CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A002600040001-0
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• Document Page Count: 56
• Document Creation Date: December 20, 2016
• Document Release Date: June 24, 2005
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• Publication Date: October 27, 1999
• Content Type: SUMMARY

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FI ENTIALT
COPY N01~-
CURRENT
INTELLIGENCE
WEEKLY
:SUMMARY
OCI NO.0403/60
4 February 1960
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
CONFIDENTIAL
NO-CHANGE IN CLASS. ^
E1 DECLASSIFIED 25X1
State Department review completed CLASS. CHANGED TO: TS S Q
~ NEXT REVIEW DATE: qO
R - AUTH: HR 70-2
f DATE: REVIEWER:
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
OF IMMEDIATE INTEREST
MOSCOW MEETING OF BLOC LEADERS . . . . . . . . . . . . . . Page 1
Moscow moved last week to demonstrate unqualified
bloc solidarity and support for the Soviet Union's pre-
summit policies on the major East-West issues. The meet-
ing of the Warsaw Pact countries on 4 February in Moscow
will provide a forum for new "peaceful initiatives" by the
bloc, possibly in the form of an endorsement of the one-
third cut in Soviet armed forces, approval of further re-
ductions in the Soviet troops stationed in Poland, Hungary,
and East Germany, and an announcement of some reduction in
satellite forces. The bloc leaders will probably also use
this opportunity to underline their readiness to take ap-
propriate military countermeasures in Eastern Europe to
offset Bonn's alleged policy of nuclear armament.
FRANCE AND ALGERIA . . . . . . . . . . . . . . . . . . . . Page 4
The French Parliament on 3 February by an overwhelming
vote granted decree powers to the government for 12 months.
This will greatly strengthen De Gaulle's hand for taking
measures against opponents--including several cabinet mem-
bers--of his policy of self-determination for Algeria.
(Despite De Gaulle's personal support of Al-
gerian self-determination, the Algerian rebels continue to
demand guarantees more binding on the French Government.
They appear concerned regarding a possible upsurge of De
Gaulle's popularity among Algerian Moslems, and are prob-
ably reluctant to begin negotiations when De Gaulle's pres-
tige is so high. 25X1
MIDDLE EAST HIGHLIGHTS . . . . . . . . . . . . . . . . . . Page 7
Clashes along part of the Israeli-Syrian border have
distracted Arab attention from developments in Iraq.
Further Israeli-UAR incidents seem likely despite the
efforts of UN officials on the spot to maintain a cease-
fire, and a UN Security Council meeting may be called on
the issue. No change has been apparent in the situation
in Iraq; four political parties, including two Communist,
will be able to operate legally next week unless the
Ministry of Interior objects, and two new parties have
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4 February 1960
PART I (continued)
applied for official sanction. Qasim has brushed aside,
at least ostensibly, the charges that some of his top
officials plotted against him. A meeting of Arab League
foreign ministers, primarily to discuss the Palestine
problem is scheduled to convene on 8 February.
CARIBBEAN DEVELOPMENTS . . . . . . . . . . . . . . . . . . Page 9
Mikoyan's presence in Havana to inaugur.,ato the Soviet
exhibition on 6 February will reportedly open the way for
resumption of diplomatic relations between Cuba and the
USSR, and a formal agreement for a Soviet credit may be
concluded. Raul Castro and Che Guevara are using "peoples'
militias" and new powers of the Ministry of Labor to ex-
tend their control. Meanwhile, the Trujillo regime in
the neighboring Dominican Republic faces increasing diffi-
culties from church criticism at home and from hostility
abroad, especially from Venezuela.
NOTES AND COMMENTS
PEIPING'S BORDER PROBLEMS WITH RANGOON AND NEW DELHI . . . Page 1
The signing of the Sino-Burmese border agreement and
a friendship and nonaggression treaty in Peiping on 28
January is being played up by both countries as a major
diplomatic achievement and is being used by the Chinese
to refurbish their badly damaged prestige. General Ne Win
is expressing gratification over having brought home a
formal Chinese commitment, in a signed document, to the
traditional boundary. Negotiations over the two small
areas still in dispute, however, may drag on. Prime Min-
ister Nehru, who reportedly is planning to invite Chou
En-lai to visit New Delhi in mid-March, may interpret the
agreement with Burma as indicating a greater willingness
on Peiping's part to make some concession toward a settle-
ment with New Delhi.
SOVIET REACTION TO US-JAPANESE SECURITY TREATY .
. Page 3
The USSR, reacting to the signing of the new US-Japa-
nese security treaty, has withdrawn its pledge to return
the Habomai and Shikotan islands to Japan when a Soviet-
Japanese peace treaty is concluded. The Soviet leaders
probably do not expect to prevent Japanese ratification
of the security treaty, but apparently felt impelled to
follow up their prolonged propaganda warnings with some
retaliatory action. In Japan, the Soviet note has aroused
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4 February 1960
PART II (continued)
strong indignation and has probably strengthened support
for ratification. The USSR will probably underline its
displeasure with Tokyo by additional pressures during
the annual Japanese-Soviet fishing negotiations. which
COMMUNIST TERRORISM IN SOUTH VIETNAM . . . . . . . . . . . Page 4
South Vietnam may be facing an upsurge of the persist-
ent Vietnamese Communist guerrilla activity. The Diem
government is alarmed by the unprecedented scope of a raid
last week by several hundred Communist guerrillas on a
regimental headquarters near the Cambodian frontier and by
signs of stepped-up Communist infiltration and subversion.
While increased Communist terrorism alone does not pose
an immediate threat to government stability, erosion of
public confidence and disruption of the economy would have
serious long-range implications. 25X1
THE SITUATION IN LAOS . . . . . . . . . . . . . . . . . . Page 6
The Laotian Government has set 24 April as the date
for national elections, thus leaving itself little time
to prepare for them. The main problem will be the selec-
tion of a single slate of non-Communist candidates by 24
February. Laotian officials appear to assume that the
pro-Communist Neo Lao Hak Zat will have its own candidates;
however, the Communists, fearful that the army intends to
rig the elections, may boycott them and intensify guerrilla
operations. Meanwhile, the UN economic aid program for
Laos is gradually taking shape.
ANTI-COMMUNIST COALITION WINS KERALA STATE ASSEMBLY E[ ECTIO N . Page 7
The decisive majority won by the anti-Communist coali-
tion in the Kerala assembly election on 1 February is a
serious setback to Communist prestige throughout India.
Despite its loss of many assembly seats, however, the Com-
munist party retained a sizable share of the popular vote,
indicating that it still has a firm hold on the lower
classes in Kerala and can effectively exploit any short-
comings of its successors. The new government, likely to
be formed jointly by the Congress and Praja Socialist
parties, probably will also be troubled by internal dis-
sension and by Kerala's increasingly difficult economic 25X1
problems.
THE SECOND ALL-AFRICAN PEOPLE'S CONFERENCE . . . . . . . . Page 8
The second plenary meeting of the All-African People's
Conference, held in Tunis from 25 to 31 January, was large-
ly characterized by regional divergencies among African
nationalists and clashes between relatively moderate and
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4 February 1960
PART II (continued)
radical factions. At the same time, the leaders of
African nationalism displayed increased confidence since
the organization's first meeting in December 1958 and
demonstrated a growing determination to come to grips
with problems arising after independence.
UN MISSION TO VISIT RUANDA-URUNDI . . . . . . . . . . . . Page 9
The Belgian Government appears concerned over the
forthcoming UN mission to its central African trust terri-
tory of Ruanda-Urundi, where more than 300 persons died in
tribal warfare last November. Belgian officials are re-
portedly briefing local chiefs in an attempt to ensure
favorable testimony concerning Brussels' handling of the
November disorders. Refugees from the Watutsi tribe have
charged the Belgians with being slow in responding to the
initial outbreaks, and even with complicity in attacks
against the Watutsis. In Ruanda the fighting appears to
have made for a continuing state of tension between the
tribes, and to have shaken the political dominance of the
TUNISIA OPENS CAMPAIGN FOR BIZERTE . . . . . . . . . . . . Page 10
Tunisian pressure for the evacuation of the remaining
7,000 French military forces from Bizerte reached a new
high last week when President Bourguiba announced that the
"battle for evacuation" would begin on 8 February. Unless
the French indicate before Bourguiba's deadline that they
are at least willing to discuss the Bizerte issue, the
Tunisians will resort to tactics likely to create a new
crisis in French-Tunisian relations. These may include a
complaint to the UN Security Council.
LAND REFORM IN IRAN . . . . . . . . . . . . . . . . . . . Page 11
The Shah, concerned over the possible impact of re-
curring foreign criticism of Iranian landownership, recent-
ly introduced legislation in the Majlis designed to break
up large private landholdings. These proposals would
affect the landlords with the largest holdings, who would
be forced to sell a major portion of their land at prices
established by the government. While the legislation is
almost certain to be enacted, considerable difficulty will
be encountered in enforcing it. 25X1
SINO-SOVIET BLOC FOOD SUPPLIES . . . . . . . . . . . . . . Page 12
Food supplies in the Sino-Soviet bloc should be
adequate to meet domestic needs this winter and spring
despite the reduced 1959 harvests. The decline in compar-
ison with 1958 crops will be felt mainly in livestock feed
supplies and in the bloc's ability to export agricultural
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
PART II (continued)
products. In Communist China, reduced harvests will
affect food supplies more directly, but critical short-
ages will probably be avoided. The per capita food
supply may also be somewhat lower than last year in
Poland and East Germany.
YUGOSLAV TRADE WITH THE SOVIET BLOC . . . . . . . . . . . Page
With the signing on 30 January of a trade agreement
with the USSR, Yugoslavia has completed trade protocols
for 1960 with the USSR and all the East European satel-
lites. However, despite the improvement in state rela-
ticns with the bloc during the past few months--manifested
by a warmer atmosphere in the trade talks--no major expan-
sion in trade is likely in view of Belgrade's unwilling-
ness to become overly dependent on such exchanges. Bel-
grade's relations with China remain cool. Trade during
1959 fell to an insignificant level, and no agreement has
25X1
SOVIET-ETHIOPIAN AID TALKS INCONCLUSIVE . . . . . . . . . Page 15
The Soviet economic aid delegation which visited
Addis Ababa from early November until mid-January appar-
ently made little progress in determining the projects to
be undertaken under the USSR's $100,000,000 line of credit.
The head of the delegation has remained in Addis Ababa,
however, presumably to assist in drawing up a formal ver-
sion of Moscow's d technical aid agreement.
BRITISH LABOR PARTY TROUBLES . . . . . . . . . . . . . . . Page
Hugh Gaitskell's controversial proposal to soften the
British Labor party's doctrinaire attachment to nationali-
zation is encountering increasingly vocal opposition.
During the illness of Aneurin Bevan, who as deputy leader
has often played a stabilizing role, Gaitskell has been
attacked by many moderates as well as left-wingers. Since
Bevan remains the only alternative leader on the horizon,
his retirement from active politics probably would enable
Gaitskell gradually to recast the party's policies.
ITALIAN GOVERNMENT FACES INCREASING STRAIN . . . . . . . . Page
Italy's minority Christian Democratic government
faces intensified attacks from political elements both
within and outside the party when President Gronchi re-
turns from his 6-11 February visit to the USSR. The
meetings this month of the governing bodies of the Chris-
tian Democratic, Nenni Socialist, Liberal, and Communist
parties will put the government under heavy pressure to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
PART II (continued)
realign its parliamentary support. What happens at these
meetings may decide whether or not the Segni government
will stay in power until after the spring local elections.
POLITICAL DEVELOPMENTS IN THE SIX-NATION EUROPEAN
COMMUNITY . . . . . . . . . . . . . . . ... . . . . . . . Page 18
The foreign ministers of the six European Community
countries held the first of a series of quarterly "politi-
cal consultations" in Rome in late January. The new pro-
cedure, set up last fall as a means of increasing politi-
cal cooperation among the member countries, may lend it-
self to French efforts to create a "Continental political
bloc." It may also weaken the existing Community institu-
tions, since these meetings will not regularly include
the top officers of the Community itself. In contrast to
this trend against supranational institutions, however,
the Council of the Coal-Steel Community (CSC) has just
approved by majority vote an important extension of the
powers of the CSC's High Authority.
VENEZUELAN STATE ENTERPRISES CONTRIBUTE TO FINANCIAL
PROBLEMS . . . . . . . . . . . . . . . . . . . . . . . . . Page 19
Venezuela's present financial difficulties, marked
by a decline in foreign exchange holdings since last Sep-
tember and attempts to borrow abroad to meet government
expenses, are due in large part to the investments and
subsidies necessary for several major government corpora-
tions, a number of them inherited from the Perez dictator-
ship. The ventures, which are largely designed to diver-
sify the country's economy and free it from dependence on
the oil industry, now have become symbols of national
prestige and will probably continue to be a drain on zov-
ernment revenues for several years.
COMMUNIST-LED VIOLENCE IN BOLIVIA . . . . . . . . . . . . Page 20
Communist-led units of miners' militia recently prof-
ited from right- and left-wing rivalry within the Bolivian
government party to seize the key mining town of Huanuni.
The seizure opens the way for Communist-led forces to at-
tack the major city of Oruro, 40 miles away on the rail-
road, and raises the possibility of civil war. President
Siles--strongly averse to bloodshed--is unlikely to order
the army to dislodge the Communists from Huanuni,but will
probably seek the support of former President Victor Paz
Estenssoro, who has considerable influence with leftist
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
PATTERNS AND PERSPECTIVES
FRONDIZI'S STABILIZATION PROGRAM AND THE ARGENTINE
ELECTIONS . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Argentine President Frondizi's US-backed stabilization
program faces its first national electoral test in the
voting on 27 March for 97 of the 187 seats in the Chamber
of Deputies. The year-old program has greatly improved
Argentina's long-term economic prospects, but has not had
time to produce dramatic results that would help adminis-
tration campaigners. Its austerity aspects, which have re-
sulted in a 100-percent increase in the cost of living,
have prompted virulent opposition, including politically
motivated strikes by the Peronistas and Communists. Peron-
ista and Communist candidates may be barred from partici-
pating in the elections. 25X1
CHILE UNDER PRESIDENT ALESSANDRI . . . . . . . . . . . . . Page 4
President Jorge Alessandri--inaugurated in November
1958 as Chile's first conservative president in 20 years--
has succeeded in improving general business confidence and
the foreign investment climate, but has not reversed the
declining trend of real wages which has contributed to
leftist strength in recent years. Elected by less than a
third of the total vote, Alessandri has had to move warily
in lining up the necessary political support for his eco-
nomic program. He has sought to appease the leftists by
a liberal policy on visas for Communist visitors. Despite
Chile's lack of diplomatic relations with any of the bloc
countries, this has led to a sharp rise in Communist-af-
filiated conventions held in Chile during the past year.
