CURRENT INTELLLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A002600060001-8
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• Document Creation Date: December 20, 2016
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• Publication Date: October 27, 1999
• Content Type: SUMMARY

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CONFIDENTIAL
iii ~r
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO.4/ -
OCI NO. 0405/60
18 February 1960,
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
CONFIDENTIAL'
[I DECLASSIFIED 25X1
State Dept. review completed _ ' , ' CLASS. CHANGED To: TS S Lq)
NEXT REVIEW DATE: /g91L
19 DATE: J I f&Q REVIEWER:
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
NUCLEAR TEST TALKS . . . . . . . . . . . . . . . . . . . . Page 1
In formally rejecting the American proposal for a
limited treaty, the Soviet delegate, in a counterproposal,
has moved to divide the Western delegations, by adopting
an earlier British suggestion for temporary control meas-
ures, provided the West agrees to a small fixed quota of
on-site inspections of suspected nuclear explosions. The
Soviet concession accepts, within+, the fixed-quota limita-
tion, the more liberal American criteria for initiating
on-site inspections, making eligible almost any unidenti-
fied seismic event. Moscow probably believes that this
move will make it increasingly difficult for the United
States to continue its opposition to the fixed-quota pro-
posal advanced last winter by Prime Minister Macmillan.
2
FRANCE'S NUCLEAR TEST . . . . . . . . . . . . . . . . . . Page
France appears ready to press ahead with a broad
nuclear weapons fabrication and test program, including
one or two additional atmospheric tests before Khrushchev's
arrival in Paris on 15 March. World reaction to the 13
February test has been almost entirely unfavorable, rang-
ing from cool "no comment" by some of Fkanoe's Western
allies to violent criticism by some of the Asian and Afri-
can states. Ghana and Morocco underlined their protests
by diplomatic and economic sanctions. Soviet propaganda
has been highly critical and disparaged the test weapon
as "primitive." Khrushchev, while "regretting" the test,
said it would not affect the summit conference or the
current negotiations in Geneva. 25X1
KHRUSHCHEV'S PRE-SUMMIT MANEUVERS . . . . . . . . . . . . Page 6
A new formula put forward at the recent pre-summit
strategy meeting with bloc leaders by Khrushchev, and
subsequently outlined publicly by East German Premier
Grotewohl, calls for two basically similar peace treaties,
one between the West and Bonn and the other between the
bloc and East Germany. Khrushchev will elaborate on this
procedural variation at the summit in pressing the West
to negotiate a German peace treaty
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
PART I (continued)
MIDDLE EAST HIGHLIGHTS . . . . . . . . . . . . . . . . . . Page 8
Iraqi Prime Minister Qasim has given another jolt to
the Iraqi Communists by dismissing the pro-Communist min-
ister of agrarian reform. The orthodox Communist faction
in Iraq continues to campaign strongly, with Moscow's
support, to get the Qasim regime to recognize it as.a:.
party after the initial rejection of its application for
legal status. Although there are no signs that Tel Aviv
intends to make any military moves at this time, the Is-
raelis have warned that they will raise the Suez Canal is-
sue by sending ships to seek passage "from time to time."
NOTES AND COMMENTS -
KHRUSHCHEV IN INDIA AND BURMA . . . . . . . . . . . . . . Page 1
The public welcome accorded Khrushchev in India from
11 to'16 February fell far short of that received during
his earlier visit in 1955 or that given President Eisenhower
last year. The visit was marked by a lack of public enthu-
siasm and marred at its conclusion by rising criticism of
some of Khrushchev's more extreme statements. Khrushchev
nevertheless gained some support from Nehru in the final
communique for the positions on total disarmament and
"peaceful coexistence" which he will champion in coming
negotiations with the West. The Burmese Government and
people have accorded Khrushchev the minimum welcome con-
sonant with the dictates of protocol. In contrast, elab-
orate preparations were made to greet him in Indonesia,
where he received a warm, if not spontaneous, reception.
TENTH ANNIVERSARY OF THE SINO-SOVIET ALLIANCE .
Peiping's treatment of the tenth anniversary of the
Sino-Soviet treaty of alliance on 14 February reflects
the conviction of the Chinese leaders that the relation-
stip is indispensable to Peiping. At the same time, the
anniversary propaganda shows the two allies still in dis-
agreement over the best political tactics to be pursued
toward the United States.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
PART II (continued)
CARIBBEAN TROUBLE CENTERS . . . . . . . . . . . . . . . . Page 5
New Panamanian demonstrations, possibly more violent
than those of November 1959, may follow the action.ofthe
US Congress declaring its opposition to Panama's desire
to fly its flag in the Canal Zone. In Cuba, the rapidity
with which Castro is moving toward closer ties with the
Soviet bloc and intensifying controls over business, fi-
nance, labor, and news media is creating a sense of des-
peration among middle,-and upper-class Cubans. In the
Dominican Republic, Trujillo appears to have about an
even chance of remaining in power through the end of 1960,
and 'U 7S i n:f hu.e n c e there will probably decline under any
succeeding regime, since many dissidents resent past US
support for the present government. 25X1
KHRUSHCHEV REVAMPS SOVIET PARTY UNIT . . . . . . . . . . Page 7
Recent information indicates that the important Bu-
reau for the RSFSR, a key unit in the Soviet party adminis-
tration which has been headed by Khrushchev since 1956,
has been quietly revamped during the past year. Apparently
only five of the twelve members appointed in 1956 remain.
Party presidium member Averky Aristov, as Khrushchev's
second-in-command on the bureau, is in effect the party
chief of the largest and most important of all the Soviet
republics in ke
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personal following.
YUGOSLAVIA'S RELATIONS WITH THE BLOC . . . . . . . . . . . Page 9
Despite indications that Khrushchev has recently sought
increased Yugoslav support for his foreign policies, par-
ticularly concerning East Germany, neither he not Tito
seems willing to make the concessions necessary for a real
improvement in relations or even for significantly expanded
cooperation in the foreign policy sphere. There has been
some easing in Belgrade's relations with the East European
satellites, but Communist China continues to attack Yugo-
slavia as a "renegade" state.
BLOC STRESSING CLOSE TIES WITH GUINEA . . . . . . . . . . Page 10
The USSR and the five European satellite countries
which have trade agreements with Guinea have succeeded
in diverting a largo portion of Guinea's foreign trade
from its traditional Western trading partners. The USSR
has underscored its desire to strengthen political and
economic ties with Guinea by announcing that Khrushchev
will visit there later this year. Moscow has begun imple-
mentation of its $35,000,000 economic and technical coop-
eration agreement with preparations to establish a voca-
tional school accommodating 2,5000 students in Conakry.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1$ February 1960
PART II (continued)
GROWTH OF MEDIUM AND SMALL INDUSTRY IN COMMUNIST CHINA . . Page 11
Communist China's medium and small industrial plants,
after inauspicious beginnings, are developing into an
important component of the industrial establishment, par-
ticularly in the coal, iron, steel, and cement industries.
The so-called "backyard" operations popularized in 1958
have been abandoned, but the regime in 1959 emphasized
construction. of comparatively modern facilities of medium
size to allow fuller use of scattered resources and to
supplement the output of major producers. The program
has a number of advantages and can be expected to remain
for some time a feature of Chinese industrial development.
SINO-INDIAN BORDER DISPUTE . . . . . . . . . . . . . . . . Page 13
The diplomatic stalemate between India and Communist
China on the border question has been broken as a result
of Nehru's invitation to Chou En-lai to meet with him in-
formally in New Delhi in March. Nehru's suggestion is a
significant-"shift from his previous insistence on certain
preconditions to such talks, but he strongly reasserted
that formal negotiations are "not possible" on the basis
of China's position that the entire border is undelimited.
Nehru's willingness to confer with Chou will be viewed by
the Chinese as a concession. Chou probably will agree to
talks this spring, but the site may be subject to further
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RELATIONS BETWEEN BHUTAN AND INDIA . . . . . . . . . . . . Page 14
India's influence in Bhutan is being expanded slowly
despite historic Bhutanese suspicions and the ruling fam-
ily's policy of restricting contacts with the outside
world. Sino-Indian border problems have led New Delhi
to step up economic aid and to plan for the military de-
fense of this former British protectorate.
TUNISIA . . . . . . . . . . . . . . . . . . . . . . . . . Page 15
Tunisian President Bourguiba has recalled for consul-
tation his ambassadors assigned to NATO capitals, probably
preliminary to a new move to enlist NATO assistance in
persuading France to evacuate Bizerte. Not desiring to
add to the problems of President de Gaulle, now preoccupied
with Algeria, Bourguiba postponed his popular "battle for
Bizerte"--which was to have begun on 8 February--but again
emphasized, that Tunisia's goal is to see the French out of
the base.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
PART II (continued)
POLITICAL TRENDS IN AUSTRIA . . . . . . . . . . . . . . . Page 16
The highlight of the congress of the Austrian People's
party on 11 and 12 February was Chancellor Raab's resigna-
tion as party chairman, and this may mark the beginning of
a decline in Austria's successful postwar experiment in co-
alition government. Raab has been his party's most power- 25X1
ful personality, and expectations that he will retire from
political life in a year or so are in keeping with other
indications of the party's dissatisfaction with its 14-
year-old alliance with the Socialists.
BRITISH TRADE UNION TROUBLES . . . . . . . . . . . . . . . Page 18
The 5-percent interim wage increase awarded British
railway workers on 12 February marked a setback to the
chancellor of the exchequer's anti-inflation program.
Increasing militancy among the trade union membership
over wages and other disputes could endanger Britain's
controlled economic expansion program and in the long
run hurt the Conservative government's standing.
PATTERNS AND PERSPECTIVES
THE USSR AND THE CUBAN REVOLUTION . . . . . . . . . . Page 1
In the nearly 14 months since Castro's revolutionary
forces took over in Cuba, the Soviet bloc's attitude has
changed from cautious approval of the government to opti-
mism regarding the opportunities the situation presents
for the advancement of Soviet interests in Latin America.
The sending of Mikoyan to Havana indicates the importance
Moscow now attaches to its relations with Cuba. The USSR's
extension of substantial credits and agreement to buy more
than three times its previous average annual purchases of
Cuban sugar are ample evidence of the Soviet intention to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
PART III (continued)
exploit the Castro government's "neutralism," anti-Ameri-
canism, and desire for economic independence. The resump-
tion of diplomatic relations is to be discussed by the two
countries. One of the USSR's principal assets in Cuba is
the local Communist party, which has been able to ac uire 25X1
considerable influence.
COMMUNIST CHINA'S ETHNIC MINORITIES . . . . . . . . Page 5
Communist China has 35,000,000 non-Chinese people--6
percent of the total population--who make up the ethnic
minorities which occupy some 50-60 percent of China's
land area. The application since 1958 of "leap forward"
economic programs, especially the communes, in minority
areas is Peiping's strongest move to strengthen its he-
gemony over these peoples and to facilitate exploitation
of the minerals and farmland in their areas. Other than
in Tibet, little armed opposition.can be expected to the
Communist programs.
Page 10 25X6
THE TURKISH ECONOMY 1959-1960 . . . . . . . . . . . . . . Page 13
Turkey's economy, although still far from healthy,
has improved substantially since the Western-backed
$359,000,000 stabilization program was adopted in August
1958. Now, however, Prime Minister Menderes, who may
call for elections this year, has included in his 1960
budget several politically inspired and inflationary proj-
ects. Menderes' policy of development regardless of costs
came close to wrecking the national economy two years ago.
The ability of Turkey's allies to apply pressure in sup-
port of the stabilization program in the coming months
has been weakened by Ankara's increasing tendency to deal
bilaterally and to bypass Western re tonal economic organ- 25X1
izations.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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In a move to divide the
Western delegations, the Soviet
delegate at Geneva on 16 Febru-
ary formally rejected the recent
American proposal for a limited
test ban treaty and offered to
accept a set of temporary stand-
ards for detecting underground
nuclear explosions, provided the
West agrees to Khrushchev's pro-
posal favoring a fixed number of
on-site inspections of suspected
nuclear explosions each year.
Adopting suggestions along
the lines put forward by the
British delegate on 15 January,
the Soviet plan calls for tem-
porary control measures during
the approximately two to three
years needed for setting up the
inspection control system, and
in effect accepts, within the
fixed-quota limitation, the
Western contention that almost
any unidentified seismic event
should be eligible for an on-
site inspection. Under the So-
viet proposal, the control or-
ganization would, during the
two- to three-year period, de-
velop and make more precise the
number of criteria for sending
out inspection teams.
