CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
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• Release Decision: RIPPUB
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• Document Page Count: 46
• Document Creation Date: December 16, 2016
• Document Release Date: March 1, 2005
• Sequence Number: 1
• Publication Date: June 16, 1960
• Content Type: SUMMARY

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INTELLIGENCE
WEEKLY
SUMMARY
CURRENT
COPY NO. A
OCI NO. 2699/60
16 June 1960
DOCUME,N. 1.o.
NO CHANuF_ i.; C! n, _.
CLASS. C ED TC:
NEX T REV/ic'a',: DATL:
--
RUTH:
DATE.
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
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State Department review completed
RE~3".'35 CENTEt
REtUri~ 1d A~.tt~i~t~
1MMEU1ATEII AFTER USE
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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 13, 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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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
SINO-SOVIET CONTROVERSY DEEPENS . . . . . . . . . . . . . Page 1
The continuing Sino-Soviet dispute over tactics
toward the United States has led to Moscow's most sweeping
and explicit condemnation to date of Chinese internal and
foreign policies. The Chinese, dropping all pretense of
disguising their criticism with quotations from Lenin,
have publicly condemned policies with which Khrushchev
personally is associated. Pravda's strongly worded reaf-
firmation of Khrushchev's pre-summit policies on 12 and
13 June confronts Peiping with a choice between intensified
condemnation by Moscow and adjustment to Soviet positions.
Publication of these authoritative statements is the best
recent evidence that Khrushchev is firmly in control in
Moscow and serves notice to any critics at home or in the
satellites that support for the more aggressive Chinese
line will not be tolerated. 25X1
EAST-WEST RELATIONS . . . . . . . . . . . . . . . . . . . Page
Soviet propaganda is maintaining a drumfire of criti-
cism of American policy as aggressive and provocative.
Personal attacks on President Eisenhower, however, have
declined. Moscow contends that the "negative reception"
the President has received on his current Far Eastern tour,
in contrast to the warm reception during his Asian tour
last year, reflects the adverse Asian reaction to the U-2
incident and the "sabotage" of the summit meeting by the
l
n
e
US. Peiping's propaganda is, typically, moredviru
than Moscow's in personally attacking the Press en .
CUBA . . . . . . . . . . . . . . . . . . . . . . . . Page 6
Czechoslovakia has extended to the Castro government
a $20,000,000 long-term, low-interest credit as well as
SITUATION IN JAPAN . . . . . . . . . . . . . . . . . . . . Page
The ineffectiveness of the Kishi government in coping
with the political crisis over ratification of the US-
Japanese security treaty and its inability to control
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PART I (continued)
public disorders provoked by an extremist left-wing minor-
tiy have forced Tokyo to request President Eisenhower to
postpone his visit to Japan. The domestic political situ-
ation now appears to have deteriorated to a point at which
it probably cannot be resolved until Kishi steps down.
NOTES AND COMMENTS
. . . . . . . . . . . . . . . . . . Page 1
The interim constitution approved by the National
Unity Committee (NUC) on 12 June legalizes this officer
group as the supreme authority in Turkey. There are indi-
cations, however, that factionalism is developing within
the committee. There are also hints that the new regime
may be reappraising Turkey's foreign relations.
CURRENT INTELLIGENCE WEEKLY SUMMARY
. . . . . . . . Page 2
De Gaulle made no new proposals to the Algerian reb-
els in his 14 June speech, but in repeating his earlier
offers on cease-fj.re talks and self-determination be ap-
peared to retreat from his more recent "bard line" stress-
ing military pacification. The rebel provisional govern-
ment will probably express qualified approval of De Gaulle's
remarks, while reiterating its opposition to any
of rebel arms in a cease-fire or to any solution
might involve partition of Algeria. De Gaulle's
may also have been an attempt to answer mounting
of his government's domestic policies.
. . Page 3
Brussels' designation of Patrice Lumumba to attempt
to form a Congo government is unlikely to halt the politi-
cal disintegration in the colony. Europeans are likely
to be disillusioned by Brussels' seeming capitulation to
Lumumba, who had threatened violence if he were not in-
vested as premier. In Leopoldville and Katanga provinces,
separatist sentiment continues strong. The Abako party
in Leopoldville has proposed the establishment of a new
province in the lower Congo as its special preserve, while
threats of secession by the Conakat party in Katanga have
prompted Belgian authorities to declare a state of emer-
gency there.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
PART II (continued)
FRENCH COMMUNITY DEVELOPMENTS . . . . . . . . . . . . . . Page 4
The French Community, recently revamped to accommo-
date independent African member states, may be about to
undergo a further evolution toward a loose, Commonwealth-
type institution. De Gaulle has largtly acceded to the
request of the Ivory Coast and three other West African
Community states for immediate independence within the Com-
munity without prior negotiation of future ties with France--
the procedure followed by Mali and,the Malagasy Republic.
Should this tactic appear to result in the four states'
achieving preferred treatment when new bilateral ties with
France are finally negotiated, other Community states which
have settled for less are likely to press for a revision
of their own arrangements with Paris.
BLOC ECONOMIC ACTIVITY IN WEST AFRICA . . . . . . . . . . Page
Bloc economic activity in West Africa has thus far
centered in Guinea, where offers of aid and trade have
been readily accepted. Although efforts to develop eco-
nomic ties with Ghana have been mostly unsuccessful,
recent indications suggest Accra may expand its minimal
contacts with the bloc. The bloc now is moving quickly
to establish close economic relations with the Mali Feder-
ation, which becomes independent on 20 June.
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BLOC BIDS FOR NEW ECONOMIC TIES WITH BURMA . . . . . . . . Page 7
Since U Nu returned to power in Burma, the Sino-So-
viet bloc has been pressing to revitalize its unsuccessful
trade and aid program there. Both Peiping and Moscow have
offered new economic assistance, and there have been gen-
eral bloc offers for expanded trade. The success of this
effort will depend chiefly on the bloc's willingness to
agree to terms which would overcome some of Rangoon's ob-
jections to past programs, and both sides probably wi
proceed cautiously under any new agreements.
SOVIET LEADERS' ACTIVITIES . . . . . . . . . . . . . . . . Page 8
Khrushchev and several other presidium members are
absent from Moscow, and political activities in the Soviet
capital for the last week and a half have been at a mini-
mum. Top-level discussions within the Soviet leadership
following the collapse of the summit conference appear to
11
have been suspended. Mikoyan reappeared in Moscow on
June for the first time in a month.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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PART II (continued)
SHAKEUP IN EAST GERMAN PARTY AT LOCAL LEVEL . . . . . . . Page 9
Dismissals and reassignments in East German district
party organizations reflect what is probably Ulbricht's
most serious political problem since the 1958 Schirdewan
conspiracy. He now is attempting to enforce discipline
among party functionaries who are either disillusioned by
his failure to achieve a better international status for
East Germany or who are unconvinced that his harsh internal
policies are correct. While it is not likely that he will
be deposed, either by his own party or the Kremlin, Ulbricht
is acting vigorously to root out all traces of opposition.
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CONSEQUENCES OF EAST GERMANY'S COLLECTIVIZATION DRIVE . . Page 10
The recent mass collectivization drive in East Ger-
many is beginning to affect the food supply and has com-
pounded fiscal problems of the Ulbricht regime. Food
shortages and higher costs of agricultural subsidies will
probably make necessary a request for bloc aid before the
end of the year.
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MIDDLE EAST DEVELOPMENTS . . . . . . . . . . . . . . . . . Page 11
No significant disturbances accompanied the Lebanese
parliamentary elections which took place on 12 June in the
first of four voting areas. The mixture of candidates
elected includes prominent politicians of every stripe
and appears to be very nearly what President Shihab was
hoping for. In Iraq, rumors of trouble, or even a coup,
on 14 July--the second anniversary of the revolution--
are circulating much as they did a year ago. While party
rivalries are intense and the Communists are complaining
about government discrimination against them, Qasim's mili-
tary support appears to be strong.
SOMALI SITUATION WORSENING . . . . . . . . . . . . . . . . Page 13
On the eve of Somalia's independence on 1 July, ten-
sion with Ethiopia has heightened and the moderate pro-
Western regime of Prime Minister Abdullahi Issa is jeop-
ardized by growing opposition in the local parliament.
Critical economic negotiations aimed at helping the new
nation stay on its feet may be further complicated by
these developments.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PART II (continued)
SINO-INDIAN BORDER PROBLEMS . . . . . . . . . . . . . . . Page 14
India's leaders appear increasingly concerned over
the Chinese Communists' consolidation of their hold on the
disnuted border areas.
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INDONESIA . . . . . . . . . . . . . . . . . . . . . . . . Page 16
Indonesian President Sukarno has promised to appoint
additional members to his rubber-stamp Parliament of 261
members before he installs it sometime this month.
25X1 he additions will amount to about 25X1
25 representatives of Moslem groups. Such a change, al-
though a concession to the army and the political opposi-
tion, would reduce Communist strength in Parliament only
from 24 to 22 percent, and Sukarno will probably continue
to permit substantial Communist participation in govern-
ment councils.
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NEW SOUTH KOREAN CONSTITUTION . . . . . . . . . . . . . . Page 17
The South Koreans probably will have trouble in main-
taining an orderly government as they have had little ex-
perience with the type of parliamentary system their new
constitution provides. The new government will have a
cabinet and prime minister responsible to the lower house
of a bicameral legislature. A president with greatly re-
duced powers will be elected for a five-year term by a
joint session of the legislature. Elections for the lower
house of the National Assembly are expected to be held in
late July or early August; those for the new upper house
may be held on the same date or later. 25X1
SITUATION IN THE DOMINICAN REPUBLIC . . . . . . . . . . . Page 18
Dissidents inside the Dominican Republic have been
encouraged by the charges of "flagrant and widespread
violations of human rights" made against the Trujillo
dictatorship on 8 June by the Inter-American Peace Com-
mittee (IAPC), a subsidiary of the Organization of Ameri-
can States. Both the dissidents and the Trujillo regime
evidently attribute the five-nation committee's report
largely to its US chairman. There are persistent reports
that some officers of the armed forces are plotting with
the dissidents; such tendencies are likely to be increased
by the IAPC report and by the growing bitterness between
Trujillo and the church.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PART II (continued)
ARGENTINE POLITICAL PRESSURES . . . . . . . . . . . . . . Page 19
President Frondizi's departure on 13 June on a month-
long state visit to eight Western European countries re-
flects a temporary lessening in Argentine tensions. The
brief and localized military rebellion quashed in San Luis
Province earlier in the day was an expression of the con-
flicting pressures which continue to plague Argentina's
political and economic recovery. Most military elements
distrust Frondizi but feel compelled to back him as they
favor constitutional government and support many of his
policies. F_ I 25X1
COMMON MARKET DEVELOPMENTS . . . . . . . . . . . . . . . . Page 20
The meeting in Paris on 9-10 June of the European
Economic Community (EEC or Common Market) and the European
--Free Trade Association (EFTA) and other interested powers
may have eased frictions between the rival groups. Both
sides have recognized, however, that no new basis for an
eventual amalgamation has been established. EEC members
remain basically suspicious of London's European policies
and are developing plans to consolidate the Community
approach by creating a single executive body for the EEC
EURATOM, and the Coal-Steel Community. 25X1
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PATTERNS AND PERSPECTIVES
NEW DEVELOPMENTS IN PARTY CONTROL OF THE SOVIET ARMED
FORCES . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Proposals and accomplished reforms approved in Moscow
in May by a conference of secretaries of party units within
the armed forces add up to one of the most significant
developments in the relationship of the Soviet military and
the Communist party since the ouster of Marshal.Zhukov in
October 1957. The reforms expand the party structure in
the military establishment, and appear to have the ultimate
goal of replacing the military officers now responsible
for party work with professional party functionaries.
