CENTRAL INTELLIGENCE BULLETIN - 1959/02/20

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03023209
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 13
• Document Creation Date: February 25, 2020
• Document Release Date: February 27, 2020
• Publication Date: February 20, 1959

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CENTRAL
INTELLIGENCE
BULLETIN
/DOCUMENT NO.
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20 FEBRUARY 1959
I. THE COMMUNIST BLOC
USSR - GMAIC comments on 17 Feb-
ruar_vHICBM launching.
Peiping pressing for resumption of
International Control Commission in
Laos.
IL ASIA-AFRICA
Arabs incensed by "threat" of increased
Jewish emigration from bloc to Israel.
South Korean political crisis continues;
Rhee using police to keen opposition
suppressed.
Pakistan - Funds lacking for economic
development; government's popular sup-
port in jeopardy.
III. THE WEST
Guatemala - Ydigoras government los-
ing strength.
Panama - Demonstrations may presage
coup attempt; National Guard, however,
seen loyal to President.
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CENTRAL INTELLIGENCE BULLETIN
20 February 1959
DAILY BRIEF
I. THE COMMUNIST BLOC
USSR; The Guided Missile and Astronautics Intelligence
Committee has assessed the information which has become
available since the ICBM firing from Tyura Tam on 17 Feb-
ruary. This review confirmed that the operation culminated
in a Successful launching of a test ICBM which reached the
Kamchatka area.
GMAIC concluded as follows:
--itd "The precise test objectives of the launch are
unknown. However, considering the lengthy count-
down procedure, the amount of telemetry equipment
utilized, the number of instrumentation stations ac-
tive both in the rangehead and impact areas, and the
extent of the upper-air reporting in the impact area,
we believe that it was for research and development
purposes."
Communist China - Laos: Reacting to Laotian Premier
Phoui's statement of 11 February, Communist China's foreign
minister has appealed to the Geneva cochairmen--Britain
and the USSR--to "check" Laotian refusal to remain bound by
the Geneva agreements. Peiping's intensified propaganda on
the subject suggests it hopes to stimulate international sup-
port for the Communists' legal position and to prod India, in
its capacity as chairman of the International Control Commis-
sion, to call for the reconvening of the commission in Laos.
(Page 1)
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IL ASIA-AFRICA
Israel-Bloc-UAR: Increased Jewish emigration from
Rumania to Israel and a public statement by Israeli Prime
Minister Ben-Gurion that there may also be emigration
from the Soviet Union have caused a strong reaction in the
Arab states. The government-controlled press in the UAR
has branded the migration as an "imperialist plot" against
the Arabs, and has warned the Soviet Union that if it permits
the Jewish exodus, it will be committing an "unforgivable
crime." (Page 2)
South Korea: The South Korean internal political crisis
continues. It stems from the Rhee administration's use of
force on 24 December to enact legislation aimed at repress-
ing the opposition Democratic party.
Democratic party efforts to
promote local opposition to the legislation are being suppressed
by the police. On 18 February, Democratic assemblymen
walked out on the opening day of the new National Assembly
session. The administration may hope to divert attention
from the continuing intern .l
ation clisnutp with innnn
' 'Pakistan: A recent survey ot Pakistan's imanciai posi-
tion by the Ayub government indicates that Karachi--even
after having cut defense expenditures--does not have the
funds to complete the economic development projects now
under way. It believes, however, it must expand the eco-
nomic development program to retain popular support. Fi-
nance Minister Shoaib, who is scheduled to arrive in Wash-
ington on 22 February, probably will claim that the govern-
ment's energetic fiscal and economic reforms and irmra-
Western Dolicv entitle it to increased foreign aid.
20 Feb 59
DAILY BRIEF ii
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III. THE WEST
Guatemala: he government of President Ydigoras has
lost considerable strength in the face of a worsening economic
situation and a number of political scandals in the administra-
tion. Plotting against Ydigoras has recently increased. The
President informed the US ambassador on 18 February that he
may have to "crack down in a dictatorial manner" and indicated
that he intends to reshuffle his cabinet-)
(Page 4)
Panama: EA Panamanian radio commentator who led several
thousand demonstrators in the seizure of Panama City's munic-
ipal building on 18 February has called for a 48-hour general
strike to protest against administrative corruption and the eco,
nomic condition of the country. Powerful opposition groups are
known to possess substantial caches of arms and to have been
waiting for a public demonstration which they could attempt to
turn into a coup against President de la Guardia. The success
of such an attempt would hinge on the National Guard, which
still appears loyal to De la Guardia
(Page 5)
IV. SIGNIFICANT INTELLIGENCE
REPORTS AND ESTIMATES
(Available during the preceding week)
Present Trends in Communist China.
February 1959.
NIE 13-2-59. 10
Estimate of the World Situation. NIE 100-59. 17 Febru-
ary 1959.