The British delegate had
asked Soviet delegate Tsarapkin
on 15 January whether the Soviet
Union could agree to Western
criteria for dispatching inspec-
tion teams if the West were to
accept the quota proposal. The
Soviet delegate said the British
question deserved "careful atten-
tion" and remarked that it could
"possibly" provide the way for
resolving the technical impasse.
Moscow may have believed
that the British suggestion
could lead to a formula to ban
all testing "temporarily" until
a satisfactory system for detect-
ing and identifying small under-
ground explosions is developed,
after which the ban would become
permanent. In presenting its
new plan, the USSR probably be-
lieves that it will divert the
negotiations from the American
proposal for a partial treaty
and effectively promote the So-
viet position favoring an initial
ban on all testing.
After the presentation of
the American plan for a partial
treaty on 11 February, the Soviet
delegation at Geneva moved immedi-
ately to discredit it by posing
a series of questions designed
to portray the American proposal
as a "conspiracy" to permit the
resumption of nuclear testing.
Tsarapkin charged that the pro-
posal not only sanctioned a re-
sumption of tests but "legal-
ized" it, and strongly implied
that the United States had plans
to resume testing of small nu-
clear weapons. Hinting that once
tests were resumed they could
not be limited, he charged that
other states might have differ-
ent weapons development programs,
necessitating tests in "other
environments which they would
be free to carry out."
Before introducing his coun-
terproposal on 16 February,
Tsarapkin charged that after 15
months the talks had been close
to agreement on a comprehensive
treaty until the "180-degree
American shift." Calling the US
move a "serious and dangerous
step backward," he put forward
his new proposal "to overcome
this serious obstacle." He
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CURRENT ' INTELLIGENCE WEEKLY SUMMARY
18 FebruarT 1960
avoided giving the Soviet view
of what "specific quota number"
should be adopted, stating that
the idea should first be agreed
to "in principle."
In debate with the British
delegate, he attempted to draw
the British into an admission
that London's position differed
significantly from the United
States' view as to the advisa-
bility of testing during the
present negotiations. He
charged that the difficulties
in the negotiations were-caused
by the inspection issue, '?on
which the USSR had accepted
the principle proposed by the
British prime minister."
Moscow probably believes
that its firm rejection of the
American plan, coupled with its
concession to the Western tech-
nical position, will make it
increasingly difficult for the
United States to continue its
opposition to the Soviet scheme
for a small, politically deter-
mined, annual quota of inspec-
tions, particularly in light
of British support of the gen-
eral con
FRANCE'S NUCLEAR TEST
France appears ready to
press ahead with a broad nuclear
weapons fabrication and test
officials have a ready referred
publicly to plans for advanced
nuclear and thermonuclear weap-
ons. National production of
highly enriched U-235, which de-
pends on the expansion of a
gaseous diffusion plant now under
construction, is unlikely before
1963.
Although France lacks instru-
ments for measuring underground
tests, there are indications
Paris is actively investigating
underground testing. The un-
expectedly violent international
reaction to the first French
shot may accelerate a decision
to change over to underground
testing.
Official Western reaction
has been slight and generally
cool, with only West German
Chancellor Adenauer suggesting
that the French test im-:
proves the Western defense
posture.
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CURRENT INTELLIGENCE WEEKLY $ RY
18 February 1960
African and Arab Reaction
Independent African states,
which had sought unsuccessfully
to forestall the French testing
program by mobilizing African
and world opinion against it,
were the most intense in their
adverse reaction when the long-
planned explosion finally oc-
curred. In addition to reflect-
ing genuine fear of the possible
physical effects of the blast,
this revealed again the depth
of anti-French sentiment latent
in many parts of the continent.
In Accra,Prime Minister
Nkrumah, whose regime has long
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exploited the test issue as
part of its drive for leader-
ship of the growing bloc of
independent African states,
announced that, "as a first
step," he was freezing the assets
of French companies in Ghana--
unofficially estimated at $14,-
000,000--until the effect of
the Saharan testing program on
Ghana's population becomes
known. Nkrumah's move appears
to have been patterned after
Cairo's similar action at
the time of the 1956 Suez
crisis and may have been
directly encouraged by the
UAR ambassador.
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The American ambassador in
Accra believes Nkrumah may, at
some point, even sever diplo-
matic relations with Paris over
the bomb issue. Meanwhile,
Ghana's government-controlled
press is continuing an unre-
strained campaign of incitement
against France and to some extent
also against the United States
and Britain for allegedly sup-
porting De Gaulle.
Elsewhere in Black Africa,
the reaction has so far appar-
ently been more moderate, al-
though Nkrumah's move against
French assets has been hailed
by nationalist elements in
still dependent Nigeria and
Sierra Leone. Liberia's Presi-
dent Tubman was scornful of
Nkrumah's action and made light
of the French test, but will
probably be anxious to keep in
step with prevailing African
opinion and may yet adopt a
harsher line toward France.
Morocco, which claims a
large portion of the western
Sahara where the French test
occurred, has summoned home
its ambassador in Paris and
announced the abrogation of a
1956 accord under which the
governments agreed to coordinate
their policies and France was
allowed to represent Morocco
in certain countries where
Rabat maintains no envoy. These
measures followed'sharp anti-
French outbursts by nationalist
elements, especially spokesmen
for the opposition Istiqlal
party, which on 15 February
sponsored a partially successful
general strike in. protest .
Morocco, as well as Tunisia,
where press criticism Of France
has so far not been accompanied
by any official statement or
action, can be expectedto;attenpt ;
to use unfavorable domestic and
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',interua,tional reaction to the
French test in their
campaigns to hasten evacuation
of remaining-French military
forces.
The UAR is exploiting the
issue by broadcasts in.Swahili,
to East Africa which play on
widespread African fears of the
effects of fallout. Some popu-
lar demonstrations occurred in
Libya where, at the official
level, Prime Minister Kubaar
denounced France in his 15 Feb"
ruary speech opening parliament.
The Spdanese Government lodged
a formal protest through the
French ambassador in Khartoum.
At the UN, Morocco and the
UAR, 'supported ' 'by - Tunisia and
Ghana, appear to be pushing with-
in the Asian-African group for
either an early,Security Council
meeting or a special session of
the General Assembly, which last
November called on France to
forego its planned tests. Asians
are reported cool to either al-
ternative, however, and the
Africans appear uncertain among
themselves as to how the issue
should be handled and what action
should be sought.
Aaiau.-Re ction
In Asia, where comment has
been more limited, the sharpest
reaction has been in Japan. In
a formal protest to France, the
Kishi government expressed its
"deep regret" that Paris had
ignored the UN resolution., All
Japanese political parties and
newspapers condemned the test.
Strc pgly critical press
rea,ctiph in Indonesia suggests
that, Djakarta would' be under
cofSiderable pressure to
participate in any joint ;action
ag*tnat Euafce which mighti da
velop within the,.Asian-African
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CURRENT INTELLIGENCE WEEKLY 8 Y
18 February 1960
framework. Foreign Minister
Subandrio indicated on 16 Feb-
ruary that his government would
make a formal protest.
Reaction in India has been
similarly critical. Prime Min-
ister Nehru on 17 February called.
France's disregard of world o-
pinion "a matter of great -.re-
gret. "
Sino-Soviet Bloc Reactions
The Soviet leaders appar-
ently do not intend to use the
French test as a pretext for re-
voking their 29 August pledge
that the USSR would not resume
tests unless the "Western powers"
did so, although Mikoyan raised
this possibility before leaving
Cuba, stating that "it is a prob-
lem which must be discussed."
Renouncing its pledge at
this time would cripple the
Soviet position at Geneva which
insists on a comprehensive ban
on all nuclear testing, in con-
trast with the new American
proposal for a limited treaty,
not including cessation of small
underground experiments. Over
the past few months, Soviet of-
ficials have stated
that their pledge covered only
American and Britis& tests.
The official TASS statement
warned that, "if nuclear explo-
sions should continue," the USSR
could not "fail to draw the prop-
er conclusions"; this was prob-
ably intended to maintain intact
the long-standing public position
of opposition} to any further
testing.
Khrushchev has carefully
avoided committing himself,
although he did say in India
that the test would not affect
the summit conference or the
negotiations in Geneva. Khrush-
chev's statement that he believes
De Gaulle favors a relaxation of
international tension reflects
Moscow's policy of avoiding any
moves which would jeopardize its
relations with France prior to
Khrushchev's visit and the summit
meeting.
According to Western press
sources, Mikoyan-stated in Oslo,
while remarking on the French
tests, that Communist China may
ultimately get nuclear weapons
if there is no nuclear test ban.
He was purposely vague however,
as to whether such arms would be
supplied by the Soviet Union or
whether China--as has often been
repeated by Moscow--would ulti-
mately develop such weapons
itself. Peiping is heavily
critical of the testing program,
linking it to "US plans for a
nuclear war."
Soviet propaganda has em-
phasized the health danger of
the French testing program,
warning of the fallout not only
over nearby countries but also
over Italy, Greece, Yugoslavia,
Czechoslovakia, and France
itself. Moscow's propaganda com-
bined denunciation of the French
with dispatagement of the test .
device itself as."primitive" and
"unwieldy, " citing 'press r~.ports"
that the weapon is "not suitable
for delivery by aircraft or any
other means."
The European satellites have
taken a similar= line. Most
countries mention alleged Ameri-
can assistance to the French in
enabling them to carry out the
test, with East German media
alleging that Bonn hel ed also.
The United States is blamed for
delaying the Geneva test ban
talks, the successful conclusion
of which, it is asserted, would
have prevented the French test
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
KHRUSHCHEV'S PRE-SUMMIT MANEUVERS
During the recent meeting
of bloc leaders in Moscow, a
concerted line of action was
developed for the pre-summit
period. Khrushchev is reported
to have put forward a number of
new moves to be undertaken by
the East Germans in an effort
to strengthen his position in
pressing the West fora German
peace treaty and all-German
negotiations. He suggested a
new formula for concluding two
basically similar peace treaties,
one between the West and Bonn
and the other between the bloc
and East Germany.
This variation was out-
lined publicly by East German
Premier Grotewohl on 10 Febru-
ary. He explained that "both
peace treaties" would be basi-
cally of the same content, settle
the same problems, and "lead
to the same results." He added
that "such a procedure would
do away with the objections
which are being raised by some
governments" to concluding a
peace treaty with both German
states. Pravda on 11 February
emphasized these aspects of
Grotewohl's speech.
Khrushchev reportedly plans
to elaborate on this formula at
the summit conference and again
to urge negotiations on the
principles of a peace treaty,
which could then be amplified,
possibly in a four-power com-
mission. East German party boss
Ulbricht's public suggestions
along these lines on 7 February
were reportedly made at Khru-
shchev's request to set the
stage for introducing the sub-
ject at the summit as an East
German initiative.
Moscow has moved to gain
the adherence of monbloc powers
to a separate peace treaty with
East Germany. During Soviet
President Voroshilov's visit to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
India, Deputy Foreign Minister
Kuznetsov pressed Nehru for
recognition of East Germany,
and the West German Embassy in
New Delhi believes Khrushchev
also intended to raise this
problem with Nehru. The Turk-
ish ambassador to Thailand
has informed American officials
that he has learned Moscow is
also approaching Cambodia and
possibly other neutralist coun-
tries on this question. The
Thai foreign minister has con-
firmed that Moscow recently
had indirectly sounded out
Bangkok.
armed forces only if West Germany
would do likewise.
Charging that the Adenauer
government has chosen the road
leading to war, Rapacki said
that Poland's defense effort
depends on the scale of 'lest
German armament. He reiterated
that the "German issue" is the
main international problem in
East-West relations and remains
the key subject in Polish foreign
policy.
Touching briefly on the
Warsaw Pact conference in Mos-
cow two weeks ago, Rapacki said
discussions on means of easing
international tensions and fur-
thering peaceful coexistence
took precedence over defense
matters.
Poland has sought this past
week to maintain pressure on
West Germany to accept all-Ger-
man negotiations on armament
limitations in Germany, by tylrig.
cutbacks in its forces to a re-
duction in West German forces.
Polish Foreign Minister Rapacki
on 16 February declared that
Poland would follow the Soviet
Union's example and reduce its
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PART I OF IMMEDIATE INTERf
In a speech at Cologne on
15 February, West German Chan-
cellor Adenauer made his strong-
est public appeal to date for
Western firmness in regard to
the issue of Berlin. He said
the "crucial" factor was whether
the free nations, "move all the
United States," will-abide by
their "word." Declaring he had
used such strong language pur-
posefully, Adenauer added that
to give in on the Berlin issue
would be "the end."
the right of "!sue'--determination."
