SINO-SOVIET BLOC ECONOMIC ACTIVITIES IN UNDERDEVELOPED AREAS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92B01090R000700020018-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 16, 2016
• Document Release Date: August 2, 2005
• Sequence Number: 18
• Publication Date: September 11, 1961
• Content Type: REPORT

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BIWEEKLY REPORT
S1NO - SOVIET BLOC
ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
EIC WGR 1/146
11 September 1961
PREPARED BY THE WORKING GROUP
ON SINO-SOVIET BLOC ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
ECONOMIC INTELLIGENCE COMMITTEE
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Summary of Events
25 August - 7 September 1961
On 21 August, Communist China and Brazil signed a trade and pay-
ments agreement in Peiping providing for a total trade turnover of $56
million during, an "initial trade exchange" of unspecified duration, with
a swing balance of $4. 2 million. It is not clear how Brazil's recent
policy of accelerated trade with the Bloc will be affected by the current
political crisis orwhether the above agreement and others recently
concluded with Bloc regimes will enter into force.
Recent negotiations in Kabul have led to an agreement for the USSR
to construct a small atomic reactor for producing electricity. In addi-
tion, 20 Afghan undergraduates are to go to Moscow to study nuclear
physics.
The USSR and Yemen have drawn up a draft agreement for building
a road between Al Hudaydah and Ta'izz, apparently to be financed by a
Soviet credit repayable in local currency or goods.
On 30 August the USSR dispatched to Mali a team of railroad sur-
veyors and an 11-14 mapping plane and crew to lay out a projected Mali-
Guinea rail line. This line will connect with the port of Conakry and
thus will provide Mali with an outlet to the sea to replace the Bamako-
Dakar rail line, which was closed as a result of the dissolution of the
Mali Federation.
A Soviet delegation has formally transferred to Burma three Soviet
"gift" projects -- a technological institute, a hotel, and a hospital.
These projects were originally proposed for construction by the USSR
under an agreement of 1957.
The Finance Minister of India is expected to visit Hungary in the
near future for the purpose of accepting a credit offer of $16. 8 million
repayable by exports in 8 or 9 years at 2. 5 percent interest. Hungary
also has agreed to collaborate in the establishment of India's first
factory for producing detonators and also will aid in establishing an
aluminum plant and a to ctile-testing laboratory.
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The Belgrade conference of nonaligned countries that was held from
1 to 5 September included most of the underdeveloped countries of the
Free World that have received assistance from the Bloc. Twenty coun-
tries represented at the conference have received $3. 9 billion, or 96
percent of all Bloc economic aid to underdeveloped countries, and 11 par-
ticipants, including representatives of the Provisional Algerian Govern-
ment, have been the recipients of all military aid provided by the Bloc,
which amounted to $1. 8 billion as of mid-1961. The communique issued
at the close of the conference declared that aid to underdeveloped coun-
tries must be "unconditional" and that recipients of external assistance
"must be free to decide the priority application of aid according to
necessity."
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CONTENTS
Page
I. General . . . . . . . . . . . . . . . . . . . . . . 1
The Belgrade Conference . . . . . . . . . . . . . . 1
II, Latin America . . . . . . . . . . . . . . . . . . . 2
Trade Agreement Between Brazil and Communist
China . . . . . . . . . . . . . . . . . .
III. Middle East . . . . . . . . . . . . . . . . . . . . 3
A. Soviet Atomic Energy Program in Afghanistan . . 3
B. Soviet Contract for a Road in Yemen . . . . . . . 3
Soviet Survey for a Rail Link Between Mali and Guinea . 4
A. Former. Transfer of Soviet "'Gift" Projects to
Burma . . . . . . . . . . . . . . . . .
B. Hungarian Economic Assistance to India . . . 5
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8lC G
SINO-SOVIET BLOC ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS*
I. General
The Belgrade Conference
The Belgrade conference of nonaligned countries that was held from
I to 5 September brought together heads of state and other representatives
from 28 countries in Asia, Africa, and Latin America. The countries
participating in the meeting -- the largest convocation of leaders from
underdeveloped countries since the Afro-Asian conference at Bandung in
1955 -- included most of the underdeveloped countries of the Free World
that have received assistance from the Sino-Soviet Bloc. Twenty coun-
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Although the Belgrade meeting was particularly concerned with
critical world problems such as disarmament and nuclear testing, the
participants also discussed economic and social matters and, in par-
ticular, the economic development of the less developed countries. In
a communiqu6 issued at the close of the conference the conferees de-
clared that aid to underdeveloped countries must be "unconditional" and
that recipients of external assistance "must be free to decide the priority
application of aid according to necessity." They also recommended the
establishment by the UN of a fund for capital development that presumably
* Although the main emphasis of the Biweekly Report is on economic
activities of the Sino-Soviet Bloc in underdeveloped areas of the Free
World, significant Bloc activities of this nature in areas not considered
underdeveloped also will be discussed.
** All dollar values in this report are in terms of US dollars.
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would expand considerably the UN's present limited lending resources
available for development purposes. (UNCLASSIFIED)
The Belgrade conference served as a well-publicized forum from
which representatives of the underdeveloped countries could voice their
desire for economic growth. Although the countries represented at
Belgrade vary in their political orientation, they are similar in their
determination to proceed as rapidly as possible with economic develop-
ment programs and in their willingness to obtain assistance from the
Sino-Soviet Bloc. (UNCLASSIFIED)
II. Latin America
Trade Agreement Between Brazil and Communist China
On 21 August the Peoples Bank of China and the National Bank of
Brazil signed a trade and payments agreement in Peiping providing for
a total trade turnover of $56 million during an "initial trade exchange"
of unspecified duration, with a swing balance of $4. 2 million. No fur-
ther provisions of the agreement have as yet been disclosed. Brazil's
trade with Communist China in 1960 was well below $1 million. This
trade agreement is the secmd to be concluded between a Latin American
country and China, Cuba having concluded such a pact in 1960. (UN-
CLASSIFIED)
Joao Goulart, successor to the presidency of Brazil, headed the
official trade delegation that negotiated the agreement. Goulart's
trip was interrupted by a political crisis in Brazil resulting from the
resignation of President Janio Quadros on 25 August. This event has
been attributed in part to Quadros' drive to strengthen the country's
economic and political relations with the Bloc. (UNCLASSIFIED)
Although Gp.ulart succeeded to the Brazilian presidency on 7 Sep-
tember in accordance with constitutional provisions, his future activi-
ties may be narrowly circumscribed by a recently adopted constitu-
tional amendment aimed at curtailing his executive powers. It is not
clear how the recent Brazilian policy of accelerated trade with the
Bloc will be affected or whether or not this agreement and others recently
concluded with Bloc regimes will enter into force. (UNCLASSIFIED)
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