Such moves would probably facilitate the exercise of party
authority and might reduce the areas of conflict ween
the party and the military.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
PART III (continued)
AUSTRIA'S ECONOMIC RELATIONS WITH THE BLOC . . . . . . . . Page 3
Premier Khrushchev, who will visit Austria from 30
June to 8 July, will find Vienna preoccupied with the
political and economic aspects of East-West trade. Vienna's
reparations deliveries to the USSR will be essentially com-
pleted early next year, and for the first time in two dec-
ades trade relations with the bloc will be on a purely
commercial basis. The gradual increase in bloc trade in
the past four years has encouraged many government and
business leaders to hope that Austria's trade pattern can
be restored to what it was before World War II. The in-
crease in bloc trade to 20-25 percent of total trade--the
generally accepted objective of these leaders--could ex-
pose Austria to bloc pressures although Vienna now dis-
counts such a possibility.
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ECONOMIC DECLINE IN SOUTH AFRICA . . . . . . . . . . . . . Page 6
Continuing racial tension in the Union of South Africa
has impaired foreign confidence in the country's economy;
the market value of Johannesburg stocks has dropped by
about 23 percent--some $1.72 billion--and the country's
gold and foreign exchange reserves have been reduced by
21 percent in nine weeks. The internal economic structure
has not yet been seriously affected, but few South African
firms are making long-term commitments. The reluctance of
many local businessmen to disturb the economy further by
supporting a program of political reform weakens the effec-
tiveness of the parliamentary opposition, which derives
most of its support from the business community.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
OF IMMEDIATE INTEREST
SINO-SOVIET CONTROVERSY DEEPENS'
The continuing Sino-Soviet
controversy over the proper tac-
tics to be pursued toward the
West, particularly the United
States, has led to Moscow's most
sweeping and explicit condemna-
tion to date of Chinese internal
and foreign policies. The ve-
hicle was a 12 July Pravda ar-
ticle, ostensibly a rev a of
Lenin's book "Left-Wing Commu-
nism, an Infantile Disorder" on
the 40th anniversary of its
publication. While asserting
that "revisionism" is the main
enemy of Communism, the article
makes'it clear that Moscow re-
gards "leftist sectarians"--in
context a thinly veiled epithet
for the Chinese leaders--as its
most dangerous present opposi-
tion in the Communist world.
This and other recent ar-
ticles and editorials in the
Soviet party press seem designed
to dispel any idea that the U-2
incident and the summit collapse
might necessitate a reassessment
of Khrushchev's pre-summit pol-
icies. The Soviet premier's
speeches since the summit break-
up appear to be defensive state-
ments calculated to demonstrate
the consistency of his policies,
while anticipating and deflect-
ing further criticism.
The Soviet Union seems to
have been forced to state its
position in more fundamental and
open terms than before by the
renewed attack being carried on
by the Chinese in People's Daily
ore
and in virulent speeches Uef -
the recently concluded meeting
of the World Federation of Trade
Unions (WFTU) in Peiping. Fail-
ure by Moscow to express its po-
sition in unambiguous terms would
tend to create confusion in the
bloc and the international Com-
munist movement and undermine
Soviet prestige and standing.
The Chinese have presumably
watched post-summit developments
with increasing bitterness. They
did not comment on Khrushchev's
20 May or 28 May speeches, which
left the door ajar for future
summit meetings, and they have
given no more than cursory notice
to other statements about the
possibility of a future heads-
of-government meeting. The re-
vised Soviet disarmament proposal
of 2 June apparently was inter-
preted in Peiping as a clear in-
dication that Khrushchev intends
to resume his detente tactics
after a period of tension. Fol-
lowing the proposal, the Chinese
dropped all pretense of disguis-
ing their criticism with quota-
tions from Lenin and have public-
ly condemned policies with which
Khrushchev personally is as-
sociated.
A People-,s Daily editorial
of 6 June noedbriefly in sup-
port of the Soviet disarmament
proposal and then attempted to
demolish the premise that war
can be eliminated by destroying
arms. This, People's Daily
claims, is an unpracticillu-
sion about peace. Peiping fol-
lowed this with a broader attack
by two Chinese central committee
members, who used the WFTU meet-
ing as a forum to assail Moscow's
ideas on negotiations and gen-
eral disarmament.
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CURRENT INTELLIGENCE WEEKLY 'SUMMA:RY
Liu Chang-sheng, speaking
on 8 June, said it is inconceiv-
able that there could be general
disarmament until the socialist
revolution is victorious through-
out the world. Another Chinese
official, Liu Ning-i, was equal-
ly critical when he told the
meeting on 7 June that any im-
plication that peaceful coex-
istence could be stretched to
include general cooperation is
a lie to deceive the people.
A current Red Flag article,,
broadcast on 15 Junee,demon
strates Peiping's strong aver-
sion to those East-West negotia-
tions from which the Chinese
are excluded. "To place hope
on diplomatic negotiations is
nothing but an illusion deviat-
ing from class reality," the
article stated.
Moscow's Reply.
Pravda, in a 13 June edi-
torial, addressed itself specif-
ically to Moscow's disarmament
proposals and rebutted Peiping's
strong reservations on this
question by reiterating as the
basis of Soviet foreign policy
Khrushchev's formulation that
war is no longer inevitable. It
went on to assert that only
shortsighted people who have
lost all sense of reality can
fail to believe in the possi-
bility of realizing total dis-
armament.
Pravda's more comprehen-
sive 12 June article had reaf-
firmed in authoritative language
Khrushchev's policies of peace-
ful coexistence, summit meet-
ings, and tactical compromises
with the West. It characterized
opponents to these policies as
dogmatists and sectarians,
strong imprecations in Moscow's
lexicon. The article also at-
tacked Chinese Communist inter-
nal policies and insisted that
the USSR's Communist party and
Soviet policies are the examples
Communist parties of other coun-
tries should follow.
The article labeled as naive,
erroneous, and incorrect the
statements of "leftists in the
international Communist movement"
that Communism can be introduced
immediately, bypassing historical
stages in the process. To try
to anticipate the result of fully
developed Communism in this way,
it said, quoting Lenin, "amounts
to the same thing as to try to
teach higher mathematics to a
four-year-old child."
The current round of ex-
changes is a continuation of the
debate that was joined when So-
viet presidium member Otto Kuusi-
nen, in his speech on the anni-
versary of Lenin's birth in
April, replied to the criticism
of Soviet ideological positions
contained in two editions of
Red Flag, the Chinese theoreti-
cs journal, earlier that month.
By virtues of the comprehensive-
ness and openness of the criti-
cism, however, the conflict has
advanced to a new and deeper
phase, making compromise more
difficult for both sides.
Although the Chinese now
are putting relatively more
stress on the prospects for avoid-
ing war than they had in April,
their criticism continues to be
centered on Moscow's failure to
emphasize the inherent threat of
US imperialism. This failure
directly undercuts Peiping's
justification of its "struggle"
to be recognized as the only
Chinese government, eventually
regain Taiwan, and reduce US
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16 June 1960
influence, which prevents at-
tainment of these goals. One
Chinese spokesman recently
summed up this position, stating,
"If we only talk, about the pos-
sibility of stopping the impe-
rialists from launching a world
war, but not about the danger
of imperialism's launching a
world war, we will only lull
ourselves and the people."
Satellites Support Moscow
Peiping's willingness to
engage in more open dispute with
Moscow is possibly based on an
assessment that, since the U-2
incident and summit collapse,
Khrushchev may find it diffi-
cult to ignore those elements
in the bloc which oppose a re-
turn to his detente policies.
However, satellite spokesmen
have rallied to Moscow";s posi-
tion, and the wording of the fir.
nal WFTU resolution reflected the
Soviet stand more than the Chi-
nese. A high Polish official
has indicated his dismay over Chi-
nese tactics to the US ambassador.
The publication of author-
itative statements fully support-
ing Khrushchev's policies is the
best recent evidence that he is
firmly in control in Moscow. The
articles: themselves are probably
also intended as an implicit
warning to any critics at home
and in the satellites that sup-
port for the more aggressive
Chinese line will not be tol-
erated. It now has been made
clear to the Chinese lead-
ers that they must choose be-
tween intensified condemna-
tion from Moscow and adjust-
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Soviet propaganda is main-
taining a drumfire of criticism
of American policy as aggressive
and provocative. Personal attacks
on President Eisenhower, how-
ever, have declined. Moscow
contends that the "negative re-
ception" the President has re-
ceived on his current Far East-
ern tour, in contrast to the
warm reception during his Asian
tour last year, reflects the
adverse Asian reaction to the U-2
incident and the l"Sabotage", "of
the summit meeting by the US.
Peiping's propaganda is, typical-
ly, more virulent than Moscow's
in personally attacking the
President.
The President's planned
visit to Japan has occasioned
critical comment from Moscow
and has been used as a point of
departure for attacks on the US
policy of maintaining military
bases overseas. It was pictured
as an effort by the President to
secure enforcement of the mili-
tary alliance with the US, to
bolster the unpopular Kishi gov-
ernment, and "to plunge Japan
more deeply into the whirlpool
of the cold war."
The demonstrations which
accompanied Press Secretary
Hagerty's arrival in Tokyo were
termed a "dress rehearsal" for
the President's reception--vig-
orous demonstrations were pre-
dicted--and the security precau-
tions which were to have been
taken for the President's safety
were greatly emphasized and
termed a mark of the Visit's'
unpopularity.
In a note to the Japanese
Government on 15 June, Moscow
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
reiterated the warning contained
in its note of 20 May on the
danger of the continued pres-
ence of American military forces
in Japan. The following day
the initial Soviet reaction to
the postponement of the Presi-
dent's trip referred to the
"bankruptcy" of the Kishi ad-
ministration and described in
detail the demonstrations ap-
proving the decision. This
latest note, together with the
tenor of Moscow's propaganda,
suggests that the USSR desires
to maintain pressure on Kishi
to resign as well as to sustain
the momentum of demonstrations
against the security treaty.
Chinese Communist commen-
taries have called President
Eisenhower "chieftain of the US
imperialist brigands," and
charged that his tour is aimed
at intensifying US war prepara-
tions in the Far East against
the USSR, Communist China, and
other Asian countries. They
have asserted that Communist
China could be accused of in-
citing Asians against the US
and that any hostile demonstra-
tions could be attributed to US
actions alone. Peiping is encour-
aging demonstrations against the
visit by publicizing Japanese
broadcasts appealing for such
displays of opposition.
In Moscow a Soviet lecturer
on the international situation
stated on 14 June that Soviet
propaganda is attacking the
President because "to strike at
the head" is the most effective
technique to maximize the loss
of prestige by the US as a whole
over the U-2 and the summit in-
cidents.
Other issues have been
seized on for similar attacks
on US policy. At the disarma-
ment negotiations in Geneva, the
chief Soviet delegate, in the
harshest language he has used
since the talks resumed on 7
June, denounced American aggres-
sive designs in maintaining mil-
itary bases abroad, in rearming
West Germany with nuclear weap-
ons, and in stalling on the dis-
armament issue. The recent ac-
cidental explosion of a Bomarc
missile in New Jersey has been
greatly exaggerated by Soviet
commentators, who have pointed
to the incident as "fresh evi-
dence of the danger involved in
the US armament policy." The
State Department's note to Cuba
on 4 June taking exception to
Castro's charges against the
US was termed "another aggres-
sive act against the people and
government of Cuba."
Moscow may intend to ex-
pand its propaganda exploitation
of the U-2 incident and the sum-
mit collapse into a more gen-
eralized anti-US campaign. The
Soviet party central committee
on 11 June published a 60-page
booklet for propagandists which
is entirely devoted to disparage-
ment of the United States. Ar-
ticles are featured contrasting
the alleged evil practices and
conditions in America with such
proud accomplishments of the
USSR as its industrial produc-
tion and growth, agriculture,
technology, education, human
rights, culture, medical care,
race relations, and foreign pol-
icy. The American Embassy in
Moscow reports that there seems
to be an increase in Soviet TV
programs, broadcasts, and lec-
tures critical of the United
States.