He reiterated his stand of
recent weeks that Germany, like
other nations, should be granted
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CURRENT INTELLIGENCE WEEKLY SUNKARY
18 February 1960
Iraq
The Iraqi Communists have
suffered their second jolt in
two weeks as a result of the
dismissal on 16 February of
pro-Communist Ibrahim Kubba,
minister of agricultural re-
form and acting minister of
oil affairs, from the Qasim
cabinet. Kubba's dismissal
followed a long struggle be-
tween Kubba and the anti-Com-
munist minister of interior,
Brigadier Yahya, for control
of the agricultural reform
program. Yahya, a confidant of
Qasim, has been made acting
minister of agrarian reform in
addition to his other duties.
Another extreme leftist, Min-
ister of Planning Shaybani,has
taken.over the oil portfolio
on an acting basis.
The dismissal may presage
an attempt by the Qasim regime
to lay the blame for agricul-
tural disasters and disorgani-
zation at the door of Kubba
and Communist-dominated peasant
organizations which he favored.
However, the general disorgani-
zation of agriculture is likely
also to furnish the Communists
with a handle to criticize the
Qasim regime. Discontent in
the countryside will probably
rise in any case, since 1960
crop prospects appear unusual-
ly poor.
The orthodox Communist
faction, whose application for
legal recognition as a party
was turned down last week, has
resubmitted its application and
changed its name from the Com-
munist party of Iraq to the
Union of the People. Apparent-
ly fearing a second rejection,
the Communist press has begun
a campaign for a "national
front" and is claiming support
from the Communist parties of
the USSR, Lebanon, Syria, Bul-
garia, and Czechoslovakia. Mean-
while, another Communist front
group'has tendered its applica-
tion for recognition. This
group, calling itself the Re-
publican party,includes the
pro-Communist director general
of oil affairs, Abd al-Fattah
Ibrahim, among its leaders.
Moscow has reacted to Qa-
sim's rejection of the applica-
tion of the "orthodox" Iraqi
Communists by extensive press
and radio publicity of this
faction's "platform," an indi-
cation of Moscow's concern over
Qasim's recognition of the
splinter group. Nevertheless,
the USSR is continuing its ef-
forts to expand its ties with
the Qasim regime, as exempli-
fied by the announcement on 10
February that the USSR is will-
ing to help Iraq by building a
330-foot-high hydroelectric
dam on the Tigris and several
water control projects in
the Tigris-Euphrates basin.
The expectation that sen-
tences will be handed down
next week to those ac-
cused of attempting to as-
sassinate Qasim may have
accelerated plans among army
elements to overthrow his
regime.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
Arab League
Unconfirmed press reports
furnished virtually all the
news on the progress of the
sessions of the Arab League
which began in Cairo on 8 Feb-
ruary. When the initial meet-
ing revealed wide differences
of opinion among the delegates,
closed sessions were decided
on and continued through 15
February. The delegates appear
to have split over a UAR-sup-
ported plan for some form of
Palestine "entity." A three-
man committee representing Mo-
rocco, Libya, and Saudi Arabia
has been formed to create "a
Palestine entity,"' involving
a charter for Palestine, ad-
mission of Palestine to the
Arab League, and a permanent
Palestinian delegation to the
United Nations.
The Jordanian representa-
tive, Foreign Minister Nasir,
left Cairo for Amman on 16 Feb -
ruary for consultations. The
Jordanian chargd in Cairo has
stated that the plan for Pales-
tine as outlined in the press
would be unacceptable to his
government. King Husayn has
already offered Jordanian
citizenship to all Palestinian
refugees, and is unalterably
opposed to the creation of a
separate state likely to be
under UAR influence.
The positions of other rep-
resentatives are unclear, but
it seems certain that no prac-
ticable program for a solution
of the Palestine problem will
emerge, and it is likely that
intensified inter-Arab antago
nism and bickering bay be the
chief result.
Israel-UAR
The Israeli-Syrian Mixed
Armistice Commission, which
met on 16 February without the
Israelis, condemned Israel for
ISRAEL AND THE ARAB STATES
SELECTIVE ARMAMENTS INVENTORY*
TANKS
MISC
FIELD ARTILLERY
ANTITANK
ROCKET
ANTIAIRCRAFT
MORTARS
LIGHT
MEDIUM
HEAVY
ARMORED
VEHICLES
SELF
PROP
75.105
MM
106-155
MM
SELF
PROP
57.15
MM
LAUNCHERS
RECOILLESS
20-40
MM
75.130
MM
81-160
MM
UAR EGYPT
40
335
92
819
8
161
266
142
333
1400
465
138
428
UAR SYRIA
300
551
9
121
200
114
177
143
433
62
477
TOTAL UAR
40
635
92
1370
17
282
4661
256
510
1543
898
200
905
JORDAN
130
453
116
18
36
104
459
120
154
IRAQ
36
205
125**
476
419
16444
52
129
179
363
51
348
LEBANON
40
20
140
18
18
97
66
12
96
YEMEN
30
124
61
34
135
10
106
26
SAUDI ARABIA
36
18
114
81
6
15
1784
114
32
638
TOTAL ARAB
152
1038
217
2677
78
916
706
344
893
4072
1667
321
2141
ISRAEL
175
366
16
1413
199
584
92
124
385
5599
914
92
1534
*Certain obsolete items have been omitted.
**Centurion tanks, although medium-gunned, are classified as heavy (by weight)
in this inventory.
If Including 32 tube 130mm truck mounted rocket launchers in both countries.
44 Including 13 8-inch howitzer US and 24 16-tube 132mm truck mtd rckt launchers.
~ Including 24 82mm AT SPG 82.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
FIGHTERS
Jet Piston
BOMBERS
Jet Piston
TRANSPORTS
Jet Piston
OTHER
Jet Piston
TOTAL
178
15
70
3
48
10
70
394
50
5
18
104
177
228
15
70
3
53
28
174
571
25
7
2
18
52
19
8
11
35
73
20
3
4
21
48
30
3
19
52
76
37
12
6
12
70
213
368
82
82
14
80
46
337
1009
UAR
EGYPT
UAR
SYRIA
TOTAL
UAR
JORDAN
SAUDI
ARABIA
LEBANON
YEMEN
IRAQ
TOTAL
ISRAELI AND ARAB AIR AND NAVAL CRAFT
UA
EGYPT
UAR
SYRIA
TOTAL
UAR
IRAQ
LEBANON
JORDAN
SAUDI
ARABIA
TOTAL
ARAB
DESTRO
-ERS (DD)
PATROL
VESSELS
(PF PS PC PY
MOTOR
TORPEDO
BOATS (PT)
MINE
CRAFT
(MSCJ(MSF)
SUBS
(SS)
AMPHIB.
CRAFT
8(1)
(3)
8(1)
1(1)
13
4
Figures in parentheses indicate inactive ships (both nonoperational
and those undergoing repairs).
* In addition there are 6-10 PT under construction in France and Italy.
* * One submarine, although transferred to the Israeli Navy, is still in
the UK.
128
violating Syrian air;-space and
attacking the village of Tawa-
f iq on 1 February. The UN
chairman of the commission voted
with the Syrian representatives.
Israel boycotted the meeting
because it claims sovereignty
over Tawafiq and the rest of
the demilitarized zone and ac-
cordingly denies that the com-
mission has any juriddiction
over the zone.
The dispute now may move
into the UN Security Council
if Secretary General Hammar-
skjold decides to call a coun-
cil meeting on his own authority..
He has expressed a willingness,
if necessary, to do so., Prior
to such a meeting, however,
there probably would be a "re-
affirmation" of the UN posi-
tion on the status of the de-
militarized zpne, perhaps in
the form of a letter from Ham-
marskjold to Israel and the UAR.
The UAR, however, is fear-
ful of a resumption of the con-
flict. There is no evidence of
Israeli preparations for any
large-scale military action,al-
though the latest incident along
the border, on 12-'February when
two Israelis were killed, has
again raised the prospects of
reprisals. Israeli Chief of
Staff Laskov is quoted previous-
ly as having threatened new
moves if the Syrians "start
anything else."
According to an Israeli
Foreign Ministry official, Is-
rael has no intention of re-
laxing the dispute over Israeli
shipping via the Suez Canal, de-
spite the unloading of the Inge
Toft and its departure, from Port
Said on 15 February after Al-
most nine months of detention.
"From time to time," the offi-
cial said, other ships with
cargoes from Israel will appear
at Port Said under conditions
of the formula Hammarskjold
arranged with the UAR last fall.
Such tests assertedly will be
made "as a matter of principle"
and in order to divert Nasir's
attention from Israeli use of
Eclat and the Gulf of Aqaba.
The Israelis presumably also
expect to benefit diplomatical-
ly and to embarrass Nasir by
keeping the canal issue alive.
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CURRENT INTELLIGENCE WEEKLY SUNJEAMY
16 February 1960
NOTES AND COMMENTS
The public welcome accorded
Khrushchev in 'ndia from 11 to
16 February fell far short of that
received during his earlier
visit in 1955 or that given
President Eisenhower last year.
Although there was little public
enthusiasm and considerable
criticism of some of Khrushchev's
more caustic statements, the
Soviet premier did gain some
support from Nehru in the final
communique for the positions on
total disarmament and "peaceful
coexistence" which he will
champion in coming negotia-
tions with the West.
The Burmese Government and
people have accorded Khrushchev
the minimum welcome consonant
with the dictates of protocol.
In contrast, elaborate prepara-
tions were made to greet him
in Indonesia, where he received
a warm, if not spontaneous, re-
ception.
Visit to India
Khrushchev probably hoped
he would receive in India the
same thunderous acclaim with
which he was greeted in 1955
and that his visit would thus
offset somewhat the effect of
President Eisenhower's trip
last year. The crowds which
greeted the Soviet premier, how-
ever, were relatively small and
were unenthusiastic.. The in-
terest of the Indian masses may
well have become exhausted by
the parade of world statesmen to
their country and by the recent
lengthy visit by Voroshilov and
several other Soviet delegations.
Khrushchev's glum and dispirited
appearance on the first to days
of the visit may have reflected
his dissatisfaction with the per-
functoriness of the public wel-
come.
Some Indian officials and
the press deplored Khrushchev's
use of neutral India as a "cold-
war" battleground. Some members
of Parliament apparently re-
sented his preaching of Marxist
ideology and his emphasis on the
merit of a one-party political
system. His attacks on the
West, including criticism of
American aid as a "dole" and
his description of the American
economic system as a "lame
horse," were not well received,
and his boasting of Soviet mili-
tary strength lessened the im-
pact of his mission of peace
and his stated willingness to
disarm.
Perhaps most discouraging
to the Indians was Khrushchev's
inability to help solve the
border dispute with China. Gov-
ernment leaders must have real-
ized that direct intervention
by Khrushchev would be most un-
welcome in Peiping, and~there-
fore they probably did not ex-
pect much; the Indian press,
however, echoing public senti-
ment, had expressed great hopes
for the visit. Khrushchev did
not mention China publicly until
the very moment of his departure
when, at the prodding of news-
ment, he said he hoped India and
China could solve the dispute
peaceably.
It was apparent throughout
the visit that Chinese actions
in Tibet and clashes on the
Indian border have left a resi-
due of suspician in India re-
garding bloc faith in the prin-
ciples of peace and coexistence.
The good will generated in India
by Soviet neutrality on the
Tibetan border issue and by So-
viet expressions of hope for a
peaceful solution apparently
was not increased by the visit,
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CURRENT INTELLIGENCE WEEKLY gtMXBY
18 February 1960
and, because of Khrushchev's
failure to make any specific
gestures toward such a solution,
may actually have been lessened.
The communique issued on
16 February did satisfy some of
the political aims of Khru-
shchev's good-will mission.
Nehru noted Khrushchev's per-
sonal contributions to a less-
ening of world tensions, cou-
pling his role with that of
President Eisenhower,, and ex-
pressed appreciation of Soviet
disarmament proposals and mili-
tary cutbacks. He also supported
a cessation of nuclear tests and
a prohibition of thermonuclear
weapons, and commented favorably
on the remarkable advances of
Soviet science. Thus India is
again on record as approving a
number of important Soviet foreign
policy positions and propaganda
themes.
Rangoon Visit
As in India, there was only
a minimal public turnout to greet
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18 February _ .1960
Khrushchev when he arrived in
Rangoon on 16 February, in
striking contrast to the tumul-
tuous welcome accorded him dur-
ing his first trip there in 1955.
The President, prime minister,
and cabinet met him at the air-
port, extending all the essen-
tial courtesies--but no more.
Although the largest English-
language daily's editorial ad-
vice to the Burmese people to
"lock up your daughters and bury
the silver" was the most un-
friendly note struck in the
press,. none, except the Commu-
nist papers, displayed any
warmth.
