CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000800050001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 47
• Document Creation Date: December 16, 2016
• Document Release Date: January 24, 2005
• Sequence Number: 1
• Publication Date: April 12, 1956
• Content Type: SUMMARY

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CONFIDENTIAL
9M:1*?:ff.
CURRENT
INTELLIGENCE
WEEKLY
S MMAR
Docqn
No
D
Class.
Next
Auth.:
Date: -
4)
COPY NO. is
OCI NO. 1777/56
12 April 1956
Document
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No Change In Class. 0
0 Declassified
Class. Changed to: TS S A
Next Review Date: ---- - ------ 117_0
Hi.: HR 70-3
2-4441 741- By:
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
State Department review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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CONFI
CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
THE WEEK IN BRIEF
PART I
OF IMMEDIATE INTEREST
ARAB-ISRAELI SITUATION Page 1
The pattern of Israeli reaction to last week's
Egyptian commando raids in the Gaza area, and the fact
that Egypt failed to give a direct answer to Israel's
demand for a cease-fire, leave open the possililitv of an
Israeli retaliatory raid of substantial size.
SOVIET TACTICS
IN THE ARAB-ISRAELI SITUATION Page 3
The USSR appears to regard the present situation in
the Middle East as offering an ?unprecedented opportunity
to widen the split between the Egypt-baudi-Syrian bloc
and the West. In the UN Security Council deliberations
last week, Soviet maneuvers were designed to cause the
Arabs to question the motives behind the American reso-
lution and to reduce the scope of the secretary general's
mission to the Middle East.
BAGHDAD PACT MEETING Page 4
When the council of ministers of the Baghdad pact
convenes in Tehran on 16 April, the four Middle East
members can be expected to demand some tangible evidence
of the usefulness of the pact. Disappointed over their
failure to obtain any direct advantages from the alliance,
the Middle East members probably will consider making
the pact an instrument of economic planning and develop-
ment. Attempts will probably be renewed to obtain formal
American adherence, and the United States may also be
pressed to take a leading role in the economic develop-
ment of the northern tier area.
CEYLON ELECTION
0 0 ? 0 ?
?S C ............
S.W.R.D. Bandaranaike, who became Ceylon's prime
minister as a result of the victory of his united front
coalition in this week's national elections, will find
most other Ceylonese political parties supporting his
announced socialist-neutralist policies. His government
will find it difficult to deal with differences of
opinion in parliament on the issue of one or two national
languages for Ceylon.
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12 April 1956
SOVIET EXPECTATIONS
FOR VISIT TO BRITAIN Page 6
During their visit to Britain, starting on 18 April,
Khrushchev and Bulganin will probably engage in conver-
sations on trade and disarmament, perhaps propose a
friendship treaty with Britain, as well as restate the
Soviet desire to take part in a conference on the Middle
East. A 9 April Pravda statement expressing the dis-
appointment of the Soviet leaders that the British were
limiting the opportunities for contacts with British
people suggests that a major goal of the trip is to make
a favorable impression on the population as Malenkov did
during his recent trip.
PART II
NOTES AND COMMENTS
MAO'S STANDING IN CHINA
UNIMPAIRED BY ATTACK ON STALIN . . . Page 1
Although the Chinese Communists have joined in the
attack on the cult of personality, they are not disposed
to detract from the stature of Mao Tse-tung. The USSR
does not appear willing to make an issue of the special
treatment given Mao, although it would probably prefer
to see less adulatory references to the Chinese leader.
SATELLITES EXONERATE
HIGH-LEVEL PURGE VICTIMS ? 1 Page 2
The Soviet Communist Party's public disavowal of the
last two decades of Stalin's one-man rule has opened the
way to complete the program, begun in 1953, of reversing
or modifying the charges brought against top-level
Satellite Communists purged during the Stalin era. The
degree of exoneration, however, will apparently vary. It
will probably be complete only in those Satellites
neighboring Yugoslavia where the charges were primarily
nationalism and conspiracy with Tito, and the major
victims, like Rajk, were executed.
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12 April 1956
BULGARIAN PREMIER'S POSITION
IMPERILED . . ? ? ? Page,
The Bulgarian central committee's criticism of
Premier Vulko Chervenkov augurs severe limitation on
his powers, if not removal from his position as number-
one Bulgarian political leader. The secretariat of
the party has already been enlarged, and the central
committee is reported to have voted to "rehabilitate"
Chervenkov's former rival Traicho Kostov, executed as
a "Titoist" in 1949. An extraordinary session of the
Bulgarian National Assembly has been set for 16 Anvil
probably to consider changes in government.]
NEW "LIBERALISM" IN POLAND Page 5
Poland has officially gone further than any other
Satellite in its interpretation of the downgrading of
Stalin. Polish public information media regard the
Soviet 20th Party Congress as "a denial of slavish
adherence to formula" and as promoting a new liberalism
in numerous fields. The abundance and intensity of the
Polish comment probably reflect Polish nationalist re-
sentment of Stalin and the Warsaw government's eagerness
to place the blame elsewhere for measures which have
proven unpopular. In propagating the new liberalism
the Warsaw regime must exercise caution to keep Polish
nationalist sentiment in bounds. I
MIXOYAN IN COMMUNIST ASIA
? a S ? ? . ........
Soviet first deputy premier Anastas I. Mikoyan
completed his trip through Asia with stops in Peiping
and Ulan Bator. The trip was highlighted by the signing
of an aid agreement with China which committed the USSR
to further support of Chinese Communist economic
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LAOS Page 7
In the expected absence of any solution to the Pathet
Lao problem resulting from this month's meeting of the
Geneva co-chairmen, the Laotian government may decide to
see what a direct meeting with the Viet Minh could pro-
duce.
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12 April 1956
JAPANESE-SOVIET RELATIONS Page
The USSR, in response to a Japanese request, has
agreed to talks on the fisheries problem either in Tokyo
or Moscow. Japanese foreign minister Shig3mitsu prefers
Moscow and has selected a delegation of government
officials and private fisheries representatives. Mean-
while, Japan's chief delegate at the London peace treaty
talks publicly hinted that Japan's weak position may
force it to make some unpopular concessions to obtain an
over-all settlement with the USSR.
SCANDINAVIAN-SOVIET AIR AGREEMENTS Page 8
The bilateral civil air agreements between the
Soviet Union and Sweden, Norway and Denmark signed on
31 March are the USSR's latest move in tbe establishment
of direct scheduled air flights between Moscow and the
West. The USSR, by virtue of its geographic position,
offers the shortest air route from Europe to the Orient,
which it can use as a bargaining point for further air
agreements with Western countries.
LYSENKO'S REPLACEMENT
Lysenko's replacement by Lobanov as head of the
USSR's Agricultural Aeademy amounts to repudiation of
Lysenko's theories in the field of biology and will
probably accelerate a return by Soviet scientists to
established beliefs hnd techniques in biology and
agriculture.
Page 10
SOVIET IMPORTS OF ALUMINUM ORE Page 11
Current Soviet efforts to obtain gubstantial amounts
of bauxite from Greece and Yugoslavia suggest that in
the future the USSR may become partially dependent on
alumillum ore from outside the Sino-Soviet bloc. Unless
new iiiternal sources of bauXtte are developed soon,
Soviet bloc supplies by 1960 will be inadequate to
support the USSR's planned aluminum production.
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NORTH AFRICA ..
CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
. ? ?
? .............
Military operations have been stepped up in Algeria7
In Morocco, a joint
Moroccan-Spanish statement accepted, in principle,
independence for the Spanish zone, but left unsolved
several pressing issues. ' In Tunisia, Neo-Destour
president Habib Bourghiba is assuming formal governmental
responsibilities.
TURKEY'S ECONOMIC SITUATION
? ? ......
Turkey's.worsening eronomic situation is characterized
by serious inflation and lack of essential goods and raw
materials. The government is apparently divided on
whether to devalue the currency, and a new cabinet crisis
may develop over the issue.
EFFECT OF STALIN REPUDIATION
ON THE ITALIAN LEFT ,
The Soviet leaders' repudiation of Stalin appears
to have had more impact on the Italian left than on
other left-wing groups outside the Sino-Soviet bloc.
The turmoil within the Communist and Nonni Socialist
Parties has threatened unity within both parties and may
be weakening their alliance. Communal and provincial
elections, to be held throughout Italy on 27-28 May, are
likely to find Togliatti and Nenni competing with each
other for leadership of the Italian left.
WEST GERMANS FEAR DISARMAMENT
MAY OVERRIDE UNIFICATION ISSUE . . .. . ..... ? ? ?
West German officials and the press are displaying
sensitivity to statements suggesting that agreement can
be reached on disarmament or any other important East-
West issue on the basis of a continuing division of
Germany. The 3onn government has protested recent
remarks by French premier Mollet And Soviet Communist
Party chief Khrushchev..
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12 April 1956
PART III
PATTERNS AND PERSPECTIVES
BRITISH POLICY TOWARD THE USSR ON THE EVE OF THE BULGANIN-
KNRUSHCHEVVISIT ..... ? ? . ....... . ....
The British government, which has for some months
shown increasing concern over the new tactics of Soviet
foreign policy, is treating the 18-27 April visit of
Bulganin and Khrushchev primarily as an opportunity to
probe Russian intentions, particularly with reference to
the Middle East. Britain would be interested in any
Soviet overtures that would appear to lessen the
prospects of war between Israel and the Arab states.
INDIAN ATTACKS AGAINST PAKISTAN SYMPTOMATIC OF NEHRU'S
HOSTILITY TO SEATO AND BAGHDAD PACT
Indian prime minister Nehru's antagonism to
Western-sponsored defense alliances in Asia appears to
be expressing itself in a tougher policy toward Pakistan--
a member of both SEATO and the Baghdad pact. Increased
Indian pressure on Pakistan--especially over the ex-
plosive Kashmir issue--may intensify Pakistan's efforts
to force the West to choose between it and India.
Page 1
Page 3
JAPAN COMPETES FOR ROLE IN ASIAN DEVELOPMENT Page 5
The Japanese government has well-defined plans for
the economic development of South and Southeast Asia--
a region where Communist economic penetration is be-
ginning to have an impact,but where 'Iritain and West
Germany still offer Japan its stiffest competition.
Tokyo's plans are to open new sources of supply for
cheap raw materials and to stimulate the Asian market
for Japanese goods. But these plans are likely to fall
short of their potential unless the government is willing
to devote greater financial resources to developing such
trade than it has in the past.
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12 April 1956
PEIPING ATTEMPTS TO OVERCOME PETROLEUM DEFICIENCY . . Page 9
Communist China's First Five-Year Plan (1953-1957)
places great emphasis on the development of petroleum
resources. Production of crude oil increased from
120,000 tons in 1949 to 980,000 tons in 1955. This is
equal to one day's United States production and five
days' Soviet production. Sharply rising consumption
forced China to import 57 percent of its requirements
last year. This dependence on imports has been a
major military vulnerability and has tied up some
overland transport from the USSR.
BRAZIL'S FOREIGN POLICY UNDER KUBITSCHEK Page 12
President Kubitschek's first 60 days as head of
the Brazilian government have revealed his intentions
to expand commercial relations with Western Europe and
the Soviet bloc. There are indications that he will
seek at the same time to strengthen Brazil's tradi-
tional ties with the United States.
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12 April 1956
PART I
OF IMMEDIATE INTEREST
ARAB-ISRAELI SITUATION
Egypt still
has given no
Cairo has, however, announced
direct
answer to
the Israeli
that terrorist fedayeen were
demand
for a cease-fire, al-
being withdrawn from Israel.
though
the final
deadline was
Should the Israelis decide to
passed
at noon on
11 April.
undertake a commando operation
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
against Egyptian forces, there
would be very strong pressure
on Egyptian prime minister Nasr
to reply in kind, but the pres-
ence and activity of UN secre-
tary general-Hammarskjold may.
exercise a restraining influence
on both parties and may even be
used as an excuse for postponing
new actions.
