CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A001400370001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 8
• Document Creation Date: December 15, 2016
• Document Release Date: November 13, 2003
• Sequence Number: 1
• Publication Date: January 31, 1954
• Content Type: REPORT

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31 January 1954 4
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CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO. 38 /- -- -
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Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
1. Yugoslavia will reportedly make strong demands at London talks
on Trieste (page 3).
2. Afghanistan signs $3,500,000 credit agreement with USSR (page 3).
3. Soviet charge comments on Sino-Soviet economic relations (page 4).
SOVIET UNION
4. Soviet tanker construction in Black Sea area revealed (page 4).
FAR EAST
5. Rhee pressuring Magsaysay to lead Asian alliance (page 5).
SOUTHEAST ASIA
6. British official comments on situation in Malaya (page 6).
7. Burma may conclude rice deal with India (page 6).
NEAR EAST - AFRICA
8. Papagos urges that Greek armed forces be reduced (page 7).
WESTERN EUROPE
9. Adenauer dissatisfied with plan for protection of East Germans
after election (page 7).
10. French Socialist Party rejects popular front with Communists (page 8).
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 GENERAL
1. Yugoslavia will reportedly make strong demands at London talks on
Trieste:
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The Yugoslav government will remain firm
during the forthcoming London talks in its
demands for access to the free port of Trieste
Italian insistence on a con-
tinuous coastal strip from Monfalcone to Pirano would be "unfortunate,"
and that Yugoslavia will insist on obtaining sovereignty over a corridor
through Zone A to the sea, preferably at Zaule.
Although not in a position to finance the con-
struction of a port at Zaule, Yugoslavia feels it can use its control over
the area as a lever to ensure Italian guarantees of economic cooperation.
The Slovene minority question is also viewed as a major obstacle to
settlement.
Yugoslav leaders reportedly believe that the
American and British representatives at London will in. effect be acting
on behalf of Italy.
Comment: The United States, Britain, and
Yugoslavia, as the three occupying powers in Trieste, will meet in London
on 2 February to attempt to establish a realistic basis for negotiation of a
definitive Trieste solution.
This report indicates no significant change in
the Yugoslav position in the past three months. It is highly improbable
that any Italian government would accept a solution giving Yugoslavia
sovereignty over a corridor through Zone A.
. Afghanistan signs $3,500,000 credit agreement with USSR:
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Afghanistan and the Soviet Union have signed
an agreement for the construction by Soviet
technicians during the next three years of
two grain warehouses, a flour mill, and a
bakery near Kabul. The costs will be covered
by a $3,500,000 credit at three percent interest,
which Afghanistan is to begin repaying in 1957
with cotton, wool, and oilseeds.
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The American embassy in Kabul comments
that the new facilities should help greatly in coping with food shortages
and controlling grain prices. Some elements, however, are uneasy
over the prospect of Soviet activities spreading into southern Afghanistan.
Comment: This agreement apparently
finalizes negotiations under way for nearly two years. Five Soviet
technicians arrived in Kabul in April 1953 to plan construction of
grain silos.
This is the second.known instance in which
the USSR has made a written commitment to provide Soviet technicians
in a non-Orbit country. The first was in the Soviet-Indian trade agreement
of December 1953.
:3. Soviet charge comments on Sino-Soviet economic relations:
The Soviet charge in Rangoon told
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hat the USSR is delighted with the 25X1
American refusal to trade with Communist
China, as Soviet trade with China is now
"increasing enormously." He said that the economies of the two countries
are being rapidly integrated and a long-term demand for Soviet replace-
ment parts is being created.
The Soviet diplomat reportedly added that
time is on the USSR's side, and that the longer the Western "blockade"
continues, the greater will be the possibility for establishing a Soviet
economic stranglehold over China.
Comment: These remarks may have been
planted to support the case of Western traders who favor a lowering of
trade barriers and to test the strength of support for the current Western
embargo program.
SOVIET UNION
4. Soviet tanker construction in Black Sea area revealed:
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official Soviet
publications provide the first evidence of tanker construction in the Black
Sea area as part of an effort to relieve the Soviet tanker deficiency.
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FAR EAST
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The building program at the Marti yard in Leningrad and at a Black Sea
shipyard has included at least six ships of 7,900 gross tons each. Three
of the tankers have been put into service, two are being fitted out, and
one is still under construction.
In addition to these six tankers, the. USSR has
an ocean-going tanker fleet of 38 vessels, 22 of which are smaller than
2,500 gross tons.
