CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Publication Date: October 27, 1999
• Content Type: SUMMARY

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CONFIDENTIAL
f~'QT
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO.
50
OCI NO- 1798/58
17 July 1958
Q (DECLASSIFIED
CLASS. CHANGED TO:
DOCUMENT NO. ,T
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CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
CONFIDENTIAL
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current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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CONFIDENTIAL.
17 July 1958
Jordan
The landing of British
forces in Jordan on 17 July may
forestall a coup attempt, against
King Husayn by UAR-supported
opposition elements. The UAR
operations may have been post-
poned. The Baghdad radio on
17 July was still forecasting
a revoliition in Jordan "Tomor-
row."
Acutely aware of the danger
to his government, Husayn has
instituted extensive security
precautions. Demonstrations
in West Jordan favoring the
Iraqi coup were suppressed, and
additional army officers and
others suspected of disloyalty
have been arrested. The Iraqi
troops which Husayn had once
hoped might assist him in main-
taining order in Jordan were
allowed to return to Iraq after
their officers threatened to
shoot their way out of the coun-
try. These troops have now
joined other Iraqi forces at
pumping station H-3, some 50
miles inside Iraq, and probably
will remain there for the time
being as a barrier to Husayn's
stated intention of using his
own army against the Iraqi re-
gime. In time these Iraqi forces
may well be used by Baghdad to
exert pressure on Husayn, and
presumably would be available
if called on to support a pro-
UAR coup in Amman.
cians are finding it inadvisable
to favor the move, and the rebels
are issuing propaganda state-
ments that they will oppose it.
General Shihab, the Lebanese
Army commander, is continuing
to obstruct the operations of
the American forces.
There is no indication so
far that the UAR intends to op-
pose the American action direct-
ly. However, UAR assistance to
the rebels, already~omuch in
evidence during the previous
week, is likely to be stepped
up.
The landing of the marines
plus other area developments
puts; an end for the moment to the
political compromise moves which
were being talked of last week.
Iraq
The new quasi-military re-
gime in Baghdad is gradually
extending its authority to all
parts of the country. The re-
gime has eliminated most, if
not all, the potential leaders
of any countermove. Not only
have King Faysal, Crown Prince
Abd al-Illah, and Prime Minis-
ter Nuri Said been killed, but
a substantial number of other
personalities in the Nuri gov-
ernment appear to have suffered
the same fate. Massive trans-
fers of high officers have been
made to extend the coup lead-
ers' hold over the army.
Although the American land-
ing force in Beirut met an ini-
tially friendly reception,
sentiment hostile to the move
now appears to be building up.
Even moderate Lebanese politi-
The formal head of the
new republic is General Rubai,
most recently Iraqi ambassador
to Saudi Arabia. However,
neither Rubai nor Brigadier
Qasim, the new prime minister,
may be the actual leader of
rb -CPR
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- S E C R E T
the coup group.
CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
sugges a
Brigadier Abd al-Salaam Arif,
who has been named vice premier
and has assumed charge of the
strategically placed Ministry
of Interior, is the real lead-
er of the new regime. Several
of the civilians nandd to
the cabinet are exiles; others
are persons who had long been
banned from politics of
who had been forced out of
the army because of political
activity.
While the military leaders
have assumed a superficially
friendly attitude in talks with
the American and British ambas-
sadors, the new regime appears
basically radical, Arab nation-
alist, and anti-Western. Should
Kamil Chadirchi, Iraq's most
prominent leftist front man, be
called on to participate in the
new government, this would al-
most certainly be an indication
of pro-Communist influence.
The Baghdad regime has been
assured of UAR assistance in
whatever form it desires. Na-
sir's government has also for.-.
mally announced that it would
regard an attack on Iraq as
an attack on the UAR.
Impact of Coup in Area
The threat the Iraqi devel-
opments pose to Jordan and pos-
sibly to oil-rich Kuwait have
been the aspects of most con-
cern to other states in the
area. Turkey has been particu-
larly vehement in its insistence
that Jordan's government be
given all the support possible
from the Western camp, and the
Turks have taken various meas-
ures to strengthen their mili-
tary position in areas border-
ing Syria and Iraq.
Israel has been especially
concerned over Jordan; the Is-
raelis almost certainly feel
they would have to take mili-
tary action, probably to seize
West Jordan, should the Jor-
danian Government be overthrown.
The British troop support for
King Husayn has probably less-
ened their fears temporarily.
Israel militarily remains alert,
but there have been no indica-
tions of mobilization as yet.
The Israelis are capable, how-
ever, of full mobilization with-
in 48 hours with very few ad-
vance Indications.
In the Arabian and Persian
Gulf oil areas, the news from
Iraq was hailed po ularly with
Anm4a
Open manifestations of ap-
proval have also been reported
from Kuwait, where the acting
ruler put on a show of force to
curb paraders who were shouting
"Long live the Iraqi Army," and
from Bahrein, where there is an
American-owned refinery. Britain
is sending additional troops to
Bahrein and to Aden, and the
chief British diplomat in Kuwait
has been authorized by London
to call in British troops if
local security forces cannot
control disturbances. Further
afield, the Sudanese and Libyan 25X1
governments fear that pro-Egyp-
tian elements may take some ac-
tion.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
Communist Reaction
The Soviet Government state-
ment calling for the immediate
withdrawal of American troops
is Moscow's strongest official
pronouncement on the Lebanese
crisis, but falls considerably
short of Soviet statements dur-
ing the Suez crisis in 1956 and
the Syrian-Turkish dispute of
last fall. Terming the situa-
tion a "threat to the peace,"
Moscow employed the classic
Soviet formula of noncommitment,
stating that the USSR "cannot
remain indifferent to events
creating a grave menace in an
area abutting on its frontiers."
Bloc propaganda reaction
to the landings was immediate
and voluminous and reflected
confidence that the interven-
tion would boomerang when faced
with the pressure of world
opinion. Peiping and the East-
ern European satellite capitals
closely paralleled Moscow
charges that the move, labeled
"open military aggression," was
the first stage in comprehensive
Western plans for suppressing
the Arab national movement and
for re-establishing colonial
dominance of the Middle East.
The Pravda editorial on 17 July
calleor "hands off Lebanon,
hands off Iraq, hands off all
Arab countries!"
The Soviet announcement
that air and ground force
maneuvers in the Transcaucasus
and Turkmen Military Districts
will begin on 18 July is an
effort by the USSR to inhibit
any Turkish or Iranian military
action against Iraq or Western
military action through Turkey
or Iran.
Prompt action by both Mos-
cow and Peiping in recognizing
the new Iraqi regime indicates
bloc interest in preserving the
revolutionary government and
inhibiting any Western counter-
action in Iraq. Moscow's harried
recognition will lead to the
re-establishment of diplomatic
relations broken in January
1955 by the Nuri government;
Peiping's recognition paves
the way for the opening of Pei-
ping-Baghdad ties which would
replace the diplomatic relations
formerly existing between the
Nuri government and Nationalist
China.
Communist China: At a mass
rally in Pe ping on the night
of 16 July, called to protest
the US move in Lebanon and to
proclaim Chinese support for
the new republic of Iraq, there
were calls for the defeat of
American "aggression" in Korea
and Taiwan. There are no signs,
however, that Peiping is pre-
paring to launch a diversionary:
military effort in the Far East
to counter the US move in the
Middle East.
Yugoslavia: Belgrade,
while noting he "legitimate
interests" Westerners have in
the area, has condemned the
American landing of troops and
has announced its recognition
of the new Iraqi republic. Vice
President Kardelj gained the
impression during Nasir's visit
to Yugoslavia that the Egyptian
President had not expected the
Iraqi coup.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
Free World Reaction
Initial free world reaction
to the Iraqi coup and the Amer-
ican landings in Lebanon is for
the most part along expected
lines. Western European re-
action has been mixed, although
many countries, concerned over
the rising Arab nationalism,
have supported the American
moves. A growing number of
Latin American governments are
indicating approval of the
landings. Asian countries al-
lied to the Baghdad Pact or
otherwise closely associated
with the United States seem
willing to back the American
actions. The "neutralist" and
small nations in general are
concerned mainly with the pos-
sibility of World War III, and
hope that the United Nations
can take over from the United
States as soon as possible.
Little reaction has developed
yet in Africa.
Western Europe:, opin-
ion is split over, whether
the United States''inter-
vention in Lebanon' will
help stem the rise of
Arab nationalism ~ ,high=
lighted by., the,, Iraqi
coup. Conservative opinion
tends to support the action,
socialist opinion,,to criticize
it, while independent views
straddle the fence. Only in
France, among the major coun-
tries, do all shades of non-
Communist opinion support the
landing, albeit with caustic
comments that if the 1956 Suez
intervention had succeeded the
Arab nationalist tide might
have been halted then.
Strongest governmental op-
position has come from Sweden,
which believes the landing was
not justified by the UN Charter
and prejudices the usefulness
of the UN Observer Group. Neu-
tral Austria, through Foreign
Minister Figl, has expressed
complete approval of the Amer-
ican action. Among NATO mem-
bers, support has come from
Britain, France, Turkey, Canada,
Italy, Belgium, Netherlands,
and Portugal, but others have
not spoken or have been equivo-
cal. In a North Atlantic Coun-
cil meeting on 16 July, repre-
sentatives of West Germany,
Denmark, and Norway evaded any
direct expression of approval
or disapproval, with the Danes
and Norwegians supporting the
Italian emphasis on the need
for a solution through the United
Nations. The Greek delegate
was uninstructed, and the Ice-
landic and Luxembourg repre-
sentatives did not speak.
Sharp criticism of the ac-
tion has come from the official
paper of Norway's governing
Labor party, and from two major
Conservative press supporters
of the Diefenbaker government
in Canada. Otherwise criticism
in Europe has come principally
from socialist opposition forces
in Britain, West Germany, and
Italy. In Britain the Labor
party, while not voting against
the government for endorsing
the US move, concentrated on
warnings against the consequences
of any extension of the Western
intervention.
The initial reaction of
the entire Greek press to the
coup in Iraq was that it con-
stituted a new victory for Pan-
Arabism and a new and probably
fatal blow to the Baghdad Pact
and Eisenhower doctrine. For-
eign Minister Averoff believes
Greek public reaction to Amer-
ican intervention in Lebanon
will be unfavorable, but he
has promised that his govern-
ment will attempt to influence
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 19 58
press reaction along more fa-
vorable lines.
Latin America: A growing
number of Latin American govern-
ments are indicating approval
of the US landings. Chile has
publicly expressed its full
support, and private statements
of support have come from Bra-
zil, Nicaragua, and the Domin-
ican Republic. Argentina, Bo-
livia, and Peru have privately
stated their satisfaction and
approval, and Mexico and Costa
Rica have privately expressed
their sympathetic understanding.
In Buenos Aires, however, on
the night of 16 July a small
mob of 200 to 300 persons,
tentatively identified, as iCom-
munists and sympathizers, at-
tacked the US chancery, inflict-
ing small property damage.
Far East - Southeast Asia:
Indonesian Foreign M n s ter
Subandrio stated on 15 July
that the Iraqi situation must
be decided.~.completely by the
Iraqi people. He hoped it would
be settled in the "Bandung
spirit." On the other hand,
Merdeka, a non-Communist nation-
alist paper which often acts as
the government mouthpiece, de-
clared on 16 July that the "fla-
grant American intervention"
could not be tolerated, and
that it would "cal 1? f_or inter-
vention from other circles,"
thus increasing the possibility
that hostilities would spread
to other areas.