By sending in terrorists,
Nasr apparently hoped to have
again, without incurring a full-
scale reprisal from the Is-
raelis, the success this kind
of operation enjoyed last fall.
Although last fall's successes
have not been -f--t-s
he Egyptian press,
y quo ng e Tel Aviv radio,
has again been able to claim
that the Arabs have struck
terror into Israeli hearts.
Israeli Reaction
The pattern of Israeli
reaction would appear to call
for a retaliatory raid of sub-
stantial size. However, the
Israelis seem to realize the
advantage they now have--with
the highest UN official on the
scene--as the most recently
injured party. Hammarskjold
was disappointed with the
Egyptian response to Israel's
request for a cease-fire,,and
asked for a less equivocal
statemedt from -Cairo.
Coupled with this factor
is the ability of the Israeli
security forces to limit the
scope of the terrorist incur-
sions. The success of the
Israeli government's security
measures is believed to have
led to some relaxation in the
tension among the population
and possibly to have stolen
some thunder from Israeli ex-
tremist groups which probably
are calling for forceful re-
taliation.
Air Battle
Frequent overflights by
both sides resulted in an air
battle on 12 April in which
an Egyptian Vampire jet fighter
was shot down over Israeli ter-
ritory. Egypt had previously
protested an Israeli reconnais-
sance flight which penetrated
the Suez Canal zone
The air action also
paralleled events of last fall,
when two Egyptian jets were
shot down or collided over
Israeli terrority near the
Gaza strip.
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12 April 1956
SOVIET TACTICS
IN THE ARAB-ISRAELI SITUATION
The USSR appears to regard
the present situation in the
Middle East as offering it an
unprecedented opportunity to
widen the split between the
Egyptian-led Arab bloc and the
West. Fully aware of Egypt's
growing isolation from the
Western powers--especially
France and Britain--and its
determination to alter the
present Middle Eastern balance
of power in favor of the Arabs,
Moscow has shown its intention
to give the Egyptian-led Arab
bloc political, economic, and
limited military support until
the entire situation is reopened
in the UN Security Council or
a special conference is con-
vened at which the Soviet Union
can press its campaign for a
permanent voice in the Middle
East.
Moscow probably believes
that by capitalizing on deep-
seated Arab antagonisms toward
Israel and taking an active
anti-West, pro-Arab position in
the tangled diplomatic maneuvers
that will be forthcoming on
Middle Eastern problems, it can
pry the Egyptian-led Arab bloc
still further away from its re-
maining ties with the West and
bring it permanently into align-
ment with the Asian neutralists.
PART I
In the Security Council's
deliberations last week, Soviet
maneuvers were designed to sup-
port Arab questioning of the
motives behind the US resolu-
tion and to limit the scope of
the secretary general's mission
to the Middle East. Although
the USSR's pro-Arab amendments
were rejected, they emphasized
to the Arabs that the USSR was
taking seriously its role as
their champion.
Although the Soviet posi-
tion has been openly pro-Arab
for some time, it has not been
violently anti-Israeli. In-
stead, Moscow's primary criti-
cisms have been directed
against the Western Big Three
powers.
Moscow has maintained the
West intends to send troops
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
into the Middle East for the
purpose of dictating a settle-
ment without the participation
of the Arabs and the USSR. It
is for this reason that Moscow
continues to insist that the
correct place for finding a
solution is in the Security
Council, where the USSR oc-
cupies a permanent seat and can
either veto Western moves to
which it objects or sponsor any
BAGHDAD PACT MEETING
The secona meeting oi the
Baghdad pact council of min-
isters opens in Tehran on 16
April. The prime ministers of
the four Middle Eastern member
countries will be present:
Adnan Menderes for Turkey, Nuri
Said for Iraq, Hussain Ala for
Iran and Chaudhri Mohammad
All for Pakistan. Britain will
be represented by Minister of
War Sir Walter Monckton.
The major items to be dis-
cussed will be the reports of
the various committees--mili-
tary, economic, counter-sub-
versive and liaison--which have
been meeting almost steadily
since the first meeting of the
council of ministers in November
1955. Discussion is expectdd
to be particularly extensive on
economic problems, as the mem-
bers appear to be giving greater
consideration to making the
pact an instrument of economic
planning and development.
Britain has already announced
PART I
action that might serve its
objective of bringing the Arabs,
closer to the USSR.
If open conflict between
the Arabs and the Israelis does
not force the Security Council
to reopen the problem before Ham-
marskjold returns, Moscow probably
will wait for his report before
pressing the problem further.
that it is allotting $700,000
for economic projects.
The Middle East members
are discouraged at the lack
of progress and feel that the
pact may not survive if vig-
orous action is not taken at
this meeting. Secretary-General
Awni Khalidi has said that the
pact had to reach down to the
common man for support "even
if for no more than a Baghdad
pact malaria team," adding
that the pact's days would be
numbered if it continued to
be supported only by the govern-
ment leaders.
Although the pact members
are pleased that the United
States will be represented by
a high-level delegation of
observers, further attempts
will probably be made to se-
cure formal American adherence.
The members will also press
the United States to take a
leading role in financing the
economic development of the
northern tier area.
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12 April 1956
CEYLON ELECTION
. S.W.R.D. Bandaranaike, who
became Ceylon's new prime min-
ister after the smashing upset
scored by his united front
coalition in the three-day
elections held on 5, 7, and 10
April, should find most other
Ceylonese political parties
supporting his announced so-
cialist-neutralist policies.
It is possible, however, that
before his government can imple-
ment these policies it will be
seriously embarrassed by dif-
ferences of opinion in parlia-
ment on the issue of one or two
national languages for Ceylon.
Party Strengths
Bandaranaike's united
front won 51 of 95 contested
seats in the lower house of
parliament, His own Sri Lanka
Freedom Party won 40 of these,
the Trotskyite Viplavikara
Lanka Sama Samaja 5, and as-
sociated independents 6. Out-
side the front, the Trotskyite
Nava Lanka Sama Samaja won 14
seats, Tamil parties 13, Sir
John Kotelawala's United Na-
tional Party 8, Independents 6,
and Communists 3.
Prime Minister Kotelawala's
resignation on 11 April paved
the way for Bandaranaike to as-
sume the premiership almost im-
mediately. His united front
holds an absolute majority of
one seat in the 101-man lower
house and will presumably be
strengthened by 6 more votes
when Bandaranaike appoints 6 .
additional members representing
special interests as he is en-
titled to do. Thus, if the
front remains united, it will
continue to hold a majority
even after the house has been
raised to its full new strength
of 105, following special
elections for four seats al-
located to registered Ceylonese
citizens of Indian and Pakistani
descent.
In parliament, the 14
Trotskyite Nava Lanka Sama
Samaja members, the majority
of the 13 members from Tamil
parties, the three Communists,
and some independents would
probably support Bandaranaike's
announced policies of national-
ization of foreign business
holdings, Ceylonization of
trade (a policy commenced by
the ousted UNP), dissociation
from power blocs, elimination
of British bases and troops
from Ceylon, and the establish-
ment of diplomatic relations
with tile USSR and Communist
China.
It is possible, however,
that before Bandaranaike has
the opportunity to implement
these policies he will be seri-
ously embarrassed,by differ-
ences of opinion on the national
language question.
The Language Issue
Under pressure from the
Sinhalese-speaking Buddhist
population of Ceylon, which
constitutes between 70 and 80
percent of the total population
and which was primarily respon-
sible for Bandaranaike's eleva-
tion to power, Bandaranaike as
one of his first items of busi-
ness will probably have to seek
a constitutional amendment
making Sinhalese the sole na-
tional language. A two-thirds
majority is required to effect
such an amendment.
Since Zandaranaike's own
Sri. Lanka Freedom party controls
on1y-40 seats,;he must neces-
saril have considerable outside
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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support to carry an amendment.
The 13 Tamil members of parlia-
ment will be automatically op-
posed to any policy which does
not recognize both Tamil and
Sinhalese as national languages.
The Trotskyite Nava Lanka Sama
Samaja and Communist parties,
represented by 17 members,
campaigned on a two-language
platform. Some independents
probably also favor two lan-
guages.
The 8 members of the de-
feated United National Party,
who would probably seize any
opportunity to cause Bandara-
naike's downfall, might well
oppose him on thig, point despite
their party's one-language
stand. Finally, the loyalty
of the other members of Bandara-
naike's united front is some-
what uncertain. Bandaranaike
may therefore be faced with a
bloc of at least 38 opposing
votes, making it impossible
for him to win the required 68.
Bandaranaike's only real
opportunity to obtain a two-
thirds majority would seem to
lie in his altering the two-
language stand of the 14 Nava
SOVIET EXPECTATIONS
FOR VISIT TO BRITAIN
During their visit to
Britain, starting on 18 April,
Khrushchev and Bulganin will
prubably want to hold conversa-
tions on trade and disarmament
and will perhaps propose a
friendship treaty with Britain,
as well as restate the Soviet
desire to take part in a con-
ference on the Middle East.
A Pravda statement of 9 April
expressing the disappointment
of the Soviet leaders that the
British were limiting their
Lanka Sama Samaja members. His
best chance to do so would be
to offer the party at least
two posts in his cabinet. It
is doubtful whether Bandara-
naike would be willing to pay
this price or whether the Nava
Lanka Sama Samaja party would
agree to participate in his
government.
Other Issues
Considering his weakness
on the language issue, Bandara-
naike may move slowly until he
has thoroughly tested senti-
ment in parliament, and he may
not press immediately for meas-
ures nationalizing foreign
holdings and ousting British
forces from Ceylon. He may
soon declare Ceylon a republic.
However, he may for some time
retain its Commonwealth status
in view of widespread Ceylonese
fears that India would attempt
to fill the gap left by the
British. He may also be slowed
somewhat by recognition that
Trotskyite, Communist and dis-
sident Tamil members constitute
one third of the total parlia-
ment strength.
opportunities for contacts with
British people suggests that a
major goal of the trip is to
make a favorable impression on
the population as Malenkov did
during his recent trip.
Soviet resentment over the
British arrangements, which
will keep to a minimum the
number of cities and institu-
tions the Soviet leaders will
visit, had led Bulganin to sug-
gest on 3 April that the trip
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12 April 1956
be postponed. The next day,
however, he agreed to Prime
Minister Eden's request that
he come as scheduled.
Topics for Discussion
The British have scheduled
much of Bulganin's and Khru-
shchev's time for substantive
discussions. Moscow, while
expressing a desire for such
talks, has given few clues as
to the subjects it favors for
discussion.
Disarmament will probably
be the major topic stressed by
the Soviet leaders. They will
presumably seek to prove that
the USSR's position has been
brought close to the British
stand, emphasizing particularly
the similarity of the Soviet
plan for a zone in central
Europe subject to armaments
limitation and inspection and
the Eden plan presented at the
summit conference. The Soviet
plan assumes the continued
division of Germany, and has
been rejected by Britain as well
as the United States on this
ground. The Soviet leaders
may use the occasion to make
some additions to the 27 March
Soviet disarmament proposal.
Bulganin and Khrushchev
are likely to take a cautious
attitude toward most of the
issues that come up, being
careful not to antagonize the
British on such matters as
colonialism and probably not
making obvious efforts to
weaken the Great Britain-United
States alliance. Their interest
In discussing various issues
may be limited because of a
belief that such divisive tac-
tics would not be particular-
ly profitable at this time.
With respect to the Middle
East, one of the subjects the
British particularly want to
discuss, the Soviet leaders will
probably do little more than
reaffirm their eagerness to take
part in a conference on the area
and their belief that the Bagh-
dad pact is the real cause of
tension there.
Possibly in preparation
for discussions of the problem
of Vietnam elections, a meeting
was scheduled on 11 April be-
tween A. A. Gromyko and Lord
Reading, representing the co-
chairmen of the 1954 Geneva
conference. The USSR has re-
portedly agreed to postpone the
July 1956 date for all-Vietnam
elections while pushing for a
new Geneva conference on Indo-
china.