20 Feb 59
DAILY BRIEF iii
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I. THE COMMUNIST BLOC
Peiping Calls for Reconvening of International Control
Commission in Laos
A statement by Chinese Communist Foreign Minister Chen
Yi on 18 February and an editorial in the People's Daily on the
following day call on the Geneva cochairmen--Britain and the
USSR--to "check" Laos' refusal to be bound by the 1954 Geneva
accords. On 19 February, Peiping sent letters to the cochairmen
charging that the United States had introduced large numbers of
military personnel and arms into Laos. Chen claimed that Laos
was "fully bound" by the accords, and the People's Daily editorial
insisted that Laotian Prime Minister Phoui Sananikone has failed
to provide "any legal basis" for his opposition to the operations
of the International Control Commission (ICC) in Laos. Pei-
ping's intensified propaganda suggests that it hopes to stimulate
international support for the Communists' legal position and to
prod India, in its capacity as chairman of the ICC, to call for the
reconvening of the commission in Laos.
The delay of one week before Chen Yi's statement, follow-
ing a mild initial Communist reaction to Laos' action, suggests
that Peiping was reluctant to attack Phoui strongly on the mat-
ter in the hope that India would act on its own initiative to revive
the ICC. The Chinese Communists will probably avoid military
threats in their propaganda in order not to arouse apprehension
among Southeast Asian countries.
The People's Daily also belatedly attacked Laos' permission
for the establishment of a Chinese Nationalist consulate in Vien-
tiane--granted last November--as a "deliberate provocation and
extremely unfriendly act."
Eihe strong bloc reaction is likely to reinforce British and
French views, already expressed, that Laos' renunciation was
precipitous. It probably will also raise additional doubts in
Britain and France as to the feasibility of introducing US mil-
itary training personnel into Laos:-1
20 Feb 59
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IL ASIA-AFRICA
Arab Reactions to Increased Israeli Immigration
Increased Israeli immigration from Rumania and a public
statement by Israeli Prime Minister Ben-Gurion that the USSR
may permit some of its Jews to emigrate have brought forth a
strong reaction from the Arab states. The government-con-
trolled press in the UAR has branded the migration as an "im-
perialist plot" against the Arabs, and has warned the Soviet
Union that if it permits the Jewish exodus, it will be commit-
ting an "unforgivable crime." There are 3,000,000 Jews in the
USSR.
Plans are under way to coordinate Arab efforts to oppose
the exodus of Rumanian Jews, which began to increase last fall
and which probably now involves the departure of 200-300 Jews
daily. Dissatisfaction with private American financing of the
migration has been expressed. Israel's aim in increasing its
population, the Arabs contend, is to expand its territory at Arab
expense. Arab League Secretary General Hassouna, asserting
that the migration is "the greatest peril faced by the Arabs
since the creation of the State of Israel," indicated the problem
would be considered at the league's meeting in Cairo on 2 March.
Lebanon's Prime Minister Karame and Jordan's Prime Minister
Rifai reportedly are contacting other Arab countries regarding a
common stand on the question.
The Rumanian Foreign Ministry) in reply to an official UAR
protest which it obviously expected, stated that the emigration
has been permitted for "humanitarian" reasons. The Bucharest
regime apparently is seeking to resolve its perennial problem
of anti-Semitism as well as to reduce a potentially troublesome
minority group which has resisted assimilation. The desire to
find responsible positions in industry and the professions for
Communist-educated ethnic Rumanians is also a factor.
-e&NR-E,EALTIAL,-
20 Feb 59
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Pakistani Government Increasingly Concerned About, Financial
Difficulties
The Ayub government, following an investigation of Pak-
istan's financial position, has informed the US Embassy in
Karachi that Pakistan's financial condition is considerably weak-
er than previously estimated. Foreign-exchange reserves�in-
cluding gold--amount to only $162,000,000, the lowest figure on
record for this time of year. The foreign-exchange gap for the
first half of 1959 is estimated to be at least $30,000,000 and
may be considerably more.
The government--despite sharp cuts in civil and defense ex-
penditures�does not have the funds to complete economic devel-
opment projects now under way or to provide adequate imports
of raw materials for private industry. If imports are held at the
present level, the shortage of consumer goods will make preven-
tion of inflation extremely difficult. Karachi believes its ability
to hold prices below the levels which prevailed before martial
law was imposed last October and to expand the economic devel-
opment program are key factors in its ability to retain popular
support.
dioresident Ayub reportedly is increasingly concerned about
the economic situation and wants more economic aid even at th
expense of defense support z The high priority his government is
placing on economic development is illustrated by its decision to
cut defense imports by about 40 percent. It has also canceled
plans to purchase three submarines and is scrapping the navy's
only cruiser4
Pakistan has secured a $28,000,000 long-term loan from the
United Kingdom and has arranged a $25,000,000 stand-by credit
from the International Monetary Fund. Finance Minister Shoaib,
who is scheduled to arrive in Washington on 22 February, prob-
ably will claim that his government's energetic fiscal and eco-
nomic reforms and firm pro-Western policy entitle it to increased
US aid.
