INTRODUCTION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01443R000100010003-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 39
• Document Creation Date: December 19, 2016
• Document Release Date: May 26, 2005
• Sequence Number: 3
• Publication Date: January 29, 1953
• Content Type: SPEECH

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INTRODUCTION
Gentlemen: Since this is the first meeting of the new
National Security Countil, I shall not confine my
remarks to the events of the last week, as is
customary. Instead, I shall refer to some of the
major foreign policy problems with which you will have
to deal, and give you our best estimate of what can be
expected to happen, as we see it.
These estimates can be called educated guesses,
but they are based on the combined intake of all
intelligence gathering agencies of this government,
and result from a careful evaluation, on which each
and every intelligence agency has expressed its views.
The first problem, of course, is the Soviet
Union and its Satellites.
State Department review completed
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SOVIET WORLD ESTIMATE - THROUGH MID-1953
We believe that during the first half, and
probably through all of the present year, the Soviet
Union will offer no real concessions to effect a
settlement with the West. The main Soviet line of
action will be an effort to frustrate or offset any
gain.in the Western power position and to undermine
the unity of the non-Communist world by propaganda,
subversion, penetration or diplomatic action. It will
try in particular to isolate the United States,
politically and morally.
Although we do not think the Soviet Union will
decide it can launch a new armed aggression without
serious risk of global war, we do believe that it and
the Chinese Communists -- who are almost sure to see
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eye to eye over this period at least -- will still .3
support, to one degree or another, the Korean war and
the armed rebellions in Indochina and Malaya.
As to general war -- our best guess is that even
if it has much greater striking power than we think it
has, the Soviet Union must realize that the scale
of retaliation would be such as to threaten the
Kremlin's control even inside the USSR's own borders.
It is chronically sensitive to Western action,
however, and if its security seemed threatened from
that quarter, it might take any given countermeasure,
even at grave risk of war. The basic situation
between the United States and the USSR is such that
general war could come from an action or series of
actions undertaken with no such intent in mind.
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There are always many "if's" involved in
relations with the Soviet Union. On one matter
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there is no "if." We have no doubt that the Kremlin
means sooner or later to dominate the world and that
it will use war -- on any scale -- to that end at
any time it seesa gain in so doing.
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The armed forces of the USSR total 4,500,000
men. This total includes: 2,500,000 Army; 800,000
Navy; 750,000 Air Forces; and 400,000 security troops.
About the same strength has been maintained since
1947. During this period there has been no major
redisposition of Soviet armed forces.
There are three main concentrations of the Soviet
army: in the Soviet Far East, in the Trans-Caucasus
area and in the Soviet zone of Germany. The 400,000
troops in East Germany, comprising 22 of the 175 line
divisions, afford the best current view of the Soviet
army. The strength of these forces has increased
gradually since 1948 but no new major units have been
added.
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The Soviet Air Force has approximately 20,000
aircraft in operational units, and about the same
number in reserve. It is rapidly being modernized and
now has 6,300 jet fighters, over 1,100 jet light
bombers and 1,150 medium bombers. Steps have been
taken to establish an efficient early warning network
along the rim of the Soviet orbit.
The Soviet Navy has at least 158 major surface
vessels and over 360 submarines. Since the war they
have concentrated on the development of a modern force
of cruisers and destroyers. Recent evidence indicates
that a program of submarine construction begun in 1950
may stress long-range ocean patrol craft.
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ECONOMIC
The economy of the USSR had recovered its pre-war
level of total production by 1948 and had surpassed
that level by an estimated 20-30% in 1951. This high
rate of advance has been achieved despite factors
severely limiting expansion. For example, labor
productivity in all major sectors of the economy is low
by U.S. standards. And there are shortages of trained
engineers and technicians, specialized machinery, and
industrial power and fuel, although progress has been
made toward overcoming these deficiencies.