Bilateral Issues
There are few outstanding
bilateral issues between Brit-
ain and the USSR. Premier Bul
ganin, in an interview on 11
April, said that the USSR was
Interested in expanding trade
with Britain considerably, and
in particular stressed the advan-
tages that would result if
Britain was willing to abandon
strategic trade controls. Bul-
ganin is likely to propose a
friendship treaty such as that
which he suggested to President
Eisenhower. His second letter
to the President on 1 February
stated that the USSR was williqg
to conclude similar treaties
with Britain and France.
The two sides should have
no trouble in agreeing to in-
creased cultural exchanges, al-
though the USSR will probably
resist, as it did at Geneva, any
agreement to remove obstacles to
the free flow of information
such as the jamming of broad-
casts. (Also see PART III,.
P.1)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 195C
PART II
NOTES AND COMMENTS
MAO'S STANDING IN CHINA UNIM-
PAIRED BY ATTACK ON STALIN
Although the Chinese Com-
munists have joined in the at-
tack on the cult of personality,
they are not disposed to detract
from the stature of of Mao Tse-
tung. The USSR does not appear
willing to make an issue of the
special treatment,given Mao, al-
though it. would probably prefer
to see less,adulatory references
to the Chinese ieader.
A Chinese Communist edi-
torial of 4 April, reprinted
in part in Pravda on 7 April,
flni=. first non-Soviet comment
on Stalin to be published in the
USSii, although astern European
comments were available much
earlier. This may reflect Soviet
sensitivity to the Chinese at-
titude on the re-evaluation of
the former Soviet leader. The
Soviet leaders are probably
aware of Western speculation on
a Sino-Soviet difference on the
question of Stalin and "collec-
tive leadership" and used this
means to indicate unanimity.
While Peiping's explanation
of the reasons for and the na-
ture of Stalin's errors has
generally followed Soviet prop-
aganda treatment, the Chinese
editorial implied that a com-
parable situation did not exist
in China. The re-evaluation of
Stalin was presented as primarily
a Soviet problem without direct
effect either on Mao Tse-tung's
position or on fundamental
Chinese Communist Party policies.
Importance of Individual Leaders
The Chinese editorial, while
criticizing Stalin for putting
himself above the masses, af-
firmed the importance of indi-
vidual leaders. Peiping has
justified its preferential
PART II
treatment of Mao in recent
months on the ground that he
above all other Chinese leaders
"feels the pulse of the broad
masses."
Since the Soviet 20th Party
Congress in February, Peiping
has almost completely elimi-
nated references to Stalin and
has divorced certain theories
from his name and attributed
them to Mao Tse-tung as the
"outstanding leader in our
party's theoretical work."
This will almost certainly in-
crease the great prestige which
Mao already enjeys in China and
among Asian Communists.
While devaluating Stalin,
the Chinese Communist editorial,
in some respects, treats Stalin
more gently than the Russians
have themselves. For example,
the Chinese have emphasized
more than the Russians the idea
that Stalin and his teachings
should not be condemned in tato.
The Chinese editorial explic-
itly calls for "serious" study
of the works of Stalin, es-
pecially those "correctly sum-
marizing Soviet experience in
construction."
Whereas Soviet speakers
at the 20th Party Congress
spoke of the achievements of
the "Chinese Communist Party,"
the Chinese Communists continue
to credit these achievements to
the "directives of Mao Tse-
tung" and speak of the Chinese
party's central committee,
"headed by Mao Tse-tung." At
the reception given in Peiping
on 7 April for visiting Soviet
leader Mikoyan, Vice Chairman
Chu Teh referred to "Mao Tse-
tung and other leading per-
sonages of China." In his
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12 April 1956
reply, however, the Soviet leader
mentioned Chu Teh, Liu Shao-chi,
Chou En-lai, and Chen Yun, col-
lectively along with Mao
SATELLITES EXONERATE HIGH-LEVEL
PURGE VICTIMS
The Soviet Communist Party's
public disavowal of the last
two decades of Stalin's one-man
rule has opened the way to com-
plete the program, begun in 1953,
of reversing or modifying the
charges brought against top-
level Satellite Communists
purged during the Stalin era.
The degree of exoneration, how-
ever, will apparently vary. It
will probably be complete only
in those Satellites neighboring
Yugoslavia, where the charges
were primarily nationalism and
conspiracy with Tito, and the
major victims, like Rajk, were
executed.
The Hungarian goverdment
announced on 29 March the com-
plete exoneration of former
foreign minister Laszlo Rajk
and, according to unconfirmed
reports, the Bulgarian central
committee has exonerated former
politburo member Traicho Kostov.
Both men were tried and executed
for nationalist deviation in
1949. In Poland, however, where
the major victim, former party
secretary general Wladyslaw
Gomulka, is still alive, and in
Czechoslovakia, where Titoism
was a secondary charge against
former secretary general Slansky,
the regimes have already indi-
cated that the victims will not
be politically rehabilitated.
Effects in Satellites
This Moscow-inspired pro-
gram will have a number of ef-
fects. Within the bloc, it
adds a semblance of credibility
to Communist claims that justice
PART II
Tse-tung, as the "leaders of
the Chinesepeople."
an legality are being sincerely
pursued in the post-Stalin era.
Iti also intended to encourage
initiative among party members
and to Win greater popular sup-
port for the regimes. Exter-
nalry, it supports Soviet ob-
jectives of making Communism
more appealing to the non-
Communist world, and is es-
pecially useful in encouraging
Tito to increase his ties with
the Soviet bloc.
While the original charges
in the Satellite purges were
contrived to meet Soviet propa-
ganda needs at the time, in most
cases the purges appear to have
been at least in part the out-
growth of serious factionalism
or struggle for power within the
parties. This was almost cer-
tainly true of the major purges in
Albania,'Bulgalria, Czechoslovakia,
and East Germany, and probably
was an important factor in the
Hungarian, Polish and Rumanian
purges.
The trend of eVents in the
last few months has already
Stimulated renewed factionalism
within the parties. The regimes'
repudiation of their past actions
against former "nationalist"
leaders is likely to give further
encouragement to nationalist
elements within the parties and
complicate the present leaders'
problems in setting limits on the
criticism now being permitted.'
The rehabilitations will
increase unrest, particularly
in the East German, Polish, and
Hungarian parties where
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12 April 1956
rank-and-file members are already
confused over the recent at-
tacks on Stalin.
In Hungary, where there
was already strong nationalist
opposition to party first secre-
tary Rakosi's leadership, rumors
are widespread that the "reha-
bilitation" of Rajk has caused
prominent Communists to join in
the increasing criticism of
BULGARIAN PREMIER'S POSITION
IMPERILED
The Bulgarian Communist
Party central committee's
criticism of Premier Chervenkov
augurs severe limitation on his
powers, if not removal from his
position as number-one Bulgarian
political leader. The party
secretariat has already been
enlarged, and unconfirmed
reports claim the central com-
mittee has voted to "rehabil-
itate" Traicho Kostov, a rival
of Chervenkov's who was executed
as a "Titoist" in 1949.
CHERVENKOV
Rakosi. Rakosi apparently still
retains Moscow's support, how-
ever. In their message of greet-
ings to the Hungarian leader-
ship on the eleventh anniversary
of the Hungarian liberation on
4 April, Khrushchev and Bulganin
praised Rakosi as a "tested
veteran of the revolutionary
movement responsible for a num-
ber of important measures."'
Any derogation of Cherven-
kov will please Tito. The Yugo-
slays have long considered
Chervenkov one of the most
Stalinist of the Eastern Euro-
pean leaders. It has often
been rumored that one of Bel-
grade's prices for further
reconciliation with the Soviet
bloc has been the political
"heads" of such men as Cher-
venkov, and that Moscow is
willing to pay this price.
Official Criticism
The Bulgarian party central
committee resolution adopted
during a plenum held from 2
to 6 April and announced on
8 April said that "the cult
surrounding the person of
comrade Vulko Chervenkov changed
to a great extent the traditional
and tested methods of work of the
Bulgarian Communist Party,
namely, internal party democracy
and collective leadership." It
said thatttis had at times led
to unilateral decisions and
hurt the "organizational, ideo-
logical, and economic work of
the party and state."
While other Satellite
parties in discussing the Soviet
20th Party Congress have said
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that the cult of personality
had extended into their coun-
tries, the Bulgarians are the
only ones to associate these
admissions directly with their
present top leader.
Present Leadershi
After Stalin's death in
1953, the individual Satellite
leaders who in most cases head-
ed both the government and the
party divested themselves of
one post or the other in con-
formity with Moscow's line of
instituting collective leader-
ship. Most of them resigned
as premier and retained party
leadership, but Chervenkov pre-
ferred to exercise his authority
formally as premier rather than
as party first secretary, boss-
ing the party from behind the
scenes
At the Bulgarian party
congress in February 1954,
Chervenkov formally relinquished
the post of party secretary gen-
eral and Todor Zhivkov, a rela-
tive nonentity, took over in
the position. Chervenkov ap-
peared to keep the party reins
in his own hands, and he led
the Bulgarian delegation to
the Soviet 20th Party Congress
in Moscow. However, Zhivkov,
who did not even go to the con-
gress, was the one to report on
it at the recent Bulgarian cen-
tral committee meeting. Although
considered a Chervenkov man at
the time of his appointment,
Zhivkov may be used now as a
relatively "neutral" element to
modify Chervenkov's predomi-
nance in the regime.
One of the two new appoint-
ees to the secretariat, Encho
Staikov, a politburo member,
reportedly holds dual Soviet-
Bulgarian citizenship and has
had a background in police and
political indoctrination work.
He may have been appointed to
assure Moscow a check on future
activity in the party, even
though Chervenkov himself has
always been known as a good,
loyal "Muscovite." The other
new member, Boyan Bulgaranov,
apparently represents the other
major Bulgarian party group,
the "nativiSts," who spent the
war years in Bulgarian partisan
activity rather than in Moscow.
The choice of these two men,
therefore, appears in part to
be an attempt to please each
of the two basic groups within
the party.
Problems of Succession
Chervenkov may, of course,
be completely demoted. An ex-
traordinary session of the Bul-
garian National Assembly, set
for 16 April, will probably
approve some changes in the
government structure and may be
used to effect Chervenkov's
ouster.
In this event, the exist-
ence of factions in the Bulgar-
ian party might complicate the
problems of finding a successor
for Chervenkov. The present
number-two man, Deputy Premier
Anton Yugov, is a "nativist."
Moscow and the Moscow-oriented
elements of the Bulgarian party
may feel that making him pre-
mier would encourage "nativist"
elements to set an overly inde-
pendent course for Bulgaria.
To keep this group within bounds
an attempt may be made to set
up a "collegial" system spread-
ing power among several inplud-
ing Yugov and possibly "re-
formed" Chervenkov. I
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NEW "LIBERALISM" IN POLAND
Poland has officially gone
further than any other Satellite
in its interpretation of the
downgrading of Stalin. Polish
public information media regard
the Soviet 20th Party Congress
as "a denial of slavish ad-
herence to formula" and as
promoting a new liberalism in
numerous fields. The abundance
and intensity of the Polish
comment probably reflect Polish
nationalist resentment of Stalin
and the regime's eagerness to
place the blame elsewhere for
measures which have proven un-
popular.
The Poles, in their en-
thusiasm to cast off the re-
strictions of Stalinism, have
called for: "youth...thinking
independently," public debate,
especially in parliament, and
greater freedom and independence
in the arts. Premier Cryankie-
wicz, calling for a new period
of "bold and creative ferment"
at a national conference of
architects, stated that "the
past two decades have been
fatally weighted down by the
painful distortions which grew
...from the omnipotence of
Stalin, who usurped the position
of final authority in all fieldq
not only. architecture, but also
science, literature and art."
Laws and Enforcement
Another call for more
creative activity and independ-
ent thought was made in sev-
eral recent broadcasts which
criticized the unanimity of
voting in the Polish parliament
(Sejm) and demanded public
discussions and clashes of view
in order to reach correct con-
clussions. Jerzy Rawicz, writ-
ing on 31 March in Trybuna Ludu,
the official organ of the P-61-Tgh
United Workers (Communist) Party,
attacked the formula that since
"there are no fundamental
antagonisms in the Sejm, all
the deputies should not discuss,
but vote unanimously."