The Japanese Government
has indicated that developments
in Lebanon and Iraq are domestic
affairs which made outside in-
tervention undesirable. This
view apparently has led Prime
Minister Kishi to state that
Japan would express disap-
proval in the UN Security
Council of the American move
in Lebanon. He also asserted
that any intervention in
Iraq would be "undesirable,"
even if called for by the United
Nations.
Government spokesmen in
South Korea and Taiwan have
stanchly supported the US troop
landings. Chen Cheng, the new
Chinese Nationalist prime min-
ister, said Nasir must be over-
thrown in order to solve the
problems of the Middle East.
Nationalist Chinese military
forces have been placed on a
special alert, and daylight air
patrols are being made along
the mainland coast.
the
leaves of or ore military
personnel have been canceled
have been confirmed by Pyongyang
radio. There is no indication,
however, that Seoul or Taipei
is considering any unilateral
action as a result of the Mid-
dle East crisis.
South Asia: Indian Prime
Minister Nehru is reacting cau-
tiously and confining himself
to generalized; ;etatementS, say-
ing merely that intervention
by "outside" powers in Lebanon
could create a "great danger
of world war." Most Indian
newspapers, however, have re-
acted violently, describing the
landings as "political insanity,"
"a flagrant breach of interna-
tional law," and as reducing
the UN Charter to a "mockery."
Pakistani reaction has been
limited as a result of the ab-
sence of President Mirza and
Army Commander in Chief Ayub,
who are in Turkey.
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UUN11I ntt' I IHL
,, T
CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
PART II
NOTES AND COMMENTS
SOVIET SUMMIT AND DISARMAMENT TACTICS
Soviet tactics at the Gene-
va technical conference on nu-
clear test controls and Khru-
shchev's speech of 12 July at
a Czech-Soviet "friendship ral-
ly" suggest that the USSR is
trying to minimize the need for
disarmament inspection measures,
but they do not indicate how
extensive an inspection system--
if any--the USSR might agree to.
Khrushchev apparently considers
the presummit ambassadors' talks
in Moscow deadlocked and prefers
to follow other courses in order
to limit negotiations with the
Western powers to topics ac-
ceptable to the USSR.
Khrushchev on 12 July again
expressed an interest in a sum-
mit conference but denied tak-
ing this position because of
either internal problems or
difficulties in the satellites.
He left the impression, however,
that Soviet interest in a sum-
mit meeting derived partly from
a desire to gain some form of
Western recognition of the
status quo in the satellites.
He said the West was blocking
a summit conference because it
did not want to recognize the
existence of the Eastern Euro-
pean states. Once again, Khru-
shchev criticized only one
agenda topic proposed by the
West--the Eastern European
situation.
Since the chances for hold-
ing an early summit conference
are dim, the USSR is following
other avenues of negotiation
to publicize its disarmament
position and press for Western
agreement. The European friend-
ship and cooperation treaty it
proposed on 15 June includes
disarmament and security plans
for Europe previously suggested
by Moscow. Moscow has adopted
the conciliatory pose of accept-
ing the Western plan for talks
by experts on various phases of
disarmament. If technical talks
are held on methods of prevent-
ing surprise attack, as the USSR
suggested on 2 July, Moscow would
probably try to make its pro-
posals appear valid without com-
mitting itself to elaborate in-
spection systems.
In his 12 July speech,
Khrushchev emphasized that the
USSR still stood by its propos-
als for control measures to pre-
vent surprise attack, but he
made no reference to the ques-
tion of control measures to en-
sure a ban on nuclear tests.
He scored the West for insisting
on giving priority to the in-
spection aspects of disarmament,
specifically the idea of under-
taking any comprehensive inspec-
tion system before mutual trust
among nations had been estab-
lished.
Whether or not the
apparent Soviet vacillation
over attending the Geneva con-
ference reflects internal dif-
ferences, Moscow's caution with
regard to inspection continues
to be evident.
While Khrushchev has been
publicly arguing that a large-
scale inspection .system is
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17 July. 1958
infeasible at the start, the
Soviet scientists in Geneva
have been trying to demonstrate
that relatively modest systems
would be adequate to detect
nuclear tests. Western dele-
gates have felt that in the
discussions to date, Soviet
scientists have made exaggerated
claims for the accuracy of
various acoustic and seismic
techniques for detecting nu-
clear explosions. The Russians
also claim that the use of air-
craft to collect nuclear debris
is unnecessary and that ground
stations would suffice. Until
the control system itself is
discussed, however, it will not
be evident how realistic and
extensive a system the USSR is
willing to discuss.
Whether or not the USSR is
willing to implement some limited
system of controls in order to
gain an end to testing, the
present Soviet tactic is to
demonstrate that there is a wide
measure of agreement among the
scientists on control measures.
If the talks fail, Moscow wants
it to appear that the West is
to blame either because it makes
extravagant demands for in-
spection systems or because it
refuses to halt tests despite
a wide measure of agreement
on inspection. (Con- 25X1
curred in by OSI)
The latest move of the
Soviet regime to impose ideo-
logical conformity in the lit-
erary sphere is the removal of
Konstantin Simonov as chief
editor of the literary journal
Novy Mir. The Soviet Writers'
n on announced on 28 June that
Simonov was released at his own
request and that his predeces-
sor, Alexander Tvardovsky, had
been renamed editor.
Since mid-1954, when Simonov
replaced Tvardovsky, Novy Mir
has been the subject oo eased
controversy centering on the
journal's publication of such
politically questionable works
as Vladimir Dudintsev's Not By
Bread Alone, Daniel Granins-
sshiorE -story "Personal Opinion,"
Semyon Kirsanov's poem "Seven
Days of the Week," and poems
by Margarita Aliger, Olga Berg-
golts, and Yevgeniy Yevtushenko.
Simonov has been held per-
sonally responsible for Novy
Mir's mistakes and has been
criticized on a number of occa-
sions for its editorial poli-
cies. Khrushchev made unfavor-
able reference to the journal
at a joint meeting of leading
writers and party central com-
mittee officials in May 1957,
saying, "We cannot allow the
organs of the press to fall in-
to unreliable hands."
Simonov apparently failed
to heed this warning. The March
1958 issue of Novy Mir featured
a new play by VaIenUn Ovechkin,
"Facing the Wind," which has
been sharply attacked in the
press and which probably marks
Ovechkin's final estrangement
from service to the regime.
Ovechkin has long been known
for his ability to anticipate
the party line on "sensitive"
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CURRENT INTELLIGENCE WEEKLY SUIMARY
17 July 1958
topics, notably agricultural
policy, but since the 20th par-
ty congress his public state-
ments and writings have increas-
ingly diverged from official
pronouncements. He was quietly
dropped from membership on the
editorial board of the authori-
tative newspaper Literaturnaya
Gazeta in September.
Soviet leaders could not
fail to be seriously concerned
when Novy Mir featured his new
play---whicFalthough ostensibly
justifying the agricultural re-
organization, emerges as an
eloquent critique of the Soviet
system and party control of
agriculture.
Although Simonov has suf-
fered a decided loss of prestige
in being removed from the edi-
torship of Novy Mir, the regime
evidently regards Fim as a use-
ful writer and international
figure who can be relied on in
positions not involving policy
decisions. He has played a
leading role in the prepara-
tions for the heavily propagan-
dized Second Afro-Asian Writers'
Conference to be held this fall
in Tashkent, Uzbekistan.
Probably he will gather materia
for a new novel in some remote
part of the Soviet Union.
The poet Tvardovsky, who
was himself bitterly attacked
and fired for publishing "ideal-
ist" and "nihilist" articles
in Novy Mir during the "thaw"
followin talin's death, has
evidently satisfied the party
leadership that he is a reformed
man. At the May central com-
mittee meeting Khrushchev said
that "friendly" talks with Com-
rade Tvardovsky have given rea-
son to hope that this master of
the written word will "draw the
necessary conclusions." Al-
though it is unclear whether
Tvardovsky has become ideo-
logically reformed or merely
more realistic politically,
the regime is apparently
confident that he will not
again abuse a very influ-
ential position.
USSR FURTHER DECENTRALIZING ECONOMIC PLANNING
A speech by Khrushchev
in April, delayed over two
months in publication, contained
an economic proposal which may
have engendered policy differ-
ences. He mentioned that the
regional economic councils
(sovnarkhozy) should be given
the authority, now exercised
by Gosplan, to determine where
investment funds allotted them
would be spent to meet pre-
scribed production goals. They
would be allocated funds for
five-year periods, and would
distribute them by project and
by year.
The justification for de-
centralizing control over in-
vestment is that regional of-
ficials in the field would be
better able to judge local con-
ditions and make detailed in-
vestment decisions than central
planners who have often made
costly errors in investment al-
location. The danger arises,
however, that Moscow's capabil-
ity to control the direction of
economic development might be
considerably reduced under such
a scheme. Regional officials,
under the pressure to improve
the living conditions of the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
local population, would be
tempted to divert funds when-
ever possible to consumer-
oriented industries. While
Khrushchev in his speech ac-
knowledged this difficulty and
would probably move to offset
it by putting greater reliance
on the party apparatus, there
are indications that more
orthodox officials are skepti-
cal of this further decentral-
ization.
Judging from the numerous
press articles during May and
June playing up the mishandling
of investment funds by the sov-
narkhozy, some Moscow adminis-
trators apparently have deep
misgivings about endowing the
sovnarkhozy with more power,
particularly if it results in
any diminution of their own
authority. The delay in the
publication of the speech in-
dicates that Khrushchev may be
encountering some high-level
resistance to this attempt to
carry last year's industrial
reorganization a long step for-
ward. In his April speech,
given at a construction con-
ference which was attended by
nearly all members of the party
presidium, Khrushchev is re-
ported to have criticized
severely a number of prominent
officials, although these re-
marks were expurgated in the
published version. The cir-
cumstances surrounding the re-
moval of N. K. Baybakov as
chairman of RSFSR Gosplan in
early May suggest that he may
have been one of the officials
involved.
The problem was presumably
aired at an all-union confer-
ence on investment efficiency
held in Moscow in mid-June, and
since then some steps in line
with Khrushchev's proposal have
been taken. According to recent
Soviet articles, the duties of
sovnarkhozy have been broadened
and central planning will hence-
forth be concerned with details
in only eight major branches of
industry--ferrous and nonferrous
metallurgy, petroleum, gas, chem-
icals, coal, electric power sta-
tions, and agriculture. Further-
more the number of items whose
production is specified by cen-
tral planning is to be drastic-
ally reduced. It fell from
1,640 in 1957 to 1,042 in 1958,
and will fall again to only a
third of the present figure in
the forthcoming Seven-Year Plan.
These steps may represent
a compromise falling short of
Khrushchev's proposal, or they
may be only initial steps. In
any case, a definitive policy
statement on the handling of
investment funds has not yet
been publicized. The ultimate
division of planning responsi-
bility between Gosplan and the
sovnarkhozy could result in
further limiting Gosplan's
duties. The central authori-
tiet will certainly preserve,
however, basic principles and
goals concerning, for instance,
the predominance of heavy indus-
try and Khrushchev's 15-year
economic forecasts.