At the same time, the USSR's
efforts to justify its peaceful
coexistence policy and to in-
dicate its continuance have been
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
noticeable. The appearance of
two articles in Pravda, on 12
and 13 June,;seems designed to
dispel any idea that the U-2 in-
cident and the summit collapse
might necessitate a reassess-
ment of the premises of Khru-
shchev's pre-summit policy.
The optimistic line of
anticipating an improvement in
US-Soviet relations was set by
Khrushchev at his 3 June press
conference and has been fol-
lowed by bloc diplomats in offi-
cial and social contacts with
their American counterparts.
Western diplomats have reported
that the attitude of Soviet and
satellite officials with whom
they have spoken has been warm
and unexpectedly cordial in
some cases. One of the most
overt demonstrations of friend-
liness occurred in Prague on 4
June when Czech President and
party First Secretary Novotny
gave a reception for all chiefs
of diplomatic missions. This
was the first reception of this
type in 12 Years, and the Czech
leaders went out of their way
to display cordiality toward
Western officials who were pres-
ent.
Apparently,'too, there has
been a decision to proceed with-
out change with the Soviet and
satellite exchange programs
with the United States. Yuri
Zhukov, chairman of the Soviet
State Committee for Cultural
Relations with Foreign Countries,
told American officials on 9
June that the USSR was anxious
to carry on with its program
and emphasized the "necessity"
of cultural exchanges, particu
larly in the light of "well-
known events." Most satellite
regimes also have privately as-
sured American representatives
in their countries that despite
recent events, the limited cul-
tural exchange programs now in
progress will continue.
Bloc delegates at the 10-
nation disarmament talks con-
centrated last week on pressing
the West to respond construc-
tively to the USSR's revised
proposals of 2 June on general
and complete disarmament. So-
viet delegate Zorin stressed
that the Western delegates had
acknowledged Soviet movement to-
ward the Western position, but
complained that the West had
not shown any willingness to
make reciprocal concessions.
He strongly pressed French dele-
gate Moch for an adequate reply
to the new Soviet proposal to
prohibit and destroy all means
for the delivery of nuclear weap-
ons in the first stage of a dis-
armament program--a move de-
signed to appear responsive to
French views.
Bloc delegates also con-
tinue to hammer on the West's
alleged unwillingness to dis-
cuss general and complete dis-
armament, which they insist is
the task assigned the conference
by the UN General Assembly.
Zorin emphasized that if the
Unites States is not prepared
to discuss general disarmament,
it should say so forthrightly.
He warned, however, that in this
event there would be no basis
for further discussions.
These'tactics strengthen
the impression that the main aim
of bloc delegates is to build
the strongest possible record
for presenting their general and
complete disarmament program to
the United Nations next fall or,
possibly, to a session of the
82-nation 1UN *.Disarmament
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16 June 1960
Commission prior to the regular
meeting of the General Assembly.
.Nuclear Test Talks
Soviet delegate Tsarapkin
at the nuclear test talks main-
tained his adamant position on
the terms of Soviet participa-
tion in a joint research program
to perfect means of detecting
small underground nuclear tests.
He repeated that the USSR will
not conduct any explosions, nu-
clear or chemical, and again
demanded full Soviet participa-
tion in the United States re-
search program. He contended
that if the United States and
Britain want Soviet cooperation,
they have only to accept Soviet
views on the number, yield, sites,
and safeguards for proposed West-
ern nuclear explosions.
Tsarapkin also underscored
previous warnings that if the
US proceeds with nuclear explo-
sions without Soviet agreement,
Moscow will consider itself
free to resume nuclear weapons
tests. ](Concurred
in by OSI)
25X1
Czechoslovakia on 10 June
signed several agreements de-
signed to further bloc economic
interests in Cuba. A five-year
trade pact underscores Prague's
active role, but no specific
volume of trade was disclosed,
partly because Czechoslovakia--
an exporter of sugar--probably
is unwilling to purchase large
quantities of Cuban sugar. Ear-
lier, however, the Czechs ex-
pressed interest in importing
Cuban iron ore and possibly some
manganese and nickel. A deal
concluded last year calls for
the exchange of Czech trucks
for Cuban tobacco.
valued at nearly $4,000,000 to
set up eight small factories
producing household goods and
tools. A group of Czech tech-
nicians is already in Cuba for
sales promotion and presumably
to plan for more important de-
velopment projects.
There is no firm evidence
that arms agreements were con-
cluded during the Czech-Cuban
negotiations. However, the pos-
sibility remains that the bloc
has agreed to supply military
equipment to the Castro government.
Other agreements provide
for a
long-term
$20,000,000
Czech
credit to
supply indus-
trial
machinery and equipment
and technical assistance for
Cuban industrial projects. A
subsequent announcement states
that contracts have been con-
cluded for Czech equipment
In a television interview
on 10 June, Castro praised Czech
equipment and hailed bloc eco-
nomic agreements as facilitating
an industrialization program
under which machinery was already
being purchased and installed in
"70 factories." Castro claimed
that Cuba now has almost $200,-
000,000 in foreign exchange
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
25X1
reserves; he ignored the fact
that half or more of this amount
is owed--chiefly to US suppliers.
There have been further
examples this month of the in-
creasingly'close relationship
between the Castro regime and
the Communist bloc. A group of
Bulgarians headed by the under
secretary for foreign affairs
arrived in Havana almost simul-
taneously with the Czech group,
supposedly to discuss trade.
Soviet technicians continue to
be received warmly by the Cuban
Government, and the Peiping
Opera Company now is touring
the island under government
auspices. Castro has expressed
gratification over the atten-
tiveness shown to the Cuban com-
mercial mission now in Moscow,
including an honorary academic
degree awarded to mission chief
Nunez Jimenez, director of the
Cuban National Agrarian Reform
Institute.
Communist. strength within
the Cuban Government is growing.
Known Communists, including at
least two from Other Latin Amer-
ican countries, have been ap-
pointed to key positions by
Castro.
The Western refineries
which refused to process Soviet
crude oil have not yet been
taken over. Castro may wait
until he is assured of assistance
from other sources in maintain-
ing Cuba's POL requirements.
Arrangements are probably under
way for shipment of Soviet
petroleum and products in larg-
er quantities than _,present
levels. Castro attacked the
companies' refusal as economic
and political aggression by
Washington. Touring Cuban
President Dorticos echoed
Castro's charges in Mexico on
14 June and added that the
Cuban Goverment "is prepared
to ? takeL a ro ri4te mmeasures.. !'? , c ._-
X-Prepared jointly
with ORR) 25X1
The ineffectiveness of the
Kishi government in coping with
the political crisis over rati-
fication of the US-Japanese se-
curity treaty and its inability
to control public disorders pro-
voked by an extremist left-wing
minority forced Tokyo to request
President Eisenhower to post-
pone his visit to Japan. The
domestic political situation
now appears to have deteriorated
to a point where it probably
cannot be resolved until Prime
Minister Kishi steps down.
Efforts of the Japanese
Government to obtain the full
agreement of the opposition So-
cialist parties for a political
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CURRENT INTELLIGENCE WEEKLY SARY
16 June 1960
truce during the President's
stay in Japan, including a pro-
posal to recess the Diet during
the visit, proved unsuccessful.
The Socialists, possibly heed-
ing to some extent press clamor
and widespread pressures for ex-
tending an enthusiastic welcome
to the President, adopted an
official position opposing vio-
lence during the visit. The
large, leftist Sohyo labor fed-
eration, while vacillating on
its plans to mobilize some 300,-
000 orderly demonstrators at
the airport on 19 June, was ex-
pected to organize demonstra-
tions at the Diet, Kishi's res-
idence, and at a park near cen-
tral Tokyo.
Radical left-wing elements,
however, have not been influ-
enced by these developments.
There are strong indications
that the Japanese Communists,
aided by propaganda and funds
from the Communist bloc, in many
instances have taken over lead-
ership of the demonstrations.
The violent riot by the radical
student organization Zengakuren
at the Diet building on 15 June
in which three persons reported-
ly were killed bore the earmarks
of trained and efficient Com-
munist leadership, Subsequent
demonstrations and disorders
suggest that the Communists plan
to continue inciting students
and labor unionists to acts of
violence.
On 16 June unofficial re-
ports of the postponement of the
President's visit circulating
among demonstrators near the
Diet prompted a jubilant reac-
tion, and the feeling of confi-
dence engendered by the success
of their tactics probably will
encourage the extremists to con-
tinue public disorders.
Immediate actions which the
Kishi government will take, in-
cluding ratification of the se-
curity treaty,are almost certain
to depend on the resoluteness of
the prime minister and his party
in facing up to the leftist
threat, and also on the deter-
mination of the extremist ele-
ments to cause the downfall of
the government.
Kishi's tenure as prime min-
ister has become even more pre-
carious, and it is doubtful that
he will be able to resist pres-
sures for his resignation much
longer. Whatever chance he has
of remaining in office appears
to rest on an early dissolution
of the Diet and a convincing
conservative victory in the sub-
sequent elections. Informed
observers believe, however, that
Kishi will be forced to resign
shortly and that he may be replaced
by an interim prime minister, an
elder party leader such as Mitsu-
jiro Ishii or former Prime Minister
ihigeru Yoshida, pending attempts by
Liberal-Democratic factional lead-
ers to agree on a longer term
successor. F77 I
25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
NOTES AND COMMENTS
The National Unity Commit-
tee (NUC)--38 military officers
from all services--on 12 June
legalized-. its position as the
supreme political power in Tur-
key by approving an interim
constitution giving it the
powers of the old Grand National
Assembly. This constitutional
law, declared to be in force
since 27 May, confirmed a condi-
tion that has existed since the
military coup. According to Col.
Ahlatli, spokesman for the NUC,
a new permanent constitution
will be submitted to a national
referendum in the near future.
However, a referendum in a coun-
try where over half the popula-
tion is illiterate would be lit-
tle more than a gesture on the
part of the regime. The new re-
gime has thus consolidated its
position as the governing author-
ity and is unlikely to relin-
quish its power soon.
The 38 signatures on the
interim constitution probably
do not give an accurate listing
of NUC members, although some
who are known to be active are
included. Who constitutes the
real power within the committee
is not known, and a struggle
for power may be brewing behind
the scenes. A'division in the
25X1comittee is reported between
those who favor the return to
power of soldier-statesman Is-
met Inonu and the Republican
People`s party, and those who
favor a new, more nationalistic'
25X1
The NUC on 12 June confirmed
that a "High Investigation" Com-
mittee has been created to de-
termine who in the former regime
was responsible for crimes against
the state during the ten-year
rule of the Democratic party (DP).
This committee has power only to
make charges where there is evi-
dence of guilt. The accused will
then be tried before a "High
Justice" court composed of judi-
cial, administrative, and mili-
tary judges.
General Gursel,who heads
the Turkish Government, appears
to be setting the stage for clear-
ing "low-level government offi-
cials" and focusing blame on
"stupid and unconscientious ad-
ministration." In a speech
broadcast throughout Turkey on
13 June, Gursel appealed spe-
cifically for public good will
toward those members of the na-
tional police who had been
cleared by the government and
were resuming normal police
functions. The national police
bore the brunt of popular criti-
cism, as they had fired on stu- ---
dent demonstrators.
There are suggestions that
the United States may lose the
preferential status it has had
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political movement.
25X1
25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
in recent years. Although the
provisional government has
stated it will honor all inter-
national commitments made by the
former government, reappraisal
of Turkey's relations with the
United States is suggested by
a conversation between Ambassa-
dor Warren and LTurkish Fore
eign Minister Sarper. Somewhat
cryptically, Sarper noted his and
Warren's responsibility to "re-
move any obstacles arising be-
tween our two peoples" and com-
mented, "You have a hard job
ahead of you."