In an article on the trade
unions, Trybuna Ludu deplored
the fact that "the labor laws
in our country are systematical-
ly violated."
The new liberalism also
has called for a return to the
rule of law to replace "the
lack of supervision over organs
of government."
Another example of the
criticism of the regime was an
open letter, published in Zycie
Warszawy on 28 March, whitE----
stated that many people who had
been sentenced to long prison
terms for high treason were
being released without the
public being informed of their
"rehabilitation in the eyes of
justice." The letter called on
the minister of justice to
remedy the situation so that
these men would be rehabilitated
in the eyes of society as well.
This letter set the stage
for the regime's announcement
on 6 April that former party
secretary general Gomulka,
purged in 1949 for "nationalist
deviations," has been cleared
of "unfounded accusations,"
though no change has been made
in "the correct thesis of
political and ideological
struggle which the party...
continues to conduct against
the false ideological con-
ceptions represented by Gomulka."
In addition, other purged of-
ficials, including Generals
Komar and Spychalski, have been
exonerated.
Problems for the Leaders
The Polish regime is faced
with the task of curbing the
Poles, who have always been
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12 April 1956
highly nationalistic, while it
propagates the new liberalism.
The party may hope toNplacate
nationalist elements by ostensi-
bly adopting more liberal in-
ternal policies.
The party leadership, how-
ever, has reportedly been plagued
by serious factionalism, and a
MIKOYAN IN COMMUNIST ASIA
Soviet first deputy pre-
mier Anastas I. Mikoyan com-
pleted his trip through Asia
with brief stops in Peiping and
Ulan Bator, arriving back in
Moscow on 10 April where he
will probably take over while
Bulganin and Khrushchev are in
London. Mikoyan, as number-
three man in the Soviet hier-
archy, once before "tended the
farm"--as Bulganin put it--
while Bulganin and Khrushchev
were at the Geneva conference
last year.
The last phase of the
trip was highlighted by the
signing of agreements with
China which committed the USSR
to further support of Chinese
Communist economic development.
These agreements had been
initially negotiated in Moscow
and were probably completed
before he arrived. They sup-
plement those signed in 1953
and 1954.
One calls for the con-
struction and equipping of 55
new industrial enterprises in
China in addition to the 156
enterprises for which the
USSR is already committed.
Among these new enterprises
are metallurgical plants,
machine-building plants,
synthetic fiber and plastics
factories, enterprises for
"electrical technique and
radio technique industries,"
group Opp6sed to the politburo
is said to have been gaining
in strength since Beria's down-
fall. It addition, large
segments of the party are
sympathetic to the views of
Gomulka, whoSe exoneration can
only serve to bolster opposi-
tion to the present leadership.
fantortes producing synthetic
liquid fuel, power stations,
and "scientific research insti-
tutions for the aeronautical
industry."
The other agreement pro-
vides for the opening in 1960
of a new railroad linking
China and the USSR--the 2,000-
mile Lanchow-Aktogai railroad
through northwest China.
The total value of new
Soviet assistance is equivalent
to 2.5 billion rubles. No loan
appears,to have been granted to
finance this sum, which is to
be defrayed "through trade pro-
cedures." The new commitments,
while not increasing the annual
level of Soviet support to
China, will extend support well
into China's Second Five-Year
Plan (1958-1962).
The Soviet-Mongolian
communique signed by Mikoyan
on 8 April provides for "long-
term credits on easy terms" to
Outer Mongolia. Soviet aid is
to include assistance in
residential construction and
the construction of public
Utility and other enterprises.
Agreement was also reached on
the transfer of two narrow-
gauge ,railroads to the Soviet-
MongoliOn Joint Stock Company
of the Ulan Bator railroad and
on joint geological surveys.
prepared jointly
with ORR)
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12 April 1956
LAOS
In the expected absence
of any solution to the Pathet
Lao problem resulting from this
month's meeting of the Geneva
co-chairmen?Britain and the
USSR--the Laotian government
may decide to see what a direct
meeting with the Viet Minh can
produce.
The Indian charge in
Vientiane has been trying to
arrange for Premier Souvanna
Phouma to make a courtesy visit
to Hanoi. He feels the Viet
Minh might 'persuade" the
Pathets to accept the govern-
ment's authority in the two
northern provinces in return
for a pledge not to enter any
military alliances or to admit
any foreign military personnel
into Laos. Viet Minh terms
would presumably include the
elimination of American influ-
ence.
Souvanna Phouma has de-
clared he will treat with
"great circumspection" any
Communist approach, but he is
apparently pleased by the
triendly treatment of his
JAPANESE-SOVIET RELATIONS
The USSR, in response to
a Japanese request, has agreed
to talks on the fisheries prob-
lem either in Tokyo or Moscow.
Foreign Minister Shigemitsu
expects the negotiations to
begin shortly in Moscow and
has selected a delegation of
government officials and pri-
vate fisheries representatives.
Interim Agreement Possible
The USSR will probably
limit the talks to the question
of its restrictions on salmon
fishing which become effective
govetnftent in Chinese Communist
and Viet Minh propaganda. More-
over, he has agreed in principle
to a Pathet Lao proposal to re-
open political negotiations,
thus backing away from the
government's previous position
that negotiations must be pre-
ceded by Pathet Lao acceptance
of the control spmmission's 7
January resolution, which
called for prompt restoration
of the government's autllority
in Phong Saly and Sam Neua
Provinces.
Meanwhile, intensified
military action may occur at
an isolated government post in
Sam Neua Province. The pres-
ence of a truce team at the
post since last June has served
to protect it, but Polish mem-
bers of the team have withdrawn
after being threatened by
government troops. If they do
not return, the Indian and
Canadian members will have no
basis under the Geneva agree-
ment for staying. The govern-
ment has alerted commando units
to reinferce the post, a symbol
of its determination to maintain
a foothold in the north.
25X1
on 15 May rather than disenss
the larer question of a
general fisheries settlement.
Moscow has consistently made a
general fisheries settlement
conditional on the conclusion
of a peace treaty. The USSR
will probably be prepared to
present an interim regulation
agreement on salmon fishing in
terms, that will be extremely
adverse to Japan.
It is possible the USSR
will make any fisheries settle-
ment conditional on Japanese
agreement to establish diplomatic
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relations. Any temporary ar-
rangement would reduce somewhat
the pressure on the Tokyo gov-
ernment from Japanese fishing
interests for an early peace
treaty, but the unilateral na-
ture of the Soviet restrictions
is likely to remain a source of
dissatisfaction for the Japanese.
In view of Moscow's resist-
ance on the repatriation issue,
which the Hatoyama government
has proposed also be discussed
apart from the peace talks,
there may be some disposition
in Tokyo to soften Japanese
territorial demands to obtain
a settlement on fishing and
repatriation.
Japan May Be Conciliatory
Meanwhile, Japanese chief
negotiator Matsumoto, whore-
turned to Tokyo following the
SCANDINAVIAN-SOVIET
AIR AGREEMENTS
The bilateral civil air
agreements between the Soviet
Union and Sweden, Norway and
Denmark signed on 31 March are
the USSR's latest move in the
establishment of direct sched-
uled air flights between Moscow
and the West. A concurrent
agreement was reached between
the Scandinavian Airlines System
(SAS) and Aeroflot, the Soviet
civil air organization, pre-
sumably implementing the bi-
lateral agreements0
suspension of the London talks,
has publicly hinted that it
may be desirable to take a
"practical view" of the situa-
tion. He has referred to
Japan's weak power position,
the improbability of American
support or of further Soviet
concessions on the territorial
issue, and the Soviet refusal
to settle the fishing and
repatriation problems without
a peace treaty.
The Japanese negotiator
stated, "We may have to do some
things even more unpopular than
Jutaro Komatsu once did," a
reference to concessions by the
Japanese negotiator at the peace
conference after the Russo-
Japanese War of 1904-1905.
Matsumoto says he is willing to
wait for a "very powerful leader-
ship" to "reshape public opinion
and carefully align the public
attitude toward the negotia-
tions."
Details concerning rates
and flight schedules will be
worked out in a forthcoming con-
ference between SAS and Aeroflot
representatives. An SAS spokes-
man said his company may provide
daily connections with Moscow
beginning in May, although the
American embassy in Stockholm
reported that the agreement
called for SAS to operate two
flights weekly in each direc-
tion. Apparently, the agree-
ment provides for flight service
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
NORTH
AN
FINLAND
SWEDEN
NORWAY
Helsinki. Leningrad
EU RopE
Stock I
C Cotta
Stockholm
Kochi
DENMARK
* Copenhagen
1-2 APRIL 1956
\ MB
which will result in a rough
balance of seating capacity
between Aeroflot and SAS.
Both lines will use two-
engine conventional-powered
aircraft. Riga, the only stop
en route to and from Moscow, is
to be a "technical" stop for
purposes of maintenance and re-
fueling only. SAS representa-
tives will be located in Riga
and Moscow and an SAS commer-
cial office- in Moscow is
planned.
The volume of traffic is
uncertain despite the SAS con-
tention that the traffic with
Russia is"increasing rapidly
both ways:' The Finnish airline,
currently the only non-Orbit
line operating into Moscow, has
found that the traffic between
Helsinki and Moscow will sup-
port no more than token flights.
Besides Finland, three
other non-Orbit countries--
Yugoslavia, Austria and Afghan-
istan--have negotiated civil
air agreements with Moscow.
However, these countries either
do not have aircraft capable
of making regular passenger
flights into Moscow or have
made no moves to implement the
agreements.
Advantages for USSR
The agreement with SAS has
given the USSR access to civil'
air routes outside the Orbit
which will enable Soviet pilots
to gain valuable experience. In
return it has given to SAS--an
airline with major world air
routes--rights for overflights
of Soviet territory. As it
gains experience and adds new
equipment, the USSR will be in
a position to capture more pas-
senger traffic and to expand
its services to more routes.
Moreover, the USSR controls the
shortest air route from Europe
to the Orient, which it can use
as a bargaining poiut for fur-
ther agreements with Western
countries.
The route from London
to Tokyo via Moscow, for ex-
ample, is over 1,000 miles
shorter than the polar route
via Greenland and the North
American continent and some
3,000 miles shorter than the
India-Pakistan route.
(Prepared by ORR)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
LYSENKO'S REPLACEMENT
The release of T. D.
Lysenko from his post as presi-
dent of the All-Union Academy
of Agricultural Sciences "at
his own request" would appear
to administer the coup de grace
to Lysenko's biological and
agricultural theories, the best
known of which claimed that
changes in environmental con-
ditions could alter hereditary
characteristics of plants. The
latter hypothesis, which re-
ceived Stalin's wholehearted
approval because it appeared to
confirm Marxist doctrine, has
long been denounced by Western
geneticists and has been of-
ficially discounted in the
Soviet Union since Stalin's
death.
Lysenko himself has been
the target of frequent Soviet
criticism over the past three
years but appeared to be sur-
viving the downgrading of his
theories. He still retains his
post as director of the Insti-
tute of Genetics, as well as
membership in the Academy of
Sciences and the Academy of
Agricultural Sciences, but it
is clear that his over-all
influence in the agricultural
field has been broken.
Lysenko's doctrines have
had a profound influence on
Soviet biological and agri-
cultural research for more
than a decade, and even though
these doctrines may now be
abandoned, considerable harm
has been done to the generation
of scientists trained according
to his precepts. The appli-
cation of his theories un-
doubtedly hindered the develop-
ment of improved varieties of
agriculturally important plants.
Soviet geneticist N. P. Dubinin
recently blamed Lysenko for
blocking earlier Soviet attempts
to carry out a hybrid corn
breeding program and now the
USSR has officially requested
permission to send a delegation
of scientists to study American
corn breeding techniques. Ly-
senko's removal will probably
accelerate a return by Soviet
scientists to beliefs and tech-
niques in the fields of biology
and agriculture generally ac-
cepted in the West.