(DreDared by ORR)
POLES FEAR CHANGE IN GOMULKA POLICIES
Poles who played prominent
parts in setting the stage for
Gomulka's experiment in "na-
tional Communism" are increas-
ingly pessimistic about the
chances for the Polish "road
to socialism" to survive.
As a direct consequence
of the increased state control
over cultural policy, liberal
writers, intellectuals, and pro-
fessional men are withdrawing
from or are being forced out of
political life. "Revisionist"
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writers who found themselves
jobless have generally been
able to find employment else-
where but only by refraining
from writing about topics in-
imicable to the regime. The
installment of Minister of High-
er Education Zolkiewski as ed-
itor in chief of the heretofore
liberal journal Nowa Kultura
was marked by the resigns ion
of three of its editors, among
them the philosopher Leszek
Kolakowski.
The party's agitprop chief,
Andrzej Werblan, in a speech
condemning the "errors" of Nowa
Kultura, singled out Kolakowski
for criticism. Kolakowski had
written brilliant essays on the
evils of Stalinism, a topic the
party leadership feels is being
used to masquerade criticism
of the present regime. The Pol-
ish press now is engaging in
bitter criticism of a once-
favorite son, Marek Hlasko, the
prize-winning novelist who has
powerfully depicted the demoral-
ization of life under Stalinism.
Werblan, in an earlier speech,
had warned that works not con-
tributing to the building of
socialism would not be pub-
lished, and books by Hiasko
and Leopold Tyrmand, who re-
signed from the party last fall,
have already been rejected.
The tendency toward non-
involvement in politics is also
strong among professional per-
sons other than writers and
among armed forces personnel
who have not been victimized
by the restrictive cultural pol-
icy. Their attitude derives
from a sense of futility, fear
of increased repression, and
continued revulsion to Marxism-
Leninism. Students have con-
sistently refused to join the
Socialist Youth Union, and the
most popular courses in the
universities are nonpoliti-
cal.
In the past week, articles
in the party press indicate
that the party is moving to
counter the marked unreceptivity
to Marxism-Leninism. Although
the party maintains that free
scientific research will be
continued, the "Marxist charac-
ter" of lectures in the univer-
sities will be guaranteed by a
prescribed general outline and
an obligatory reading list.
Measures will also be taken to
export Marxist-trained scholars
to provincial university centers,
since "appeals and suggestions"
have so far proved fruitless.
Two-year courses for "per-
fecting political officers" are
planned for the unpopular eve-
ning sessions of the army schools
of Marxism-Leninism. Gradua-
tion from these courses is re-
quired for promotion to a high-
er officer rank.
Soviet pressures on Poland
implicit in the Yugoslav dis-
pute and the Hungarian execu-
tions, while designed to bring
conformity in foreign policy
matters, may be used by Gomulka
to justify his efforts to re-
instate greater party control
over the nation. The two poli-
cies most closely linked with
the Gomulka experiment--abandon-
ment of forced collectivization
of agriculture and a truce with
the church--remain unchanged
and are in part, responsible for
his continued popularity.
Should Soviet pressure be
extended to include internal
affairs, it would most likely
be applied first in agricultural
matters. The Polish regime--
through the puppet Peasant par-
ty leader Stefan Ignar--on 18
June strongly reaffirmed its
intentions of pursuing the pres-
ent policy of support for the
middle peasant and voluntary 25X1
cooperation of all types.
25X1
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17 July 1958
ULBRICHT TRIUMPHANT AT EAST GERMAN PARTY CONGRESS
East German party boss
Walter Ulbricht, supported by
Khrushchev, placed his own
hard-line stamp on the fifth
Socialist Unity (Communist)
party (SED) congress held in
East Berlin from 10 through 16
July and emerged as the un-
questioned leader of the East
German party. Dealing a crush-
ing bloc to the opposition,
the Ulbricht-dominated congress
eliminated his opponents from
high party posts while raising
several loyal henchmen to top
jobs in the SED hierarchy. Un-
compromising condemnation of
"revisionism" and a call for
rigid orthodoxy at home and
abroad, intensification of the
campaign against West German
pert Fritz Selbmann, a deputy
premier and deputy chairman of
the Planning Commission who had
opposed Ulbricht on economic
matters; East German Ambassador
to China Paul Wandel, a former
party secretary; former polit-
buro member Fred Oelssner, who
was once the SED's leading
theoretician; and Grete Witt-
kowski, a onetime deputy chair-
man of the Planning Commission.
Education Minister Fritz Lange,
who came under fire at the con-
gress for shortcomings in the
East German educational system,
was dropped as a candidate mem-
ber of the central committee.
The politburo was packed
with Ulbricht adherents, its
EAST GERMAN PARTY LEADERSHIP
SECRETARIAT POUTSURO
Walter Ulbricht, 1st Secretary
Albert Norden
Kurt Hager
Erich Mueckenberger
Alfred Neumann
Erich Honecker
Gerhardt Grueneberg
Paul Verner
Friedrich Ebert
Otto Grotewohl
Hermann Matern
Alfred Neumann
Wilhelm Pieck
Heinrich Rau
Willi Stoph
Walter Ulbricht
Former
Politburo
members
Former
candidate
members
Herbert Warnke
Erich Honecker
Bruno Leuschner
Erich Mueckenberger
Edith Baumann
Luise Ermisch
Paul Froelich
Kurt Hager
Alfred Kurella
Karl Mewis
Alois Pisnik
Paul Verner
"imperialism," and promises of
great economic accomplishments
in the future were the themes
set by Ulbricht on opening day
and reiterated by speaker after
speaker throughout the congress.
The most important of
those purged from the central
committee included economic ex-
New .
candidate
members
membership being in-
creased from eight to
thirteen full members.
Four candidates were
upgraded to full mem-
bership and one new
member was elected,
while eight new can-
didate members were
chosen. The entire
secretariat, headed
by Ulbricht as first
secretary, was re-
elected with the ex-
ception of Paul
Froehlich, who be-
came a politburo can-
didate member.
In his opening
speech, Ulbricht
charged that "revision-
ists" tried to exploit
the complicated and
difficult problems of
the "transition to socialism"
and termed modern revisionism
a dangerous reflection of
bourgeois ideology. "National
Communism," he asserted, is
aimed at undermining the unity
of the socialist camp and can
serve only "to smooth the path
to counterrevolution." Ulbricht
pointed out that only exceptional
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17 July 1958
vigilance had prevented great
damage being done to the party
by the revisionist Schirdewan-
Wollweber faction and the "coun-
terrevolutionary" Harich group.
To combat revisionism, Ulbricht
urged "an atmosphere of intol-
erance toward mistakes and
shortcomings," meanwhile remind-
ing his audience of party mem-
bers who had already been purged.
Ulbricht stressed that the
objective of "socialist" educa-
tion is to prepare individuals
for life in "socialist" society
and to inculcate in them the
"socialist" approach to all
problems. Fritz Lange admitted
in his self-criticism that a
"dogmatic petrification of the
process of instruction" had con-
tributed to the program's fail-
ure to achieve its objective.
He announced that, in September,
"polytechnical instruction"--
school instruction interspersed
with periods devoted to pro-
ductive work in industry or
agriculture--would start in
the upper six classes of all
schools. Although the stated
aim of this educational innova-
tion is to enable students to
combine theory and practice,
its major purpose is to utilize
students in the labor force to
alleviate the critical manpower
shortage in East Germany.
In the economic sphere, the
East Germans were promised that
their "socialist" system would
soon bring them a better life
and enable them to surpass the
West German standard of living.
thereby proving the superiority
of "socialism" over capitalism.
It was emphasized repeatedly
that this goal can only be
achieved through higher labor
productivity--meaning tighter
labor discipline and probably
higher work norms, which are
certain to heighten worker dis-
content.
Khrushchev promised to help
East Germany by stepping up
aid. East Germany's grandiose
plans for higher economic pro-
duction appear to be highly
colored with propaganda, how-
ever, and it is doubtful that
appreciable increases in con-
sumer goods can be made avail-
able--even with Soviet aid--
if the planned increases in
heavy industrial capacity are
carried out.
(Concurred in by ORR)
BLOC EMPHASIZES ANTI-TITO STAND AT EAST GERMAN CONGRESS
Delegates to the East
German fifth party congress,
held from 10 to 16 July, used
the occasion to demonstrate
that the experiments in liberal-
ism which led to the "events of
1956" had come to an end and
that unity of the Communist
movement under Moscow's leader-
ship is the common goal. Rang-
ing from Soviet Premier Khru-
shchev's long, scathing attack
on Belgrade to Polish Party
Secretary Morawski's moderate
slap of Tito's wrist, the
principal speeches at the Com-
munist meeting in East Berlin
condemned opportunism and "re-
visionism." Khrushchev termed
"revisionism" the Yugoslav
"Trojan horse" which has the
purpose of first undermining
the Kremlin's power and then
isolating and bringing down the
satellites.
Khrushchev held out hope,
however, that Yugoslavia and
the other Communist countries
would, "despite current circum-
stances,... carry on a common
struggle in the future against"
their "common enemy." Even the
Stalinist Ulbricht hoped that
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"over a prolonged period" it
would be possible to convince
the Yugoslav comrades that they
were in error; in the meantime,
he said, normal state relations
were to be cultivated.
Khrushchev asserted that
the rift was "no earthquake"
and that Moscow does not propose
to overemphasize the polemics
with the Yugoslavs. He declared
that the methods used against
Belgrade in 1948, and not the
Cominform resolution charges,
were wrong. Nevertheless, the
major portion of his address
was devoted to a violent attack
on the Yugoslav leaders, and
Belgrade's response indicates
that it regards Khrushchev's
more conciliatory words as hol-
low.
The delegates reaffirmed
the bloc position on the Nagy
executions, noting, as Ulbricht
said, that the Hungarian revolu-
tion showed "that in our coun-
tries revisionism is the peace-
maker of the counterrevolution."
Ulbricht drew some pointed
parallels between the Petoefi
Circle's revisionist influence
in Hungary and the "vacillating
elements" in his own party
which have brought to East Ger-
many the most serious factional
strife in the Communist regime's
history.
Both Morawski--a liberal
Gomulka adherent--and Hungary's
party leader Kadar were rela-
tively subdued in their com-
ments on the Nagy and Yugoslav
questions. Morawski, in con-
trast to the other major speak-
ers, said nothing at all about
Nagy or the Hungarian revolu-
tion. Kadar's speech as it
was first broadcast by the Ber-
lin radio contained nothing
about Yugoslavia, though in a
later broadcast a paragraph was
added that criticized the Yugo-
slav program.
The congress speeches con-
tained veiled warnings that Go-
mulka's deviations from accepted
practice will not be tolerated.
Such a warning appears implicit
in Khrushchev's statement that
Moscow will not interfere in
party or state matters but will
criticize in a comradely way
those leaders "who make mis-
takes, but are capable of
appreciating them...." Khru-
shchev's attacks on Yugoslavia's
collectivization policies may al-
so have been intended for Polish
ears. 25X1
DE GAULLE'S POLICIES AND PROBLEMS
Premier de Gaulle has
ordered the committee on con-
stitutional reform to step up
its schedule to permit a joint
government-parliamentary con-
sultative committee to consider
its proposals early in August,
and has hinted officially that
the revision may open the way
for a federal union of France
and its overseas possessions,
presumably including Algeria.