25X1
FRANCE-ALGERIA
De Gaulle made no new pro-
posals to the Algerian rebels
in his speech of 14 June, but
in repeating his earlier offers
on cease-fire talks and self-
determination he appeared to re-
treat from his emphasis in early
March on military pacification.
The rebel provisional government
will probably express qualified
approval of De Gaulle's remarks,
while reiterating its opposition
to any surrender of rebel arms
in a cease-fire or to any solu-
tion which might involve parti-
tion of Algeria.
De Gaulle virtually re-
turned to his October 1958
"peace of the brave" offer, al-
though he strengthened his ap-
peal this time by directly ad-
dressing the "leaders of the
insurrection" and by spelling
out that cease-fire talks would
"settle the destination of arms"
and "assure the fate of the com-
batants." In regard to an even-
tual referendum, he slightly
amplified his November 1959
statements concerning rebel par-
ticipation in the arrangements
and the campaign. His 14 June
speech may thus reassure impor-
tant sectors of French opinion
which feared that he was giving
up the attempt to seek an
early end to the fighting.
The Algerian rebels, meet-
ing in Tunis, are likely to
criticize De Gaulle's failure
to spell out the specifics of
a cease-fire, or to withdraw his
earlier threat to partition
Algeria should it opt for inde-
pendence. In February the rebels
were reported to favor a cease-
fire based on a withdrawal of
rebel forces to areas near the
Tunisian and Moroccan borders.
Within a year of the cease-fire,
a referendum to determine Al-
geria's future relationship with
France would be held, supervised
by the French, the Algerians,
and a third party.
Although rebel leaders rec-
ognize that they are incapable
of defeating the French Army in
the field, they have repeatedly
demonstrated their reluctance to
negotiate with the French under
any conditions suggesting a ca-
pitulation. Moderate rebel
leaders recognize that military
reverses in Algeria have weak-
ened their bargaining position,
and that the emergence of a
Gaullist "Third Force" in Algeria
could threaten their popular sup-
port. More intransigent spokes-
men, however, may link De Gaulle's
conciliatory tone with recent
rebel overtures to Peiping, and
may argue that he can be pres-
sured into substantive conces-
sions.
If the rebels respond favor-
ably, there is some danger of a 25X1
violent reaction from rightist
extremists in France and Algiers.
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CURRENT INTELLIGENCE WEEKLY SUIMARY
De Gaulle's speech may
also reflect concern over
mounting criticism of the gov-
ernment,:'-,s domestic policies.
The unrest generated in the
past six months over legisla-
tion providing increased state
3eussels' action in asking
National Congo Movement leader
Patrice Lumumba to form a gov-
ernment is unlikely to halt the
political disintegration in the
Congo. Although Lumumba claims
to have the support of a major-
ity of the 137-seat legislature
groups opposing him are numerous
and vocal. His investiture would
probably increase the separatist
sentiment in four of the colony's.
six provinces.
The choice of Lumumba to
head a government--made in the
face of his threats of "drastic"
action if his various demands
were not met--may lower still
further the morale of Europeans
in the Congo. Resident Congo
Minister van der Meersch, how-
ever, indicated to American of-
ficials in early June that he
believed it safer to give the
premiership to Lumumba than to
turn to a loose coalition of
moderates which would be open
to the charge of being Belgian
puppets.
Although Belgian authorities
are probably discouraging anti-
aid to church schools and new
standards for farm prices has
probably given momentum to la-
bor action. This is seen
most recently in a wave of
short strikes by workers in
nationalized industries and
services protesting the size
of wage increases provided in
the new budget now under par-
liamentary consideration. The
glowing prospects for social
and economic gains De Gaulle
held out;.for;France:may not be
suffieientito~r(?strain)special-
interest,groups with long-stand,, 25X1
ing grievances who are begin-
ning to feel the strength of
their numbers.
Lumumba groups from opposing
Lumumba's initial efforts, they
are hoping that his government
will shortly give way to a coa-
lition of moderates. Lumumba,
who gained A plurality in the
legislative elections, had
predicted that any government
opposed to his party "would not
last two months."
The investiture of Lumumba,
however, in combination with
partisan maneuvering for control
of the provincial assemblies,
may increase sentiment against
the type of strong central gov-
ernment espoused by him. In
Leopoldville Province, demands
for local autonomy have led the
,Abako party to request King
Baudouin to permit it to form a
new semiautonomous province in
the lower Congo area. The Abako
petition did not threaten out-
right secession, however, and
appears to have been prompted in
part.by chagrin that a rival
party gained a slim majority in
the present provincial assembly.
in mineral-rich Katanga Prov-
ince,'senliment for a dissolution
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9
K I V U
leopoldville K A I ,A I
_
f LEOPOLDVI LLE~ )_' _
Lvluaburge A
-"B eopold rr)J ukavu
6NGO
BELGIAN
G0L'A
16 JUNE 1960
O ?? 300
.L-. 0 R I E N T A L E
E Q. U AT E U R Stanleyville w?J
on 15 June to the
Conakat's demand that
the two-thirds rule
be amended to a simple
majority, secessionist
gentiment remains strong.
Belgian authorities
declared a state of
emergency in Katanga
on 14 June.
Meanwhile, a
worsening financial
situation may prompt
the Congolese govern-
ment, when it is formed,
to take drastic remedial
action. The American
Consulate General at
Leopoldville speculates
that, confronted With
Belgian-incurred defi-
cits, the Congo may
repudiate its debts,
which amount to at
least $80,000,000, and
resort to large-scale
FEDERATION OF RHODESIA
AND NYASALAND
of all ties with a Congo gov-
ernment appears stronger than
in Leopoldville. A boycott of
the Katanga assembly by the
minority Balubakat party has
kept attendance below the two-
thirds quorum necessary before
the majority Conakat party can
organize the assembly. Although
the Belgian parliament acceded
dismissals of Belgian civil serv-
ants. Debt repudiation could
disqualify the Congo for loans
from such international organ-
izations as the International
Bank and increase its vulnera-
bility to economic overtures
from the Soviet bloc.I
President de Gaulle's
French Community, recently re-
vamped to accommodate independ-
ent African member-states, may
be about to undergo a further
evolution toward a loose, Com-
monwealth-type institution.
As launched 15 months ago, it
was a close-knit association
linking 12 autonomous Black
African republics to France under
one sovereignty.
The constitutional revi-
sion--sanctioned by. De Gaulle
last December and completed
this month--permits the African
states to retain their Community
status after becoming independ-
ent through a negotiated trans-
fer of "competences" originally
reserved to the Community and
exercised by France. In return,
Paris had insisted on the con-
current negotiation of bilateral
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K A T A N G A
S U DAN-,
Loke Mweru
Loke
Bangweulu
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
cooperation accords preserving
close diplomatic, military, eco-
nomic, and other ties.
Mali and the Malagasy Re-
public (Madagascar)--the first
two Community states to invoke
the new option--initialed such
accords in early April and are
expected to complete action on
them immediately after becoming
sovereign later this month.
This procedure now has been
challenged by four West African
Community states which follow
the leadership of Premier Hdur; -
pboaet-Boigny of the Ivory Coast
and are loosely grouped in the
"Conseil de 1'Entente." These
four--Ivory Coast, Upper Volta,
Niger, and Dahomey--recently re-
quested their immediate inde-
pendence and proclaimed their
determination to discuss future
ties with France only after
they have actually obtained
their sovereignty and gained
admittance, separately,,, into
the UN. They even threatened,
should this arrangement be de-
nied them, to become independent
outside the French orbit, as
Guinea did in 1958, by resort-
ing to the referendum procedure
provided for in the Community's
constitution. The four states
plan to proclaim their independ-
ence on separate dates during
the first week in August.
SECRET
the Entente's Z5X1
move was motivated largely by a
restrictive French interpreta-
tion of the legal competence of
the Community's independent Afrih
can members to enter into direct
economic relationships with
other countries. a 25X1
further reason a desire on Hou
phouet"s part to facilitate
Guinea's reassociation with the
other states of the oldc.federa-
tion of French West Africa.
The American Embassy in
Paris, however, believes the
move was essentially an angry
reaction to Houphouet's failure
to secure assurances from De
Gaulle that the four states--
which have been the most loyal
to France--would have a preferred
status in the "new" Community.
De Gaulle has apparently
forestalled a serious crisis
over the Entente leaders' tactic
by approving their request as
being consonant with the spirit
of the "evolving" Community.
For his part, Houphouet appears
willing to accept the principle
of future cooperation with France
--the only condition De Gaulle
seems to have posed.
This victory for the Entente
should offset in part the pres-
tige gained by Mali and the Mala-
gasy Republic as the pioneers
of independence within the Com-
munity. It should thus help to
refurbish Houphouet's reputation
as an area leader.
Should the Entente's approach
also appear to result in the four
states' achieving especially ad-
Malagasy precedent.
vantageous terms when new ties
with France are finally nego-
tiated, other Community states
which have settled for less can
probably be expected to press
for a revision of their own ar-
rangements with Paris. As of
now, the Community states of
Equatorial Africa, which are
about to claim their "interna-
tional sovereignty," have indi-
cated they will follow the Mali-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
BLOC ECONOMIC ACTIVITY IN WEST AFRICA
Bloc economic activity in
West Africa has thus far cen-
tered in Guinea, where offers
of aid and trade have been read-
ily accepted. Although the So-
viet $35,'000,000 line of ' credit
to Conakry calls for assistance
in agricultural, transportation,
and industrial development, many
of the projects are designed
basically as symbols of national
prestige. Moscow announced ear-
lier this month, for instance,
completion of draft plans for a
25,000-seat sports stadium and
a "polytechnical institute" for
1,500 students. In addition,
Soviet technicians are to super-
vise construction of offices
for the national assembly and
SIERRA
LEONE
Conakry tR
IVORY
COAST
Independent country
the government ministries as
well as two hotels in Conakry.
Emphasis is also given to
technical assistance. Bloc
specialists hold posts in the
local government agencies, and
others are supervising opera-
tions at Conakry's seaport and
airport. Czechoslovakia recent-
ly concluded a technical coopera-
tion agreement formalizing its
already extensive technical as-
sistance program in Guinea
which also provides for Czech
SECRET
BR. CA
~A((YY//HC~ "
NIGERIA
medical aid teams. Early in
June a group of 40 "able-
bodied" Chinese "agriculturists"
arrived to work on rice and
livestock farms to be established
in the hinterland.
Bloc economic activity in
Ghana, conversely, has thus far
been limited essentially to
trade. Nevertheless, the bloc
countries have persisted in
their efforts to tempt Accra with
the advantages of closer coopera-
tion. An interview with Ghana's
minister of economic affairs and
leader of the national assembly
--published recently in Moscow--
suggests that Accra now may be
reconsidering its policy of mini-
mal economic contacts
with the bloc. The
minister stated that
Ghana was placing
great hopes on the de-
velopment of economic
cooperation with the
bloc, and he expressed
a desire for technical
aid, machinery, equip-
ment, and factories
from the USSR.
Recent Czech
trade and technical
assistance overtures
to officials of the
Mali Federation prob-
ably presage a bloc
drive to establish
close economic ties
with Dakar after the federation
gains independence on 20 June.
This initial probe, which en-
tailed offers to send Czech tech-
nicians to the new country and
to provide free technical train-
ing for Mali students in Czecho-
slovakia, also seemed to hint
at the prospect of economic aid
credits. If the Czech move is
successful, other bloc countries
would probably follow suit with
similar offers--probablyinclud-
in;a credit proposals.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
BLOC BIDS FOR NEW ECONOMIC TIES WITH BURMA
Since U Nu returned to
power in Burma, the Sino-Soviet
countries have been pressing
to revitalize their unsuccess-
ful trade and aid program there.
