CURRENT INTELLIGENCE BULLETIN - 1957/12/10

• Document Type: SPECIALCOLLECTION
• Keywords: 2018 Sanitization
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03177768
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 13
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: December 10, 1957

07(100:71/40"00;40"Anyved for Release: 2019/12/10
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OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
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TOP SECRET
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776.W.101,1/M
3.5(c)
10 December 1957 �
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3.3(h)(2)
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CONTENTS
1. SITUATION IN INDONESIA
(page 3).
2. DUTCH CONSIDER INDONESIA ACID TEST OF NATO CO-
OPERATION (page 5).
Ivo 30 JAPAN MAY PROVIDE SHIPS TO INDONESIA
(page 6)0
4. SOVIET PARTY CENTRAL COMMITTEE TO MEET TWO
DAYS FART,TER THAN ORIGINALLY PLANNED
(page 7).
5. TITO DETERMINED TO MAINTAIN INDEPENDENCE
(page 8).
6. EAST GERMANS MAY ASSERT SOVEREIGNTY OVER WEST-
ERN COMMERCIAL AIR TRAFFIC TO BERLIN
(page 9).
cp2__ 7. SPAIN PROTESTS TO MOROCCO OVER IFNI HOSTILITIES
(page 10).
8. THE CYPRUS SITUATION
(page 11).
9. ANTIGOVERNMENT CANDIDATES SUCCESSFUL IN LOCAL
MALAY ELECTIONS stage 12).
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1: SITUATION IN INDONESIA
Comment on:
The 8 December explosions which ap-
)arently destroyed Indonesia's largest
Irsenal and ammunition dump in Ban-
-lung could as well have been carried
)ut by the Communists as by one of the
Intigovernment groups. The Commu-
lists would be motivated by fear that the
lrmy sooner or later would move against
hem as a result of their activities in the
:.'.urrent anti-Dutch campaign. In any
-)vent, this incident is probably a severe
)low to the army--still fundamentally a
ion-Communist force--and, following by
)nly a week the attempt on Sukarno's life,
t may well lead to further incidents.
There are growing signs that Dutch, and
possibly American, petroleum interests in Indonesia may be
the next target of a Communist-inspired takeover by company
employees. The managing director of BPM, a subsidiary of
Dutch Shell, has recently learned of pressure on the company's
union from leaders of the Communist-dominated labor federa-
tion (SOBSI) to seize the installations, and SOBSI leaders are
also advocating the seizure of Stanvac and Caltex.
Interference with the oil industry would have
major repercussions on the Indonesian economy. Java, with
about a week's supply of petroleum products on hand, would soon
find its economy coming to a halt. Disruption of oil production
would also remove one of the government's major sources of
revenue and cause a considerable dislocation of the petroleum
distribution pattern for neighboring Southeast Asian countries,
particularly Singapore and Malaya. Although some Indonesian
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itwo
officials seem aware of the dangers inherent in any seiz-
ure of foreign petroleum enterprises, the Communists may,
as in earlier instances, force the government's hand.
In a further move against the Dutch,
Prime Minister Djuanda announced on 9 December that
all Dutch estates, agricultural enterprises, and factories
had been placed under the government's control. His action
followed an approach by SOBSI to Dutch estate owners for
direct labor control of the estates. The government's move
appears to be another effort to keep Dutch property from
falling completely into Communist hands, but the govern-
ment will probably be unsuccessful since its available
forces for occupation and control are limited.
the morale of rightist elements is rapidly declining in the
face of the deteriorating political and economic situation.
The various non-Communist factions are unable to resolve
their own differences and unite against the Communists. Ac-
cording to a late report from the American naval attach�n
Djakarta, however, youth groups affiliated with the Masjumi
and Socialist parties were planning to assassinate leaders of
the Communist party on 10 December. Such action might be
expected to precipitate violent countermeasures by the Com-
munists. The attach� source stated that the plan had the
support of friendly elements in the army which intended to
follow up the attacks on the Communists by attempting to
"gain control and protect the youth groups."
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20 DUTCH CONSIDER INDONESIA ACID TEST OF
NATO COOPERATION
Comment on:
At the emergency North Atlantic Coun-
cil meeting on 7 December, Dutch offi-
cials declared that they considered the
situation in Indonesia an "acid test of
NATO cooperation." They warned that
he issue would be raised at the NATO
summit meeting if the situation had not
improved by that time.