Personnel Shifts
Lysenko was succeeded in
the agricultural academy post
by P. P. Lovanov, former minis-
ter of agriculture in the Rus-
sian Republic (RSFSR), who was
promoted to USSR deputy premier
in the post-Malenkov reorgani-
zation in February 1955. He
acted as Khrushchev's principal
assistant in agricultural mat-
ters until after Matskevich was
appointed Soviet minister of agri-
culture in October 1955. Since
then Lovanov's political for-
tunes have waned; he was the
only deputy premier not elected
a full member of the party's
central committee at the 20th
Party Congress in February 1956.
Lobanov is not a scientist
by training and his career has
been almost exclusively in the
field of agricultural adminis-
tration. In a speech in April
1955, Lobanov described the
mission of agricultural scien-
tific institutes as improvement
of practical work rather than
abstract theorizing. He has
been particularly active in the
past three years in connection
with the Soviet party and
government efforts to increase
agricultural production. His
public statements and articles
reflect a special knowledge of
and concern for the problems of
agricultural mechanization.
Agriculture Minister V. V.
Matskevich, who previously
worked under Khrushchev in the
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CURRENT INTELLIGENCE 'WEEKLY SUMMARY
12 April 1956
Ukraine, was promoted to the
vacated deputy premier's slot.
He will apparently continue as
agriculture minister and as-
ume over-all direction of the
agricultural complex in the
council of ministers. In the
SOVIET IMPORTS OF ALUMINUM ORE
Current Soviet efforts to
obtain substantial amounts Of
bauxite from Greece and Yugo-
slavia suggest that in the
future the USSR may become par-
tially dependent on aluminum
ore from outside the Sino-soviet
bloc. Unless new internal
sources of bauxite are developed
soon, Soviet bloc supplies will
be inadequate by AW?O to support the
USSR b planned aluminum production.
The Sixth Five-Year Plan
calls for Soviet production of
an estimated 1,100,000 metric
tons of aluminum a year by 1960
--about double 1955 :production.
This will require at least
4,500,000 tons of bauxite an-
nually.
The USSR will produce an
estimated 1,200,000 tons of
bauxite in 1960, and will prob-
ably be able to import about
1,600,000 tons from Hungary and
another 200l0o0 tons from Ru-
mania, leavihea deficit of
about 1,500,000 tons a year.
The USSR is now using only about
2,000,000 tons a year, but it
is attempting to cope with
the anticipated deficit in three
ways. It is engaged in inten-
sive exploration for new de-
posits of bauxite; in a large-
opinion of the US agricultural
attache in Moscow, Matskevich
will probably be a stronger and
more dynamic agricultural over-
lord than Lobanov.
Prepared jointly with
OSI; concurred in by ORR)
scale research program to pro-
duce alumina from other ores;
and in efforts to increase im-
ports from the free world.
The USSR had obtained only
negligible quantities from
Greece until last year. In the
second h lf of 1955, however,
it took delivery on 100,000 tons,
and asked permission of the
Greek government to purchase
an additional 300,000 tons dur-
ing a 17-month period beginning
in August 1955. It has indicated
a willingness to purchase from
400,000 to 800,000 tons a year
for the next three years.
Under the terms of the
Yugoslav-Soviet trade agreement
signed on 6 January, Moscow
will import 100,000 tons Of
bauxite and 2,000 tons ofalu-
mina this year. According to an
unconfirmed report, MOSCOW has
requested an additional 800,000
tons of bauxite, Reported'
Spviet willingness to pay as
much as 20 percent more than
Italy and West Germany for
high-grade Yugoslav ore
indicates the pressing Soviet
need for the ore,
prepared by OR
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
NORTH AFRICA
Algeria
Military operations in Al-
geria are increasing in scope
and intensity as the build-up
of French security forces con-
tinues.
the rebels in recent en-
gagements have revealed better
arms and discipline than in the
previous hit-and-run fighting.
In the western area, France
has evacuated 5,000 persons
from a "no- man's land," in an
effort to control more effec-
tively rebel traffic across the
Moroccan border.
Meanwhile, France is trans-
ferring to Algeria up to 40,000
men from units in Germany and
French West Africa. These re-
inforcements, it is estimated,
will boost French ground strength
to approximately 230,000 men be-
fore the end of April.
On 11 April the French cab-
inet endorsed Minister Lacoste's
request for still more substan-
tial reinforcements by approving
a decree permitting military
authorities to recall up to
200,000 men from the "ready
reserve" as needed. Reportedly,
the initial orders will go out
immediately in order to get re-
inforcements of 70,000 to 80,000
to Algeria by the end of May.
Naval forces in North African
waters have also been augmented
and brought into combined tac-
tical operations for the first
time, and additional air power
has been transferred to Algeria.
MEDITERRANEAN SEA .sssz,
,gb
"Algiers ? BONE
Constantine
Nemo
CONSTANTINE
?
ALGIERS
ALGERIA
PRORT
Tunis
'Significant incidents since 26 March 1956
100
2?0 3?0 400
40111-4E1
*US Air -bases
12 APRIL 1956
IPPANI6H MOROCCO
1.11SYA
RA
FRENCH
WEST AFRICA
24100
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
French Morocco
Moroccan negotiations
witL the French to define the
terms of "interdependence
between two countries are
likely to be complicated by
an increasing Moroccan involve-
ment in Algerian matters. The
issue of aid to Algerian
nationalists will probably
arise in connection with the
formation of a Moroccan army,
which is the most immediate
issue facing Moroccan and
French negotiators. France has
proposed an army of 20,000
soldiers, formed largely by
the transfer of Moroccan units
now in the French army and
staffed and trained by France.
Spain wants to participate in
staffing and training this
army and the Moroccans insist
that the few Moroccan officers
occupy key posts.
The increasing number of
countries which have recognized
Moroccan independence was
swelled this week by the Chi-
nese People's Republic and
Iraq. The sultan, who has not
yet named a foreign minister,
is expected to appoint Abder-
rahim Bouabid, prominent Isti-
qlal leader and now minister
of state in the Moroccan govern-
ment, to head a foreign min-
istry. Because there are few
Moroccans qualified to staff
diplomatic posts, as well as
for budgetary reasons, the
number of such establishments
will initially be small, pos-
sibly limited to Paris, Wash-
ington, London, Cairo, and
Madrid.
A three-day strike of sev-
eral thousand Moroccan and
European workers at the four
American air force bases al-
legedly had the full endorse-
ment of the Istiqlal party and
the sultan, who believed it
necessary to demonstrate to the
United States tae urgency of
Moroccan labor demands. The
strike was ended on 11 April,
however, without the fulfill-
ment of any of the 14 demands
of the pronationalist Moroccan
Union or Labor (UMT).
Spanish Morocco
The Madrid conversations
resulting in the 7 April
declaration proclaiming the
independence of the Spanish
protectorate of Morocco were
reported to have been "stormy."
Many troublesome issues were
left unsettled, including the
future of the Spanish enclaves
of Ceuta and Melilla, whose
return was requested by the
Moroccans. The Spaniards tried
unsuccessfully to obtain Moroc-
can agreement to a condition
that the transfer to Morocco
of full powers in the Spanish
zone follow the achievement of
"genuine independence" of the
French zone.
All indications point to
further rough going when
negotiations are resumed on 7
May. Spain will make every
effort to have a voice in
Moroccan affairs and a position
in a united Morocco equal to
that of France.
Tunisia
The newly created Tunisian
Constituent Assembly unanimously
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April'l956
elected Habib Biaurghiba,,mod-
erate leader of the Neo-Destour
party, as its president during
the inaugural ceremony on 8
April. Subsequently, Bour-
ghiba was asked to form a new
government to succeed the care-
taker cabinet of Premier Tahar
ben Ammar, which resigned on
9 April.
By emerging from the wings
to the center of the stage of
Tunisian politics, Bourghiba
may hope both to recapture the
elements of the Neo-Destour
party which have looked to
extremist Salah ben Youssef for
leadership and to play a more
dominant role in current nego-
tiations with France. Bour7
ghiba has adopted a less coi-
ciliatory attitude toward
France since the 20 March
declaration of Tunisian
TURKEY'S ECONOMIC SITUATION
Turkey's worsening eco-
nomic situation is characterized
by serious inflation and a des-
perate lack of essential goods
and raw materials. The govern-
ment is apparently divided on
whether to devalue the currency,
and a new cabinet crisis may
develop over the issue.
The public debt has passed
the billion-dollar markt and
foreign trade has reverted to
its usual deficit position fol-
lowing a small surplus in Jan-
uary. The cost of living, which
rose 5 percent during the last
quarter of 1955, continues to
climb, reflected especially in
food prices. Shortages of raw
materials and spare parts have
forced many industries to lower
production. Metallurgical
industries have been operating
at 10-20 percent of capacity,
and textiles and cement, at
about 80 percent0
independence, and is now likely
to press harder for more favor-
able terms for Tunisia when
negotiations with France are
resumed in mid-April.
Tunisian minister of in-
terior Mongi Slim has been con-
ferring in Paris with Minister
of State Savary on the transfer
of internal security powers to
the Tunisians. The French cite
the need for protecting French
nationals in Tunisia as the
main objection to transferring
control over security matters
to the Tunisians. The acting
high commissioner in Tunis re-
cently informed the American
consul general that terrorist
activities in the south and
west may soon reach such pro-
portions that French inhabitants
will have to be evacuated.
Prime Minister Menderes,
Secretary General for Economic
Affairs Esenbel, and Ambassador
Gork are still pushing for a
large US loa, which they re-
gard as a badly needed "shot
in the arm" because of the
country's critical cash position
and inability to meet demands
for consumer goods. These
officials continue to oppose
devaluation, although there
is growing support within the
government for taking some
action on the exchange rate.
American representatives in
Ankara believe immediate
action on devaluation and
debt funding is essential.
Reaction to Soviet Offers
The Turkish government
continues to rebuff Soviet
economic aid offers, but it is
alarmed over the cumulative
effect of Soviet propaganda on
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
public opinion. Many deputies
are said to be demanding an
explanation from Foreign Minis-
ter Koprulu of why, in view of
its desperate economic plight,
Turkey does not accept Soviet
aid offers.
The Turkish people are
traditionally anti-Russian.
However, if they were to lose
confidence in the government's
ability to provide the basic
necessities of life, they
would become increasingly
EFFECT OF STALIN REPUDIATION
ON THE ITALIAN LEFT
The Soviet leaders' re-
pudiation of Stalin appears to
have had more impact on the
Italian left than on any other
left-wing group outside the
Sino-Soviet bloc. The turmoil
within the Communist and Nenni
Socialist parties has threat-
ened unity within both parties
and may be weakening their
alliance. The Italian local
elections on 27 and 28 May are
likely to find party leaders
Togliatti and Nenni competing
with each other for leadership
of the left.
Togliatti's Problems
Togliatti, challenged by
his colleagues for subservience
to Moscow, appears to be on
the defensive, and the American
embassy in Rome reported on 23
March that the Communist Party
was undergoing a real crisis.
Although Togliatti has since
secured a somewhat equivocal
retraction of criticism from
his prominent party colleague,
Senator Terrapini, and has
apparently brought other
critics badk into line, the
embassy comments that Togli-
atti's attempts to control the
party may well lead to new
dissatisfaction.
PART II
vulnerable to Soviet blandish-
ments and propaganda.
Possible Cabinet Crisis
The reported resignation
of Minister of Economy Ulas in
protest against Menderes'
Interference in the affairs of
his ministry may presage another
cabinet crisis over the economic
situation. Unusual political
activity throughout Turkey
during the past month suggests
the possibility of a new po-
litical alifnment.
