CURRENT AFGHAN-SOVIET RELATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91T01172R000300070018-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 20, 2016
• Document Release Date: March 13, 2006
• Sequence Number: 18
• Publication Date: September 30, 1955
• Content Type: MEMO

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CONE DENT
OCI No. 5785/55 CENTRAL INTELLIGENCE AGENCY
Copy No. 3 OFFICE OF CURRENT INTELLIGENCE
30-September 1955
TO: Deputy Director (Intelligence)
SUBJECT: Current' Afghan-Soviet Relations
1. Although the Afghan-Soviet treaties of 1921 and 1931
provided for establishment of close ties, Soviet contact with
Afghanistan prior to 1954, was limited to.routine matters--
boundary and quarantine questions and a modest amount of trade.
Exceptional contacts were a barter agreement (signed in July
1950 and renewed in 1954 for another four years) and an exten-
sion-of credit by the Soviet Union in 1953 for construction
of four gasoline storage facilities in northern Afghanistan.
2. In, 1954, Soviet-Afghan economic contacts increased
significantly and other countries of the Soviet bloc began to
manifest interest in the Afghan economy. The USSR advanced
a total of $6,200,000 in credit for street and road construc-
tion, and the building of silos, more gasoline storage facil-
ities, a flour mill, and a bakery. Czechoslovakia also ad-
vanced Afghanistan $5,000,000 in credit in 1954, of which
$1,500,000 has been allocated to construction of a cement
plant. There have also been reports that the Czechs are to
supply a glass factory, briquette plant, a fruit cannery, and
a nitrogen plant, but as far as is known, the rest of the
Czech credit has not been committed to specific projects;
the Afghans may be using this credit for their recently re-
ported substantial quantities of imports from Czechoslovakia.
Both the Soviet Union and Czechoslovakia are to be repaid
in goods at low interest over an extended period.
3. The last three annual protocols signed under the
Soviet-Afghan barter agreement suggest an expansion in Soviet-
Afghan trade. The 1954 protocol was announced as covering
$25,000,000 worth of trade; the 1955 protocol reportedly pro-
vided for trade up to $30,000,000; the 1956 protocol covers
"expanded" trade. It seems quite. doubtful that actual trade
has approached these figures. For one thing, the increase
in Afghan production of goods for export has probably not
been sufficient for barter trade on such a scale. Afghanistan's
main exports to the USSR are wool, cotton, seeds, and hides;
its principal imports from the USSR are petroleum products,
sugar, cotton piece goods, building materials, and vehicles.
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4. Since October 1954, when the lates
with the USSR was signed, new contacts of i
Afghanistan and the Soviet bloc have been a
an Afghan-Soviet transit agreement signed o
under which Afghanistan is allowed to ship
ports through the USSR duty-free and at a 1
(2) establishment of a small new
discount
t credit agreement
mportance between
s follows: (1)
n 28 June 1955
imports and ex-
0-percent freight
rt of entry on
,
~!
the Oxus River at pizil gala in June 1955,
r
25X1
25X1
5. Soviet technicians promptly began work on all of the
1954 nrniantR_ Most are now completed or near completion.
6. Afghanistan's economic contacts with countries out-
side the Soviet bloc continue to overshadow those with the
bloc. Since 1951, $8,200,000 in direct American technical
assistance and $39,200,000 in loans from the Export-Import
Bank have been given to Afghanistan. The American construc-
tion firm of Morrison-Knudsen has since 1948 worked on more
than $50,000,000 worth of projects. Most'of the money for
these projects came from the Export-Import Bank loan. No
significant effort has been made to challenge Morrison-
Knudsen's dominant position in southern Afghanistan and a
new contract for construction of an international airport
at Kandahar was concluded while the recent Pakistaniblockade
was still on. Afghanistan's total trade with nonbloc:coun,
tries has remained about $65,500,000 annually since 1951.
The number of American technical personidel now in Afghanistan
is about 140. While the amount of Soviet gasoline scheduled
to be imported into Afghanistan under the barter protocols
has remained about 3,000,000 imperial gallons each year, this
figure was actually met only in'1954. Afghan imports of gaso-
line from the West rose from less than 2,000,000 imperial
gallons annually in 1950-1953 to 3,300,000 gallons in 1954.
(Although Soviet gasoline at the border costs less than half
the delivered price of Western gasoline, internal freight
costs tend to offset the price differential - in .the southeastern
part of the country.)
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7. A large number of offers have been made by the bloc 25X1
which, either as a result of Afghan suspicion or Communist de-
lay in following up, have never been implemented.
8. The two most significant factors affecting Afghani-
stan's foreign economic contacts are: (1) division of the
country into two geographic areas by the Hindu Kush Mountains,
which makes the transporation of goods in the country from
the north to the south, or from the south to the north, both
difficult and expensive, and (2) Kabul's determination to
avoid complete dependence on either the Soviet Union or Paki-
stan as a source of supply. Prime Minister Daud's impatience
for modernization has occasioned an increased emphasis on the
Soviet source when it has been impossible to obtain necessary
material from the West.
9. The Pakistani blockade of the Afghan border from
April to September 1955 introduced a new but probably tempo-
rary element. Since the Afghan-Soviet transit agreement was
signed on 28"June, Afghanistan has directed that some imports
from Western Europe be sent via the USSR. Bloc countries
have also demonstrated interest in utilizing the Soviet route
to expand their trade with Afghanistan. Apparently the USSR
expedited shipments of petroleum products and cement but
failed to relieve all shortages caused by the Pakistani block-
ade. Goods are now reported. to be coming in again from Pak-
istan. The hardships caused by the Pakistani blockade and
continuing bad feelings between Kabul and Karachi make it
unlikely that Afghanistan will let itself become as heavily
dependent on the Pakistani channel as before.
10. The Soviet development projects agreed to in 1954
have been executed promptly, serve immediate needs, and are
psychologically appealing, with consequent increased Soviet
potential for influencing Afghan policy. Initiative for the
development projects has, however, been as much Afghan as
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Soviet. The Soviet Union has made the most out of the Paki-
stani blockade and Daud's intense desire for modernization.
No new Soviet-Afghan agreement for development projects has
been signed since October 1954, when strong foreign and do-
mestic protests followed Daud's acceptance of the $2,100,000
Soviet road building and maintenance program for Kabul. Most
of the Soviet credits extended in 1954 have probably been
used up, and unless additional arrangements are made shortly,
a slacking off of bloc activities in Afghanistan can be ex-
pected.
11. The Afghans, confident in the success of their tra-
ditional policy of playing great powers against each other,
are primarily concerned with internal affairs. Since confu-
sion and uncertainty. do not alarm them and do trouble the
United States, and presumably the USSR, the Afghans are
probably reasonably satisfied with their present position.
They have expressed some willingness to join the West if as-
sistance on a sufficiently large scale is forthcoming. The
sincerity of this offer is open to question since such Western
assistance could be expected to alarm the Soviet Union and
provoke major counterefforts.. Moderate but gradually ex-
panding American economicand?-political aid, however, probably
could reduce the modest recent Soviet gains without alarming
the USSR. In any case, it is unlikely that Afghanistan of
its own volition will choose between East and West..
Act ling Assistant Director,
Current Intelligence
(Coord. with ORR)
CONFIDENTIAL
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