The visit was practically
imposed on Burma by Khrushchev's
public bid last January for an
invitation. He probably hoped
to counter the present disen-
chantment of the Burmese Gov-
ernment and people with the So-
viet Union by the force of his
personality. The Burmese, how-
ever, are still smarting from
Soviet Embassy strong-arm tac-
tics in preventing the defection
of a military attache last May,
from the expose of Soviet Em-
bassy clandestine activities
reported by defector Kuznache-
yev, and from the flouting of
the Burmese courts by TASS cor-
respondent Kovtunenko, defend-
ant in a libel suit. Therefore,
while polite to the visitor,
they have been cool to his blan-
dishments.
Burma has also been disil-
lusioned with substandard Soviet
imports and with Soviet technical
aid projects, which have been ex-
cessively costly and not suited
to Burmese needs. Since Premier
Ne Win is in a lame-duck capacity
awaiting ' the. installation of U
Nu in April, no agreement on
bloc economic aid can be expected.
With the return of U Nu, however,
a better climate for Burmese-
Soviet relations may be estab-
lished. U Nu is more inclined
to accept bloc aid than is Ne
Win and, unlike Ne Win, prefers
loans to grant aid. Khrushchev
may be looking during this visit,
therefore, to long-term gains
and may not be overly unhappy
with his poor reception.
Indonesian Preparations
come wherever he goes.
In contrast to India and
Burma, Indonesia made elaborate
preparations to greet Khrushchev.
Sukarno reportedly sent buses
to the provinces to bring in
crowds and requested local em-
ployers to give their workers
time off with pay to greet the
Soviet leader. Soviet flags
and enormous smiling Khrushchev
portraits were displayed in the
streets a day early. The army
is taking special security pre-
cautions, and the combined ef-
forts of the government and the
large Indonesian Communist party
assure an enthusiastic public wel-
TENTH ANNIVERSARY OF THE SINO-SOVIET ALLIANCE
Pieping's treatment of
the tenth anniversary of the
Sino-Soviet treaty of alliance
on 14 February reflects the
conviction of the Chinese lead-
ers that the treaty's advantages
far outweigh any disadvantages.
Pieping's radio coverage was
five times that of Moscow's.
At the same time, the anniversary
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CURRENT INTELLIGENCE WEEKLY SUMMY
18 February 1960
Writing in Iz-
vestia on 14 February,
the chairman of the
Soviet Committee for
External Relations
stated that about 11,-
000 Soviet specialists
had been sent to Chi-
na since 1950, and
that more than 7,000
Chinese engineers and
skilled workers had
been given technical
training in the USSR.
Soviet First
Deputy Premier Mikoyan
pointed to one aspect
of Soviet help for
which China apparently
does not pay--Soviet
know-how. Replying
to a question concerning
the role of the USSR
in aiding China manu-
facture aircraft and
develop its industries,
Mikoyan told a Cuban
audience that the USSR
"gave" the Chinese
"free" the "latest ad-
vances" of science and
Khrushchev and Mao in Peiping, October 1959. technology and sent
propaganda shows that the two the best scientists and engineers
allies are still in disagree- I to its ally.
went over the best tactics to
be pursued toward the United
States.
The Chinese clearly regard
continued, long-term Soviet
support as essential for Chi-
na's programs for economic
growth. Ambassador Liu Hsiao
told a group of high-level So-
viet officials at the Chinese
Embassy reception in Moscow
that the alliance is a "reli-
able guarantee of the success-
ful building of socialism in
China," and politburo veteran
Chu Te said that the 292 large-
scale construction projects
which the USSR has helped and
will help China to build form
"the core and sinew of. China's
industrial construction."
The Chinese, ' while in ef-
fect conceding Soviet superior-
ity in the economic and scien-
tific field, feel that Peiping's
role in influencing general
bloc policy toward the West
should approach Moscow's in im-
portance. Peiping's comments
on the anniversary stress that
the alliance of China and the
USSR has become the "key element"
in the present world situation
and the "center" of bloc soli-
darity, whereas most Soviet
commentators do not imply so
much importance to Peiping's
place in the alliance.
People's Daily this year
stated on 14 February that both
"China and the USSR forcefully
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CURRENT INTELLIGENCE WEEKLY SUUARY
18 February 1960
safeguarded the security of,
all the socialist countr1e0!;
in last year's anniversary
statement People's Daily,
credited the USSR with a some-
what more important role-in
this task.
These implicit assertions
of China's growing importance
in the alliance suggest that
Peiping intends to offer advice
on more than intrabloc rela-
tions--as it did in 1956 re-
garding Poland. The Chinese
leaders in the past year or so
seem to have become bolder in
giving Moscow unwanted advice
on how to handle relations with
the West, or at least in dis-
senting from Soviet policies.
People's Daily, in this year's
anniversary editorial, did not
mention "complete agreement"
between the two allies on in-
ternational problems, whereas last
year's editorial did.
Ambassador Liu Hsiao in
Moscow attempted to gloss over
foreign policy differences with
the statement that the Chinese
people "resolutely endorsed
and supported all efforts of
the Soviet people for bringing
about a detente," but he went
on to criticize the "peace
game of the United States."
Soviet Ambassador Chervo
nenko mentioned the communes--
an "organizational form of agri-
culture"--as one factor which
has contributed to the success
of Chinese economic efforts.
Although qualified, this is the
first favorable reference to
China's communes ever made by
a Soviet official at a public
gathering.
The Chinese do not disagree
with the USSR on principles,
but only on tactics. That is,
the Chinese leaders agree with
Moscow that the future should
and will belong to "socialism"
and that the bloc states must
seek jointly to expand their
influence. They disagree with
Moscow's policy of "peaceful
contacts," preferring a vigorous
attack on the United States as
the "archenemy" of the bloc.
People's Daily on 14 February
cited militantly anti-US
Moscow Declaration of 1957,
which Mao helped to draft, as
the "guide" to the international
Communist movement; Moscow, how-
ment.
ever, has been silent on the
current importance of this docu-
CARIBBEAN TROUBLE CENTERS
Panama
Panama's desire to fly its
flag in the Canal Zone and its
resentment of US congressional
rejection of this aspiration
may bring about new anti-US
demonstrations, possibly more
violent than the outbursts of
last November. University stu-
dents, civic groups, and labor
organizations are planning to
stage a new sovereignty march
into the zone to express their
resentment.
Although the plans and
timing for demonstrations have
not been announced, 1 March
appears a likely date. All
shops and offices will be closed
to celebrate National Constitu-
tion Day, and this will be the
peak day of the annual pre-
Lenten carnival celebrations.
However, student groups, idle
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18 February 1960
since examinations ended on 15
February, or other ardent na-
tionalists may launch demon-
strations at any time. The
flag issue and other Panamanian
complaints about US canal
policies are receiving heavy
,attention during the present
heated political campaign.
Panamanian and American
officials have indicated grow-
ing concern over the magnitude
The rapidity with which
the Castro regime is moving
toward close ties with the So-
viet bloc and intensifying its
controls over business, finance,
labor, and news media is creat-
ing a sense of desperation among
middle- and upper-class Cubans.
Some of them indicate that they
may turn to armed opposition.
They lack effective organization
The Caribbean Area
' elize
British, Honduras
yTI~GUA
DJADELOUPE
and intensity of the anti-US
feeling. They believe new
demonstrations would probably
receive much broader public
support than the November in-
cidents. Panamanian Government
spokesmen, while promising to
do everything possible to dis-
courage new demonstrations,
have warned that the National
Guard would intervene only if
Panamanian property were en-
dangered. Administration
leaders fear that repressive
action might transform an anti-
US outburst into an all-out
attack on the government.
and leadership, however, and
have no means of influencing
the masses, most of whom still
favor Castro.
On the other hand, some
progovernment elements, while
declaring their continued sup-
port for Castro, have boldly
proclaimed their opposition to
Communism and to Soviet influ-
ence in Cuba. The anti-Commu-
nist students who rioted after
Mikoyan had placed a wreath
at a Cuban hero's statue on 5
February also proclaimed their
loyalty to Castro. The influential
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:18 February 1960
Cuban weekly Bohemia, a fervent
Castro backer, carried a hard-
hitting article on 14 February
attacking the Soviet exposition
in Havana for presenting a one-
sided picture of life in the
Soviet Union.
Dominican Republic
The 30-year-old dictator-
ship of Generalissimo Rafael
Trujillo appears to have about
an even chance of surviving
this year. The regime's end,
when it comes, will probably be
sudden and violent, although
there is some chance that mili-
tary elements with middle-class
civilian backing might be able
to preserve order. The return
of exile groups, many of which
are Communist influenced, would
pose a threat to the stability
of any post-Trujillo government.
In any event, US influence in
the Dominican Republic is likely
to decline after the fall of
Trujillo, since many dissidents
resent past US support of him.
The Generalissimo, who
resents the anti-Trujillo state-
ments of Puerto Rican officials
and the US embargo of arms for
his forces, recently attacked
the Puerto Rican policies of
the United States. On 11 Feb-
ruary, the rubber-stamp Dominican
Senate passed a resolution con-
demning the US "aiolation of
human rights" in the detention
of Puerto Rican nationalist
Albizu Campos and referring to
Puerto Rico as "one of the last
vestiges of colonialism in
America."
Recent information in-
dicates that the important
Bureau for the RSFSR, a key
unit in Soviet party adminis-
tration headed by Khrushchev
since 1956, has been quietly
revamped during the past year.
Apparently only five of the
twelve members appointed in
1956 remain. The reorganiza-
tion is part of a series of
personnel shifts which Khru-
shchev has carried out in par-
ty and government bodies over
the past four years.
The RSFSR Bureau acts as
a junior presidium and sec-
retariat for party activities
in the Russian Republic--larg-
est and most important of the
major subdivisions of the So-
viet Union. Unlike the other
republics, the RSFSR does not
have its own central committee
but is administered directly
by the central party organization.
The bureau was created in
February 1956 at Khrushchev's
STAFF DEPARTMENTS
BUREAU FOR THE RSFSR
CENTRAL COMMITTEE,CPSU
(1 FEBRUARY 1960)
DEPARTMENT
Party Organs M. T. Yefremov
Propaganda & Agitation V. P. Moskovsky
Agriculture G. 1. Vorobyev
Industry & Transport S. A. Baskakov
Science, Schools, & Culture N.D. Kazmin
Administrative, Trade,
& Finance Organs
Soviet Russia
Full Member, Central Committee, CPSU
Member, Central Auditing Commission, CPSU
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18. ,February 1960
FEBRUARY 1956
CHAIRMAN
N.S. Khrushchev
DEPUTY CHAIRMAN
N. 1. Belyayev
MEMBERS
N. G. Ignatov
I. V. Kapitonov
A. P. Kirilenko
F.R. Kozlov
M. A, Yasnov
A.M. Puzanov
V.M. Churayev
BUREAU FOR THE RSFSR
CENTRAL COMMITTEE, C P S U
1st Secretary, CC, CPSU
Also Premier, USSR
(since March 1958)
Secretary, CC, CPSU
1st Secretary, Gorky Oblast,
1st Secretary, Moscow Oblast
1st Secretary, Sverdlovsk Oblast
1st Secretary, Leningrad Oblast;
RSFSR Premier
RSFSR 1st Deputy Premier
Head, Department of Party
Organs for the RSFSR
Head, Department of Agriculture
for the RSFSR
A. B. Aristov (added March 1956) Secretary, CC, CPSU
P.N. Pospelov(added'March 1956) Secretary, CC, CPSU
A. B. Aristov
L.N. Yefremov
P.N. Demichev
A. P. Kirilenko
I.V. Spiridonov
D.S. Polyansky*
M.A. Yasnov
M. T. Yefremov
P.N. Pospelov
Full Member, Central Committee, CPSU
Candidate Member, Central Committee, CPSU
Member, Central Auditing Commission, CPSU
Full Member, Presidium, Central Committee, CPSU
Candidate Member, Presidium, Central Committee, CPSU
*Tot definitely identified as members but thought to be by virtue of their other positions.
00216 A 18 FEBRUARY 1960
behest to "provide more con-
crete and effective leadership"
for the republic. Membership
on the bureau is not a full-
time job brit is held simultane-
ously with other assignments.
It was originally composed of
leading party and government
officials of the republic as
well as those central party
secretaries who concentrated
on Russian affairs. This or-
ganizational scheme has been
retained.
The new members have been
drawn from the same full-time
jobs as their predecessors on
the bureau. For example, Leonid
Yefremov, party chief in the
Russian Province of Gorky, now
is a member of the RSFSR Bureau,
as was Nikolay Ignatov when he
held the Gorky post.