While the Dutch officially confined them-
selves to a general request for "complete solidarity" and
diplomatic intervention with the Indonesians, some of their
remarks implied that they might later seek Allied support
in an appeal to the UN Security Council and perhaps a freeze
of Indonesian assets in NATO countries. The Dutch may be
worried that some NATO member may attempt to "fill the
economic vacuum" caused by Dutch expulsion; they would
bitterly resent such a move.
In the meantime, the government is mak-
ing plans to comply with Djakarta's request for evacuation of
Dutch citizens from Indonesia. Djakarta is reported, however,
to have requested that needed technicians remain. Two Dutch
naval vessels reportedly en route to Indonesia are probably in-
tended to support this action and to reinforce the garrison in
New Guinea.
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3. JAPAN MAY PROVIDE SHIPS TO INDONESIA
Following an Indonesian inquiry, Japan
apparently is prepared to lease a number
of small ships to Indonesia for use in its
vital interisland trade and communica-
tions. These ships would replace those
of Dutch ownership which are being withdrawn to escape seiz-
ure by Indonesian authorities. Press reports have indicated
that larger vessels for transoceanic use may also be involved
in the proposed lease,
a private firm, the Japan Steam-
ship Company, be designated sole handler for the coastal
shipping project. Although this action probably involves con-
donement by the Japanese government, Japan may move cau-
tiously out of concern over economic repercussions from the
Netherlands and other quarters.
The .director of Japan's Maritime Bureau
has been quoted by the press as saying that 280,000 tons of
shipping could be leased if a decision is made to do so. En-
couraged by the recent Kishi-Djuanda agreement on repara-
tions, Tokyo may hope to capitalize on the emergency to im-
prove economic relations with Indonesia.
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4. SOVIET PARTY CENTRAL COMMITTEE TO MEET TWO
DAYS EARLIER THAN ORIGINALLY PLANNED
Comment on:
A meeting of the party central committee
in Moscow, originally scheduled for 17
December, will apparently take place on
15 December.
The date of the central committee meeting
was probably advanced so the committee could complete its
work before the USSR Supreme Soviet session begins on 19 De-
cember. The period of time apparently allotted for the commit-
tee's meeting is still comparatively short, indicating that serious
controversies are not expected to develop.
The timing of the central committee meet-
ing suggests that the topics for discussion will be related to the
work of the Supreme Soviet, which is expected to discuss and
give formal approval to the 1958 state budget and probably adopt
the economic plan for 1958. The Supreme Soviet may also hear
a report on the international situation and Soviet foreign policy.
Any changes in high-level government personnel assignments
would probably be approved at this time.
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5. TITO DETERMINED TO MAINTAIN EPENDENCE
The tenor of President Tito's remarks,
in an hour-and-a-hall conversation with
American Ambassador Riddleberger on
6 December, indicates that the Yugoslav
President is determined to increase the appearance of inde-
pendence in his foreign policy. The timing of the decision to
reject American military aid suggests that Tito feels it neces-
sary to emphasize to the Communist world that Yugoslavia is
not tied too closely to the West.
Tito told Riddleberger that since military
aid seemed to have embittered American-Yugoslav relations
and affected the ability of Yugoslavia to carry out its truly in-
dependent policy, his government had decided to propose the
discontinuance of such aid. Tito hoped, however, that US-
Yugoslav economic relations "could continue as before" and
"that eventually he could get away from grants and more
toward credits and loans."
Tito professed to believe that the process
of internal liberalization in the USSR will continue and that
the present "hard-line" Soviet declarations do not represent
long-term intentions. He refused, however, to comment on
Zhukov's removal because he considered it an internal matter--
a line taken earlier by other Yugoslav officials.
In justifying Yugoslavia's recent recogni-
tion of East Germany, Tito asserted this represented a logical
continuation of Yugoslavia's long-enunciated independent policy.
It should be accepted, he said, as based on the principle that a
way must be found to settle great issues between the blocs,
pointing out that it would have been done earlier except for
Moscow's ideological attacks on Belgrade in early 1957.
