h)(2)
6 February 1957 3.5(c)
Copy No. 131
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
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CONTENTS
1. USSR SLOWS RATE OF ECONOMIC GROWTH FOR 1957
(page 3).
2. NEHRU DISTURBED OVER POSSIBLE CONSEQUENCES OF
HIS KASHMIR POLICY (page 5).
3. PATHET CHIEF RETURNS TO VIENTIANE
(page 6).
r IkS)4 SINO-CEYLONESE COMMUNIQUE
k �
(page 7).
. U NU'S POLITICAL OPPONENTS FEAR HE WILL MAKE
PEACE WITH COMMUNIST INSURGENTS oforn)
(page 8).
, 6. MOSCOW STEPS UP ATTACK ON NATIONAL COMMUNISM
(page 9).
6 Feb 57
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1. USSR SLOWS RATE OF ECONOMIC GROWTH FOR 1957
At the opening session of the Supreme
Soviet on 5 February the USSR revealed
a more realistic "new look" in its plan-
ning aimed at salvaging Sixth Five-Year
Plan goals. Planned growth of industrial
production in 1957 has been cut back from the 10.7 percent
for 1956 to 7.1 percent in order to concentrate resources in
lagging raw materials industries. The 1957 budget alloca-
tions to industry and agriculture are slightly higher than last
year.
Industry: Incomplete data from the speeches
by the new chief of planning, M. G. Pervukhin, and Finance
Minister A. G. Zverev give no indication that the USSR has
abandoned the Sixth Five-Year Plan goals, but prospects for
success are by far the worst that have faced the Soviet Union
since World War II. By radically rephasing the investment
program Soviet leaders may still hope to reach the 1960 goals
for iron, steel, coal, cement and electric power, the key in-
dustries in which construction of new capacity is far behind
schedule. The machine building industries will concentrate
on producing the capital equipment required by these basic
industries. State investment expenditures on machinery and
equipment will increase by 20 percent, from 55 to 60 billion
rubles. Production of agricultural machinery, however, still
has high priority. Growth rates in heavy and light industry
were cut back about equally.
Consumer Welfare: The budget provides
for a substantial reduction in the state loan and higher per-
sonal income tax exemptions, and more than half of the in-
crease in total budget expenditures is allocated to health and
welfare measures, Although investment in housing is increased
from 25 to 30 billion rubles and loans to private builders will
increase six times, no change in the original housing goals for
1960 is apparent. The planned 9.5 percent increase in agricul-
tural production in 1957 assumes that the extremely favorable
weather conditions of 1956 will recur. Thus prospects for the
Soviet consumer in 1957 appear essentially unchanged.
6 Feb 57
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Military Allocations: The announced
military allocation decreased from 102.5 billion rubles
planned for 1956 to 97, 6 billion in 1957. Although informa-
tion is incomplete, this allocation is not inconsistent with
the announced Soviet demobilization of 1, 2 million men. If
this demobilization has in fact been completed, the 1957 allo-
cation could allow an increase in military procurement of
approximately 10 percent. On the other hand, if demobiliza-
tion was limited to the 400,000 soldiers who apparently joined
the labor force in 1956, 1957 procurement may be held at about
1956 levels.
Prospects: Soviet economic problems ap-
pear to be more serious than had previously been thought.
Pervukhin's more realistic approach may in the long run bring
industrial growth back to the rate of previous years. In the
short run, however, the planned rate of growth will be the
smallest for any peacetime year since 1928. The Soviet lead-
ership will have to accept at least a temporary delay in the
race to "catch up with the West!'
6 Feb 57
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2. NEHRU DISTURBED OVER POSSIBLE CONSEQUENCES
OF HIS KASHMIR POLICY
Indian prime minister Nehru is at his
"wit's end" as to what to do about
Kashmir,
Nehru is fully
aware, that a
plebiscite there would go against India.
Nehru will continue to argue that Kash-
mir has belonged to India since 1947 and that the UN has no
competence to probe into a nation's internal affairs. He
fears, however, that such a stand will compromise his own
moral position and that Indian refusal to accept the Security
Council resolution of 24 January will damage the authority of
the UN.
Nehru is said to fear Pakistan border
raids which may eventually involve the Pakistani armed
forces and end in war, and to feel that President Eisen-
hower is "our one hope of restraining the Pakistanis!'
Comment Nehru's reported attitude probably re-
flects a recognition that his position
on Kashmir is seriously threatened for the first time.
Since the UN last considered the case
in 1952, India's prestige has risen and Nehru feels particu-
larly sensitive to attack on moral grounds. He may also
feel that the capability of the United Nations to deal with
such problems as Kashmir has increased. If Pakistan with-
drew its troops from Kashmir--removing India's strongest
objection to holding a plebiscite--New Delhi would have only
the dubious legality of the Maharajah's accession in 1947 on
which to lean. The 10-0 vote in the Security Council on 24
January may have convinced Nehru that this argument will
be received unsympathetically.