HAMMARSKJOLD PLAN FOR WORLD-WIDE;:UNITELNA'IONS DIPLOMATIC
CORPS . . . . . . . . . . . . . . . . . . . . . . . . Page 7
UN Secretary General Hammarskjold is reported proceed-
ing with plans to station senior officials on "permanent"
duty throughout the world, particularly in trouble spots,
to deal with localized political problems. The secretary
general would by this means train a corps of UN profession-
als, available for assignment as crises arise. Hammarskjold
apparently hopes these professionals would gradually re-
place the somewhat unsatisfactory ad hoc investigative
commissions, composed of representatives of UN member states,
which the United Nations has employed in the past. The
increasing tendency of UN members of turn to Hammarskjold
is facilitating his program.
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4 February 1960
PART III (continued)
EASTERN EUROPE'S ATTITUDE TOWARD COMMUNIST CHINA . . . . . Page 10
Communist China exercises greater influence in the
Eastern European satellites today than during the Stalin
era and there are signs it hopes to expand this influence.
"Hard-line" elements in satellite party circles have shown
considerable interest in Chinese practices and ideology.
As Communist China increases its material strength and
takes a greater role in bloc affairs--particularly as an
independent center of Communist theory--the tendency of
Eastern Europe to find precedents in Peiping's policies
could become a matter of increasing concern to Moscow.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
PART I
OF IMMEDIATE INTEREST
MOSCOW MEETING OF'BLOC LEADERS
Moscow moved last week to
demonstrate unqualified bloc
solidarity and support for the
Soviet Union's policy on major
East-West issues. As in pre-
vious years, the meeting of the
Warsaw Pact's Political Con-
sultative Committee. on 4 Feb-
ruary in Moscow will provide
the forum for a number of high-
level pronouncements on topics
listed by Khrushchev for dis-
cussion at the summit--disarm-
ament, Berlin and a German
peace treaty, East-West rela-
tions, and a nuclear test ban.
Bloc leaders will probably
use this opportunity to combine
an endorsement of the USSR's
one-third cut in its armed
forces with approval of further
reductions in Soviet forces
stationed in Poland, Hungary,
and East Germany. A similar
meeting in May 1958 was used 1D
announce the withdrawal of all
Soviet forces from Rumania and
one Soviet division from Hun=
gary as well as major troop
reductions by the satellites.
As-at the 1958 meeting, the
presentsession will probably
call on'the Western powers to
follow suit and thus "prove by
deeds" their professed desire
for peace through disarmament.
The 4 February meeting
may also renew such earlier
proposals as a NATO - Warsaw
Pact nonaggression pact. Such
"peaceful initiatives" prob-
ably will be accompanied by a
strong warning that the bloc
will be compelled to take ap-
propriate military counter-
measures if West Germany pur-
sues its alleged policy of nu-
clear rearmament and refuses
to join East Germany in an
arms-limitation agreement for
Germany.
A warning along these
lines was foreshadowed in East
German party chief Ulbricht's
letter of 23 January to Ade-
nauer, which stated that unless
Bonn discontinued its atomic
armaments "within a short time,"
East Germany would be forced
to "request its allies to
place rocket weapons at its
disposal." Khrushchev's letter
to Adenauer on 28 January, fo-
cusing on the "aggressive" in-
tention of Bonn to revise Ger-
man borders with Czechoslovakia
and Poland, was also part of
a bloc effort to set the stage
for a renewed high-level threat
to take "protective measures."
The last previous explicit
warning that NATO policy might
oblige the Warsaw Pact members
to station missiles in East
Germany as well as Poland and
Czechoslovakia was made by
Khrushchev in his speech to
the Political Consultative Com-
mittee session in May 1958.
He added then that this move
would "inevitably increase the
danger of an outbreak of war"
since the area between rocket
installations would thereby
become "smaller and smaller."
The meeting of the Warsaw
Pact countries was preceded
by a conference on bloc agri-
cultural problems held on 2
and 3 February. At thb meet-
ing, attended by Khrushchev
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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and all the East European lead-
ers, views on agricultural
problems were exchanged. The
sessions dealt especially with
the possibilities of sharply
increasing living standards
in order to implement Communist
promises of surpassing Western
standards. The immediacy of
this problem may be underlined
by the food situation in East
Germany and,.to a lesser extent,
in Poland.
While such increases are
to be achieved on the basis of
raising production and labor
productivity, the official com-
muniqud called on CEMA to con-
sider plans for "further spe-
cialization in agricultural pro-
duction, taking into considera-
tion the interests and possi-
bilities of each country," and
for an increase in farm machin-
ery production. Such a confer-
ence was probably necessary to
deal with the basic agricultural
problems which have constantly
hindered the bloc's economic
growth and led to a failure to
meet planned increases 'in agri-
culture in the USSR and all
East European. countries except
Rumania and Hungary.
In addition to basic short-
comings in mechanization and
internal distribution, East
European satellites have been
hampered by shortages of ferti-
lizer and livestock, resistance
to collectivization, and inept
rural organization and adminis-
tration of land.
Khrushchev probably dis-
cussed the significance and
implications of a number of
recent foreign policy develop-
ments for bloc countries. The
Hungarian news service pointed
out that the fact that the
party first secretaries were
present for the agricultural
conference offered the oppor-
tunity for an exchange of views
on "party work and international
problems."
In reviewing international
affairs with all the bloc lead-
ership, Khrushchev probably
stressed that the present phase
of coexistence diplomacy does
not imply any concessions on
matters of ideology--a theme
which has appeared consistently
in his major foreign policy
statements--or any relaxation
of internal controls in Commu-
nist countries. In this'con-
nection, Stalinist elements in
certain of the satellites have
quietly made it known that they
were apprehensive about the
detente and its effects on in-
ternal stability.
Public announcements list-
ing participants in the agri-
cultural talks noted that high-
level delegations from North
Korea and Outer Mongolia had
attended "by invitation" be-
cause of their "expressed de-
sire" to be present. The pres-
ence of these Asian satellites
made more conspicuous the ab-
sence of any representatives
from Communist China for this
conference and for the private
discussions Khrushchev held
with some bloc leaders earlier
in the week.
Peiping, however,. although
not a member, sent observers
to attend the session of the
Warsaw Pact, a procedure followed
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
by the Chinese at previous pact
meetings. The relatively low
level of the delegation--led
by Kang Sheng, an alternate
politburo member of little im-
portance in the leadership--
suggests that the Chinese were
present primarily to nod agree-
ment rather than actively par-
ticipate in matters largely of
European significance.
In contrast with the pres-
ent meeting, which was an of-
ficial pact conference, one
called for similar purposes on
the eve of the Geneva foreign
ministers' conference in April
1959 was billed as a "confer-
ence of the foreign ministers
of the Warsaw Pact organization
and the Chinese People's Repub-
lic"--a formula which enabled
Peiping to participate fully
in the proceedings.
Germany and Berlin
Since Premier Khrushchev's
lengthy and intemperate attack
on Chancellor Adenauer in his
Supreme Soviet speech on 14
January, the bloc has inten-
sified its campaign to discredit
and isolate the West German
Government and stimulate old
antagonisms and distrust of
Bonn in Western Europe. Capi-
talizing on recent anti-Semitic
incidents in West Germany,
Khrushchev's 28 January letter
to Adenauer charged that Ade
nauer has assisted in creating
conditions in West Germany
which encouraged the re-emer-
gence of fascism.
Khrushchev described Ade-
nauer's internal policies as
"essentially those which Hitler
held," and accused the chancellor
of conjuring up the "bogey of
the Communist menace" to justify
a policy of revanchism, thereby
evoking "memories of the most
sinister aspects of Germany's
recent past."
The general sharpening of
the bloc campaign against Ade-
nauer has been accompanied by
increasingly frequent state-
ments by Khrushchev combining
a repetition of the Soviet pro-
posal for making Berlin a -free
city" with warnings of the con-
sequences of a separate peace
treaty with East Germany. This
line of approach was contained
again in Khrushchev's letter,
along with the now standard de-
nial of any direct West German
interest in the solution of the
Berlin problem.
In an apparent move to
underline the practical effects
of these "consequences," Soviet
authorities have issued to
Allied military liaison per-
sonnel new documents implying
a degree of East German control
over mission personnel. This
move may be designed to test
Western willingness to acquiesce
in the implications of East
German control rather than ap-
ply a self-imposed ban on the
missions' activities or withdraw
completely.
Soviet officials in Berlin
also attempted to gain some
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
Western acceptance of East Ger-
man control over Berlin access
routes by prefacing a guarantee
of flight safety for an SAS-
commercial plane with a state-
ment that permission had been
granted by "governmental author-
ities of the German Democratic
Republic" (East Germany).
While the bitterness of
Khrushchev's attacks on Adenauer
has provoked criticism in West
Germany, Chancellor Adenauer
views the letter as presenting
nothing new. He told the Chris-
tian Democratic national com-
mittee on 1 February that if
Khrushchev wins Western conces-
sions in Berlin, he will have
a tremendous psychological vic-
tory resulting in a loss of
confidence in the United States.
In a public announcement
on 30 January, West Berlin
Mayor Willy Brandt stated that
he and Chancellor Adenauer had
reached agreement on a basic
assessment of the Berlin situ-
ation which emphasized insist-
ence on the maintenance of
existing West Berlin - West
German ties. Brandt, added,
however, that this relation-
ship does not in any way preju-
dice the basic four-power re-
sponsibility: for Berlin.
The German press reports
that unanimous approval is ex-
pected for a Bundestag joint
resolution supporting the pres-
ervation of the present status
of Berlin. The recent furious
attacks from the USSR and East
Germany are reportedly respons-
ible for the uncommon show of
unity among the parties on for-
eign policy issues.
De Gaulle, following his
firm stand against rightist
pressure to modify his offer
of self-determination to Al-
eria during the European set-
tler insurrection, seems to
feel obliged to press swiftly
for a thorough clean-up and
reorganization of his civil
and military administration.
Despite overwhelming public
support in France and the spe-
cial decree powers voted on 3
February by Parliament, he is
likely to face rough going from
an apparently well-entrenched
network of plotters who have
numerous political and military
sympathizers.
Despite De Gaulle's firm
personal support for Algerian
self-determination, the FLN
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4 February 1960
rebels continue to demand guar-
antees more binding on this
and possible future French Gov-
ernments concerning implementa-
tion of self-determination.
They appear concerned regarding
a possible upsurge of De Gaulleh
popularity among Algerian Mos-
lems, and are probably reluc-
tant to begin negotiations with
the French when De Gaulle's
prestige is so strong.
The special powers to gov-
ern by decree for one year
voted overwhelmingly by both
houses of Parliament on 3 Feb-
ruary will enable De Gaulle to
move swiftly and drastically
to try to rout suspected plot-
ters from the military and civil
administration. Although critics
question the need for such spe-
cial powers, the government now
has a freer.hand to investigate
and detain suspects than it had.
On the other hand, reliance on
Article 38, rather than on the
constitutional provisions pro-
viding for extreme emergency
powers, will permit enough con-
tinuation of normal political
activity to help undercut the
expected leftist argument that
a dictatorship has been estab-
lished.
The decree powers adopted
on 3 February relate solely to
the "maintenance of order, safe-
guarding the state, and paci-
fication and administration of
Algeria," and require subsequent
ratification by Parliament for
any permanent measures taken
under them. Parliament will
continue to meet according to
its regular schedule--next on
26 April--to handle routine
legislation, French Community
relations, the budget, and eco-
nomic and social matters.
SECRET
De Gaulle began a cabinet
clean-up on 4 February by drop-
ping Deputy Premier Jacques
Soustelle, who openly backed
integration of Algeria with
France, and reportedly opposed
forceful measures to deal with
the insurrectionists. Minister
of the Armies Guillaumat, pri-
marily a "technician" and atomic
energy expert, may be given
another post. A tough, loyal
Gaullist, Pierre Messmer, former
high commissioner in French
West Africa, has replaced Guil-
laumat. There is also specula-
tion that Delegate General Paul
Delouvrier may be given a minor
cabinet post and his Algerian
responsibilities taken over by 25X1
a "tougher" Gaullist.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
Both military and civilian
rightist elements have indi-
cated that their next public
line of attack on De Gaulle--
already foreshadowed in their
clandestine propaganda--will
be to charge him with prepar-
ing to "sell out" both France
and NATO when Soviet Premier
Khrushchev makes his scheduled
visit to France in late March.
Europeans in Algeria con-
tinue apprehensive concerning
the possible prosecution of
individual insurgents. Most
of the insurgents, however,
have had second thoughts re-
garding service with the For-
eign Legion in Algeria and
have returned to their homes.
While organized resistance to
De Gaulle disintegrated with
the surrender of the insurgents,
widespread opposition to his
Algerian policy remains. Rumors
in Algiers that insurgent lead-
er Pierre Lagaillarde was
promised immunity from prosecu-
tion in return for his surrender
could presage a move to make
him a martyr.
Military spokesmen in Al-
geria have already seized on
De Gaulle's 29 January promise
that the army would remain in
Algeria to supervise the refer-
endum as a face-saving device
under which they can continue
reaffirming their loyalty to
the government while pushing
for integration.
Recent events in Algiers
have probably reassured the Mos-
lem rebel National Liberation
Front (FLN) concerning De Gaulle's
good faith with respect to
Algerian self-determination.
There are no indications, how-
ever, that the rebels desire
cease-fire negotiations at a
time when De Gaulle's prestige
has been newly reinforced. The
rebels appear concerned that De
Gaulle's firm support of his
self-determination program may
undercut support for the FLN
among Algerian Moslems. Rebel
leaders probably hope to begin
new military actions in Algeria
which could serve as a show of 25X1
strength prior to negotiations
should they and the French a ree
on conditions for talks.
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Israeli-Syrian Border
CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
MIDDLE EAST HIGHLIGHTS
Sporadic outbreaks of fir-
ing continued this week along
the Israeli-Syrian border, where
the largest Arab-Israeli clash
since the 1956 Sinai campaign
was spread over a four-day period
beginning on 29 January. The
fight involved infantry, heavy
mortar, and artillery fire, and
an air battle in which the Syr-
ians claim two Israeli jet
fighters were hit, one of them
allegedly crashing in Israeli
territory.