Burma was one of the first tar-
gets of the bloc's economic
offensive and has had ample ex-
perience with the difficulties
as well as the benefits of eco-
nomic relations with the bloc.
During the 18 months of military
rule under Ne Win, Burma termi-k.
nated most- of its original com-
mitments to the bloc. The suc-
cess of a new bloc effort will
depend largely on its willing-
ness to agree to terms which
would overcome some-.,of' Rangoon's
objections to the past relation-
ship. Both sides will probably
proceed cautiously under any
new agreement to avoid earlier
mistakes.
The USSR, China, Czechoslo--
vakia, East Germany, and Poland
have made bids for expanded
trade, raising the possibility
of new bilateral barter agree-
ments of the type eight bloc
countries signed with Burma be-
tween 1954 and 1956. All of
these agreements have been ter-
minated, and it is unlikely they
will be renewed in their old
form. Burma's difficulties in
using the credits it built up
through rice exports to the bloc
were a major cause of dissatis-
faction with the past relation-
ship, and Rangoon's desire to
put its trade on a cash basis
probably will preclude immedi-
ate barter commitidents.
The situation may change, however, if Burma once again
finds itself with large stocks
of surplus rice, especially if
it feels US surplus rice sales
are affecting traditional Bur-
mese markets.
Rangoon has not yet respond-
ed to recent offers by the USSR
to construct roads in Burma and
to provide a medical staff and
train personnel for the Soviet-
built hospital. The hospital,
termed a "white elephant" by
many Burmese, is one of nine
Soviet "gift" projects originally
to be built in Burma under a
$30,000,000 credit. All of the
projects were to be repaid with
"gift". rice. Six of these low-
priority projects were dropped
last year because the USSR re-
fused to provide aid on a grant
basis.
A technical institute and
a hotel are in the final stages
of construction, bringing the
total cost of the program to
about $12,500,000. Soviet imple-
mentation of the program has
been generally praised, but
continuing difficulties and
delays have been a constant
source of irritation to the
Burmese.
Burma apparently has ac-
cepted a $10,500,000 credit
offer to finance imports of
Czech industrial equipment..
Although Czechoslovakia has
long been a satisfactory source
of Burma's capital equipment
imports, trade under a barter
agreement has faltered, report-
edly because the Czechs con-
sistently refuse to provide con-
sumer goods in addition to ma-
chinery.
Communist China has been
Burma's chief source of bloc
goods in recent years, having
established a market for its
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16 June 1960
consumer goods and light indus-
trial products before its barter
agreement was canceled in 1957.
During Chou En-lai's visit in
April the Chinese asked for in-
creased trade and proposed eco-
nomic aid for the construction
25X1
SOVIET LEADERS' ACTIVITIES
of light industrial projects.
Peiping already has furnished
equipment and technical assist-
ance for the expansion of one
Burmese textile mill, apparent-
ly with satisfactory results.
I Prepared by ORR)
With the absence of Khru-
schev and several other presid-
ium members from Moscow, politi-
cal activities in the Soviet cap-
ital for the last week and a half
have been at a minimum.
Top--level discussions
within the Soviet lead-
ership following the
collapse of the summit
conference appear to
have been suspended.
Khrushchev, Suslov,
and Voroshilov are in
the Black Sea area.
Mikoyan, whose month-
long vacation took
place amid signs of a
serious political fall-
apparently been on vacation since
15 and 29 May, respectively.
On the same day as the fes-
tivities in Pitsunda, Mikoyan
ing out with Khrushchev,
reappeared in Moscow
on 11 June.
Khrushchev ap-
peared at a Moscow
press conference on
3 June and probably
flew from Moscow to
Adler, the main air-
port for the Sochi 31195
resort area' on the Blac k
Sea, the following
day. On 10 June he entertained
the leader of the Greek Liberal
party at his estate in Gagra.
On 12 June Pravda carried a
banner-headline story entitled
"Happy Day for Tourists at Pit-
sunda" describing a "festive"
evening at a tourist camp in a
town near Gagra attended by
Khrushchev, Suslov, and Voroshi-
lov. Voroshilov and Suslov have
was reported in Moscow with
other members of the party pre-
sidium. Mikoyan's reappearance
probably indicates that whatever
the nature of his political dif-
ficulties, he has not been slated
for abrupt, drastic demotion.
Khrushchev in his 28 May speech
at a workers' conference scoffed
at Western speculation about Mik-
oyan, remarking that the latter
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
was vacationing in Pitsunda.
However, although the two lead-
ers were subsequently near each
other in the Sochi area for
several days, Khrushchev passed
up the opportunity for a display
of political "togetherness" with
Mikoyan.
Thus far this year Khru-
shchev has taken three short
vacations, totaling about a
month. These, together with
domestic and foreign trips, have
kept Khrushchev away from Moscow
almost three months since the
first of this year. There has
been no announcement as to when Khru-
shchev plans to return to Mos-
cow. A Western news agency re-
ports that he is expected to
address the all-Union conference
of agricultural specialists which
opened on 14 June, so he may be
back by 18 June.
Khrushchev has a number of
foreign visits scheduled for this
summer. The Soviet ambassador
in Bucharest has indicated that
Khrushchev will put in an appear-
ance at the Rumanian party con-
gress which opens on 20 June
before making his state visit to
Austria, scheduled to start on
30 June. Khrushchev has also
accepted an invitation to visit
Cuba, probably late this year or
early 1961. He is also scheduled
to visit Africa this year. Khru-
shchev is expected to be in Mos-
cow for the party central commit-
tee plenum scheduled to convene
14 July.
25X1
SHAKEUP IN EAST GERMAN PARTY AT LOCAL LEVEL
The East German Socialist
Unity (Communist) party's (SED)
district-level apparatus is
undergoing what appears to be
an extensive purge. Ulbricht
is removing functionaires who
fail to implement his policies
and who have shown tendencies
toward "liberalism," "social
democratism," or various "re-
visionist" sins. Some are also
being accused of excessive zeal
in carrying out party direc-
tives.
These changes are tak-
ing place during a time
of confusion brought on
by Khrushchev's statement
at Berlin that he plans
no " action': for ': 'six to
eight months toward a-, sep-
arate peace treaty and its con-
comitant greater authority for
East Germany.
The SED's humiliating let-
down by Khrushchev after the
Paris conference, the deterior-
ating food supply followingi.the
rush to achieve "100-percent"
collectivization, and the per-
sistent social democratic ideal-
ism in traditionally socialist
East Germany add up to what is
probably Ulbricht's greatest
political problem since the
Schirdewan affair in 1958.
There is probably no danger that
he will be deposed, either by
his fellow Germans or the Krem-
lin, but he now must try to re-
establish discipline among func-
tionaries who are either demor-
alized by his failure to achieve
a better international status
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
for East Germany or who remain
unconvinced that his internal
policies are correct.
Local party functionaries
are in the position of being
forced to consolidate the col-
lectivization drive and to rec-
oncile it somehow with the fact
that the food supply is deteri-
orating. In several districts,
particularly in the south, party
leaders apparently have been un-
willing or unable to implement
fully the regime's collectiviza-
tion, as well as other, policies.
Party functionaries in Dresden
District were the greatest of-
fenders, judging from the exten-
sive shakeup there. Premier
Grotewohi has singled out this
district for particular criti-
cism, stating publicly that the
party first secretary there had
tolerated "social democratic"
ideas and had not "correct-
ed or overcome old prej-
udices against our. ppolic-
ies."
Similar, although less se-
rious, confusion has evidently
prevailed even in such major
industrial districts as Leipzig,
Madgeburg, and Halle, Ulbricht's
remarks at the conference of
Leipzig party delegates on 28
May indicate that some officials
failed to carry out regime di-
rectives, while others applied
excessive pressure to force col-
lectivization, thereby accel-
erating the refugee flow.
Still others attempted to merge
newly collectivized farms into
large-scale enterprises. Even
the regime's favorite institu-
tions, the "socialist labor
brigades," were accused by
Ulbricht of being too zealous
and trying to assume managerial
functions
in by ORR)
25X1
CONSEQUENCES OF EAST GERMANY'S COLLECTIVIZATION DRIVE
The recent mass collectivi-
zation drive in East Germany is
beginning to affect food sup-
plies. At a series of recent
meetings between high East Ger-
man officials, much attention
was given to the prospect of
"alarming shortages of food and
the necessity of using state
reserves of fats and meats."
New collective farms are
being blamed for the decline in
livestock production. On being
forced into a cooperative, the
peasant has kept his livestock
for himself when possible, or
generally slaughtered rather
than surrender it. This re-
duction in livestock--coming
after the feed shortages of last
year and the abnormally heavy
slaughter during the winter--
could cause severe shortages in
meat supplies during the coming
months. A reduced output of
spring grains, potatoes, sugar
beets, and vegetables has also
resulted from the campaign.
Winter grains, furthermore, were
damaged by the weather,
East Germany normally must
import almost 2,000,000 tons of
grain and a large part of its
meat requirements each year from
the USSR. The bloc, moreover,
would find it difficult to in-
crease exports of food to East
Germany.
The collectivization cam-
paign also has created new long-
range problems of budgeting,
pricing, and investment alloca-
tion. The privately owned farms
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CURRENT INTELLIGENCE WEEKLY SUMMARY
have cost the state little;
investment costs were borne by
the farmer and produce was ac-
quired by the state below cost.
By contrast, state farms and
collectives must be subsidized.
In 1958, subsidies for farm
work payments totaled $225,000,-
000 and a considerably higher
subsidy was planned for 1959--
a year of severe drought. With
expansion of collectivized agri-
culture these costs will now
have to be increased greatly.
Also pressing is the need
to revise the pricing system for
agricultural products in order
to give the collectives an
opportunity to earn profits
and thus an incentive to in-,
crease output.
More agricultural machinery,
fertilizers, and construction
materials must be supplied to
the new cooperatives, lest many
of the advantages of large-
scale farming be vitiated. This
requirement could lessen the
capital goods available for some
key industries. Lastly, any ef-
fort to increase productivity
will be hampered by the flight
of skilled agricultural labor
to West Germany or to the cities.
The political gains of rap-
id collectivization may prove to
have been dearly bought by the
regime, since the food shortages
and higher costs of agricultural
subsidies will probably make nec-
essary an East German request for
bloc aid before the end of the
year
125X1
25X1
MIDDLE EAST DEVELOPMENTS
The first round of the
parliamentary elections, held
in Mount Lebanon on 12 June,
was characterized by a light
vote and by, a large number of
voters splitting their ballots
for candidates on opposing lists.
Prominent politicians of nearly
every faction won parliamentary
seats. It appears that Presi-
dent Shihab will emerge with
very nearly the parliament: that
he had hoped for--one that will
differ from the 1957 parliament
by including almost all of Leb-
anon'.s shore important pol .t cians.
Election Areas in Lebanon
The biggest surprise in
Lebanon's first election under
a secret ballot system was the
election of candidates listed
on competing ballots. In the
past the Lebanese had no option
but to a straight party ticket.
This split voting resulted in
the election of rivals in the
same district. A significant
example of this was the election
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
of both former President Chamoun
and the brother of his rival,
phalangist leader Pierre Juma-
yyil, in the Metn district.
Chamoun, who ran against a gov-
ernment-backed list, was third
among the Maronites campaigning
for the three Maronite seats in
his constituency. Although he
won personally, he lost face
by failing to secure the elec-
tion of his entire list.
In other constituencies
most Chamoun-backed candidates
were defeated, largely by army
interference. All candidates
of the anti-Nasir Social Na-
tional party lost, although
President Shihab is said to
have promised them at least two
seats in parliament. They may
gain these in the next three
weeks' balloting in other areas.
Military support for the
Qasim regime appears to be
strong. The situation among
the political. parties is still
confused, however, with party
rivalries and dissensions with-
in parties increasing. The
Iraqi Communist party continues
to be split between the ortho-
dox faction, which apparently
has Moscow's support, and the
small, Qasim-backed, splinter
group led by Daud Sayigh.