Appointments to the bureau
are apparently made by Khru-
shchev personally and are not
publicized. Officially, the
bureau is a unit of the party
central committee and presum-
ably should be composed of its
members. However, bureau mem-
bers Petr Demichev and Ivan
Spiridonov, party chiefs in
Moscow and Leningrad, rose to
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18 February 1960
prominence after February 1956,
when the central Committee was
picked. Although they are in
line for election to the central
committee at the next party
congress in 1961, their ap-
pointment to the bureau before
being formally elected to the
central committee reflects
their high standing in Khru-
shchev's esteem.
The structure of the work-
ing staff of the bureau, organ-
ized in six departments and
an editorial board of the re-
public newspaper Soviet Russia,
has remained the same as orig-
inally set up in 1956. Within
the past year, however, the
heads of the Departments of
Party Organs, Agriculture, and
Administrative, Trade, and Fi-
nance Organs have been changed.
Khrushchev's manifold ac-
tivities probably restrain him
from actual day-to-day super-
vision of the bureau, with the
result that the deputy chair-
man, presidium member Averky
Aristov, has become, in fact,
the party chief of the RSFSR.
From this vantage point, Aristov
may be able to develop suffi-
cient following among the pro
fessional party functionaries
to make him a strong contender
eventually to succeed Khrushchev.
YUGOSLAVIA'S RELATIONS WITH THE BLOC
Despite indications that
Khrushchev has recently sought
increased Yugoslav support for
his foreign policies, partic-
ularly concerning East Germany,
neither he nor Tito seems will-
ing to make the concessions
necessary for a real improvement
in relations or even for sig-
nificantly expanded cooperation
in the foreign policy sphere.
The Yugoslav regime be-
lieves the cold war is ending
and will be replaced by a period
of intense economic competition
between East and West in which,
Belgrade fears, its political
importance would be reduced and
its economic growth retarded.
In an attempt to adjust to this
new situation, the regime is
trying to improve its relations
with members of both Eastern
and Western economic groupings,
without, however, sacrificing
any of its basic policies.
It was apparently for this
purpose that Yugoslav Vice Presi-
dent Vukmanovic-Tempo visited
Moscow from 6 to 26 January.
His trip, however, apparently
resulted largely in an exchange
of opinions and an exploration
of Soviet intentions. Khru-
shchev probably sought more
active Yugoslav support for his
policies in the Balkans, the
underdeveloped countries, and
an East German peace treaty.
Yugoslavia has generally sup-
ported Soviet foreign policies,
and on 6 February it became the
first nonbloc state to sign an
air transport agreement with
East Germany. Belgrade is also
the only nonbloc state which has
diplomatic relations with East
Germany.
There seems to be opposition
in some quarters in the Sino-
Soviet bloc as well as in Bel-
grade to closer relations. The
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18 February 1960
USSR, East Germany, and partic-
ularly Albania have continued
to belabor Yugoslavia since
Tempo's trip, although polemics
are in a lower key than before
Khrushchev's trip to Albania
last spring--a trip which marked
the beginning of a gradual and
limited improvement in Yugo-
slavia's state relations with
the bloc.
Moscow has rejected a Yugo-
slav request, made during cul-
tural negotiations in late Janu-
ary, for permission to open an
information office in Moscow,
and Peiping showed its antipathy
toward the Yugoslav "renegades"
at the recently concluded Warsaw
Pact meeting in Moscow. Bel-
grade, for its part, has con-
tinued to needle the bloc,partic-
ularly. on satellite economic
failures last year.
Because the bloc, in its
campaign for a missile-free
zone in the Balkans, has been
willing to settle for less than
a Balkan heads-of-state meeting,
greater low-level cooperation
between Yugoslavia and the
Balkan bloc appears possible.
For example, a large Yugoslav
delegation attended a youth
conference in Bucharest from
30 January to 4 February--also
attended by predominantly left-
wing groups from Italy, Greece,
and Cyprus. At this session
the Yugoslavs signed an appeal
for a missile-free Balkan zone
but prevented the appeal from
being directly addressed to the
delegations' governments. While
old differences led to hostile
exchanges between the Yugoslavs
and the Albanians, Bulgarians,
and Rumanians, the Yugoslav
delegation also approved a rec-
commendation. for extensive future
cooperation among Balkan youth
groups--particularly in the
fields of culture, tourism, and
sport.
BLOC STRESSING CLOSE TIES WITH GUINEA
The USSR, underscoring its
desire to strengthen its polit-
ical and economic ties with
Guinea, recently announced that
Khrushchev will visit there
later this year. Another visit
to the Soviet Union by Guinea's
President Tour6--who went to
Moscow and Prague last November--
is also apparently contemplated.
Meanwhile, Moscow has announced
it will establish a vocational
school accommodating 2,500
students in Conakry under the
$35,000,000 economic and techni-
cal cooperation agreement con-
cluded last summer.
Prominent among other bloc
countries endeavoring to enhance
their position in Guinea is
Czechoslovakia, which announced
earlier this month that it would
send 60 medical workers to Guinea
this year. Prague is also plan-
ning to start weekly air service
to Guinea, using impressive IL-
18 turboprop passenger planes.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
In addition to transient
bloc personnel,it is estimated
there are 40 to 50 bloc techni-
cians in Guinea on a long-term
basis, including 30 Czechs and
9 Hungarians. Czech nationals
reportedly were managing the
Conakry airport,training police
personnel, frontier gnards,and
customs employees, occupying
professional positions in the
Ministry of Health, and partic-
ipating in Guinea's informa-
tion service. Budapest pro-
vided personnel to maintain
Conakry's new Hungarian-
equipped transport system and
to teach physical education.
The bloc countries, in ad-
dition,are stressing trade with
Guinea. The Soviet Union re-
cently reported the opening-of
a sea route between Black Sea
ports and Conakry. The USSR and
the five European satellite
countries which have trade a-
greements with Guinea have al-
GROWTH OF MEDIUM AND SMALL INDUSTRY IN COMMUNIST CHINA
Communist China's medium
and small industrial plants,
after inauspicious beginnings,
are developing into an impor-tr-
tadt component of the
industrial establish-
ment. The medium- and
small-scale enter-
prises Peiping pro-
moted in 1959 were
different from the
native, backyard
type of operation so
heavily publicized
the previous year,
when the program of
setting up numerous
small plants to aug-
ment the output of
large producers and
make fuller use of
widely scattered re-
sources emerged. These back-
yard operations have been large-
ly junked, and increased empha-
sis has been put on comparatively
itoderri facilities of medium size .
In 1959, Peiping devoted
37 percent of total state spend-
ready succeeded in diverting
a large portion of Guinea's
foreign trade from its tradi-
tional Western trading partners.
Before the bloc trade
pacts went into effect, only
about 3 percent of Conakry's
foreign trade was with the bloc.
In 1959, however, this figure
rose to almost 50 percent. Es-
sentially, the bloc is exchang-
ing manufactured goods for ag-
ricultural products--the pri-
mary source of Conakry's for-
eign exchange earnings.
The Soviet economic aid
credit is designed to assist
Guinea in constructing indus-
trial'enterprises, developing
agriculture,and expanding its
road network.with Soviet equip-
ment and technical advice. Guinea
apparently will pay its debt in 25X1
agricultural products,thus`raiding
still further its trade with the
bloc.
ing in industrial capital con-
struction to this type of plant.
There were in this category at
the end of the year 1,000 iron
and steel centers, 17,000 coal
mines, 15,000 machine plants,
power stations with a total
capacity of 500,000 kilowatts,
more than 400 plants producing
petroleum from coal, over 100
cement plants, and "many thou-
sands" of chemical, coke,coal-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
dressing, and light industrial
plants. Peiping reports that
these medium and small installa-
tions contributed 56 percent of
the pig iron, 40 percent of the
coal, 35 percent of the steel,
and 14 percent of the cement
produced nationally in 1959.
This performance is viewed as
a vindication of the regime's
faith in the program.
COMMUNIST CHINA: INDUSTRIAL PRODUCTION
(MILUON METRIC TONS)
OUTPUT OF
MEDIUM- AND
SMALL- SCALE
PLANTS
195$ 1959
`CONVERTER- PRODUCED STEEL
CEMENT
348 12.3
N
1959 1959
00216 2
scheduled for the nonferrous
metals, chemical, petroleum, and
electric power industries, where
only the first steps have been
taken.
In the longer run, Peiping
evidently hopes to create a rea-
sonably well-functioning system
in which the simpler plants will
be modernized and made into
PETROLEUM
3.70
While China had some suc-
cess last year in improving la-
bor productivity, utilization of
raw materials, and product qual-
ity in these plants, the per-
formance by no means matched
that of large producers. The
smaller variety of blast fur-
naces, for example, proved only
about half as efficient as the
larger ones, and at least 20
percent of the pig iron from
the small furnaces was not up
to industrial Standards.
Little new small-scale
construction is scheduled for
the iron and steel industry in
1960; plans call instead for
raising technological levels
and further improving efficiency
and product quality. Small-
scale construction, however, is
1959
1e FEBRUARY 1960
larger integrated
works. It is doubt-
ful whether smaller
producers are expected
to account for more
than one third to one
half of the national
output in particular
products for the next
several years. The
11,500,000 tons of
pig iron from small
furnaces in 1959 is
already at the level'
called for from these
units during the Sec-
ond Five-Year Plan
period (1958-62).
Peiping's claims
concerning the advan-
tages of its small-
scale schemes are al-
most certainly over-
stated, especially be-
cause returns are not
complete. Small-scale
plants do have real advantages
in the still-backward country-
side, in that they are compara-
tively easy to build, bring quick
returns, lessen demand on the
transportation system, and con-
stitute a training ground for
technicians and administrators.
On the other hand, these advan-
tages may be offset by higher
operating costs, greater require-
ments of skilled labor, and low-
er quality of output.
For the present, however,
Peiping is committed to the
medium- and small-plant concept,
and these plants can be expected
to continue to play an important
role in Chinese industry during
its present stage of develop-
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PART II NOTES AND COMMENTS
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
SINO-INDIAN BORDER DISPUTE
Diplomatic maneuvering be-
tween India and Communist China
on the border question has been
resumed as a result of Prime
Minister Nehru's invitation to
Chou En-lai to meet with him in-
formally in New Delhi during the
second half of March. Nehru's
suggestion, made in a personal
letter of 5 February accompany-
ing the latest Indian note, is
a significant shift from his
previous insistence that such
talks would be useful only after
preliminary efforts to narrow
the gulf between the Indian and
Chinese positions.
Nehru has felt that his
government was under increasing
pressure, as a result of the
Sino-Burmese border agreement
and Soviet influence, to respond
favorably to Peiping's overtures
for high-level talks. While
conceding in his letter to Chou
that a meeting "might be help-
ful," Nehru nevertheless re-em-
phasized that formal negotia-
tions on a border settlement are
"not possible" unless Peiping
abandons its position that the
entire Sino-Indian boundary
is undelimited.
This caveat probably was
intended not only to preserve
India's bargaining position but
to emphasize that any progress
toward substantive negotiations
would be up to the Chinese. Neh-
ru probably also hoped that such
a stand would give the Indian
Parliament and press less grounds
for criticizing his shift in
position.
Opposition leaders, as well
as all major newspapers in New
Delhi, lost no time in attacking
Nehru's agreement to meet with
Chou without preconditions as
a humiliating "climbdown" and
"reversal" of Indian policy.
Nehru countered initial criticism
by denying any change in his
position and by maintaining
that India's policy always has
been to "meet anybody and
everybody."
Despite Nehru's flat re-
jection of Peiping's claims
as a basis for negotiations,a
meeting of prime ministers
would in effect constitute
negotiations. Such discus-
sions would also provide an
opportunity to explore in-
formally some compromise for-
mula. There have been indi-
cations that New Delhi might
eventually consider ceding
some territory now occupied by
the Chinese in the Ladakh area
of Kashmir in return for a
guarantee of the McMahon line
in Assam, although the govern-
ment may find it expedient to
maintain its present claims
against Peiping and live in-
definitely with the Situation
as it now stands.
The Chinese began putting
out feelers for a high-level
meeting as early as mid-Septem-
ber, probably convinced that
Nehru's uncompromising posi-
tion in public was conditioned
by the angry Indian reaction to
border incidents and that he
might be more tractable in
private. Peiping probably also
felt such a meeting would dem-
onstrate its much touted "will-
ingness to negotiate." In his
letter of 17 December to Nehru,
Chou crystallized the invita-
tion, suggesting the Indian
leader meet with him either in
Peiping or Rangoon.