On 1 February, an uneasy
cease-fire'was arranged by the
UN Truce Supervision Organiza-
tion (UNTSO),which also ordered
troops on both sides to
evacuate the southernmost of the
three demilitarized zones along
this border. UN Secretary Gen-
eral Hammarskold has said he
will call a UN Security Council
meeting if the two sides fail
to comply.
The fight evolved out of
the long-standing dispute over
the political status of the de-
militarized zones. Contrary to
the UNTSO's interpretation of
the 1949 armistice agreement,
Israel claims sovereignty over
the southern zone, which was
part of the Jewish sector of
partitioned Palestine occupied
by Syrian forces at the close
of the Palestine war.
The presently disputed
area is land of mixed Arab and
Jewish ownership within the zone.
In 1958 the Israelis complicated
the situation by digging a
drainage ditch, which they
contend is the eastern boundary
of the Jewish cultivated land.
TAWAFIQ,
- - Armistice Line
Demilitarized Zone
------ Oil pipeline
SAUDI
ARABIA
Neither the UNTSO nor the local
Arabs, however, recognize it as
a boundary, and the UNTSO had
authorized the Arabs to work,on
certain fields west of the ditch.
When Arab farmers tried
to do so on 29 January, the
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CURRENT INTELLIGENCE WEEKLY SV MARY
4 February 1960
Israelis attempted to drive them the Israeli-Egyptian border, but
back, and a fight ensued.. On the publicity attending this move-
the night of 31 January - 1 ment suggests that the deployment
February the Israelis demolished is largely for propaganda pur-
Tawaf iq, a then-abandoned ' poses. Neither the UAR nor Israel
Arab village in the zone,which seems to be preparing to extend
Israel claims was a Syrian mil- the conflict beyond the present
itary base. The Syrians sub- limited scope, but recurrent
sequently reoccupied the town. trouble in the disputed zone
seems likely.
Israeli Foreign Minister
Meir, who says "the United
Nations is more to blame than
the Syrians" for the lengthy
history of trouble in the de-
militarized zone, claims the
Arab "farmers" are in fact Sy-
rian soldiers. Israeli Prime
Minister Ben-Gurion announced
that if the UNTSO should fail to
"expel" Syrian soldiers who
enter the zone, the Israelis
themselves would be "compelled"
to drive them out. Ben-Gurion
told the American ambassador,
however, that he did not think
the recent clash was serious and
that he regards it as "a local
affair by local Syrians." He
added, "Higher authorities in
Egypt don't want trouble."
Meanwhile, an Israeli force,
estimated to be a reinforced
infantry brigade of about 3,500
men,-has been observed moving
into the border area with some
armor and heavy artillery. The
deployment of this force appears
defensive, however. There is a
general military alert in the
Syrian region of the UAR, and
some civilian mobilization,
possibly of civil defense units,
appears to have been ordered in
Damascus. Approximately one
brigade of UAR troops has moved
into the Sinai peninsula toward
Arab League Meeting
The over-all problem of
Palestine is to be the subject
of an Arab League foreign min-
isters' meeting scheduled for
8 February. The league, largely
dominated by the UAR, will at-
tempt to formulate a unified
Arab policy on Palestine, in-
cluding Israel's plans to di-
vert water from the Jordan River
valley for irrigation of its
Negev wastelands. The Iraqis
have refused to attend the
meeting, since it is to be held
in Cairo, although they have
said they would come if it were
held elsewhere. Tunisia re-
portedly has also refused to
attend, because of Bourguiba's
differences with Nasir.
All the countries im-
mediately surrounding Israel
will be represented, however,
and they will discuss joint
plans for countering the Israeli
water scheme by diverting tribu-
taries of the Jordan River with-
in Arab territory before they
reach the Jordan. Lebanon claims
it will proceed with a project
for exploiting the Hasbani trib-
utary, and the UAR intends to
divert the Baniyas tributary,
which rises in Syria.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
Iraq
There has been little
change in the Iraqi internal
situation. Six groups now have
applied for status as political
parties under the new law regu-
lating parties--the moderate-
leftist National Democratic
party (NDP), the United Demo-
cratic party of Kurdistan (UPDK),
two Communist factions, a
"Liberation" party, and a group
calling itself the Iraqi Islamic
party.
Pro-Communist People's
Court President Mahdawi has
declared his intention of form-
ing a party "if Qasim approves,"
Should he do so, he would have
to resign his court positkon
under the terms of the law on
parties. The formation of sev-
eral Communist-front groups is
likely to work to the Commu-
nists' advantage,since they
could wean away support from
anti-Communist groups and even"=-
tually form a Communist-domi-
nated united front.
The charges leveled last
week in Colonel Mahdawi's court
by a defendant who alleged that
Chief of State Rubai and mili-
tary governor Gederal Abdi, had
been involved in the plot to
assassinate Prime Minister Qasim
have been laid aside, at leadt
for the present. In a conversa-
tion with the American ambassa-
dor last week, Qasim brushed aside
the charges,as well as accusa-
tions that the American ambassa-
dor in Cairo had furnished funds
to antiregime plotters. on 30
January, Mahdawi felt constrained
to declare that these charges
were meant to "create confu-
sion in the country and make the
leader suspicious... of those
whose loyalty could not be ques-
tioned."
Regardless of what Qasim
may believe, it now appears
that he intends no immediate
shake-up in the top level of
his government, possibly be-
cause of uncertainty over its
repercussions.
A shake-up in Communist-
dominated Radio Baghdad appears
under way with the dismissal of
two Communist script writers
and the warning to others to
refrain from writing with a
"red pencil." The station's pro-
Communist director has been
shifted to another job. Radio
and editorial comments no long-
er quote the Communist part
paper Ittihad a,-Shaab. P
CARIBBEAN DEVELOPMENTS
Mikoyan's presence in
Havana to inaugurate the USSR's
technical,scientific, and cul-
tural exhibition on 6 February
will give impetus to increased
Cuban-Soviet relations in sev-
eral fields. He and the various
Russian technicians and artists
who will visit Cuba during
the exhibition will probably
be more enthusiastically re-
ceived than they were in
Mexico, since many Cubans sup-
port Castro's campaign--one
gesture of defiance of the
United States--to strengthen
relations with neutral and
bloc countries.
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4 February 1960
life through Minister of Labor
Martinez, who controls employ-
ment and is empowered to inter-
vene in business management
almost at will.
TASS has recently given
some play to Foreign Minister
Raul Roa's statement that Cuba
plans "to establish diplomatic
relations with all countries,
including the Soviet Union,"
and a permanent TASS corre-
spondent has just been ac-
credited by the Cuban Govern-
ment.
The heavy representation
of trade specialists in Miko-
yan's party suggests that he
will also press for expanding
economic contacts. He will
probably conclude a formal
agreement for Soviet credits.
One projected credit of $5,000,-
000-$6,000,000 to finance pur-
chases of Soviet agricultural
machinery has already been re-
ported. Soviet purchases of
Cuban sugar in 1959 amounted
to 500,000 tons, approximating
the peak purchases from the
Batista regime.
Inside Cuba,the numerous
militias formed among labor,
student, and other groups--on
Castro's exhortation but at
the original suggestion of the
Cuban Communist party--have
been more tightly organized un-
der control of Minister of the
Armed Forces Raul Castro and
of Che Guevara, who remains
head of instruction for the
armed forces. Raul Castro also
exercises increasingly decisive
authority over Cuban economic
Several leaders in other
Latin American countries, in-
cluding Argentina, Peru, Chile,
and Costa Rica have indicated
their approval of the US at-
titude toward Castro expressed
in President Eisenhower's
speech of 26 January. Growing
official Latin American cool-
ness toward Castro may intensi-
fy his overtures toward Asian,
African, and Communist bloc
countries.
Dominican Republic
There are indications of
increasing pressure against
the Trujillo regime in the Do-
minican Republic. The arrests
last month of hundreds of al-
leged blotters have strained
Trujillo's relations with the
Roman Catholic hierarchy,whose
good will the dictator has pre-
viously considered necessary
for the stability of his re-
gime. Six bishops have issued
a pastoral letter criticizing
the arrests,and the papal nuncio
has hinted that a church-state
rupture is imminent unless some
clemency is shown those im-
prisoned.
In Venezuela,the government
headed by Romulo Betancourt,Tru-
jillo's long-standing enemy, is
preparing to ask the Organization
of American States to take action
to terminate Dominican interfer-
ence in Venezuelan internal af-
fairs. Venezuela will also is-
sue a white paper detailing its
charges of hostile Dominican ac-
tivity. Both moves will further
encourage the Dominican plotters
against Trujillo,and Betancourt
probably stands ready to give
them more substantial support
clandestinely
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
NOTES AND COMMENTS
PEIPING'S BORDER PROBLEMS WITH RANGOON AND NEW DELHI
The signing of the Sino-
Burmese border agreement and
friendship and nonaggression
treaty in Peiping on 28 Jan-
uary is regarded by both coun-
tries as a major diplomatic
achievement. The agreement--in
effect a protocol preliminary
to a final settlement--and the
treaty are being used by the
Chinese to refurbish their
prestige, which was at an all-
time low in Asia. . For his
part, General Ne 'Win got
formal Chinese com-
mitment, in a signed
document, to the tra-
ditional boundary
with minor adjust-
ments, and Burma can
cite this in the
event of future Chi-
nese incursions. Ap-
parently only two
small areas remain t
be defined.
The border agree-
ment indicates that
the territorial ex-
tent of the Hpimaw-
Gawlum-Kangfang vil-
lage tracts and Pang-
hung-Panglao tribal
areas, conceded to
China, continues un-
resolved. There may
be prolonged nego-
tiations on this sub-
ject in the joint
border committee
which is to be formed
to "work out solu-
tions for the exist-
ing issues" and to
draft a "final" bor-
der treaty.
Premier Chou En-
lai stated on 28 Jan-
uary that the agree-
ment covered matters
of "principle," and paves the
way for a final settlement.
The Chinese position has not
been changed since Chou En-lai's
speech to the National People's
Congress in July 1957, and the
same differences continue as
stumbling blocks to an over-all
settlement. The Burmese are
likely, however, to lean over
backward to obtain a treaty.
The friendship and nonag-
gression treaty is Peiping's
SINO-BURMESE BORDER AREA
International boundary, as shown on
former Chinese Communist sources
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NOTES AND COMMENTS
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CURRENT INTELLIGENCE WEEKLY SU)[MARY
4 February 1960
first with a non-Communist
Asian country. By agreeing
with the Chinese not to par-
ticipate in military alliances
directed against each other,
the Burmese apparently went be-
yond their original intentions.
Otherwise, the document is a
restatement of the 1954 five
principles of peaceful coexist-
ence and, even including the
clause on military alliances,
conforms to established Burmese
foreign policy.
Sino-Indian Border Dispute
The Sino-Burmese talks
are reported to have proceeded
smoothly after the Burmese
reached Peiping. The relative
speed with which the border
' AND KASHM
.1 (Status in dispute)
ICFA
SFF/Af CINE; ? ??
ej
rlna
ar
C
l ~'V
g
1~~Pari as
Chuva
Si mlasungshd
Puling-Su
ang
Selected road
5X1 - --Selected trail
4 FEBRUARY 1960
O MILES 200
lai to discuss the Sino-Indian
border problems. An editorial
in the Peiping People's Daily
on 1 February stated 'that the
"agreement provides a good ex-
ample for Asian countries
seeking reasonable settlement
of their boundary disputes."
Although the editorial did not
mention India by name, it was
obviously written with an eye
to the Sino-Indian dispute.
The editorial added that
the reason for China's willi!:g-
ness to cede the Namwan tract
was that the highway running
through it and linking the
Kachin and Shan states "makes
this area more important to
Burma." The Chinese almost
certainly were hinting that
Areas from which Nehru asks
Chinese troop withdrawal
Sangcha Frontier posts from which
Chou En-lai asks Indian
troop withdrawal
---e---.....- Boundary shown on Indian maps
-- Boundary shown on recent
Chinese Communist maps
Boundaries are not necessarily those
recognized by the U.S. Government.
C H I N A
Zhikatse
I A
agreement was drawn up-sug-
gests that the Chinese are
anxious to use it as an ex-
ample for inducing Nehru to
meet personally with Chou En-
their highway connecting Sin-
kiang with Tibet should be
viewed by New Delhi as
a parallel case.
SECRET
'SIKKIM
Ga ngton
r \ Luhit
Snap" 11I. -A.
ne ~,ys~~~
j7
S Njrga Hills-
uensang
Shillong. `.1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
Nehru is not likely to re-
gard the Sino-Burmese border
dispute as comparable to his
country's case, as Chinese "ag-
gression" and forcible occupa-
tion of considerable Indian-
claimed territory are involved.
Peiping's agreement with Ran-
goon does establish a precedent
for defining the border between
Assam and Tibet--on the basis
of the McMahon line, since Pei-
ping has accepted the, eastern
end of this line as the "tra-
ditional" Sino-Burmese border.
There is no agreement on any
"traditional" border in the
Ladakh area of Kashmir,however,
and any agreement based on the
status quo would require New
Delhi to surrender its claim
to several thousand square
miles of Ladakh occupied by
Chinese forces.
Some Indian officials be-
lieve that in order to reach a
settlement, they may eventual-
ly have to give up portions of
Ladakh in return for firm
guarantees from Peiping on the
remainder of the border. Nehru
may interpret the Sino-Burmese
agreement as indicating a great-
er willingness on Peiping's
part to make some concession
toward a settlement with New
Delhi..
Leaders of India's con-
servative Swatantra party and
of the moderate Praja So-
cialist party, intend to make
any shift in Nehru's public
position on the border dis-
pute as difficult as possible.
They plan to issue state-
ments opposing any sell-
out of Indian territory, and
they hope to debate this
subject in Parliament. in the
session opening 3 February.
The recent improvement in
Soviet-Japanese relations, no-
tably in trade and cultural mat-
ters, has been reversed by the
USSR's reaction to the signing
of the new US-Japanese security
treaty. Follwinga 19 January
Pravda hint of reprisal, the
USSR'in a 27 January note to
Japan formally repudiated its
pledge to return the Habomai
and Shikotan,islands when a
Soviet-Japanese peace treaty is
concludegAarguing that the new
security treaty is directed a-
gainst the USSR and Communist
China and "undermines the foun-
dations of peace in the Far
East." The note stated that the
islands will be returned only
on condition that all "foreign"
troops are withdrawn from
Japan.