No firm decisions have yet
been indicated on details of
the new constitutional proposals,
but it appears certain that
the president of the republic
will be given increased powers.
For example, he apparently will
have the right to appeal to the
country in a referendum. Jus-
tice Minister Debre, in charge
of the revisions, has said that
cabinet ministers should not be
members of the National Assembly,
and that assembly powers should
be reduced.
In a radio address on 13
July, De Gaulle called for new
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17 July 1958
institutions, established on a
federal model, to link France
with its overseas possessions,
and said Algeria would have a
"choice place" in this ensemble.
Like his previous pronounce-
ments on Algeria, this state-
ment seems deliberately vague,
since he still has to reckon
with extremist French settlers
who want Algeria integrated
into France. De Gaulle's promo-
tion of Jacques Massu to three-
star_general and his award of
France's highest military medal
to General Salan appear to be
part of a "carrot and stick"
policy toward the military to
wean them from the ultranation-
alist settlers. Some of the
troublesome "parachute colonels"
are being reassigned. De
Gaulle's scheduled monthly re-
turn visits to Algeria are pre-
sumably designed in part to
impress both Moslems and French
settlers with the importance
of the referendum.
Emerging signs of discon-
tent suggest that the honeymoon
period is ending for some polit-
ical and economic elements
which had heretofore tacitly
supported De Gaulle. The So-
cialist party has called on the
government to dissolve the Pub-
lic Safety Committees, voiced
opposition to "freezing" . sal-
aries and social benefits, and
requested that the October ref-
erendum also include a question
as to whether the present con-
stitution needs any revision.
Agricultural producers, the
first major economic group to
refuse a De Gaulle request,
have indicated their opposition
to voluntary renunciation of
part of a prospective increase
in agricultural prices. Labor
unions are also pressing their
demands for wage increases.
The Communists are re-
ported to be having.' difficulties
in rallying opposition to the
De Gaulle program. Party ef-
forts to form "committees for
defense of the republic" are
reported going badly, and a Com-
munist party section leader has
stated that, from the party
standpoint, "the political
situation has never been so
grave as now." A national
party conference may be
called to establish more
effective tactics.
AMERICAN AIR BASES IN MOROCCO
The Moroccan Government,
responding to popular clamor
for the evacuation of all for-
eign troops, may soon press
for an American declaration of
willingness in principle to
evacuate the five American air
and naval air bases in Morocco.
The King recently asked for a
speed-up of the negotiations
begun in May 1957,to regularize
the status of these bases. They
were built by the United States
under a bilateral agreement
with France negotiated in De-
cember 1950 when Morocco was
a French protectorate and are
jointly operated with French
forces. Moroccan nationalists
strongly resent the fact that
Morocco did not participate in
the 1950 negotiations, and the
government continues to insist
that the agreement was illegal.
The popular outcry against
the United States, instigated
in part. by the French Embassy's
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17 July 1958
press officer, who may have been
seeking to divert Moroccan atten-
tion from French troop evacua-
tion negotiations, stems from
a routine change in command on
28 June at the American base at
Nouaseur coincident with the
termination of that base's func-
tion as a supply de-
pot for the air force's
European opera-
tions. The~Moroccan
press, which favors
Morocco's neutrality,
charged that the base
had become a NATO in-
stallationand labeled
the command change
an "aggressive design
of the United States
to commit Morocco to
side with the West."
Lodging a formal pro-
test on 30 June, the
government insisted
* U S Air Force base
US naval air facility
it should have been I o
consulted and, in ef-
fect, rejected ex-
planations of the
American Embassy.
eil
THE AUSTRIAN CHANCELLOR'S VISIT TO MOSCOW
A major test of Austria's
foreign policy may emerge from
the 21-27 July visit to Moscow
of Chancellor Julius Raab and
other Austrian coalition leaders.
The principal Austrian ob-
jective is a reduction in the
$150,000,000 reparations bill
imposed by the 1955 state treaty.
The Austrians also want trade
concessions, including settle-
ment in hard currencies of
persistent Soviet deficits.
Raab has described as "pure
conjecture" numerous reports
that he also hopes for a large
loan, but there is a precedent
in his endorsement in 1955 of
the abortive Soviet loan offer
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17 July 1958
to the province of Lower
Austria.
rus ev
probably views the meeting as
an opportunity for further moves
to dissipate the hostile West-
ern reaction to the Hungarian
executions, and hopes it will
present to the world a picture
of closer Austrian-Soviet rap-
port.
Comparatively generous eco-
nomic concessions are therefore
HONDURAN GOVERNMENT WEAKENING
President Ramon Villeda
Morales, whose inauguration
last December ended a turbulent
three-year lapse in constitu-
tional government and brought
his Liberal party to power after
likely; the Soviet Union is in
a good position to offer, as a
minimum, a cut in Austrian oil
reparations deliveries. Even
if coupled with the requirement
for replacement deliveries of
other Austrian goods, this would
still be an attractive offer
to Vienna, which needs the oil
but has difficulties in finding
a market in the West for some
other products--particularly
those produced in the former
Soviet-controlled factories of
eastern Austria.
Moscow will probably press
in return for Austrian approval
of such Soviet foreign policies
as Chinese Communist representa-
tion in the UN, the Rapacki plan,
cessation of nuclear tests, and
condemnation of West German
atomic armament. The Austrians
will probably be cautious about
such overtures, but they have
found it hard during the past
year to refuse various conces-
sions, such as permission to
hold the 1959 World Youth Fes-
tival in Vienna. None of these
has involved an alarming depar-
ture from a strongly pro-Western
orientation.
25X1
for German reunification and his
offer of Vienna as the site for
a summit meeting were evidently
motivated by such considerations.
Raab's attitude has caused
some concern, however, since he
apparently yearns for a diplo-
matic success to crown a career
which,for health reasons, may
be coming to an end. His plan
25 years as a persecuted op-
position party, is rapidly
losing his once broad and en-
thusiastic popular support. He
is now faced with a serious la-
bor problem, and the politically
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17 July 1958
decisive armed forces are be-
coming increasingly disillu-
sioned with constitutional
civilian government.
no un s ave been
available n recent weeks to
pay the salaries of military
and civilian officials.
The United Fruit Company,
which dominates the economy in
the important north coast area,
has suffered serious setbacks
in its operations in Honduras
in recent years and is in no
mood to grant labor demands in
the present negotiations for a
new labor contract to replace
the one which expired on 15
July. The anti-Communist lead-
ers of the dominant union, which
is Honduras' largest and the
virtual keystone of the coun-
try's entire labor movement,
are fighting a continual battle
with a Communist minority for
control of the union, and feel
they cannot afford to back down
on the union's wage and other
demands. Although both sides
have agreed to continue negotia-
tions beyond the expiration of
the contract, an impasse could
arise at any time and result
in a crippling strike which
could threaten the government's
stability.
Most armed forces leaders,
whose careers developed during
the long period of Nationalist
party rule, are not unhappy to
see Villeda's position weakening.
The armed forces managed the
unprecedentedly free elections
last year and subsequently ended
the military.iunta's.15-month
rule. Before doing so, however,
they demanded and obtained con-
stitutional provisions giving
the armed forces virtual auton-
omy in the governmental struc-
ture. The civil government thus
has little control over the
military, many leaders of which
expect again to assume direct
control of the government when
the Villeda administration has
become sufficiently discredited
in the public mind.
INDIAN FINANCIAL CRISIS
The rapid decline of India's
foreign exchange reserves in
recent weeks suggests that a
flight of capital has begun as
a result of apprehension regard-
ing the outlook for the economy.
The reserves have declined at
the rate of $15,175,000 a week
since early June, after declin-
ing by only about $6,000,000 a
week during early 1958. They
stood at the dangerously low
level of $442,400,000 on 4 July.
Such a flight of capital could
be managed by underinvoicing
exports and overinvoicing im-
ports and depositing the dif-
ferential abroad. This would
be almost impossible for
the Indian Government to
control.
The Indian Government re-
cently estimated the foreign
exchange deficit for the fiscal
year ending 31 March 1959 at
$617,000,000, and the deficit
for the last three years of the
Second Five-Year Plan (1956-61)
at $1.317 billion after taking
into account all assured for-
eign aid. India held only $561,-
000,000 in reserves at the be-
ginning of the present fiscal
year. Indian officials had
hoped that the reserves could
be reduced to about $200,000,000,
but the fear that a capital
flight is beginning may cause
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the government to adopt a more
cautious view.
In a drive to increase its
falling exports, the govern-
ment has reduced or elimi".
nated the export duties on
a number of products. It
is requiring all sugar refin-
eries to sell part of their
output abroad, even though
this means selling at a
loss, since the price in India
is above the world market price.
Import restrictions have also
been made even more stringent,
and the government reportedly
plans to make imports scheduled
for the 1 April - 30 September
licensing period last for the
following three months as
well.
While such a drastic cut
in imports will force many fac-
tories to curtail production be-
cause of shortages of imported
raw materials and parts, the gov-
ernment may decide that increased
unemployment is more acceptable
than a third cut in the Second
Five-Year Plan, especially since
nearly all major projects are
well underway. It recognizes
that such import restrictions
are only a stopgap measure,how-
ever, and will make an all-out ef-
fort to obtain large-scale for- 25X1
eign aid before abandoning the
goals of the plan.
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17 July 1958
MODERATE FORCES FACE TEST IN SINGAPORE BY-ELECTION
The 26 July by-election to
the Kallang district seat on the
Singapore city council will pose
a major test for the proposed
United Socialist Front (USF),
which is still in process of
formation. Singapore Chief Min-
ister Lim Yew Hock's Labor Front
and the conservative Liberal
Socialists, the main components
in the proposed USF organization,
have agreed to support one can-
didate in this election in an
effort to defeat the left-wing
People's Action party (PAP)
candidate and halt steadily
growing pro-Communist strength
in Singapore. Their failure in
this first test would be a se-
vere blow to the USF concept
of political cooperation among
moderates and would pave the
way for future left-wing vic-
tories.
ly based and effective po-
litical organization.
Chief Minister Lim is fully
aware of the importance of a
victory in Kallang and is making
a strong personal fight for the
moderate candidate. He faces an
uphill battle, however, for
the Communist-influenced PAP
appears to have lost none of
its strength since sweeping
13 of the 14 seats it contested
in the city council elections
last December. The PAP is well
organized and financed and
appears to be in an excellent
position to augment its strength
by capitalizing on Singapore's
economic difficulties, which
have created a growing unem-
ployment problem.
Victory ini. Kallang would
give the USF a temporary boost,
but it would have only a few
months to consolidate its
strength and build an island-
wide grass-roots organization
to compete with the PAP in the
Legislative Assembly elections
early next year. No moderate
party in Singapore has ever
been able to create a broad-
Chief Minister Lim's agree-
ment with the conservative
Liberal Socialists indicates that
he has, at least for the present,
abandoned his long-standing ef-
forts to strengthen the moderates
by persuading the right-wing"
group in the PAP, controlled by
Secretary General Lee Kuan Yew,
to., j oin his Labor.. Front..:in a lef t-
of -center non-Communist coalition.
