BLOC FOREIGN AID PROGRAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64B00346R000500080010-2
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 16, 2016
• Document Release Date: January 12, 2005
• Sequence Number: 10
• Publication Date: May 16, 1961
• Content Type: BRIEF

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S E C R E T
DCI BRIEFING 16 May 1961
BLOC FOREIGN AID PROGRAM
I. Bloc trade and aid offensive continues to be a primary weapon for
promoting Communist image and encouraging neutralism in underdeveloped
countries.
A. Since 1954 Bloc has extended about $4 billion in economic assist-
ance. Military aid totals about $2 billion, but down payments
and "discounts" reduce credit extended for this part of pro-
gram to about $1 billion.
1. 1960 was biggest year ever for bloc foreign aid with new
obligations of more than $1.5 billion.
B. As many as 8,000 bloc economic and military technicians now at
work in nonbloc areas and nearly 12,000 nationals from under-
develpped countries have received military or economic training
in the bloc since 1955.
C. New African states featured prominently in growing list of re-
cipients. Cuba has become key part of program in Latin America
and Brazil is likely to accept substantial bloc aid in near
future. Pakistan and Mali both accepted bloc aid offers for
first time this year.
D. Nevertheless, bloc aid remains highly selective with almost 60
percent of all aid commitments made to three countries--the
UAR, Indonesia, and India.
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SECRET 16 May 1961
E. Moscow still provides about three quarters of all bloc aid
and apparently directs program with close cooperation from
the European satellites. Peiping plays a rather independent role
and while the Chinese contribution is relatively small, it is
concentrated where opportunities for promoting Communism are
best.
II. Variety of political and economic motives prompt underdeveloped
countries to seek and accept bloc aid.
A. Sometimes bloc aid sought chiefly as demonstration of neutralism.
B. Attractiveness of bloc aid usually lies in low interests rates,
(2-2 1/2 percent) long-term repayment provisions, (10-12
years) and bloc's willingness to accept repayment in local
commodities or currency.
1. The Chinese Communist penchant for grants and interest-
free loans is a notable variation.
C. As opening wedge, bloc offers to provide whatever aid, economic
or military, most desired or least obtainable from Western
sources.
1. Initial enthusiasm often tempered when bloc officials prove
every bit as hard-headed and practical as their Western
counterparts during stages of implementation.
III. Moscow emphasizes aid for industrial projects--steel mills, dams,
railroads, and small factories. Bloc often builds hospitals and
educational centers, and is now participating more widely in
agricultural and urban development schemes.
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SECRET 16May1961
A. Bloc also favors aid pacts with low priority but highly
desired projects such as atomic reactors, athletic stadiums,
and hotels.
B. Soviet aid to civil air programs expanded considerably last
year with emphasis on sales of high-performance IL-18 turboprop
transports, primarily to West African states.
1. Moscow's terms include use of bloc aircrews and maintenance
personnel until local nationals are trained.
IV. Bloc military aid accounts for only about one-third of all bloc aid,
but the arms usually are delivered much faster than economic assist-
ance. Capacity of recipient to utilize equipment not necessarily
factor in Moscow's willingness to supply it.
A.. About 75 percent of all bloc military aid extended to just two
countries--the LIAR and Indonesia.
1. Iraq, Afghanistan, and Cuba also have received substantial
military assistance, and bloc ar
s in smaller quantities
have been supplied to Morocco, Guinea, Yemen, and to the
Algerian rebels.
B. Acceptance of bloc arms aid results in reliance on bloc for
spares, ammunition, and replacements. Ar
greements usually
include stationing of bloc technicians in country for local
training, and military facilities within the bloc are made
available to train the recipient's personnel.
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C. Recent military aid activity includes:
1. Large-scale deliveries to Cuba starting last September.
2. Major new agreements with Indonesia for supply of land
armaments, modern jet aircraft, and naval vessels.
3. Supply of advanced jet fighters to Iraq and the UAR as
part of recent deliveries.
4. Occasional shipments to West Africa, chiefly for Guinea,
but also for transshipment to dissident forces in other
countries.
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S E C R E T
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