The Soviet leaders prob-
ably do not expect this action
to prevent ratification of the
treaty by the Japanese Diet.
However, they apparently felt
impelled to follow up their
prolonged propaganda warnings
about the dangerous consequences
of the treaty with some retal-
iatory measure and to warn that
there is no prospect for an im-
provement in Soviet-Japanese
relations as long as Kishi re-
tains power.
Japan regards these is-
lands as relatively insignifi-
cant and has refused to resume
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4 February 1960
peace treaty negotiations unless
the USSR first recognized Jap-
anese claims to the southern
islands of the more important
Kuril chain.
The USSR will probably
underline its displeasure with
Tokyo by additional pressures
during the annual Japanese-So-
viet fishing negotiations which
opened in Moscow on 2 February.
There are indications that Mos-
cow intends to pare down the
Japanese catch quota, extend
the area of restricted fishing
southward, and prohibit all
salmon fishing off Kamchatka.
The USSR has consistently re-
fused to grant Japan "safe fish-
ing" rights within 12 miles of
Soviet-held Sakhalin and the
Southern Kurils until the con-
clusion of a peace treaty.
In Japan, the Soviet note
has aroused strong indignation
and probably has strengthened
support for ratification of the
treaty. Major Japanese news-
papers have denounced the Soviet
tactic and, with one exception,
have rallied to the government's
defense. Foreign Minister Fu-
jiyama has remarked that for the
first time since he assumed of-
fice in July 1957 Japanese press
editorials reflect his own
thinking exactly.
Japanese diplomats in To-
kyo and Moscow believe that the
USSR has overestimated Japanese
opposition to the new security
treaty and that the note will
prove to be a blunder.. It may
I~ip RRrwM V.HIRU_ I.
fond., USSR I'I Gja cs~ II
d +,tdt;ani
U.HI.U
ml O
N1M
t %l'
}
K.y rs)onds in (~
The
peace gm.ty dispat. 0 ,;iU..
~"\L d. faced
~
HOKKAIDO ~:(
P'.."
boon) mr
11' 0 05
iTOROYU
"$MIKOTAN
NA.OMAI
ISLANDS
0
also work to Prime Minister
Kishi's advantage in the event
he calls an election on the
ratification issue.
The Japanese Government,
well aware of possible addi-
tional Soviet pressures in the
fishery negotiations, is pre-
paring a strongly worded re-
jection of the Soviet note, em-
phasizing that it constitutes
unwarranted interference in the
domestic affairs of another
country. Government spokesmen
and the press have commented
that Moscow's withdrawal of its
pledge regarding Shikotan and
Habomai constitutes a breach
of international trust and gives
good cause to doubt the USSRs sin-
cerity in its appeals for peace-
ful coexistence and repeated
protestations of noninterven-
tion in the affairs of
other countries
The recent bold attack by
several hundred Communists on
a regimental headquarters near
Tay Ninh,about 50 miles north-
west of Saigon, points to a
possible upsurge in guerrilla
activity in South Vietnam.
While South Vietnam has long
had a security problem, this
attack was of unprecedented
scope; over 30 Vietnamese
troops were killed and con-
siderable materiel was cap-
tured, The Diem government
is particularly disturbed by
reports that the attackers,
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An increase in Communist
terrorism in South Vietnam
would not alone pose a serious
threat to the Diem government
with its increasingly well-
trained armed forces numbering
some 140,000 men and addition-
al paramilitary forces. How-
ever, erosion of public con-
fidence in the Diem government
and dislocation of the econ-
omy by Communist activity would
have serious implications for
long-range stability.
CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
who fled toward the nearby
Cambodian border, were aided
by Communist penetration of
the regimental headquarters
and, possibly by the local
populace. Relaxed security
at the headquarters during
the Chinese New Year festivals
abetted the raiders.
There are other indica-
tions that the Communist un-
derground activity in South
Vietnam may be be-
coming more aggres-
sive, shifting from
assassinations of
local off icials--
averaging 15 a month
--and other isolated
acts of terrorism
that have been the
pattern for the past
several years to
larger scale guerril-
la warfare. Communist
armed strength in
South Vietnam, long
estimated at between
2,100 and 2,500 men,
reportedly has been
augmented' in recent
months by armed per-
sonnel infiltrated
from North Vietnam
25X1 via Cambodia.
Rach Gia
t
IrA s
President Diem feels the
Tay Ninh attack has seriously
hurt the prestige of the Viet-
namese Army. His concern over
this event will probably be
translated into stepped-up
antidissident activity and
changes in the field military
command structure. The army
has already been ordered on
a stand-by alert and all leaves
have been canceled
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
THE S.ITUATIO IN .LAOS:
The provisional government
of Khou Abhay, after a month
of inaction, has finally set
24 April as the date for elec-
tions for a new Laotian Nation-
al Assembly. This leaves the
government little time for
preparations. A new electoral
ordinance is still to be pro-
mulgated, and no provision has
yet been made for voter regis-
tration. The government re-
portedly plans to issue identi-
ty cards to voters, in an
apparent effort to disfranchise
known Communists. It seems
highly problematical that these
cards can be printed and issued
in time.
Even more urgent is selec-
tion of the single slate which
all non-Communists agree is
necessary. Since candidates
must file 60 days before elec-
tions, only about three weeks
remain in which to agree on
the non-Communist candidate for
each of the 59 assembly seats
at stake.
The main source of fric-
tion in hammering out a uni-
fied slate will be the competi-
tion between the reformist Com-
mittee for the Defense of Na-
tional Interests (CDNI), which
has not been represented as a
party in the assembly, and
former Premier Phoui's Rally
of the Lao People (RLP). The
CDNI may try to name as many
as 30 of the candidates, which
would mean that several RLP
incumbents from the previous
assembly would be dropped.
The divisions and personal
feuds resulting from the CDNI-
RLP split which led to Phoui's
resignation in late December
will make selection of a single
slate difficult.
The government apparently
assumes that the pro-Communist
Neo Lao Hak Zat (NLHZ) will
have its own candidates; how-
ever, the Communists, fearful
that the army intends to rig
the elections, may boycott
them and intensify guerrilla
operations.
The dissidents, avoiding
major clashes with government
forces, presumably so as not
to strengthen sentiment for
controlled elections, are con-
tintaing subversive efforts
through propaganda and intimi-
dation. Isolated kidnapings,
ambushes, and road mining have
been reported in various sec-
tions of the country. The
dissidents are recruiting per-
sonnel, organizing villagers,
and requisitioning supplies.
UN Secretary General
Hammarskjold's personally ap-
pointed "coordinator for UN
activities in Laos"--Edward
Zeliweger, a Swiss who was UN
economic adviser to the govern-
ment of Libya--is scheduled to
arrive in Vientiane about 15
March. He will be in charge
of implementing a UN program
based on recommendations made
in a report drawn up by a team
of UN officials headed by
Sakari 'i'uomioja of Finland--
the executive secretary of the
Economic Commission for Europe
on temporary assignment to Laos.
istration system.
The Tuomioja report reOom+
mends UN aid in development of
natural resources; creation of
a comprehensive transport and
communications network and im-
provement of communications be-
tween Laos and the outside
world; improvement of health
conditions; development of an
educational system and the
rural communities; and improve-
ment of the entire public admin-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
ANTI-COMMUNIST COALITION WINS KERALA STATE ASSEMBLY ELECTION
The decisive majority won
by the anti-Communist coali-
tion in the Kerala State as-
sembly election on 1 February
is a serious setback to Com-
munist prestige throughout
India. Despite the loss of
half their seats, however, the
Communists retained a sizable
share of the popular vote, in-
dicating they still have a
firm hold on the lower classes
in Kerala and will provide po-
tent opposition to the new
government.
Final returns gave the
anti-Communist front three
quarters of the 127-member
state assembly. Of these 94
seats, the Congress party won
63, the Praja Socialist party
(PSP) 20, and the Moslem League
11. The Communists' strength
was reduced from 65 to 29 seats,
including those of three inde-
pendents they supported. Sev-
en ministers in the former Com-
munist cabinet were defeated.
The Congress party, with
almost a majority on its own,
is in a strong position to con-
trol the coalition government
likely to be formed with the
PSP. Although it had been gen-
erally anticipated that the
leadership of any Congress-PSP
government would go to PSP lead-
er Pattom Thanu Pillai, a promi-
nent former chief minister, the
Congress party now may insist
that its own leader be named
to head the government. What-
ever agreement is worked out,
these two leading anti-Commu-
nist parties probably will be
unable to maintain the same
degree of cooperation while in
power as they did during last
summer's agitation and the re-
cent election campaign.
Their task also will be
complicated by Kerala's deteri-
orating economic situation. The
Communist regime was able to
do little to relieve the
state's chronic problems of
unemployment, lagging food
production, and lack of re-
sources, and it is unlikely
that any new government can
improve on the record of past
regimes without greatly in-
creased funds for development
projects from the national gov-
ernment. New Delhi has indi-
cated it intends to step up
its normal financial assistance
once the Congress party is re-
turned to power, although there
is no assurance that an adequate
effort will be made.
The Communist party,
moreover, retains consider-
able potential in Kerala to
exploit any shortcomings of
the new government. Party
leaders will make full use
of the mass support indicated
by the apparent increased
percentage of the popular
vote over 1957 to keep the
Congress-PSP coalition under
steady pressure. This fac-
tor also will be helpful
in minimizing the damage to
Communist prestige in such
other key states as West
Ben al and Andhra Pradesh.
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4 February 1960
THE SECOND ALL-AFRICAN PEOPLE'S CONFERENCE
The second plenary meeting
of the nongovernmental All-
African People's Conference
(AAPC), held in Tunis from 25
to 31 January, was largely
characterized by regional di-
vergencies among African nation-
alists and clashes between rel-
atively moderate and radical
factions--despite the public
emphasis on the need for conti-
nent-wide unity. At the same
time, the leaders of African
nationalism displayed increased
confidence since the organiza-
tion's inaugural meeting in
Accra in December 1958 and dem-
strated a growing determination
to come to grips with the com-
mon problems likely to arise
after independence.
Approximately 150 dele-
gates from political parties
and trade unions in 30 African
states and dependent territo-
ries reportedly attended this
broadly representative gather-
ing of African nationalists.
Nevertheless, important ele-
ments stayed away--notably
spokesmen for the generally
moderate dominant groups in
French Community states and
newly independent Cameroun.
Numerous observers and
journalists from the 'Sino-
Soviet bloc were again present
but, unlike their counterparts
at the 1958 meeting, apparently
made little effort to influence
delegates. Nevertheless, an
active group of Communists from
Angola, who are well financed
and presently operate from East
Berlin, had full delegate sta-
tus and obtained representation
on the new 22-member steering
committee elected to supervise
AAPC activities until the next
plenary meeting a year from
now in Cairo.
While the usual agreed res-
olutions were adopted at the.
meeting, the basic divergencies
in problems and interests sep-
arating northern and sub-Saharan
--and to some extent also east-
ern and western--Africa appear
to have manifested themselves
more clearly than heretofore.
Moreover, a clash developed, as
expected, between impatient mil-
itants--led by delegates from
Guinea and Ghana--and more mod-
erately nationalist elements--
led by delegates from British
East and Central Africa, Nigeria,
and Tunisia.
The outcome of this rival-
ry, which was reflected in both
the tactics and programs advo-
cated by the adherents of the
respective factions, was incon-
clusive. It demonstrated that
the African nationalist move-
ment now is far from being a
monolithic organism ready to ac-
cept the direction of any coun-
try or personality. The Guin-
eans, in particular, appear to
have lost stature by pushing
their approach too hard.
French, quarters.
in some European, especially
Meanwhile, the now rapid
evolution of most of the con-
tinent toward formal independ-
ence was reflected in a shift
in emphasis from the Accra meet-
ing's preoccupation with polit-
ical "liberation." Instead,
greater attention was focused
on the attainment of "economic
independence" and on the crea-
tion of the new "African person-
ality" as well as the develop-
ment of suitable institutions--
such as an eventual African
"common market"--for its expres-
sion. By contrast, no sympathy
was expressed for the broader
"Eurafrican" concept advocated
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4 February 1960
UN MISSION TO VISIT RUANDA-URUNDI
The Belgian Government ap-
pears concerned over the forth-
coming UN mission to its cen-
tral African'trust territory
of Ruanda-Urundi, where more
than 300 persons died in tribal
warfare last November.. Belgian
officials are reportedly brief-
ing local chiefs in an attempt
/,~RUANDA -URUNDI
to ensure favorable testimony
concerning Brussels' handling
of the November disorders.
UN Secretary General
Hammarskjold, who visited the
area in mid-January, expressed
concern over: conditions there
together with the hope that
"experienced senior officials"
could be found to serve on the
UN Trusteeship Council's visit-
ing mission scheduled to arrive
in Ruanda in later February or
early March. The visiting mis-
sion subsequently named com-
prises representatives of the
United States, the UAR, New
Zealand, and Paraguay.
The Belgian press has char-
acterized the recent fighting
as stemming from the long-stand-
ing rivalry between the Bahutus,
who make up about 85 percent
of Ruanda-Urundi's population
of 4,500,000, and the political-
ly dominant Watutsi minority.
Watutsi refugees, however,
whose testimony has been con-
firmed in part by Western
observers, have charged the
Belgians with be-
ing slow in respond-
ing to the initial
outbreaks of vio-
lence and even with
complicity in Bahutu
attacks against
the Watutsis. In
testimony before the
Trusteeship Council,
the Watutsi spokesmen
alleged that Brussels
had opposed Watutsi
demands for political
reforms and for inde-
pendence by 1962.
Belgian authori-
ties have emphasized
Brussels' intention
of abiding by the
trusteeship agree-
ment, which requires
that the final status of the
territory be decided by nego-
tiations within the UN framework.
The fact that Brussels is com-
mitted to early independence
for the Belgian Congo renders
implausible the charge that it
is attempting to block independ-
ence from Ruanda-Urundi. It is
possible, however, that the op-
position of local Belgian au-
thorities to Watutsi agitation
for early self-government led
to tacit support of Bahutu
groups dedicated to the force-
ful elimination of the Watutsis
as a political force. The
American Consulate in Tan-
ganyika characterizes the Bel-
gians as having "purposely
and systematically" distorted
the facts of the Ruanda situa-
tion.