25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
POLITICAL CRISIS IN LAOS
The Souvanna Phouma cabi-
net in Laos will resign shortly
to permit the formation of a
new government following the re-
cent National Assembly elec-'
tions. The polarization in
Laotian politics which followed
the pro-Communist victory in the
elections has resulted for the
first time in an effective left-
ist opposition, which may con-
trol about one third of the Na-
tional Assembly. Right-wing
politicians belatedly have
moved to unite by merging the
Independent and Nationalist
parties into the Rally of the
Laotian People (RLP). In addi-
tion, young members of the
Laotian elite who hold positions
in the army and civil adminis-
tration have formed a political
instrument, the "Committee for
the Defense of the National In-
terest," through which they in-
tend to work for the formation
of a strong anti-Communist
government.
The younger conservative
elements associated with this
committee are alarmed about the
erosion of the government's
authority in the provinces and
about the ineffective response
of the present conservative pol-
iticians to the growing politi-
cal and subversive capabilities
of the Communist-dominated Neo
Lao Hak,Zat. They believe an-
other conservative government
containing the same discredited
politicians would ensure the
loss of the country to the Com-
munists at the next general
election in December 1959 or
early 1960.
Accordingly, the young e-
lite have warned Souvanna Phouma
that unless a strong anti-Commu-
nist government is invested, the
group, apparently acting with
army support, will take "extreme
measures." Souvanna and Foreign
Minister Phoui Sananikone are
sympathetic to the group's call
for "new faces," but are resist-
ing proposals for a government
composed exclusively of young
technicians headed by Souvanna.
Both feel the new cabinet would
have to include a few deputies
drawn from the several factions
in the assembly or it would
stand little chance of investi-
ture.
At best the conservatives
are likely to muster only a
slim majority for investiture.
It is possible that the strong
leftist opposition, in combina-
tion with the opportunism and
factionalism characteristic of
the conservative deputies, will
wreck efforts to establish a
strong government. In that
event the young elite might very
well make good'.their threats to
impose a government by extra-
constitutional means. Such a
move would probably have the
support of the army leadership,
which has long debated inter-
vening in the deteriorating
political situation.
JAPANESE - SOUTH KOREAN NEGOTIATIONS
Indications that South
Korea intends to continue for-
mal negotiations for normaliz-
ing relations with Japan, de-
spite its strong protest over
Japan's decision to parole a
group of Korean detainees in
Japan, suggest that Seoul ex-
pects to secure certain advan-
tages by continuing the dis-
cussions, at least for the time
being.
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17 July 1958
Beginning on 21 July, Japan
is planning to parole 26 of 93
Korean detainees who, having
entered Japan illegally since
World War II, now desire to go
to North Korea. Eventually all
93 are expected to be released
in Japan, but Seoul is demanding
that they be sent to South Ko-
rea. Most of the 1,200 other
illegal postwar entrants already
have been repatriated to South
Korea.
A Japanese Foreign Ministry
official has asserted Japan will
not forcibly repatriate the dis-
puted detainees and thereby pre-
sent the spectacle of a non-Com-
munist country sending "hapless
detainees in manacles" to a
country where they can expect
punishment on political grounds.
Tokyo's position also may be
influenced by a desire not to
antagonize North Korea.
SECRET
PART II NOTES AND COMMENTS
South Korea's Vice Foreign
Minister Kim told an American
Embassy officer in Seoul that
his government would not break
off negotiations, but would of-
fer a compromise solution, such
as the hospitalization of the
93. As a bargaining lever, how-
ever, Seoul may threaten to ter-
minate the talks.
The Japanese Foreign Minis-
try, irritated by South Korea's
repeated postponement of sub-
stantive discussions on the con-
troversial Rhee fishing line 25X1
since negotiations were resumed
on 15 April, believes Seoul is
trying to extract concessions
from Japan on the return of art
objects, fishing vessels, and
other claims issues, before
beginning talks on the fishery
issue from which the Japanese
feel t have somethin to
gain.
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CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
PATTERNS AND PERSPECTIVES
SOVIET PUBLIC'S ATTITUDE TOWARD THE GOVERNMENT
During the past several
years, an increasing diversity
of views on'internal develop-
ments have been expressed in
the Soviet Union, and there are
suggestions that public opinion
may be emerging as a factor in
the political life of the coun-
try. Unorthodox views emerge
principally from among the more
educated and highly paid sectors
of the population. These views
are expressed, however, with
cynicism rather than with any
expectation of change.
Among the lower income
groups, on the other hand, per-
sonal security and visible im-
provements in economic condi-
tions have laid the basis for
positive support of Khrushchev
and his policies. This support
rests, however, on self-inter-
ested recognition of personal
gains possible under..Khru-
shchev's leadership rather than
on the more idealistic atti'
tudes evoked in the early days
of the regime.
General Breakdown of Attitudes
The "new Soviet man," the
selfless executor of party di-
rectives and ardent promoter of
Marxism-Leninism presented in
official Soviet propaganda as
representative of the vast ma-
jority of Soviet citizenry,
seems to be found only among
the youth, and then only rarely.
Even the high school student
tends to loose his ideological
enthusiasm when brought face
to face with life as it exists
outside the classroom.
present policies accept many of
the basic elements in the sys-
tem. Few object to government
control of heavy industry, cen-
trally planned economy, the So-
viet educational system, or even
Communist party hegemony. The
problems that beset their lives
they see as arising from partic-
ular policies of ;the. :regime
rather than from the Soviet sys-
tem itself.
Indifference toward Marxist
theory and party-line pronounce-
ments is almost universal.
Although all Soviet citizens
seem to have absorbed a great
amount of official propaganda
as a result of constant expo-
sure, for many the repetition
of the party line is often me-
chanical. The impassiveness
often shown by Soviet citizens
when the official position is,
challenged by a Westerner seems
to testify to such an absence
of emotional or mental involve-
ment.
While the mass of Soviet
citizens are dissatisfied with
one aspect or another of their
lives and to varying degrees
unenthusiastic about specific
policies and goals of the re-
gime, love of homeland and pride
in the growing world power of
the USSR tend to keep this dis-
content from becoming a politi-
ccal problem. In addition, most
citizens seem to be convinced
of or resigned to the 'inevitable
victory of the Soviet Union and
world Communism. More important
perhaps is the fact that few
can conceive of an alternative
to the existing regime.
On the other. hand, except
for certain minority nationali-
ties which present their own
special problems, few Soviet
citizens reject the Communist
system in toto. Even those who
express negative attitudes to-
ward the present leadership and
Effect of Post-Stalin Policies
The removal of arbitrary
police terror and the subsequent
destruction of the Stalin myth
had a profound effect on the
Soviet population, loosening
CC` IuENTIAL
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CURRENT INTELLIGENCE WEEKLY SUM M.
17 July 1958
tongues and shaking many long-
accepted beliefs. During Sta-
lin's later years, public opin-
ion was silenced by fear and
awe of his power. The break-
down of this structure resulted
in a chaotic situation; bewil-
derment,high optimism, cynicism,
and open dissatisfaction in
varying combination spread
through all levels of the pop-
ulation.
One important reason be-
hind the regime's subsequent
effort to restore a more favor-
able interpretation of Stalin
was to end this unsettled state.
De-Stalinization was supposed
to clear the record and stimu-
late more voluntary support for
the regime; it was never in-
tended to provide a symbol for
continued liberalization.
Most Soviet citizens now
tend to see the top leadership,
collectively and individually,
reduced to human size. As one
Soviet student commented, "Now
every taxi driver in Moscow
feels it is his duty to curse
out Khrushchev. Theater-goers
laugh at newsreel shots of him.
No one laughed at Stalin."
Two trends appear to be
emerging from this situation.
Among the 'lower economic groups,
where material considerations
are paramount, the improvement
in working conditions and sup-
ply of food and consumer goods
have generated a positive at-
titude toward the regime, if
not toward Communism.
Among many members of the
intelligentsia, however, par-
ticularly university students
and those below the top levels
in the cultural and social pro-
fessions, events of the last
few years have seemed more often
than not to have fortified their
alienation. This was the seg-
ment of the population which
took the greatest advantage of
the easing of thought control
and had been the most enthu-
siastic about the prospects for
further liberalization suggested
by the de,-Stalinization campaign.
By the same token, they have
become the most 'disillusioned
by the regime's renewed emphasis
on ideological conformity and
increased restrictions on free-
dom of expression.
Hungarian Revolution
Western observers have
found that most Soviet citizens
with whom they have come in con-
tact were aware of what really
transpired in Hungary and deeply
disturbed by the actions of their
government. Recently a Western
embassy official, dining in a
restaurant in the Caucasus, fell
into conversation with a Soviet
truck driver who had been in
the military service in Hungary
at the time of the revolution.
He kept insisting he had not
killed any Hungarians. It was
clear that this experience had
been a nightmare for him, fill-
ing him with a sense of horror
and shame.
The glaring contrast be-
tween what the public knew and
felt about these events and the
version presented by Soviet prop-
aganda media may in part: account
for Khrushchev's sensitivity
over the Hungarian issue and his
occasional defensive attempts
to rationalize the intervention
as having been painful but un-
avoidable. The execution of
Nagy has probably revived these
feelings among the Soviet popu-
lation.
Antiparty Group
Reactions to the purge of
Malenkov, Molotov, and Kagano-
vich provide one of the best
examples of how widely opinions
vary on any given issue. One
man, representing the official
point of view, remarked that the
antiparty group had tried to
grasp power at the top: "Their
ouster will mean more opportuni-
ties for our people to express
themselves in the government."
A taxi driver, however, admitted
that he was upset because Malen-
kov had been the "one who got
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
things for the people." "We
were surprised," a high school
English teacher stated, "but
what must be, must be. It is
good for the government." A
waiter tersely passed off the
purges as "just like all the
rest," probably echoing the
feelings of the majority who
have always viewed high-level
political developments as above
and beyond them.
One interesting aspect of
the purge of the antiparty group
was the large reservoir of pop-
ular good will toward Malenkov
that it revealed. In the minds
of many Soviet citizens, Malen-
kov is still associated with a
popular food and consumer goods
program. Many contend that 1954
was the best postwar year. This
attitude is apparently being
reinforced by such stories as
the one now making the rounds
in central Asia which alleges
that Malenkov made a great hit
with the workers at the electric
power station he now heads by
inquiring about their living
conditions immediately on his
arrival. The inability of Khru-
shchev to erase this positive
picture of Malenkov probably
accounts in part for the con-
tinued effort to single him out
for special condemnation.
World Prestige
The emergence of the So-
viet Union as a world power is
generally a source of pride to
the Soviet people, the launch-
ing of the first earth satellite
being one of the most recent and
dramatic illustrations. Soviet
citizens are strongly impressed
by the technical achievements
of sputnik and take almost child-
like delight in the world-wide
recognition it has brought the
USSR. Some opinions, however,
have been contrary to this gen-
eral mood of jubilation. Some
Soviet citizens have disparaged
the importance of the launching
and others have dwelt on the
price at which it was made pos-
sible. A provincial dentist,
for instance, remarked with dis-
gust to an American Embassy of-
ficial, "We can't buy good food,
clothing, or automobiles at rea-
sonhble prices, but we do have
a sputnik."
Khrushchev's slogans on
"catching up with the West" have
struck another responsive chord.
The Soviet people have long been
aware of the higher standard of
living in the West and read into
these slogans a reassurance that
the gap will soon be bridged.
