CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A003500330001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 15, 2016
• Document Release Date: March 22, 2004
• Sequence Number: 1
• Publication Date: January 11, 1958
• Content Type: REPORT

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CURRENT
INTELLIGENCE
BULLETIN
AT REVIEWER:
11 January 1958
Copy No. 143
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
State Dept. review completed
j TOP SECRET
/
;e 2004/07/08: CIA-RDP7~
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CONTENTS
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1. USSR HOPES SUMMIT PROPOSAL WILL TEST NATO UNITY
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2. THE SITUATION IN INDONESIA
3. RIFT IN CHINESE NATIONALIST GOVERNMENT
6. TUNISIAN-FRENCH TALKS ENCOUNTERING DIFFICULTIES
7. INDIA RE-EMPHASIZES POSITION ON KASHMIR DISPUTE
8. BURMA TO OBTAIN ECONOMIC AID FROM BLOC
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100 SHAKE-UP IN VENEZUELAN CABINET
12. DUTCH POLICY TOWARD INDONESIA
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1. USSR HOPES SUMMIT PROPOSAL WILL TEST
NATO UNITY
rivate statements by Soviet officials,
is well as Premier Bulganin's new
etters, reflect Moscow's increasing
onfidence that West European pres-
sures for new East-West negotiations will either force
eventual American agreement to a heads-of-government
meeting or encourage its NATO allies to make independ-
ent moves toward an accommodation with the USSR.
Moscow's repeated rejection of the
NATO proposal for a foreign ministers' conference, which
Bulganin said would only create "additional obstacles" to
agreement, indicates that the Soviet Union believes it can
rebuff Western offers without jeopardizing its posture of
seeking an East-West settlement. Soviet Ambassador Malik
told Foreign Minister Selwyn Lloyd privately on 7 January
that instead of a foreign ministers' meeting, the USSR pre-
ferred either a summit conference,- a special UN General
Assembly session, or a world disarmament conference.
The Soviet Union's vigorous efforts to
create the appearance of a serious desire for top-level
negotiations have been accompanied by signs that the So-
viet leaders would like to undertake new visits to free
world countries. Norway has reported renewed feelers
from Moscow for a trip by Khrushchev and Bulganin to
Oslo, and there are unconfirmed reports that they will
visit Iran in March and Egypt sometime this year. Recent
pronouncements by the Soviet leaders and notes to free
world'.heads of government have stressed the need for high-
level personal contacts.
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2. THE SITUATION IN INDONESIA
The possible establishment of an inde-
pendent regime in Sumatra is receiving
wide publicity, both in Holland and
Indonesia. Detailed Dutch press re-
~orts state that Indonesia's dissident
colonels who met at Padang, Central
Sumatra, wish to establish a govern-
ent, possibly with Hatta at its head,
o counter that of Djakarta and to com-
at Communism. Two newspapers in
Jakarta, one leftist and one Commu-
ist, reported on 9January that anti-
Communists were planning to establish
a "state of Sumatra," and denounced Masjumi and Socialist
party leaders on the island for supporting these plans.
Additional evidence of the central gov-
ernment's difficulties with the outer regions is the recent
intensification of dissident activities in East Indonesia. The
self-styled governor of North Celebes recently broke with
the provincial administration in Makassar, stating that he
would henceforth deal only with Djakarta, which he asserted
had already given de facto recognition to his autonomy move
last year. In addition, pro-Djakarta officials in Makassar
are said to be highly disturbed over reports that the South
Celebes commander and Darul Islam leader Muzakkar have
agreed to end fighting between their forces, which may result
in unity of action.
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3. RIFT IN CHINESE NATIONALIST -GOVERNMENT
serious rift between the Control Yuan
and the executive organs of the Chinese
Nationalist Government may, if not re-
solved soon, lead to further Control Yuan
ttacks on government officials and possi-
ly to some ministerial shakeups. The
Control Yuan, the "watchdog" branch of
he government, on 23 December impeached
Premier O. K. Yui on charges of derelic-
ion of duty, and on 9 January, in the face
strong official disapproval, voted to con-
ii nue the investigation.
In its resolution of 9 Janu
Yuan affirmed its intention to continue to inv
ary, the Control
estigate Yui's con-
nections with the government Central Bank.
The members of the Control Yuan have long
been frustrated by their lack of authority. Repeated attempts
in the past to impeach officials have failed.
A potentially serious aspect to the crisis is
the demonstrated collapse of Kuomintang. party discipline.
Ninety percent of the Control Yuan members belong to the rul-
ing party,
This lack of discipline
also extends to the Legislative Yuan, which has recently opposed
official policy on several important issues.