The split in the National
Democratic party (NDP) has
widened, and the party's ef-
fectiveness as a political force
has sharply declined. The anti-
government faction led by Kamil
Chadirchi has obtained official
recognition as a legal party,
but it has suffered a consider-
able loss of membership to the
proregime. faction headed by
former Finance Minister Muhammad
Hadid. Hadid is rumored planning
to form a new party which would
have Qasim's blessing.
The Communist press is com-
plaining about discrimination
and suppression by authorities
in the provinces It has ap-
pealed to Qasim to overrule an
order by the military commander
in southern Iraq banning dis-
tribution of the party's paper
in his command until after 14
July.
The bulk of the army officer
corps is, anti-Communist. Anti-
Communist influence in the air
force is increasing, and Com-
munist unit commanders have been
replaced by nationalist officers.
While there is apparently some
contingency planning by anti-
Communist army officers in the
event of Qasim's death, there
are no reliable indications
that these officers plan to
undertake an anti-Qasim coup.
Rumors circulating in Baghdad
of a coup attempt to be made
on 14 July--the second anniver-
sary of the revolution--appear
to be based more on the hopes
of antiregime elements than
on any realistic plans to over-
throw or assassinate Qasim.
Similar rumors circulated prior
to last year's anniversary
celebration.
The governments of the UAR
and other states bordering Iraq
probably feel less urgency in
attempting to displace Qasim
than they did six months or a
year ago. The moves undertaken
by the Qasim regime have con-
in-
siderably reduced aComtunisthis
fluence in Iraq,
been some slight improvement
in relations with the UAR, Jor-
dan,and Iran.
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25X6
25X1
One the eve of Somali inde-
pendence, tension with Ethiopia
has heightened and the moderate
regime in Somalia is jeopardized
by growing local parliamentary
opposition.
The imminence of Somali in-
dependence--26 June for the
British Somaliland protectorate
and 1 July for the Italian-
administered trust territory of
Somalia--and unification of the
two areas has increased Ethio-
pia's fears of Somali national-
ist agitation. Addis Ababa--
particularly concerned over the
threat to its Ogaden region,
which contains about half a
million Moslem, largely nomadic,
Somali tribesmen--has reinforced
its army units there.
Having failed in bilateral
negotiations to obtain Somali
agreement to present boundaries
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CURRENT INTELLIGENCE WEEKLY SUMMARY
and grazing rights, Ethiopia is
strengthening its ties with
France, because both nations
are strongly opposed to Somali
efforts to incorporate all
Somali-inhabited areas into a
Greater Somalia state.
Ethiopia may also raise
the question of frontier guar-
antees in the United Nations
when Somalia is considered for
membership.
Meanwhile, opposition at-
tacks in Somalia on the pro-
Western government of Prime
Minister Abdullahi Issa are
becoming more telling. Polit-
ical factions--most of them
from within the governing So-
mali Youth League but hostile
to the prime minister for
tribal and personal reasons--
have exploited the govern-
ment's unpopular action in
inviting Israel to the inde-
pendence celebrations, thus
raising the threat of an Arab
boycott.
The opposition showed its
strength on 10 June, when it
established age qualifications
for the present of the new
Somali republic which eliminated
the youthful Abdullahi Issa from
consideration. The government
had already been weakened by an
apparent withdrawal of Italian
support and a rumored falling
out between the prime minister
and a delegation from British
Somaliland--an area previously
considered a source of strength
for Abdullahi Issa.
Overturn of the relatively
experienced Abdullahi Issa gov-
ernment and its replacement,
possibly by Abdirasid All Scer-
marche,, who is also pro-Western,
would complicate the West's prob-
lems in concluding critical
economic and financial negotia-
tions. Such a development could
aid representatives from the Com-
munist bloc who will be attend-
ing the independence celebrations
and who may probe the possibili-
ties of establishing economic
relations.
25X1
Indian leaders appear in-
creasingly concerned over the
Sino-Indian border, in the wake
of recent reports from military
outposts of Chinese Communist
activities in the disputed areas.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
Boundary shown on Indian maps
Boundary shown on recent
Chinese Communist maps
Mototable road
_ _ _ _ _ . Motorable road
under construction
- - - Minor road or trail
enundn? o,dy rno e
recngn ed byecl i S Gn e,nmenr.
Gyangtse
further development. a-c Luc -
lomatic level. A team of five
Indian officials arrived in
Peiping on 13 June with more
than 500 documents to begin a
25X1
25X1
thorough study of the historical
evidence on both sides of the
case. Chinese officials will
go to India in July for the same
purpose, and a factual report
detailing "agreements and dis-
agreements" is scheduled for
September.
It is doubtful that Nehru,
despite domestic pressures,
would approve the adoption of a more aggressive policy while
there is hope of even limited
progress at the diplomatic
level. Peiping apparently is
consolidating its "status quo"
in Ladakh and intends to remain
in occupation, but Chou En-lai
has declared publicly that the
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16 June 1960
Chinese will refrain from for-
ward patrolling in order to
avoid the bitterness which would
attend a military clash. Never-
theless, Chinese troops would
be unlikely to permit aggres-
sive patrolling by the Indians
without attempting to turn back
or capture those Indian patrols
found on Chinese-claimed terri-
tory. Nehru probably fears Pei-
ping would gain a propaganda ad-
vantage from any ensuing clahh
25X1
The rubber-stamp Indonesian
Parliament, whose appointment
by President Sukarno provoked
considerable criticism from mili-
tary and political elements dur-
ing his April-May absence on a
world tour, apparently will be
installed sometime before 26
June. Sukarno has promised pub-
licly, however, that prior to
the installation, additional
members will be added to the 261
25X1 appointed in late March.
ditions will total approximately
25 and will represent Moslem
25X1 groups.
mains uncertain. Internal dis-
cord over the parliamentary issue
has weakened both the National
party and the Nahdatul Ulama,
the orthodox Moslem party, al-
though the top leaders of both
support Sukarno. The largest
Moslem party, the liberal Mas-
jumi, has lost nearly all influ-
ence at the national level be-
cause of Sukarno's disfavor. It
had hoped to use the Democratic
League, a coalition of several
parties which led the unprece-
dentedly critical campaign in
April and May against the Presi-
dent and his Parliament, as an
effective political vehicle.
Sukarno insisted, when an-
nouncing his plans to increase
parliamentary membership, that
his decision did not stem from
pressure but from his realiza-
tion that he had made errors in
the initial composition. De-
spite his insistence, the change
is obviously the result of crit-
icism of the composition of
Parliament, which was 24-percent
Communist. The anticipated ad-
ditions would have little sign=-'
cance, however, since they would
reduce Communist participation
only to 22 percent.
The political future of non-
Communist political parties re-
Sukarno plans to hold po-
litical discussions with selected
party leaders this month before
he announces the additions to
parliament. The identities of
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these leaders, the nature of
the discussions, and the orien-
tation of the subsequent ap-
pointees will indicate to some
extent Sukarno's political empha-
sis.
25X1 about half the new seats will be
allocated to the Nahdatul Ulama
and the remainder possibly to
"Masjumi-oriented" individuals
who would sit as members of
"functional groups" and not
as members of the Masjumi
party.
Regardless of the outcome,
however, Sukarno can be expected
to contidue to permit increased
Communist participation in gov-
ernment councils in the belief
that he can control the Commu-
nist party and that its popular
strength deserves national rep-
resentation
25X1
NEW SOUTH KOREAN CONSTITUTION
The South Koreans probably
will have trouble maintaining an
orderly government as they have
little experience with the type
of parliamentary system their
new constitution provides. The
new government will have a cabi-
net and prime minister respon-
sible to the lower house of a
bicameral'legislature. A pres-
ident with greatly reduced powers
will be elected for a five-year
term by a joint session of the
legislature. Elections for the
lower house of the National As-
sembly are expected to be held
in late July or early August;
those for the new upper house
may be held on the same date or
later.
Huh Chung reportedly will
act as prime minister as well as
acting president until the new
lower house is convened. Huh,
an independent conservative,
might emerge either as prime min-
ister or'as president following
the elections. However, should
the conservative Democratic party
win a strong majority in the new
legislature, former Vice Presi-
dent Chang Myon could become the
first prime minister. Chang is
well known for his opposition to
ex-President Rhea, but he is not
believed to have a widespread
following, nor is he regarded
as a dynamic leader.
Of the nonconservative
groups to emerge since the fall
of the Rhea regime, the Social
Mass party (SMP) appears to
have the most promising future.
The SMP is a coalition of left-
of-center minor party leaders
and does not appear to include
extreme radicals. The party
advocates a "mixed" economy com-
bining public control and private
ownership,.', Such a grouping, if
it remains cohesive, might con-
trol the balance of power between
warring conservative elements
in the new legislature.
Disregard of the law is
still widespread, and the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
National Police as yet have
failed to demonstrate a capa-
bility of maintaining order.
The army remains the main sta-
bilizing factor in the country,
but there have been indications
of increasing factional strife
among senior military leaders.
25X1
SITUATION IN THE DOMINICAN REPUBLIC
Dissidents inside the Do-
minican Republic have been
greatly encouraged by the charges
of "flagrant and widespread vio-
lations of human rights" made
against the Trujillo dictator-
ship on 8 June by the Inter-
American Peace Committee (IAPC),
a subsidiary of the Organiza-
tion of American States COPTS):,.
Colombia, El Salvador, Mexico,
and Uruguay were represented on
the committee along with the
United States, but both the
regime and the dissidents evi-
dently attribute the tone of the
report largely to US Ambassador
to the OAS, John Dreier, who
served as chairman.
Government officials re-
acted by snubbing US personnel,
and on 10 June the US Embassy
was picketed by a small.group
with a sign insulting Ambassador
Dreier. Picketing in the Do-
minican Republic is allowed only
on specific government permit.
The controlled press was slow
in reacting editorially, how-
ever, thus suggesting that
Generalissimo Trujillo was un-
prepared for an attack directed
specifically against his govern-
ment. In the past, the IAPC
has avoided naming offending
countries out of respect for
the inter-American principle
on nonintervention.
tion and are evidently cheered
by the outside sanction they
feel it has given their efforts.
Before it appeared, dissident
leaders claimed only to be wait-
ing for some favorable sign
from the US Government before
taking "direct action" to get
rid of Trujillo, and one leader
has since told an American Em-
bassy officer that the IAPC
statement constitutes "a firm
basis for practical action"
against Trujillo.
The generalissimo's con-
duct of government has become
progressively more clumsy and
erratic since he became aware
last January of the widespread
plotting against his regime.
He has shown an increasingly
stronger anti-US bias in his
policy and there has been grow- 25X1
ing bitterness in his relations
with the church hierarchy.
There are persistent re-
ports that the predominantly
middle-class opposition is
attracting some officers of the
armed forces to the dissident
movement. This tendency is
likely to be increased by the
impact of the IAPC report and
of Trujillo's acrimonious re-
The dissidents have managed
to give the report wide circula-
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lations with the church.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
ARGENTINE POLITICAL PRESSURES
President Frondizi's de-
parture on 13 June on a month-
long state visit to eight West-
ern European countries reflects
a temporary lessening in Argen-
tine tensions. The brief and
limited military rebellion in
San Luis Province which was quelled
on the same day was an expres-
sion of the conflicting pres-
sures which have plagued Argen-
tina's political and economic
recovery since Peron's ouster in
1955.
The major opposition groups,.
especially the large People's
Radical party (UCRP) and the out-
lawed Peronistas, continue to
make irresponsible attacks on
Frondizi's policies, and the
Peronistas resort to frequent
bombings and other terrorist tac-
tics. Most military elements
mistrust Frondizi but feel com-
pelled to back him as they favor
constitutional government and
support many of Frondizi's poli-
cies.