20 Feb 59
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III. THE WEST
Position of 'Guatemalan President Weakening
dhe Guatemalan political situation continues to deteriorate.
The extreme venality among President Ydigoras' closest advisers,
including members of his family, is receiving increasing public
attention. This, combined with the President's recent political
blunders and a worsening economic situation due in part to a de-
cline in income from coffee exports, has so weakened his posi-
tion that his government may fall unless he acts quickly to clean
it up. Plotting to oust him is increasing among several groups
ranging from the extreme right to the moderate left and now ap-
pears more widespread than at any time since he assumed office
last March.-)
CYdigoras apparently realizes his danger and told the US am-
bassador on 18 February that he may have to "crack down in a
dictatorial manner." He also indicated that he intends to reshuf-
fle his cabinet, dropping some of the members most identified
by the public with grafia
tWhile there appears to be no immediate danger of a coup,
since various opposition leaders are believed to be working at
cross-purposes and the army remains loyal to the President,
continuation of the present trend could within a relatively short
time lead to his ouster. Key army officers, the ultimate locus
of political power, have proven responsive to public pressure in
the pasty and their support of Ydigoras would probably be with-
drawn if they became convinced that the President had lost his
political and public backingl
CONFIDENTIAL
20 Feb 59
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Uni'est in Panama May Be Exploited by Opposition Forces
Panamanian radio commentator who led several thousand
demonstrators in the seizure of Panama City's municipal build-
ing on 18 February has called for a 48-hour general strike to
protest against administrative corruption and economic condi-
tions. This may give President de la Guardia's strong opposi-
tion a pretext to try a long-awaited coup:1
&he commentator, who specializes in sensationalistic and
inflammatory broadcasts, is not known to be allied with any of
the several opposition groups which have been smuggling arms
into the country. However, he has been attacking De la Guardia's
inability to control corrupt officials and has criticized the Na-
tional Guard, chief source of political strength in Panama. His
recent calls to rise against the corrupt oligarchy which has ruled
the country for many years have probably influenced the thousands
of poor and unemployed concentrated in Panama City:1
De la Guardia's main opposition is from cynical groups with-
in the oligarchy whose eagerness to gain more control of the
country's economy by taking over the administration has kept
Panama in a political ferment for months. These groups have
previously exploited for their own ends demonstrations by dis-
contented crowds and may hope to capitalize on this latest ex-
pression of dissatisfaction]
{:T. he President ordered the unpopular National Guard not to
interfere with the demonstrators and has suspended the municipal
council until an investigation of the charges is made. The guard
is still considered loyal to De la Guardia and is probably capa-
ble of maintaining him in office:j
20 Feb 59 CENTRAL INTELLIGENCE BULLETIN Page 5
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T A TA Aa
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THE PRESIDENT
The Vice President
Executive Offices of the White House
Special Assistant for National Security Affairs
Scientific Adviser to the President
Director of the Budget
Office of Defense and Civilian Mobilization
Special Assistant for Security Operations Coordination
Board of Consultants on Foreign Intelligence Activities
Special Assistant for Foreign Economic Policy
Executive Secretary, National Security Council
The Treasury Department
The Secretary of the Treasury
The Department of State
The Secretary of State
The Under Secretary of State
The Under Secretary of State for Economic Affairs
The Deputy Under Secretary for Political Affairs
The Deputy Under Secretary for Administration
The Counselor
Director, International Cooperation Administration
The Director of Intelligence and Research
The Department of Defense
The Secretary of Defense
The Deputy Secretary of Defense
Assistant Secretary of Defense for International Security Affairs
The Secretary of the Army
The Secretary of the Navy
The Secretary of the Air Force
The Chairman, The Joint Chiefs of Staff
Commandant, United States Marine Corps
The Director, The Joint Staff
Chief of Staff, United States Army
Chief of Naval Operations, United States Navy
Chief of Staff, United States Air Force
Assistant to Secretary of Defense for Special Operations
Director for Intelligence, The Joint Staff
Assistant Chief of Staff for Intelligence, Department of the Army
Director of Naval Intelligence, Department of the Navy
Assistant Chief of Staff, Intelligence, Department of the Air Force
Supreme Allied Commander, Europe
Commander in Chief, Pacific
The Department of the Interior
The Secretary of the Interior
The Department of Commerce
The Secretary of Commerce
Federal Bureau of Investigation
The Director
Atomic Energy Commission
The Chairman
National Security Agency
The Director
National Indications Center
The Director
United States Information Agency
The Director
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