Nevertheless, despite its
views on the value of a top-
level meeting, Peiping has re-
fused to compromise its own ul-
timate bargaining position or
its prestige by withdrawing
from Indian-claimed territory--
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CURRENT INTELLIGENCE WEEKLY SUNNA Y
18 February 1960
the price Nehru originally set
for talks. Nehru's dropping of
this condition now will be con-
sidered by the Chinese as a con-
cession on his part. Chou prob-
ably will agree to talks this
Recent events along the
Tibetan-Indian frontier, partic-
ularly the skirmishes last fall,
have focused New Delhi's atten-
tion anew on Bhutan. The In-
dian Army reportedly has been
directed to plan for the defense
of Bhutan against possible in-
cursions from the north. New
Delhi is trying to preserve
Indian influence in Bhutan it-
self as well as protect the
position of its own force of
40, 000 to 504 000 men deployed in
Assam and the North-East Fron-
tier Agency.
spring, believing the Indians
can be maneuvered into some
compromise at the conference
table, and may again suggest a
meeting in some third country
Traditionally oriented to-
ward Tibet, both culturally and
economically, the Bhutanese rul-
ing family and large elements of
the population have always been
suspicious of India. Relations
between the two countries are
governed by a 1949 treaty wherein
India took over "guidance" of the
kingdom's "external relations,"
but left internal affairs to the
Bhutanese. New Delhi's inter-
pretation of "external relations"
includes defense.
SECRET
The countries'
formal relations are
conducted through two
channels. One of these
is an Indian political
officer who resides in
Sikkim but travels reg-
ularly to Bhutan. The
other is Jigne Dorji,
a member of the ruling
family who, although
often referred to as
prime minister, func-
tions as ambassador.
at large and resides
mainly in Indian ter-
ritory.
New Delhi allows
the Bhutanese, esti-
mated to number about
700,000, relatively
free access to India,
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18 February 1960
but the number of Indians per-
mitted to stay in Bhutan is
severely restricted by the Bhu-
tanese. This policy is facili-
tated by Bhutan's rough terrain
and primitive communications.
Under the terms of its 1949
treaty, India provides Bhutan
with an annual subsidy of about
$105,000. In addition, over the
past four years, India has pro-
vided a loan of $46,000 and
more than $270,000 in economic
assistance--primarily for steel,
cement, and various types of
equipment. Starting in 1960,
Indian economic aid to Bhutan,
over and above the yearly $105,-
000 subsidy, will be stepped up
to an annual sum of.$147,000--
nearly double the sums expended
in 1958 and 1959. New Delhi has
allotted up to $31,500,000 for
road construction into Bhutan
from West Bengal and Assam dur-
ing the next six years.
Furthermore, an agreement
has been signed whereby India
will construct'a large hydro-
electric plant, the principal
beneficiary of which will be
West Bengal, but which will
utilize portions of, Bhutan's
territory. This plant will cost
about $10,600,000.
the
num er o n ans in Bhutan at
26, most of whom are working on
the road construction program.
There is also a small number of
Indians manning the 20 meteoro-
logical and flood-control sta-
tions which the Indian Govern-
ment, with Bhutan's permission,
maintains in Bhutan. These posts
probably provide India with infor-
as well.
mation of a nonscientific nature
Tunisian President Habib
Bourguiba, probably as a pre-
liminary to a new move to se-
cure the withdrawal of French
forces from Bizerte, has re-
called his ambassadors assigned
to NATO capitals for consulta-
tion. Discussions with his
ambassadors may indicate that
Bourguiba hopes to enlist NATO
assistance in persuading France
to meet Tunisia's minimum de-
mand--a phased withdrawal of
France's 7,000 army, navy, and
air force personnel from Bizerte..
Not desiring to add to the
problems of President de Gaulle,
now. preoccupied with Algeria,
Bourguiba postponed his popular
"battle for Bizerte" which was
to have begun on 8 February.
He nevertheless was emphatic
in declaring that Tunisia's
goal is the eventual evacua-
tion of the French base.
In his radio address re-
garding Bizerte on 8 February,
Bourguiba cited France's formal,
but negative, reply of several
days earlier as proof that Paris
had entered into negotiations
on the subject. He also declared
that conversations were begin-
ning on 8 February to permit
clarification of the French
reply. French Ambassador Boegner
informed the American Embassy
that his call on the Tunisian
.ecretaries of foreign affairs
and defense, coincident with
Bourguiba's broadcast, developed
nothing new but "Was staged for
psychological support of the
President's statement."
Boegner claims that Paris
offered Bourguiba a mutual de-
fense agreement providing for
joint occupation of Bizerte,
which France would recognize
as a Tunisian base. This
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
solution is unacceptable to
Bourguiba as long as the Algeri-
an rebellion remains unsettled.
Boegner apparently believes that
Tunisian officials have been
impressed by De Gaulle's suc-
cess and good faith throughout
the crisis provoked by European
insurgents in Algeria and are
unwilling to increase pressure
on the Bizerte issue.
Bourguiba's statement of S
February probably will satisfy
the Tunisian people for the pres-
ent-. and commits his government
to explore all facets of nego-
tiation to find an amicable set-
tlement of the issue. Neverthe-
less, Bourguiba will attempt to
align support for his point of 25X1
view should be decide to attempt
to place the quests he
UN Securit Council.
POLITICAL TRENDS IN AUSTRIA
The highlight of the con-
gress of the Austrian People's
party on 11 and 12 February
was Chancellor Raab's resigna-
tion as party chairman, and
this may mark the beginning of
a decline in Austria's success-
ful postwar experiment in coali-
tion government. Even before
he became chancellor in 1953,
Raab was his party's most power-
ful personality, and his com-
plete retirement--expected now
in a year or so--would remove
from the scene another of the
political leaders who have made
Austria's unique People's
party - Socialist coalition a
going concern for fourteen
years.
Although ill, 68-year-old
Raab is stepping down in re-
sponse to pressure for a major
"rejuvenation" of the party.
The party has been weakened
since the presidential elections
of 1957, and losses in last
May's voting nearly cost Raab
his parliamentary plurality.
The Socialists' success since
then in consolidating their in-
fluence in government and in-
dustry has led to persistent
demands from within the People's
party for new leaders, a cleanup
of party corruption, and a new
program of "popular appeal."
Predominantly a Catholic
party in which the diverging
interests of its industrialist,
farmer, and worker "leagues"
dictate a need for compromise,
the People's party continued
nevertheless to drift to the
right. The new party chairman,
Alfons Gorbach, is from the
workers' league, but he is a
party hack on good terms with
both the "reformers" and the
"old guard."
The real direction of party
affairs will probably be in the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18'February 1960
hands of the new secretary gen-
eral, Herman Withalm--a young
and energetic associate of Fi-
nance Minister Reinhard Kamitz.
Kamitz declared in a recent
speech that the present coali-
tion "benefits only the Social-
ists" and should be extended to
include the extreme rightist
Liberal party or be replaced by
a one-party--i.e., People's
party--government.
Austrians, however, have
not forgotten the violent con-
flict between the Catholic right
and the Socialist left which
occurred between World Wars I
and II. Catholic-Socialist co-
operation has minimized that
conflict--at.the cost of sub-
ordinating parliament to the
coalition committee. While
some conservatives apparently
,believe that "democracy" and
the future of the People's
party depend on a coalition
"divorce," the electorate has
shown itself skeptical of such
experiments. In both the 1957
and 1959 elections, the Social-
ists were successful with the
charge that the People's 25X1
party not only wanted to win,but
also aspired,to govern alone.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 Febx#ary 1960
BRITISH TRADE UNION TROUBLES
The Macmillan government's
capitulation on 12 February in
granting an interim 5-percent
wage boost to workers of the
nationalized railways in order
to avert a nationwide strike
will encourage further trade
union pressures and increase
the likelihood of serious labor
trouble this year. Widespread
wage concessions could endanger
Britain's controlled economic
expansion program and in the
long run would hurt the Conserv-
ative government's standing.
Following an 18-month
period when virtually no major
wage claims were granted and
prices remained stable, indus-
trial workers now are demanding
both pay raises and a shorter
workweek. As justification for
their demands, they point to
the 6-percent rise in indus-
trial production and the in-
creased profits earned.
Trade union leaders have
sought to divert agitation for
wage increases into a coordinated
drive for a shorter workweek
as a more likely issue to at-
tract public support. Union
members, however, have become
increasingly resentful of this
approach. The clash of interests
has already led the union rank
and file to stage a one-day "un-
official" rail strike and threat-
ens more stoppages of the type
that tend to discredit both the
unions and the Labor party.
The railway award is an
initial defeat within the gov-
ernment for Chancellor of the
Exchequer Amory, who is said
to be almost totally preoccupied
with the danger of inflation
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18 February 1960
resulting from new wage demands.
His determined but so far un-
successful attempt to persuade
manufacturers to reduce prices
and the late January boost in
the bank rate from 4 to 5 per-
cent indicate his concern to a-
void a repetition of the 1957-
58 inflation which brought a
run on sterling.
In the railway award, his
views were overriden by other
Conservative leaders anxious
to avoid labeling the govern-
ment with an anti-union bias.
Presumably these included Home
Secretary Butler, who presided
over the cabinet during Prime
Minister Macmillan's tour 'of
Africa, and Minister of Labor
Heath. Heath has so far quashed
the demand made last month by
several Conservative members of
Parliament that the government
honor its campaign pledge to set
up a royal commission to inves-
tigate trade union practices.
Other Labor tests--including
further railroad workers' demands
--may be handled more firmly by
Macmillan, who in the past has
shown a willingness to risk 25X1
short-term unpopularity to enhance
his Party's lone-rance ing.
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18 February 1960
PATTERNS AND PERSPECTIVES
THE USSR AND THE CUBAN REVOLUTION
In the nearly 14 months
since Castro's seizure of power
in Cuba, Moscow's attitude has
changed from cautious approval
of the new government to opts---
mism regarding the opportunities
the situation presents for the
advancement of Soviet interests
in Latin America.
Prior to First Deputy Pre-
mier Mikoyan's visit, the USSR
had refrained from any blatant
moves to exploit
Castro's anti-Amer-
ican posture and had
instead relied pri-
marily ion' the
strength of the lo-
cal Communists to in-
fluence the regime
toward support for
the Soviet bloc's for-
eign policy objec-
tives. The acceptance
by Mikoyan of the
Cuban Government's
invitation to open
the Soviet scientific,
technological, and
cultural exhibit in
Havana and the large
Soviet trade and cred-
it offer clearly in-
dicate a Soviet deci-
sion to take greater
advantage of the Cu-
ban situation by
identifying the USSR
with Castro's foreign
policy aims.
Political Relations
Moscow's initial caution
in commenting on the victory
of Castro's 26 of July Movement
seems to reflect surprise at'
the sudden collapse of the
Batista regime and uncertainty
regarding Castro's intentions.
In an interview with a Latin
American journalist in October
1958, Khrushchev appeared to
discount Castro's chances of
success by referring simul-
taneously to the "tragic fate"
of Guatemala and the "heroic
struggle" of the people of Cuba
against Batista.
Soviet propaganda media
quickly reported the downfall
of Batista as an event of "mo-
mentous significance" and gave
a general evaluation that placed
the Cuban revolution "on a par
with other recent events of a
similar magnitude in Latin Amer-
ica." A further indication of
CASTRO AND M I KOYAN
Moscow's failure to anticipate
the course of the revolution was
the failure of the Cuban Popu-
lar Socialist (Communist) party
to identify itself with the
Castro movement before the final
moments of the revolt in the
closing months of 1958.
Soviet officials' warnings
to Latin American Communist lead-
ers attending the Soviet 21st
party congress in early 1959
that the Cuban leadership "may
go to the right just like Nasir"
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18 February 1960
show their uncertainty as to
the new regime's future course.
It was not until April, when
the character of the revolution-
ary movement and its tolerant
attitude toward the local Com-
munists became clearer, that
Moscow adopted a more enthusi-
astic tone toward the Cuban rev-
olution, although it still re-
frained from general endorse-
ment of Castro personally.
In August 1959, however,
Castro's removal of puppet Pres-
ident Urrutia--after the Tat-
ter's unexpected speech warning
of the Communist influence--was
declared by both Moscow and Pei-
ping to be a reaffirmation that
Castro represented the "true
aspirations" of the Cuban peo-
ple. In November, Izvestia ap-
peared to put an ideological
stamp of approval on the Castro
regime by describing the revolu-
tion as a national liberation
movement in which the "over-
whelming majority of the Cuban
people participated and in
which the working class and
laboring peasantry took the
most active role."
Despite these signs of ap-
proval, Moscow in 1959 appar-
ently made no overtures to nor-
malize diplomatic relations
with Cuba--broken off in 1952.