The conflicts and compli-
cations in these many political
pressures also inhibit revolu-
tionary action. For example,
the military favored the People's
Radical party in the February
1958 elections and still have
many close contacts in this par-
ty. Some leaders of the~-armed
forces even argued strongly
against permitting Frondizi to
take office on 1 May 1958, be-
cause they disliked his past
advocacy of economic nationalism
and had strong misgivings about
his receiving electoral support
from the Peronistas and Commu-
nists. Nevertheless, the strong-
est military elements--headed by
former President Aramburu--in-
sisted on returning Argentina
to constitutional government.
Since July 1958 when Frondizi
adopted the policy that Argentina's
near bankruptcy demanded the as-
sistance of foreign capital in '
the development of petroleum and
other resources, the UCRP,espous-
ing the economic nationalism
which the military had expected
from Frondizi, has maintained an
all-out attack on the government.
The adoption of the US-backed
stabilization and austerity pro-
gram in January 1959 received the
same treatment, with threats to
renounce all such agreements if
the UCRP comes to power. These
attacks have not been tempered
by economic gains under the pro-
grams and are as severe as those
of the Peronistas and Communists,
who have reinforced their attack
with strikes.
The UCRP has also played
politics on the issue of curbing
Peronista terrorism in Cordoba
Province. When Frondizi; un-
der pressure from the army,
asked the national congress
to approve federal control
over Cordoba Province, the
UCRP minority walked out. Ap-
proval of'the bill on 11
June probably averted a coup
by army officers more power-
ful than the retired general
who led the abortive rebellicn
in San Luis.
On his long-scheduled
European tour, Frondizi will
probably seek to encourage
increased investment in Argen-
tina. Ile is concerned over the
impact of European economic
integration on Latin America,
believing a reduced market
for Argentine exports could
threaten the stabilization
program and political stabili-
ty.
25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
COMMON MARKET
Developments of the last
few weeks have made it even less
likely that there will be an
early merger of the European
Economic Community (EEC or Com-
mon Market) and the European
Free Trade Association (EFTA),
The 9-10 June meeting in Paris
at which the rival organizations
were represented failed to find
any new basis for amalgamation.
Both sides have recognized this,
and for the next few months the
six EEC members will be preoc-
cupied with strengthening their
own approach to European unity.
The decision to establish
a "contact committee'--which
may ease frictions between the
two groups--is in fact a victory
for the EEC's determination to
carry out its plans for economic
union. Proposed by EEC President
Halistein in September 1959,
the committee will survey EEC-
EFTA trade and identify especial-
ly important trading items on
which reciprocal tariff conces-
sions might be negotiated. Any
such concessions would be ex-
tended on a most-favored-nation
basis--an approach strongly en-
dorsed by the United States
but not likely to lead to an
all-European trading associa-
tion,
More indicative of the gap
between the two groups is the
generally cool reception accord-
ed London's offer at a recent
meeting of the assembly of the
Western European Union--of
which Britain is a member--to
"consider" membership in
EURATOM and the Coal-Steel
Community (CSC). It was quickly
DEVELOPMENTS
pointed out that this would
leave unsolved the basic prob-
lem--Britain's relat? n-ghin
to the Common ma"'Lca+l
Even current speculation
that Britain may be working to-
ward a full customs union be-
tween the EEC and EFTA has pro-
voked skepticism. A responsible
Italian official has already
declared it impossible to
"create simultaneously a customs
union of thirteen and an economic
union of six."
London's overture to the
CSC and EURATOM appears to have
been especially ill-timed in view
of the emerging plans to com-
plete the institutional amal-
gamation of the three six-nation
communities. Already sharing
a common assembly and court,
the EEC, EURATOM, and the CSC
now propose to create a single
executive of 14 or 15 members.
Such plans reflect a belief
that both EURATOM and the CSC
are increasingly overshadowed
by the Common Market, and also
a growing optimism that the
three could be merged without
risk of jeopardizing their
separate supranational powers,
which have not yet been fully
accepted in some quarters.
Successful steps toward such a
single community would confront
the EFTA with a Continental bloc
even more formidable--political-
ly and economically--than the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The All-Army Conference
of Secretaries of Primary Party
Organizations, held in Moscow
from 11 to 14 May, reflected
one of the most significant de-
velopments in party-military
relationships since the ouster
of Marshal Zhukov in October
1957. The meeting turned out to
be a mammoth assembly of polit-
ical officers and military com-
manders at all levels, as well
as party and government offi-
cials. The importance of the
conference was underscored by
the presence of three top party
leaders: chairman of the USSR
Supreme Soviet Presidium Leonid
Brezhnev, who delivered a
speech; 'Deputy Premier.
Nikolay Ignatov;and party sec-
retary Mikhail Suslov, who par-
ticipated in the work of the
conference.
The conference, which was
convoked by the party central
committee, reaffirmed the de-
cisions of the October 1957 par-
ty central committee plenum on
strengthening the role of the
party in military affairs and
approved, with reservations,
the implementation of those de-
cisions thus far. It also took
a major step toward expanding
the regular party structure in
the military establishment, with
the apparent aim of eventually
replacing deputy military com-
manders for political affairs.
The political deputy ordinarily
has been a military officer es-
pecially trained for political
work. He probably runs the
party organization in his unit
in most cases but is not a par-
ty professional in the usual
sense of the word. For admin-
istrative purposes he is a part
of the unit to which he is as-
signed, but he receives orders
through an independent channel
from the Chief Political Direc-
torate of the Army and Navy.
This directorate, administra-
tively a part of the Ministry
of Defense, functions as a staff
department of the party secre-
tariat and has been one of the
principal means for exercising
party authority in the armed
forces.
The changes called for by
the conference would bring the
structure of party control in
the armed forces into line with
its structure in other elements
of the state, and would probably
facilitate the exercise of party
authority and might reduce the
areas of conflict between the
party and the military. The
clash of interests between mil-
itary commanders and political
representatives, however, is
deeply rooted and will not be
easily overcome. Various sys-
tems have been tried in the past
to solve this problem. Polit-
ical commissars were introduced
and then abolished; deputy com-
manders for political affairs
were created at all levels of
the armed forces, then removed
from the company level and be-
low. None of these measures
proved wholly satisfactory.
Since Zhukov's ouster,
growing attention has been paid
to the role of the regular party
organizations in the military
establishment. The recent con-
ference, which heard reports by
Defense Minister Marshal Malinov-
sky and the head of the Army and
Navy's Political Administration,
Army General Golikov, called for
an expansion of the number of
basic party units by establish-
ing them at the battalion level
instead of the regimental level
as heretofore. In addition,
party "groups"--somewhat compara-
ble to shop subdivisions of a
factory party organization--are
to be set up "wherever possible"
at lower units.
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The conference also called
or the replacement of the po-
litical departments in the head-
quarters of military districts,
groups of forces, fleets, and
military schools by "elective"
party organs. A proposal in
somewhat the same vein, but for
a lower level in the military
hierarchy, had been advanced
earlier in the military news-
paper Red Star. The authors,
discussing structural changes
similar to those called for by
the conference, pointed out
that with such changes, "it
would be reasonable" to have a
full-time party secretary--
that is, a professional party
functionary--at the battalion
level instead of a deputy com-
mander for political affairs.
They also noted that "some
comrades" thought it desirable
to abolish the political dep-
uty's post at the regimental
level, but argued that this
should not be done "at pres-
ent," since the regimental po-
litical officer had duties of
an administrative nature as
well as party-political work.
The published accounts of
the conference do not discuss
the question of the battalion
or regimental deputy for polit-
ical affairs, probably indicat-
ing that a more gradual execu-
tion of this part of the reform
is contemplated in order to
avoid the disruptions of too
sharp a transition.
One of the most signifi-
cant developments in the Soviet
armed forces since Zhukov's
ouster has been the program to
rotate military personnel be-
tween political and command
posts. A report at the confer-
ence on this program stated
that "thousands" of command-
ers, engineers, and technicians
had been "promoted" to polit-
ical work and over 1,500 polit-
ical workers had been appointed
to command posts. This pro-
gram, heartily approved at the
conference, seems designed to
create an "all-purpose" officer
cadre as one means of overcom-
ing the antagonism which has al-
ways existed in one form or
another between the military
commanders and the political of-
ficers.
The conference reaffirmed
the principle of "one-man com-
mand," but participants de-
scribed this .as "unity in the
performance,,-of, military service
by commanding and political of-
ficers" and as command "on a
party basis."
The conference had been
scheduled to consider problems
connected with Khrushchev's
troop reduction plan, which was
approved by the USSR Supreme
Soviet in January. There is no
indication, however, that the
plan as such was discussed, al-
though the implications of the
reduction probably permeated
the thinking of all participants.
Marshal Malinovsky probably
had the troop reduction in mind
and also Khrushchev's suggestion
for eventually changing over to
a territorial militia defense
system when he cautioned that
"as long as agreement on com-
plete and universal disarmament
has not been reached, we are
obliged to display the greatest
vigilance and to maintain the
country's defense potential at
a high level, keeping the indis-
pensable armed forces." At
another point he asserted, "No
matter how powerful and effective
military technology might be,
without man it is nothing. Tech-
nology is applied by man." He
concluded that the task, there-
fore, is to achieve "the correct
combination" of political, com-
bat, and technological training
of military personnel. 25X1
25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
16 June 1960
AUSTRIA'S ECONOMIC RELATIONS WITH THE BLOC
With its reparations deliv-
eries to the Soviet Union ap-
proaching an end, Austria will
be increasingly preoccupied in
the next few months with the
economic and political aspects
of East-West trade, In accord-
ance with the state treaty set-
tlement of 1955, Austria must
continue to deliver gratis to
the USSR a million tons of
crude oil annually until 1965--
an obligation alleviated some-
what by Moscow's agreement in
1958 to "give" Austria a half
million tons of Soviet crude
per year. By early
1961, however, the
last of the $150,000,-
25X1 000 in "compensation
deliveries" will have
been completed, and,
except for the oil
deal, Austria's trade
relations with the
bloc will be on a
purely commercial
basis for the first
time in two decades.
Vienna's govern-
ment and business
leaders are greeting
the prospective return
to normalcy with a
mixture of relief,
trepidation, and ex-
aggerated optimism.
While some believe
Recent Trade Trends
Austria's hopes derive in
part from the gradual increase
in its trade with the Sino-
Soviet bloc in the four years
since the occupation ended. Bloc
trade last year constituted
about 11.5 percent of total
Austrian imports and 14.8 per-
cent of total exports--exclu-
sive of reparations, which were
equivalent to 4.8 percent of
total exports. Nearly 16 per-
cent of Austria's exports went
to the bloc in the last half of
AUSTRIA'S TRADE WITH THE SINO-SOVIET BLOC
1956
1957
1956
1959
s
woeTS
IMnMn
EXMTS
IMroRrs
ExMRES
IMPORTS
EXPOM
USSR
7.2
14.0
21.4
27.4
21.9
20.3
29.6
33.6
POLAND
25.8
27.5
33.0
32.0
29.7
31.3
28.1
20.0
HUNGARY
19.1
19.5
15.0
23.6
20.4
19.6
23.8
26.0
CZECHOSLOVAKIA
17.7
19.1
18.9
22.6
18.2
18.7
21.0
18.3
EAST GERMANY
12.1
17.4
15.2
17.1
15.0
15.2
15.6
15.5
RUMANIA
6.2
6.8
6.4
5.6
6.1
4.5
4.7
5.1
BULGARIA
5.0
6.1
5.2
7.0
4.4
4.3
6.3
10.0
CHINA
2.1
7.4
2.3
7.8
2.5
14.3
3.2
14.4
TOTAL TRADE WITH BLOC
95.2
117.6
117.4
143.1
113.2
128.2
132.3
142.0
TOTAL FOREIGN TRADE
850.3
$49.1
1,128.4
978.5
1,072.1
917.8
1,145.0
964.2
BLOC SNARE
OF FOREIGN TRADE
11.0%
13.3%
10.4%
14.0%
11.0%
14.0%
11.5%
14.8%
AUSTRIA'S REPARATION*
DELIVERIES TO THE USSR
54.3
42.1
45.0
47.2
that major problems are ahead
for those industries which, be-
cause of reparations, have be-
come accustomed to the Soviet
market, others profess to see
an opportunity to restore Aus-
trian trade to something like
the proportions between East
and West which prevailed before
World War II. To explore the
prospects along these lines
will be one of Vienna's major
objectives during Khrushchev's
tour to Austria from 30 June to
8 July and during the regular
trade negotiations opening lat-
er. this year.