The present construction program may reflect
the success of Western export controls. Since 1951 the USSR has acquired
two large tankers and at least 12 smaller ones from Western yards. As a
result of the COCOM embargo on :tanker. sales .and construction, hQwever,
the USSR can now count only on Finland for rther tanker building in the
West.
Rhee pressuring Magsaysay to lead Asian alliance:
Chinese Nationalist foreign minister Yeh told
Ambassador Rankin that Syngman Rhee recently
urged Philippine president Magsaysay to assume
leadership in obtaining a Far East anti-Communist
pact. Yeh said his government agrees with Rhee but feels he is pushing the
matter too hard.
According to Yeh, Rhee assumes the United
States will persuade Magsaysay to accept the proffered leadership.
Comment: Rhee has reportedly been planning
a conference this spring of anti-Communist Asian nations. He probably
desires to dominate such a meeting, but not openly.
Magsaysay, who is reluctant to identify himself
closely with Rhee and Chiang, has stated he must complete necessary re-
forms in the Philippines before entering the international scene.
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 SOUTHEAST ASIA
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A senior British official at the Berlin con-
ference showed surprise when informed of
Foreign Secretary Eden's statement that the
situation in Malaya was deteriorating. He
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6. British official comments on situation in Malaya:
told a member of the American delegation that Eden's statement may
have been based on a belief that the emergency in Malaya would probably
continue indefinitely, with no prospects of an early reduction in British
military forces there.
Comment. British officials in Malaya have
admitted that the emergency will continue indefinitely, but have not even
suggested that the situation is worsening.
7. Burma may conclude rice deal with India:
The Burmese prime minister told the British
ambassador in Rangoon recently that he was
hopeful a rice sales agreement with India
would soon be concluded, and that trade nego-
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According to the embassy, Burma's policy of
demanding inordinately high prices for its rice has been based on inade-
quate marketing information and a vague hope that time was on its side.
The Burmese are now considering price reductions, though they may not
be sufficient to satisfy the Indians.
Comment: A large sale of rice to India would
greatly reduce the pressure on the Burmese government to make economic
commitments to the Orbit. India is in a strong bargaining position, how-
ever,.;because of its current bumper crop.
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NEAR EAST - AFRICA
25X1A 8. Papagos urges that Greek armed forces be reduced:
Prime Minister Papagos emphasized to
General Gruenther in Paris on 26 January
that Greek defense expenditures cannot be
maintained at their present level. He said
that his government would face financial difficulties unless it reduced
its defense budget or received additional American aid. He felt that
his country's armed forces could be reduced without danger, as the
Greek-Yugoslav-Turkish pact had improved Greece's defensive capa-
bilities and Greece would now have sufficient advance warning of any
aggression.
Comment: Although Papagos apparently
is willing to postpone any trove to reduce the armed forces until after
a Greek-American study, sentiment favoring a cut is widespread in
Greece. The government, whose popularity rests primarily on the
success of its economic reforms, may be expected to press seriously
for NATO agreement to such a reduction.
WESTERN EUROPE
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9. Adenauer dissatisfied with plan for protection of East Germans after
election:
Chancellor Adenauer has reportedly expressed
concern over the Allies' rejection of his pro-
posal for separate East German elections
simultaneous with all-German elections.
On 29 January the West German delegation
in Berlin suggested to the Western tripartite
working group that even before an all-German
government is formed, the proposed constituent assembly should have
power to legislate for the protection of the East Germans.
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Comment: Adenauer is not convinced that
the non-German control mechanism which would be set up to supervise
all-German elections could shield the East Germans from postelection
retaliatory acts by the Communist regime. His plan, regarded as overly
cautious by most Bonn leaders, is to "cut the hands off" the present East
German regime by holding separate East German state elections, reducing
the East German armed forces beforehand, and giving interim legislative
power to the constituent assembly.
25X120. French Socialist Party rejects popular front with Communists.
According to the American embassy in Paris9
the French Socialist Party's resolution of 28
January was its first official rejection of Com-
munist designs to form a popular front. The
party's central committee denounced the Communist Party as an agent of
Moscow, and warned party members against any common action with
Communists and particularly against signing any declarations "against
the Bonn and Paris accords."
The embassy sees the resolution as indicating
that the pro-EDC faction is still dominant in the party. It also comments
that the resolution has caused further speculation on the Socialists' role
in any new government, which prominent observers have recently pre-
dicted would be a left-center coalition.
Comment. The resolution may convince
Premier Laniel that the present EDC treaty stands a better chance for
ratification than would a version watered down to please the ex-Gaullists.
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