The extremely high rate of post-war economic
expansion probably cannot be maintained in the new
Five-Year Plan recently announced. Nevertheless, the
absolute growth in the Soviet gross national product
will annually become greater. With most of the annual
increment used to expand war production, enlarge
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the economic base, increase stockpiles and decrease
industrial vulnerability to enemy action, the
Soviet economic capability to engage in global war
will steadily increase.
European Satellites
In the European satellites, considerable
progress has been made towards standardization
of organization and equipment. Ground force
strength has risen from less than 500,000 in
1947 to over 1,300,000 at the end of 1952. The
Satellite air forces have an estimated actual
strength of 1,500 aircraft. The delivery of
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Soviet jet fighter aircraft to the Satellite air
forces began in 1951 and now totals about 350.
In addition an extensive program of airfield
construction has been carried out throughout
Eastern Europe.
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USSR - Current
The relative weakness of the Soviet economic
war-making potential has no doubt dictated a degree
of caution in the Kremlin's foreign policy, as well
as a concentration on internal defenses such as the
jet interceptor program and an early warning system.
Today, the Kremlin's major short-term political
aims are to destroy Western unity through exploiting
differences among the Western powers and morally
and politically to isolate the United States.
Meanwhile, the Kremlin is doubtless unsure of what
it may expect from the new administration in the
United States. The most recent developments in
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l/
the Soviet world, such as the current rash of
purges of various types, appear designed to
tighten discipline in all areas of Soviet life.
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KOREA ESTIMATE - Through Mid-1953
We do not believe that, at least through mid-
1953, the Communists could drive the UN forces out
of Korea unless they used very substantial Soviet
forces, and we do not believe that the USSR is
willing to take that grave a risk of general war.
We believe that the Communists will protract
the armistice negotiations just as long as they
think they can get political and military advantage,
from the situation in Korea.
In the unlikely event that an armistice is
concluded in the near future, we are sure that
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the Communists will complicate any efforts at a
political settlement by injecting issues unrelated
to Korea. In Korea itself, the Communists cer-
tainly still aim to control the whole country,
and will do all they can in the meantime to
redevelop North Korea as a militant satellite,
and to sabotage progress in South Korea.
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If#
KOREA
Means
The Truce talks in Korea began 18 months ago.
Since that time the Communists have more than
doubled their military strength. This strength,
which was already over a million, has just recently
been increased by the arrival in Korea of three and
possibly six additional Chinese armies.
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Another recent development has been a very
noticeable increase in front line supply efforts
by the Communist forces. Just last week truck
sightings - vehicles moving supplies from the
rear to the front - reached an all-time high of
an average of 9,000 daily. In the past, this
figure has averaged around 3,000 to 4,000, and
unusual increases in the past have been asso-
ciated with pending offensive operations.
Conclusions
Before we can go all out and predict a
definite military offensive operation by the
Communist forces we have two - what we call
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"negative indicators" - to contend with.
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Our conclusion, therefore, after taking all
these facts and fancies into account, is that a
spoiling attack may well be undertaken by the
Communists in February. How firmly we can predict
this - the exact time or the intensity of such an
offensive - we cannot say with the evidence on
hand. The experts tell me we should know within
another week or two. We do know and must emphasize,
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that the capability has increased during the past
4 months in ground strength, logistic-wise, and
in the air.
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China
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Internally, the Chinese regime appears stable:
the Communists are steadily consolidating their con-
trol. Guerrillas have, we believe, been reduced to
fewer than 50,000. There is no evidence that the
heavy burdens on the economy will force China to
abandon its military effort in Korea, and the regime
is undertaking a five-year national construction
program as its second major goal.
Communist China is a willing partner of Russia,
and not a satellite like the Eastern European coun-
triest. It is united with the USSR in a determina-
tion to drive Western power and influence from Asia.
With the Korean War at stalemate the Chinese will
probably not try to seize additional territory by
force. The will continue to stren thin t
economic any d industrial base and modernize hierir
armed forces with Soviet assistance. Despite the
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China
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USSR's commitment in the Sino-Soviet treaty of 1950,
we have no information to indicate that major Soviet
forces would be committed openly to its defense if
the war spread.