In fact, what is to be a future
accomplishment sometimes tends
to be thought of as something
almost achieved. Many people
have not been so impressed, how-
ever. A Soviet engineer, com-
menting recently on milk, meat,
and butter goals, remarked cyni-
cally, "Sure, we'll catch up
tomorrow morning or, at the very
latest, tomorrow night."
Living and Working Conditions
Since 1953, an impressive
number of government decrees
have been aimed at improving the
working and living conditions
of the population. Relaxation
of the stringent labor laws went
a long way toward easing one of
the more important sources of
discontent. Other measures
taken have included increasing
pension rates and minimum wages
and shortening the working day
in certain industries. Most
important has been the gradual
increase in the availability of
food and consumer goods. Almost
all Soviet citizens appear to
feel that in this respect living
conditions have begun to show
real signs of improvement. The
most frequent and bitter com-
plaints now seem to be reserved
for the severe housing shortage.
Agriculture is the area of
the economy which has received
the most unprecedented attention
during the past five years and
one in which living conditions
and morale have shown the most
improvement. Khrushchev undoubt-
edly believes that the critical
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17 July 1958
failure of agricultural policies
under Stalin can only be reme-
died by significantly improving
the lot of the peasants and pro-
viding them with material in-
centives to produce.
Since 1953, agricultural
decrees have provided, among
other things, for the cancella-
tion of individual tax debts,
an increase in ptdcurenhent
prices for various crops, and,
most recently, changes in the
price system for deliveries to
the state. These various meas-
ures have worked significant
changes in the Soviet country-
side. While conditions are
still far worse than in the
towns, the grinding poverty of
Stalin's day is beginning to
disappear. More importantly,
the Soviet peasant, who under
Stalin constituted the most
disaffected element of the pop-
LEBANON: ITS RELIGIOUS COMMUNITIES AND THE STATE
The internal difficulties
in Lebanon emphasize the prob-
lems arising from the existence
of many rival religious sects
in the country and from the del-
icate balance among them on
which the government is based.
Jealously guarding their priv-
ileges, the sects are continu-
ally at odds with each other.
A strict distribution of gov-
ernmental offices along reli-
gious lines and constant alert-
ness on the part of the author-
ities against agitators have
been the means relied on to pre-
vent the outbreak of religious
strife.
Lebanon is not a unity in
the national sense, but is a
mosaic of divergent traditions
and religious beliefs. Through-
out its history, it has been an
area of migration and resettle-
ment, a refuge for minorities.
The cultural and linguistic dis-
tinctions which came to be in-
stitutionalized by the Ottoman
authorities--each sect forming
a semiautonomous community with-
in the state--have been largely
preserved in law and in practice
in the modern state.
Religious Communities
In matters affecting a
religious community, the gov-
ernment deals with it as a whole
through its spiritual leaders,
not with the members individu-
ally. Certain civil functions
are the province of the spiritual
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PATTERNS AND PERSPECTIVES Page 4 of 15
ulation and still apparently
strongly opposes the collective
farm system in its present form,
has softened in his opposition
to the regime.
Khrushchev's recent plan
to abolish the machine tractor
stations (MTS) and sell the ma-
chinery to the collective farms
has perhaps been the most popu-
lar move.
J kolkhoz officials were
literally swarming over the MTS's,
inspecting the equipment in de-
tail and forcing MTS officials
to sell machinery at prices much
lower than they were asking.
These sales were followed by 25X1
drunken orgies in which every-
body participated.
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CURRENT INTELLIGENCE WEEKLY SUMI&BY
17 July 1958
heads, not the government. They
are allowed to administer the
property and institutions of
their communities and to decide
matters of personal status--mar-
riage, divorce, inheritance,
and parochial education--in ac-
cordance with the tenets of
their faiths. The decisions of
ecclesiastical courts in these
fields are enforced, by the
state.
Both Moslems and Christians
are conscious that membership
in a religious community is the
basis of all political and so-
cial rights and obligations.
This is as equally true among
the Christian sects,
as between Moslems
and Christians. Each
sect ',tends', to be
a closed community
deeply suspicious of
outsiders--to leave
one's sect is, to
leave one's world and
live without loyal-
ties and the protec-
tion of the community.
As long as foreign
intrusions were kept
to a minimum, this
traditional system
worked fairly well.
However, under the
impact of Western
ideas, particularly
the concept of a na-
tion-state, and with
outside political in-
fluences and rival-
ries intervening on
the local scene, the
old order has begun
to decay without a
satisfactory substi-
tute to take its
place.
Sectarianism in
Government
Fifteen distinct
religious sects are
recognized under Leb-
anese law--11 Chris-
tian, two Moslem, the
Druze, and the Jews--
each constituting a separate
community in the eyes of the
state. In addition, several
other minor sects exist in Leb-
anon.
The Lebanese constitution,
in contrast with those of other
Arab states, makes no mention
of the official religion of the
state. Since no single commu-
nity constitutes a majority of
the populace, the constitution
specifically provides that the
communities shall be "equally"
represented in public appoint-
ments and the composition of
the cabinet. Public office is
considered by each community as
LEBANON
SECRET
*Hamah
Approximate Distribution
of Religious Communities
Approximate population proportions in Beirut:
Sunni Moslem ............??.. 30%
Shia Moslem ............??... 5%
Maronite ...................... 10%
Armenian Catholic.......--- .5%
Armenian Orthodox.......... 25%
Greek Orthodox 10%
Others (Protestants, Jews,
Syrian Catholics)... 15%
- - - Limits of Ottoman province
of Mount Lebanon
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
a fief, and this view applies
to every office from the presi-
dency on down. Thus the various
communities are a substitute
for political parties as well
as religious entities.
Since an unwritten agree-
ment in 1943, the president has
been a Maronite Christian, the
a new one would show that Mos-
lems actually outnumber Chris-
tians because of their higher
birth rate and the influx of
predominantly Moslem Arab refu-
gees from Palestine. The Mos-
lems are agitating, however, for
a reapportionment of governmental
positions based on a more real-
istic recognition of the actual
population statistics.
Some Moslem leaders
are even demanding that
the presidency be at
least open to a Moslem.
LEBANESE PARLIAMENT
GREEK
RMEN'_ j; DDX
urxDi
MINORITY SE I
SHIA
MOSLEM
SUNNI
MOSLEM
14
66 SEATS
SPEAKER
(SHIA)
MARONITE
prime minister a Sunni Moslem,
and the speaker of Parliament
a Shia Moslem. The cabinet
seats are apportioned among
Sunni and Shia Moslems, Greek
Orthodox and Catholics, Maron-
ites, and Druze roughly in pro-
portion to their numbers among
the populace. Representation
in Parliament is apportioned
along confessional lines, with
the eight most numerous sects
holding 65 seats. The 66th
seat is allotted to a represent-
ative of the minority sects.
The present apportionment
of governmental offices favors
the Christians, especially the
Maronites, since it is based on
the 1943 census, which included
over 250,000 emigrants, most of
whom were Christians. No cen-
sus has been taken since that
date because the Christians fear
The most impor-
tant Christian group
consists of the Uniat
Churches--oriental,
churches recognizing
papal supremacy. Of
these, approximately
350,000 Maronites form
the largest single de-
nominational group,
29 percent of the pop-
ulation. The leader
of the Maronites is
Patriarch Paul Maushi,
who opposes President
Chamoun. This church
has close ties with
France, which has used
it in an attempt to maintain a
special position in Lebanon.
The patriarch has great influence
throughout the country, and his
voice is heeded in political,
economic, and ecclesiastical
affairs.
The other Uniat groups are
the Greek Catholics (Melkites),
who number about 85,000 and who
are less Western-oriented than
the Maronites; the Syrian Catho-
lics, with some 6,000 adherents;
and the Chaldeans and Armenian
Catholics. There is also a
Latin Catholic church, which
does not belong to the Uniat
group.
Next to the Uniats,, the
Orthodox Eastern churches com-
prise the largest group of
Christians. Of these, the 140,-
000 members of the Greek
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17 July 1958
Orthodox Church are the most
important, totaling 10 percent
of the population and nearly
one fifth of Lebanon's Chris-
tians, largely concentrated in
the area south of Tripoli. They
are more Arab and eastern in
orientation than the Maronites.
Through its ties with the Rus-
sian Orthodox Church, the Greek
Orthodox Church is a prime tar-
get of Soviet political-religi-
ous designs in the Middle East.
Definite inroads have been made
through visits by Russian church
officials and financial aid to
distressed bishoprics.
Another target of Soviet
policy has been the Armenian
Orthodox (Gregorian) Church,
the world's oldest national
church, whose membership in Leb-
anon is estimated at 70,000 per-
sons. Speaking an alien lan-
guage, the Armenians are half-
isolated socially and are mainly
craftsmen, office workers, and
professional people. Soviet
influence has made some inroads
among the Armenians, who are
divided into two factions, with
the anti-Soviet Dashnak group
predominating. Another small
group is the Syrian Orthodox
(Jacobite) Church, which ...has
about 5,000 members.
Most of Lebanon's 6,000
Jews live in Beirut and include
refugees from Syria. following
the 1948 events in Palestine.
While the existence of Israel
has had its repercussions in
Lebanon, the authorities have
been careful to curb anti-Jew-
ish activities, lest they exac-
erbate the general sectarian
antagonisms.
The main Moslem sects in
Lebanon are the Sunnis and the
Shias. The Sunnis regard the
Koran, supplemented by the Tra-
ditions of the Prophet--words
and deeds attributed to the
prophet Mohammed--as the sole
and sufficient repository of the
Moslem faith. They are the
largest Moslem group in Lebanon,
numbering 300,000. They com-..
prise about one third of Beirut's
population and dominate Tripoli,
the country's second city. They
lack the tight communal cohesion
of other groups, and sharp social
differences exist within '.the
Sunni community.
In the north, the Sunni
peasantry is dominated by a
small upper class of semifeudal
families. In the cities they
form a part of the urban prole-
teriat. Sunni conciousness of
belonging to the religion of
the greater part of the Arab
world has given them a "majority
attitude, " a sense of being "un-
justly" overshadowed by their
former second-class subjects,
the Christians.
The Shias (Mutawalis) con-
stitute the second important
Islamic sect. They believe in
the Imamah, the combined secular
and spiritual leadership of
Islam which they claim descended
from Mohammed to the Imam. The
Imam has remained "hidden" since
the 9th century and they believe
he will reappear and rule the
world. Two Shia subsects are
the Ismailis, whose leader is
the Aga Khan, and the Zaidis of
Yemen, whose leader is the pres-
ent ruler of Yemen, Imam Ahmad.
Numbering about 250,000, the
Shias live principally in south-
ern Lebanon and the Biqa Valley.
Economically, they are the most
backward of the communities and
are practically serfs on the
estates of feudal lords.
The 85,000 Druze also be-
lieve in a "lost" leader who
will some day return. Some
practice systematic dissimula-
tion of their beliefs for pro-
tection against possible perse-
cution. They are concentrated
on the southern half of Mount
Lebanon, just east and south of
Beirut. Members of closely knit
agricultural groups, they have
retained a great deal of their
feudal organization,,their'loyal-
ty. td .heir :chieftains,. and dis-
like, of outsiders.
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The representatives of the
great Druze families dominate
the community. Among these
are the rival Jumblatt and Ar-
san families. The Shihabs, the
family of army commander Gen-
eral Shihab, were originally
Druze professing to be Sunni
Moslems, but the general's an-
cestors became Maronites in the
18th century. However, another
branch of the family remains
Moslem, a factor which may con-
tribute to the general's ambig-
uous behavior during the present
crisis.