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6. TUNISIAN-FRENCH TALKS ENCOUNTERING DIFFICULTIES
Tunisian-French discussions preparatory
to resuming negotiations appear to be
floundering. Tunisian President Bourguiba
continues to insist that all uniformed French
personnel be withdrawn from southern Tunisia before common
defense negotiations can begin. Bourguiba threatens that if .
Paris does not agree, he will withdraw his proposal that Bizerte
remain a French base and offer it "to another Western country
or countries:' He told the French ambassador that Britain and
the United States would understand his position.
Paris may find it difficult to meet Bour-
guiba?s terms inasmuch as other French concessions are de-
pendent on Tunisia's acceptance of French air police at four
airfields in southern Tunisia. The French are particularly
concerned about Bourguiba's conviction that he will have the
understanding and support of London and Washington.
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7. INDIA RE-EMPHASIZES POSITION ON KASHMIR DISPUTE
The Indian Government during the past
ten days has re-emphasized its ada-
mant position in the Kashmir dispute,
possibly to strengthen its bargaining
power in advance of UN representative
Frank Graham's arrival in New Delhi
on 12 January to open a new round of dis-
cussions on the issue.
In recent public statements, Prime Min-
ister Nehru and Defense Minister Krishna Menon have reiterated
in strong terms the Indian stand that there can be no progress
toward a solution of the Kashmir dispute until Pakistan evacu-
ates the sector of Kashmir it has "illegally" occupied since
1947. Krishna Menon on 4 January ruled out any settlement
on the basis of a partition such as along the present cease-
fire line, and warned that the Indian Government was not pre-
pared to hold "secret negotiations" of any kind with Dr. Graham.
Indian leaders previously had indicated
that they were giving some consideration privately to the possi-
bility of a package settlement with Pakistan, in which agreement
on such other major differences as the division of canal waters
would be negotiated along with the Kashmir question.
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8. BURMA TO OBTAIN ECONOMIC
AID FROM BLOC
The loans obtained by Burmese Deputy
Prime Minister Kyaw Nyein from the
USSR and Communist China during his
recent tour of the bloc are to be used
for projects that appear to be econom-
ically sound and highly desired by the Burmese, according
to the American Embassy in Rangoon.
The USSR has agreed to provide up to
$6,000,000 for the construction of two irrigation darns in
central Burma which had been previously recommended by
a Soviet agricultural team. Negotiations for the financing
of these dams have been under way in Moscow for some
time, but their conclusion was deferred until Kyaw Nyein
arrived.
Communist China has promised a
$7,000,000 loan for the construction of a farm implement
factory and a textile factory. This is the first instance of
Peiping granting a loan to .a non-Communist country.
All loans carry a 2.5-percent interest
rate, but vary in longevity. The Burmese will have 12
years to pay for the dams, and five years for the imple-
ment factory; the period of the loan covering the textile
Plant. has yet to be determined. Burma is to make repay-
ment in kind, presumably: in rice.
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10. SHAKE-UP IN VENEZUELAN CABINET
he Venezuelan cabinet resigned at
idnight on 9 January at the request
f President Perez, who probably
cted under strong military pressure.
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Perez may be replaced shortly by a military junta, possibly
with civilian elements. According to press reports, a new
cabinet, formed on 10 January, has a majority of military
officers.
The breakdown in Perez' one-man rule
may touch off an extended period of instability, in which lon;-
suppressed civilian groups compete with the armed forces
for dominance of the government. The military leaders may
therefore retain Perez at least temporarily as a symbol of
their unity and to prevent widespread violence in reaction to
several years of Perez' authoritarian control. A large-scale
demonstration was held in Caracas on 10 January calling for
an end to the dictatorship.
The government has moved to heal the
widening breach with the Catholic Church by releasing six
priests from prison.
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The cabinet resignations suggest that
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12. DUTCH POLICY TOWARD INDONESIA
After discussions with various Dutch
officials, Ambassador Young at The
Hague has the impression it is virtually
impossible for the present Netherlands
Government to enter negotiations with
Indonesia on the future status of West New Guinea. Although
there has been some criticism of this policy, the vast major-
ity of Dutch opinion holds that the Netherlands should not
"submit to blackmail." Moreover, the present coalition was
constituted on the basis of retention of sovereignty over New
Guinea, and Prime Minister Drees is obstinately opposed to
any revision of this stand.
While Dutch enterprises have been mark-
ing time concerning their future in Indonesia, indications are
that all except those which can demonstrate international own-
ership will leave "lock, stock, and barrel" if no political
changes occur during the absence of President Sukarno. One
factor in such a decision would be anticipation of civil disor-
ders growing out of the food crisis.
Once Dutch interests have decided to with-
draw, they may be more amenable to suggestions that non-
Communist nations should attempt to fill the resulting vacuum..
Ambassador Young believes that the Dutch Foreign Ministry
already considers this to be in the Netherlands' own interest.
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