6 Feb 57
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3� PATHET CHIEF RETURNS TO VIENTIANE
Comment on:
Pathet Lao chief Souphannouvong's re-
turn to Vientiane on 4 February would
appear to signal a Pathet drive to win
final approval for the formation of a
coalition government under the terms
of its 28 December agreement with
Prime Minister Souvanna Phouma. De-
spite increasing criticism of the agree-
ment and cabinet demands for additional
safeguards, Souvanna maintains that a mutually satisfactory
position will be quickly reached and assembly approval will
follow.
the Pathets and Viet Minh viewed the growing opposition with
apprehension and Souphannouvong was summoned to Hanoi
for consultation on 23 January,
The issue hinges on the degree to which
the Pathets are willing to meet cabinet demands for the disso-
lution of the Pathet movement and the restoration of effective
government control over the two disputed provinces. It seems
likely that Souphannouvong will offer some formula which will
satisfy the form, if not the substance, of the cabinet's demands..
Meanwhile,
the Pathets are anxious to win legal status for their front
organization in order to launch a campaign for the supplemen-
tary elections, which will probably be held in April.
they are hopeful of coming to an agree-
ment on campaign co-operation with the non-Communist Inde-
pendent Party and the National Union Party of fellow-traveling
Bong Souvannavong. A measure of Pathet confidence in their
prospects is that after the
elections they would "demand to have important ministries!'
6 Feb 57
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4. SINO-CEYLONESE COMMUNIQUE
Comment on:
The joint communiqu�ssued on 5 Feb-
ruary in Colombo by Premiers Bandara-
naike and Chou is a propaganda victory
for Chou, and will help to offset the fact
that he obtained no joint communiqu�
from Nehru and only noncommittal statements from the other
Asian leaders he has visited since his return from Moscow.
The statement reflects the Communist view on several key
issues and criticizes American policies.
On the question of Middle East develop-
ments the communiqu�choes Communist propaganda ridi-
culing the concept of a power vacuum and charging the US
with trying to take over the position formerly occupied by
Britain and France. The statement also attacks "antago-
nistic military blocs," stressing the need for prohibition of
nuclear weapons and calling for an end to nuclear weapons
tests.
The communiqu�alls for stronger Asian-
African solidarity to combat the efforts of "imperialist and
colonial forces" and declares that another Asian-African
conference should be convened "at the earliest opportune mo-
ment!' Peiping and Moscow both had earlier indicated ap-
proval of Indonesian suggestions for a second Bandung con-
ference.
Bandaranaike probably acquiesced in
Chou's wording on several points on which the Ceylonese
prime minister himself does not feel strongly and which he
does not intend to press. A number of views expressed in
the communiqu�re also held by other South Asian nations.
6 Feb 57
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5. U NU'S POLITICAL OPPONENTS FEAR HE WILL MAKE
PEACE WITH COMMUNIST INSURGENTS
The Burma Socialist Party, which domi-
nates the government coalition, suspects
that U Nu, soon to return as Burma's
prime minister, is considering accept-
ance of the insurgent Burma Communist Party's recent peace
offers,
both the
Socialists and the army strongly oppose such action and would
resist any move Nu might make in this direction.
the So-
cialists were concerned over the possibility Nu may attempt
to include members of the parliamentary opposition--pre-
sumably the Communist-controlled National United Front
(NUF)--in his new cabinet.
Comment Although these views may be colored by
the fact that both ministers belong to that
section of the Socialist Party which is bitterly opposed to Nu,
there may be some substance to the statements.
As an incoming prime minister, Nu may
be planning to offer a program with a "new approach" to the
solution of Burma's most serious problems. Some kind of
negotiations with the insurgents and an effort to establish a
coalition with the NUF might well be part of such a plan, as
there is considerable sentiment in Burma for the nine years
of insurgency to end.
The Communist insurgents have made sev-
eral unsuccessful approaches to the government during the
past year for a negotiated settlement in order to operate as
a legal political party. The government, however, has con-
sistently refused to deal with the Communists as equals and
has insisted that the insurgents surrender with their arms be-
fore negotiations take place.
6 Feb 57
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6. MOSCOW STEPS UP ATTACK ON NATIONAL COMMUNISM
Comment on:
An article in the 3 February issue of
Soviet Russia, entitled "Concerning False
Slogans of National Communism;' contains
specific attacks on members of the Yugo-
slav, Polish and United States parties.
Such attacks, if continued, may cause the Gomulka leadership
in Poland to take an even more definitive stand in defense of
national Communism and lead to a more overt Soviet campaign
against that leadership. At the same time, this type of attack
will encourage pro-Soviet elements in Poland to believe that
their cause is not yet lost.
The article cites US official and press state-
ments as depicting national Communism as a tactical weapon
which can be used to "divide and conquer" and equates national
Communism with "national opportunism!' It attacks Yugoslavia
for attempting to substitute coexistence for proletarian inter-
nationalism in relations between socialist states. It criticizes
statements "in Yugoslavia, and also in some organs of the Pol-
ish press...in. which national peculiarities are emphasized
one-sidedly and their 'particular roads' are advanced as the
first plan for the achievement of socialism!'
The continued attack on the Yugoslays tends
to belie the rumors circulating in Belgrade that Klirushchey of-
fered Tito some form of "olive branch" when he talked with the
Yugoslav ambassador to Moscow on 28 January shortly before
the latter returned to Belgrade.
6 Feb 57
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