1959. The rate of growth of
Austria's trade to the entire
bloc is slightly higher than
that of its total trade, gain-
ing roughly a percentage point
since 1955. Exports to the
USSR alone in 1959 were consid-
erably more than double the 1956
figure.
Some Austrian industries
lean heavily on bloc markets. In
1959, over 30 percent of Austria's
exports of chemicals, electrical
equipment, and machinery went to
the bloc. If reparations deliv-
eries are taken into account,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
this percentage is
considerably higher--
42 percent in the case
of machinery. Grain,
other foodstuffs, and
fuels are the major
import items--the last
accounting for nearly
half of Austria's 1959
imports from the USSR.
The USSR is Aus-
SWITZERLAND
tria's leading bloc
trading partner, fol-
lowed by Hungary, Po-
land, Czechoslovakia,
East Germany, and
Communist China. Since
shortly after the occu-
pation period, trade
with China has increased 16 JUNE 196C
nr M
25X1 sharply, largely because
of Chinese willingness 31193
to incur a deficit and pay or
Austrian products in British
pounds. Peiping has seemed in-
creasingly reluctant to continue
doing this, however, and Aus-
trian exports to China in 1959
remained at slightly more than
$14,000,000, the figure for
1958.
Attitudes Toward Bloc Trade
More significant for the
future than the gradual growth
in trade with the bloc is the
strong desire of many respon-
sible Austrians to increase that
trade. Indicative of this is
the widespread acceptance with-
in the business community and
at the highest levels of govern-
ment of the theory that bloc
trade could be increased to 20-
25 percent of total trade with-
out "rendering Austria subject
to economic pressure or seri-
ously endangering its independ-
ence." This arbitrary figure,
as interpreted by American Em-
bassy officials in Vienna, is
exclusive of trade with Commu-
nist China, and its achievement
would require the conversion of
all reparations payments into
commercial deliveries plus a
slight amount more.
C', GERMANY
'FEDERAL
~H.AapN1 J
}FU NGARY
a l
ii-W/ I 11C
There are historical and?? po-
litical reasons, as well as eco-
nomic, for the attractiveness to
Vienna of this dubious formula.
Despite the Communist take-over
of Eastern Europe, many Austri-
ans cling to the belief that
their "natural" market is the
Danubian basin of the old Ital.;
burg empire. These tradition-
alists are allied to a degree
with the cautious, who feel that
a small, neutral country heavily
dependent on exports is polit-
ically wise to distribute its
trade and to take precautions
against recessions in the West.
Despite Austria's remark-
able postwar recovery, many of
its industrialists are still
doubtful they would survive in
more competitive Western markets.
In the opinion of embassy ob-
servers, however, the Austrians
have grossly exaggerated the
problems of those firms whose
production now is geared to
reparations deliveries.
Perhaps a more important
factor than any of these is the
persisting notion of many Aus-
trians that geography and neu-
trality can be exploited to the
advantage o:i their country.
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Vienna's accession to the bloc-
dominated Eastern Danube Com-
mission, formally completed in
January, was motivated in part
by belief that it would end
bloc discrimination against
Austrian shipping and pave the
way for a thriving river trade.
Similar hopes are involved to
some extent in the construc-
tion of Vienna's new interna-
tional airport, and the in-
crease in air traffic to and
from the bloc in the past year
has been enough to keep these
hopes alive.
Even more ambitious Aus-
trian schemes, usually involv-
ing re-exports of bloc products,
have been rumored from time to
time. Early this year, for ex-
ample, a consortium of Austria's
leading nationalized banks was
reportedly working on an elab-
orate plan by which it hoped to
persuade the USSR not only to
take substantially greater quan-
tities of Austrian goods but
also to use Austria as an en-
trepot for exports of certain
Soviet ores and metals.
Political Pressures
The widespread conviction
that Austria could be "chosen"
to play such a profitable role
without paying a price ignores
the example of the Finns, whose
current proportion of trade
with the bloc is about that
which many Austrians apparent-
ly hope to achieve but whose
governments have been increas-
ingly subjected to Moscow's
pressures. It also ignores
several recent instances in
which considerations of economic
ties with the bloc have posed
disagreeable political prob-
lems for Vienna.
Having whetted Austrian
appetites with a sample of the
"vast China market," Chinese
Communist negotiators have be-
come increasingly insistent in
recent months that diplomatic
recognition of the Peiping
regime is a prerequisite for a
further expansion of trade. In-
fluential Austrian industrial-
ists have in turn exerted strong
pressures on Foreign Minister
Kreisky--first to authorize an
unofficial trade mission and,
when that fell through, to ac-
cord full recognition.
The recent Austrian deci-
sion to place grain imports un-
der a "state trading system"
was allegedly motivated, to some
extent at least, by Vienna's
belief that grain is one of
the few products it needs which
the bloc can supply. Moreover,
fear of Soviet disfavor and re-
taliation was almost certainly
one of the reasons for Austria's
decision to join the Outer Seven
rather than the Common Market.
The forthcoming trade nego-
tiations may disclose more
clearly whether Moscow is in a
mood to step up economic pres-
sures on Austria. There have
been rumors for several years
of the USSR's desire to expand
the charter of its existing
trade insurance firm in Vienna
and also to open a Soviet-con-
trolled bank. The trade talks
would provide an opportunity to
press these demands. Austrians
have also expressed concern that
at some point Moscow may wish
to make an issue of Vienna's
past cooperation with COCOM,
perhaps by ordering an embar-
goed rolling mill as a test case.
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CURRENT INTELLIGENCE WEEKLY StJM Ry
The Outlook
None of these episodes
would justify the conclusion
that Austria is in imminent
danger of coming under severe
political and economic pressure
from the Soviet Union. They do
suggest that at present the ma-
jor deterrent to Austria's ex-
posing itself to that danger is
not Vienna, but Moscow. As long
as the Soviet Union is basical-
ly concerned with bloc self-
sufficiency, consider;; the un-
derdeveloped countries more
fruitful targets for exploita-
tion, and is unwilling to put
its trade on a multilateral
basis, there will be limits to
the growth of Austrian trade
ties with the bloc. In view of
the present Austrian eagerness
to increase these ties, however,
Vienna's initial resistance at
least would probably be slight
if Moscow should decide to
make an attractive offer.
by ORR)
(Concurred in
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ECONOMIC DECLINE IN SOUTH AFRICA
Continuing racial tension
in the Union of South Africa
has impaired foreign confidence
in the country's economy. The
internal economic structure has
not yet been seriously affected,
but few South African firms are
making long-term commitments.
The reluctance of many local
businessmen to disturb the
economy further by supporting
a far-reaching program of polit-
ical reform weakens the effec-
tiveness of the parliamentary
opposition, which derives most
of its support from the business
community.
At the beginning of 1960,
most observers believed that
South Africa was on the way to
a complete recovery from the
recession which began in 1958
and lasted through most of 1959.
A decline in imports, a rise in
the volume of exports, a record
level of gold production, and
a steady inflow of foreign cap-
ital had erased the 1958 balance-
of-payments deficit of $207,-
000,000; the favorable payments
position in turn had led to an
easing of the money market. Al-
though retail .sales had not im-
proved appreciably, unemployment
had declined somewhat from its
mid-1959 high, and the construc-
tion industry was expanding
steadily.
Economic Effect of Riots
This optimistic trend was
sharply reversed as a result of
the racial disturbances in March
and April. A wave of overseas
selling reduced the value of
stocks on the Johannesburg ex-
change by more than $1.72 bil-
lion--23 percent--and informed
observers believe an even more
serious decline was prevented
only by heavy institutional buy-
ing within the Union. The Un-
ion's foreign exchange and gold
reserves fell from $429,000,000
to $340,000,000 in nine weeks--
a drop of 21 percent.
The international consumer
boycott of South African prod-
ucts--which the International
Confederation of Free Trade Un-
ions (ICFTU) had been promoting
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CURRENT INTELLIGENCE WEEKLY 3UMM RY
since the beginning of the
year--was extended through May.
Some of ICFTU's European mem-
bers are continuing the boy-
cott through the summer. Gha-
naian Prime Minister Nkrumah
has called for a total boy-
cott--political as well as eco-
nomic.
Despite these external
pressures, commercial and in-
dustrial activity within the
union has continued at a fairly
high level. Retail trade and
the machine tool and construc-
tion industries, which were
hardest hit by the disturbances
and the economic disruption
which followed, have generally
resumed normal operations.
Nevertheless, most firms are
concerned over their long-term
prospects, and many expansion
programs have been curtailed
or postponed. With investment
capital diverted, much of the
economic activity at present is
short-term speculation.
Political:Repercussions
As a result of South Afri-
ca's uncertain economic posi-
tion, there has been an in-
creasing demand from leaders
of the business community for
reform of the government's ra-
cial policies. Federations of
commerce and industry in most
of the major economic centers
have urged that the 3,000,000
urban Africans be given a
greater stake in the political
and economic life of the cities.
The interests of this group,
despite its importance as the
labor force for South Africa's
industrial economy, have largely
been ignored by the government;
the urban African bears the
brunt of the restrictive as-
pects of apartheid.
Most business groups have
proposed a reduction of restric-
tions on urban Africans and a
concomitant increase in wage
scales. Many have advocated
consultations between govern-
ment officials and spokesmen
for the politically conscious
natives. A few have suggested
that Africans be permitted to
organize unions and purchase
land near the cities.
However, the effectiveness
of these appeals is weakened by
the apparent unwillingness of
the business community to sup-
port the recommendations of its
spokesmen. Businessmen, moti-
vated either by a desire to
keep out of politics or by a
reluctance to disturb the Un-
ion's favorable short-term eco-
nomic prospects, hesitate to
give public support to any far-
reaching reforms. In addition,
few of them are willing to un-
derwrite the expense which a
program of native political and
economic reform would entail.
Some establishments--notably a
large percentage of the gold
mines--would be driven out of
business by an increase in
African wages.
The business community's
reluctance to come to grips
with the racial question is re-
flected in the inability of the
opposition United party (UP) to
formulate an alternative to
apartheid. As spokesman for
South Africa's financial in-
terests, the UP is perennially
torn between the dependence of
its supporters on cheap Afri-
can labor and their desire for
economic stability. The party
is strong in its opposition to
the Nationalist government's
efforts at separate develop-
ment of the white and black
races, but it has been unable
to devise a positive alterna-
tive program of multiracial de-
velopment. It has supported
many of the Verwoerd govern-
ment's emergency measures, while
simultaneously directing a
stream of acrimonious and large-
ly ineffective criticism at the
government's basic policies.
The opposition's ineffec-
tiveness will probably be in-
creased as a result of the re-
forms proposed by Prime Minister
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Verwoerd late last month. While
reaffirming his intent to speed
up the development of native
areas, Verwoerd also proposed
the easing of some of the imme-
diate sources of discontent
among urban Africans--notably
an easing of the pass laws and
the creation of "authorities"
which would give the Africans
some voice in the supervision
of the urban native areas.
Many businessmen, their at-
tention focused on the Union's
short-term economic outlook,
are likely to consider these
measures an adequate concession
to African unrest. Opposition
pressure for change would thus
be lessened, and the government
would have greater freedom to
push for the completion of its
apartheid program.
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