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Although order appears to
have been restored in Ruanda
during December, Watutsi refu-
gees in neighboring Uganda have
only reluctantly bowed to Brit-
ish pressure to return to their
homes. The fighting appears to
Tunisian pressure for the
evacuation of the remaining
French military forces from Bi-
zerte reached a new high on 25
January when President Habib
Bourguiba announced that the
"battle for evacuation" would
begin on 8 February. Bourguiba
earlier had asked the French
ambassador in Tunis to seek in-
structions from Paris to nego-
tiate the evacuation of these
troops, now estimated to total
7,000 army, air force,and navy
personnel.
Paris had replied, how-
ever, that France's "right" to
the Bizerte base was not nego-
tiable. It appears prepared to
rely on Tunis' agreement to the
provisional occupation of the
base contained in the exchange
of notes of 17 June 1958, when
0
25X1 I .,.,~...
38558
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have made for a state of contin-
uing tension between the Watut-
sis and Bahutus,'and to have
shaken the political prominence
of the Watutsis without total-
ly destroying "the old order."
France agreed to withdraw all
other troops from Tunisian soil.
Bourguiba launched his
campaign to obtain control over
Bizerte at an open-air rally
convoked to protest forthcoming
French atomic tests in the Sa-
hara and coincident with the
opening of the All-African
People's Conference in Tunis.
Evidently he hoped to impress
conference delegates--some of
whom have criticized him for
collaborating with the West--
with his devotion to African
nationalist causes.
Tunisian officials appar-
ently were encouraged to press
for a French withdrawal from
Bizerte by the US-Moroccan
agreement in December for the
evacuation by the end of 1963
of the American air bases in
Morocco. Tunis and Rabat, how-
ever, apparently have not yet
seriously considered coordinat-
ing their tactics in seeking
the recall of French forces
from their territories.
For maximum propaganda
effect both at home and abroad,
Bourguiba selected 8 February--
second anniversary of the French
aerial bombardment of the vil-
lage of Sakiet Sidi Youssef near
the Algerian border--as the
deadline for France's agreement
to negotiate the issue. His
comments to newspaper corre-
spondents on 30 January indicate
he probably will be moderate and
flexible within his declared
terms of reference. An adviser
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
believes he would accept a
phased withdrawal of troops
over a six- to ten-month period.
Unless the French indicate
before Bourguiba's deadline '
that they are at least willing
to open talks, the Tunisians
probably will resort to tactics
certain to create a new crisis
in relations with France. Such
tactics are likely to include
attempts to seal off the base,
carefully contained mass demon-
strations, and strikes of base
workers. Tunisia may also at-
tempt to lodge a complaint with
the UN Security Council, and
might seek to have the United
States again play a good-of-
fices role as it did in con-
junction with Britain at the
height of the French-Tunisian
crisis in the spring of 1958.
The Shah is taking steps
to break up large private land-
holdings in Iran at a time when
he is facing widespread dis-
satisfaction with his regime.
The landholders and even the
peasants prefer to continue
the feudal system. The land-
owners oppose and the peasants
are mostly indifferent to the
land-reform program. The Shah
probably has a genuine interest
in land reform, but he apparent-
ly is undertaking the program
at this time primarily to
counter Soviet propaganda at-
tacks on Iranian landownership
and unfavorable articles ap-
pearing in the American press.
A land-reform bill recently
introduced in the Majlis would
affect about 800 of the largest
landholders, who *ould be forced
to sell, at government-estab-
lished prices, all land in
excess of about 1,480 acres if
unirrigated or about 500 if
irrigated. Landholders who
distribute 60 percent-of their
holdings free to peasants would
be allowed to retain the re-
maining 40 percent. Land ac-
cruing to the government as a
consequence of the law would
be sold to peasants, farm la-
borers, and graduates of agri-
cultural schools.
Although the bill is al-
most certain to be enacted into
law--because'the Shah can pre-
vent the re-election of unco-
operative deputies during the
Majlis elections in March--it
is moving very slowly through
the Majlis committee created
for it. Failure of the gov-
ernment to enforce the con-
flict-of-interest laws passed
last January, however, may
encourage landowners to believe
that implementation of any
radical land-reform law would
likewise be delayed.
In preparation for break-
ing up large private holdings,
the Shah since 1951 has been
distributing crown land to
peasants and recently,began to
distribute public lands. So
far the distributed land totals
about one percent of the cul-
tivated acreage. Crown and
public lands amount to 20 per-
cent of the total land in Iran.
By 1970 about 4,800 villages
on crown and public lands are
to be subdivided and a minimum
of 240,000 villagers are to be-
come private landowners. While
this program has increased the
Shah's popularity with some
peasants, most Iranians prob-
ably discount the move as only
a return to the people of land
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CURRENT INTELLIGENCE WEEKLY SUMY*ARY
4 February 1960
which the Shah's father had tak-
en from them.
There apparently is little
popular pressure for land re-
form. The pressure which does
exist comes primarily from the
foreign-influenced, urban in-
tellectual class and from prop-
aganda, usually Soviet inspired.
Merchants and businessmen
do not favor land reform. They
fear that the planned changes
would reduce profits and thus
endanger their newly ac-
quired investments in farm land.
Nevertheless, members of this
class have no sympathy for the
traditional landowning families;
they would probably favor see-
ing them humbled if the process
had no repercussions on them-
selves. Iranian labor probably
favors land reform, but this
group is too busy with its own
problems to give the matter
much thought.
The peasants, who make up
75 percent of Iran's 20,000,000
population, live at a bare sub-
sistence level and have shown
little interest in land distri-
bution. A few peasants, how-
ever, regard the projected land
reform as a means to become
landlords themselves. While the
peasants have many grievances
against their landlords, at pres-
ent most of them apparently
prefer that government action
be limited to protecting their
rights and acting on their be-
half within the present system.
SINO-SOVIET BLOC FOOD SUPPLIES
Food supplies in the Sino-
Soviet bloc should be adequate
to meet domestic needs until mid-
year despite the reduced 1959
harvests. The decline in com-
parison with 1958 crops--result-
ing generally from poor weather
throughout much of Communist
China, the USSR, and the north-
ern European satellites--will
be felt mainly in livestock feed
supplies and in the bloc's abil-
ity to export agricultural prod-
ucts. In Communist China, re-
duced harvests will affect food
supplies more directly, but crit-
ical food shortages will prob-
ably be avoided.
Per capita food supply may
also be somewhat lower than last
year's in Poland and East Ger-
many.
In the Soviet Union, a
grain crop of 100,000,000 tons
is estimated--considerably be-
low last year's bumper harvest.
The potato crop also will prob-
ably be somewhat less than last
year's. Although these items
form a major part of the Soviet
diet, only 40-50 percent of the
total output is used for direct
human consumption. Food use in
the USSR tends to remain con-
stant, with fluctuation in sup-
ply largely affecting the amounts
used as livestock feed and in
industry and, in the case of
grain, the amounts exported
and stockpiled.
China's grain harvest is
not likely to exceed 200,000,000
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
tons, or 5 to 7 percent less
than last year's outstanding
harvest, but much of this de-
cline was probably in coarse
grains and sweet potatoes, which
the Chinese include in "grain"
figures. Furthermore, Peiping
has taken steps to stretch grain
stocks by urging a more care-
ful handling of all available
food stocks.
Grain output in the satel-
lites over-all was up 11 per-
cent over last year, although
adverse weather in Czechoslo-
vakia, Poland, and East Germany
caused a decline in feed grain
and fodder crops. Potatoes may
be in short supply in the latter
two countries. Domestic sup-
plies of meat and other live-
stock products may be general-
ly better than last year in the
bloc, with the exception of East
Germany and Poland, where the
unfavorable food situation diir-
ing the last half of 1959, in-
volving shortages of meat, but-
ter, and milk, has already shak-
en the morale of the urban work-
er and caused unrest. Further
shortages of such products
are expected through June 1960.
Somewhat less sugar and
vegetable oil are expected to be
available in the bloc up to mid-
year. The Soviet and Chinese
1959 crops of fruits and vegeta-
ables, however, were apparently
somewhat better than in 1958.
The change in the food sup-
ply situation between 1958-59
and 1958-60 is not expected to
have a large effect on intrabloc
trade in agricultural products.
The need to pay for imports in
connection with industrializa-
tion will tend to keep Chinese
agricultural exports to the USSR
at a reasonably stable level.
Also, although the northern
satellites, particularly Poland
and East Germany, need more feed
grains, the USSR is not in as
good a position this year as
last to supply them. Food sup-
plies per capita are thus not
expected to be altered appreci-
ably by intrabloc trade.
PRODUCT N OF GRAIN
IN T1# S NO-9OY#T BLOC
mum __ "M
>no
CHE~p,
COMMUNIST
SO
ussR
loo
so
EASTERN
EUROPE
. .[..UMY N/.
Export capability of the
Communist bloc to the free world
may be restricted, but this trade
represents a very small percent-
age of total production. During
1958 and 1959, the European satel-
lites were net importers of grain
from the free world, and there
has been some effort among the
northern satellites to increase
imports during 1960. Poland
and Hungary account for about
70 percent of total bloc exports
of meat, but domestic shortages
in Poland may compel a reduction
in these exports during 1960.
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000,000 difference for the same
period in 1959.
4 February 1960
YUGOSLAV TRADE WITH THE SOVIET BLOC
With the signing on 30
January of a trade agreement
with the USSR, Yugoslavia has
completed trade protocols for
1960 with the USSR and all the
European satellites. However,
despite the improvement in
state relations during the
past few months--manifested in
this case by a warmer atmos-
phere in the trade talks--no
major expansion in trade is
likely, in view of Belgrade's
unwillingness to become over-
ly dependent on such exchanges.
Belgrade's relationship with
China remains cool. Trade dur-
ing 1959 fell to an insignif-
icant level, and no agreement
has been announced for 1960.
Although bloc-Yugoslav
trade in the first nine months
of 1959 was more than 15 per-
cent below planned levels and
slightly less than the actual
amounts traded in an equivalent
period in 1958, Yugoslavia is
probably content with the
volume exchanged. From Jan-
uary through September, bloc
countries took 30 percent of
Belgrade's exports and pro-
vided 23 percent of its im-
ports, thus keeping bloc-Yugo-
slav trade totals at roughly
the 25-percent figure of the
past few years. These patterns
suggest that the increases
called for under the 1960 pro-
tocols are unrealistic. Ful-
fillment of trade agreements,
furthermore, is not uniform
throughout the bloc. The USSR
has, in the main, met its com-
mitments, but the satellites
have fallen substantially
short.
Belgrade apparently was
able in 1959 to reduce its un-
favorable balance of trade
with the bloc; from a $66,000,-
000 difference for the first
nine months of 1958 to an $18,-
The pattern of trade in
the first nine months of 1959
suggests Yugoslavia is still
dissatisfied over specific
commodity exchanges with bloc
countries and its inability to
get favored treatment from them.
In the past, Belgrade has
not been able to obtain desired
quantities of crude oil from
Rumania, and Yugoslav-Rumanian
trade had not reached half its
planned level in the first
nine months of 1959; the 1960
agreement, nevertheless, calls
YUGOSLAV TRADE WITH THE
SMiO-SOVIET SIOC
Of DCUAIS (374)
rlwo-ter Uoc
?oaa
on ACTUAL
romp KAM N
1956
*1
9" 1950
4 FEBRUARY 1960
for a $2,000,000 increase over
1959 goals.
Similarly, Poland has ap-
parently been unable to export
agreed quantities of coking
coal because of its commitments
to the bloc's Council for Mutual
Economic Assistance (CEMA).
Accordingly, Polish exports to
Yugoslavia reached only one
third of 1959 goals in the first
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4 February 1960
nine months of that year, but
a $6,000,000 increase in trade
over 1959 goals has been sched-
uled for this year. Belgrade
apparently feels it could im-
prove its trading position with
the bloc by reacquiring ob-
server status on CEMA, but as
late as 8 January Yugoslav
overtures had been ignored.
Despite Belgrade's dis-
pleasure at not being given
special treatment, the bloc
appears to be living up to
its public position of main-
taining normal trade rela-
tions with Belgrade on the
basis of "mutual profit." The
bloc has been less amiable in
other economic areas, how-
ever, as is indicated by
its continued unwillingness
to reinstate canceled develop-
mental credits or to negotiate
outstanding claims issues satis-
factorily.
(Concurred in by
ORR) 25X1
SOVIET-ETHIOPIAN AID TALKS INCONCLUSIVE
The Soviet economic aid
delegation which visited Addis
Ababa from early November un-
til mid-January apparently
made little progress in de-
termining the projects to be
undertaken under the USSR's
$100,000,000 line of credit.
The head of the delegation has
remained in Addis Ababa, how-
ever, presumably to assist in
drawing up a formal version of
Moscow's economic and techni-
cal aid agreement.
The delegation apparently
refused to agree to undertake
several obviously impractical
or uneconomic projects sug-
gested by Addis Ababa, and Mos-
cow made only`a few specific
offers of assistance. These
reportedly included proposals
to participate in the Emperor's
nascent land-reform program.
In addition, Moscow apparently
offered to assist in develop-
ing highways and agreed to
build several relatively small
light industrial projects.
A Soviet Embassy official
in Addis Ababa indicated that
the delegation had encountered
substantial difficulties in the
negotiations, and stated that
agreement had been reached on
only a few of the less impor -
tant projects. Because of
Ethiopian intransigence, he
claimed, Soviet technicians
will be delayed for almost a
year from beginning work on
the projects. Ethiopian offi-
cials were irritated by Soviet
insistence that Ethiopia pro-
duce economic data on the
projects under consideration.
Ethiopia did agree to pur-
chase--under the credit--a
quantity of refined petroleum
products approximately suffi-
cient to meet the country's
needs for one year. The four
Western petroleum distributors
--the only such firms in the
country--have, however, re-
fused to handle Soviet deliv-
eries, and Ethiopian officials
now are considering a review
of the petroleum commitment.
The 21-man Czechoslovak
economic delegation which spent
more than a month in Addis Ababa
late last year experienced sim-
ilar difficulties in dealing
with Ethiopian officials. An
agreement calling for a $10,-
000,000 Czechoslovak credit
for economic and technical aid
was signed on 11 December, but
the Czechoslovak negotiators
complained that the Ethiopians
were frustrating and indecisive
during the talks.
