CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A003000340001-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: December 14, 2016
• Document Release Date: October 17, 2002
• Sequence Number: 1
• Publication Date: March 31, 1957
• Content Type: REPORT

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/ 25X1 State Department review completed
31 March 1957
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BULLETIN AU7F91 1 REVIEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
TOP SECRET
~ 2003/03/10: CIA-RDP79
00' 00
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CONTENTS
I. H VIEWS ON EGYPTIAN CANAL MEMORANDUM
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,rh3. KHRUSHCHEV'S "THESES" ON ECONOMIC REORGANIZATION
PUBLISHED "FOR DISCUSSION"
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f;4. NEW GOVERNMENT IN THAILAND
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/ 5. INDIAN COMMUNISTS ATTEMPT TO ATTRACT PRIVATE
CAPITAL TO KERALA STATE
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h116. NEW POLITICAL CRISIS IN HAITI
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1. BRITISH VIEWS ON EGYPTIAN CANAL MEMORANDUM
A British Foreign Office official told the
American embassy in London on 29 March
that the Egyptian memorandum on the canal,
although obviously unacceptable in its pres-
ent orm, pr ides a possible basis for negotiation. The For-
eign Office believes the Egyptian attitude might allow payment
of dues through the Suez Canal Users Association (SCUA), and
is seeking an early SCUA meeting to discuss the memorandum
along with the conclusions of the Bermuda conference.
Comment London appears resigned to its inability to
induce Nasr to alter his terms significantly,
but is probably hoping to save face by reaching an agreement
on some modifications. The recourse to SCUA represents a
shift in Britain's position since it had agreed at the Bermuda
conference that it would not be useful at this time to involve
SCUA, most of whose members preferred to act through the
UN on canal matters.
In his recent Cairo negotiations, UN Secre-
tary General Hammarskjold found Egypt hard to budge on points
in the memorandum but persuaded Egypt to consider it as a
draft pending comments from other governments. Hammar-
skjold concluded that the way had been left open for arrange-
ments for co-operation with the users. Egypt would probably
refuse to permit toll payments to SCUA itself.
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3. KHRUSHCHEV`S "THESES" ON ECONOMIC REORGANIZATION
PUBLISHED "FOR DISCUSSION'
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licize the forthcoming governmental reorganization and enlist
popular support for it.
central committee meeting. The discussion is intended to pub-
The 30 March publication of Khrushchev's
"theses" on reorganization of the adminis-
tration of Soviet industry provides guide-
lines for a nationwide discussion on how to
implement the decisions of the February
Khrushchev's outline is an expansion and
reaffirmation of information published in the Soviet press and
given to US columnist Alsop by Khrushchev and chief long range
planner Baibakov. New information on the direction and scope
of this most sweeping decentralization since national five-year
plans began in 1928 includes transfer of operational authority to
regional administrative units. One of Khrushchev's recommen-
dations calls for abolition of the State Committee for Current
Planning, headed since last December by presidium member
W G. Pervukhin. He also advocated that' all "planning and co-
ordinating functions of the central government except major
policy matters be concentrated in Gosplan, now responsible
for long-range planning. In such an event, Pervukhin and the
other top level administrators assigned last December to the
State Economic Commission might be transferred to Gosplan.
Failure to assign Pervukhin as head of Gosplan or give him
another important post would suggest dissatisfaction with his
performance in the preparation of the 1957 plan.
Khrushchev also put unusually strong em-
phasis on the continued primacy of heavy over light industry,
and stated that the nation's future growth would suffer "if _we
yield to an incorrect, false interpretation" that light industry
should have priority. This suggests that the issue may have
been the subject of recent debate. Khrushchev said heavy in-
dustry will continue to receive the lion's share of investment,
thus destroying any illusions that the increased priority of
housing in 1957 foreshadows substantial concessions to con-
sumers in the final version of the Sixth Five-Year Plan.
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4. NEW GOVERNMENT IN THA[LAND
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The cabinet announced in Thailand on
30 March shows that Premier Phibun
continues to control the country by
balancing rival factions in Thailand's
ruling oligarchy. Police Director Gen-
eral Phao and Army Commander Sarit
have not only been retained in the cabi-
net but promoted to higher posts. Phao,
formerly deputy minister of the interior, has been placed
in charge of the ministry, while Sarit has been similarly
advanced to the position of minister of defense. With minor
changes in personalities and positions, the rest of the cabi-
net remains as it was before the 26 February elections.
The new government can be expected to
maintain Thailand's strong pro-Western orientation. Internal
stability also seems assured for the time being, although the
Phao-Sarit rivalry will continue to cause trouble for Phibun.
Any such difficulty in the near future would probably be in-
spired by Sarit in irritation over his inability during the re-
cent postelection emergency to destroy Phao's influence.
Phao, who reportedly is stepping down as chief of police,
will. probably act cautiously for the present to deny Sarit
any pretext to move against him.
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5, INDIAN COMMUNISTS ATTEMPT TO ATTRACT PRIVATE
CAPITAL TO KERALA STATE
The Indian Communists, who are ex-
pected shortly to be asked to form a
government in Kerala State, are invit-
ing private capital to the state as one
means of improving economic conditions
there in an effort to make Kerala a model
state under their administration.
On 28 March, Kerala Communist leader
Namboodripad said that the Communists would not imme-
diately attempt to establish a Communist state but would
encourage private capital to develop local industry if satis-
factory terms could be arranged. Simultaneously, G. D.
Birla, one of India`s topmost industrialists, reported that
he had already been approached by the Communists and
asked to start a pulp and rayon factory in Kerala. He was
promised that the Communists would do everything he wanted
to make the venture attractive, and he said he had decided
to accept the offer.
Any Communist success in improving
conditions in Kerala would reflect adversely on the Congress
Party's past record and might have far-reaching effects over
the next few years in other states where the Congress Party
has lost popularity. Congress leaders hope the Communists
will fail but cannot take an overt stand against their efforts
to improve the economy.
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6, NEW POLITICAL CRISIS IN HAITI
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1~ The opposition to presidential candidate
Duvalier, which includes all other candidates, claims that the
scheduled 28 April election is rigged in.Duvalier's favor. In
a new ultimatum to President Sylvain on 29 March, the candi-
dates reiterated, under threat of calling a general strike, their
demand that he select a new cabinet representing all political
factions. They also demanded that he halt election registrations.
Several cabinet ministers have told the American embassy they
are uncertain how long they can remain in office.
The American embassy in Port-au-Prince
states that the current political situation
in Haiti is "akin to that of the first week in
February" when Provisional President
Pierre-Louis was forced out and replaced
by Franck Sylvain.
Sylvain has weathered several political storms,
however, and, unlike Pierre- Louis, has won popular favor by
pushing sequestration proceedings against members of the Mag-
loire regime and by setting a definite date for national elections.
The position of the army, which could determine Sylvain's fate, is
unclear, but the embassy reports that senior army officers are
"noticeably active."
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