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Nenni's Tactics
Togliatti's problems have
been further complicated by the
statements of Nenni, who is
striving to reconcile the pro-
and anti-Stalin elements within
his own parIty. In the 26 March
issue of the Socialist Party
organ Avanti!, Nenni commended
Togliatti as the only Com-
munist leader defending those
aspects of Stalin which made
him a histbric and heroic
figure. ,At the same time, how-
ever, Nenni emphasized that
his own party, contrary to the
CommuniSts, had consistently
expressed reservations with
regard to certain of Stalin's
policies.
In an earlier Avanti!
article, shortly after Togli-
atti's return from the Soviet
20th Party Congress, Nenni
in effect invited the Com-
munists to debate the causes
which had led to the "cult of
personality" in the USSR. In
the same article, Nenni said
that "Communist errors" were
responsible for the split in
the Socialist movement during
the early 1920's.
Togliatti has apparently
tried to side-step such a de-
bate, and did his best,according
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12 April 1956
to the American embassy in Rome,
to suggest in his 13 March re-
port to his party's central com-
mittee that the Communists
would remain "at the head of
the working class" and that the
unity-of-action pact with the
Nenni Socialists would not be
broken.
Election Outlook
The differences between
Togliatti's and Nenni's state-
ments have aroused wide specu-
lation in Italy as to their
joint and respective fortunes
in the communal and provincial
elections in May. The American
embassy in Rome believes the
Communists may lose some votes
WEST GERMANS FEAR DISARMAMENT
MAY OVERRIDE UNIFICATION ISSUE
West German officials and
the press are displaying sen-
sitivity to statements suggest-
ing that agreement can be
reached on disarmament or any
other important East-West issue
on the basis of a continuing
division of Germany.
Prior to the opening of
the UN subcommittee meetings
on disarmament in London on
19 March, both the government
and opposition in Bonn approved
of disarmament as a possible
road to German unification.
The press, however, was already
voicing concern that "German
unification might be sacrificed
on the altar of disarmament."
In recognition of these fears,
the Bonn government arranged to
be kept fully informed if issues
concerning Germany were discussed
in London.
Mollet's "US News" Interview
On 3 April, the Bonn
government was unpleasantly
surprised by French premier
to the Nenni Socialists, and
Togliatti evidently considered
it necessary to urge his fol-
lowers on 3 April not to shift
to Nenni.
Meanwhile, center and left-
of-center parties are concen-
trating their attention on
Nenni. Republican deputy La
Malfa has suggested to his
party that a meeting ground
between the center and the
Nenni Socialist Party, "which
cannot be regarded as a total-
itarian party" may now exist.
The Social Democratic directo-
rate published a statement on
31 March challenging Nenni to
break with the Communists and
subscribe to the principles of
the Socialist International.
Mollet's statements in US News
and World Report criticizing
Western policy and proposing
that disarmament be put on the
list of international business
ahead of German unification.
The next day Soviet leader
Khrushchev publicly endorsed
Mollet's remarks, and expressed
the view that German unifi-
cation was not necessary to
world peace.
Bonn issued a statement
protesting Mollet's remarks and
declared that "no German govern-
ment will be prepared to discuss
seriously proposals for the re-
laxation of tensions based on
even the temporary division of
Germany." The German ambassa-
dor in Paris pointed out to
Mollet that such serious matters
should be co-ordinated in ad-
vance among the Allies. Bonn
described Khrushchev's views
as "completely unrealistic."
On this last point, the opposi-
tion Social Democrats, who had
professed to see in Mollet's
position a "way out of the blind
alley," expressed complete
agreement.
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12 April 1956
General Gruenther Misquoted
Bonn's apprehensions a-
bout Western policy were height-
ened when General Gruenther,
supreme Allied commander in
Europe, was incorrectly quoted
in the West German press as
having said that NATO strategy
was based on an initial with-
drawal from Germany in the
event of attack. Responsible
West German papers asserted
that if this report was correct,
"Allied headquarters will have
to think of a new plan."
Although Mallet has since
assured Bonn there is no change
in French policy and he feels
there can be no secure peace
without German unification,
Chancellor Adenauer apparently
is anxious for a meeting with
the French premier to seek
further reassurance of Western
solidarity on this issue.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
PART III
PATTERNS AND PERSPECTIVES
BRITISH POLICY TOWARD THE USSR
ON THE EVE OF THE BULGANIN-KHRUSHCHEV VISIT
The British government,
which has for some months shown
increasing concern over the new
tactics of Soviet foreign
policy, is treating the 18-27
April visit of Bulganin and
Khrushchev as primarily an op-
portunity to probe Russian in-
tentions, particularly with
reference to the Middle East.
The recently concluded tour
of ex-premier Malenkov and the
preparations for the Bulganin-
Khrushchev visit have focused
the British public's attention
to an unusual extent on rela-
tions with the USSR. Advance
arrangements have been exten-
sively debated in the press and
by the public; but except among
fellow travelers and some Bevan-
ite elements, there so far ap-
pears to be no inclination to
assume that Soviet policy has
undergone more than a tactical
change. The arrival of security
chief Serov to make advance
preparations for the visit was
generally considered as confirm-
ing this.
The efforts of certain
Eastern European refugee groups
to organize hostile demonstra-
tions have received no important
support from either Labor or
Conservative Party circles, how-
ever, and the US Information
Service in London believes
Malenkbv's performance as good-
will ambassador, which occa-
sioned favorable press comment
at a ratio of more than two to
one, greatly smoothed the way
for Bulganin and Khrushchev.
Re-examination of USSR Policy
This surge of public in-
terest in relations with the
USSR has been paralleled in
government circles by an ex-
tensive re-examination of Soviet
policy, starting with the Czech-
Egyptian arms deals last Sep-
tember and becoming more in-
tensive after the 20th Party
Congress in February.
The Foreign Office was
particularly disturbed by the
Soviet entry into areas of tra-
ditional British influence as
signalized by the Middle Eastern
arms deals and the Bulganin-
Khrushchev visit to India and
Burma. It saw these moves as
meaning that Moscow, though re-
pudiating full-scale war as an
instrument of national policy,
was still bent on Communist ex-
pansion through ways that might,
lead to war.
The Soviet policy of com-
petitive coexistence through
the use of economic enticements
to underdeveloped areas is seen
by London as offering a special
threat to its own position in
these areas because of Brtain's
present economic inability to
compete in kind. As a result,
Britain has been informally
trying to interest the United
States in expanding economic
aid programs, particularly to
the Baghdad pact countries.
British officials have also
been seeking ways in which Lon-
don can regain the initiative
on the diplomatic front.
Several aspects of the
20th Party Congress caused
British officials special con-
cern. One was the statement
that there was more than one
way of achieving socialism--
and indeed the emphasis on
"socialism" rather than "com-
munism." This line, British
officials fear, will be partic-
ularly seductive in colonial
areas and in neutral or un-
committed countries.
Another aspect was the
de-emphasis of Stalin in favor
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of Leninist collective leader-
ship. One official saw this
line as likely to delude seg-
ments of the British public,
and stated that the Foreign
Office planned a campaign to
expose the dangers of Leninism.
Prime Minister Eden evi-
dently shares the Foreign Of-
fice worries. In mid-March
he reportedly gave French pre-
mier Mollet his "personal esti-
mate" that the present Soviet
diplomatic and economic tactics
are even more dangerous than
those in use when NATO was
established.
Attitude Toward the Visit
Against this background,
the British government evidently
sees the Bulganin-Khrushchev
visit, initiated at the summit
conference last July, as both
a diplomatic opportunity and a
propaganda hazard.
Every effort is being made
to keep the visit as much as
possible in a purely diplomatic
context, avoiding the "triumphal
tour" aspects which character-
ized Bulganin's and Khruschev's
visit to India and Burma and
Malenkov's trip to Britain. Of
the eight full days in their
scheduled stay, three provide
for talks at 10 Downing Street
and two others for dining with
Eden--one of them including an
overnight stay at the Chequers
estate. A trip to only one im-
portant industrial center,
Birmingham, will be made. At
the same time, the Foreign Of-
fice has endeavored to dissuade
the leaders of Eastern European
refugee groups from causing any
disturbances, and London twice
soughisszto dissuade Moscow from
sending Serov to superintend
the security arrangements.
Diplomatically, on the
other hand, Britain has evi-
dently tried to capitalize to
some extent on the fact that it
is the first Western country to
receive the top Soviet leaders.
Possibly seeing some parallel
with the 1954 Geneva conference
where he won great prestige as
a "bridge" between East and
West, Prime Minister Eden dis-
cussed the impending visit with
French premier Mollet during
their 10-11 March conference.
Foreign Secretary Lloyd will
report on it afterward to Mol-
let and Foreign Minister Pineau
before they undertake their
own trip to Moscow.
Conduct of the Talks
In the talks themselves,
Eden and other top leaders seem
to see mainly an opportunity to
probe the intentions and mutual
relationships of the top Soviet
leaders. This idea was an im-
portant part of Churchill's orig-
inal 1953 proposal for summit
talks and has appeared again
In the comments of some of the
British leaders--mainly on the
Labor side--who talked with
Malenkov. There is also a
general British hope of correct-
ing at least some of the Soviet
leaders' dangerous misconcep-
tions about the West.
The agenda for substantive
discussions is extremely loose,
and the British have emphasized
that they have no intention of
turning the "serious talks" in-
to negotiations on any question
of multilateral interest. Topics
of bilateral concern mentioned
by the Foreign Office official
arranging the details of the
visit include such matters as
radio jamming and cultural ex-
changes.
British officials have
made clear, however, that they
hope for an exchange of views
on several matters of key im-
portance, presumably including
the Middle East situation.
While Britain apparently
has no proposals to offer, it
would be interested in any
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Soviet overtures that would ap-
pear to lessen the prospects of
war between Israel and the Arab
States.
The British also anticipate
a serious eXChanie of views on
disarmament. As of late Feb-
ruary, the Foreign Office ex-
pected the Russians to offer a
new friendship treaty--which
Britain planned to reject on
the grounds that there had been
insufficient time since their
1955 abrogation of the 1942
pact, to see how coexistence
worked.
Nervousness About US Attitude
Several recent remarks by
British officials about the
Bulganin-Khrushchev visit have
indicated some anxiety lest
Anglo-American co-operation be
imperiled by too great an aura
of "good will" toward the Soviet
guests. The British ambassador
in Moscow, for example, in tell-
ing his American colleagues of
London's advice that Serov be
kept at home, remarked that he
hoped the Russians would send
Serov anyway as a "grim reminder"
of Soviet reality.
Foreign Office officials
have expressed to the American
embassy in London a hope for
some "clumsy" Khrushchev re-
mark that would serve to
further cement Anglo-Ameri-
can solidarity. They have even
suggested that Eden intends to
receive the Russians as leaders
of a hostile state--a plan
scarcely compatible with the
schedule prepared for them.
INDIAN ATTACKS AGAINST PAKISTAN
SYMPTOMATIC OF NEHRU'S HOSTILITY TO SEATO AND BAGHDAD PACT
Indian prime minister
Nehru's antagonism to Western-
sponsored defense alliances in
Asia appears to be expressing
itself in a tougher policy to-
ward Pakistan, a member of both
SEATO and the Baghdad pact.
Increased Indian pressure on
Pakistan--especially over the
explosive Kashmir issue--may
result in intensified efforts
by Pakistan to force the West
to choose between it and India.
The Tough Policy
Nehru has from the begin-
ning campaigned vigorously
against Western defense align-
ments in Asia. Although he
made it clear in 1954 that he
felt American military assist-
ance to Pakistan had "introduced
a new element' into Indian-
Pakistani negotiations on Kash-
mir, he did not until recently
translate his anger into action.
In the first three months
of 1956, India apparently in-
itiated a series of incidents
along its borders with Pakistan.
The incidents were timed to
coincide with the SEATO council
meeting in Karachi between 6
and 8 March and were followed
by Indian charges that Ameri-
can weapons were being used by
the Pakistani forces involved.
On 29 March, Nehru made a
blistering 90-minute speech
in the Indian parliament attack-
ing SEATO and the Baghdad pact
and denouncing Pakistan's claims
to Kashmir.