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China Means
There are G,35O,OOO regulars in the Chinese
Army, of which about one-third are committee in
Korea. The principal concentrations in China
proper are on the east coast and along the northern
borders within striking distance of Indo-china and
Burma. In addition there are I, .,t,p(SO partially
trained and equipped district and security troops.
The army is capable of undertaking military opera-
tions elsewhere in Asia concurrently with opera-
tions in Korea.
Since the beginning of the Korean War the
Soviet Union has enabled China to create a powerful
air force of 2,350 combat planes, including 1,400
MIG-15 jet fighters and approximately 100 twin jet
light bombers.
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China - Means
Russian assistance has made it possible for
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China Current I I '"
The Chinese Communist army remains capable of
overrunning Indochina, Burma, Thailand and the
colonies of Hong Kong and Macao if opposed only by
the forces now in those areas. There is no evidence
of a Chinese intention to take action. against any
of them in the near future. The Communists do not
appear likely to assault Formosa so long as the
United States remains willing and able to defend it.
The Chinese Nationalists are still incapable of
defending Formosa without American help and can con-
duct only minor raids and limited air attacks against
mainland China.
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Southeast Asia
25-
All developments in the critical area of
Southeast Asia are overshadowed by the great mass
of Communist China to the north and by its military
preponderance. Several governments have made marked
progress during the past year against Communist
insurgents. This progress is due in part to better
measures by locaalgovernments, and in part to the
lack of increased aid from the Chinese Communists.
It may also reflect a change in Soviet tactics which
places more emphasis on political rather than mili-
tary activities. Nevertheless, the area remains
weak and extremely vulnerable to Communist expansion.
Both France and Britain, realizing that they are
unable to provide the forces necessary to defend
these areas in case of Chinese Communist invasion,
have pressed for a prior American commitment to join
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Southeast Asia
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The conflict in Indochina, now in its seventh
year, is still a military stalemate between the
Viet Minh and French Union forces. While there
is fighting in all three of the Indochina states,
the province of Tonkin in Vietnam is the area of
critical activity.
The recent Viet Minh campaign outside the
Tonkin delta has resulted in firmer enemy control
over portions of the western Tonkin highlands.
However, the enemy has been unable to dislodge
several important French hill garrisons and has
temporarily lost the initiative. Within the delta
defense perimeter, French Union troops have achieved
moderate success against Viet Minh forces estimated
one month ago at 12,500 infiltrated regulars plus
40,000 irregulars.
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In Burma, various insurgent groups still
dominate much of the countryside and are capable
of mounting serious raids, but there has been a
slow, steady improvement in the country's
stability during the past year. There are also
signs that Burmese leaders are becoming increas-
ingly aware that their country's survival as a
free nation is dependent on support from the West.
The government, however, is disturbed over the
growing Karen cooperation with Chinese Nationalist
forces in northeast Burma and may be forced by
this development to divert its military effort
from the Communist insurgents.
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INDONESIA
The recent politico-military crisis in
Indonesia seems in process of peaceful settle-
ment, but the trend toward dictatorial, national-
istic government has been accelerated. In contra-
vention of the UN embargo on the export of rubber
to China, the Indonesian Government is negotiating
a sizeable rice-rubber agreement with Peiping.
The Thai Government's vigorous campaign
against Communists and fellow-travelers, which
commenced last November, is continuing and
reflects further the country's strongly pro-
Western orientation.
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In Malaya, Communist terrorism has decreased
but there is no end to the emergency in sight.
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The West has a basic concern with the
extensive natural resources of the Middle East.
Their loss or denial would be a serious set-back
in the cold war. There is a rising tide of
nationalism and relations with the West are
deteriorating. Discontent with local conditions
and institutions and frustration over Western
policy prevail. British prestige is at a low
ebb. Israeli-Arab differences. seem irreconcilable.
The situation invites Soviet exploitation.