The Cuban acceptance of
Mikoyan's broad offer while in
Mexico in November to send the
Soviet exposition to any Latin
American country was probably
interpreted in Moscow as the
occasion for undertaking a more
active policy toward Cuba. The
decision to send Mikoyan to in-
augurate the exposition opened
a new phase in Moscow's policy,
and his visit reflects the
USSR's more active efforts to
increase its influence in the
area. His primary objective
appears to have been to demon-
strate in a dramatic fashion
the availability of Soviet eco-
nomic and political support as
an alternative to dependence
on the United States.
The communique issued at
the conclusion of Mikoyan's vis-
it suggests that extensive po-
litical discussions were held
with Cuban leaders. Diplomatic
relations will probably be re-
sumed within a short time, and
Moscow can be expected to ex-
ploit this as a breakthrough
in Latin America, pointing to
it as an example of the inter-
national relaxation -?of "- ?ten-
sions.
In his speech at the open-
ing of the Soviet exhibition
on 6 February, Mikoyan was un-
reserved in his praise of the
Cuban revolution. He pointed
to "the confiscation--without
any compensation--of all means
of production and land" as part
of the "secret" of Soviet prog-
ress and asserted that, as in
the case of the Soviet revolu-
tion, the Cuban revolution can-
not be exported, "but the force
of example cannot be overcome."
Khrushchev in his address to
the Indian Parliament on 11
February went out of his way
to express Soviet sympathy for
Cuba in its struggle "to safe-
guard its national and economic
independence."
Economic Relations
In the economic field,
the agreements announced in
the 12 February Soviet-Cuban
communique also reflect the
USSR's reappraisal of its at-
titude toward 'then ,Castro gov-
ernment. As these agreements,
which deal with major Cuban
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18 February 1960
exports and imports, are ful-
filled, the. USSR will be able
to achie considerable eco-
nomic fluence in Cuba. The
Sov purchase of nearly
5,000,000 tons of Cuban sugar
ti the next five years, if
carried out, will absorb up to
20 percent of Cuba's sugar ex-
ports in that period. Previ-
ous Soviet purchases, ranging
from 200,000 to 450,000 tons
annually, have accounted for
only 3 to 8 percent of such
exports in any one year.
The USSR has been obtain-
ing about 50 percent of its to-
tal sugar imports from Cuba
and has paid cash for these
purchases. The barter provi-
sions of the new agreement--
only 200,000 tons is to be paid
for in cash each year--will re-
quire Cuba to make substantial
purchases in the USSR. Cuban
imports from the USSR hereto-
fore have been negligible.
During recent months, the
USSR laid the groundwork for
its new economic ties by sugar
purchases carefully timed to
reap considerable propaganda
gains by bolstering the sag-
ging Cuban sugar market and at
the same time to benefit from
low prices on top of which Cuba
granted discounts. Purchases
under the new agreement are to
be made at prevailing world
market prices.
The $100,000,000'economic
aid credit, repayable in 12
years at 2.5-percent interest,
is similar to that rejected by
USSR AND BLOC IMPORTS
OF CUBAN SUGAR
(THOUSAND TONS)
21
3
1955 1956 1957
00215 2
"M111-
1958 1959 (EST) 1960 (EST)
18 FEBRUARY 1960
SECRET
USSR
00 PERCENT OF CUBAN
SUGAR SALES
X6.9
PATTERNS AND PERSPECTIVES
Mexico during Mikoyan's visit
there in November. It is the
usual Soviet offer when no spe-
cific development program has
yet been prepared. The long-
range effect of such a credit
would be further to support the
growth of Cuba's trade with the
bloc. The credit is to be used
during the: next five years to
obtain Soviet agricultural and
industrial equipment in addition
to that received in barter for
sugar. The USSR is also to supply
necessary technical assistance.
In view of the Castro gov-
ernment's failure to obtain mil-
SUGAR PURCHASES FROM CUBA
MILLION DOLLARS
1955
1956
1957
1958
1959(EST)
USSR
36.4
14.2
42.0
14.1
15.0
OTHER BLOC
1.0
3.0
0.6
3.6
NONE
UNITED STATES
293.2
317.3
332.8
382.4
348.8
itary aircraft from western
sources and its expressed inter-
est in obtaining them from the
bloc, Cuban officials almost
certainly pressed Mikoyan for
such equipment. When asked at
a reception on 12 February wheth-
er the USSR would sell planes
to Cuba, Mikoyan replied it
would if they were requested.
While the USSR has taken
the lead in promoting economic
relations with Cuba, both Po-
land and Communist China have
recently purchased 50,000 tons
of Cuban sugar. Czechoslo-
vakia and East Ger-
many also have
shown interest in in-
creasing their trade
and an East German
trade delegation
is in Havana to
negotiate a barter
agreement.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
Chinese Communist activ-
ities in Cuba have been pri-
marily on the ideological and
propaganda fronts. Like all
of the bloc, Peiping lacks dip-
lomatic relations with Cuba,
but especially since early 1959
it has encouraged Cuban and
other Latin American Communists
to turn to it for ideological
guidance, stressing the applica-
bility of Chinese revolutionary
experience to the area. Its
attempts to foster travel to
Communist China and training
for Cuban Communists there have
met with some success. Along
with stepping up the volume of
their propaganda broadcasts to
the area, the Chinese have
opened an office of the off i-
cial New China News Agency in
Havana.
Moscow and the Cuban Communists
The highly organized Cuban
Popular Socialist (Communist)
party (PSP)--17,000 members--
has enjoyed considerable suc-
cess in following the direc-
tives laid down by bloc leaders
during the 21st party congress
in Moscow in early 1959. At
meetings between Latin American
Communists and Soviet officials,
new political strategy was out-
lined which placed greater
stress on the need for increased
coordination among Latin Amer-
ican parties and for more flex-
ible adjustment of tactics to
local conditions.
Particular emphasis was
again given to the creation of
national fronts which could be
exploited to mobilize public
opinion against the United States
and in support of bloc foreign
policies, while at the same time
acquiring a respectable facade
for infiltrating non-Communist
organizations and institutions.
The PSP has openly iden-
tified itself with the princi-
pal goals of Castro's program.
Party members pose as strong
supporters of the revolution.
Taking advantage of the govern-
ment's benevolent attitude
toward the party, the Cuban
Communists have succeeded in
obtaining considerable influ-
ence in the government--par-
ticularly in the military and
economic sectors--and in the
labor movement.
They have, however, exer-
cised great caution by refrain-
ing from openly pushing Commu-
nist ideology and holding their
membership recruitment drive to
a low key. This is probably
considered advisable because
of the party's former close
identification with the Batista
regime, under which it acquired
strength by refraining from ac-
tive opposition to the govern-
ment in return for guarantees
of a favored position, especially
in the labor unions. The PSP
is clearly anxious to avoid
giving the Castro government
cause to take any action re-
stricting the party's free-
dom.
Future Prospects
Soviet leaders probably
realize that international Com-
munism has little attraction
for most Cubans and believe
that the Castro government
wishes to be independent of
Moscow as well as of Washing-
ton. Nevertheless, they ev-
idently now view Cuban devel-
opments as ripe for exploita-
tion in the advancement of So-
viet interests throughout Latin
America.
The USSR intends to take
advantage of Cuba's economic
weaknesses: its dependence on
the sale of sugar, its lack of
investment capital at a time
when the demand for funds is
especially high, and its low
foreign exchange balance.
The Cuban Government's
increasingly leftist orienta-
tion, and its apparent eager-
ness to flaunt its independ-
ence of the United States by
attempting to increase its con-
tacts with the bloc are prob-
ably considered the principal
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18 February 1960
political factors susceptible
to Soviet exploitation.
The Soviet Union will seek
to encourage Cuban support for
its foreign policy objectives.
The 12 February communigdd
stated that it was "the clearly
recorded interest of both gov-
ernments to collaborate active-
ly in the United Nations in
favor of coexistence...." Cu-
ban representatives in the
United Nations last year ab-
stained on the moratorium on
Chinese UN representation and
have already been reported plan-
ning to support Peiping this
year.
The extent of Moscow's ef-
forts in the immediate future
on the political and economic
fronts, including military aid,
will depend, on the one hand, on
the increased opportunities it
sees in the Cuban situation to
enhance its drive to decrease
US influence and raise Soviet
prestige throughout Latin Amer-
ica and, on the other, by the
need it feels to refrain from
actions which would alienate
other Latin American governments
or unnecessarily antagonize the
United States in this period of
"peaceful coexistence" diplo-
macy.
The application since 1958
of "leap forward" economic pro-
grams--especially the communes--
to the 35,000,000 people who
make up Communist China's eth-
nic minorities is Peiping's
most destructive attack on the
individuality of these non-
Chinese groups. In many bor-
der areas, the minorities have
reacted with alarm. While the
Chinese have in some cases
slowed down their program in
deference to minority sensibil-
ities, they show every inten-
tion of pushing through the
consolidation of non-Chinese
areas as rapidly as possible.
Effects on Minorities
The "leap forward" pro-
grams have greatly undercut
the traditional way of life of
the ethnic Chinese as well as
the minorities. This destruc-
tion has been more deeply felt,
however, among the minorities
whose traditions differ greatly
from Chinese culture, on which
the Communist pattern has at
least in part been based. The
minorities occupy 50 to 60
MINORITY
Chuang
Uighur
Hui
I (Yi)
Tibetan
Miao
Manchu
Mongolian
Pu-i
Korean
Tung
Yao
Pai
Kazakh
Ha-ni
Thai
APPROXIMATE
m
7,000,000
3,640,000.
3,559,000
3,250,000
2,775,000
2,511,000
2,418,000
1,464,000
1,247,000
1,120,000
712,000
665,000
567,000
509,000
481,000
478,006
33 other minorities 2625,000
SECRET
percent of China's land area,
but make up only 6 percent of
the population. Most of the
minorities have been helpless
to resist.
The commune program has
sought to resettle nomadic
MAJOR ETHNIC UNOW1115 IN
COM111 NIST CHINA
Total 35;021;
It FEBRUARY 1960
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
herdsmen in prescribed areas
and force them into industry
and agriculture. According to
Chinese statistics, more than
800,000 herdsmen have become
"workers" and more than 2,000,-
000 have become permanent
settlers. Most of these chang-
es have occurred in Inner Mon-
golia, Sinkiang, Tsinghai, and
Kansu; little progress has been
reported in Tibet. Peiping
justifies the changes on eco-
nomic grounds: nomadic life is
said to be disadvantageous both
to animal husbandry and to the
health of herdsmen; most impor-
tantly, for the regime, it is
impossible to carry out capital
construction in pastoral areas.
Chinese propaganda hailing
the progress made by minorities
in discarding "superstitions"
indicates that traditional re-
ligious practices are being
violated, despite Peiping's
avowed policy of respecting
native customs. Chinese Com-
munist practice has generally
been to permit for a time cus-
toms which are harmless, but to
alter those which run counter
to the regime's policies. Food
taboos, animal sacrifices, re-
ligious feasts, and special
holidays are frowned on in many
areas because they impede the
"leap forward" production drives
and impair the effectiveness of
economy measures.
Response of Minorities
In general, minority reac-
tion has been conditioned by the
Mongolian Uighur
Miao Chuang
? Tibetan Others
Manchu-The Moo.ho: o.e dsr,rboud ore. Noah,- Chloo
ood do not hoop "y ddmite "g",
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18 February 1960
degree of control the Commu-
nist authorities have been able
to exercise in a given area.
The most violent reaction oc-
curred in Tibet. The revolt
there last March was the most
serious challenge to Peiping's
In Sinkiang, the full ex-
tent of Uighur opposition to
Communist rule has been diffi-
cult to gauge because of the
scarcity of firm intelligence
on developments there. It seems
likely that serious unrest has
occurred in parts of the region
during the past several years.
The major sources of informa-
tion have been the Chinese Com-
munists themselves, who since
1957 have complained about the
prevalent problem of "local na- 25X1
tionalism" there.
authority in ten years of Com-
munist rule.
The uprising apparently
impressed Peiping with the
urgency of accelerating Tibet's
integration into the Chinese
political and social structure.
Last summer the Chi-
nese began such "dem-
ocratic reforms" as
land redistribution.
The first phase is
scheduled for comple-
tion this spring and
will be followed by
succeeding stages in
the socialization and
collectivization
process designed to
bring Tibet into line
with economic and po-
litical systems in
China at large.
Although Commu-
nist progress in Ti-
bet has been fairly
steady since the re-
Peiping acknowledged in
August 1958 the existence of
counterrevolutionary uprisings
volt, scattered armed Delivery of Tractors to a Sinlflang Farm
resistance continues to hamper I in unnamed parts of Sinkiang
Peiping's efforts. It seems
likely that Tibetan opposition
will continue to slow down the
schedule for development of the
area and impair the regime's re-
lations with India.
and purged local officials. In
1959 the Chinese further ad-
mitted that Sinkiang's 451 com-
munes with their 30,000 mess
halls had been responsible for
the exodus of many natives to
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18 February 1960
the Soviet Union. Opposition
to Peiping's rule in Sinkiang
would seem to be deep-seated,
albeit ineffective in arrest-
ing the Chinese advance.