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He reaffirmed his state-
ments in a press conference on
2 April,
Probably inspired by the
SEATO council's reiteration of
support for a settlement of
the Kashmir issue through the
United Nations, Nehru stated
that a plebiscite was not
possible at this time and vir-
tually ruled out solution of
the Kashmir problem on any but
India's terms. While Indian
obstructionism on a Kashmir
militarily, despite American
military assistance to Pakistan.
While Moscow attempts to
convince members of SEATO and
the Baghdad pact that their as-
sociation works economic hard-
ships, India can demonstrate
that there are also political
disadvantages. Thus, Nehru can
profit from the Soviet campaign
against the pacts without as-
sociating himself with it
directly. New Delhi also ap-
pears to be encouraging Egypt
u-^ \
EGYPT
Baghdad Pact nation
SEATO nation
Nation receiving
US military grant aid
X Border incident
CEYLON
12 APRIL 1956
24131
S.
VIET- PHILIPPINES
*
plebiscite is not new, Nehru's
categorical statements served
notice that India would not
attempt to reach a solution.
Meanwhile, India has en-
couraged an exodus of Hindus
25X1 from East Pakistar
25X1
The Indian Objective
From New Delhi's point of
view, pressure on Pakistan is
a conservative means of ex-
pressing Indian anger at Western
policy in the area. Public
sentiment against Pakistan is
strong and Kashmir has long
been a local issue between the
two countries. India is, and
can expect to remain, dominant
in its efforts against the
Baghdad pact and promoting op-
position to SEATO in Cambodia.
Pakistan's Reaction
Pakistan's reaction to
India's tactics may result in
the United States and USSR lin-
ing up on opposite sides on
the Kashmir issue. Nehru's
closing of the door on Kashmir
has already resulted in Paki-
stan's deciding to return the
Kashmir issue to the UN Se-
curity Council. There India,
probably backed by the USSR,
will face Pakistan, which will
probably consider the amount
of Western support as an index
to its future relations with
the West.
Pakistani prime minister
Chaudri Mohammad Ali made this
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clear on 6 April in the National
Assembly. Facing a barrage of
criticism on his handling of
Indian moves against Pakistan,
he said simply: "I am sure our
friends, the Americans ,are
quite capable of dealing with
such tactics."
The border incidents pro-
voked by a militarily more
powerful India will almost cer-
tainly inspire Pakistani leaders
to greater efforts to turn
American military assistance
into channels designed to pro-
mote strength against India
rather than the USSR.
Pakistani officials have
said they intend to bring up
the Kashmir question at the 16
April meeting of the Baghdad
pact in Tehran. The amount of
support for Pakistani aims given
there by the West 1411 probably
be looked upon as another indi-
cator of future relations.
Mohammad All has already indi-
cated that he does not intend
to act on the long-pending
Treaty of Friendship, Commerce
and Navigation with the US
until he returns from Tehran.
JAPAN COMPETES FOR SOLE
The Japanese government
has well-defined plans for the
economic development of South
and Southeast Asia--a region
:where Communist economic pene-
tration is beginning to have
an impact, but where Britain
and West Germany still offer
Japan its stiffest competition.
Tokyo's plans are to open new
sources of supply for cheap raw
materials and to stimulate the
Asian market for Japanese goods.
But these plans are likely to
fall far short of their poten-
tial unless the government is
willing to devote greater fi-
nancial resources to developing
such trade than in the past.
The Future
In the current atmosphere
of disillusion and doubt over
the future of SEATO and the
Baghdad pact, failure of the
West to "produce" as Pakistan
and other interested states
feel it should could result
in the Asian members of the
pacts abandoning any sincere
effort to achieve the aim of
the pacts--defense against
Communism.
If Nehru finds that his
policy of talking against the
pacts to the West and making
his opposition to them felt in
action against Pakistan is
frustrated by strong Western
support for Pakistan on Kash-
mir, he may, as he has in the
past, attempt to evolve a new
approach in line with his
neutralist principles. How-
ever, he will also be greatly
tempted to undertake a policy
of closer economic and political
co-operation with the USSR, pos-
sibly including purchase of
Soviet arms.
IN ASIAN DEVELOPMENT
Financing
A prime problem exists in
how to pay for the large re-
quired imports of raw materials,
plus construction, installation
and other costs in the countries
which receive aid from Tokyo.
Japan would be financially able
to support technical assistance
projects and an increased vol-
ume of long-term loans and in-
vestments if the Hatoyama gov-
ernment were willing to lessen
its present high priority for
social welfare and other domes-
tic programs.
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12 April 1956
JAPANESE CAPITAL GOODS EXPORT FINANCING
(JYY APRIL 1954-MARCH 1955, IN THOUSANDS OF DOLLARS)
Amount of
Contract Validated
Pakistan
India
Burma
Thailand
Indochina
Formosa
Philippines
Hong Kong
Indonesia
Other Countries
Amount of
Credit Committed
Ex-Im Bank Private Banks
166,789 99,164
21,098
9,161
1,022
3,386
1,328
2,350
2,422
4,800
121,222
Businessmen's Attitude
10,437
5,791
733
1,711
680
1,481
1,094
3,603
73,633
Japanese businessmen are
neither willing nor able to in-
vest in South and Southeast Asia
in any great numbers without
political and economic stability
in those countries, guarantees
against expropriations, repatri-
ation of profits and participa-
tion in management. Rates of
return on loans and investments
must be more nearly commensurate
with those in Japan, where rates
are high, unless government as-
sistance is forthcoming.
Tokyo's Plans
Current trade: Tokyo's
agreement to pay certain repara-
tions and embark on a program
of economic co-operation with
underdeveloped Asian countries
stems from the view that trade
between Japan and the rest of
Asia has about reached the max-
imum under present conditions.
In the Japanese fiscal
year 1954-55, South
and Southeast Asia
bought only $46,000,-
000 of Japan's total
capital goods exports
of $167,000,000. The
Japanese estimate that
they could increase
capital goods output
by $633,000,000 over
the 1954 level with-
out having to expand
existing capacity.
24,736
2,122
1,684
183
442
217
492
450
903
18,244
60317 4
has not moved much
beyond the planning
stage. In formulating
its plans, moreover,
Tokyo counts first of
all on a large Ameri-
can dollar contribu-
tion. In addition,
it hopes payments to
the United States for
postwar economic aid
(GARIOA) and yen funds
from the sale of US sur-
plus agricultural com-
modities will be
loaned back to Japan
or used directly by
the United States to procure
Japanese goods for Smith and
Southeast Asia.
Reparations: Reparations
payments are likely to be the
government's principal contri-
bution to Asian economic devel-
opment. A $250,000,000-agree-
ment with Burma, a $27,000,000-
debt settlement with Thailand,
and an impending $800,000,000-
agreement with the Philippines
are all payable in goods and
services, a portion of which is
to consist of Japanese long-
term loans and investments. In
addition, a substantial settle-
ment will eventually have to be
made with Indonesia and a lesser
one with South Vietnam. In Ja-
pan's fiscal 1956-57 budget,
$42,000,000 has already been set
aside for reparations, most of
it earmarked for Burma.
Private Investors: Except
for reparations, the Japanese
government has placed primary
JAPANESE EQUITY INVESTMENT ABROAD
1951-1954 Aggregate
1953-1954 Aggregate
(Okinawa
(Southeast Asia
(North America
(Central & South America
By Countries
(Mining-Manufacturing
(Agriculture, Forestry 4
By Industries Fishery
(Banking
(Others
To date, the source: Japanese Ministry of Commerce and Industry
Japanese government
Contracts
23
18
6
6
2
4
9
5
2
2
1,000
dollars
5,294
5,007
432
315
1,325
2,935
2,830
649
1,325
203
60317 4
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responsibility on private in-
vestors in carrying out Asian
economic co-operation in 1956-
57. A few deals like the Orissa,
India, iron mine project will
receive Japan Export-Import Bank
assistance in addition to foreign
aid and commerdial bank credits.
Seventy million dollars in
government trust funds is to be
transferred to the Export-Import
Bank to supplement its capital
under the 1956-57 budget. Most
of the bank's loans will be for
ordinary commercial
purposes, however,
with only $8,000,000
earmarked for econom-
ic co-operation,
25X1 I. e., medium-term
loans and investments.
Private business-
men have concluded a
nurnber of technical
assistance agreements
with Asian nations
in such fields as
textiles and fishing,
extended medium-term
loans for the purchase
of Japanese industri-
al plants and equip-
ment, and partici-
pated in a few joint
ventures, generally
furnishing goods and
services. ?Most loans
have been for mine
development projects
of direct interest to
Japanese industry,
which are repayable in raw ma-
terials at favorable prices.
development corporation, which
Tokyo proposes should be estab-
lished with financial partici-
pation by the United States and
Asian countries. This proposal
is in line with the Japanese
preference for a regional rather
than a bilateral approach.
Communist Competition
India: With respect to
Communist competition, India
and Burma are presently the
areas of greatest concern.
...,01.11 ?
lftillarlIEVAITATIONS St-HEM/LE 70FI IKPANkSE
1955 (1 April 1955-31 March 1956)
(In millions of dollars)
EStI ted urgeineils
ctPrlce n
auggehygiSeltdits_prolect
,d5aria
cu re protect "
o ro ecf-
--Stock-anreciuipment
, arges, ea;-Oilier srnall craft
()rake
a erials
y-and'equiPment
6.5
i2AWigorib?
transportation,
16-ngoon
- -
ifs- Only $700 000 as of late March
Japanese businessmen have
to depend heavily on domestic
bank financing at high rates
for foreign trade deals. The
supply of credit for other than
short-term loans is limited, and
Japanese government institutions
and private banks alike are con-
servative in assessing South
and Southeast Asian credit risks.
Development corporations:
One of the principal vehicles
for carrying out the Japanese
program is to be a new Asian
603174
India plans to spend an esti-
mated $2.8 billion for foreign
capital goods and equipment
over the next five years, of
which $1.6 billion must come
from foreign grants and credits.
Communist commitments include
mainly a $115,000,000 Soviet
credit on easy terms for the
construction of a steel mill
and additional credits by the
Satellite countries for indus-
trial equipment.
Britain and West Germany
have each agreed to build one
steel mill, though on less
favorable terms. Japanese
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efforts are likely to be con-
fined to less costly industrial
projects for which financing is
available on terms competitive
with those of Britain and West
Germany.
Communist competition in
the Indian market has not yet
affected the Japanese seriously.
Last year, India's trade with
the Soviet Union reportedly
amounted to only one third of
India's trade with Japan. Brit-
ain and West Germany were in
fact the more formidable com-
petitors. There are strong
indications, however, that
Communist economic penetration
will increase.
Burma: Rice is the key
to foF5TER competition in the
Burmese market. It comprises
80 percent of Burma's exports.
With Moscow's recent agreement
to increase its purchases to
400,000 tons this year, the
Sino-Soviet bloc will take at
least one third of Burma's total
rice exports. This figure may
even become as high as one half
in succeeding years. Communist
countries are thus in a posi-
tion to gain a major share of
Burma's capital goods' market
despite Burma's preference for
dealing with the West.
Communist deliveries to
date have been minimal, but are
expected to gather momentum this
year. In addition to making
token payments of rice for such
Soviet gifts as a technological
institute and a medical center,
the Burmese government tenta-
-tively plans to procure $40,-
000,000 worth of capital goods
from the bloc in 1956. This is
about one half of itS total
planned public capital imports.
It has already accepted a Chi-
nese Communist offer to expand
a textile mill near Rangoon.
The details of Burma's
utilization of its barter cred-
its with the USSR will be worked
Out when a high-level Soviet
planning mission visits Rangoon
in May. The Burmese may seek
Russian aid for the establish-
ment of a tractor factory and
truck assembly plant and for
the enlargement of a steel mill.
The Chinese and Soviet programs
may be supplemented to a lesser
extent by the Satellites, which
have also purchased Burmese
rice.
Other Countries: In other
count=a-br$buth and South-
east Asia, Communist economic
penetration is still just a
black cloud on Japan's horizon.