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In Iran a settlement of the oil dispute in 1953
is unlikely. The National Front Government is ex-
pected to stay in power during that period, despite
growing unrest. The danger of serious Tudeh infil-
tration and eventual control must be accepted. The
U.S. Point Four and military missions are likely
to find it increasingly difficult to operate. The
USSR has the capability of greatly increasing its
overt and covert interference in Iran at any time to
the detriment of U.S. security interests.
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. In Egypt the stalemate on the Sudan and Suez
issues, as well as Prime Minister Nagib's inabili-
ty to make progress on his land reforms, are driv-
ing him to drastic measures. He has abolished all
political parties for three years and labor unions
have "voluntarily" dissolved themselves. His empha-
sis on the theme of "full" British evacuation, with
overtones of religious fanaticism, may foreshadow
a drift toward an outright anti-Western position.
Ambassador Caffery's recent dispatchesi
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o gioom an urgency. They have emphasized the
necessity of offering the Nagib regime tangible evi-
dence of American support to prevent possible col-
lapse or the development of violent extremism.
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General Nagib has stated that he would not
consider joining MEDO until the dispute with Bri-
tain is settled. Privately, he has also indica-
ted-to Ambassador Caffery that even then it might
not be advantageous to join. While some leaders
in other Arab states are attracted by the idea of
a Western-sponsored defense pact, none is inclined
to act without Egyptian approval.
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-3s
France will eventually have to yield independence
to Morocco and Tunisia or be faced with increasingly
costly repression. It is unlikely that French
concessions will be sufficiently timely to satisfy
the Nationalists. Since the recent riots, France
has been temporarily in control of the situation,
acting through the Bey of Tunis and the Sultan of
Morocco. Able exiled leaders, however, are vocal
on behalf of an active underground. A merger of
the four Moroccan nationalist parties is reportedly
under discussion. The recent imprisonment of
moderate local leaders by the French opens the door
for eventual extremist control of the nationalist
movements.
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3'
The expulsion of the Western Powers from Berlin
will remain a basic Soviet objective, in the first
place because Moscow regards it as a base for Western
intelligence and political warfare, and in the second
glance because the presence of Western troops hinders
the conversion of all of East Germany to satellite
status.
Increasing pressure on West Berlin by the Soviet
Union or, more probable, through the East German
government, is almost certain. It seems unlikely,
however, that a surface blockade will again be tried
within the next few months, because its effects are
uncertain.
The Kremlin probable now believes that use of
force to achieve its objective would be met by force.
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by the United States and its allies, although our
allies, and in particular the French, have often been
reluctant to take prompt counteraction onmuch.more
minor issues. Therefore, although the danger of war
over Berlin cannot be disregarded, we believe that up
to the middle of this year the Kremlin will avoid
courses of action which it feels would involve grave
risk of general war.
Meanwhile the general pressure on West Berlin
increases slowly. Only four of ten roads and seven
of eight passenger rail lines through the Soviet zone
to West Germany remain open. The main canal route
has been closed since August. The western sectors
of the city are being gradually sealed off from East
Berlin and Eastern Germany through the erection of
barriers, closing of crossing points and cutting of
city-wide transportation lines. The streetcar and
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electric power sy independent
units and there are indications that the important
elevated railroad-may shortly be cut at the zonal
border.
On the plus side, West Berlin now has a stockpile
of nearly a year's supply of solid and liquid fuels
and about six months' of emergency food and medical
supplies. Morale is good, but the chronic unemploy-
ment, now set at 25 percent of the labor force, is
being aggravated by East German refugees, whose influx
reached a high of 16,000 in December and has recently
run as high as 2,000 a day.
In the event of surface blockade, the United
States has the capability of reinstating the airlift
which broke the 1948 blockade. The Soviet Union, with
fighter airdromes close to the three irco rido s,
could seriously disrupt the airlift it 1t dose rto
accept the obvious risk
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It is now believed, however, that on a short-
term basis, West Berlin will be completely sealed
off from the Soviet Zone and from East Berlin at
the time of West German ratification of the Bonn
and Paris treaties, but that it will be left with
limited rail and road access to West Germany.
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