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4 February 1960
The Ethiopian attitude
probably stems in part from
Addis Ababa's dissatisfaction
with Prague's performance under
an earlier credit arrangement.
This culminated in the recall
of Czechoslovakia's commercial
attache last December. The
Czechoslovak delegation ap-
parently had been prepared to
discuss a wide variety of proj-
ects, but it reportedly also
made only a few specific com-
mitments.
Despite the Communist
bloc's apparent lack of success
in achieving early implementa-
tion of credits, both Moscow
and Prague have actively sought
to increase commercial and cul-
tural relations with Ethiopia.
The USSR recently began a heavy
advertising campaign in the
local press, emphasizing Soviet
consumer goods, heavy machinery,
and publications--presumably
in preparation for a commercial
exhibit reportedly planned for
May in Addis Ababa. Meanwhile,
three Czechoslovak scientists
are reportedly conducting a
six-month study of Ethiopia's
thermal springs at the request
of the Emperor, who is eager to
develop the country's tourist
potential.
Although the Emperor is
reported to have serious mis-
givings about admitting large
numbers of Communist bloc tech-
nicians into Ethiopia, he ap-
parently hopes to accept moder-
ate amounts of assistance from
the bloc in an effort to speed
the country's economic develop-
ment and alleviate its serious
financial situation, while re-
taining the friendship and con-
tinued support of the West. The
Ethiopian Government, hampered
by second-level officials un-
able or unwilling to make deci-
sions, can be expected to pro-
crastinate in its dealings with
bloc technicians, and thus add
to the bloc's difficulties in
carrying out aid programs.
BRITISH LABOR PARTY TROUBLES
Hugh Gaitskell's contro-
versial proposal to soften his
Labor party's doctrinaire ap-
proach to nationalization is
encountering increasingly vocal
opposition. Deputy leader
Aneurin Bevan's,serious illness
has removed a possible stabi-
lizing influence. Should Bevan
retire, however, the absence
of as alternative leader
would strengthen Gaitskell's
position.
Gaitskell wants to remove
"public ownership" as a consti-
tutionally directed party goal.
Some moderate trade union of-
ficials have joined the party's
left wing in insisting that
Gaitskell's views constitute a
repudiation of British socialism
which, they contend, remains a
valid guide for political action.
Trade unionists are primarily
giving vent to their long-stand-
ing complaint that the influen-
tial position of intellectuals
like Gaitskell and his advisers
impedes the Labor party's ad-
vancement. The trade unionists'
alignment with left-wing intel-
lectuals such as writer Michael
Foot who have already been re-
jected by the electorate, how-
ever, points up the weakness of
their challenge to Gaitskell.
A definite solution to the
party's problems will probably
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CURRENT INTELLIGENCE WEEKLI SUMMARY
4 February 1960
have to wait until next fall,
because all major policy and
organizational changes must be
approved at the annual confer-
ence. Bevan's illness, how-
ever, has caused the party's
executive committee to delay
its formal start on revamping
party policy.
Since no other Labor leader
has Bevan's ability to pacify
dissident party views on policy
issues, his absence from Parlia-
ment may also pose an immediate
threat to Gaitskell's authority.
The anti-Semitic incidents in
West Germany have led an in-
creasing number of backbench
Laborites to demand that the
party reverse itself and oppose
German rearmament under any cir-
cumS,tances. They have warned
Gaitskell that they intend to
press this view during the pres-
ent session of Parliament.
In balance, however, Bevan's
absence should help Gaitskell
win the fight to free the party
from socialist dogma. If Bevan
retires, Gaitskell will emerge
for the first'time as unchallenged
leader of the Labor movement, 25X1
and he can then proceed to
broaden the base of Labor's
electoral appeal,
ITALIAN GOVERNMENT FACES INCREASING STRAIN
Italy's minority Christian
Democratic government faces in-
tensified attacks from political
elements both within and outside
the party when President Gronchi
returns from his 6-11 February
visit to the USSR. The meetings
this month of the governing
bodies of the Christian Demo-
cratic (CD), Nenni Socialist,
Liberal, and Communist parties
will put the government under
heavy pressure to realign its
parliamentary support. What
happens at these meetings may
decide whether or not the Segni
government will stay in power
until after the spring local
elections."
The Christian Democratic
party parliamentary group last
month elected an executive com-
mittee which gave the center-
left Fanfani group inadequate
representation in comparison with
the strength this group showed
at the national congress in No-
vember. Party Secretary Moro,
reportedly feared that the Fan-
fani group would pull its
four members out of the
cabinet and dump the Segni
government; he offered his
own resignation.
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4 February 1960
This rift has been patched
up, but the Christian Democratic
national council meeting on 13-
14 February may reopen the issue,
in view of a recent statement
by Moro that the Christian Dem-
ocrats would be willing to re-
place the present gov-
ernment if a viable
alternative were a-
vailable.
This statement
may precipitate a
reaction from the Lib-
eral party, which has
threatened to with-
draw support from the
Segni government un-
less the Christian
Democrats' intentions
with regard to an
in three Italian cities, and
Nenni apparently intends to ex-
ert his own pressures for an
understanding with the Christian
Democrats at his party's 8-10
February central committee meet-
ing. He has said that his party
ITALIAN PARLIAMENT
1-COMMUNITY MOVEMENT
S` .6-REPUBLICANS (PRO
UNITED MOVEMENT OF
SOCIALIST INITIATIVE- 5
"opening" to Nenni are clarified.
The Liberal national council
meeting on 20-21 February has
been scheduled to follow the
Christian Democrats' meeting so
that action can be taken in the
light of the CD decision.
Christian Democratic - Nenni
Socialist governments have in
the past few months been formed
should support any Christian
Democratic government that
breaks with the economic and
political right. Meanwhile, the
Communists, at their national
congress opening on 30 January,
showed concern over the possi-
bility of their own isolation
as a result of a rapprochement'
between Nenni and the Christian
Democrats.
The foreign ministers of
France, Italy, West Germany,
and the three Benelux countries
met in Rome on 25 and 26 Jan-
uary in the first of a series
of quarterly "political con-
sultations" agreed on last fall.
The meeting was regarded by
all six participants as "in-
formative and constructive."
In several respects, how-
ever, the meeting supports sus-
picions that the new forum com-
petes with existing European
Economic Community (EEC or
Common Market) institutions.
President Hallstein of the Com-
mon'MArket was not invited. At-
tendance of European execu-
tives at future sessions will
evidently depend on a unanimous
invitation of the ministers.
The Rome session was also
marked by strong concern that
the series of consultations
will lend itself to French ef-
forts to develop a "Continental
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TYROLEANStSVP)
VALOOSTAN UNION(UVD)
TALIAN DEMOCRATIC PARTY(POO
NEO- FASCISTS(MSI)
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4 February 1960
bloc." French proposals that
the consultations be "binding"
on the member governments were
strongly opposed by the other
countries, and it was decided
to rotate future meetings among
the six Community capitals and
not to set up a permanent polit-
ical secretariat.
Although the ministerial
meetings are intended as a
forum for the discussion of
Community political problems,
the Rome talks explored mat-
ters of wider concern. At
Italian request, the ministers
discussed the impact on Com-
munity countries of the "relaxa-
tion in East-West tensions,"
and West Germany's Von Brentano
reviewed the Berlin - East Ger-
man situation. Participants
in the meeting have since
minimized these detours as
"harmless" and have promised
that NATO and the Western Euro-
pean Union (the six plus Brit-
ain) will be kept informed.
In practice, however, the dis-
cussion of broad free world
issues seems likely to con-
tinue since there are no pro-
cedural restraints on what
matters may be raised.
On balance, the tendency
to treat Community and other
problems in a purely diplomatic
framework appears to be a re-
treat from the objective of
creating a fully integrated
Community under "European" in-
stitutions. Nevertheless,
while the foreign ministers
met in Rome, the Council of
Ministers of the Coal-Steel
Community (CSC) met in Luxem-
bourg and voted five to one to
permit the CSC High Authority
to continue to subsidize the
retraining and re-employment of
workers for the duration of the
CSC treaty, or 42 years.
This is an important "supra-
national" success: the treaty
revision was achieved under a
procedure not requiring ratifica-
tion by the six parliaments, and
it may have reversed a year-long
trend toward curtailing the High
Authority, the most supranation-
al of the three European execu-
tives. Moreover, on 1 February,
the member countries authorized
the CSC, EURATOM, and the Common
Market to open a combined dip-
lomatic mission in Washington--
ecutives.
a recognition of status long
sought by the Communities' ex-
VENEZUELAN STATE ENTERPRISES CONTRIBUTE TO FINANCIAL PROBLEMS
Venezuela's present fi-
nancial difficulties, marked
by a decline in foreign ex-
change holdings since last Sep-
tember and attempts to borrow
abroad to meet government ex-
penses, are due in large part
to the investments and subsidies
necessary for several major
government corporations, a num-
ber of them inherited from the
Perez dictatorship. These ven-
tures, which are largely de-
signed to diversify the coun-
try's economy and free it from
dependence on the oil industry,
now have become symbols of na-
tional prestige and will prob-
ably continue to be a drain on
government revenues for several
years.
Two of the heaviest expend-
itures have been for the Petro-
chemical Institute and the na-
tional steel mill, both of which
are of questionable economic
soundness. The institute, which
is not expected to be self-sup-
porting for another four or
five years, will reportedly re-
quire--including funds already
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4. : ? 'e:b; arv 060
invested--a total outlay of
more than $500,000,000 by 1963.
The steel mill had incurred
about $340,000,000 in govern-
ment obligations by 1957. It
is expected to begin operations
sometime this year, and its
production, at capacity, will
probably be 35 percent above
Venezuelan steel consumption,
even including all the fabri-
cated steel products now im-
ported by the key oil industry.
To a lesser degree, the
government-owned airline,LAV,
has been another drain on gov-
ernment funds. LAV is still an
important symbol of national
prestige, but its accident rec-
ord has largely destroyed the
traveling public's confidence,
and there appears to be no
early prospect of ending the
heavy subsidies necessary to
keep it operating. Other gov-
ernment economic enterprises
which have proved to be inef-
ficient and expensive include
the National Hotel Corporation,
the railroad and telephone sys-
tems, and various agricultural
projects. A possible exception
is the National Merchant Marine.
Administrative waste and graft
have added to direct investment
costs.
A new enterprise projected
by the Betancourt administra-
tion itself and endorsed by the
three parties in the coalition
is a national oil company which
will engage in all phases of
the oil business and have its
own tanker fleet. This may
eventually be the most grandiose
and costly project undertaken.
Delay in proceeding with it,
however, reflects a degree of
official caution derived from
experience with other govern-
ment white-elephant agencies as
well as the. present lack of
treasury reserves.
chemical Institute is so pro-
nounced that he is apparently
unable to revise these projects
Betancourt has recently
expressed his strong support of
private investment and the need
for foreign capital in Venezuela.
However, nationalistic interest
in the steel mill and the Petro-
substantially
COMMUNIST -LED VIOLENCE IN BOLIVIA
Communist-led units of
miners' militia from Catavi,
taking advantage of right- and
left-wing rivalry within Boliv-
ia's governing Nationalist Rev-
olutionary Movement (MNR),,sei2ed
the key mining town of Huanuni
on 23 January. The seizure
opens the way for Communist-led
forces to attack the major city
of Oruro, 40 miles away on the
railroad, and raises the pos-
sibility of civil war. Huanuni
had been a progovernment bar-
rier on the railroad linking
Catavi with Oruro and the capi-
tal, La Paz.
The leader of the right-
wing miners at Huanuni was shot
and then hanged, 11 others were
killed, and 32 were wounded.
The incident destroyed the bar-
rier, deprived the government
of an armed unit which it had
called to La Paz on critical
occasions both as ' a political
and a police force, and in-
timidated other moderate labor
leaders.
Right- and left-wing units
of peasant militia in the
Cochabamba valley mobilized '.in
response to the Huanuni episode,
and intermittent fighting be-
gan on 27 January. Cochabamba
leaders of both MNR factions
are pessimistic about pacifica-
tion. Ammunition is limited,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February. 1960
but both sides have
practically unlimited
supplies of impro-
vised dynamite bombs.
The degree of
anarchy prevailing
is suggested by the
detention on 27 Jan-
uary of former Pres-
ident Victor Paz
Estenssoro--in the
Cochabamba area to
calm his left-wing
followers--by a
right-wing unit while
a member of his par-
ty was beaten. Paz
was arrested a second
time on the same day
and was released only
through the personal
intervention of
Walter Guevara, the
national right-wing
leader who resigned
as foreign minister
on 1 February.
Sales is unlike-
ly to commit the
armed forces as such
to action because he
intensely dislikes
responsibility for bloodshed,
he fears precipitating civil
war, and because the MNR--which
he helped found--came to power
in 1952 by defeating the mili-
tary with civilian militia.
Sales Apparently.;,is attempting
to combine city militia with
small police and army elements
in an armed group based in
Oruro for use against Catavi.
Sales' most important potential
weapon, however, is an aroused
Mua -
vCatavi
Charagua
oyuibe ,
public and party opinion. For
this he needs the support of
Paz, Bolivia's most powerful
political leader and the left
wing's favored candidate for
the presidential election next
May or June.
In order to gain Paz' sup-
port, Sales will probably be
forced to act against right-wing
leader Guevara--perhaps by cur-
tailing the number of right-wing
congressional nominees at'.the forth-
coming MNR convention.
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4 February 1960
PATTERNS AND PERSPECTIVES
FRONDIZI'S STABILIZATION PROGRAM AND THE ARGENTINE ELECTIONS
Argentine President Fron-
dizi's US-backed stabilization
program faces its first nation-
al electoral test in the vot-
ing on 27 March to renew half
of the Chamber of Deputies. The
program, started a year ago to
reverse a decade of economic
decline, already has sign,if i-
cantly improved Argentina's
long-range economic prospects,
but has not had time to produce
results that are politically
impressive. The wage-price
squeeze resulting from the pro-
gram's austerity measures have
prompted bitter complaints even
within Frondizi's party, as well
as politically motivated strikes
led by Peronistas and Communists,
who helped support his election
in 1958.
The principal difficulties
handicapping Frondizi both in
the forthcoming elections and
in his determined stabilization
efforts are the fundamental
economic and political problems
which he inherited when he took
office on 1 May 1958. These
problems will continue for some
time in varying degree. Follow-
ing a decade of Peron's dicta-
torship, Frondizi took over,
from a provisional government
which had given the peaceful
transfer to constitutional gov-
ernment priority over economic
matters, a country on the verge
of bankruptcy and a body politic
deeply and bitterly divided.