The chief source of anxiety
for Japan is Chinese Communist
exports of light consumer goods.
Many Asian governments, partic-
ularly those having declining
agricultural and raw materials
prices, are becoming increas:.
ingly tempted to strike a neu-
tralist pose to obtain economic
assistance from both sides.
In all cases, ability to
pay for imports in foodstuffs
and raw materials and the will-
ingness of foreign nations to
extend credit on liberal terms
are the determining factors in
Asian economic planning. The
ideological factor plays,' at
most, a minor role. Communist
technicians and trade represent-
atives have so far behaved
correctly and given no cause
for complaint on political
grounds.
Western Competition
..,,Britain and West Germany
still offer Japan its stiffest
competition in most of Asia,
both as to price and quality.
Their reluctance or inability
to extend latge credits has .
helped Tokyo to retain its lead
1711 total trade, except against
Britain in formerly British-
controlled areas.
The Hatoyama government's
proposal for an Asian develop-
ment corporation and its posi-
tive attitude on reparations
should assure the Japanese a
more important economic role
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in South and Southeast Asia
than in the past.- But Unless
a greater official willingness
to participate financially is
shown, the government's efforts
are likely to fall considerably
short of achieving their
full potential.
(Concurred in by wilt)
'PEIPING ATTEMPTS TO OVERCOME
Communist China's First
Five-Year Plan (1953-1957)
places great emphasis on the
development of petroleum re-
sources. Annual production
of crude oil increased from
120,000 tons in 1949 to 980,-
000 tons in 1955, but sharply
rising consumption still forced
China to import 57 percent of
its requirements last year.
This dependence on imports has
been a major military vulner-
ability and a strain on over-
land transport from the USSR.
Reserves
Peiping has undertaken an
ambitious program of prospect-
ing and exploration, optimis-
tically Lloping to locate a
total petroleum reserve of
55,000,000 tons by 1957. This
quantity, which is far larger
than previous estimates of
proved reserves, would probably
meet refinery demands for
several decades in China, even
though it would be only nine
months' supply for the USSR
and two months' for the United
States.
PART III
PETROLEUM DEFICIENCY
Considerable publicity
has attended the search for
oil in the remote Tsaidam
Basin of Tsinghai Province,
where crude oil of good quality
reportedly has been discovered.
The recent decision to build
a 930-mile railroad from Lan-
chow into the Tsaidam Basin
may have been prompted by oil
discoveries.
Production
The Chinese Communists
acknowledge that their petroleum
industry is still backward in
spite of its impressive ex-
pansion since 1949. The total
COMMUNIST CHINA'S
CRUDE OIL PRODUCTION
(THOUSAND METRIC TONS)
SYNTHETIC CRUDE
11111 NATURAL CRUDE
120
980
1,400
1949 1952
12 APRIL 1956 60409 3
1955
1957
ESTIMATED
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PETROLEUM PROSPECTS AND REFINERIES
'Arts
Ulan Ude
TARIM BASIN brig
I SAIDAM BASIN
t?ngntor
SZECHWAN
BASIN
gking
Ing tan
Oil basin with promising prospects
Petroleum refincry
$ Synthetic oil plaid
Railroad
Railroad, under construction or projected
0
12 APRIL 1956
annual production of 980,000
tons of crude oil in 1955 is
slightly more than the average
daily production in the United
States.
Considerable effort has
been expended to rehabilitate
the Manchurian synthetic oil
facilities, most of which were
looted by the Soviet army in
1945. In 1955 crude shale oil
accounted for about 95 percent
of the total production of
synthetic crude oil and over
40 percent of the total crude
oil production in China. In
view of the abundant resources
of oil shale at Fushun, some
further expansion of oil shale
processing plants is expected.
Because of their high operating
costs, however, greater emphasis
Haroic
an
NORTH
VIETNAM
24130
will be placed on exploitation
of natural oil in the northwest,.
and tneir proportionate con-
tribution to total crude oil
production will probably decline.
Development of the Yumen
oil field, China's only im-
portant producer of natural
crude oil, has been delayed
by poor communications with
markets in eastern China. How-
ever, the Lanchow-Sinkiang
railroad will probably reach
Yumen in mid-1956. By 1960
production may be double the
1955 output of 480,000 tons.
Soviet and Rumanian technicians
have helped develop the field.
For example, a recent Soviet-
sponsored innovation has been
the injection of water to re-
pressurize the field, a typical
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Soviet practice of
secondary recovery
to restore or in-
crease crude oil pro-
duction.
Refining
Petroleum re-
fineries in China
are small by Ameri-
can standards, and
about a dozen pro-
vided only 1,300,000
tons of refining ca-
pacity per year in
1955. The USSR, how-
ever, plans to build
a 1,000,000-ton re-
finery for the Chi.-
nese at Lanchow, where it can
be supplied with crude oil from
Yumen and from other oil fields
which may be discovered in
northwestern China. The re-
finery probably will not be
completed during the First Five-
Year Plan because preliminary
construction work has just
begun.
12 April 1956
COMMUNIST CHINA
PETROLEUM SUPPLY AND CONSUMPTION
( THOUSANDS OF METRIC TONS)
SUPPLY
?
1955
1952
Domestic crude production
980
436
Imported crude
250
Total crude
1,230
1,250
586
950
Domestic refined products
1,100
TOTAL
IM
IMPORTS
500
TOTAL
2!"ORTS
Imported refined products
1,000
800
Total supply
2,100
1,300
CONSUMPTION
Military
630
400
Aviation fuel
(226)
(143)
Civil
1,470
900
Total
2,100
1,300
12 APRIL 1956
Peiping has announced that
aviation gasoline and aviation
kerosene will be among the prod-
ucts made at Lanchow; neither
of theSe is now produced in
China. The refinery will re-
quire specialized conversion
equipment, such as catalytic
cracking units, in order to
produce aviation gasoline.
Imports and Consumption
About half of Communist
China's petroleum imports in
1955 were delivered thousands
of miles via the Trans-Siberian
Railroad, the remainder origi-
nating in Soviet Far East re-
fineries or coming by tanker
from the Black Sea. These
imports, constituting about 30
percent of the volume of all
60409 3
Chinese imports, are a signifi-
cant strategic liability and
a heavy cost to the Sino-Soviet
bloc.
In the first few years
of the Communist regime, con-
sumption of petroleum products
was drastically restricted by
severe rationing and use of
substitute fuels wherever pos-
sible. In recent years, as
the supply has improved, ra-
tioning has been eased and
prices reduced. Industry and
transportation has sharply
increased their use of petroleum,
and Peiping has announced that
users of lamp kerosene increased
from 90,000,000 in 1950 to 380,-
000,000 in 1953.
Because of the limitation
to greatly increased imports
and difficulties in expanding
the petroleum industry, con-
sumption is still closely con-
trolled, and petroleum will con-
tinue for the foreseeable future
to be a much less prominent
source of energy for the Chi-
nese economy than it is for
the USSR or the United States.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
BRAZILS? FOREIGN POLICY
President Kubitschek's
first 60 days as head of the
Brazilian government have re-
vealed his intention to ex-
pand commercial relations with
Western Europe and the Soviet
bloc. There are indications
that he will seek at the same
time to strengthen Brazil's
traditional ties with the
United States.
Kubitschek's failure dur-
ing? his election campaign to
disclaim support of the corrupt
Vargas machine and of certain
Communist elements had aroused
such strong antagonisms in
Brazil that for several months
before and after the 3 October
presidential election there
were persistent reports of prep-
arations for a military coup.
Since his inauguration on 31
January, rumors of impending
coups have been far fewer.
Relations With US
During the campaign,
Kubitschek had promised an
extensive economic development
program for Brazil--"50 years
of progress in five." His
major foreign policy objectives
seem to be to obtain the eco-
nomic assistance to make good
this promise. In this, he
seems likely to turn to those
countries offering the most
help in tackling Brazil's
enormous foreign exchange and
development problems.
Although Kubitschek is
considered more Europe-oriented
than were presidents Dutra and
Vargas, he looks to the United
States as his major source of
economic assistance. He has
already asked Washington's
help in expanding agricultural
production and storage facili-
ties, in refunding Brazil's
external debt, and in meeting
investment goals totaling over
a billion dollars. To smooth
his relations with the United
UNDER KUBITSCHEK
States, Kubitschek apparently
intends to move as far as pos-
sible from the ultranational-
istic policies of Vargas.
Kubitschek's foreign min-
ister is regarded as strongly
pro-US, but the degree of his
own support for American poli-
cies in international affairs
is not yet clear. However, he
agreed to oppose the seating of
a Chinese Communist delegation
at the International Parlia-
mentary Union meeting in Yugo-
slavia.
Relations With Europe
While looking to the United
States as his major source of
aid, Kubitschek hopes to tap
Western European sources as
well. This was illustrated by
his pre-inaugural tour of
Europe following his visit to
the US. Kubitschek also ap-
pears eager to expand the
"limited convertibility area"
trading arrangement now in ef-
fect between Brazil and a Euro-
pean group composed of Britain,
West Germany, Belgium and the
Netherlands.
In late March, Kubitschek
followed up earlier conversa-
tions in Bonn with West German
industrialists by negotiating
the establishment of a large
Krupp subsidiary and four Bayer
chemical plants and the expan-
sion of a Brazilian steel mill
by Ferrostaal. Krupp has
agreed to co-operate with
Kubitschek in his transporta-
tion and power programs by
constructing locomotives, trucks,
buses, tractors and turbines.
The American embassy in Rio de
Janeiro believes West German
investment in Brazil in 1956
might outstrip new American
investment activity.
The West German government
has agreed to supply geologists
for Brazil's still ineffective
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 April 1956
national petroleum monopoly,
Petrobras. Although Kubitschek
is believed by some observers
to be willing to throw petro-
leum open to private investment,
the step is considered politi-
cally risky at present. Foreign
involvement in this important
field will probably continue
to be limited to loans and
technical aid. French interests
have already supplied equipment
for one Petrobras refinery and
are considering financing
another in conjunction with
Belgian and Italian interests.
Relations With Soviet Bloc
Kubitschek has been under
mounting public pressure to ex-
pand trade with the Soviet bloc.
This pressure has increased
since Bulganin's overtures to
Latin America in January and
the US announcement of its
surplus cotton disposal program.
The subject of Soviet trade and
diplomatic relations has become
a major Communist-front theme,
in which over 20 non-Communist
deputies have become involved.
Kubitschek has publicly
stated his desire to use trade
with the Soviet bloc as a means
to solve pressing surplus and
foreign exchange problems.
Diplomatic ties, however--ex-
cept those that exist with
Czechoslovakia and Poland--will
depend on congress, according to
Kubitschek. He told newsmen in
February that relations with
other bloc countries would be
"a step I will not initiate."
Soon after Kubitschek's
inauguration, the Soviet
embassy in London asked to
meet the Brazilian ambassador
there to "clear up any past
misunderstandings." This was
interpreted as a Soviet move to
resume relations which Brazil
broke off in 1948. The Brazilian
ambassador was instructed to
confine himself to listening,
according to Foreign Ministry
officials.
The Czechs and Poles both
sent delegations to the inaugu-
ration,and Prague is reliably
reported to have laid plans to
exploit Kubitschek's ancestral
ties to improve relations.
The plan was abandoned, however,
when it was learned that he
had no sentimental attachment
for Czechoslovakia.
Kubitschek's Foreign Min-
istry appointees appear grati-
fied by the Soviet bloc offers
but aware that past arrange-
ments have not always improved
Brazil's trade position. They
recently denounced an official
trade agreement with Czech-
oslovakia in order to revise
unfavorable exchange rates.
Nevertheless, new trade
agreements are under considera-
tion. /
preliminary trade talks with
the Soviet Union are being
carried on between Brazilian
and Soviet diplomats in Argen-
tina. Poland, Hungary and
East Germany have offered to
buy surplus cotton and coffee
In exchange for needed indus-
trial equipment.
(Concurred in by OttH)
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