PROSPECTS FOR A EUROPEAN FREE TRADE AREA
The impasse which has
arisen in negotiations for the
projected free trade area (FTA)
derives mainly from Britain's
overriding concern with its
world trading role as contrasted
with the desire of the six Com-
mon Market nations for a more
thoroughgoing integration of
Western Europe. Developments
in France have forced the United
Kingdom to abandon its 1 January
1959 deadline for establishment
of the FTA. The De Gaulle`gov-
ernment may drag its feet less
than previously expected, how-
ever, and in the 24-25 July
meeting of the Intergovernmental
Committee (IGC) may agree to a
West German compromise formula
that would make possible con-
tinued negotiations for a FTA.
The six countries of the
European Economic Community
(Common Market) are committed to
the development of an integrated
community on the Continent that
would go a long way toward elim-
inating national political and
social differences as well as
merging their economies. They
are so dedicated to this objec-
tive that, despite the genuine
desire of five of the six for
a FTA, they are willing to sup-
port France in some of its ob-
jections to the FTA rather than
see the EEC itself jeopardized.
Britain and to a lesser ex-
tent the other ten non-EEC coun-
tries of the Organization for
European Economic Cooperation
(OEEC) want the FTA as a means
of access to the Common Market
without sacrificing their over-
seas trading interests or ac-
cepting the EEC's supranation-
alism. The United Kingdom in
particular sees its world posi-
tion menaced by competition
that would result from West
German exploitation of the grow-
ing EEC market and resource base
were Britain to remain completely
outside.
The countries of the EEC
feel Britain is demanding the
best of two worlds. They see
the United Kingdom as gaining
free access to the rich indus-=
trial market on the Continent
while restricting EEC members'
access to Commonwealth markets
through "imperial preference"
and to the United Kingdom's
large home market for agricul-
tural products. Such a position
they believe would also confer
disproportionate financial ad-
vantage on Britain by enabling
it to attract American capital
for investment in firms that
would benefit from these double
advantages.
The disagreement between
the two sides centers on three
main issues: 1) common tariff
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
versus nationally determined
tariffs; 2) coordination of
national policies; and 3)
treatment of agricultural trade.
A Common External Tariff
Central to the differences
in concept and interests of the
EEC as a customs union and those
of the non-EEC candidates for
the FTA is the question of
whether or not all shall share
a common external tariff. Both
the EEC and the FTA contemplate
gradual removal of tariffs
against member nations over a
period of 12 to 15 years. The
EEC would then have a single
external tariff while non-EEC
members of the FTA would remain
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a Potential members of the Free
Trade Area
Member nations of the European
Economic Community
(Common Market)
0 200 400 600 800 Miles
free to fix their own national
tariffs against outside coun-
tries.
On the EEC side of the con-
troversy, the high tariff mem-
bers, France and Italy, fear that
if the EEC is merged in a larger
FTA trading arrangement, their
own protected producers will be
threatened by competition from
low-cost goods imported from the
outside world through non-EEC
member countries of the FTA hav-
ing low external tariffs. To
guard against this contingency
they have demanded at various
times in negotiations: 1) a
system of certification of origin
of such imports and a compensa-
tory levy at the EEC border;
THE PROPOSED FREE TRADE AREA
(ALL OEEC COUNTRIES)
POPULATION GNP 1955
1956 (Billion
(Millions) Dollars)
European Economic Community
(Common Market)
BELGIUM-LUX ........ 9.2 9.75
FRANCE................Q.6 52.00'
WEST GERMANY..... 51.6 41.80
ITALY .................... 48.2 21.70
NETHERLANDS ....... 10.9 8.20
TOTAL ....... 163.5 . 133.45
Countries that probably will join FTA
with full obligations:
AUSTRIA ............... 7.0 4.21
DENMARK ................ 4.5 4.15
NORWAY ............... 3.5 3.38
SWEDEN ............... 7.3 8.74
SWITZERLAND ....... 5.0 6.24
uK ......................51.2 57.40.
TOTAL ........ 78.5 64.12
Countries that probably will join FTA
with special conditions:
GREECE ................ 8.0 2.15
ICELAND ..............
IRELAND ............... 2.9 1.52
PORTUGAL............ 8.8 1.78
TURKEY ................24.8 3.92
TOTAL .? . ?44.7 9.53
GRAN D TOTAL ...... 286.7 227.10
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
2) equalization of external
tariffs between the EEC and the
non-EEC countries of the FTA;
and 3) a compromise arrange-
ment known as the Carli plan
under which a compensating duty
would be levied only on products
on which the tariff of the non-
EEC, re-exporting FTA country
was below a specified level.
Britain, in accordance with
its interests in procuring ma-
terials from low-cost sources
and subject to low tariffs in
order to support its vital ex-
port trade, refuses to accept
a common FTA tariff on the
grounds that it would involve
discrimination against the rest
of the Commonwealth and other
outside trading partners.
Although "imperial prefer-
ence" establishes a relatively
low 10 to 15 percent reduction
in tariff rates, it does pro-
vide preferred outlets for Brit-
ain's manufactures and has much
significance as a symbol of
Commonwealth unity. At the re-
cent Commonwealth meeting, other
members expressed serious con-
cern that the present FTA ne-
gotiations might involve Brit-
ain in another preferential sys-
tem.
The importance of Common-
wealth markets to Britain is
declining relative to the Euro-
pean market as Commonwealth
-countries industrialize. Its
exports to these markets have
shown little change in volume
since 1950, while those to the
EEC area have increased by about
40 percent. In absolute terms,
however, the Commonwealth mar-
ket remains well over ten times
as large a market for Britain
at about $12 billion annually.
The Continental concept
of a Common Market envisages
supervision by central institu-
tions to "harmonize" the eco-
nomic and social policies of
the six member states. These
institutions will seek to elim-
inate national differences in
production costs attributable
to dissimilarities in taxes,
social security, and conditions
of work when they are found to
have an undue effect on the
ability of national industries
to compete in the Common Market.
Britain and the Scandi-
navian nations take strong ex-
ception to the "harmonization"
principle, seeing it as a cloak
for French protectionism, and
therefore contrary to their in-
terests in maximizing interna-
tional trade on a global basis.
The non-EEC countries further
point out that their govern-
ments do not have the powers to
regulate working conditions
such as overtime pay or equal
pay for women, such matters be.=
ing settled by collective bar-
gaining between employers and
unions.
Agricultural Trade
Of all the provisions of
Britain's initial FTA proposal,
that which would exclude trade
in agricultural products from
tariff removal has provoked the
widest objections, including
strong remonstrances from most
of the other non-EEC member
countries of the OEEC. They,
as well as the EEC countries,
find that their trading inter-
ests require a lowering of tar-
iffs on Britain's imports of
food products, which exceed any
other country's in volume, in
return for freer access to their
home markets for the United
Kingdom's exports of manufac-
tured products.
This situation is partic-
ularly acute for Denmark, for
which agricultural products
constitute 70 percent of its
total exports to the OEEC area.
Of this amount Britain takes
about half, but the 39 percent
going to EEC countries is also
vitally important. The Danes,
confronted with the possi-
bility of exclusive marketing
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CURRENT INTELLIGENCE WEEKLY SUVUARY
17 July 1958
arrangements and of a substan-
tial'increase in tariffs on
their exports to the important
West German market, as tariffs
are averaged to establish the
common EEC external tariff, are
seriously considering joining
the EEC despite their preference
for the FTA in which trade in
food products would be liberal-
ized. In most EEC countries
also, agricultural products ac-
count for a large proportion of
their exports to Britain--40
percent for Italy and Benelux;
22 percent for France--thus
reinforcing their determination
to have such products included
in FTA tariff reduction.
Some 60 percent of Brit-
ain's imports of agricultural
products come from the Common-
wealth and only 10 percent from
the EEC area. But three fourths
of these imports from the Com-
monwealth are either noncompeti-
tive (tropical) with EEC agri-
culture or in product categories
(grain) not subject to the. 10- to
15-percent tariff imposed on
dutiable items. The
United Kingdom has
rejected EEC demands
that it modify "im-
perial preference"
to share the Common-
wealth market for in-
dustrial products on
the grounds that such
action is up to the
Commonwealth members.
However, there would
appear to be consid-
erable room for bar-
gaining, in collab-
oration with :other
Commonwealth members,
on preference in Com-
monwealth member mar-
was imperative in order that
tariff reductions be undertaken
by the other 11 OEEC members in
step with those scheduled by
the EEC among its members for
1 January 1959. As it became
increasingly apparent during
the spring that France's pre-
occupation with internal prob-
lems might prevent its adjust-
ing its previous negative posi-
tion on the FTA, as urged by the
EEC Commission, the negotiators'
interest grew in a compromise
formula earlier proposed in-
formally by West Germany.
This formula calls for a
voluntary simultaneous 10-per-
cent reduction of tariffs by
the eleven non-EEC countries on
1 January to match the internal
tariff reductions of the EEC.
This would provide a basis for
synchronizing tariff reductions
and allow further attempts to
negotiate formal agreement on
a FTA before the second round
of EEC. tariff reductions,
scheduled. for ,1 January
1960.
EXPORTS OF THE COMMON MARKET, FREE TRADE AREA,
AND THE UNITED KINGDOM: 1955
EXPORTING
COUNTRY
AREA
COMMON
MARKET
FREE TRADE
AREA
UNITED
KINGDOM*
UNITED STATES
& CANADA
kets for EEC manufac-
tures and easier access to Brit-
ain for agricultural exports
from the EEC that do not com-
pete with the Commonwealth.
Present Negotiation
Since last October the
United Kingdom has insisted that
establishment of the FTA in 1958
MILLIONS OF DOLLARS
COUNTRY OR AREA OF DESTINATION
UNITED*
KINGDOM
COMMON
MARKET
FREE TRADE
AREA
WORLD
341
804
1,434
2,248
AGRICULTURE**
1,319
5,643
10, 294
18,257
TOTAL
952
1,327
2,707
4,342
AGRICULTURE**
2,953
8,813
16,889
32,945
TOTAL
212
68
313
729
AGRICULTURE**
601
1,074
2,616
8,496
TOTAL
NOT AVAILABLE
503
1,338
3,004
AGRICULTURE**
NOT AVAILABLE
2,354
4,940
19,799
TOTAL
'INCLUDES IRELAND AND ICELAND "FOOD, BEVERAGES AND TOBACCO
NOTE UNITED KINGDOM AND COMMON MARKET TOTALS ARE INCLUDED IN FREE TRADE AREA FIGURES.
As the time for the IGC
meeting has approached, both
Britain and France have taken
increasingly cautious positions
on the 10-percent reduction.
In order to avoid committing
itself to the precedent for es-
tablishment of the FTA that
would be implied if the 10-per-
cent cut were to '.take place
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 19 58
solely among OEEC nations,
France proposes that the cut
be made by these nations in
relation to the whole outside
world.
In addition, France wants
the cut to apply only for those
EEC nations, such as itself,
which have tariffs above the
approximate average tariff of
the Six. Thus, France in com-
mitting itself to the 10-percent
cut against the rest of the
world would only be agreeing to
begin on 1 January 1959 to do
what it would have to do anyway
as the external EEC tariff grad-
ually assumes the level of the
average of all EEC countries.