Frondizi hopes that economic
improvement will soften such
divisions and strengthen the
bases for genuinely democratic
government.
Stabilization Program
The stabilization agree-
ment just renewed with the In-
ternational Monetary Fund (IMF)
is supported by $300,000,000 in
credit arrangements from vari-
ous international sources: a
$100,000,000 stand-by credit with
the IMF, $75,000,000 from Amer-
ican commercial banks, $75,000,-
000 from European commercial
banks, and $50,000,000 from the
US Treasury for peso stabiliza-
tion purposes. These arrange-
ments represent funds available
for use as needed, in contrast
to loans contracted for imme-
diate and specific use.
As in the original agree-
ment, the new program emphasizes
a reduction in the government def -
icit;'bstimated'at $325,000,000
l
77
as
USowr,
m?
05 "ZI
CIE ^ 1J..'
i1..
1..f
..
ARE MAINLY TON PESO SV^O
0101
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
in the 1959/1960 budget; strict
control over credit and wage
increases; and elimination of
price controls to restore a
balance with external price
levels. A freely fluctuating
exchange rate for all transac-
tions was established in Jan-
uary 1959 when the program be-
gan.
One immediate result of
these policies and the earlier
removal of consumer subsidies
was soaring prices; principal
food items, for example, tri-
pled in cost. In line with a
reduction of the fiscal def-
icit, the major source of in-
flation, the government raised
charges for government-owned
services. The cost of living
doubled during 1959, in con-
trast with only a 22-percent
depreciation in the peso with
respect to the dollar.
Since 88 percent of 1959's
rise in living costs occurred
during the first eight months,
the government has hopes that
the worst of the price adjust-
ment difficulties are over.
Government economies have in-
cluded a reduction of person-
nel, one half of the target of
80,000 reportedly having been
reached during 1959, but prog-
ress toward this goal is slowed
by the scarcity of alternate
employment.
The driving force behind the
austerity and stabilization pro-
gram is Alvaro Alsogaray, minis-
ter of economy and acting minis-
ter of labor. He has succeeded
in negotiating a considerable
reduction in wage demands by
strikers in a number of instances,
but labor resistance is growing
with the continuing decline in
real wages, which dropped another
20 percent in 1959. Labor gen-
erally feels it is having to bear
the brunt of the austerity pro-
gram. Since he is not a member
of the administration party, the
appointment of Alsogaray on 24
June added to discontent within
Frondizi's Intransigent Radical
Civic Union (UCRI) over the un-
favorable aspects of the stabi-
..?n program.
Complaints Over Austerity
UCRI leaders not only fear
labor's reaction at the polls
but are concerned over the lag
in economic development. The
strict credit controls, the fall
in consumer purchasing power,
and strikes have contributed to
a mild recession. Constructive
opposition voices have echoed
this concern, commenting that
the recovery program is not pro-
ceeding rapidly enough and that
economic pressure on labor is
too severe. Other opposition
groups, such as the Peronistas,
Socialists, Communists, and the
People's Radical Civic Union
(UCRP)--the only important mi-
nority party in Congress --term
stabilization a program of hun-
ger imposed by the United States.
Frondizi, whose party mo-
nopolizes the Senate and con-
trols the Chamber of Deputies,
has managed to maintain party
discipline in voting but not with-
out criticism. The stabilization
program, with its explicit em-
phasis on free enterprise, is
a bitter pill for the UCRI, whose
traditional platform has favored
considerable state control over
the economy, protection of the
social rights of labor, and pro-
scription of foreign investment
in petroleum production. Despite
Congress' nationalization of the
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CURRENT INTELLIGENCE WEEK SUMMARY
4 February 1960
petroleum industry in May 1958,
Frondizi's invitation two months
later to foreign firms to help
develop the industry on a con-
tract basis prompted national-
ist and Communist charges of a
"sellout to American imperi-
alism."
Among the most favorable
results of Frondizi's policies,
however, is the 30-percent in-
crease in production of crude
petroleum during 1959, reaching
136,600 barrels per day in De-
cember. This amounts to slight-
ly more than half the present
national demand for petroleum
and a considerable saving in
oil import costs--which in
1958, for example, cost $270,-
000,000.
Argentine gold and hard-
currency holdings rose from $97r
000,000, in December 1958 to
$295,800,000 a year later. Be-
cause of reduced imports, there
was a small trade surplus, in
contrast with the trade deficit
of $239,000,000 in 1958. Ar-
gentine indebtedness abroad,
however, will require an esti-
mated $300,000,000 in amortiza-
tion and interest payments dur-
ing 1960.
New foreign investment has
helped increase foreign exchange
holdings and will have a great-
er impact later. The govern-
ment approved contracts for
some $162,000,000 worth of for-
eign investments in industry
during 1959, but most of these
contracts have yet to be imple-
mented. This is in addition to'
some $331,000,000 actual or in-
tended investment by Americans
in connection with the petro-
leum contracts since July 1958.
These improvements, how-
ever, are not the type which
political campaigners can ef-
fectively exploit in seeking
votes.
Congressional Elections
The voting in March will
renew 93 of the 187 seats in
the Chamber of Deputies, and
fill four vacancies. The UCRI
needs at least 31 of the 97 to
assure a legal quorum in the
face of frequent boycotts by
the minority UCRP, and 35 to 45
seats to maintain an effective
majority. Of the 97 seats, 68
were originally held by the
UCRI, 28 by the UCRP, and one
by the Liberal party of Corri-
entes, Province. The Liberals,
who also hold one seat not at
stake in this election, recently
joined the Federation of Center
Parties, a loose association of
parties ranging from center to
conservative whose hopes have
risen recently. Under the vot-
ing system, in each province the
party winning a plurality re-
ceives two thirds of the seats,
while the runner-up receives the
other third.
The fortunes of the UCRI
will be most strongly affected
by the distribution of the
Peronista vote, which now is es-
timated at about 25 percent, in
contrast with more than 60 per-
cent under the Peron regime.
While the old Peronista party
has been outlawed since Novem-
ber 1955, its successor, the
Justicialista party, is recog-
nized in 15 of the 23 electoral
districts.
The Peronistas remain split
over leadership and tactics in
both labor and political circles.
The Peronista Coordinating Coun-
cil has called for a blank pro-
test vote, a plan endorsed by
Peron from Spain, his new place
of asylum. Other leaders have
threatened to vote for the Com-
munist party, as many Peronistas
did in the provincial elections
last year in Mendoza and Santa
Fe, if the Justicialista party
is barred. Cooperation between
the Peronistas and the Commu-
nists in labor was formalized
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
in their August agreement or-
ganizing the United Workers
Movement to fight against the
stabilization program.
Frondizi has requested
the electoral courts of the
provinces, which control the
inscription of parties within
their areas, to bar candidates
of both the Justicialista and
the Communist parties. Thus far
two courts have already re-
fused to outlaw the Communists,
despite Frondizi's strong plea
backed up by his 27 April de-
cree outlawing Communist po-
litical activities.
Frondizi may not want to
gamble that the Peronistas will
indeed cast blank ballots, and
instead may issue an executive
decree banning both Peronista
and Communist candidates, citing
special powers under the state
of siege which has been in effect
since 11 November 1958. This ac-
tion would probably please the
military elements, which in mid-
1959 renewed pressure on Frondizi
for stronger action against Per-
onista and Communist influence.
Although some plotting continues,
the top military leaders in New
Year's statements reasserted
their strong defense of consti-
tutional government.
President Jorge Alessandri
--inaugurated in November 1958`.
as'Chile's first conservative
president in 20 years--has suc-
ceeded in improving general
business confidence and the
foreign investment climate, but
with only 31 percent of the pop-
ular vote, and his administra-
tion initially faced an opposi-
tion congress. However, in the
by-election for the Santiago
Province senatorial seat vacated
by Alessandri, administration
leaders gave what proved to be
decisive support to the Radical
party candidate against a left-
ist-backed candidate, thereby
helping the government attain a
working majority in Congress.
Economic Achievements
has not yet reversed the de-
clining trend of real wages
which has contributed to left-
ist strength in recent years.
Son of a famous president
but without firm party ties him-
self, Alessandri won election
The government last April
was able to secure passage of
an omnibus economic bill, with
the grant of emergency power for
a year. Simultaneously the ad-
ministration sought and obtained
dollar credits--amounting to
$132,000,000--from the Interna-
tional Monetary Fund and US lend-
ing agencies. The minister of
finance has arranged preliminary
terms for further credits from
Germany and France.
Imports have been freed
from many restrictions and a
start has been made on adminis-
trative reform and on both public
and private housing. An expansion
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CURRENT INTELLIGENCE WEEKLY.SY
4 February 1960
in public utilities was stimu-
lated by a decree in effect pro-
viding higher rates. A feeling
of confidence in the government's,
purposefulness has been created
and bolstered by the credits
obtained abroad, which are in-
terpreted as an endorsement by
the outside business and finan-
cial world. Interest in private
investment, particularly by for-
eign investors, has increased
sharply, although no substantial
new investments have been made
thus far.
The immediate balance of
payments situation has improved,
owing in part to the foreign
credits and in part to improved
prices for copper--Chile's key
source of foreign exchange and
tax revenue. Production of
copper has also risen; complete
figures for 1959 will probably
set a new record.
Cost-of-Living Problems
Despite rising confidence
in the economic situation, real
wages have continued to shrink
under the impact of a persistent
inflation which has been one of
the factors behind the political
strength of the left in Chile.
Cost-of-living figures show a
33-percent increase for 1959,
approximately equal to the rise
in 1958. A cost-of-living de-
cline in November and December
1959 was attributed to seasonal
factors, but continuation of
the decline in January has raised
hopes that the regime's anti-
inflation policies may be effec-
tive.
Unemployment has dropped
but may still approximate 7 per-
cent of the labor force. Never-
theless, the estimated 5-percent
increase in Chile's gross na
tional product during 1959 re-
verses a five-year downward trend
and would appear to' give
Alessandri a period of relative
safety in which to seek basic
reforms in the long-stagnant
economy and thereby strengthen
the conservative anti-Communist
groups he represents.
In holding his congressional
political support in line under
conditions of continuing cost-
of-living difficulties, Ales-
sandri has tried to avert leftist
attacks by a liberal policy on
visas for Communist visitors.
This has led to a sharp rise
in international Communist ac-
ti,Oity in Chile during the past
year.
Foreign Communist Activity
The rise in foreign Com-
munist activity began in November
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CTTRRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
1958 with the attendance by
delegates from six other Latin
American countries at the Chil-
ean Communist party's 11th
National Congress. In mid-
August 1959, leaders of five
Latin American Communist parties
met secretly in Santiago and
agreed to cooperate against dic-
tatorship and to call a later
conference of all Latin American
Communist party leaders in that
city.
In November,delegates from
at least 13 Latin American coun-
tries, France, the USSR, and
Bulgaria attended a Communist-
front women's congress in Chile.
In the same month a strongly
Communist-influenced youth con-
ference with delegates from 12
Latin American countries was
held preparatory to a similar
congress in Havana in July 1960.
In December a national labor
congress was attended by repre-
sentatives from the USSR, Com-
munist China, Czechoslovakia,
and the Communist-controlled
World Federation of Trade Un-
ions.
Although Chile still has
no diplomatic relations with
Sino-Soviet countries, there
have been some indications of
increased economic and cultural
relations. An exploratory trade
mission led by conservative
former business associates of
Alessandri went to the USSR
and several of the satellite
countries last month. A cul-
tural group from Communist China
paid Chile a three-month visit
in early 1959.
Chilean Communist Activity
In labor, the Communists
last December gained 12 of 20
seats on the directive council
of the labor federation, the
Single Center of Chilean Workers.
(CUTCH), as a result of their
extensive financing of delegate
travel. Domination of the coun-
cil is expected to help the Com-
munists to create a public im-
pression of considerable strength.
Obvious domination of the council
by the Communists, who control
only about 10 percent of member
unions, seems likely to diminish
the council's influence in union
affairs, however.
The Chilean Communist party
--with 20,000-25,000 members and
9,000 in its affiliated youth or-
ganization--remains one of the
largest and best organized Com-
munist parties'in Latin America.
In political matters, the Commu-
nists act with the Socialists
in the Popular Action Front,
whose presidential candidate
polled 29 percent of the vote in
the 1958 election, a close second
to Alessandri.
The party does not seem,
however, to have profited mark-
edly thus far from the increase
in foreign Communist visitors
under the Alessandri regime, and
its record in organizing popular
demonstrations has recently been
poor. The demonstration in favor
of Cuba and Venezuela prior to
the conference of American for-
eign ministers last August marked
the third time in 1959 that the
Chilean Communists tried but
failed to utilize a popular
issue to demonstrate their
strength. Moreover, in the
University of Chile's Fed-
eration of Students, which is
a training ground for future
politicians and was once a
leftist stronghold, the
Communists were badly defeat-
ed recently.
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4 February 1960
HAMMARSKJOLD PLAN FOR WORLD-WIDE UNITED NATIONS DIPLOMATIC CORPS
UN Secretary General Dag
Hammarskjold is reported pro-
ceeding with plans to station
high-ranking UN officials on
permanent duty throughout the
world, particularly in trouble
spots, to deal with localized
political problems. These of-
f icials would be responsible
only to the secretary general,
would be of ambassasorial rank
or higher, and would be hand-
picked by Hammarskjold. Crea-
tion of such a network would
also provide a corps of trained
UN professionals available for
assignment as crises arise. All
appointees would assume their
duties subject to the consent
of the host country.
Perhaps Hammarskjold's,
major purpose is to assure UN
access to impartial and "neu-
tral" information before and
during a crisis. He also hopes
that having a UN official on
the spot would increase the
likelihood of averting a crisis
or at least of preventing it
from reaching proportions that
would require formal UN action.
Hammarskjold is also said
to be seeking a means of exert-
ing a calming influence on the
newly arrived leaders of the
underdeveloped and politically
immature countries, particular-
ly in Africa. He believes that
stationing UN political agents
in these countries would help
prevent their sometimes vola-
tile leaders from rushing to
the UN Security Council with
so many relatively minor is-
sues. UN officials with a
realistic view of what the
United Nations can and cannot
do would be in a position to
educate those government lead-
ers who tend to regard the UN
as a panacea for all their ills.
to him directly and privately.