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6. EAST GERMANS MAY ASSERT SOVEREIGNTY OVER
WESTERN COMMERCIAL AIR TRAFFIC TO BERLIN
Comment on:
The East German regime, apparently
with Soviet support, is
planning
an official assertion of its sovereignty
in the air corridors between the Federal Republic and
West Berlin. Such action would have the dual objective of
halting the transport of refugees to West Germany by com-
mercial carriers, and compelling the three Western air-
lines now flying to Berlin--one from each of the Allies--to
negotiate agreements with the German Democratic Republic
setting forth the conditions of operation.
The East Germans might contend that
only Allied military aircraft are covered by existing four-
power agreements and demand that all commercial carriers
obtain permission from the East German government for
Berlin flights. The East Germans have the capability of using
military aircraft or electronics interference devices to im-
pede Western flights. An overt threat against the Western
airlines--particularly if it jeopardized the safety of the air-
craft�would probably cause them to stop flights to West
Berlin.
The USSR will probably restrain the East
Germans from taking any action which might precipitate a
major crisis at this time.
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70 SPAIN PROTESTS TO MOROCCO OVER
IFNI HOSTILITIES
Comment on:
Spanish Foreign Minister Castiella
told Ambassador Lodge on 8 December
that Spain had protested to the Moroccan
government on 7 December over Rabat's
failure to control the irregular Moroccan
forces attacking Spanish forces in Ifni.
Spain had also asserted that responsibility
for continuation of the two-week-old hos-
tilities must be borne by Rabat.
According to Castiella, the Spanish pro-
test note and the Spanish navy's show of force at Morocco's
port of Agadir, also on 7 December, were based on Rabat's
failure to cooperate in stopping hostilities. He added that
Spain did not intend to make war on Moroccan territory.
Spain has now decided, according to
Castilla, to restrict its military position to a defense per-
imeter around the city of Sidi Ifni, where he implied there
are about 10,000 Spanish troops. However, Spanish forces
will conduct retaliatory raids beyond this perimeter, although
still within Ifni's borders.
On 7 December, Morocco urged the United
States to intercede with Spain and, on 8 December, Moroccan
Acting Foreign Minister Benjelloun said his government will
take no action against Spain "except on the gravest provocation."
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8. THE CYPRUS SITUATION
A 24-hour general strike on Cyprus,
called by the underground organiza-
tion, EOKA, marked the 9 December
opening of the United Nations' debate
on the future of the island. Riots and
violence between police and demonstrators flared throughout
Cyprus for the third consecutive day. At least 75 persons have
been injured, but no fatalities have been reported during this
latest period of violence. British troops, for the first time in
several months, used gunfire to disperse Cypriot demonstra-
tors.
At the United Nations, initial attempts to
work out a compromise on the Cyprus issue failed when Greek
Foreign Minister Averoff introduced a draft resolution on 6
December supporting the right of self-determination for Cyl3rus.
The debate began with speeches by British Minister of State
Noble and Averoff. Noble suggested a "compromise" solution
and pressed for talks among Britain, Greece, and Turkey.
Averoff ca7 .,,1 for direct British negotiation with representa-
tives of the Cypriots, denied that Turkey was an "interested
party" in the dispute, denounced Britain for refusing to permit
Archbishop Makarios to return to Cyprus, and warned that dis-
appointment with the British position will lead to new uprisings
'on the island.
Whether there is a heated debate and con-
current worsening of Greek-British relations will depend largely
on whether or not the Greeks press their charges of alleged
British atrocities against the Cypriots.
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9. ANTIGOVERNMENT CANDIDATES SUCCESSFUL IN
LOCAL MALAY ELECTIONS
Comment o
The growing effectiveness of left-wing
opposition in Malaya to the ruling Alli-
ance party, especially in urban areas,
first noted in a by-election on 23 Novem-
ber, was further illustrated by the victory
of 19 of 37 anti-Alliance candidates in scattered municipal
elections throughout the country on 7 December, The most
important gain registered by opposition elements was in
Penang, the federation's second largest city, where the left-
wing Labor party of Malaya won four out of five contested
city council seats.
These results underscore the danger to
Malaya's fragile political stability, particularly in view of the
fact that the victorious opposition candidates based their cam-
paigns on a racial rather than an ideological or economic basis.
The success of the appeal to race fears and prejudice will almost
certainly promote its continued use in future local and national
elections- a situation which could lead to a marked trend toward
a further polarization of communal interests and intensification
of mutual antagonism.
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CONTMENTIA L
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