Britain, on the other hand,
stipulates that it will agree
to the 10-percent cut arrange-
ment only if agricultural prod-
ucts are excluded and the cut
applies only between OEEC na-
tions. This would establish a
precedent tantamount to accept-
ance of the FTA in principle.
Britain has intimated that un-
less there is significant prog-
ress toward general acceptance
of the FTA, it may instruct its
chairman of the IGC to report
to the OEEC Council on 26 July
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that his committee has failed
to carry out its instructions.
This carries the threat that
the United Kingdom would then
be prepared to abandon the ef-
fort for the free trade area.
Since the French techni-
cians continue firmly opposed
to the FTA, progress or failure
in the IGC, meeting will depend
on De Gaulle's decision on the
position France is to take. His
1 July talk with Prime Min-
ister Macmillan indicated he
was not fully aware of the po-
litical implications of a col-
lapse of the FTA. However,
Foreign Minister Couve de
Murville, who has been assigned
responsibility for FTA affairs,
is evidently convinced that
agreement on the FTA is.ulti-
mately inevitable for France.
General de Gaulle's past aver-
sion to supranationalism and
preference for looser forms of
union in Western Europe that
would include the United King-
dom suggest that France's posi-
tion in the IGC meeting will
be to give the minimum con-
cessions necessary to make
possible continuation of nego-
tiations to establish the.
FTA.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 July 1958
SINO-SOVIET BLOC
ACTIVITIES IN THE NEAR EAST
elements in Lebanon probably
reassured Moscow that such a
prospect has become more remote.
1. General Bloc Policy:
Sino-Soviet bloc policy toward
the Near East is aimed at weak-
ening and ultimately eliminat-
ing Western influence by sup-
porting radical Arab national-
ism, exploiting existing ri-
valries and tensions, and in-
creasing the USSR's own par-
ticipation in Near Eastern af-
fairs. Bloc leaders are seek-
ing thus to gain a position of
influence which would enable
them to vitiate the Western
base structure in this strategic
region and to deny Near Eastern
oil resources to the West. Dur-
ing the period of this report,
Moscow continued efforts to
identify itself as the champion
of Arab nationalism against
"Western imperialism" and Israel,
and to strengthen its ties-with
Egypt, Syria, and Yemen.
2. Moscow probably re-
garded the formation of the
United Arab Republic as a tem-
porary setback inasmuch as the
influence in Syria of both the
USSR and of local Communists,
which had been progressively
increasing since August 1957,
was checked by the assumption
of direct control by Nasir.
Nasir's visit to the Soviet Un-
ion in May does not appear to
have been completely success-
ful. While the visit rein-
forced the popular image of So-
viet support and the similarity
of UAR and Soviet policies, Mos-
cow only partially agreed to
UAR demands on scaling down
debts, and refused to' sell new-
er model jet fighters and to
lower prices on jet transports.
During the visit Soviet leaders
were also displeased with signs
of a growing political and eco-
nomic rapprochement between
Nasir and the West,although the
UAR's support of anti-Western
3. Diplomatic Representa-
tion: The ommun s s a es m-
mediately recognized the UAR
after it came officially into
existence in February. The
seven bloc countries with diplo-
matic missions in Cairo--the
USSR, Communist China, and all
the Eastern European countries
except East Germany and Albania
--accredited these missions to
the UAR, while the Communist
missions in Damascus were down-
graded to the rank of consulates
and their military attaches were
promptly withdrawn.
4. Yemen's adherence to
the amorphous "United Arab State"
produced no change in its ties
with the bloc; the Soviet Union
has a small mission in Sana,
while the Chinese Communist and
Czech ambassadors in Cairo are
also accredited to Yemen. Bloc
diplomatic representation in
Lebanon, Sudan, and Israel--the
other states of the Near East
having relations with bloc coun-
tries--did not change during the
period. On 1 March King Saud re-
ceived a Soviet diplomat--the
first such visit to Saudi Arabia
by a bloc official--who probably
used the opportunity to request
the establishment of formal re-
lations and to extend exploratory
offers of Soviet economic as-
sistance.
5. Economic Activity: Sino-
Soviet bloc commerce with Near
Eastern countries rose from
$278,000,000 in 1956 to $460,-
000,000 in 1957, the bulk of
which was conducted with the
UAR. Trade with the bloc last
year accounted for 20 percent of
Egypt and Syria's combined total
imports and 40 percent of total
exports, with the surplus used
in part to service obligations
arising from economic aid and
arms purchases. Yemen has also
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CURRENT 'INTELLIGENCE WEEKLY SUMMARY
17 July 19 58
become indebted to the bloc and
the bulk of its exports--esti-
mated at about $10,000,000 an-
nually--will be obligated for
some time if the credits are
repaid. Bloc trade with other
Near Eastern countries was neg-
ligible last year in terms of
their total foreign transactions.
6. Bloc countries have to
date agreed to provide Egypt,
Syria, and Yemen with assistance
valued at $887,000,000, or 40
percent of the bloc's total
economic and military aid to
underdeveloped countries. Eco-
nomic and technical assistance
projects, many of which are
still in the planning stage, ac-
count for over one half of total
aid to the three Near Eastern
countries, while the balance
involves military aid, most of
which has already been delivered.
Agreements concluded during 1958
involving additional bloc assist-
ance,including Soviet and Czech
economic assistance to Egypt
valued at $175,000,000 and $56,-
000,000, respectively, and So-
viet and Chinese Communist cred-
its of $26,000,000 and $16,300,-
000, respectively, to Yemen for
economic development projects.
During the current period, So-
viet officials have stated that
the USSR would be willing to ex-
tend economic assistance to Leb-
anon, Jordan, Saudi Arabia, and
Sudan. The Sudanese Government
has periodically expressed in-
terest in Soviet aid; however,
the prime minister has stated
privately that the government
is not seriously considering
acceptance.
7. An estimated 1,700
bloc technicians,; mostly Soviet,
Czech, and East German nationals,
are working in Egypt, Syria,
and Yemen, an increase of about
400 above the number believed
to have been involved at the end
of 1957. Slightly over one half
of the current total is engaged
in giving military instruction
or in assembling military equip-
ment.
8. Cultural and Propaganda
Activities: The bulk of dele-
gation exchanges between Near
Eastern and bloc countries dur-
ing 1957 involved Egypt and Syria:
two thirds of the some 310 bloc
groups traveling to the area
visited these countries, while
three fourths of the approxi-
mately 200 Near Eastern delega-
tions to the bloc were from Egypt
and Syria. Professional, scien-
tific, technical, and cultural
groups predominated among the
bloc delegations visiting the
UAR countries, a further indica-
tion of the bloc's tactic of
cultivating Nasir's sense of im-
portance. The small-scale bloc
exchanges with Lebanon, Jordan,
Israel, and Sudan, on the other
hand, largely involved groups
representing Communist or Com-
munist-front organizations.
9. Bloc broadcasts in
Arabic, which totaled only 28
hours per week at the end of 1956,
have been expanded rapidly, reach-
ing almost 70 hours per week in
late 1957 and currently about 82
hours each week. This total in-
cludes Chinese Communist broad-
casts in Arabic which were in-
itiated in late 1957 and
increased in early April to
over 10 hours per week. In ad-
dition, the bloc broadcasts 3.5
hours a week to the area in French
language programs which are in-
tended for Europeans and educated
Arabs. In May the Egyptian radio
organization joined the Communist-
controlled International Broad-
casting Organization, becoming
with Finland the only nonbloc
members.
10. Subversive Activity:
Soviet and other bloc officials
and technicians in Near Eastern
countries have avoided overt
contact with local Communists
and have outwardly maintained a
degree of correct aloofness from
internal problems involving the
local government and Communist
parties. In Egypt, where the
Communists have been split among
several factions, a merger in
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CURRENT INTELLIGENCE WEEKLY SUMAStY
17 July 1958
January of the two major groups
has brought the bulk of Egyptian
Communists together in a single
party. Although Nasir continues
to harass minor Communists and
to suppress all public Commu-
nist manifestations, his policy
of friendship with the bloc has
created a favorable atmosphere
which the Communists are suc-
cessfully exploiting to attract
additional adherents. Most Com-
munist elements in Egypt have
overtly supported Nasir's neu-
tralist and reformist policies
for the past several years at
Moscow's bidding. Recently,
however, dissatisfaction has in-
creased among Egyptian Commu-
nists over Nasir's repression
of the Syrian Communist party
and continuing signs that he
would like to improve relations
with the West. Egyptian Commu-
nists are also believed to have
penetrated the government at
a fairly high level, and Moscow
is attempting to develop a dis-
ciplined underground apparatus
to take advantage of future de-
velopments.
11. The Syrian Communist
party, which prior to the f or-
mation of the UAR was the
strongest Communist party in
the area, has again been re-
duced to cautious activity un-
der the threat of imminent sup-
pression. During the prepara-
tions for the VAR merger, Syrian
Communists maneuvered to main-
tain the multiparty system and
as much autonomy as possible for
Syria. In the other Arab states,
the Communists are seeking both
to penetrate and to cooperate
with pro-UAR radical national-
ists in opposition to pro-West-
ern governments and parties.
In Sudan, the Communists are
pushing for a "united front" of
all elements opposed to the
present pro-Western orientation
of the government. In Israel,
the Communists continue to be
weak because of their stand
favoring concessions to the
Arab states and because the par-
ty includes both Jewish and
Arab--mostly Christian--members.
12. Near Eastern Reactions
to Bloc Activities: Ara atti-
tudes toward a loc have been
a prime factor in Moscow's gains
in moving toward its objectives
in the area. The USSR has been
successful, particularly among
radical Arab nationalists, in
representing bloc opposition to
Western "imperialism" as equal
to that of the Arabs and-in ex-
ploiting the Israeli issue. Pub-
lic Soviet espousal of Nasir and
Arab causes, the visible evi-
dence of bloc support in the
form of aid, and the pro-Soviet
line followed by most of the
more rabid Arab journalists and
radio commentators in their treat-
ment of world news have also con-
tributed to a favorable popular
conception of the bloc.
13. The Outlook: Bloc lead-
ers will probably continue a
flexible and opportunistic policy
of limited risks in the Near East
by supporting Nasir against the
West and against Israel as new
occasions arise, but without mak-
ing firm commitments to the UAR.
The Soviet Union would, however,
probably try to exercise cautious
pressure on Cairo in the event
Nasir moved toward a truly neu-
tral position or if he adopted
a course counter to bloc objec-
tives. Nasir's admiration of
Tito's past successes in getting
assistance from both the bloc and
the West without becoming depend-
ent on either, and the close Yugo-
slav ties with many radical Arab
elements,especially in Syria,
are also likely to emerge as dis-
quieting factors in the UAR's
relations with Moscow.
14. The bloc may be expect-
ed to make additional offers of
economic aid to Near Eastern coun-
tries, particularly when such of-
fers might have political value
by embarrassing pro-Western gov-
ernments of countries having eco-
nomic difficulties. Moscow will
probably direct local Communists,
both as individuals and as par-
ties, to continue the strategy of
cooperating with and infiltrating
radical nationalist groups.
SECRET
ANNEX Page .15 of 15
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Approved For Release 2007/10/23: CIA-RDP79-00927AO01800070001-6