The United Nations' experience
in the past with investigative
commissions composed of repre-
sentatives appointed from UN
member states has not been
satisfactory. Most of these com-
missions-which usually repre-
sent all factions in the UN--
produce public reports bearing
little or no relation to-.the
facts because there have to be
so many compromises to meet the
views of the governments repre-
sented.
According to one UN offi-
cial, these commissions have
been staffed with "hopeless
people--the Eastern representa-
tive just looked out for the
interests of the bloc, the
same for the Western, the Latin
Americans were lazy and did
nothing, the ex-colonials pound-
ed the table, some of the others
were just interested in whatever
night life the locality offered,
the Scandinavians said both
sides of the issue had equal
merit, and the result was a
meaningless report."
UN Investigative Commissions
Another advantage to Hammar-
skjold would be that his per-
sonal appointees would report
The increasing tendency of
UN members to "leave it to Dag"
.to negotiate settlements and
mediate has aided Hammarskjold
in his plans. While he and
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4 February 1960
Under Secretary Bunche have
traveled to various areas to
resolve problems, Hammarskjold
now is more inclined to appoint
others for these tasks. To
date he seems to have relied
on his personal knowledge of
individuals' abilities--knowl-
edge acquired during his many
years with international and
regional European economic
bodies?
Nationals of Finland,
Sweden, Italy, Switzerland, and
the Netherlands are among those
who have been assigned by Aammar-
skjold to carry out specific
functions. All these appoint-
ees have been of ambassadorial
rank, well-known in their spe-
cific fields, closely connect-
ed with UN or other interna-
tional activities, and, above
all, men dedicated to the prin-
ciple of "quiet diplomacy."
Hammarskjold now has per-
sonal representatives stationed
in Jordan and Laos. Despite
strong objections from the
Ethiopian Government, the sec-
retary general intends to ap-
point an ambassador to Somalia
when it becomes independent in
July 1960. An official who
mediated a dispute between Thai-
land and Cambodia may return to
that area.soon. The large corps
of UN employees engaged in var-
ious economic and observer func-
tions throughout the world pro-
vides Hammarskjold with a re-
serve for future assignments.
Spinelli Mission in Jordan
Hammarskjold's first ex-
periment of using a UN diplo-
matic mission staffed by UN
civil servants was the "UN
presence" in Jordan, headed by
the Italian diplomat, Pier P.
Spinelli. This experiment en-
couraged the secretary general
to apply the principle in other
areas.
On 21 August 1958 the Gen-
eral Assembly asked the secre-
tary general to make practical
arrangements for buttressing
the pledge given by the Arab
states to end subversive inter-
ference with each other. Hammar-
skjold appointed Spinelli, then
in charge of the Geneva office
of the United Nations, as his
special representative in
Jordan to as in the imple-
mentation of the General As-
sembly's resolution.' The mis-
sion functioned primarily as
a clearinghouse: for complaints
of subversive activity against
Jordan by the United Arab Re-
public.
By September 1959 the situa-
tion in the area had so improved
that the mission was virtually
phased out, -but Ambassador Spin-
elli maintains his post in Amman.
At the request of the Jordanian
Government, Spinelli has on ac-
casion served as a general po-
litical adviser.
Special Representative in Laos
Hammarskjold's appointment'
of a special representative in
Laos without a specific mandate
from the United Nations and
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
despite strong Soviet objections
is his boldest initiative to date.
The UN mission now is function-
ing and making plans for a broad
economic development program,
and a permanent coordinator of
UN activities in Laos has been
appointed.
In September 1959 Laos ap-
pealed to the UN Security Coun-
cil, accusing North Vietnam of
overt aggression and request-
ing UN intervention. To avoid
a Soviet veto, the West on 8
September resorted to a pro-
cedural maneuver in the coun-
cil by establishing a four-na-
tion subcommittee to "study
the Laotian situation." The
subcommittee subsequently went
to Laos for a month and sub-
mitted a report to the council
on 5 November 1959. This re-
port has never been acted on
by the Security Council.
Hammarskjold, meanwhile,
searched for some legal way to
establish a personal represent-
ative in Laos over the objec-
tions of the USSR, which main-
tained that the problem was
within the purview of the In-
ternational Control Commission
established by the Geneva ac-
cords. Hammarskjold went to
Laos and on 15 November appoint-
ed Sakari Tuomioja of Finland--
the executive secretary of the
UN Economic Commission for
Europe--as his "personal repre-
sentative in Laos" until he Over the next few years
Hammarskjold can be expected to
SECRET
could find a permanent replace-
ment. several UN officials
were borrowed from the UN Eco-
nomic Commission for Asia and
the Far East to assist Tuomioja.
Hammarskjold now has ap-
pointed as the permanent "co-
ordinator for UN activities in
Laos" Eduard Zellweger, a Swiss
who was UN economic adviser to
the government of Libya. Zell-
weger is scheduled to arrive in
Vientiane about 15 March.
Although the Soviet press
severely attacked Hammarskjold
for his action in Laos,the UN
mission was established and
will be useful as a precedent.
In December 1958 the seri-
ous deterioration in relations
between Thailand and Cambodia
led Hammarskjold to appoint
Baron Beck-Friis, former secre-
tary general of the Swedish For-
eign Ministry, as a special
mediator. In January 1959 Beck-
Friis succeeded in restoring
some measure of calm. Since
Thai-Cambodian relations are
once again worsening, Hammar-
skjold is considering sending
Beck-Friis back to the area and
may appoint a permanent repre-
sentative there.
Out look
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
continue to establish UN mis-
sions in other areas, particu-
larly in Africa, where he re-
cently made a month-long tour.
In his 1959 report on the work
of the United Nations, Hammar-
skjold reiterated his view that
the evolution of the office of
the secretary general into spe-
cial diplomatic and operational
functions is a new approach to
international cooperation. He
added that this practice has
provided means for smooth and
fast UN action.
He declared: "This is of
special value in situations in
which prior debate on a pro-
posed Course of action
might increase the diffi-
culties that such an action
would encounter, or in which
a vacuum might be feared
because members might prove
hesitant, without fuller
knowledge of the facts or
for other reasons, to give
explicit prior support in
detail to an action, which,
however, they approve in
general terms or are will-
ing should be tried with-
out formal commitment."
EASTERN EUROPE'S ATTITUDE TOWARD COMMUNIST CHINA
Communist China exercises
greater influence in the East-
ern European satellites today
than it did during the Stalin
era, and there are signs it
hopes to expand this influence.
There is considerable inter-
est in Chinese practices and
ideology in satellite party
circles, primarily among the
Stalinist elements. The "hard-
liners," however, even in those
satellites where they control
the party machinery, are not
known to have challenged Mos-
cow's authority by appealing
to Peiping.
Moreover,there is no firm
evidence that the Chinese are
pursuing a policy which would
challenge Soviet hegemony over
the satellites, as they appar-
ently were willing to do in
1956. Nevertheless, the So-
viet leaders must be aware
that as Communist China in-
creases its material strength
and attempts to play a greater
role in bloc affairs--particu-
larly as an independent ideo-
logical center--the tendencies
already seen in Eastern Europe
to find precedents in Peiping's
policies could seriously threat-
en bloc unity, especially during
a succession crisis when there
might be instability in the So-
viet leadership.
Satellite interest in Com-
munist China,even where it has
assumed substantial proportions,
has been seen primarily in en-
thusiastic expressions of ap-
proval by party leaders and
functionaries for Peiping's pol-
icies; in only a few cases has
this interest carried over to
adoption of some Chinese Com-
munist practices. Variations
in viewpoint among the satel-
lites over Soviet and Chinese
differences have been observed
with respect to foreign policy,
ideology, and Chinese domestic
programs.
Chinese Goals in Eastern Europe
The Chinese have claimed
that their experience in "social-
ist construction" has "signif-
icance" for other states. Nu-
merous delegations have been
exchanged between the satel-
lites and Communist China in
recent years,and the satellite
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4 February 1960
delegations, lavishly enter-
tained, have written enthu-
siastic reports of what they
have seen. The chairman of
the Chinese National People's
Congress, Liu Shao-chi, is
planning to visit Eastern Eu-
rope--the first visit there by
an important Chinese Communist
political figure since 1957.
On his trip Liu may solicit
what support he can for Pei-
ping's foreign policy objec-
tives, even those not wholly
compatible with Moscow's.
There is also some evidence
that the Chinese leaders prob-
ably have been criticizing So-
viet policies to European col-
leagues. Mao, for example, re-
portedly told Czechoslovak par-
ty leader Novotny last Octo-
ber that Khrushchev "betrays"
Peiping when "he shakes hands
with China's archenemy."
Impact on Satellite Population
On the whole, Chinese ex-
periences have made little im-
pression on the people of the
satellite nations, although the
excesses accompanying the com-
mune experiments are known to
have aroused popular dread in
East Germany, and some Polish
writers have been openly crit-
ical of the communes.
Publicity efforts by Pei-
ping, such as tho highly touted
cultural and industrial exhibit
shown in Bucharest and other
Rumanian cities in 1959, did
not draw large crowds. All the
countries have publicly praised
China from time to time, but
there has been no substantial
popular support for Chinese
methods. The Chinese friend-
ship societies in the satellites
have not been very effective.
Impact on Satellite Regimes
China's ideological inno-
vations probably form a signif-
icant divisive factor in bloc
politics, but the Chinese so
far seem to have relied on let-
ting the facts--as interpreted
by Peiping--speak for them-
selves.
The greatest interest in
Peiping's policies and attitudes
has been shown by the East Ger-
man, Czechoslovak, and Bulgarian
governments. Pro-Peiping elements
in the leadership of these sat-
ellites are impressed by Commu-
nist China's speedy economic
development, by the elan which
is believed to exist throughout
the Chinese Communist party,
and by the vigorous control ex-
ercised in mobilizing the masses.
The frequently expressed offi-
cial view, however, is that
while Chinese methods are fine
for China, they should not be
applied in the country of the
particular satellite spokesman
expressing the opinion. Rumania
is the satellite adhering clos-
est to Moscow's line.
.The East German Case
Pro-Chinese sentiments are
relatively strong in the East
German party, and this sympathy
for China reportedly led to
differences of opinion between
Khrushchev and East German par-
ty boss Ulbricht. Ulbricht's
regime publicly sided with the
Chinese on the Sino-Indian bor-
der dispute, despite prior So-
viet indication that this con-
troversy should be treated cau-
tiously. Considerable pro-Chi-
nese commentary has. appeared
in East German publications dur-
ing the past year, especially
in October and November. This
was probably due both to the
self-confidence generated by the
East German regime's tenth an-
niversary celebrations and to
the celebrations in Peiping of
Communist China's first decade.
The differences between
Ulbricht and Khrushchev over
Communist China have stemmed at
least in part from the ideo-
logical affinity of Ulbricht
for Mao, and the enthusiasm of
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CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
East German Communists for the
communes experiment. Such dif-
ferences, coupled with Ulbrichth
and Mao's anxiety over Khru-
shchev's "detente" policy, may
have intensifed the misgivings
the German leader has had since
Khrushchev won out over the
hard-line elements in the Soviet
Union.
Bulgaria
Developments in Bulgaria
also provide an interesting ex-
ample of how Chinese practices
can affect a satellite. During
the last few months of 1958 the
Bulgarian regime, while seeking
to implement Soviet directives
for "socialist construction,"
showed great enthusiasm for
Peiping's methods. By early
1958, however, Bulgaria began
to hew closer and closer to
what it believed to be Soviet
views.
In the early days of Bul-
garia's "great leap," the Chi-
nese program provided inspira-
tion for the Bulgarian leaders,
who were faced with some prob-
lems similar to China's--low
production, a generally back-
ward economy, and a desire to
be among the first in "building
socialism." Chinese practices
appear to have been borrowed
for Bulgaria's "voluntary labor"
program and formation of large
agricultural units. The lat-
ter, although initially termed
"communes" in isolated in-
stances, lacked certain basic
features of the Chinese model:
the military aspect, communal
living, and control over most
industries located on the unit's
territory.
The adoption of some of
Peiping's ways apparently con-
tributed to the confusion in
the Bulgarian party, the highly
unrealistic economic planning,
and frictions in the party's
top leadership. Even today there
remain certain elements in Bul-
garia who greatly admire Chinese
practices.
Bulgaria's "experimentation"
and its associated interest in
the Chinese model, however, have
gradually given way to a less
controversial posture, indicat-
ing that the Bulgarians, and
probably the Kremlin, felt that
a retrenchment was necessary.
An added factor may have been
the economic report for 1959,
which showed considerable prog-
ress but fell embarrassingly
short of any "leap forward."
Current Trends
Since the Chinese tenth an-
niversary celebrations, there
have been few satellite ref-
erences to controversial issues
relating to China. East German
Premier Grotewohl retracted his
statement on the Sino-Indian
border issue during a special
press conference on 9 November,
pleading that he was poorly in-
formed because his country has
no diplomatic relations with
India. In addition, Deputy
Premier Rau, while recently in
China, paid lip service to Mos-
cow's leadership in the bloc and
skirted the issue of communes.
A trend toward conformity
on the "detente" issue has also
been noted, although this does
not necessarily reflect loss of
sympathy for China. Some satel-
lites. have sound internal rea-
sons for opposing a detente--
reasons which are similar to
China's--but they have gradual-
ly, and apparently sometimes re-
luctantly, suppressed them in
order to conform to the Soviet
viewpoint.
Soviet Control
Satellite deviations in
general on issues involving
Peiping do not appear to have
been serious enough to warrant
open and visible Soviet pres-
sure to conform. Nor can these
deviations in themselves be
regarded as an immediate threat
to Moscow's continued hegemony
in Eastern Europe. However,
the evident attraction Peiping
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
4 February 1960
holds for some satellites is
indicative of the state of
mind of many important offi-
cials in these countries, and
this must be disturbing to Mos-
cow,
The satellites generally
appear to be allowed some in-
dependence in their internal
affairs, but there is a po-
tential danger for the USSR in
this policy. While it may make
for a better relationship, it
also permits continuing dif-
ferences to exist within the
bloc, even if under the surface.
At a time of crisis in the So-
viet leadership, these dif-
ferences probably would erupt
into the open. Whereas in 1956
they took the form of revolt,
in the future they could induce 25X1
some satellites to look more
and more toward Peiping as a
source of leadership.
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% i I"U =M I IAL
t C CRE T
-SEC flEC. TT'
CONFIDENTIAL`
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