There has been no known
opposition to socialist re-
form in Inner Mongolia, where
Communist control was consol-
idated even before the Peiping
regime was established in 1949.
Inner Mongolia, in fact, illus-
trates Peiping's most success-
ful technique for the complete
consolidation of a minority
area: saturation of the area
with Chinese citizens. In the
past ten years the ratio of
Chinese to Mongols has in-
creased from three to one to
seven to one. This has been
accomplished both by the mass
migration of Chinese citizens
into Inner Mongolia and by the
incorporation of predominantly
Chinese areas under the juris-
diction of the Inner Mongolian
Autonomous Region.
No unrest has been report-
ed in the Ninghsia Hui Autono-
mous Region or the Kwangsi
Chuang Autonomous Region, Chi-
na's other major minority areas.
Peiping has been less success-
ful with some of the smaller
minority groups, however. Na-
tives along the Burmese border
in southwest China have fled
the country in considerable
numbers. Mass flights became
so prevalent following the in-
troduction of communes that
Peiping reportedly was forced
last spring to postpone the
program in some areas.
Peiping's Intentions
Most of the land occupied
by the minorities is largely un-
productive at present, but it
contains minerals and some
farmland which could be devel-
oped by modern technology.
Wang Feng, senior vice chair-
man of the regime's National-
ities Affairs Commission, writ-
ing in commemoration of Pei-.,
ping's tenth anniversary, pro-
vides the best public state-
ment of the regime's progress
and intentions. He writes that
a "socialist system" has been
installed in areas embracing
95 percent of the country's
minority peoples, Thus only
Tibet and "certain areas of
very small population"--now in
the earlier stage of "demo-
cratic reform"--remain outside
the Communist pale.
Wang confirms that changes
in economic and cultural fea-
tures have become "greater and
faster" in national minority
areas since 1958. This prog-
ress he credits particularly to
the success of the 1957-1958
rectification campaign and to
the "leap forward" and commune
programs.
Wang added that communes
have been established in vir-
tually all minority areas except
Tibet. Most of these are com-
posed of members of several
nationalities; this is espe-
cially true where Chinese live
side by side with non-Chinese.
Wang feels this improves the
"solidarity and cooperation"
between the minorities and their
Chinese neighbors. For the
ethnic minorities, however, it
is this "solidarity" that threat-
ens their individual identity.
Wang leaves little doubt
that Peiping intends to push
through reforms in Tibet and
the few remaining "backward"
areas. Laying the responsi-
bility for opposition to
"peaceful" reformation on "ex-
ploiting and upper-strata"
classes, Wang states that it
will be necessary to "resolute-
ly pulverize" them.
Both Wang's report and one
by Ulanfu, the Mongol chairman
of the Nationalities Affairs
Commission, provide clues to
some of Peiping's working meth-
ods in the minority areas. As
is the rest of China's population,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
the minorities are being sub-
jected to a large-scale cam-
paign to enlist their partic-
ipation in the "leap forward."
Particular emphasis is placed
on training in construction
fields. This is necessary,
according to Wang, because the
key to the development of the
ethnic minorities lies in the
development of modern industry
in their areas.
Peiping also considers it
essential that Chinese man-
power be transferred in large
numbers to western areas in
order to ensure continued Com-
munist control. Many politi-
cal and technical officials
have already been sent there,
as have sizable groups of
young workers and farmers.
Some 200,000 youths moved to
Tsinghai from 1956 to 1959,
and 100,000 are expected to
arrive there annually from
Honan Province. Kiangsu,Hupeh,
and Anhwei provinces sent
100,000 youths and adults to
Sinkiang during 1959. Especial-
ly in Tibet and Sinkiang, army
troops and demobilized service-
men have played a major role
both in enforcing Peiping's
rule and in developing agri-
cultural and industrial pro-
duction.
An important feature of
mass work among the minorities,
as it is elsewhere in China,is
the implementation of a "so-
cialist education" movement.
In Sinkiang and Inner Mon-
golia, which appear to be
taking the lead in this cam-
paign, the emphasis is on
again overhauling the communes
which were set up in 1958-1959.
The problem this time is not
in correcting difficulties re-
sulting from overzealous: im-
plementation of the program
but in criticizing the "capital-
ist thinking" of comparatively
well-to-do peasants and in
overcoming general lack of en-
thusiasm for the communes.
Both party members and the gen-
eral populace are to be subject
to "rectification," but party
documents call for "mild" per-
suasion and education.
During the past ten
years
more than 500,000 ethnic
mi-
nority peoples have
been
en-
rolled as members of
the
Chinese
Communist party and
over
900,000
as members of the Young Commu-
nist League, the party's youth
auxiliary. Over 11,000 students
were enrolled in Communist
China's five nationalities in-
stitutes at the end of 1958,
and more than 26,000 had al-
ready graduated. Despite this
intensive indoctrination, some
Tibetan members of the party
and graduates of nationalities
institutes are said to have
turned against the regime dur-
ing the 1959 revolt.
The Communists appear to
be in a good position to make
further rapid progress in
minority areas. Except in
Tibet, not much opposition can
be expected from the minorities.
What little there is may re-
tard Chinese Communist economic
progress in the hinterlands,
but it probably will not suc-
ceed in weakening Peiping's
control.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
Turkey's economy, although
still far from healthy, has im-
proved substantially since the
Western-backed $359,000,000
stabilization program was a-
dopted in August 1958. Now,
however, Prime Minister Menderes,
who may call for elections this
year, has included in his 1960
budget several politically in-
spired and inflationary proj-
ects which depart from the
economic policies recommended
by the West. The ability of
the Organization for European
Economic Cooperation (OEEC)
and probably the International
Monetary Fund (IMF) to press
Turkey to adhere to the prin-
ciples of the stabilization
program in coming months has
been weakened by disputes be-
tween Ankara and the OEEC as
well as by Turkey's reluctance
to accept economic advice.
In 1958, following almost
nine years of Menderes' policy
of development regardless of
cost, Turkey was close to fi-
nancial chaos despite substan-
tial US aid. Foreign exchange
reserves were virtually ex-
hausted; the Turkish pound,
officially set at 2.8 to the
dollar, was quoted on the black
market at more than 20 to one;
and the government was unable
to make scheduled payments on
its foreign debt, which had soared
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
Imports (CIF)
Invisibles (Net)
Balance on Current
Direct Private Investment
Total Grants
PL 480 Credits
Other Loans and Credits
IMF Transactions
Total Repayments
Balance on Capital Account
Net Change in Foreign Assets Positi
330
-415
33
-11s
10
128
20
56
- 10
period at 3 percent.
To restore price sta-
bility and make Turk-
ish exports competitive,
the government adopted
a de facto currency
devaluation changing
the rate to 9 pounds
to the dollar for most
transactions. Price
controls were largely
eliminated and import
restrictions eased.
Most importantly,
credit was sharply cur-
tailed and new govern-
ment investment re-
stricted.
to about $1.2 billion. Domes-
tic prices were increasing
rapidly, and Turkish exports
were being priced out of world
markets. Exports in 1958 were
only $247,200,000, compared
with more than $345,000,000 in
1957.
Stabilization Program
The Menderes government
reluctantly adopted a program
to eliminate inflationary pres-
sures, ensure a rapid increase
of goods and services in the
domestic economy, establish
an investment program to
strengthen the balance-of-pay-
ments position, and re-establish
foreign trade on a sounder
basis. To enable the Turks to
carry out this program, the
United States took the lead in
persuading the OEEC and the
European Payments Union (EPU)
members and the IMF to extend
credits and aid totaling $359,-
000,000. Of this total the
United States is providing
$234,000,000, the OEEC and EPU
members $100,000,000, and the
IMF $25,000,000.
Turkey also agreed to a
rescheduling of its foreign
debt. An agreement was con-
cluded covering about $440,-
000,000 of private debt--in-
cluding more than $60,000,000
owed to American firms--which
was to be repaid over a 12-year
Accomplishments
In the month following
announcement of the stabiliza-
tion program,economic activity
in Turkey came to a virtual
standstill, but by the end of
1958 the pace of recovery had
picked up. The price control
and currency measures all but
eliminated the internal black
market. Scarce goods reappeared
on local markets, and both 1.*r,-
ports and exports began to _crease substantially. Exports
in 1959 probably amounted to
about $330,000,000--almost 35
percent more than 1958. Im-
ports increased about $100,-
000,000 to reach $415,000,000.
The 1959 deficit of $85,000,.
000 in commodity trade, plus
the $33,000,000 deficit in
"invisibles," will be made up
almost entirely by Western aid.
No longer solely dependent
on domestic production, Turkish
consumers bought imported goods
heavily. As a result some local
industry was hard hit. Compet-
itive prices forced some mar-
ginal firms out of business.
In other fields, prices rose
following the removal of price
controls, and the purchasing
power of the Turkish consumer
dropped slightly. The textile
industry was hit especially
hard; widespread unemployment
characterized this industry
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
in the early months of 1959.
By midyear, however, Turkish
industry--including textiles--
had revived.
Encouraged by a relatively
stable price level, business-
men adjusted to the new en-
vironment. Quality of goods
improved somewhat, and inven-
tories were maintained at
manageable levels. Although
agriculture--which contributes
about 40 percent to national
income--was down slightly com-
pared with 1958, other sectors
advanced sufficiently so that
the gross national product prob-
ably increased by 3 or 4 per-
cent in real terms compared with
1958.
Despite the initial suc-
cess of the stabilization pro-
gram, the future remains un-
certain. Much of the economic
improvement has been achieved
through utilizing part
of the $359,000,000 aid
program, and the govern-
ment has been able to
undertake its finan-
cial reforms without
sacrificing much of
its cherished develop-
ment program.
Thus far, too,
Ankara has failed to
draw up the orderly
investment program
called for in the
stabilization program
Investment plans are
being developed on
an individual-project
basis without regard
to priorities, and
Turkish relations with the
OEEC have deteriorated seriously.
Ankara's request last fall for
OEEC help in financing a $67,-
000,000 trade deficit was turned
down. At last account the Turk-
ish representative had stopped
attending OEEC meetings, and
Ankara reportedly was no longer
sending in even routine reports.
The influence of the IMF has
also declined. Ankara appears
to be returning to its practice
of dealing with its European
partners on a bilateral basis
rather than with multilateral
groups. This practice could
break down regional coordination
of the total credits offered to
Turkey, and thus permit the
Turks to overextend themselves.
Prospects
The Menderes budget for
the Turkish fiscal year begin-
ning 1 March is inflationary.
With planned expenditures 22
percent higher than last year,
THE TURKISH BUDGET
MILLION DOLLARS
EXPENDITURES
FISCAL 1959
FISCAL 1960
PERCENT
APPROVED
PROPOSED
INCREASE
General Budget
Current
451.4
515.8
14
Investment
213.1
291.7
40
Subtotal
664.5
807.5
22
Annexed Budget, net
Current
17.4
26.8
55
Investment
10.4
12.6
17
Subtotal
27.8
39.4
41
General & annexed
combined
Current
468.8
542.6
16
Investment
223.5
304.3
36
Total
692.3
846.9
22
9 Turidsh lira equals US $1. 00
excessive drains are being
placed on the economy. At the
urging of the OEEC and the IMF,
Ankara prepared a three-year
investment program late last
year. Both organizations re-
jected the program, however,
because it was little more than
a compilation of the existing
investment programs of various
state enterprises and govern-
ment departments.
the budget appears to have
been designed chiefly to im-
press the voting public.
Investment has been in-
creased 40 percent over last
year, but much of the increase
is slated for "prok-barrel" proj-
ects such as village roads and
drinking-water facilities. In
addition, the prime minister
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CURRENT INTELLIGENCE WEEKLY SUMMARY
18 February 1960
is showing increasing signs of
wanting to return to some of
his earlier grandiose public
works projects such as the
Bosporus Bridge. He is in-
creasingly reluctant to carry
out restrictive measures called
for under the economic reform
program and apparently wants
to resume building a "modern
industrial Turkey," heedless of
the ' economic factors involved.
Although the new budget is
purportedly a balanced one, it
is extremely unlikely that
revenues will increase 22 per-
cent, and a substantial deficit
appears likely. The prospect
of early elections increases
the probability that government
action on a number of economical-
ly important but politically
unattractive measures, includ-
ing an agricultural tax, will
be postponed. If Ankara fails
to modify its budget, serious
problems are likely to develop
later this year when the govern-
ment becomes hard pressed for
funds to finance imports
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